`
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of |
(I.R.S. Employer |
incorporation or organization) |
Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of May 14, 2024, the registrant had
VIRGINIA NATIONAL BANKSHARES CORPORATION
FORM 10-Q
TABLE OF CONTENTS
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Page 4 |
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Page 4 |
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Page 5 |
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Page 6 |
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Consolidated Statements of Changes in Shareholders’ Equity (unaudited) |
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Page 7 |
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Page 8 |
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Page 9 |
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Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Page 32 |
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Page 33 |
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Page 33 |
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Page 39 |
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Item 3 Quantitative and Qualitative Disclosures About Market Risk |
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Page 44 |
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Page 44 |
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Page 44 |
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Page 44 |
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Item 2 Unregistered Sales of Equity Securities and Use of Proceeds |
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Page 45 |
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Page 45 |
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Page 45 |
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Page 45 |
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Page 46 |
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Page 47 |
2
Glossary of Acronyms and Defined Terms |
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2005 Plan |
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2005 Stock Incentive Plan |
2014 Plan |
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2014 Stock Incentive Plan |
2022 Plan |
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2022 Stock Incentive Plan |
ACL |
- |
Allowance for credit losses |
Acquired Loans |
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Loans acquired from Fauquier |
AFS |
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Available for sale |
ALLL |
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Allowance for loan and lease losses |
ALM |
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Asset liability management |
ASC |
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Accounting Standards Codification |
ASC 326 |
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ASU 2016-13, Financial Instruments and Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
ASC 820 |
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ASC 820, Fair Value Measurements and Disclosures |
ASU |
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Accounting Standards Update |
ATM |
- |
Automated teller machine |
the Bank |
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Virginia National Bank |
bps |
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Basis points |
CD |
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Certificate of deposit |
CDARS |
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Certificates of Deposit Account Registry Service |
CECL |
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Current expected credit losses |
CME |
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Chicago Mercantile Exchange |
CMO |
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Collateralized mortgage obligation |
the Company |
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Virginia National Bankshares Corporation and its subsidiaries |
CRE |
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Commercial real estate |
DCF |
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Discounted cash flow |
EBA |
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Excess Balance Account |
Effective Date |
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April 1, 2021 |
Exchange Act |
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Securities Exchange Act of 1934, as amended |
Fauquier |
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Fauquier Bankshares, Inc. and its subsidiaries |
FASB |
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Financial Accounting Standards Board |
Federal Reserve |
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Board of Governors of the Federal Reserve System |
Federal Reserve Bank or FRB |
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Federal Reserve Bank of Richmond |
FHLB |
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Federal Home Loan Bank of Atlanta |
Form 10-K |
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Annual Report on Form 10-K for the year ended December 31, 2023 |
FTE |
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Fully taxable equivalent |
GAAP or U.S. GAAP |
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Accounting principles generally accepted in the United States |
ICS® |
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Insured Cash Sweep® |
IRR |
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Interest rate risk |
LIBOR |
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London Interbank Offering Rate |
Masonry Capital |
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Masonry Capital Management, LLC |
Merger |
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Mergers of Fauquier Bankshares, Inc. and The Fauquier Bank with and into the Company and the Bank, respectively |
NPA |
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Nonperforming assets |
OREO |
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Other real estate owned |
OTTI |
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Other than temporary impairment |
PCA |
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Prompt Corrective Action |
PCD |
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Purchased loan with credit deterioration |
PCI |
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Purchased credit impaired |
PITI |
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Principal, interest, taxes and insurance |
the Plans |
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2005 Stock Incentive Plan, 2014 Stock Incentive Plan and 2022 Stock Incentive Plan |
Reorganization |
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Reorganization Agreement Plan of Share Exchange dated March 6, 2013 between the Bank and the Company |
ROAA |
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Return on Average Assets |
ROAE |
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Return on Average Equity |
SBA |
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Small Business Administration |
SEC |
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U.S. Securities and Exchange Commission |
SOFR |
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Secured Overnight Financing Rate |
TDR |
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Troubled debt restructuring |
TLM |
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Troubled loan modification |
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
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March 31, 2024 |
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December 31, 2023 * |
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ASSETS |
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Unaudited |
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Cash and due from banks |
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$ |
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$ |
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Interest-bearing deposits in other banks |
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Federal funds sold |
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- |
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Securities: |
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Available for sale, at fair value |
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Restricted securities, at cost |
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Total securities |
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Loans, net of deferred fees and costs |
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Allowance for credit losses |
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Loans, net |
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Premises and equipment, net |
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Bank owned life insurance |
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Goodwill |
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Core deposit intangible, net |
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Right of use asset, net |
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Deferred tax asset, net |
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Accrued interest receivable and other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Liabilities: |
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Demand deposits: |
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Noninterest bearing |
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$ |
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$ |
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Interest bearing |
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Money market and savings deposit accounts |
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Certificates of deposit and other time deposits |
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Total deposits |
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Federal funds purchased |
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- |
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Borrowings |
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Junior subordinated debt |
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Lease liability |
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Accrued interest payable and other liabilities |
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Total liabilities |
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Shareholders' equity: |
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Preferred stock, $ |
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Common stock, $ |
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Capital surplus |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
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$ |
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$ |
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Common shares outstanding |
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Common shares authorized |
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Preferred shares outstanding |
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Preferred shares authorized |
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*
See Notes to Consolidated Financial Statements
4
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share and per share data)
(Unaudited)
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For the three months ended |
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March 31, 2024 |
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March 31, 2023 |
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Interest and dividend income: |
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Loans, including fees |
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$ |
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$ |
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Federal funds sold |
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- |
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Other interest-bearing deposits |
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Investment securities: |
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Taxable |
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Tax exempt |
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Dividends |
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Total interest and dividend income |
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Interest expense: |
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Demand deposits |
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Money market and savings deposits |
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Certificates and other time deposits |
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Federal funds purchased |
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Short-term borrowings |
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Junior subordinated debt |
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Total interest expense |
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Net interest income |
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Recovery of credit losses |
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( |
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Net interest income after recovery of credit losses |
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Noninterest income: |
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Wealth management fees |
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Deposit account fees |
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Debit/credit card and ATM fees |
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Bank owned life insurance income |
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Gains (losses) on sale of assets |
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( |
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Gain on early redemption of debt |
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- |
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Gain on termination of interest swap |
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- |
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Loss on sales of AFS, net |
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( |
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( |
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Other |
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Total noninterest income |
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Noninterest expense: |
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Salaries and employee benefits |
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Net occupancy |
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Equipment |
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Bank franchise tax |
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Computer software |
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Data processing |
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FDIC deposit insurance assessment |
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Marketing, advertising and promotion |
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Professional fees |
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Core deposit intangible amortization |
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Other |
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Total noninterest expense |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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$ |
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$ |
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Net income per common share, basic |
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$ |
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$ |
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Net income per common share, diluted |
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$ |
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$ |
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Weighted average common shares outstanding, basic |
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Weighted average common shares outstanding, diluted |
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See Notes to Consolidated Financial Statements
5
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
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For the three months ended |
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March 31, 2024 |
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March 31, 2023 |
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Net income |
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$ |
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$ |
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Other comprehensive (loss) income: |
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Unrealized (losses) gains on securities, net of tax of ($ |
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( |
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Reclassification adjustment for realized gain on termination of interest rate swap, net of tax of $ |
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— |
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( |
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Reclassification adjustment for realized losses on securities, net of tax of $ |
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Unrealized gains (losses) on interest rate swaps, net of tax of $ |
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— |
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( |
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Total other comprehensive (loss) income |
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( |
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Total comprehensive income |
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$ |
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$ |
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See Notes to Consolidated Financial Statements
6
VIRGINIA NATIONAL BANKSHARES CORPORATION
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Dollars in thousands, except per share data)
(Unaudited)
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Common Stock |
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Capital Surplus |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total |
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Balance, December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of stock options |
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- |
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- |
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Stock option expense |
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- |
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- |
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- |
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Restricted stock grant expense |
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- |
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- |
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- |
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Vested restricted stock grants |
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( |
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- |
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- |
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- |
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Cash dividends declared ($ |
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- |
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- |
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( |
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- |
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( |
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Impact of adoption of CECL |
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- |
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- |
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( |
) |
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- |
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( |
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Net income |
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- |
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- |
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- |
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Other comprehensive income |
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- |
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- |
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- |
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Balance, March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Balance, December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock option expense |
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- |
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- |
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- |
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Restricted stock grant expense |
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- |
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- |
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- |
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Vested restricted stock grants |
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( |
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- |
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- |
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- |
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Shares repurchased |
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( |
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( |
) |
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( |
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Cash dividends declared ($ |
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- |
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- |
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( |
) |
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- |
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( |
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Net income |
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- |
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- |
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- |
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Other comprehensive loss |
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- |
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- |
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- |
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( |
) |
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( |
) |
Balance, March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
|
See Notes to Consolidated Financial Statements
7
VIRGINIA NATIONAL BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
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For the three months ended |
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March 31, 2024 |
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March 31, 2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Recovery of credit losses |
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( |
) |
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( |
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Net accretion of certain acquisition-related adjustments |
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( |
) |
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( |
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Amortization of intangible assets |
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Net accretion of securities |
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( |
) |
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( |
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Net losses on sale of AFS |
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Net gain on early redemption of debt |
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( |
) |
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- |
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Net (gains) losses on sale of assets |
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( |
) |
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Earnings on bank owned life insurance |
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( |
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( |
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Depreciation and other amortization |
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Stock option expense |
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Stock grant expense |
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Net change in: |
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Accrued interest receivable and other assets |
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( |
) |
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( |
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Accrued interest payable and other liabilities |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Net increase (decrease) in restricted investments |
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( |
) |
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Proceeds from maturities, calls, sales and principal payments of available for sale securities |
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Net change in loans |
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( |
) |
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( |
) |
Proceeds from sale of premises and equipment |
|
|
|
|
|
|
||
Purchase of bank premises and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash provided by investing activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Net change in demand deposits, interest checking, money market and savings accounts |
|
|
( |
) |
|
|
( |
) |
Net change in certificates of deposit and other time deposits |
|
|
|
|
|
|
||
Net change in Federal funds purchased |
|
|
( |
) |
|
|
- |
|
Net change in other borrowings |
|
|
( |
) |
|
|
|
|
Proceeds from termination of interest swap |
|
|
- |
|
|
|
|
|
Proceeds from stock options exercised |
|
|
- |
|
|
|
|
|
Repurchase of shares of stock |
|
|
( |
) |
|
|
- |
|
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS: |
|
|
|
|
|
|
||
Beginning of period |
|
$ |
|
|
$ |
|
||
End of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash payments for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING |
|
|
|
|
|
|
||
Unrealized (losses) gains on available for sale securities |
|
$ |
( |
) |
|
$ |
|
|
Initial right-of-use assets obtained in exchange for new operating lease liabilities |
|
|
( |
) |
|
|
- |
|
See Notes to Consolidated Financial Statements
8
VIRGINIA NATIONAL BANKSHARES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2024
Note 1. Summary of Significant Accounting Policies
Reclassifications: If needed, certain previously reported amounts have been reclassified to conform to current period presentation. No such reclassifications were considered material.
Note 2.
Accounting Standards Adopted in 2024: In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 was effective for the Company on
Accounting Standards Issued but Not Yet Adopted: On March 29, 2024, the FASB issued ASU 2024-02, Codification Improvements- Amendments to Remove References to the Concepts Statements, which amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The ASU is effective January 1, 2025 and is not expected to have a significant impact on the Company’s financial statements.
Recently Issued Disclosure Rules: In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will start to phase in commencing with the Company's fiscal year beginning January 1, 2026.
Refer to Note 1, "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in the 2023 Annual Report on Form 10-K for a discussion of the Company's significant accounting policies and new accounting guidance applicable to the Company that will be adopted in future periods. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows.
9
Note 3. Securities
The amortized cost and fair values of securities available for sale as of March 31, 2024 and December 31, 2023 were as follows (dollars in thousands):
March 31, 2024 |
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Cost |
|
|
Gains |
|
|
(Losses) |
|
|
Value |
|
||||
U.S. Government treasuries |
|
$ |
|
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
|
||
U.S. Government agencies |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
|
||
Mortgage-backed securities/CMOs |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate bonds |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
|
||
Municipal bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total Securities Available for Sale |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
December 31, 2023 |
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
||||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Cost |
|
|
Gains |
|
|
(Losses) |
|
|
Value |
|
||||
U.S. Government treasuries |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
U.S. Government agencies |
|
|
|
|
|
- |
|
|
|
( |
) |
|
|
|
||
Mortgage-backed securities/CMOs |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Municipal bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total Securities Available for Sale |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
As of March 31, 2024, there were $
Accrued interest receivable on AFS securities as of March 31, 2024 amounted to $
The following tables summarize all securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, for which
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Less than 12 Months |
|
|
12 Months or More |
|
|
Total |
|
|||||||||||||||
March 31, 2024 |
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
||||||
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
||||||
U.S. Government treasuries |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
U.S. Government agencies |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Mortgage-backed/CMOs |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Corporate bonds |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Municipal bonds |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Less than 12 Months |
|
|
12 Months or More |
|
|
Total |
|
|||||||||||||||
December 31, 2023 |
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
||||||
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
||||||
U.S. Government treasuries |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
U.S. Government agencies |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Mortgage-backed/CMOs |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Corporate bonds |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Municipal bonds |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
The Company’s securities portfolio is primarily made up of fixed rate instruments, the prices of which move inversely with interest rates. Any unrealized losses are considered by management to be driven by increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the instruments approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses.
Impairment of debt securities occurs when the fair value of a security is less than its amortized cost. The Company has elected to exclude accrued interest receivable from the amortized cost basis. For debt securities AFS, impairment is recognized in its entirety in net income if either, (i) we intend to sell the security; or, (ii) it is more-likely-than-not that we will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-likely-than-not that the Company will be required to sell the security before recovery, the Company evaluates unrealized losses to determine whether a decline in fair value below amortized cost basis is a result of a credit loss, which occurs when the amortized cost basis of the security exceeds the present value of the cash flows expected to be collected from the security, or other factors such as changes in market interest rates. If a credit loss exists, an ACL is recorded that reflects the amount of the impairment related to credit losses, limited by the amount by which the security’s amortized cost basis exceeds its fair value. Changes in the ACL are recorded in net income in the period of change and are included in the provision for credit losses. Changes in the fair value of debt securities AFS not resulting from credit losses are recorded in other comprehensive income (loss). The Company regularly reviews unrealized losses in its investments in securities and cash flows expected to be collected from impaired securities based on criteria including the extent to which market value is below amortized cost, the financial health of and specific prospects for the issuer, the Company’s intention with regard to holding the security to maturity and the likelihood that the Company would be required to sell the security before recovery.
Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality. In addition, issuers have continued to make timely payments of principal and interest. Accordingly, as of March 31, 2024, management believes the impairments detailed in the table above are temporary, and no credit loss has been realized in the Company’s consolidated income statement. Additionally, management has the ability to hold any security with an unrealized loss until maturity or until such time as the value of the security has recovered from its unrealized loss position.
Securities pledged as collateral to secure public deposits and to facilitate borrowing from the FRB had carrying values of $
During the three months ended March 31, 2024 and 2023, the Company sold AFS securities with a total book value of $
Restricted securities are securities with limited marketability and consist of stock in the FRB, the Federal Home Loan Bank of Atlanta, CBB Financial Corporation (the holding company for Community Bankers' Bank) and an investment in an SBA loan fund. These restricted securities, totaling $
11
The amortized cost and fair value of AFS debt securities at March 31, 2024 are presented below based upon contractual maturities, by major investment categories (dollars in thousands). Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.
|
|
Amortized Cost |
|
|
Fair Value |
|
||
U.S. Government treasuries |
|
|
|
|
|
|
||
One year or less |
|
$ |
|
|
$ |
|
||
After one year to five years |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
U.S. Government agencies |
|
|
|
|
|
|
||
One year or less |
|
$ |
|
|
$ |
|
||
After one year to five years |
|
|
|
|
|
|
||
After five years to ten years |
|
|
|
|
|
|
||
Ten years or more |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Mortgage-backed securities/CMOs |
|
|
|
|
|
|
||
One year or less |
|
$ |
|
|
$ |
|
||
After one year to five years |
|
|
|
|
|
|
||
After five years to ten years |
|
|
|
|
|
|
||
Ten years or more |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Corporate bonds |
|
|
|
|
|
|
||
One year or less |
|
$ |
|
|
$ |
|
||
After one year to five years |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Municipal bonds |
|
|
|
|
|
|
||
One year or less |
|
$ |
|
|
$ |
|
||
After one year to five years |
|
|
|
|
|
|
||
After five years to ten years |
|
|
|
|
|
|
||
Ten years or more |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Total Debt Securities Available for Sale |
|
$ |
|
|
$ |
|
Note 4. Loans
The composition of the loan portfolio by major loan classifications at March 31, 2024 and December 31, 2023, stated at their face amount, net of deferred fees and costs and discounts, including fair value marks, appears below (dollars in thousands). The Company has elected to exclude accrued interest receivable, totaling $
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Commercial |
|
$ |
|
|
$ |
|
||
Real estate construction and land |
|
|
|
|
|
|
||
1-4 family residential mortgages |
|
|
|
|
|
|
||
Commercial mortgages |
|
|
|
|
|
|
||
Consumer |
|
|
|
|
|
|
||
Total loans |
|
|
|
|
|
|
||
Less: Allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Net loans |
|
$ |
|
|
$ |
|
The balances in the table above include unamortized premiums and net deferred loan costs and fees. As of March 31, 2024 and December 31, 2023, unamortized premiums from purchases of loans (excluding loans acquired during the Merger) were $
Consumer loans include $
12
Loans acquired in business combinations are recorded in the consolidated balance sheets at fair value at the acquisition date under the acquisition method of accounting. The fair value mark as of the Effective Date was $
The following table shows the aging of the Company's loan portfolio, by class, at March 31, 2024 (dollars in thousands):
|
|
30-59 Days |
|
|
60-89 Days |
|
|
90 Days or More Past Due and Still Accruing |
|
|
Nonaccrual Loans |
|
|
Current Loans |
|
|
Total Loans |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|||||
Real estate construction and land |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
1-4 family residential mortgages |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||||
Commercial mortgages |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|||||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
The following table shows the aging of the Company's loan portfolio, by class, at December 31, 2023 (dollars in thousands):
|
|
30-59 Days |
|
|
60-89 Days |
|
|
90 Days or More |
|
|
Nonaccrual Loans |
|
|
Current Loans |
|
|
Total Loans |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|||||
Real estate construction and land |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||||
1-4 family residential mortgages |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||||
Commercial mortgages |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|||||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
CECL |
|
|||||||||
|
|
March 31, 2024 |
|
|||||||||
|
|
Nonaccrual Loans with No Allowance |
|
|
Nonaccrual Loans with an Allowance |
|
|
Total Nonaccrual Loans |
|
|||
Commercial |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Real estate construction and land |
|
|
- |
|
|
|
- |
|
|
|
- |
|
1-4 family residential mortgages |
|
|
|
|
|
- |
|
|
|
|
||
Commercial mortgages |
|
|
|
|
|
|
|
|
|
|||
Consumer |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total Loans |
|
$ |
|
|
$ |
- |
|
|
$ |
|
13
The following table shows the Company's amortized cost basis of loans on nonaccrual status as of December 31, 2023 (dollars in thousands).
|
|
CECL |
|
|||||||||
|
|
December 31, 2023 |
|
|||||||||
|
|
Nonaccrual Loans with No Allowance |
|
|
Nonaccrual Loans with an Allowance |
|
|
Total Nonaccrual Loans |
|
|||
Commercial |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Real estate construction and land |
|
|
- |
|
|
|
- |
|
|
|
- |
|
1-4 family residential mortgages |
|
|
|
|
|
|
|
|
|
|||
Commercial mortgages |
|
|
|
|
|
|
|
|
|
|||
Consumer |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
From time to time, the Company modifies loans to borrowers who are experiencing financial difficulties by providing term extensions, interest rate reductions or other-than-insignificant payment delays. As the effect of most modifications is already included in the ACL due to the measurement methodologies used in its estimate, the ACL is typically not adjusted upon modification. During the three months ended March 31, 2024,
The Company closely monitors the performance of all modified loans to understand the effectiveness of its modification efforts. Upon determination, if applicable, that all or a portion of a modified loan is uncollectible, that amount is charged against the ACL. There were no payment defaults during the three months ended March 31, 2024 or 2023 of modified loans that were modified during the previous twelve months. All modified loans are current as of March 31, 2024; at March 31, 2023, all modified loans were current with the exception of
14
Note 5. Allowance for Credit Losses
The ACL on the loan portfolio is a material estimate for the Company. The Company estimates is ACL on its loan portfolio on a quarterly basis. The Company utilizes two methodologies in its development of the ACL, discounted cash flow and remaining life.
