10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

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: 333-205986

RIVER FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

ALABAMA	46-1422125
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2611 Legends Drive Prattville, Alabama	36066
(Address of principal executive offices)	(Zip Code)

(334) 290-1012

“Registrant’s telephone number, including area code”

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

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 August 1, 2023, the registrant had 6,669,981 shares of common stock, $1.00 par value per share, outstanding.

Auditor Firm Id: 669 Auditor Name: Mauldin & Jenkins, LLC Auditor Location: Birmingham, Alabama, USA

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Statements of Financial Condition	5
	Consolidated Statements of Income	6
	Consolidated Statements of Comprehensive (Loss) Income	7
	Consolidated Statements of Changes in Stockholders’ Equity	8
	Consolidated Statements of Cash Flows	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	63
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	67
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	68
Signatures		70

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of River Financial Corporation (“we”, “our” or “us” on a consolidated basis) contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Such statements include projections, predictions, expectations or statements as to beliefs or future events or results or refer to other matters that are not historical facts. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by the statements. This may be especially true given the current environment of the lingering COVID-19 pandemic. The forward-looking statements contained in this report are based on various factors and were derived using numerous assumptions. In some cases, you can identify these forward-looking statements by words like “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “intend”, “believe”, “estimate”, “predict”, “potential”, or “continue” or the negative of those words and other comparable words. You should be aware that those statements reflect only our predictions. If known or unknown risks or uncertainties should materialize, or if any one or more of our material underlying assumptions should prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind when reading this report and not place undue reliance on these forward-looking statements. Factors that might cause such differences include, but are not limited to:

As set forth elsewhere in the risk factors referred to at Item 1A of Part II of this Form 10-Q, the COVID-19 pandemic could have adverse results on our financial condition and results of operations and other areas set forth in such risk factors.

The COVID-19 pandemic could exaggerate the negative consequences set forth in the following forward-looking statements and we have attempted to outline in the risk factor section of this Form 10-Q our best assessment of how such negative consequences may arise.

Acquisition related factors:

•The businesses of any bank acquired by us may not be integrated successfully or the integration may be more difficult, time-consuming or costly than expected;

•The expected growth opportunities or costs savings from such transactions may not be fully realized or may take longer to realize than expected;

•Revenues following such transactions may be lower than expected as a result of losses of customers or other reasons;

•Deposit attrition, operating costs, customer loss and business disruption following such transactions, including difficulties in maintaining relationships with employees, may be greater than expected;

•Governmental approvals of such transactions may not be obtained on the proposed terms or expected timeframe;

•Reputational risks and the reaction of the companies’ customers to such transactions;

•Diversion of management time on merger related issues.

Factors affecting our Bank generally:

•Changes in asset quality and credit risk of our Bank;

•Inflation;

•Customer acceptance of our products and services;

•Customer borrowing, repayment, investment and deposit practices;

•The negative impact on profitability imposed on us by a compressed net interest margin on loans and other extensions of credit that affects our ability to lend profitably and to price loans effectively in the face of competitive pressures;

•Our liquidity requirements could be adversely affected by changes in our assets and liabilities;

•Our ability to attract, develop and retain qualified banking professionals;

•Failure to attract or retain stable deposits at reasonable cost that is competitive with the larger international, national, and regional financial service providers with which we compete;

•Significant reliance on loans secured by real estate and the associated vulnerability to downturns in the local real estate market, natural disasters and other variables impacting the value of real estate;

•The introduction, withdrawal, success and timing of business initiatives;

3

•The impact, extent, and timing of technological changes;

•A weakening of the economies in which we conduct operations may adversely affect our operating results;

•The U.S. legal and regulatory framework, or changes in such framework, could adversely affect our operating results;

•The interest rate environment may compress margins and adversely affect net interest income;

•Competition from other financial services companies in our markets could adversely affect operations; and

•Interruption in our business and the businesses of our customers caused by a downturn in the economy, possible weather-related conditions such as tornadoes or hurricanes, and the COVID-19 pandemic.