Maximum Loss Rate - Management utilizes the same model to calculate maximum loss rates and expected loss rates for each segment. No additional models or methodologies were used to quantify the maximum loss rate, rather, a worst-case economic environment is utilized in the models. This process ensures symmetry between the maximum loss rate and the quantified loss rate. This process also leverages the well-documented regression models used in model development.
The process for deriving the maximum loss rate is outlined below:
15
Qualitative Factors - ASC 326 requires an entity to adjust historical loss information to reflect the extent to which management expects reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The adjustments for reasonable and supportable forecasts may be qualitative in nature and should reflect changes related to relevant data.
The Company utilizes a scorecard approach to assign qualitative factors. The scorecard approach is in alignment with the AICPA audit considerations for CECL which states:
These adjustments should be grounded in a methodology that is subject to appropriate governance, challenge, and periodic controlled reevaluation. Such methodology will generally require significant management judgment. The information used to support management’s adjustments may be publicly available information, information specifically developed for the entity via management’s specialist (internal or external), or other relevant and reliable information.
The purpose of the qualitative scorecard is to provide a qualitative estimate of the expected credit losses of the current loan portfolio in response to potential limitations of the quantitative model. It is used to aid in the assessment of the unquantifiable factors affecting expected credit losses in the loan portfolio. Benefits of the scorecard include directional consistency, objectivity, controls and quantification framework (auditable).
For each segment, the scorecard calculates the difference between the quantitative expected credit loss and the maximum loss rate. This difference represents all available qualitative adjustment that can be applied to that segment.
Individual Evaluation - In accordance with ASC 326, the Company will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. Loans will not be included in both collective and individual analysis. Individual analysis will establish a specific reserve for each loan, using one of four methods: 1) Fair Value of Collateral Method (Collateral Relationship); 2) Cash Flow Method; 3) Advanced Cash Flow Method; or 4) Loan Pricing Method.
Management has elected to perform an individual evaluation on all loans in nonaccrual status. As of March 31, 2024, after reviewing each loan in nonaccrual status, no specific reserve was deemed necessary. As of March 31, 2023, a specific reserve of $
The primary driver in the change in reserves from adoption date of January 1, 2023 to March 31, 2024 was the proportional increase in government-guaranteed loans which do not require an ACL.
The following table shows the ACL activity by loan portfolio for the three months ended March 31, 2024 (dollars in thousands):
|
|
Commercial |
|
|
Real Estate |
|
|
1-4 family residential mortgages |
|
|
Commercial mortgages |
|
|
Consumer |
|
|
Total |
|
||||||
Allowance for Credit Losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Charge-offs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Recoveries |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Provision for (recovery of) credit |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Balance as of March 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
The following table shows the ACL activity by loan portfolio at December 31, 2023 (dollars in thousands):
|
|
Commercial |
|
|
Real Estate |
|
|
1-4 Family residental Mortgages |
|
|
Real Estate |
|
|
Consumer |
|
|
Total |
|
||||||
Allowance for Loan Losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of beginning of year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Impact of ASC 326 adoption |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Charge-offs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Recoveries |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Provision for (recovery of) loan losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Ending Balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
16
The following table presents a breakdown of the provision (recovery) for credit losses for the periods indicated (dollars in thousands):
|
Three Months Ended |
|
|||||
|
March 31, 2024 |
|
|
March 31, 2023 |
|
||
Provision for credit losses: |
|
|
|
|
|
||
Provision for (recovery of) loan losses |
$ |
|
|
$ |
( |
) |
|
Recovery of unfunded commitments |
|
( |
) |
|
|
( |
) |
Total |
$ |
( |
) |
|
$ |
( |
) |
The following table presents the Company's amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to those loans as of the periods indicated (dollars in thousands):
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
Real Estate Secured Loans |
|
|
Allowance for Credit Losses - Loans |
|
|
Real Estate Secured Loans |
|
|
Allowance for Credit Losses - Loans |
|
||||
Commercial real estate - non owner occupied |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
||
Residential 1-4 family real estate |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
17
The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of March 31, 2024 (dollars in thousands). Current period gross write-off amounts represent write-offs for the three months ended March 31, 2024 (dollars in thousands):
|
|
March 31, 2024 |
|
|||||||||||||||||||||||||||||||||
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
|
Revolving Loans |
|
|
Loans Converted to Term |
|
|
Total |
|
|||||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Substandard |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||||
Total commercial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Real estate construction and land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Substandard |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Total real estate construction and land |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1-4 family residential mortgages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Watch |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
||||
Substandard |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total 1-4 family residential mortgage |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial mortgages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Watch |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Substandard |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Total commercial mortgages |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Substandard |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||||
Total consumer |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
18
The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of December 31, 2023 (dollars in thousands).
|
|
December 31, 2023 |
|
|||||||||||||||||||||||||||||||||
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
Prior |
|
|
Revolving Loans |
|
|
Loans Converted to Term |
|
|
Total |
|
|||||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Watch |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Substandard |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Real estate construction and land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Substandard |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Total real estate construction and land |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1-4 family residential mortgages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Watch |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
||||||
Special Mention |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Substandard |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
||||||
Total 1-4 family residential mortgage |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial mortgages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Substandard |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|||||
Total commercial mortgages |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||||||
Watch |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Special Mention |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Substandard |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Total consumer |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||||
Current period gross write-off |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
19
Credit Quality Indicators
The Company utilizes the following credit quality indicators:
Pass
Loans with the following risk ratings are pooled by class and considered together as “Pass”:
Excellent – minimal risk loans secured by cash or fully guaranteed by a U.S. government agency
Good – low risk loans secured by marketable collateral within margin
Satisfactory – modest risk loans where the borrower has strong and liquid financial statements and more than adequate cash flow
Average – average risk loans where the borrower has reasonable debt service capacity
Marginal – acceptable risk loans where the borrower has acceptable financial statements but is leveraged
Watch
These loans have an acceptable risk but require more attention than normal servicing.
Special Mention
These potential problem loans are currently protected but are potentially weak.
Substandard
These problem loans are inadequately protected by the sound worth and paying capacity of the borrower and/or the value of any collateral pledged. These loans may be considered impaired and evaluated on an individual basis.
Doubtful
Loans with this rating have significant deterioration in the sound worth and paying capacity of the borrower and/or the value of any collateral pledged, making collection or liquidation of the loan in full highly questionable. These loans would be considered impaired and evaluated on an individual basis.
20
Note 6. Goodwill and Other Intangible Assets
The carrying amount of goodwill was $
The Company had $
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
||||||||||||
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
||||||
Amortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Core deposit intangible |
$ |
|
$ |
( |
) |
|
$ |
|
$ |
( |
) |
|
$ |
|
$ |
( |
) |
Amortization expense was $
Estimated future amortization expense as of March 31, 2024 is as follows (dollars in thousands):
|
Core |
|
|
|
|
Deposit |
|
|
|
|
Intangible |
|
|
|
For the nine months ending December 31, 2024 |
$ |
|
|
|
For the year ending December 31, 2025 |
|
|
|
|
For the year ending December 31, 2026 |
|
|
|
|
For the year ending December 31, 2027 |
|
|
|
|
For the year ending December 31, 2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
$ |
|
|
Note 7. Leases
Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease for a term similar to the length of the lease, including any probable renewal options available. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.
Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term. Payments for leases with terms longer than
Each of the Company’s long-term lease agreements is classified as an operating lease. Certain of these leases offer the
21
The following tables present information about the Company’s leases (dollars in thousands):
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
||
|
$ |
|
|
$ |
|
|||
|
$ |
|
|
$ |
|
|||
Weighted average remaining lease term |
|
|
|
|
||||
Weighted average discount rate |
|
|
% |
|
|
% |
|
|
Three Months Ended March 31, |
|
|||||
Lease Expense: |
|
2024 |
|
|
2023 |
|
||
Operating lease cost |
|
$ |
|
|
$ |
|
||
Short-term lease expense |
|
|
|
|
|
|
||
Total lease expense |
|
$ |
|
|
$ |
|
||
Cash paid for amounts included in |
|
$ |
|
|
$ |
|
A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):
Undiscounted Cash Flow |
|
March 31, 2024 |
|
|
Nine months ending December 31, 2024 |
|
$ |
|
|
Twelve months ending December 31, 2025 |
|
|
|
|
Twelve months ending December 31, 2026 |
|
|
|
|
Twelve months ending December 31, 2027 |
|
|
|
|
Twelve months ending December 31, 2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted cash flows |
|
$ |
|
|
Less: Discount |
|
|
( |
) |
Lease liability |
|
$ |
|
Note 8. Net Income Per Share
The table below shows the weighted average number of shares used in computing net income per common share and the effect of the weighted average number of shares of potential dilutive common stock for the three months ended March 31, 2024 and 2023. Diluted net income per share is computed based on the weighted average number of shares of common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options. The recipients of unvested restricted shares have full voting and dividend rights, and as such, unvested restricted stock as of March 31, 2024 and March 31, 2023 is included in the calculation of basic and diluted net income per share (dollars below reported in thousands except per share data).
Three Months Ended |
|
March 31, 2024 |
|
|
March 31, 2023 |
|
||||||||||||||||||
|
|
Net |
|
|
Weighted |
|
|
Per |
|
|
Net |
|
|
Weighted |
|
|
Per |
|
||||||
Basic net income per share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
||||||
Effect of dilutive stock options |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Diluted net income per share |
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
For the three months ended March 31, 2024, there were
22
Note 9. Stock Incentive Plans
At the Annual Shareholders Meeting on June 23, 2022, shareholders approved the Virginia National Bankshares Corporation 2022 Stock Incentive Plan. The 2022 Plan made available up to
For the 2022 Plan, the option price for any stock options cannot be less that the fair value of the Company’s stock on the grant date. In addition,
A summary of the shares issued and available under each of the Plans is shown below as of March 31, 2024. Share data and exercise price range per share have been adjusted to reflect prior issued stock dividends. Although the 2014 Plan and the 2005 Plan have expired and
|
|
2022 Plan |
|
|
2014 Plan |
|
|
2005 Plan |
|
|||
Aggregate shares issuable |
|
|
|
|
|
|
|
|
|
|||
Options issued, net of forfeited and expired |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Unrestricted stock issued |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
Restricted stock grants issued, net of forfeited |
|
|
( |
) |
|
|
( |
) |
|
|
- |
|
Cancelled due to Plan expiration |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Remaining available for grant |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Stock grants issued and outstanding: |
|
|
|
|
|
|
|
|
|
|||
Total vested and unvested shares |
|
|
|
|
|
|
|
|
- |
|
||
Fully vested shares |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Option grants issued and outstanding: |
|
|
|
|
|
|
|
|
|
|||
Total vested and unvested shares |
|
|
|
|
|
|
|
|
- |
|
||
Fully vested shares |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Exercise price range |
|
$ |
|
|
$ |
|
|
$ |
- |
|
The Company accounts for all of its stock incentive plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and restricted stock. All stock-based payments to employees are required to be valued at a fair value on the date of grant and expensed based on that fair value over the applicable vesting period.
23
Stock Options
Changes in the stock options outstanding related to the Plans are summarized below (dollars in thousands except per share data):
|
|
March 31, 2024 |
|
|||||||||
|
|
Number of Options |
|
|
Weighted |
|
|
Aggregate |
|
|||
Outstanding at January 1, 2024 |
|
|
|
|
$ |
|
|
$ |
- |
|
||
Issued |
|
|
|
|
$ |
|
|
|
- |
|
||
Exercised |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
- |
|
|
Expired |
|
|
- |
|
|
$ |
- |
|
|
|
|
|
Outstanding at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Options exercisable at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
For the three months ended March 31, 2024 and 2023, the Company recognized $
Summary information pertaining to options outstanding at March 31, 2024 is shown below. Share and per share data have been adjusted to reflect the prior stock dividends issued.
|
|
Options Outstanding |
|
|
Options Exercisable |
|
||||||||||||
Exercise Price |
|
Number of |
|
|
Weighted- |
|
Weighted- |
|
|
Number of |
|
|
Weighted- |
|
||||
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|||||
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
Stock Grants
Restricted stock grants –
24
Changes in the restricted stock grants outstanding during the three months ended March 31, 2024 are summarized below (dollars in thousands except per share data):
|
|
March 31, 2024 |
|
|||||||||
|
|
Number of |
|
|
Weighted |
|
|
Aggregate |
|
|||
Nonvested as of January 1, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
Issued |
|
|
|
|
|
|
|
|
|
|||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Forfeited |
|
|
|
|
|
|
|
|
|
|||
Nonvested at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
Note 10. Fair Value Measurements
Determination of Fair Value
The Company follows ASC 820, “Fair Value Measurements and Disclosures,” to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
Fair Value Hierarchy
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value:
|
Level 1 – |
|
Valuation is based on quoted prices in active markets for identical assets and liabilities. |
|
|
|
|
|
Level 2 – |
|
Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. |
|
|
|
|
|
Level 3 – |
|
Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market |
25
The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the consolidated financial statements:
Securities available for sale
Securities AFS are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2).
The following tables present the balances measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (dollars in thousands):
|
|
|
|
|
Fair Value Measurements at March 31, 2024 Using: |
|
||||||||||
|
|
|
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Description |
|
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government treasuries |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
||
U.S. Government agencies |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Mortgage-backed securities/CMOs |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Corporate bonds |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Municipal bonds |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Total securities available for sale |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
|
|
|
|
Fair Value Measurements at December 31, 2023 Using: |
|
||||||||||
|
|
|
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Description |
|
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government treasuries |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
||
U.S. Government agencies |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Mortgage-backed securities/CMOs |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Corporate bonds |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|||
Municipal bonds |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
||
Total securities available for sale |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
26
Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write downs of individual assets. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements:
Collateral Dependent Loans with an ACL
In accordance with ASC 326, we may determine that an individual loan exhibits unique risk characteristics which differentiate it from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the ACL are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice.
There were no assets that were measured at fair value on a nonrecurring basis as of March 31, 2024.
|
|
|
|
|
Fair Value Measurements at December 31, 2023 Using: |
|
||||||||||
|
|
|
|
|
Quoted Prices |
|
|
Significant |
|
|
Significant |
|
||||
Description |
|
Balance |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Individually evaluated loans |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
|
|
|||||||||||||||
Description |
|
Fair Value |
|
|
Valuation Technique |
|
|
Unobservable Inputs |
|
|
Discount Rate |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Individually evaluated loans |
|
$ |
461 |
|
|
Market comparables |
|
|
|
|
|
% |
ASC 825, “Financial Instruments,” requires disclosures about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
27
The Company uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis.
|
|
|
|
|
Fair Value Measurements at March 31, 2024 Using: |
|
||||||||||||||
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|
|
|
|||||
|
|
Carrying value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value |
|
|||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalent |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|||
Available for sale securities |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Restricted securities |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Loans, net |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Bank owned life insurance |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Accrued interest receivable |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Demand deposits and interest-bearing transaction and money market accounts |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|||
Certificates of deposit |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
FHLB Borrowings |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Junior subordinated debt, net |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Accrued interest payable |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2023 Using: |
|
||||||||||||||
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|
|
|
|||||
|
|
Carrying value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value |
|
|||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalent |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
|||
Available for sale securities |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Restricted securities |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Loans, net |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Bank owned life insurance |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Accrued interest receivable |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Demand deposits and interest-bearing transaction and money market accounts |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|||
Certificates of deposit |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Federal funds purchased |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Junior subordinated debt, net |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Accrued interest payable |
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. Consequently, the fair values of the Company’s financial instruments will fluctuate when interest rate levels change, and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk; however, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.
28
Note 11. Other Comprehensive Income (Loss)
The following table presents the changes in each component of accumulated other comprehensive income (loss) as of March 31, 2024 and March 31, 2023 (dollars in thousands).
|
|
AFS Securities |
|
|
Total |
|
|
|
|
|||
Accumulated other comprehensive loss at December 31, 2023 |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other comprehensive loss arising during the period |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Related income tax effects |
|
|
|
|
|
|
|
|
|
|||
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Reclassification into net income |
|
|
|
|
|
|
|
|
|
|||
Related income tax effects |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Accumulated other comprehensive loss at March 31, 2024 |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
AFS Securities |
|
|
Interest Rate Swap |
|
|
Total |
|
|||
Accumulated other comprehensive loss at December 31, 2022 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income (loss) arising during the period |
|
|
|
|
|
( |
) |
|
|
|
||
Related income tax effects |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||
Reclassification into net income |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Related income tax effects |
|
|
( |
) |
|
|
|
|
|
|
||
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Accumulated other comprehensive loss at March 31, 2023 |
|
$ |
( |
) |
|
$ |
- |
|
|
$ |
( |
) |
Note 12. Derivative Instruments and Hedging Activities
The Company uses derivative financial instruments primarily to manage risks to the Company associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain interest rate swaps as hedging instruments in qualifying cash flow hedges. The changes in fair value of these designated hedging instruments is reported as a component of other comprehensive income. Customer accommodation loan swaps are derivative contracts that are not designated in a qualifying hedging relationship.
Cash flow hedges. The Company designates interest rate swaps as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Company’s junior subordinated debt. These interest rate swaps are derivative financial instruments that manage the risk of variability in cash flows by exchanging variable-rate interest payments on a notional amount of the Company’s borrowings for fixed-rate interest payments. Interest rate swaps designated as cash flow hedges are expected to be highly effective in offsetting the effect of changes in interest rates on the amount of variable-rate interest payments, and the Company assesses the effectiveness of each hedging relationship quarterly. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. At December 31, 2022, the Company had a designated cash flow hedge to manage its exposure to variability in cash flows on one variable rate borrowing through 2036. In anticipation of terminating the borrowing position, such hedge position was liquidated in the first quarter of 2023 for a gain of $
Unrealized gains or losses recorded in other comprehensive income (loss) related to cash flow hedges are reclassified into earnings in the same period(s) during which the hedged interest payments affect earnings. When a designated hedging instrument is terminated and the hedged interest payments remain probable of occurring, any remaining unrecognized gain or loss in other comprehensive income is reclassified into earnings in the period(s) during which the forecasted interest payments affect earnings. Amounts reclassified into earnings and interest receivable or payable under designated interest rate swaps are reported in interest expense. The Company does not expect any unrealized losses related to cash flow hedges to be reclassified into earnings in the next twelve months.
29
Note 13. Segment Reporting
For the financial periods noted in this report, the Company has
The
Segment information for the three months ended March 31, 2024 and 2023 is shown in the following tables (dollars in thousands). Note that asset information is not reported below, as the assets of VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker.
Three months ended March 31, 2024 |
|
Bank |
|
|
VNB Trust & |
|
|
Masonry |
|
|
Consolidated |
|
||||
Net interest income |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Recovery of credit losses |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Provision for (benefit from) income |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
Three months ended March 31, 2023 |
|
Bank |
|
|
VNB Trust & |
|
|
Masonry |
|
|
Consolidated |
|
||||
Net interest income |
|
$ |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
|
||
Provision for credit losses |
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Provision for (benefit from) income |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
30
Note 14. Sale of Masonry Capital Management, LLC
Note 15. Share Repurchase Plan
During the second quarter of 2023, the Board of Directors approved a share repurchase plan of up to
During the first quarter of 2024, the Company repurchased
31
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited consolidated financial statements, and notes thereto, of Virginia National Bankshares Corporation included in this report and the audited consolidated financial statements, and notes thereto, of the Company included in the Company’s Form 10-K for the year ended December 31, 2023. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results for the year ending December 31, 2024 or any future period.
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD AFFECT FUTURE RESULTS
Certain statements in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, statements with respect to the Company’s operations, performance, future strategy and goals, and are often characterized by use of qualified words such as “expect,” “believe,” “estimate,” “project,” “anticipate,” “intend,” “will,” “should,” or words of similar meaning or other statements concerning the opinions or judgment of the Company and its management about future events. While Company management believes such statements to be reasonable, future events and predictions are subject to circumstances that are not within the control of the Company and its management. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in: inflation, interest rates, market and monetary fluctuations; liquidity and capital requirements; market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts or other major events, the governmental and societal responses thereto, or the prospect of these events; changes, particularly declines, in general economic and market conditions in the local economies in which the Company operates, including the effects of declines in real estate values; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the impact of changes in laws, regulations and guidance related to financial services including, but not limited to, taxes, banking, securities and insurance; changes in accounting principles, policies and guidelines; the financial condition of the Company’s borrowers; the Company's ability to attract, hire, train and retain qualified employees; an increase in unemployment levels; competitive pressures on loan and deposit pricing and demand; fluctuation in asset quality; assumptions underlying the Company’s ACL; the value of securities held in the Company's investment portfolio; performance of assets under management; cybersecurity threats or attacks and the development and maintenance of reliable electronic systems; changes in technology and their impact on the marketing of new products and services and the acceptance of these products and services by new and existing customers; the willingness of customers to substitute competitors’ products and services for the Company’s products and services; the risks and uncertainties described from time to time in the Company’s press releases and filings with the SEC; and the Company’s performance in managing the risks involved in any of the foregoing. Many of these factors and additional risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other reports filed from time to time by the Company with the Securities and Exchange Commission. These statements speak only as of the date made, and the Company does not undertake to update any forward-looking statements to reflect changes or events that may occur after this release.