You should also consider carefully the risk factors referred to in Item 1A of Part II of this Form 10-Q, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements and could materially and adversely affect our business, operating results and financial condition. The risks discussed in this report are factors that, individually or in the aggregate, management believes could cause our actual results to differ materially from expected and historical results. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider such disclosures to be a complete discussion of all potential risks or uncertainties. Factors not here or there listed may develop or, if currently extant, we may not have yet recognized them.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

4

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

RIVER FINANCIAL CORPORATION

Consolidated Statements of Financial Condition

(in thousands except share data)

	June 30, 2023			December 31, 2022
	Unaudited			Audited
Assets
Cash and due from banks	$	50,218		$	31,952
Interest-bearing deposits in banks		30,505			42,874
Federal funds sold		25,000			-
Cash and cash equivalents		105,723			74,826
Certificates of deposit in banks		3,669			4,165
Securities held-to-maturity, at amortized cost		129,222			131,581
Securities available-for-sale, at fair value		631,518			665,887
Loans held for sale		8,536			3,413
Loans, net of unearned income and discounts		2,047,239			1,803,127
Less allowance for credit losses		(26,889	)		(24,310	)
Net loans		2,020,350			1,778,817
Premises and equipment, net		42,725			40,213
Accrued interest receivable		10,206			10,083
Bank owned life insurance		47,023			46,395
Foreclosed assets		546			609
Deferred income taxes, net		31,689			30,540
Core deposit intangible		1,755			2,116
Goodwill		27,817			27,817
Restricted equity securities		8,454			5,685
Other assets		15,524			11,235
Total assets	$	3,084,757		$	2,833,382
Liabilities and Shareholders' Equity
Noninterest-bearing deposits	$	670,935		$	672,956
Interest-bearing deposits		2,010,971			1,841,243
Total deposits		2,681,906			2,514,199
Securities sold under agreements to repurchase		16,642			8,181
Federal Home Loan Bank advances		155,000			95,000
Federal Reserve Bank discount window borrowings		20,000			25,000
Note payable		12,000			-
Subordinated debentures, net of loan costs		39,456			39,419
Accrued interest payable and other liabilities		12,943			13,397
Total liabilities		2,937,947			2,695,196
Common stock related to 401(k) Employee Stock Ownership Plan		4,048			4,160
Stockholders' Equity
Common stock ($1 par value; 15,000,000 and 10,000,000 shares authorized; 6,689,985 and 6,665,585     shares issued; 6,670,381 and 6,656,386 shares outstanding at June 30, 2023 and December 31, 2022, respectively)		6,690			6,666
Additional paid-in capital		104,688			104,294
Retained earnings		110,336			100,826
Accumulated other comprehensive loss		(72,581	)		(71,564	)
Unvested restricted stock		(1,594	)		(1,730	)
Treasury stock at cost (19,604 and 9,199 shares, respectively)		(729	)		(306	)
Common stock related to 401(k) Employee Stock Ownership Plan		(4,048	)		(4,160	)
Total stockholders' equity		142,762			134,026
Total equity		146,810			138,186
Total liabilities and stockholders' equity	$	3,084,757		$	2,833,382

The accompanying notes are an integral part of these financial statements.

5

RIVER FINANCIAL CORPORATION

Unaudited Consolidated Statements of Income

(in thousands except per share data)

	For the Three Months Ended:					For the Six Months Ended:
	June 30,					June 30,
	2023		2022			2023		2022
Interest income:
Loans, including fees	$	26,924	$	16,839		$	50,675	$	32,310
Taxable securities		3,612		3,399			7,269		6,572
Nontaxable securities		374		425			841		927
Federal funds sold		444		-			597		2
Other interest income		239		60			856		85
Total interest income		31,593		20,723			60,238		39,896
Interest expense:
Deposits		9,842		773			17,662		1,588
Short-term borrowings		131		7			230		11
Federal Home Loan Bank advances		1,731		41			2,918		41
Subordinated debentures		418		418			833		837
Note payable		248		-			335		-
Total interest expense		12,370		1,239			21,978		2,477
Net interest income		19,223		19,484			38,260		37,419
Provision for credit losses		1,311		930			2,622		930
Net interest income after provision for credit losses		17,912		18,554			35,638		36,489
Noninterest income:
Service charges and fees		1,885		1,731			3,623		3,334
Investment brokerage revenue		138		260			301		403
Mortgage operations		930		1,402			1,580		3,301
Bank owned life insurance income		319		307			629		610
Net gain (loss) on sales of investment securities		5		(678	)		5		(1,266	)
Other noninterest income		4,695		276			4,914		423
Total noninterest income		7,972		3,298			11,052		6,805
Noninterest expense:
Salaries and employee benefits		9,461		7,483			18,029		14,490
Occupancy expenses		922		645			1,830		1,290
Equipment rentals, depreciation, and maintenance		505		363			977		679
Telephone and communications		139		125			280		211
Advertising and business development		326		225			621		376
Data processing		930		873			1,950		1,722
Foreclosed assets, net		25		(40	)		35		(42	)
Federal deposit insurance and other regulatory assessments		723		289			1,294		654
Legal and other professional services		636		296			1,001		607
Other operating expenses		2,342		1,897			4,324		3,571
Total noninterest expense		16,009		12,156			30,341		23,558
Income before income taxes		9,875		9,696			16,349		19,736
Provision for income taxes		2,240		2,188			3,607		4,474
Net income	$	7,635	$	7,508		$	12,742	$	15,262
Basic net earnings per common share	$	1.14	$	1.13		$	1.91	$	2.30
Diluted net earnings per common share	$	1.13	$	1.11		$	1.88	$	2.27
Dividends per common share	$	-	$	-		$	0.48	$	0.44

The accompanying notes are an integral part of these financial statements.

6

RIVER FINANCIAL CORPORATION

Unaudited Consolidated Statements of Comprehensive (Loss) Income

(in thousands)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Net income	$	7,635		$	7,508		$	12,742		$	15,262
Other comprehensive loss, net of tax:
Investment securities available-for-sale:
Net unrealized (losses) gains		(10,970	)		(39,980	)		(1,169	)		(80,701	)
Income tax effect		2,755			10,038			294			20,264
Reclassification adjustments for losses (gains) realized in net income		(5	)		678			(5	)		1,266
Income tax effect		1			(170	)		1			(318	)
Reclassification adjustment for accretion of unrealized holding loss included in accumulated other comprehensive loss from the transfer of securities from available-for-sale to held-to-maturity		(93	)		(127	)		(184	)		(219	)
Income tax effect		23			32			46			55
Other comprehensive loss, net of tax		(8,289	)		(29,529	)		(1,017	)		(59,653	)
Comprehensive (loss) income	$	(654	)	$	(22,021	)	$	11,725		$	(44,391	)

The accompanying notes are an integral part of these financial statements.

7

RIVER FINANCIAL CORPORATION

Unaudited Consolidated Statements of Changes in Stockholders' Equity

(in thousands except share and per share data)