OVERVIEW
Our primary financial goal is to maximize the Company’s earnings to increase long-term shareholder value. We monitor three key financial performance measures to determine our success in realizing this goal: 1) return on average assets, 2) return on average equity, and 3) net income per share.
We also manage our capital levels through growth, quarterly cash dividends, share repurchases, when prudent, while maintaining a strong capital position. During the second quarter of 2023, the Board of Directors approved a share repurchase plan of up to 5% of outstanding common stock. Repurchases may be made through open market purchases or in privately negotiated transactions. The actual timing, number, and value of shares repurchased under the program will
32
be determined by a committee of the Board. During the first quarter of 2024, the Company repurchased 874 shares under this program. Through May 13, 2024, a total of 20,350 shares have been repurchased.
Refer to the Results of Operations, Non-GAAP Presentation section, later in this Management’s Discussion and Analysis for more discussion on these financial performance measures.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The accounting and reporting policies followed by the Company conform, in all material respects, to GAAP and to general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While the Company bases estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.
The Company considers accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain, and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on the Company’s consolidated financial statements. The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of financial condition and results of operations.
For additional information regarding critical accounting policies, refer to the Application of Critical Accounting Policies and Critical Accounting Estimates section under Item 7 in the Company’s 2023 Form 10-K.
FINANCIAL CONDITION
Total assets
The total assets of the Company as of March 31, 2024 were $1.6 billion. This is a $26.5 million, or 1.6%, decrease from total assets reported at December 31, 2023 and a $48.0 million, or 3.1%, increase from total assets reported at March 31, 2023. The deposit declines experienced during the first half of 2023 as a result of the strategic decision to hold rates steady in the last quarter of 2022 reversed themselves in the last half of 2023, and the Company has continued to recognize measured deposit growth through the first quarter of 2024. As a result, decreases within overnight investments and the securities portfolio which were funding outflow in the first half of 2023 are now funding loan growth. Deposit balances increased $22.9 million, or 1.6%, from December 31, 2023 to March 31, 2024.
Interest-bearing deposits in other banks
The Company had $10.6 million of interest-bearing deposits in other banks as of March 31, 2024, compared to $10.3 million as of December 31, 2023 and $15.6 million as of March 31, 2023. During the first six months of 2023, declines in customer deposit balances were largely funded by liquidation of interest-bearing deposits in other banks. During the quarter ended March 31, 2024, interest-bearing deposits in other banks have remained steady, with deposit growth and investment maturities funding other customer demands.
Federal funds sold
The Company had $27.7 million in overnight Federal funds sold as of March 31, 2024, compared to no overnight Federal funds sold as of December 31, 2023 and $12 thousand as of March 31, 2023. Any excess funds are sold on a daily basis in the federal funds market. The Company monitors liquidity on a daily basis to ensure that it maintains sufficient liquidity to meet its funding commitments at all times.
The Company participates in the Excess Balance Account of the Federal Reserve Bank of Richmond. The EBA is a limited-purpose account at the FRB for the maintenance of excess cash balances held by financial institutions. The EBA eliminates the potential of concentration risk that comes with depositing excess balances with one or multiple correspondent banks.
33
Securities
The Company’s investment securities portfolio as of March 31, 2024 totaled $348.0 million, a decrease of $80.9 million compared with the $429.0 million reported at December 31, 2023 and a $150.5 million decrease from the $498.5 million reported at March 31, 2023. A security in the amount of $1.5 million which matured on March 31, 2024 was reclassified as a receivable resulting in an increase in other assets, as the proceeds were received after quarter-end. The decrease from year-end and the prior year was part of a strategic decision to reinvest proceeds into higher yielding assets. At March 31, 2024 and December 31, 2023, the investment securities holdings represented 21.5% and 26.1% of the Company’s total assets, respectively.
The Company’s investment securities portfolio included restricted securities totaling $6.2 million as of March 31, 2024, compared to $8.4 million as of December 31, 2023 and $5.8 million as of March 31, 2023. These securities represent stock in the FRB, the FHLB, CBB Financial Corporation (the holding company for Community Bankers' Bank), and an investment in an SBA loan fund. The level of FRB and FHLB stock that the Company is required to hold is determined in accordance with membership guidelines provided by the Federal Reserve and the FHLB, respectively. Stock ownership in the bank holding company for Community Bankers’ Bank provides the Company with several benefits that are not available to non-shareholder correspondent banks. None of these restricted securities are traded on the open market and can only be redeemed by the respective issuer.
At March 31, 2024, the unrestricted securities portfolio totaled $341.9 million. The following table summarizes the Company's AFS securities by type as of March 31, 2024, December 31, 2023, and March 31, 2023 (dollars in thousands):
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
|||||||||||||||
|
|
|
|
|
% of |
|
|
|
|
|
% of |
|
|
|
|
|
% of |
|
||||||
|
|
Balance |
|
|
Total |
|
|
Balance |
|
|
Total |
|
|
Balance |
|
|
Total |
|
||||||
U.S. Government treasuries |
|
$ |
51,132 |
|
|
|
15.0 |
% |
|
$ |
121,708 |
|
|
|
29.0 |
% |
|
$ |
194,569 |
|
|
|
39.5 |
% |
U.S. Government agencies |
|
|
36,451 |
|
|
|
10.7 |
% |
|
|
39,581 |
|
|
|
9.4 |
% |
|
|
29,225 |
|
|
|
5.9 |
% |
Mortgage-backed securities/CMOs |
|
|
151,660 |
|
|
|
44.3 |
% |
|
|
155,144 |
|
|
|
36.9 |
% |
|
|
165,628 |
|
|
|
33.6 |
% |
Corporate bonds |
|
|
19,163 |
|
|
|
5.6 |
% |
|
|
19,129 |
|
|
|
4.5 |
% |
|
|
18,784 |
|
|
|
3.8 |
% |
Municipal bonds |
|
|
83,451 |
|
|
|
24.4 |
% |
|
|
85,033 |
|
|
|
20.2 |
% |
|
|
84,554 |
|
|
|
17.2 |
% |
Total available for sale securities |
|
$ |
341,857 |
|
|
|
100.0 |
% |
|
$ |
420,595 |
|
|
|
100.0 |
% |
|
$ |
492,760 |
|
|
|
100.0 |
% |
The unrestricted securities are held primarily for earnings, liquidity, and asset/liability management purposes and are reviewed quarterly for possible other-than-temporary impairments. During this review, management analyzes the length of time the fair value has been below cost, the expectation for that security’s performance, the creditworthiness of the issuer, and the Company’s intent and ability to hold the security to recovery or maturity. These factors are analyzed for each individual security.
Loan portfolio
A management objective is to grow loan balances while maintaining the asset quality of the loan portfolio. The Company seeks to achieve this objective by maintaining rigorous underwriting standards coupled with regular evaluation of the creditworthiness of, and the designation of lending limits for, each borrowing relationship. The portfolio strategies include seeking industry, loan size, and loan type diversification to minimize credit exposure and originating loans in markets with which the Company is familiar. The Company's geographical trade area includes localities in Virginia, Maryland and the District of Columbia that are within a 100-mile radius of any office of the Company as well as the counties of Jefferson and Berkeley in West Virginia.
Total loans were $1.1 billion as of March 31, 2024 and December 31, 2023, compared to $940.0 million at March 31, 2023. Loans as a percentage of total assets at March 31, 2024 were 69.7%, compared to 59.8% as of March 31, 2023. Loans as a percentage of deposits at March 31, 2024 were 78.8%, compared to 67.3% as of March 31, 2023.
34
The following table summarizes the Company's loan portfolio by type of loan as of March 31, 2024, December 31, 2023, and March 31, 2023 (dollars in thousands):
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
|||||||||||||||
|
|
Balance |
|
|
% of |
|
|
Balance |
|
|
% of |
|
|
Balance |
|
|
% of |
|
||||||
Commercial loans |
|
$ |
182,568 |
|
|
|
16.1 |
% |
|
$ |
152,517 |
|
|
|
13.9 |
% |
|
$ |
72,601 |
|
|
|
7.7 |
% |
Real estate mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Construction and land |
|
|
33,371 |
|
|
|
3.0 |
% |
|
|
33,682 |
|
|
|
3.1 |
% |
|
|
34,493 |
|
|
|
3.7 |
% |
1-4 family residential mortgages |
|
|
316,502 |
|
|
|
28.1 |
% |
|
|
317,558 |
|
|
|
29.1 |
% |
|
|
317,794 |
|
|
|
33.8 |
% |
Commercial |
|
|
558,779 |
|
|
|
49.6 |
% |
|
|
550,867 |
|
|
|
50.5 |
% |
|
|
471,602 |
|
|
|
50.2 |
% |
Total real estate mortgage |
|
|
908,652 |
|
|
|
80.7 |
% |
|
|
902,107 |
|
|
|
82.7 |
% |
|
|
823,889 |
|
|
|
87.7 |
% |
Consumer |
|
|
36,948 |
|
|
|
3.2 |
% |
|
|
38,041 |
|
|
|
3.4 |
% |
|
|
43,467 |
|
|
|
4.6 |
% |
Total loans |
|
$ |
1,128,168 |
|
|
|
100.0 |
% |
|
$ |
1,092,665 |
|
|
|
100.0 |
% |
|
$ |
939,957 |
|
|
|
100.0 |
% |
Loan balances increased by $35.5 million or 3.2% from December 31, 2023 to March 31, 2024. During the first quarter of 2024, the Company funded $27.0 million in organic loan production and purchased $34.2 million in government guaranteed loans. Paydowns and normal amortization of $25.7 million partially offset the loans funded during the first quarter of the current year.
The following table details the Company's levels of non-owner occupied commercial real estate as of March 31, 2024, along with the average loan size and % of risk ratings for each category (dollars in thousands):
Loan Type |
|
Balance |
|
% of Total CRE |
|
|
Average Loan Size |
|
Special Mention |
|
Sub- |
|
Nonaccrual |
|
||||||
Hotels |
|
$ |
40,444 |
|
|
14.17 |
% |
|
$ |
5,056 |
|
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Office Building |
|
|
66,442 |
|
|
23.27 |
% |
|
|
791 |
|
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Warehouses/Industrial |
|
|
52,907 |
|
|
18.53 |
% |
|
|
2,035 |
|
|
0.00 |
% |
|
1.16 |
% |
|
0.73 |
% |
Retail |
|
|
103,292 |
|
|
36.18 |
% |
|
|
1,693 |
|
|
0.04 |
% |
|
0.00 |
% |
|
0.00 |
% |
Day Cares / Schools |
|
|
12,569 |
|
|
4.40 |
% |
|
|
1,257 |
|
|
3.01 |
% |
|
0.00 |
% |
|
0.00 |
% |
All Other Commercial Buildings |
|
|
9,827 |
|
|
3.44 |
% |
|
|
893 |
|
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Total Non-Owner Occupied CRE |
|
$ |
285,481 |
|
|
|
|
|
|
|
|
|
|
|
|
Loan quality
The Company continues to experience extremely low levels of NPAs, as a result of strict underwriting standards and practices. However, the economic environment in the Company's lending footprint could be impacted as persistent inflation, higher interest rates, and other signs of recession materialize, which could increase NPAs in future periods.
Nonaccruals - Nonaccrual loans, comprised of nine loans to seven borrowers, totaled $2.2 million at March 31, 2024, compared to balances of $1.9 million and $1.2 million reported at December 31, 2023 and March 31, 2023, respectively.
Past Due Loans - The Company had loans in its portfolio totaling $876 thousand, $879 thousand and $69 thousand, as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively, that were 90 or more days past due and still accruing interest as the Company deemed them to be collectible. The past due balance as of March 31, 2024 is comprised of two loans totaling $783 thousand which are 100% government-guaranteed, and five student loans totaling $93 thousand.
Troubled Loan Modifications - The Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, effective January 1, 2023 on a prospective basis. During the three months ended March 31, 2024, one loan was modified for a borrower experiencing financial difficulties, totaling $703 thousand; as of March 31, 2024, the Company had TLMs totaling $1.0 million.
Management identifies potential problem loans through its periodic loan review process and considers potential problem loans as those loans classified as special mention, substandard, or doubtful.
35
Allowance for Credit Losses
The relationship of the ACL to total loans and nonaccrual loans appears below (dollars in thousands):
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
|||
Total loans |
|
$ |
1,128,168 |
|
|
$ |
1,092,665 |
|
|
$ |
939,957 |
|
Nonaccrual loans |
|
$ |
2,178 |
|
|
$ |
1,852 |
|
|
$ |
1,228 |
|
Allowance for credit losses |
|
$ |
8,289 |
|
|
$ |
8,395 |
|
|
$ |
7,772 |
|
Nonaccrual loans to total loans |
|
|
0.19 |
% |
|
|
0.17 |
% |
|
|
0.13 |
% |
ACL to total loans |
|
|
0.73 |
% |
|
|
0.77 |
% |
|
|
0.83 |
% |
ACL to nonaccrual loans |
|
|
380.58 |
% |
|
|
453.29 |
% |
|
|
632.90 |
% |
The ACL on loans as a percentage of loans was 0.73% as of March 31, 2024, 0.77% as of December 31, 2023, and 0.83% as of March 31, 2023. The fair value mark that was allocated to the acquired loans was $21.3 million as of the Effective Date, with a remaining balance of $8.8 million as of March 31, 2024.
Provision for (recoveries of) credit losses totaling $11 thousand and ($235) thousand were recorded in the three months ended March 31, 2024 and 2023, respectively. The following is a summary of the changes in the ACL for the three months ended March 31, 2024 and 2023 (dollars in thousands):
|
|
2024 |
|
|
2023 |
|
||
Allowance for loan losses, December 31 of prior year |
|
$ |
8,395 |
|
|
$ |
5,552 |
|
Impact of adoption of CECL, January 1, 2023 |
|
|
- |
|
|
|
2,491 |
|
Charge-offs |
|
|
(184 |
) |
|
|
(136 |
) |
Recoveries |
|
|
67 |
|
|
|
100 |
|
Provision for (recovery of) credit losses |
|
|
11 |
|
|
|
(235 |
) |
Allowance for credit losses, March 31 |
|
$ |
8,289 |
|
|
$ |
7,772 |
|
For additional insight into management’s approach and methodology in estimating the ACL, please refer to the earlier discussion of “Allowance for Credit Losses” in Note 5 of the Notes to Consolidated Financial Statements. In addition, Note 5 includes details regarding the rollforward of the allowance by loan portfolio segments. The rollforward tables indicate the activity for loans that are charged-off, amounts received from borrowers as recoveries of previously charged-off loan balances, and the allocation by loan portfolio segment of the provision made during the period. The events that can positively impact the amount of allowance in a given loan segment include any one or all of the following: the recovery of a previously charged-off loan balance; the decline in the amount of classified or delinquent loans in a loan segment from the previous period, which most commonly occurs when these loans are repaid or are foreclosed; or when there are improvements in the ratios used to estimate the probability of loan losses. Improvements to the ratios could include lower historical loss rates, improvements to any of the qualitative factors mentioned above, or reduced loss expectations for individually-classified loans.
Management reviews the ACL on a quarterly basis to ensure it is adequate based upon the calculated probable losses inherent in the portfolio. Management believes the ACL was adequately provided for as of March 31, 2024 and acknowledges that the ACL may increase throughout the year as economic conditions may continue to deteriorate for the foreseeable future.
Premises and equipment
The Company’s premises and equipment, net of depreciation, as of March 31, 2024 totaled $15.9 million compared to $16.2 million as of December 31, 2023 and $17.7 million as of March 31, 2023, decreasing from prior year first quarter due to the sale of a branch facility in 2023. Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed by the straight-line method based on the estimated useful lives of assets. Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon disposition, assets and related accumulated depreciation are removed from the books, and any resulting gain or loss is charged to income.
36
As of March 31, 2024, the Company occupied fourteen full-service banking facilities throughout Albemarle, Fauquier and Prince William counties and the cities of Charlottesville, Richmond, Manassas and Winchester, Virginia. The Company also operates a drive-through location at 301 East Water Street, Charlottesville, Virginia.
The five-story office building at 404 People Place, Charlottesville, Virginia, located in Albemarle County, also serves as the Company’s corporate headquarters and operations center. VNB Trust & Estate Services is located at 103 Third Street, SE, Charlottesville, Virginia.
Both the Arlington Boulevard facility in Charlottesville and the People Place facility in Albemarle County also contain office space that is currently under lease to tenants.
Leases
As of March 31, 2024, the Company has recorded $6.7 million of right-of-use assets and $6.5 million of lease liabilities, in accordance with ASU 2016-02 “Leases” (Topic 842). As of December 31, 2023, $6.7 million of right-of-use assets and $6.5 million of lease liabilities were included on the balance sheet. Right-of-use assets are assets that represent the Company’s right to use, or control the use of, a specified asset for the lease term, offset by the lease liability, which is the Company’s obligation to make lease payments arising from a lease, measured on a discounted basis.
Deposits
Deposit accounts represent the Company’s primary source of funds and are comprised of demand deposits, interest-bearing checking, money market, and savings accounts as well as time deposits. These deposits have been provided predominantly by individuals, businesses and charitable organizations in the Commonwealth of Virginia.
Total deposits as of March 31, 2024 were $1.4 billion, a decrease of $22.9 million compared to December 31, 2023, and a decrease of $34.7 million compared to March 31, 2023 (dollars in thousands). As stated above, during 2022, the Company made a strategic decision to delay increasing rates paid on deposit accounts. As a result, the Company experienced expected declines in deposit balances during 2022 and the first half of 2023. Since then, deposit balances have continued to increase modestly as a result of renewed emphasis on relationship banking.
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
|||||||||||||||
|
|
|
|
|
% of |
|
|
|
|
|
% of |
|
|
|
|
|
% of |
|
||||||
|
|
Balance |
|
|
Total |
|
|
Balance |
|
|
Total |
|
|
Balance |
|
|
Total |
|
||||||
No cost and low cost deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest demand deposits |
|
$ |
382,315 |
|
|
|
26.7 |
% |
|
$ |
372,857 |
|
|
|
26.5 |
% |
|
$ |
448,094 |
|
|
|
32.1 |
% |
Interest checking accounts |
|
|
284,789 |
|
|
|
19.9 |
% |
|
|
305,541 |
|
|
|
21.7 |
% |
|
|
360,652 |
|
|
|
25.8 |
% |
Money market and savings deposit accounts |
|
|
415,311 |
|
|
|
29.0 |
% |
|
|
412,119 |
|
|
|
29.2 |
% |
|
|
418,795 |
|
|
|
30.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total noninterest and low cost deposit accounts |
|
|
1,082,415 |
|
|
|
75.6 |
% |
|
|
1,090,517 |
|
|
|
77.4 |
% |
|
|
1,227,541 |
|
|
|
87.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Time deposit accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Certificates of deposit |
|
|
341,542 |
|
|
|
23.8 |
% |
|
|
311,378 |
|
|
|
22.1 |
% |
|
|
165,591 |
|
|
|
11.8 |
% |
CDARS deposits |
|
|
8,015 |
|
|
|
0.6 |
% |
|
|
7,203 |
|
|
|
0.5 |
% |
|
|
4,128 |
|
|
|
0.3 |
% |
Total certificates of deposit and other time deposits |
|
|
349,557 |
|
|
|
24.4 |
% |
|
|
318,581 |
|
|
|
22.6 |
% |
|
|
169,719 |
|
|
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total deposit account balances |
|
$ |
1,431,972 |
|
|
|
100.0 |
% |
|
$ |
1,409,098 |
|
|
|
100.0 |
% |
|
$ |
1,397,260 |
|
|
|
100.0 |
% |
Noninterest-bearing demand deposits on March 31, 2024 were $382.3 million, representing 26.7% of total deposits. Interest-bearing transaction, money market, and savings accounts totaled $700.1 million, and represented 48.9% of total deposits at March 31, 2024. Collectively, noninterest-bearing and interest-bearing transaction, money market and savings accounts represented 75.6% of total deposit accounts at March 31, 2024. These account types are an excellent source of low-cost funding for the Company.