	Common Stock		Additional  Paid In Capital		Retained Earnings			Accumulated  Other Comprehensive  Loss			Unvested  Restricted  Stock			Treasury Stock			Common Stock Related  to ESOP			Total Stockholders'  Equity
Balance at December 31, 2022	$	6,666	$	104,294	$	100,826		$	(71,564	)	$	(1,730	)	$	(306	)	$	(4,160	)	$	134,026
Adoption of ASC topic 326						(24	)														(24	)
Net income		-		-		12,742			-			-			-			-			12,742
Other comprehensive loss, net of tax		-		-		-			(1,017	)		-			-			-			(1,017	)
Exercise of stock options (22,900 shares)		23		304		-			-			-			-			-			327
Purchase of treasury stock (15,154 shares)		-		-		-			-			-			(571	)		-			(571	)
Restricted stock grants, net of forfeiture (1,600 shares)		1		52		-			-			(53	)		-			-			-
Sale of treasury shares (4,749 shares)		-		12		-			-			-			148			-			160
Dividends declared ($0.48 per share)		-		-		(3,208	)		-			-			-			-			(3,208	)
Stock-based compensation expense		-		26		-			-			189			-			-			215
Change for ESOP related shares		-		-		-			-			-			-			112			112
Balance at June 30, 2023	$	6,690	$	104,688	$	110,336		$	(72,581	)	$	(1,594	)	$	(729	)	$	(4,048	)	$	142,762

The accompanying notes are an integral part of these financial statements.

8

RIVER FINANCIAL CORPORATION

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	For the Six Months
	Ended June 30,
	2023			2022
Cash Flows From Operating Activities:
Net Income	$	12,742		$	15,262
Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses		2,622			930
Provision for losses on foreclosed assets		60			-
Amortization of securities		1,457			2,231
Accretion of securities		(235	)		(261	)
Realized net (gain) loss on sales of securities available-for-sale		(5	)		1,266
Accretion of discount on acquired loans		(5	)		(6	)
Accretion of deferred loan fees / costs		(1,970	)		(1,881	)
Amortization of core deposit intangible asset		361			460
Amortization of debt issuance costs		38			37
Stock-based compensation expense		215			234
Bank owned life insurance income		(629	)		(610	)
Depreciation and amortization of premises and equipment		1,345			857
Gain on sales of foreclosed assets		(51	)		(80	)
Deferred income tax (benefit) expense		(808	)		308
(Increase) decrease in operating assets and (decrease) increase in operating liabilities:
Loans held-for-sale		(5,123	)		6,563
Accrued interest receivable		(123	)		(70	)
Other assets		(4,233	)		1,466
Accrued interest payable and other liabilities		(454	)		(316	)
Net cash from operating activities		5,204			26,390
Cash Flows Used For Investing Activities:
Maturity of certificate of deposit		496			498
Activity in securities available-for-sale:
Sales of securities available-for-sale		15,252			154,392
Maturities, payments, calls of securities available-for-sale		21,299			42,212
Purchases of securities available-for-sale		(4,833	)		(182,601	)
Activity in securities held-to-maturity:
Maturities, payments, calls of securities held-to-maturity		2,433			3,228
Purchases of securities held-to-maturity		-			(12,764	)
Loan principal originations, net		(242,689	)		(186,644	)
Proceeds from sale of foreclosed assets		485			444
Purchases of premises and equipment		(3,857	)		(2,810	)
Purchase of restricted equity securities, net		(2,769	)		(916	)
Net cash used for investing activities		(214,183	)		(184,961	)
Cash Flows From Financing Activities:
Net increase in deposits		167,707			134,686
Net decrease (increase) in securities sold under agreements to repurchase		8,461			(2,091	)
Proceeds from Federal Home Loan Bank advances		190,000			30,000
Repayment of Federal Home Loan Bank advances		(130,000	)		(10,000	)
Proceeds from issuance of note payable		12,000			-
Proceeds from Federal Reserve Bank discount window borrowings		20,000			-
Repayment of Federal Reserve Bank discount window borrowings		(25,000	)		-
Proceeds from exercise of common stock options		327			421
Purchase of treasury stock		(571	)		(619	)
Sale of treasury stock		160			677
Cash dividends		(3,208	)		(2,918	)
Net cash from financing activities		239,876			150,156
Net Change In Cash And Cash Equivalents		30,897			(8,415	)
Cash and Cash Equivalents At Beginning Of Period		74,826			61,962
Cash and Cash Equivalents At End Of Period	$	105,723		$	53,547
Supplemental Disclosures Of Cash Flows Information:
Cash Payments For:
Interest paid to depositors	$	17,427		$	1,632
Interest paid on borrowings	$	4,041		$	412
Income taxes	$	3,930		$	820
Non-cash investing and financing activities:
Transfer of loans to foreclosed assets	$	431		$	637
Transfer of securities from available-for-sale to held-to-maturity	$	-		$	78,047
Restricted stock grant	$	53		$	-

The accompanying notes are an integral part of these financial statements.