37
The Company also offers insured cash sweep deposit products. ICS® deposit balances of $31.2 million and $112.8 million are included in the interest checking accounts and in the money market and savings deposit accounts balances, respectively, in the table above, as of March 31, 2024. As of December 31, 2023, ICS® deposit balances of $44.2 million and $107.4 million are included in the interest checking accounts and in the money market and savings deposit account balances, respectively. All ICS® accounts consist of reciprocal balances for the Company’s customers. The Company currently holds no brokered or specialty CDs.
The remaining 24.4% of total deposits consisted of certificates of deposit and other time deposit accounts totaling $349.6 million at March 31, 2024, increasing over the balances as of December 31, 2023 as a result of several interest rate promotions that the Bank continued in the first quarter of 2024. Included in these deposit totals are CDARSTM, whereby depositors can obtain FDIC deposit insurance on account balances of up to $50 million. CDARSTM deposits totaled $8.0 million as of March 31, 2024 and $7.2 million as of December 31, 2023, all of which were reciprocal balances for the Company’s customers.
As of March 31, 2024 and December 31, 2023, the estimated amounts of uninsured deposits were $366.8 million, or 25.6% and $360.0 million, or 25.5% of total deposits, respectively.
Federal funds purchased
The Company purchased no federal funds as of March 31, 2024, $3.5 million at December 31, 2023 and no federal funds at March 31, 2023. As noted in the Federal funds sold section previously, any excess funds are sold on a daily basis in the federal funds market and Federal funds are purchased as needed to meet liquidity needs.
Borrowings
Borrowings, consisting primarily of FHLB advances and Federal funds purchased, are additional sources of funds for the Company. The level of these borrowings is determined by various factors, including customer demand and the Company's ability to earn a favorable spread on the funds obtained.
As of March 31, 2024, based on the FHLB’s evaluation, the Company has an available credit position of $411 million, for which access can be negotiated based on multiple factors. The Company currently has a collateral dependent line of credit with the FHLB for $90.2 million, secured by commercial mortgages, with borrowings of $20.0 million as of March 31, 2024. As of December 31, 2023, there were $66.5 million in outstanding borrowings with the FHLB. At March 31, 2023, the Company had a $30.0 million letter of credit issued in favor of the Commonwealth of Virginia Department of the Treasury to secure public fund depository accounts. The letter of credit was secured under the collateral dependent line of credit described above and was retired in the second quarter of 2023.
Additional borrowing arrangements maintained by the Company include formal unsecured federal funds lines with six major regional correspondent banks for a total of $119.0 million and a secured line with the Federal Reserve discount window in the amount of $4.0 million, based on the market value of the collateral. See above for outstanding balances in Federal funds purchased as of the dates presented.
Junior Subordinated Debt
In 2006, a subsidiary of Fauquier, Fauquier Statutory Trust II, privately issued $4.0 million face amount of the trust’s Floating Rate Capital Securities in a pooled capital securities offering. Simultaneously, the trust used the proceeds of that sale to purchase $4.0 million principal amount of the Fauquier’s Floating Rate Junior Subordinated Deferrable Interest Debentures due 2036. As of March 31, 2024 and December 31, 2023, total capital securities were $3.5 million, as adjusted to fair value as of the date of the Merger. Historically, the interest rate on the capital security reset every three months at 1.70% above the then current three-month LIBOR and was paid quarterly. With the cessation of LIBOR, on September 13, 2023, the rate converted to a spread adjustment of 0.03% plus a margin of 1.70% above the three-month CME Term SOFR.
The Trust II issuance of capital securities and the respective subordinated debentures are callable at any time. The subordinated debentures are an unsecured obligation of the Company and are junior in right of payment to all present and future senior indebtedness of the Company. The capital securities are guaranteed by the Company on a subordinated basis.
38
Shareholders' equity and regulatory capital ratios
The following table displays the changes in shareholders' equity for the Company from December 31, 2023 to March 31, 2024 (dollars in thousands):
Equity, December 31, 2023 |
|
$ |
153,040 |
|
Net income |
|
|
3,646 |
|
Other comprehensive loss |
|
|
(2,508 |
) |
Cash dividends declared |
|
|
(1,770 |
) |
Shares repurchased |
|
|
(26 |
) |
Equity increase due to expensing of stock options |
|
|
24 |
|
Equity increase due to expensing of restricted stock |
|
|
171 |
|
Equity, March 31, 2024 |
|
$ |
152,577 |
|
The Basel III capital rules require banks and bank holding companies to comply with the following minimum capital ratios: (i) a ratio of common equity Tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7%); (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum Tier 1 capital ratio of 8.5%); (iii) a ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.5%); and (iv) a leverage ratio of 4%, calculated as the ratio of Tier 1 capital to balance sheet exposures plus certain off-balance sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter).
The Company’s Tier 1, common equity Tier 1, total capital to risk-weighted assets, and leverage ratios were 17.67%, 17.67%, 18.49% and 11.24%, respectively, as of March 31, 2024, thus exceeding the minimum requirements. The Bank’s Tier 1, common equity Tier 1, total capital to risk-weighted assets, and leverage ratios were 17.48%, 17.48%, 18.29% and 11.17%, respectively, as of March 31, 2024, also exceeding the minimum requirements.
As of March 31, 2024, the Bank exceeded all of the following minimum capital ratios in order to be considered “well capitalized” under the PCA regulations, as revised: (i) a common equity Tier 1 capital ratio of at least 6.5%; (ii) a Tier 1 capital to risk-weighted assets ratio of at least 8.0%; (iii) a total capital to risk-weighted assets ratio of at least 10.0%; and (iv) a leverage ratio of at least 5.0%.
RESULTS OF OPERATIONS
Non-GAAP presentations
The accounting and reporting policies of the Company conform to GAAP and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of the Company’s performance. These include tangible book value per share, tangible equity and the following fully-taxable equivalent measures: net interest income-FTE, efficiency ratio-FTE and net interest margin-FTE. Interest on tax-exempt loans and securities is presented on a taxable-equivalent basis (which converts the income on loans and investments for which no income taxes are paid to the equivalent yield as if income taxes were paid) using the federal corporate income tax rate of 21 percent that was applicable for all periods presented.
Management believes that the use of these non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods, other financial institutions, and between different sources of interest income. The non-GAAP measures used by management enhance comparability by excluding the effects of (1) items that do not reflect ongoing operating performance, (2) balances of intangible assets, including goodwill, that vary significantly between institutions, and (3) tax benefits that are not consistent across different opportunities for investment. These non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements, and other banks and bank holding companies may define or calculate these or similar measures differently. Net income is discussed in Management’s Discussion and Analysis on a GAAP basis unless noted as “non-GAAP.”
39
A reconcilement of the non-GAAP financial measures used by the Company to evaluate and measure the Company's performance to the most directly comparable GAAP financial measures is presented below (dollars in thousands, except for the per share data):
|
|
As of or for the Three Months Ended |
|
|||||
|
|
March 31, |
|
|
March 31, |
|
||
Fully tax-equivalent measures |
|
|
|
|
|
|
||
Net interest income |
|
$ |
10,936 |
|
|
$ |
13,413 |
|
Fully tax-equivalent adjustment |
|
|
87 |
|
|
|
87 |
|
Net interest income (FTE) |
|
$ |
11,023 |
|
|
$ |
13,500 |
|
|
|
|
|
|
|
|
||
Efficiency ratio |
|
|
67.2 |
% |
|
|
56.5 |
% |
Fully tax-equivalent adjustment |
|
|
-0.4 |
% |
|
|
-0.4 |
% |
Efficiency ratio (FTE) |
|
|
66.8 |
% |
|
|
56.1 |
% |
|
|
|
|
|
|
|
||
Net interest margin |
|
|
2.91 |
% |
|
|
3.69 |
% |
Fully tax-equivalent adjustment |
|
|
0.02 |
% |
|
|
0.02 |
% |
Net interest margin (FTE) |
|
|
2.93 |
% |
|
|
3.71 |
% |
|
|
|
|
|
|
|
||
Other financial measures |
|
|
|
|
|
|
||
Book value per share |
|
$ |
28.31 |
|
|
$ |
26.51 |
|
Impact of intangible assets |
|
|
(2.32 |
) |
|
|
(2.62 |
) |
Tangible book value per share (non-GAAP) |
|
$ |
25.99 |
|
|
$ |
23.89 |
|
|
|
|
|
|
|
|
||
Total equity |
|
$ |
152,577 |
|
|
$ |
141,497 |
|
Impact of intangible assets |
|
|
(12,518 |
) |
|
|
(13,963 |
) |
Tangible equity |
|
$ |
140,059 |
|
|
$ |
127,534 |
|
Net income
Net income for the three months ended March 31, 2024 was $3.6 million, a $2.1 million decrease compared to $5.8 million reported for the three months ended March 31, 2023. Net income per diluted share was $0.68 for the three months ended March 31, 2024 compared to $1.08 per diluted share for the same period in the prior year.
Net interest income
Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets for the period. The level of interest rates, together with the volume and mix of earning assets and interest-bearing liabilities, impact net interest income (FTE) and net interest margin (FTE).
Net interest income (FTE) for the three months ended March 31, 2024 was $11.0 million, a $2.5 million decrease compared to net interest income (FTE) of $13.5 million for the three months ended March 31, 2023. The increase in average loan balances, from $932.8 million for the three months ended March 31, 2023 to $1.1 billion for the three months ended March 31, 2024, positively impacted interest income by $2.5 million. This metric was however negatively impacted by the decrease in the average balances of securities, decreasing from $514.5 million in the three months ended March 31, 2023 to $370.3 in the three months ended March 31, 2024, negatively impacting interest income (FTE) by $1.1 million period over period. Interest expense increased $4.7 million, also negatively impacting net interest margin (FTE), compared to the same period in the prior year. The net interest margin (FTE) of 2.93% for the three months ended March 31, 2024 was 78 bps lower than the 3.71% for the three months ended March 31, 2023. Overall, the cost of interest-bearing deposits increased period over period, from a cost of 109 bps to 273 bps. A $3.4 million increase in average balances of time deposit product with premium rates drove interest expense higher for the first 3 months of 2024. The cost of Federal funds purchased positively impacted net interest margin (FTE) by $158 thousand compared to the same period in the prior year due to
40
reduced average balances while the cost of borrowings negatively impacted net interest margin (FTE) by $52 thousand as compared to the same period in the prior year due to increased average balances.
Refer to the Reconcilement of Non-GAAP Measures table within the Non-GAAP presentations section for a reconcilement of GAAP to non-GAAP net interest margin.
The following tables detail the average balance sheet, including an analysis of net interest income (FTE) for earning assets and interest-bearing liabilities, for the three months ended March 31, 2024 and 2023. These tables also include rate/volume analyses for these same periods (dollars in thousands).
Consolidated Average Balance Sheet and Analysis of Net Interest Income
|
|
For the Three Months Ended |
|
|
|
|
|
|
||||||||||
|
|
March 31, 2024 |
|
March 31, 2023 |
|
Change in Interest Income/ Expense |
||||||||||||
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
Change Due to : 4 |
|
Total |
||
|
|
Balance |
|
Income/ |
|
Yield/Cost |
|
Balance |
|
Income/ |
|
Yield/Cost |
|
Volume |
|
Rate |
|
Increase/ |
|
|
|
|
Expense |
|
|
|
|
|
Expense |
|
|
|
|
|
|
|
(Decrease) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Securities |
|
$303,736 |
|
$2,277 |
|
3.00% |
|
$447,428 |
|
$3,018 |
|
2.70% |
|
$(1,049) |
|
$308 |
|
$(741) |
Tax Exempt Securities 1 |
|
66,589 |
|
413 |
|
2.48% |
|
67,083 |
|
414 |
|
2.47% |
|
(3) |
|
2 |
|
(1) |
Total Securities 1 |
|
370,325 |
|
2,690 |
|
2.91% |
|
514,511 |
|
3,432 |
|
2.67% |
|
(1,052) |
|
310 |
|
(742) |
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
905,485 |
|
12,543 |
|
5.57% |
|
816,742 |
|
11,140 |
|
5.53% |
|
1,227 |
|
176 |
|
1,403 |
Commercial |
|
174,377 |
|
2,424 |
|
5.59% |
|
72,035 |
|
874 |
|
4.92% |
|
1,406 |
|
144 |
|
1,550 |
Consumer |
|
37,708 |
|
694 |
|
7.40% |
|
44,057 |
|
753 |
|
6.93% |
|
(114) |
|
55 |
|
(59) |
Total Loans |
|
1,117,570 |
|
15,661 |
|
5.64% |
|
932,834 |
|
12,767 |
|
5.55% |
|
2,519 |
|
375 |
|
2,894 |
Federal funds sold |
|
17,624 |
|
239 |
|
5.45% |
|
10 |
|
— |
|
0.00% |
|
— |
|
239 |
|
239 |
Other interest-bearing deposits |
|
8,405 |
|
57 |
|
2.73% |
|
28,262 |
|
258 |
|
3.70% |
|
(108) |
|
(93) |
|
(201) |
Total Earning Assets |
|
1,513,924 |
|
18,647 |
|
4.95% |
|
1,475,617 |
|
16,457 |
|
4.52% |
|
1,359 |
|
831 |
|
2,190 |
Less: Allowance for Credit Losses |
|
(8,413) |
|
|
|
|
|
(8,091) |
|
|
|
|
|
|
|
|
|
|
Total Non-Earning Assets |
|
109,862 |
|
|
|
|
|
114,477 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$1,615,373 |
|
|
|
|
|
$1,582,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Checking |
|
$282,825 |
|
$71 |
|
0.10% |
|
$361,894 |
|
$89 |
|
0.10% |
|
$(20) |
|
$2 |
|
$(18) |
Money Market and Savings Deposits |
|
411,973 |
|
2,922 |
|
2.85% |
|
448,870 |
|
1,773 |
|
1.60% |
|
(157) |
|
1,306 |
|
1,149 |
Time Deposits |
|
341,083 |
|
4,050 |
|
4.78% |
|
127,386 |
|
648 |
|
2.06% |
|
1,895 |
|
1,507 |
|
3,402 |
Total Interest-Bearing Deposits |
|
1,035,881 |
|
7,043 |
|
2.73% |
|
938,150 |
|
2,510 |
|
1.09% |
|
1,718 |
|
2,815 |
|
4,533 |
Borrowings |
|
42,154 |
|
486 |
|
4.64% |
|
27,848 |
|
326 |
|
4.75% |
|
(63) |
|
11 |
|
(52) |
Federal funds purchased |
|
495 |
|
7 |
|
5.69% |
|
5,130 |
|
60 |
|
4.74% |
|
160 |
|
(2) |
|
158 |
Junior subordinated debt |
|
3,465 |
|
88 |
|
10.21% |
|
3,417 |
|
61 |
|
7.24% |
|
1 |
|
27 |
|
28 |
Total Interest-Bearing Liabilities |
|
1,081,995 |
|
7,624 |
|
2.83% |
|
974,545 |
|
2,957 |
|
1.23% |
|
1,816 |
|
2,851 |
|
4,667 |
Non-Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
368,535 |
|
|
|
|
|
464,801 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
11,537 |
|
|
|
|
|
8,989 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
1,462,067 |
|
|
|
|
|
1,448,335 |
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity |
|
153,306 |
|
|
|
|
|
133,668 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities & Shareholders' Equity |
|
$1,615,373 |
|
|
|
|
|
$1,582,003 |
|
|
|
|
|
|
|
|
|
|
Net Interest Income (FTE) |
|
|
|
$11,023 |
|
|
|
|
|
$13,500 |
|
|
|
$(457) |
|
$(2,020) |
|
$(2,477) |
Interest Rate Spread 2 |
|
|
|
|
|
2.12% |
|
|
|
|
|
3.29% |
|
|
|
|
|
|
Cost of Funds |
|
|
|
|
|
2.11% |
|
|
|
|
|
0.83% |
|
|
|
|
|
|
Interest Expense as a Percentage of Average Earning Assets |
|
|
|
|
|
2.03% |
|
|
|
|
|
0.81% |
|
|
|
|
|
|
Net Interest Margin (FTE) 3 |
|
|
|
|
|
2.93% |
|
|
|
|
|
3.71% |
|
|
|
|
|
|
41
The Company believes that higher interest rates will continue to have a positive effect on yields of variable rate loans, new loan originations and purchases/reinvestment of AFS securities. The Company also understands that the cost of deposits may increase as competition for deposits increases and as time deposits reprice at maturity. A portion of the Company’s funding may continue to be drawn from borrowings in the near term, also resulting in a higher cost of funds. The effect of these factors on the Corporation’s net interest margin (FTE) will depend on a number of factors, including the Company’s ability to continue to increase the loan portfolio, compete for deposits and manage its borrowings. The Company can give no assurance as to the timing or extent of further increases in market interest rates or the impact of rising interest rates or any other factor on the Company's net interest margin (FTE). Alternatively, if market interest rates begin to decline, the Company’s net interest margin (FTE) may be adversely affected as the Company generally expects its assets to reprice more quickly than its deposits and borrowings.
Provision for credit losses
A recovery of provision for credit losses of $22 thousand was recognized during the three months ended March 31, 2024 compared to a recovery of provision for loan losses of $248 thousand recognized during the three months ended March 31, 2023. The first quarter 2024 recovery of provision for credit losses was comprised of $11 thousand of provision for loan losses and $33 thousand of recovery for provision for losses on unfunded commitments.
A significant portion of the increase in loan balances in the first quarter of 2024 was attributable to the purchase of government-guaranteed loans which do not require an ACL. No changes have been made to the qualitative factor methodology since January 1, 2023.
Further discussion of management’s assessment of the ACL is provided earlier in the report and in Note 5 – Allowance for Credit Losses, found in the Notes to the Consolidated Financial Statements. In management’s opinion, the ACL was adequately provided for at March 31, 2024. The ACL calculation, provision for credit losses, asset quality and collateral values may be significantly impacted by deterioration in economic conditions. Should economic conditions worsen, we could experience further increases in our required ACL and record additional provision for credit loss exposure.
Noninterest income
The components of noninterest income for the three months ended March 31, 2024 and 2023 are shown below (dollars in thousands):
|
|
For the Three Months Ended |
|
|
Variance |
|
||||||||||
|
|
March 31, |
|
|
March 31, |
|
|
$ |
|
|
% |
|
||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Wealth management fees |
|
$ |
426 |
|
|
$ |
404 |
|
|
$ |
22 |
|
|
|
5.4 |
% |
Deposit account fees |
|
|
387 |
|
|
|
401 |
|
|
|
(14 |
) |
|
|
-3.5 |
% |
Debit/credit card and ATM fees |
|
|
488 |
|
|
|
571 |
|
|
|
(83 |
) |
|
|
-14.5 |
% |
Bank owned life insurance income |
|
|
275 |
|
|
|
252 |
|
|
|
23 |
|
|
|
9.1 |
% |
Gains (losses) on sale of assets |
|
|
39 |
|
|
|
(1 |
) |
|
|
40 |
|
|
|
- |
|
Gain on early redemption of debt |
|
|
379 |
|
|
|
- |
|
|
|
379 |
|
|
|
- |
|
Gain on termination of interest swap |
|
|
- |
|
|
|
460 |
|
|
|
(460 |
) |
|
|
- |
|
Loss on sales of AFS, net |
|
|
(4 |
) |
|
|
(206 |
) |
|
|
202 |
|
|
|
-98.1 |
% |
Other |
|
|
188 |
|
|
|
395 |
|
|
|
(207 |
) |
|
|
-52.4 |
% |
Total noninterest income |
|
$ |
2,178 |
|
|
$ |
2,276 |
|
|
$ |
(98 |
) |
|
|
-4.3 |
% |
Noninterest income for the three months ended March 31, 2024 of $2.2 million was $98 thousand or 4.3% less than the amount recorded for the three months ended March 31, 2023, due primarily to the fact that the gain on the termination of the interest rate swap that occurred in the first quarter of 2023 was $81 thousand more than the gain on the early redemption of debt in the first quarter of 2024.
42
Noninterest expense
The components of noninterest expense for the three months ended March 31, 2024 and 2023 are shown below (dollars in thousands):
|
|
For the Three Months Ended |
|
|
Variance |
|
||||||||||
|
|
March 31, |
|
|
March 31, |
|
|
$ |
|
|
% |
|
||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and employee benefits |
|
$ |
4,152 |
|
|
$ |
4,051 |
|
|
$ |
101 |
|
|
|
2.5 |
% |
Net occupancy |
|
|
972 |
|
|
|
1,179 |
|
|
|
(207 |
) |
|
|
-17.6 |
% |
Equipment |
|
|
171 |
|
|
|
218 |
|
|
|
(47 |
) |
|
|
-21.6 |
% |
Bank franchise tax |
|
|
340 |
|
|
|
324 |
|
|
|
16 |
|
|
|
4.9 |
% |
Computer software |
|
|
208 |
|
|
|
202 |
|
|
|
6 |
|
|
|
3.0 |
% |
Data processing |
|
|
739 |
|
|
|
742 |
|
|
|
(3 |
) |
|
|
-0.4 |
% |
FDIC deposit insurance assessment |
|
|
195 |
|
|
|
100 |
|
|
|
95 |
|
|
|
95.0 |
% |
Marketing, advertising and promotion |
|
|
248 |
|
|
|
375 |
|
|
|
(127 |
) |
|
|
-33.9 |
% |
Professional fees |
|
|
252 |
|
|
|
192 |
|
|
|
60 |
|
|
|
31.3 |
% |
Core deposit intangible amortization |
|
|
343 |
|
|
|
391 |
|
|
|
(48 |
) |
|
|
-12.3 |
% |
Other |
|
|
1,199 |
|
|
|
1,087 |
|
|
|
112 |
|
|
|
10.3 |
% |
Total noninterest expense |
|
$ |
8,819 |
|
|
$ |
8,861 |
|
|
$ |
(42 |
) |
|
|
-0.5 |
% |
Noninterest expense for the quarter ended March 31, 2024 of $8.8 million was $42 thousand or 0.5% lower than the quarter ended March 31, 2023. This decrease is primarily due to reduced occupancy expense of $207 thousand after closing a branch and a reduction of marketing expenses of $127 thousand.
The efficiency ratio (FTE) was 66.8% for the three months ended March 31, 2024 compared to 56.1% for the same quarter of 2023, due predominantly to the decrease in net interest income (FTE), as described above. Refer to the Reconcilement of Non-GAAP Measures table within the Non-GAAP presentations section for a reconcilement of GAAP to non-GAAP efficiency ratio.
Provision for Income Taxes
For the three months ended March 31, 2024 and 2023, the Company provided $671 thousand and $1.3 million for Federal income taxes, respectively, resulting in effective income tax rates of 15.5% and 18.2%, respectively, declining due to the application of prior period tax adjustments. For each period, the effective income tax rate differed from the U.S. statutory rate of 21% due to the recognition of low-income housing tax credits and the effect of tax-exempt income from municipal bonds and bank owned life insurance policies.
43
OTHER SIGNIFICANT EVENTS
None
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required
ITEM 4. CONTROLS AND PROCEDURES
The Company maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective at the reasonable assurance level. There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In the ordinary course of its operations, the Company and/or its subsidiaries are parties to various legal proceedings from time to time. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome of such proceedings, in the aggregate, will not have a material adverse effect on the business or financial condition of the Company and its subsidiaries.
ITEM 1A. RISK FACTORS.
During the quarter ended March 31, 2024, there have been no material changes from the risk factors described in the Company’s Form 10-K for the year ended December 31, 2023. The risks described may not be the only risks facing us. Additional risks and uncertainties not currently known to us or that are currently considered not to be material also may materially adversely affect our business, financial condition and/or operating results.
44
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a) Sales of Unregistered Securities - None
(b) Use of Proceeds - Not Applicable
(c) Issuer Purchases of Securities
Stock Repurchase Program; Other Repurchases
On June 28, 2023, the Company's Board of Directors approved a share repurchase plan of up to 5% of outstanding common stock. The program was announced in a Current Report on Form 8-K on July 17, 2023. The first repurchases of stock under this plan occurred in February 2024. The following table discloses shares of our common stock repurchased during the three months ended March 31, 2024:
|
Total Number of Shares Repurchased |
|
Average Price Paid Per Share (1) |
|
Total Number of Shares Purchased as Part of Publicly Announced Plan |
|
Maximum Number of Shares that May Yet Be Purchased Under the Plan (2) |
|
||||
January 2024 |
|
- |
|
$ |
- |
|
|
- |
|
|
268,299 |
|
February 2024 |
|
874 |
|
|
29.60 |
|
|
874 |
|
|
267,425 |
|
March 2024 |
|
- |
|
|
- |
|
|
- |
|
|
267,425 |
|
|
|
874 |
|
$ |
29.60 |
|
|
874 |
|
|
|
(1) The average price paid per share is calculated on a trade date basis for all open market transactions and excludes commissions and other transaction expenses.
(2) Based on 5% of outstanding shares as of June 28, 2023.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
ITEM 5. OTHER INFORMATION.
None
None
45
ITEM 6. EXHIBITS.
Exhibit Number |
|
Description of Exhibit |
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101 |
|
The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline eXtensible Business Reporting Language, pursuant to Rule 405 of Regulation S-T (1): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Shareholders' Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited), tagged as blocks of text and including detailed tags
|
104 |
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline eXtensible Business Reporting Language (included with Exhibit 101.0) |
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
VIRGINIA NATIONAL BANKSHARES CORPORATION |
||
(Registrant) |
||
|
|
|
|
|
/s/ Glenn W. Rust |
|
|
Glenn W. Rust |
|
|
President and Chief Executive Officer (principal executive officer) |
|
|
|
Date: |
|
May 15, 2024 |
|
|
|
|
|
/s/ Tara Y. Harrison |
|
|
Tara Y. Harrison |
|
|
Executive Vice President and Chief Financial Officer |
|
|
(principal financial and accounting officer)
|
Date: |
|
May 15, 2024 |
47
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Glenn W. Rust, certify that:
Date: May 15, 2024
/s/ Glenn W. Rust |
Glenn W. Rust |
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Tara Y. Harrison, certify that:
Date: May 15, 2024
/s/ Tara Y. Harrison |
Tara Y. Harrison |
Executive Vice President and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Virginia National Bankshares Corporation (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that, based on their knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
/s/ Glenn W. Rust |
Glenn W. Rust, President and Chief Executive Officer |
/s/ Tara Y. Harrison |
Tara Y. Harrison, Executive Vice President and Chief Financial Officer |
|
May 15, 2024 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 2.5 | $ 2.5 |
Common stock, par value per share | $ 2.5 | $ 2.5 |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Interest and dividend income: | ||
Loans, including fees | $ 15,661 | $ 12,767 |
Federal funds sold | 239 | |
Other interest-bearing deposits | 57 | 258 |
Investment securities: | ||
Taxable | 2,159 | 2,951 |
Tax exempt | 326 | 327 |
Dividends | 118 | 67 |
Total interest and dividend income | 18,560 | 16,370 |
Interest expense: | ||
Demand deposits | 71 | 89 |
Money market and savings deposits | 2,922 | 1,773 |
Certificates and other time deposits | 4,050 | 648 |
Federal funds purchased | 7 | 60 |
Short-term borrowings | 486 | 326 |
Junior subordinated debt | 88 | 61 |
Total interest expense | 7,624 | 2,957 |
Net interest income | 10,936 | 13,413 |
Recovery of credit losses | (22) | (248) |
Net interest income after recovery of credit losses | 10,958 | 13,661 |
Noninterest income: | ||
Wealth management fees | 426 | 404 |
Deposit account fees | 387 | 401 |
Debit/credit card and ATM fees | 488 | 571 |
Bank owned life insurance income | 275 | 252 |
Gains (losses) on sale of assets | 39 | (1) |
Gain on early redemption of debt | 379 | |
Gain on termination of interest swap | 460 | |
Loss on sales of AFS, net | (4) | (206) |
Other | 188 | 395 |
Total noninterest income | 2,178 | 2,276 |
Noninterest expense: | ||
Salaries and employee benefits | 4,152 | 4,051 |
Net occupancy | 972 | 1,179 |
Equipment | 171 | 218 |
Bank franchise tax | 340 | 324 |
Computer software | 208 | 202 |
Data processing | 739 | 742 |
FDIC deposit insurance assessment | 195 | 100 |
Marketing, advertising and promotion | 248 | 375 |
Professional fees | 252 | 192 |
Core deposit intangible amortization | 343 | 391 |
Other | 1,199 | 1,087 |
Total noninterest expense | 8,819 | 8,861 |
Income before income taxes | 4,317 | 7,076 |
Provision for income taxes | 671 | 1,285 |
Net income | $ 3,646 | $ 5,791 |
Net income per common share, basic | $ 0.68 | $ 1.08 |
Net income per common share, diluted | $ 0.68 | $ 1.08 |
Weighted average common shares outstanding, basic | 5,366,890 | 5,338,099 |
Weighted average common shares outstanding, diluted | 5,380,081 | 5,375,619 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 3,646 | $ 5,791 |
Other comprehensive (loss) income: | ||
Unrealized (losses) gains on securities, net of tax of ($668) and $1,597 for the three months ended March 31, 2024 and 2023, respectively | (2,511) | 6,008 |
Reclassification adjustment for realized gain on termination of interest rate swap, net of tax of $0 and ($97) for the three months ended March 31, 2024 and 2023, respectively | (363) | |
Reclassification adjustment for realized losses on securities, net of tax of $1 and $43 for the three months ended March 31, 2024 and 2023, respectively | 3 | 163 |
Unrealized gains (losses) on interest rate swaps, net of tax of $0 and ($9) for the three months ended March 31, 2024 and 2023, respectively | (37) | |
Total other comprehensive (loss) income | (2,508) | 5,771 |
Total comprehensive income | $ 1,138 | $ 11,562 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Change in unrealized losses on available-for-sale securities, tax | $ (668) | $ 1,597 |
Reclassification adjustment for realized gain on termination of interest rate swap, tax | 0 | (97) |
Reclassification adjustment for realized losses on securities, tax | 1 | 43 |
Unrealized gains (losses) on interest rate swaps, tax | $ 0 | $ (9) |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands |
Total |
Common Stock [Member] |
Capital Surplus [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Loss [Member] |
|||
---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2022 | $ 133,416 | $ 13,214 | $ 105,344 | $ 63,482 | $ (48,624) | |||
Exercise of stock options | 18 | 3 | 15 | |||||
Stock option expense | 42 | 42 | ||||||
Restricted stock grant expense | 111 | 111 | ||||||
Vested restricted stock grants | 21 | (21) | ||||||
Cash dividends declared | (1,762) | (1,762) | ||||||
Impact of adoption of CECL | (1,890) | (1,890) | ||||||
Net income | 5,791 | 5,791 | ||||||
Other comprehensive income (loss) | 5,771 | 5,771 | ||||||
Balance at Mar. 31, 2023 | 141,497 | 13,238 | 105,491 | 65,621 | (42,853) | |||
Balance at Dec. 31, 2023 | 153,040 | [1] | 13,258 | 106,045 | 73,781 | (40,044) | ||
Stock option expense | 24 | 24 | ||||||
Restricted stock grant expense | 171 | 171 | ||||||
Vested restricted stock grants | 21 | (21) | ||||||
Shares repurchased | (26) | (2) | (24) | |||||
Cash dividends declared | (1,770) | (1,770) | ||||||
Net income | 3,646 | 3,646 | ||||||
Other comprehensive income (loss) | (2,508) | (2,508) | ||||||
Balance at Mar. 31, 2024 | $ 152,577 | $ 13,277 | $ 106,195 | $ 75,657 | $ (42,552) | |||
|
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (Unaudited) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared, per share | $ 0.33 | $ 0.33 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,646 | $ 5,791 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Recovery of credit losses | (22) | (248) |
Net accretion of certain acquisition-related adjustments | (576) | (1,517) |
Amortization of intangible assets | 343 | 391 |
Net accretion of securities | (51) | (576) |
Net losses on sale of AFS | 4 | 206 |
Net gain on early redemption of debt | (379) | |
Net (gains) losses on sale of assets | (39) | 1 |
Earnings on bank owned life insurance | (275) | (252) |
Depreciation and other amortization | 738 | 882 |
Stock option expense | 24 | 42 |
Stock grant expense | 171 | 111 |
Net change in: | ||
Accrued interest receivable and other assets | (1,255) | (200) |
Accrued interest payable and other liabilities | 790 | 2,380 |
Net cash provided by operating activities | 3,119 | 7,011 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net increase (decrease) in restricted investments | 2,193 | (613) |
Proceeds from maturities, calls, sales and principal payments of available for sale securities | 75,610 | 53,596 |
Net change in loans | (34,999) | (2,055) |
Proceeds from sale of premises and equipment | 44 | 962 |
Purchase of bank premises and equipment | (31) | (236) |
Net cash provided by investing activities | 42,817 | 51,654 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in demand deposits, interest checking, money market and savings accounts | (8,102) | (135,692) |
Net change in certificates of deposit and other time deposits | 30,976 | 54,619 |
Net change in Federal funds purchased | (3,462) | |
Net change in other borrowings | (46,500) | 19,250 |
Proceeds from termination of interest swap | 460 | |
Proceeds from stock options exercised | 18 | |
Repurchase of shares of stock | (26) | |
Cash dividends paid | (1,770) | (1,762) |
Net cash used in financing activities | (28,884) | (63,107) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 17,052 | (4,442) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 28,390 | 40,136 |
End of period | 45,493 | 35,694 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest | 7,099 | 2,827 |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Unrealized (losses) gains on available for sale securities | (3,175) | $ 7,812 |
Initial right-of-use assets obtained in exchange for new operating lease liabilities | $ (281) |
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Principles of Consolidation: The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. The statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2023. Nature of Operations: The accompanying unaudited consolidated financial statements include the accounts of the Company, and its subsidiaries Virginia National Bank and Masonry Capital Management, LLC, a registered investment advisor. The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. Effective April 1, 2024, the Company sold the membership interests in Masonry Capital Management, LLC to an officer of the Company. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. All significant intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation: The preparation of financial statements in conformity with GAAP and the reporting guidelines prescribed by regulatory authorities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ACL, accounting for business combinations, including loans acquired in the business combination, ACL on individually evaluated loans, goodwill impairment, credit losses of securities, other intangible assets, and fair value measurements. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. Reclassifications: If needed, certain previously reported amounts have been reclassified to conform to current period presentation. No such reclassifications were considered material. |
Recent Significant Accounting Pronouncements |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Recent Significant Accounting Pronouncements | Note 2. Recent Significant Accounting Pronouncements Accounting Standards Adopted in 2024: In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 was effective for the Company on January 1, 2024. The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements. Accounting Standards Issued but Not Yet Adopted: On March 29, 2024, the FASB issued ASU 2024-02, Codification Improvements- Amendments to Remove References to the Concepts Statements, which amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The ASU is effective January 1, 2025 and is not expected to have a significant impact on the Company’s financial statements. Recently Issued Disclosure Rules: In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will start to phase in commencing with the Company's fiscal year beginning January 1, 2026. Refer to Note 1, "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in the 2023 Annual Report on Form 10-K for a discussion of the Company's significant accounting policies and new accounting guidance applicable to the Company that will be adopted in future periods. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows. |
Securities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Note 3. Securities The amortized cost and fair values of securities available for sale as of March 31, 2024 and December 31, 2023 were as follows (dollars in thousands):
As of March 31, 2024, there were $334.5 million or 279 issues of individual securities, held in an unrealized loss position. These securities have an unrealized loss of $54.0 million and consist of 117 mortgage-backed/collateralized mortgage obligations, 125 municipal bonds, 21 agency bonds, 5 treasury bonds and 11 corporate bonds. Accrued interest receivable on AFS securities as of March 31, 2024 amounted to $2.0 million. The following tables summarize all securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, for which no allowance for credit losses was recorded, at March 31, 2024, and December 31, 2023 (dollars in thousands):
The Company’s securities portfolio is primarily made up of fixed rate instruments, the prices of which move inversely with interest rates. Any unrealized losses are considered by management to be driven by increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the instruments approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses. Impairment of debt securities occurs when the fair value of a security is less than its amortized cost. The Company has elected to exclude accrued interest receivable from the amortized cost basis. For debt securities AFS, impairment is recognized in its entirety in net income if either, (i) we intend to sell the security; or, (ii) it is more-likely-than-not that we will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-likely-than-not that the Company will be required to sell the security before recovery, the Company evaluates unrealized losses to determine whether a decline in fair value below amortized cost basis is a result of a credit loss, which occurs when the amortized cost basis of the security exceeds the present value of the cash flows expected to be collected from the security, or other factors such as changes in market interest rates. If a credit loss exists, an ACL is recorded that reflects the amount of the impairment related to credit losses, limited by the amount by which the security’s amortized cost basis exceeds its fair value. Changes in the ACL are recorded in net income in the period of change and are included in the provision for credit losses. Changes in the fair value of debt securities AFS not resulting from credit losses are recorded in other comprehensive income (loss). The Company regularly reviews unrealized losses in its investments in securities and cash flows expected to be collected from impaired securities based on criteria including the extent to which market value is below amortized cost, the financial health of and specific prospects for the issuer, the Company’s intention with regard to holding the security to maturity and the likelihood that the Company would be required to sell the security before recovery. Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality. In addition, issuers have continued to make timely payments of principal and interest. Accordingly, as of March 31, 2024, management believes the impairments detailed in the table above are temporary, and no credit loss has been realized in the Company’s consolidated income statement. Additionally, management has the ability to hold any security with an unrealized loss until maturity or until such time as the value of the security has recovered from its unrealized loss position. Securities pledged as collateral to secure public deposits and to facilitate borrowing from the FRB had carrying values of $21.5 million and $21.8 million at March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023, the Company sold AFS securities with a total book value of $39.6 million, incurring a pre-tax loss of $4 thousand, and AFS securities with a book value of $49.9 million incurring a loss of $206 thousand, respectively. Each of these sales was executed as the result of a strategic decision to reinvest proceeds into higher yielding assets. Restricted securities are securities with limited marketability and consist of stock in the FRB, the Federal Home Loan Bank of Atlanta, CBB Financial Corporation (the holding company for Community Bankers' Bank) and an investment in an SBA loan fund. These restricted securities, totaling $6.2 million and $8.4 million as of March 31, 2024 and December 31, 2023, respectively, are carried at cost.
The amortized cost and fair value of AFS debt securities at March 31, 2024 are presented below based upon contractual maturities, by major investment categories (dollars in thousands). Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.
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Loans |
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Loans and Leases Receivable Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Note 4. Loans The composition of the loan portfolio by major loan classifications at March 31, 2024 and December 31, 2023, stated at their face amount, net of deferred fees and costs and discounts, including fair value marks, appears below (dollars in thousands). The Company has elected to exclude accrued interest receivable, totaling $4.6 million as of March 31, 2024, from the amortized cost basis of loans.
The balances in the table above include unamortized premiums and net deferred loan costs and fees. As of March 31, 2024 and December 31, 2023, unamortized premiums from purchases of loans (excluding loans acquired during the Merger) were $6.2 million, and $4.6 million, respectively, due primarily to purchases of government-guaranteed loans. Net deferred loan costs and fees totaled $2.5 million as of March 31, 2024 and December 31, 2023. Consumer loans include $49 thousand and $252 thousand of demand deposit overdrafts as of March 31, 2024 and December 31, 2023, respectively. Loans acquired in business combinations are recorded in the consolidated balance sheets at fair value at the acquisition date under the acquisition method of accounting. The fair value mark as of the Effective Date was $23.1 million. The table above includes a remaining net fair value mark of $8.8 million as of March 31, 2024 on the Acquired Loans. The following table shows the aging of the Company's loan portfolio, by class, at March 31, 2024 (dollars in thousands):
The following table shows the aging of the Company's loan portfolio, by class, at December 31, 2023 (dollars in thousands):
The following table shows the Company's amortized cost basis of loans on nonaccrual status as of March 31, 2024 (dollars in thousands). All nonaccrual loans are evaluated for an ACL on an individual basis. As of March 31, 2024, no nonaccrual loans required an ACL, and as of December 31, 2023, only one nonaccrual loan required an ACL, in the amount of $4 thousand, due to collateral value shortfall.
The following table shows the Company's amortized cost basis of loans on nonaccrual status as of December 31, 2023 (dollars in thousands).
From time to time, the Company modifies loans to borrowers who are experiencing financial difficulties by providing term extensions, interest rate reductions or other-than-insignificant payment delays. As the effect of most modifications is already included in the ACL due to the measurement methodologies used in its estimate, the ACL is typically not adjusted upon modification. During the three months ended March 31, 2024, one 1-4 family residential mortgage loan was modified for a borrower experiencing financial difficulties, in the amount of $703 thousand and representing 0.002% of this loan segment, by extending the interest-only term and maintaining the original interest rate. During the three months ended March 31, 2023, no loans were modified. The Company closely monitors the performance of all modified loans to understand the effectiveness of its modification efforts. Upon determination, if applicable, that all or a portion of a modified loan is uncollectible, that amount is charged against the ACL. There were no payment defaults during the three months ended March 31, 2024 or 2023 of modified loans that were modified during the previous twelve months. All modified loans are current as of March 31, 2024; at March 31, 2023, all modified loans were current with the exception of two modified student loans totaling $60 thousand.