9

River Financial Corporation

Notes to Unaudited Consolidated Financial Statements

(amounts in thousands, except share and per share data)

Note 1 – Basis of Presentation

General

The unaudited consolidated financial statements include the accounts of River Financial Corporation (“River” or the “Company”) and its wholly owned subsidiary, River Bank & Trust (“Bank”). The Bank provides a full range of commercial and consumer banking services primarily in the Montgomery, Alabama metropolitan area, Autauga, Baldwin, Chilton, Coffee, Elmore, Etowah, Houston, Jefferson, Lee, Madison, Mobile, Morgan and Tallapoosa counties and surrounding counties in Alabama. The Bank is primarily regulated by the Federal Deposit Insurance Corporation (FDIC) and undergoes periodic examinations by this regulatory agency and the Alabama Banking Department. The Company is regulated by the Federal Reserve Bank (FRB) and is also subject to periodic examinations.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly River Financial Corporation’s consolidated statements of financial condition, statements of income, statements of comprehensive (loss) income, statements of changes in stockholders’ equity and statements of cash flows for the periods presented, and all such adjustments are of a normal recurring nature. All material intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the entire year.

These interim consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and, therefore, certain information and note disclosures normally presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted or abbreviated. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes as of December 31, 2022, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, the allowance for credit losses, foreclosed asset valuations, useful lives for depreciation and amortization, fair value of financial instruments, deferred taxes, and contingencies. Estimates that are particularly susceptible to significant change for the Company include the determination of the allowance for credit losses, investment securities impairment, and assessment of deferred tax assets and liabilities, and therefore are critical accounting policies. Management does not anticipate any material changes to estimates in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: external market factors such as market interest rates and employment rates, changes to operating policies and procedures, economic conditions in our markets, and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period presented.

Note 2 – Reclassifications

Certain prior period amounts have been reclassified to conform to the presentation used in 2023. These reclassifications had no material effect on the operations, financial condition or cash flows of the Company.

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Note 3 – Earnings Per Share

Basic earnings per common share are computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share are computed by dividing net income by the effect of the issuance of potential common shares that are dilutive and by the sum of the weighted-average number of shares of common stock outstanding. All shares owned by the Company’s 401(k) Employee Stock Ownership Plan (ESOP) are included in the earnings per share calculations.

The reconciliation of the components of the basic and diluted earnings per share is as follows (amounts in thousands):

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2023			2022	2023			2022
Net earnings available to common shareholders	$	7,635	$	7,508	$	12,742	$	15,262
Weighted average common shares outstanding		6,670,969		6,631,472		6,668,879		6,628,484
Dilutive effect of stock options		96,457		107,901		94,377		99,890
Diluted common shares		6,767,426		6,739,373		6,763,256		6,728,374
Basic earnings per common share	$	1.14	$	1.13	$	1.91	$	2.30
Diluted earnings per common share	$	1.13	$	1.11	$	1.88	$	2.27

Note 4 – Investment Securities

The following tables summarize the amortized cost and fair value of securities available-for-sale and securities held-to-maturity and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive (loss) income at June 30, 2023 and December 31, 2022 (amounts in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	432,357	$	63	$	(61,435	)	$	370,985
U.S. treasury securities		130,843		-		(13,234	)		117,609
U.S. govt. sponsored enterprises		70,838		-		(6,576	)		64,262
State, county, and municipal		73,770		-		(10,360	)		63,410
Corporate debt obligations		17,789		11		(2,548	)		15,252
Total available-for-sale	$	725,597	$	74	$	(94,153	)	$	631,518