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Allowance for Credit Losses |
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Allowance For Loan Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses | Note 5. Allowance for Credit Losses The ACL on the loan portfolio is a material estimate for the Company. The Company estimates is ACL on its loan portfolio on a quarterly basis. The Company utilizes two methodologies in its development of the ACL, discounted cash flow and remaining life. • Discounted Cash Flow o DCF models, being periodic in nature, allow for effective incorporation of a reasonable and supportable forecast in a directionally consistent and objective manner. o The analysis aligns well with other calculations/actions outside the ACL estimation, which will mitigate model risk in other areas and allow for symmetrical application. For example, fair value (exit price notion), profitability analysis, IRR calculations, ALM, stress testing, and other forms of cash flow analysis. o Peer data is available for certain inputs (Probability of Default, Loss Given Default) if first-party data is not available or meaningful. This is made possible by the periodic nature of the model. o The DCF methodology is utilized on the following pools: 1) Commercial & Industrial; 2) Construction; 3) Consumer; 4) CRE NonOwner Occupied; 5) CRE Owner Occupied; 6) HELOC & Junior Lien; 7) Residential 1st Lien; and 8) Multifamily.
• Remaining Life o This methodology leverages a quarterly loss rate as well as future expectations of portfolio balances to calculate a reserve. o There are two main strengths of this methodology. First, it is fairly easy to execute and does not rely on large quantities of historical loan-level data. Second, it can satisfy the need to incorporate a reasonable and supportable forecast in a straightforward manner by either applying a forecast policy of “applicable history” or leveraging an actual econometric model for the analysis. o The remaining life methodology is utilized on the following pools: 1) Minute Lender; and 2) Student Loans.
Maximum Loss Rate - Management utilizes the same model to calculate maximum loss rates and expected loss rates for each segment. No additional models or methodologies were used to quantify the maximum loss rate, rather, a worst-case economic environment is utilized in the models. This process ensures symmetry between the maximum loss rate and the quantified loss rate. This process also leverages the well-documented regression models used in model development.
The process for deriving the maximum loss rate is outlined below:
• The economic forecast reflects the worst economic environment observed for each economic factor. This is done by quantifying a rolling 1-year average for each economic factor. Then, the most pessimistic 1-year average observations are captured and utilized as economic forecast inputs within the application. • The economic forecast assumed is a ‘worst-case’ economic environment with inputs reflective of the great recession. • The economic forecast is used to quantify credit risk in the form of Loss Rate. The resulting periodic default and loss rates are applied to the prepayment adjusted amortization schedules for each segment. • The resulting ACL, which represents a lifetime reserve (symmetrical to the base model), is input into the qualitative framework’s maximum loss rate field. The difference between the expected model and the maximum model results are then allocated based on weight and risk assignment.
Qualitative Factors - ASC 326 requires an entity to adjust historical loss information to reflect the extent to which management expects reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The adjustments for reasonable and supportable forecasts may be qualitative in nature and should reflect changes related to relevant data.
The Company utilizes a scorecard approach to assign qualitative factors. The scorecard approach is in alignment with the AICPA audit considerations for CECL which states: These adjustments should be grounded in a methodology that is subject to appropriate governance, challenge, and periodic controlled reevaluation. Such methodology will generally require significant management judgment. The information used to support management’s adjustments may be publicly available information, information specifically developed for the entity via management’s specialist (internal or external), or other relevant and reliable information. The purpose of the qualitative scorecard is to provide a qualitative estimate of the expected credit losses of the current loan portfolio in response to potential limitations of the quantitative model. It is used to aid in the assessment of the unquantifiable factors affecting expected credit losses in the loan portfolio. Benefits of the scorecard include directional consistency, objectivity, controls and quantification framework (auditable).
For each segment, the scorecard calculates the difference between the quantitative expected credit loss and the maximum loss rate. This difference represents all available qualitative adjustment that can be applied to that segment.
Individual Evaluation - In accordance with ASC 326, the Company will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. Loans will not be included in both collective and individual analysis. Individual analysis will establish a specific reserve for each loan, using one of four methods: 1) Fair Value of Collateral Method (Collateral Relationship); 2) Cash Flow Method; 3) Advanced Cash Flow Method; or 4) Loan Pricing Method.
Management has elected to perform an individual evaluation on all loans in nonaccrual status. As of March 31, 2024, after reviewing each loan in nonaccrual status, no specific reserve was deemed necessary. As of March 31, 2023, a specific reserve of $27 thousand was established.
The primary driver in the change in reserves from adoption date of January 1, 2023 to March 31, 2024 was the proportional increase in government-guaranteed loans which do not require an ACL. The following table shows the ACL activity by loan portfolio for the three months ended March 31, 2024 (dollars in thousands):
The following table shows the ACL activity by loan portfolio at December 31, 2023 (dollars in thousands):
The following table presents a breakdown of the provision (recovery) for credit losses for the periods indicated (dollars in thousands):
The following table presents the Company's amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to those loans as of the periods indicated (dollars in thousands):
The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of March 31, 2024 (dollars in thousands). Current period gross write-off amounts represent write-offs for the three months ended March 31, 2024 (dollars in thousands):
The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of December 31, 2023 (dollars in thousands).
Credit Quality Indicators The Company utilizes the following credit quality indicators: Pass Loans with the following risk ratings are pooled by class and considered together as “Pass”: Excellent – minimal risk loans secured by cash or fully guaranteed by a U.S. government agency Good – low risk loans secured by marketable collateral within margin Satisfactory – modest risk loans where the borrower has strong and liquid financial statements and more than adequate cash flow Average – average risk loans where the borrower has reasonable debt service capacity Marginal – acceptable risk loans where the borrower has acceptable financial statements but is leveraged Watch These loans have an acceptable risk but require more attention than normal servicing. Special Mention These potential problem loans are currently protected but are potentially weak. Substandard These problem loans are inadequately protected by the sound worth and paying capacity of the borrower and/or the value of any collateral pledged. These loans may be considered impaired and evaluated on an individual basis. Doubtful Loans with this rating have significant deterioration in the sound worth and paying capacity of the borrower and/or the value of any collateral pledged, making collection or liquidation of the loan in full highly questionable. These loans would be considered impaired and evaluated on an individual basis. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Note 6. Goodwill and Other Intangible Assets The carrying amount of goodwill was $7.8 million at March 31, 2024, December 31, 2023 and March 31, 2023, resulting from the Merger. The Company had $4.8 million, $5.1 million and $6.2 million of other intangible assets as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively. Other intangible assets were recognized in connection with the core deposits acquired from Fauquier in 2021. The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets (dollars in thousands):
Amortization expense was $343 thousand and $391 thousand for the three months ended March 31, 2024 and 2023, respectively. Estimated future amortization expense as of March 31, 2024 is as follows (dollars in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Note 7. Leases Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease for a term similar to the length of the lease, including any probable renewal options available. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term. Payments for leases with terms longer than twelve months are included in the determination of the lease liability. Each of the Company’s long-term lease agreements is classified as an operating lease. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. The following tables present information about the Company’s leases (dollars in thousands):
A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):
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Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Note 8. Net Income Per Share
The table below shows the weighted average number of shares used in computing net income per common share and the effect of the weighted average number of shares of potential dilutive common stock for the three months ended March 31, 2024 and 2023. Diluted net income per share is computed based on the weighted average number of shares of common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options. The recipients of unvested restricted shares have full voting and dividend rights, and as such, unvested restricted stock as of March 31, 2024 and March 31, 2023 is included in the calculation of basic and diluted net income per share (dollars below reported in thousands except per share data).
For the three months ended March 31, 2024, there were 117,601 option shares considered anti-dilutive and excluded from this calculation. For the three months ended March 31, 2023, there were 101,481 option shares considered anti-dilutive and excluded from this calculation. |
Stock Incentive Plans |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Note 9. Stock Incentive Plans At the Annual Shareholders Meeting on June 23, 2022, shareholders approved the Virginia National Bankshares Corporation 2022 Stock Incentive Plan. The 2022 Plan made available up to 150,000 shares of the Company’s common stock to be issued to plan participants. The 2022 Plan provides for granting of both incentive and nonqualified stock options, as well as restricted stock, unrestricted stock and other stock based awards. No new grants can be issued under the 2014 Stock Incentive Plan or the 2005 Stock Incentive Plan as those plans have expired. For the 2022 Plan, the option price for any stock options cannot be less that the fair value of the Company’s stock on the grant date. In addition, 95% of the common stock authorized for issuance must have a vesting or exercise schedule of at least one year. For the 2014 Plan and the 2005 Plan, the option price of incentive stock options cannot be less than the fair value of the stock at the time an option is granted and nonqualified stock options may be granted at prices established by the Board of Directors, including prices less than the fair value on the date of grant. Outstanding stock options generally expire ten years from the grant date. Stock options generally vest by the fourth or fifth anniversary of the date of the grant. A summary of the shares issued and available under each of the Plans is shown below as of March 31, 2024. Share data and exercise price range per share have been adjusted to reflect prior issued stock dividends. Although the 2014 Plan and the 2005 Plan have expired and no new grants will be issued under those plans, there were options issued before the plans expired that are still outstanding as shown below.
The Company accounts for all of its stock incentive plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and restricted stock. All stock-based payments to employees are required to be valued at a fair value on the date of grant and expensed based on that fair value over the applicable vesting period. Stock Options Changes in the stock options outstanding related to the Plans are summarized below (dollars in thousands except per share data):
For the three months ended March 31, 2024 and 2023, the Company recognized $24 thousand and $42 thousand, respectively, in compensation expense for stock options. As of March 31, 2024, there was $221 thousand in unrecognized compensation expense remaining to be recognized in future reporting periods through 2028. The fair value of any stock option grant is estimated at the grant date using the Black-Scholes pricing model. There were stock options grants of 8,400 issued during the three months ended March 31, 2024. There were no stock option grants issued during the three months ended March 31, 2023. Summary information pertaining to options outstanding at March 31, 2024 is shown below. Share and per share data have been adjusted to reflect the prior stock dividends issued.
Stock Grants Restricted stock grants – 25,280 restricted shares were granted to employees and non-employee directors, vesting over a four-year period, during the three months ended March 31, 2024. For the three months ended March 31, 2024, $171 thousand, was expensed as a result of restricted stock grants. As of March 31, 2024, there was $2.3 million in unrecognized compensation expense for all restricted stock grants remaining to be recognized in future reporting periods through 2028. Changes in the restricted stock grants outstanding during the three months ended March 31, 2024 are summarized below (dollars in thousands except per share data):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 10. Fair Value Measurements Determination of Fair Value The Company follows ASC 820, “Fair Value Measurements and Disclosures,” to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value:
The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the consolidated financial statements: Securities available for sale Securities AFS are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). The following tables present the balances measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (dollars in thousands):
Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write downs of individual assets. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements: Collateral Dependent Loans with an ACL In accordance with ASC 326, we may determine that an individual loan exhibits unique risk characteristics which differentiate it from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the ACL are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice. There were no assets that were measured at fair value on a nonrecurring basis as of March 31, 2024. The following table presents the Company's assets that were measured at fair value on a nonrecurring basis as of December 31, 2023:
ASC 825, “Financial Instruments,” requires disclosures about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The Company uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis. The carrying values and estimated fair values of the Company's financial instruments as of March 31, 2024 and December 31, 2023 are as follows (dollars in thousands):
The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. Consequently, the fair values of the Company’s financial instruments will fluctuate when interest rate levels change, and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk; however, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. |
Other Comprehensive Income (Loss) |
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Other Comprehensive Income (Loss) | Note 11. Other Comprehensive Income (Loss) The following table presents the changes in each component of accumulated other comprehensive income (loss) as of March 31, 2024 and March 31, 2023 (dollars in thousands).
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Derivatives Instruments and Hedging Activities |
3 Months Ended |
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Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments and Hedging Activities | Note 12. Derivative Instruments and Hedging Activities
The Company uses derivative financial instruments primarily to manage risks to the Company associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain interest rate swaps as hedging instruments in qualifying cash flow hedges. The changes in fair value of these designated hedging instruments is reported as a component of other comprehensive income. Customer accommodation loan swaps are derivative contracts that are not designated in a qualifying hedging relationship. Cash flow hedges. The Company designates interest rate swaps as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Company’s junior subordinated debt. These interest rate swaps are derivative financial instruments that manage the risk of variability in cash flows by exchanging variable-rate interest payments on a notional amount of the Company’s borrowings for fixed-rate interest payments. Interest rate swaps designated as cash flow hedges are expected to be highly effective in offsetting the effect of changes in interest rates on the amount of variable-rate interest payments, and the Company assesses the effectiveness of each hedging relationship quarterly. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. At December 31, 2022, the Company had a designated cash flow hedge to manage its exposure to variability in cash flows on one variable rate borrowing through 2036. In anticipation of terminating the borrowing position, such hedge position was liquidated in the first quarter of 2023 for a gain of $479 thousand. There were no hedges in place as of March 31, 2024 or March 31, 2023. Unrealized gains or losses recorded in other comprehensive income (loss) related to cash flow hedges are reclassified into earnings in the same period(s) during which the hedged interest payments affect earnings. When a designated hedging instrument is terminated and the hedged interest payments remain probable of occurring, any remaining unrecognized gain or loss in other comprehensive income is reclassified into earnings in the period(s) during which the forecasted interest payments affect earnings. Amounts reclassified into earnings and interest receivable or payable under designated interest rate swaps are reported in interest expense. The Company does not expect any unrealized losses related to cash flow hedges to be reclassified into earnings in the next twelve months. |
Segment Reporting |
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Segment Reporting | Note 13. Segment Reporting For the financial periods noted in this report, the Company has three reportable segments. Each reportable segment is a strategic business unit that offers different products and services. They are managed separately, because each segment appeals to different markets and, accordingly, require different technology and marketing strategies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report. The three reportable segments are: • Bank - The commercial banking segment involves making loans and generating deposits from individuals, businesses and charitable organizations. Loan fee income, service charges from deposit accounts, and other non-interest-related fees, such as fees for debit cards and ATM usage and fees for treasury management services, generate additional income for the Bank segment. • VNB Trust & Estate Services – VNB Trust & Estate Services offers corporate trustee services, trust and estate administration, IRA administration and custody services. Revenue for this segment is generated from administration, service and custody fees, as well as management fees that are derived from Assets Under Management. Investment management services currently are offered through in-house and third-party managers. • Masonry Capital - Masonry Capital offers investment management services for separately managed accounts and a private investment fund employing a value-based, catalyst-driven investment strategy. Revenue for this segment is generated from management fees that are derived from Assets Under Management and incentive income that is based on the investment returns generated on performance-based Assets Under Management. Effective April 1, 2024, the Company sold the membership interests in Masonry Capital Management, LLC to an officer of the Company. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. No expenses will be incurred by the Company related to Masonry Capital subsequent to the effective date of sale. Segment information for the three months ended March 31, 2024 and 2023 is shown in the following tables (dollars in thousands). Note that asset information is not reported below, as the assets of VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker.
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Sale of Masonry Capital Management LLC |
3 Months Ended |
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Mar. 31, 2024 | |
Sale of Masonry Capital Management LLC [Abstract] | |
Sale of Masonry Capital Management LLC | Note 14. Sale of Masonry Capital Management, LLC Effective April 1, 2024, the Company sold the membership interests in Masonry Capital Management, LLC to an officer of the Company. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. No expenses will be incurred by the Company related to Masonry Capital subsequent to the effective date of sale. The sale of this business line did not meet the requirements for classification of discontinued operations, as the sale did not represent a strategic shift in the Company's operations or plans and will not have a major effect on the Company's future operations or financial results. |
Share Repurchase Plan |
3 Months Ended |
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Mar. 31, 2024 | |
Equity [Abstract] | |
Share Repurchase Plan | Note 15. Share Repurchase Plan During the second quarter of 2023, the Board of Directors approved a share repurchase plan of up to 5% of outstanding common stock. Repurchases may be made through open market purchases or in privately negotiated transactions. The actual timing, number, and value of shares repurchased under the plan will be determined by a committee of the Board. During the first quarter of 2024, the Company repurchased 874 shares under this plan at an average price of $29.60 per share. Through May 14, 2024, a total of 20,350 shares have been repurchased at an average price of $27.42 year-to-date. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. The statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2023. |
Nature of Operations | Nature of Operations: The accompanying unaudited consolidated financial statements include the accounts of the Company, and its subsidiaries Virginia National Bank and Masonry Capital Management, LLC, a registered investment advisor. The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. Effective April 1, 2024, the Company sold the membership interests in Masonry Capital Management, LLC to an officer of the Company. Subsequent to the date of sale, the Company will receive an annual revenue-share amount for a period of six years. All significant intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation: The preparation of financial statements in conformity with GAAP and the reporting guidelines prescribed by regulatory authorities requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ACL, accounting for business combinations, including loans acquired in the business combination, ACL on individually evaluated loans, goodwill impairment, credit losses of securities, other intangible assets, and fair value measurements. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. |
Reclassifications | Reclassifications: If needed, certain previously reported amounts have been reclassified to conform to current period presentation. No such reclassifications were considered material. |
Recent Significant Accounting Pronouncements and Adoption of New Accounting Standards | Recent Significant Accounting Pronouncements Accounting Standards Adopted in 2024: In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 was effective for the Company on January 1, 2024. The adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements. Accounting Standards Issued but Not Yet Adopted: On March 29, 2024, the FASB issued ASU 2024-02, Codification Improvements- Amendments to Remove References to the Concepts Statements, which amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. The ASU is effective January 1, 2025 and is not expected to have a significant impact on the Company’s financial statements. Recently Issued Disclosure Rules: In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will start to phase in commencing with the Company's fiscal year beginning January 1, 2026. Refer to Note 1, "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in the 2023 Annual Report on Form 10-K for a discussion of the Company's significant accounting policies and new accounting guidance applicable to the Company that will be adopted in future periods. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows. |
Securities (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Fair Values of Securities Available For Sale | The amortized cost and fair values of securities available for sale as of March 31, 2024 and December 31, 2023 were as follows (dollars in thousands):
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Schedule of Unrealized Losses in the Bank's Securities Portfolio | The following tables summarize all securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, for which no allowance for credit losses was recorded, at March 31, 2024, and December 31, 2023 (dollars in thousands):
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Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories | The amortized cost and fair value of AFS debt securities at March 31, 2024 are presented below based upon contractual maturities, by major investment categories (dollars in thousands). Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.
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Loans (Tables) |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Composition of Loan Portfolio by Major Loan Classifications | The composition of the loan portfolio by major loan classifications at March 31, 2024 and December 31, 2023, stated at their face amount, net of deferred fees and costs and discounts, including fair value marks, appears below (dollars in thousands). The Company has elected to exclude accrued interest receivable, totaling $4.6 million as of March 31, 2024, from the amortized cost basis of loans.
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Schedule of Aging of Past Due Loans | The following table shows the aging of the Company's loan portfolio, by class, at March 31, 2024 (dollars in thousands):
The following table shows the aging of the Company's loan portfolio, by class, at December 31, 2023 (dollars in thousands):
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Schedule of Impaired Loans Classified as Non-Accruals by Class | The following table shows the Company's amortized cost basis of loans on nonaccrual status as of March 31, 2024 (dollars in thousands).
The following table shows the Company's amortized cost basis of loans on nonaccrual status as of December 31, 2023 (dollars in thousands).
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Allowance for Credit Losses (Tables) |
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Allowance For Loan Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Transactions in Allowance for Loan Losses by Major Loan Portfolio Segment | The following table shows the ACL activity by loan portfolio for the three months ended March 31, 2024 (dollars in thousands):
The following table shows the ACL activity by loan portfolio at December 31, 2023 (dollars in thousands):
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Summary of Provision (Recovery) for Credit Losses | The following table presents a breakdown of the provision (recovery) for credit losses for the periods indicated (dollars in thousands):
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Summary of Amortized Cost Basis of Collateral Dependent Loans Individually Evaluated to Determine Expected Credit Losses, and Related ACL Allocated to Loans | The following table presents the Company's amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACL allocated to those loans as of the periods indicated (dollars in thousands):
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Summary of Credit Quality Indicators | The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of March 31, 2024 (dollars in thousands). Current period gross write-off amounts represent write-offs for the three months ended March 31, 2024 (dollars in thousands):
The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of December 31, 2023 (dollars in thousands).
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Goodwill and Other Intangible Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets | The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets (dollars in thousands):
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Schedule of Estimated Future Amortization Expense | Estimated future amortization expense as of March 31, 2024 is as follows (dollars in thousands):
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Liability, Right-of-use Asset, Weighted Average Remaining Lease Term and Discount Rate | The following tables present information about the Company’s leases (dollars in thousands):
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Schedule of Operating Lease Expense |
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Schedule of Operating Lease Liabilities and Reconciliation of Undiscounted Cash Flows | A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):
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Net Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average number of shares used in computing earnings per share | The table below shows the weighted average number of shares used in computing net income per common share and the effect of the weighted average number of shares of potential dilutive common stock for the three months ended March 31, 2024 and 2023. Diluted net income per share is computed based on the weighted average number of shares of common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options. The recipients of unvested restricted shares have full voting and dividend rights, and as such, unvested restricted stock as of March 31, 2024 and March 31, 2023 is included in the calculation of basic and diluted net income per share (dollars below reported in thousands except per share data).
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Stock Incentive Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Shares Issued and Available Under Each Plans | A summary of the shares issued and available under each of the Plans is shown below as of March 31, 2024. Share data and exercise price range per share have been adjusted to reflect prior issued stock dividends. Although the 2014 Plan and the 2005 Plan have expired and no new grants will be issued under those plans, there were options issued before the plans expired that are still outstanding as shown below.
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Summary of Stock Option Activity | Changes in the stock options outstanding related to the Plans are summarized below (dollars in thousands except per share data):
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Schedule of Options Outstanding and Exercisable, by Exercise Price Range | Summary information pertaining to options outstanding at March 31, 2024 is shown below. Share and per share data have been adjusted to reflect the prior stock dividends issued.
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Summary of Changes in the Restricted Stock Grants Outstanding | Changes in the restricted stock grants outstanding during the three months ended March 31, 2024 are summarized below (dollars in thousands except per share data):
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Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available for Sale Securities Measured at Fair Value on a Recurring Basis | The following tables present the balances measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (dollars in thousands):
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Summary of Assets Measured at Fair Value on a Nonrecurring Basis | The following table presents the Company's assets that were measured at fair value on a nonrecurring basis as of December 31, 2023:
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Schedule of the Carrying Values and Estimated Fair Values of the Bank's Financial Instruments | The carrying values and estimated fair values of the Company's financial instruments as of March 31, 2024 and December 31, 2023 are as follows (dollars in thousands):
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Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in each component of accumulated other comprehensive income (loss) as of March 31, 2024 and March 31, 2023 (dollars in thousands).
|
Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | Segment information for the three months ended March 31, 2024 and 2023 is shown in the following tables (dollars in thousands). Note that asset information is not reported below, as the assets of VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker.
|
Summary of Significant Accounting Policies (Narrative) (Details) |
Apr. 01, 2024 |
---|---|
Subsequent Event | |
Summary of Significant Accounting Policies [Line Items] | |
Annual revenue share amount period | 6 years |
Recent Significant Accounting Pronouncements (Narrative) (Details) - ASU 2023-02 [Member] |
Mar. 31, 2024 |
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2024 |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
Securities (Amortized Cost and Fair Values of Securities Available for Sale) (Details)) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|||
---|---|---|---|---|---|
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | $ 395,720 | $ 471,284 | |||
Gross Unrealized Gains | 110 | 238 | |||
Gross Unrealized (Losses) | (53,973) | (50,927) | |||
Available for Sale, Fair Value | 341,857 | 420,595 | [1] | ||
U.S. Government Treasuries [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 51,456 | 122,288 | |||
Gross Unrealized Gains | 35 | ||||
Gross Unrealized (Losses) | (324) | (615) | |||
Available for Sale, Fair Value | 51,132 | 121,708 | |||
U.S. Government Agencies [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 42,051 | 45,131 | |||
Gross Unrealized (Losses) | (5,600) | (5,550) | |||
Available for Sale, Fair Value | 36,451 | 39,581 | |||
Mortgage-backed Securities/CMOs [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 178,385 | 179,920 | |||
Gross Unrealized Gains | 96 | 171 | |||
Gross Unrealized (Losses) | (26,821) | (24,947) | |||
Available for Sale, Fair Value | 151,660 | 155,144 | |||
Corporate Bonds [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 19,705 | 19,680 | |||
Gross Unrealized Gains | 1 | ||||
Gross Unrealized (Losses) | (542) | (552) | |||
Available for Sale, Fair Value | 19,163 | 19,129 | |||
Municipal Bonds [Member] | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 104,123 | 104,265 | |||
Gross Unrealized Gains | 14 | 31 | |||
Gross Unrealized (Losses) | (20,686) | (19,263) | |||
Available for Sale, Fair Value | $ 83,451 | $ 85,033 | |||
|
Securities (Narrative) (Details) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2024
USD ($)
Item
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
||||
Schedule of Investments [Line Items] | ||||||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 334,531 | $ 343,192 | ||||
Number of securities designated as available for sale securities having unrealized loss | Item | 279 | |||||
Accrued interest receivable | $ 4,600 | |||||
Unrealized loss of available for sale securities | 53,973 | 50,927 | ||||
Securities, allowance for credit losses | 0 | 0 | ||||
Proceeds from the sales of securities | 39,600 | $ 49,900 | ||||
Available for sale securities pre-tax loss | 4 | $ 206 | ||||
Restricted securities, at cost | 6,192 | 8,385 | [1] | |||
Mortgage-backed Securities/CMOs [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 143,997 | 150,045 | ||||
Number of securities designated as available for sale securities having unrealized loss | Item | 117 | |||||
Unrealized loss of available for sale securities | $ 26,821 | 24,947 | ||||
U.S. Government Agencies [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 39,227 | 39,580 | ||||
Number of securities designated as available for sale securities having unrealized loss | Item | 21 | |||||
Unrealized loss of available for sale securities | $ 5,600 | 5,550 | ||||
Corporate Bonds [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 19,164 | 19,129 | ||||
Number of securities designated as available for sale securities having unrealized loss | Item | 11 | |||||
Unrealized loss of available for sale securities | $ 542 | 552 | ||||
Treasury bond [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Number of securities designated as available for sale securities having unrealized loss | Item | 5 | |||||
Asset Pledged as Collateral without Right [Member] | Public Deposits [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Securities pledged to secure deposits and facilitate borrowing | $ 21,500 | 21,800 | ||||
Municipal Bonds [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 81,011 | 82,140 | ||||
Number of securities designated as available for sale securities having unrealized loss | Item | 125 | |||||
Unrealized loss of available for sale securities | $ 20,686 | $ 19,263 | ||||
AFS Securities [Member] | ||||||
Schedule of Investments [Line Items] | ||||||
Accrued interest receivable | $ 2,000 | |||||
|
Securities (Schedule of Unrealized Losses) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | $ 10,531 | $ 10,090 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (7) | (20) |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 324,000 | 333,102 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (53,966) | (50,907) |
Total, Estimated Fair value | 334,531 | 343,192 |
Total, Unrealized losses | (53,973) | (50,927) |
U.S. Government Treasuries [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 51,132 | 52,298 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (324) | (615) |
Total, Estimated Fair value | 51,132 | 52,298 |
Total, Unrealized losses | (324) | (615) |
U.S. Government Agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | 10,099 | 10,090 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (4) | (20) |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 29,128 | 29,490 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (5,596) | (5,530) |
Total, Estimated Fair value | 39,227 | 39,580 |
Total, Unrealized losses | (5,600) | (5,550) |
Mortgage-backed Securities/CMOs [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 143,997 | 150,045 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (26,821) | (24,947) |
Total, Estimated Fair value | 143,997 | 150,045 |
Total, Unrealized losses | (26,821) | (24,947) |
Corporate Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 19,164 | 19,129 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (542) | (552) |
Total, Estimated Fair value | 19,164 | 19,129 |
Total, Unrealized losses | (542) | (552) |
Municipal Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | 432 | |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (3) | |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 80,579 | 82,140 |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (20,683) | (19,263) |
Total, Estimated Fair value | 81,011 | 82,140 |
Total, Unrealized losses | $ (20,686) | $ (19,263) |
Securities (Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Amortized Cost | ||
Amortized Cost | $ 395,720 | $ 471,284 |
Fair Value | ||
Total Securities Available for Sale | 341,857 | |
U.S. Government Treasuries [Member] | ||
Amortized Cost | ||
One year or less | 49,956 | |
After one year to five years | 1,500 | |
Amortized Cost | 51,456 | 122,288 |
Fair Value | ||
One year or less | 49,668 | |
After one year to five years | 1,464 | |
Total Securities Available for Sale | 51,132 | |
U.S. Government Agencies [Member] | ||
Amortized Cost | ||
One year or less | 10,000 | |
After one year to five years | 10,132 | |
After five years to ten years | 17,919 | |
Ten years or more | 4,000 | |
Amortized Cost | 42,051 | 45,131 |
Fair Value | ||
One year or less | 9,996 | |
After one year to five years | 8,833 | |
After five years to ten years | 14,659 | |
Ten years or more | 2,963 | |
Total Securities Available for Sale | 36,451 | |
Mortgage-backed Securities/CMOs [Member] | ||
Amortized Cost | ||
One year or less | 2,734 | |
After one year to five years | 3,291 | |
After five years to ten years | 5,963 | |
Ten years or more | 166,397 | |
Amortized Cost | 178,385 | 179,920 |
Fair Value | ||
One year or less | 2,685 | |
After one year to five years | 3,112 | |
After five years to ten years | 5,406 | |
Ten years or more | 140,457 | |
Total Securities Available for Sale | 151,660 | |
Corporate Bonds [Member] | ||
Amortized Cost | ||
One year or less | 1,997 | |
After one year to five years | 17,708 | |
Amortized Cost | 19,705 | 19,680 |
Fair Value | ||
One year or less | 1,976 | |
After one year to five years | 17,187 | |
Total Securities Available for Sale | 19,163 | |
Municipal Bonds [Member] | ||
Amortized Cost | ||
One year or less | 610 | |
After one year to five years | 3,201 | |
After five years to ten years | 21,324 | |
Ten years or more | 78,988 | |
Amortized Cost | 104,123 | $ 104,265 |
Fair Value | ||
One year or less | 596 | |
After one year to five years | 3,104 | |
After five years to ten years | 19,641 | |
Ten years or more | 60,110 | |
Total Securities Available for Sale | $ 83,451 |
Loans (Narrative) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024
USD ($)
Loan
|
Mar. 31, 2023
USD ($)
Loan
|
Dec. 31, 2023
USD ($)
Loan
|
Apr. 01, 2021
USD ($)
|
|
Loans And Leases Receivable Disclosure [Line Items] | ||||
Accrued interest receivable | $ 4,600 | |||
Deposit account overdrafts | 49 | $ 252 | ||
Unamortized premium | 6,200 | 4,600 | ||
Net deferred loan costs and fees | (2,500) | $ (2,500) | ||
Due to collateral value shortfall | $ 4 | |||
Number of non accrual loans required allowance of credit loss | Loan | 0 | 1 | ||
Number of loan modified for a borrower | Loan | 1 | 0 | ||
Purchased Impaired Loan [Member] | Fauquier Bankshares, Inc [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable at fair value net | $ 8,800 | $ 23,100 | ||
Student Loans Purchased [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable experiencing financial difficulties | $ 60 | |||
Number of modified student loans | Loan | 2 | |||
1-4 Family Residential Mortgages [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable experiencing financial difficulties | $ 703 | |||
Loan receivable experiencing financial difficulties, percentage on loans | 0.002% |
Loans (Schedule of Composition of Loan Portfolio by Major Loan Classifications) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|||
---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | $ 1,128,168 | $ 1,092,665 | |||
Less: Allowance for credit losses | (8,289) | (8,395) | [1] | ||
Loans, net | 1,119,879 | 1,084,270 | [1] | ||
Commercial [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | 182,568 | 152,517 | |||
Real Estate Construction and Land [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | 33,371 | 33,682 | |||
1-4 Family Residential Mortgages [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | 316,502 | 317,558 | |||
Commercial mortgages [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | 558,779 | 550,867 | |||
Consumer [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans | $ 36,948 | $ 38,041 | |||
|
Loans (Schedule of Aging of Past Due Loans) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Financing Receivable Recorded Investment Past Due [Line Items] | ||
90 Days Past Due and Accruing | $ 876 | $ 879 |
Nonaccrual Loans | 2,178 | 1,852 |
Total Loans | 1,128,168 | 1,092,665 |
30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 5,663 | 8,811 |
60-89 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 266 | 1,407 |
Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1,119,185 | 1,079,716 |
Commercial [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 182,568 | 152,517 |
90 Days Past Due and Accruing | 783 | 782 |
Total Loans | 182,568 | 152,517 |
Commercial [Member] | 30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 4,143 | 378 |
Commercial [Member] | 60-89 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1 | 369 |
Commercial [Member] | Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 177,641 | 150,988 |
Real Estate Construction and Land [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 33,371 | 33,682 |
Total Loans | 33,371 | 33,682 |
Real Estate Construction and Land [Member] | 30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 70 | |
Real Estate Construction and Land [Member] | 60-89 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 37 | |
Real Estate Construction and Land [Member] | Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 33,371 | 33,575 |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 316,502 | 317,558 |
Nonaccrual Loans | 1,792 | 1,438 |
Total Loans | 316,502 | 317,558 |
1-4 Family Residential Mortgages [Member] | 30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 1,004 | 1,834 |
1-4 Family Residential Mortgages [Member] | 60-89 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 208 | 860 |
1-4 Family Residential Mortgages [Member] | Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 313,498 | 313,426 |
Commercial Mortgages [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 558,779 | 550,867 |
Nonaccrual Loans | 386 | 414 |
Total Loans | 558,779 | 550,867 |
Commercial Mortgages [Member] | 30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 344 | 6,304 |
Commercial Mortgages [Member] | Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 558,049 | 544,149 |
Consumer Loans [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 36,948 | 38,041 |
90 Days Past Due and Accruing | 93 | 97 |
Total Loans | 36,948 | 38,041 |
Consumer Loans [Member] | 30-59 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 172 | 225 |
Consumer Loans [Member] | 60-89 Days [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | 57 | 141 |
Consumer Loans [Member] | Current [Member] | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total Past Due | $ 36,626 | $ 37,578 |
Loans (Non-Accrual Loans by Loan Classification) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Nonaccrual Loans with No Allowance | $ 2,178 | $ 1,797 |
Nonaccrual Loans with an Allowance | 55 | |
Nonaccrual loans, Total | 2,178 | 1,852 |
Commercial Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Nonaccrual Loans with No Allowance | 386 | 414 |
Nonaccrual loans, Total | 386 | 414 |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Nonaccrual Loans with No Allowance | 1,792 | 1,383 |
Nonaccrual Loans with an Allowance | 55 | |
Nonaccrual loans, Total | $ 1,792 | $ 1,438 |
Allowance for Credit Losses (Narrative) (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | |
Specific reserve for nonaccrual status | $ 27 |
Allowance for Credit Losses (Summary of Transactions in Allowance for Loan Losses by Major Loan Portfolio Segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Allowance for Loan Losses: | |||
Beginning Balance | $ 8,395 | $ 5,552 | $ 5,552 |
Impact of ASC 326 adoption | 2,491 | ||
Charge-offs | (184) | (721) | |
Recoveries | 67 | 377 | |
Provision for (recovery of) credit losses | 11 | (235) | 696 |
Ending Balance | 8,289 | 8,395 | |
Commercial Loans [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 193 | 194 | 194 |
Impact of ASC 326 adoption | (11) | ||
Recoveries | 13 | 168 | |
Provision for (recovery of) credit losses | (30) | (158) | |
Ending Balance | 176 | 193 | |
Real Estate Construction and Land [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 462 | 221 | 221 |
Impact of ASC 326 adoption | 440 | ||
Provision for (recovery of) credit losses | (51) | (199) | |
Ending Balance | 411 | 462 | |
1-4 Family Residential Mortgages [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 1,492 | 1,618 | 1,618 |
Impact of ASC 326 adoption | 14 | ||
Recoveries | 4 | 10 | |
Provision for (recovery of) credit losses | (9) | (150) | |
Ending Balance | 1,487 | 1,492 | |
Commercial Mortgages [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 5,261 | ||
Recoveries | 1 | ||
Provision for (recovery of) credit losses | 30 | ||
Ending Balance | 5,292 | 5,261 | |
Real Estate Mortgages [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 5,261 | 2,820 | 2,820 |
Impact of ASC 326 adoption | 1,577 | ||
Recoveries | 42 | ||
Provision for (recovery of) credit losses | 822 | ||
Ending Balance | 5,261 | ||
Consumer Loans [Member] | |||
Allowance for Loan Losses: | |||
Beginning Balance | 987 | $ 699 | 699 |
Impact of ASC 326 adoption | 471 | ||
Charge-offs | (184) | (721) | |
Recoveries | 49 | 157 | |
Provision for (recovery of) credit losses | 71 | 381 | |
Ending Balance | $ 923 | $ 987 |
Allowance for Credit Losses (Summary of Provision (Recovery) for Credit Losses) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Provision for credit losses: | |||
Provision for (recovery of) loan losses | $ 11 | $ (235) | $ 696 |
Recovery of unfunded commitments | (33) | (13) | |
Total | $ (22) | $ (248) |
Allowance for Credit Losses - Summary of Amortized Cost Basis of Collateral Dependent Loans Individually Evaluated to Determine Expected Credit Losses, and Related ACL Allocated to Loans (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance for Credit Losses - Loans | $ 8,289 | $ 8,395 | $ 5,552 |
Collateral Dependent Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Real Estate Secured Loans | 2,444 | 1,852 | |
Allowance for Credit Losses - Loans | 4 | ||
Commercial real estate - non owner occupied [Member] | Collateral Dependent Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Real Estate Secured Loans | 612 | 414 | |
Residential 1-4 family real estate [Member] | Collateral Dependent Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Real Estate Secured Loans | $ 1,832 | 1,438 | |
Allowance for Credit Losses - Loans | $ 4 |
Allowance for Credit Losses (Summary of Investment in Loans by Credit Quality Indicators by Year of Origination) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current period gross write-off, 2021 | $ 19 | |
Current period gross write-off, 2020 | 16 | |
Current period gross write-off, 2019 | 28 | |
Current period gross write-off, Prior | $ 184 | 654 |
Current period gross write-off, Revolving Loans | 4 | |
Current period gross write-off | 184 | 721 |
Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 11,222 | 85,529 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 107,434 | 12,482 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 12,402 | 2,713 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 2,509 | 5,124 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 4,707 | 7,174 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 23,850 | 17,164 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 20,444 | 21,864 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 467 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 182,568 | 152,517 |
Commercial [Member] | Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 11,222 | 85,529 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 107,434 | 12,344 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 12,272 | 2,712 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 2,509 | 4,989 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 4,575 | 7,121 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 23,551 | 16,873 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 20,386 | 21,806 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 112 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 181,949 | 151,486 |
Commercial [Member] | Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 41 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 39 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 39 | 41 |
Commercial [Member] | Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, Prior | 79 | 79 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 8 | 8 |
Term Loans Amortized Cost Basis by Origination Year, Total | 87 | 87 |
Commercial [Member] | Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 97 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 91 | 1 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 135 | |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 132 | 53 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 220 | 212 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 50 | 50 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 355 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 493 | 903 |
Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 246 | 13,776 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 14,749 | 11,748 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 11,656 | 3,683 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 2,646 | 1,717 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 1,696 | 955 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 2,378 | 1,674 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 129 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 33,371 | 33,682 |
Real Estate Construction and Land [Member] | Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 246 | 12,425 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 13,405 | 11,748 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 11,656 | 3,683 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 2,646 | 1,717 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 1,696 | 955 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 2,048 | 1,293 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 129 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 31,697 | 31,950 |
Real Estate Construction and Land [Member] | Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, Prior | 286 | 299 |
Term Loans Amortized Cost Basis by Origination Year, Total | 286 | 299 |
Real Estate Construction and Land [Member] | Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, Prior | 37 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 37 | |
Real Estate Construction and Land [Member] | Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 1,351 | |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,344 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 44 | 45 |
Term Loans Amortized Cost Basis by Origination Year, Total | 1,388 | 1,396 |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 3,265 | 19,482 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 19,077 | 17,422 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 17,297 | 57,453 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 57,654 | 78,293 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 77,048 | 25,366 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 120,265 | 96,670 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 20,733 | 22,210 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 1,163 | 662 |
Term Loans Amortized Cost Basis by Origination Year, Total | 316,502 | 317,558 |
1-4 Family Residential Mortgages [Member] | Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 3,250 | 19,482 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 17,230 | 14,712 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 14,373 | 54,066 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 54,978 | 74,539 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 75,158 | 24,999 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 107,674 | 85,836 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 19,473 | 20,571 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 598 | 524 |
Term Loans Amortized Cost Basis by Origination Year, Total | 292,734 | 294,729 |
1-4 Family Residential Mortgages [Member] | Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,847 | 1,621 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 1,593 | 1,874 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 1,861 | 602 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 600 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 8,291 | 7,149 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 864 | 1,166 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 404 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 15,460 | 12,412 |
1-4 Family Residential Mortgages [Member] | Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,089 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 1,080 | 1,458 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 1,958 | |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 270 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 2,159 | 1,591 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 78 | |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 60 | 138 |
Term Loans Amortized Cost Basis by Origination Year, Total | 3,299 | 6,582 |
1-4 Family Residential Mortgages [Member] | Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 15 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 251 | 55 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 815 | 1,194 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 1,290 | 97 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 2,141 | 2,094 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 396 | 395 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 101 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 5,009 | 3,835 |
Commercial Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 23,070 | 112,243 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 108,406 | 41,433 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 41,396 | 49,726 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 49,234 | 104,681 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 100,211 | 45,974 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 235,173 | 195,232 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 1,289 | 1,502 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 76 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 558,779 | 550,867 |
Commercial Mortgages [Member] | Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 23,070 | 112,093 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 106,606 | 41,433 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 40,332 | 46,315 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 45,718 | 101,205 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 88,865 | 45,809 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 212,742 | 171,184 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 1,289 | 1,502 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 76 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 518,622 | 519,617 |
Commercial Mortgages [Member] | Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,800 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 1,064 | 1,196 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 1,187 | 166 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 6,398 | 165 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 11,954 | 14,188 |
Term Loans Amortized Cost Basis by Origination Year, Total | 22,403 | 15,715 |
Commercial Mortgages [Member] | Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 391 | |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 524 | 278 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 269 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 7,863 | 4,130 |
Term Loans Amortized Cost Basis by Origination Year, Total | 8,656 | 4,799 |
Commercial Mortgages [Member] | Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 150 | |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 1,824 | |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 1,805 | 3,032 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 4,679 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 2,614 | 5,730 |
Term Loans Amortized Cost Basis by Origination Year, Total | 9,098 | 10,736 |
Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 336 | 1,150 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,138 | 193 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 182 | 427 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 381 | 273 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 238 | 124 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 19,740 | 21,158 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 14,933 | 14,711 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 5 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 36,948 | 38,041 |
Consumer [Member] | Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 321 | 1,149 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1,137 | 193 |
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 182 | 420 |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 374 | 273 |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 238 | 107 |
Term Loans Amortized Cost Basis by Origination Year, Prior | 19,411 | 20,836 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 14,931 | 14,710 |
Term Loans Amortized Cost Basis by Origination Year, Total | 36,594 | 37,688 |
Consumer [Member] | Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2022/2021 | 7 | |
Term Loans Amortized Cost Basis by Origination Year, 2021/2020 | 7 | |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 9 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 175 | 190 |
Term Loans Amortized Cost Basis by Origination Year, Total | 182 | 206 |
Consumer [Member] | Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, Prior | 61 | 132 |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 1 | 1 |
Term Loans Amortized Cost Basis by Origination Year, Loans Converted to Term | 5 | |
Term Loans Amortized Cost Basis by Origination Year, Total | 62 | 138 |
Consumer [Member] | Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Term Loans Amortized Cost Basis by Origination Year, 2024/2023 | 15 | 1 |
Term Loans Amortized Cost Basis by Origination Year, 2023/2022 | 1 | |
Term Loans Amortized Cost Basis by Origination Year, 2020/2019 | 8 | |
Term Loans Amortized Cost Basis by Origination Year, Prior | 93 | |
Term Loans Amortized Cost Basis by Origination Year, Revolving Loans | 1 | |
Term Loans Amortized Cost Basis by Origination Year, Total | $ 110 | $ 9 |
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Sep. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Dec. 31, 2023 |
||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Goodwill | $ 7,768 | $ 7,800 | $ 7,768 | [1] | ||||
Other intangible assets | 4,800 | 6,200 | $ 5,100 | |||||
Amortization of intangible assets | $ 343 | $ 343 | $ 391 | $ 391 | ||||
|
Goodwill and Other Intangible Assets - Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - Core Deposit [Member] - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
---|---|---|---|
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 9,660 | $ 9,660 | $ 9,660 |
Accumulated Amortization | $ (4,910) | $ (4,567) | $ (3,465) |
Goodwill and Other Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - Core Deposit Intangible [Member] $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Schedule of Estimated Future Amortization Expense [Line Items] | |
For the nine months ending December 31, 2024 | $ 958 |
For the year ending December 31, 2025 | 1,110 |
For the year ending December 31, 2026 | 918 |
For the year ending December 31, 2027 | 726 |
For the year ending December 31, 2028 | 535 |
Thereafter | 503 |
Finite-Lived Intangible Assets, Net, Total | $ 4,750 |
Leases (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Leases [Abstract] | |
Lessee, operating lease, existence of option to extend | true |
Lease term | 12 months |
Leases (Schedule of Lease Liability, Right-of-use Asset, Weighted Average Remaining Lease Term and Discount Rate) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
[1] | Mar. 31, 2023 |
||
---|---|---|---|---|---|---|
Leases [Abstract] | ||||||
Lease liability | $ 6,451 | $ 5,968 | ||||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities | ||||
Right-of-use asset | $ 6,652 | $ 6,748 | $ 6,336 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets | ||||
Weighted average remaining lease term | 5 years 21 days | 5 years 1 month 13 days | ||||
Weighted average discount rate | 2.71% | 2.05% | ||||
|
Leases (Schedule of Operating Lease Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease cost | $ 429 | $ 511 |
Short-term lease expense | 12 | 123 |
Total lease expense | 441 | 634 |
Cash paid for amounts included in lease liabilities | $ 388 | $ 512 |
Leases (Schedule of Operating Lease Liabilities and Reconciliation of Undiscounted Cash Flows) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Mar. 31, 2023 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Nine months ending December 31, 2024 | $ 1,194 | |
Twelve months ending December 31, 2025 | 1,497 | |
Twelve months ending December 31, 2026 | 1,158 | |
Twelve months ending December 31, 2027 | 1,063 | |
Twelve months ending December 31, 2028 | 942 | |
Thereafter | 1,195 | |
Total undiscounted cash flows | 7,049 | |
Less: Discount | (598) | |
Lease liability | $ 6,451 | $ 5,968 |
Net Income Per Share (Schedule of Weighted Average Number of Shares) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Basic net income per share | ||
Net Income | $ 3,646 | $ 5,791 |
Basic, Weighted Average Shares | 5,366,890 | 5,338,099 |
Basic, Per Share Amount | $ 0.68 | $ 1.08 |
Effect of dilutive stock options, Weighted Average Shares | 13,191 | 37,520 |
Diluted net income per share | ||
Net Income | $ 3,646 | $ 5,791 |
Diluted, Weighted Average Shares | 5,380,081 | 5,375,619 |
Diluted, Per Share Amount | $ 0.68 | $ 1.08 |
Net Income Per Share (Narrative) (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Equity Option [Member] | ||
Earnings Per Share [Line Items] | ||
Securities considered to be anti-dilutive and excluded from earnings per share calculation | 117,601 | 101,481 |
Stock Incentive Plans (Plan duration - Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Jun. 23, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock grant expense | $ 171 | $ 111 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | 24 | $ 42 | |
Unrecognized compensation expense related to the non-vested awards | $ 221 | ||
Unrecognized compensation expense related to the non-vested awards, final year of recognition | 2028 | ||
Option Issued | 8,400 | 0 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense related to the non-vested awards | $ 2,300 | ||
Unrecognized compensation expense related to the non-vested awards, final year of recognition | 2028 | ||
Stock grants awarded | 25,280 | ||
Stock grant expense | $ 171 | ||
Restricted Stock [Member] | Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock grants awarded | 25,280 | ||
Restricted Stock [Member] | Non Employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock grants awarded | 25,280 | ||
Restricted Stock [Member] | Employee And Non Employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Plan duration | 10 years | ||
2022 Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance | 150,000 | 150,000 | |
Common stock available for grant | 93,988 | ||
Percentage of common stock authorized for issuance | 95.00% | ||
2014 Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance | 275,625 | ||
Common stock available for grant | 0 | 0 | |
2005 Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance | 253,575 | ||
Common stock available for grant | 0 | 0 |
Stock Incentive Plans (Summary of Shares Issued and Available Under Each Plans) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Jun. 23, 2022 |
|
2022 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate shares issuable | 150,000 | 150,000 |
Options issued, net of forfeited and expired options | (11,800) | |
Remaining available for grant | 93,988 | |
Total vested and unvested shares | 44,212 | |
2022 Stock Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | (44,212) | |
2022 Stock Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total vested and unvested shares | 11,800 | |
2022 Stock Plan [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 28.82 | |
2022 Stock Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 33.2 | |
2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate shares issuable | 275,625 | |
Options issued, net of forfeited and expired options | (174,006) | |
Cancelled due to Plan expiration | (6,331) | |
Remaining available for grant | 0 | 0 |
Total vested and unvested shares | 95,888 | |
Fully vested shares | 60,699 | |
2014 Stock Plan [Member] | Unrestricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | (11,635) | |
2014 Stock Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | (83,653) | |
2014 Stock Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total vested and unvested shares | 169,301 | |
Fully vested shares | 128,417 | |
2014 Stock Plan [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 23.75 | |
2014 Stock Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 42.62 | |
2005 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate shares issuable | 253,575 | |
Options issued, net of forfeited and expired options | (59,870) | |
Cancelled due to Plan expiration | (193,705) | |
Remaining available for grant | 0 | 0 |
Stock Incentive Plans (Changes in the Stock Options Outstanding) (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Number of Options | ||
Outstanding, at the beginning | 174,201 | |
Issued | 8,400 | 0 |
Forfeited | (1,500) | |
Outstanding, at the end | 181,101 | |
Options Exercisable | 128,417 | |
Weighted Average Exercise Price | ||
Outstanding, at the beginning | $ 33.94 | |
Issued | 33.2 | |
Forfeited | 35.35 | |
Outstanding, at the end | 33.89 | |
Exercisable | $ 35.48 | |
Aggregate Intrinsic Value | ||
Outstanding, Aggregate Intrinsic Value | $ 359 | |
Exercisable | $ 231 |
Stock Incentive Plans (Summary Information Pertaining to Options Outstanding) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
shares
| |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding | shares | 181,101 |
Weighted-Average Remaining Contractual Life | 6 years |
Weighted Average Exercise Price | $ 33.89 |
Options Exercisable | shares | 128,417 |
Weighted-Average Exercise Price | $ 35.48 |
$20.01 to $30.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Minimum | 20.01 |
Exercise Price, Maximum | $ 30 |
Options Outstanding | shares | 68,400 |
Weighted-Average Remaining Contractual Life | 6 years 4 months 24 days |
Weighted Average Exercise Price | $ 24.86 |
Options Exercisable | shares | 43,800 |
Weighted-Average Exercise Price | $ 24.82 |
$30.01 to $40.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Minimum | 30.01 |
Exercise Price, Maximum | $ 40 |
Options Outstanding | shares | 55,220 |
Weighted-Average Remaining Contractual Life | 7 years 1 month 6 days |
Weighted Average Exercise Price | $ 36.00 |
Options Exercisable | shares | 27,136 |
Weighted-Average Exercise Price | $ 37.58 |
$40.01 to $42.62 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Minimum | 40.01 |
Exercise Price, Maximum | $ 42.62 |
Options Outstanding | shares | 57,481 |
Weighted-Average Remaining Contractual Life | 4 years 1 month 6 days |
Weighted Average Exercise Price | $ 42.62 |
Options Exercisable | shares | 57,481 |
Weighted-Average Exercise Price | $ 42.62 |
Stock Incentive Plans (Changes in the Restricted Stock Grants Outstanding) (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
$ / shares
shares
| |
Number of Shares/Options | |
Non-vested Outstanding, at the beginning | shares | 62,721 |
Issued | shares | 25,280 |
Vested | shares | (8,600) |
Forfeited | shares | 0 |
Non-vested Outstanding, at the end | shares | 79,401 |
Weighted Average Grant Date Fair Value Per Share/Exercise Price | |
Non-vested Outstanding, at the beginning | $ / shares | $ 32.56 |
Issued | $ / shares | 30.05 |
Vested | $ / shares | 32.21 |
Forfeited | $ / shares | 0 |
Non-vested Outstanding, at the end | $ / shares | $ 31.8 |
Aggregate Intrinsic Value | |
Non-vested Outstanding, at the beginning | $ | $ 1,888 |
Issued | $ | 761 |
Vested | $ | (259) |
Forfeited | $ | 0 |
Non-vested Outstanding, Aggregate Intrinsic Value | $ | $ 2,390 |
Fair Value Measurements (Assets Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | $ 341,857 | $ 420,595 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 341,857 | 420,595 |
U.S. Government Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 51,132 | 121,708 |
U.S. Government Treasuries [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 51,132 | 121,708 |
U.S. Government Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 36,451 | 39,581 |
U.S. Government Agencies [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 36,451 | 39,581 |
Mortgage-backed Securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 151,660 | 155,144 |
Mortgage-backed Securities/CMOs [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 151,660 | 155,144 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 19,163 | 19,129 |
Corporate Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 19,163 | 19,129 |
Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | 83,451 | 85,033 |
Municipal Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total securities available for sale | $ 83,451 | $ 85,033 |
Fair Value Measurements (Assets Measured at Fair Value on Nonrecurring Basis) (Details) - Fair Value, Nonrecurring [Member] - Individually Evaluated Loans [Member] $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets measured at fair value | $ 461 |
Significant Unobservable Inputs (Level 3) [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets measured at fair value | $ 461 |
Fair Value Measurements (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Market Comparables [Member] - Individually Evaluated Loans [Member] - Fair Value, Nonrecurring [Member] - Significant Unobservable Inputs (Level 3) [Member] |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Unobservable Inputs | Discount applied to recent appraisal |
Discount Rate | 20 |
Fair Value Measurements (Carrying Values and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|||
---|---|---|---|---|---|
Assets | |||||
Restricted securities | $ 6,192 | $ 8,385 | [1] | ||
Fair Value, Nonrecurring [Member] | Carrying Value [Member] | |||||
Assets | |||||
Cash and cash equivalent | 45,493 | 28,390 | |||
Available for sale securities | 341,857 | 420,595 | |||
Restricted securities | 6,192 | 8,385 | |||
Loans, net | 1,119,879 | 1,084,270 | |||
Bank owned life insurance | 39,179 | 38,904 | |||
Accrued interest receivable | 6,594 | 6,179 | |||
Liabilities | |||||
Demand deposits and interest-bearing transaction, money market, and savings accounts | 1,082,415 | 1,090,517 | |||
Certificates of deposit | 349,557 | 318,581 | |||
FHLB Borrowings | 20,000 | ||||
Federal funds purchased | 3,462 | ||||
Borrowings | 66,500 | ||||
Junior subordinated debt, net | 3,471 | 3,459 | |||
Accrued interest payable | 2,314 | 2,143 | |||
Fair Value, Nonrecurring [Member] | Fair Value [Member] | |||||
Assets | |||||
Cash and cash equivalent | 45,493 | 28,390 | |||
Available for sale securities | 341,857 | 420,595 | |||
Restricted securities | 6,192 | 8,385 | |||
Loans, net | 1,043,780 | 1,029,359 | |||
Bank owned life insurance | 39,179 | 38,904 | |||
Accrued interest receivable | 6,594 | 6,179 | |||
Liabilities | |||||
Demand deposits and interest-bearing transaction, money market, and savings accounts | 1,082,415 | 1,090,517 | |||
Certificates of deposit | 349,853 | 318,768 | |||
FHLB Borrowings | 20,046 | ||||
Federal funds purchased | 3,462 | ||||
Borrowings | 66,360 | ||||
Junior subordinated debt, net | 3,471 | 3,459 | |||
Accrued interest payable | 2,314 | 2,143 | |||
Fair Value, Nonrecurring [Member] | Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||
Assets | |||||
Cash and cash equivalent | 45,493 | 28,390 | |||
Liabilities | |||||
Federal funds purchased | 3,462 | ||||
Fair Value, Nonrecurring [Member] | Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Assets | |||||
Available for sale securities | 341,857 | 420,595 | |||
Restricted securities | 6,192 | 8,385 | |||
Bank owned life insurance | 39,179 | 38,904 | |||
Accrued interest receivable | 1,994 | 1,916 | |||
Liabilities | |||||
Demand deposits and interest-bearing transaction, money market, and savings accounts | 1,082,415 | 1,090,517 | |||
Certificates of deposit | 349,853 | 318,768 | |||
FHLB Borrowings | 20,046 | ||||
Borrowings | 66,360 | ||||
Junior subordinated debt, net | 3,471 | 3,459 | |||
Accrued interest payable | 2,314 | 2,143 | |||
Fair Value, Nonrecurring [Member] | Fair Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||
Assets | |||||
Loans, net | 1,043,780 | 1,029,359 | |||
Accrued interest receivable | $ 4,600 | $ 4,263 | |||
|
Other Comprehensive Income (Loss) - Schedule of Component of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income (loss), Beginning Balance | $ (40,044) | [1] | $ (48,624) | ||
Other comprehensive income (loss) arising during the period | (3,179) | 7,559 | |||
Related income tax effects | 668 | (1,588) | |||
Total other comprehensive loss before reclassification | (2,511) | 5,971 | |||
Reclassification into net income | 4 | (254) | |||
Related income tax effects | (1) | 54 | |||
Reclassification into net income net of tax | 3 | (200) | |||
Accumulated other comprehensive income (loss), Ending Balance | (42,552) | (42,853) | |||
Interest Rate Swap [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income (loss), Beginning Balance | 400 | ||||
Other comprehensive income (loss) arising during the period | (46) | ||||
Related income tax effects | 9 | ||||
Total other comprehensive loss before reclassification | (37) | ||||
Reclassification into net income | (460) | ||||
Related income tax effects | 97 | ||||
Reclassification into net income net of tax | (363) | ||||
AFS Securities [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income (loss), Beginning Balance | (40,044) | (49,024) | |||
Other comprehensive income (loss) arising during the period | (3,179) | 7,605 | |||
Related income tax effects | 668 | (1,597) | |||
Total other comprehensive loss before reclassification | (2,511) | 6,008 | |||
Reclassification into net income | 4 | 206 | |||
Related income tax effects | (1) | (43) | |||
Reclassification into net income net of tax | 3 | 163 | |||
Accumulated other comprehensive income (loss), Ending Balance | $ (42,552) | $ (42,853) | |||
|
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gain on termination of interest swap | $ 479 |
Segment Reporting (Narrative) (Details) - Item |
3 Months Ended | |
---|---|---|
Apr. 01, 2024 |
Mar. 31, 2024 |
|
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 3 | |
Subsequent Event | ||
Segment Reporting Information [Line Items] | ||
Annual revenue share amount period | 6 years |
Segment Reporting (Schedule of Segment Reporting Information) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Net interest income | $ 10,936 | $ 13,413 |
Provision for (recovery of) credit losses | (22) | (248) |
Noninterest income | 2,178 | 2,276 |
Noninterest expense | 8,819 | 8,861 |
Income before income taxes | 4,317 | 7,076 |
Provision for (benefit from) income taxes | 671 | 1,285 |
Net income | 3,646 | 5,791 |
Bank [Member] | ||
Segment Reporting Information [Line Items] | ||
Net interest income | 10,936 | 13,413 |
Provision for (recovery of) credit losses | (22) | (248) |
Noninterest income | 1,684 | 1,855 |
Noninterest expense | 8,270 | 8,370 |
Income before income taxes | 4,372 | 7,146 |
Provision for (benefit from) income taxes | 683 | 1,299 |
Net income | 3,689 | 5,847 |
VNB Trust & Estate Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Noninterest income | 304 | 260 |
Noninterest expense | 349 | 309 |
Income before income taxes | (45) | (49) |
Provision for (benefit from) income taxes | (10) | (10) |
Net income | (35) | (39) |
Masonry Capital [Member] | ||
Segment Reporting Information [Line Items] | ||
Noninterest income | 190 | 161 |
Noninterest expense | 200 | 182 |
Income before income taxes | (10) | (21) |
Provision for (benefit from) income taxes | (2) | (4) |
Net income | $ (8) | $ (17) |
Sale of Masonry Capital Management, LLC (Narrative) (Details) |
Apr. 01, 2024 |
---|---|
Subsequent Event | |
Sale of Masonry Capital Management LLC [Line Items] | |
Annual revenue share amount period | 6 years |
Share Repurchase Plan (Narrative) (Details) - $ / shares |
3 Months Ended | 4 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Jun. 30, 2023 |
May 14, 2024 |
|
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchased | 874 | ||
Average Price | $ 29.6 | ||
Percentage of Common stock outstanding percentage | 5.00% | ||
Subsequent Event | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchased | 20,350 | ||
Average Price | $ 27.42 |
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