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	66,356	$	-	$	(13,097	)	$	53,259
State, county, and municipal		62,866		-		(12,559	)		50,307
Total held-to-maturity	$	129,222	$	-	$	(25,656	)	$	103,566

11

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	449,348	$	-	$	(59,311	)	$	390,037
U.S. treasury securities		130,971		-		(13,342	)		117,629
U.S. govt. sponsored enterprises		72,889		-		(6,527	)		66,362
State, county, and municipal		87,347		71		(11,555	)		75,863
Corporate debt obligations		17,873		16		(1,893	)		15,996
Total available-for-sale	$	758,428	$	87	$	(92,628	)	$	665,887
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	68,688	$	-	$	(12,624	)	$	56,064
State, county, and municipal		62,893		-		(13,680	)		49,213
Total held-to-maturity	$	131,581	$	-	$	(26,304	)	$	105,277

The Company reassessed classification of certain investments, and effective February 2022, the Company transferred $75 million of residential mortgage-backed securities from available-for-sale to held-to-maturity. The transfer occurred at fair value. The related unrealized loss of $3.4 million included in accumulated other comprehensive (loss) income remained in accumulated other comprehensive (loss) income, to be amortized out of accumulated other comprehensive (loss) income with an offsetting entry to interest income as a yield adjustment through earnings over the remaining term of the securities. No gain or loss was recorded at the time of transfer.

Management evaluates securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

12

The following tables summarize securities with unrealized and unrecognized losses as of June 30, 2023 and December 31, 2022 aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position (amounts in thousands):

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	13,228	$	573	$	355,326	$	60,862	$	368,554	$	61,435
U.S. treasury securities		-		-		117,609		13,234		117,609		13,234
U.S. govt. sponsored enterprises		12,738		81		51,524		6,495		64,262		6,576
State, county & municipal		2,387		72		61,023		10,288		63,410		10,360
Corporate debt obligations		920		31		12,877		2,517		13,797		2,548
Total available-for-sale	$	29,273	$	757	$	598,359	$	93,396	$	627,632	$	94,153
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	53,259	$	13,097	$	53,259	$	13,097
State, county & municipal		-		-		44,962		12,559		44,962		12,559
Total held-to-maturity	$	-	$	-	$	98,221	$	25,656	$	98,221	$	25,656
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	133,675	$	15,215	$	253,994	$	44,096	$	387,669	$	59,311
U.S. treasury securities		-		-		117,629		13,342		117,629		13,342
U.S. govt. sponsored enterprises		32,695		2,449		33,523		4,078		66,218		6,527
State, county & municipal		53,744		7,250		17,905		4,305		71,649		11,555
Corporate debt obligations		3,190		310		11,352		1,583		14,542		1,893
Total available-for-sale	$	223,304	$	25,224	$	434,403	$	67,404	$	657,707	$	92,628
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	56,064	$	12,624	$	56,064	$	12,624
State, county & municipal		10,057		2,706		33,811		10,974		43,868		13,680
Total held-to-maturity	$	10,057	$	2,706	$	89,875	$	23,598	$	99,932	$	26,304

The Company owned a total of 333 securities with unrealized losses of $119.8 million at June 30, 2023. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. As such, there is no allowance for credit losses on available for sale or held to maturity securities recognized as of June 30, 2023.

As of June 30, 2023 and December 31, 2022, securities with a carrying value of approximately $290.8 million and $242.3 million, respectively, were pledged to secure public deposits as required by law. At June 30, 2023 and December 31, 2022, the carrying value of securities pledged to secure repurchase agreements was approximately $27.0 million and $16.2 million, respectively.

During the six months ended June 30, 2023, the Company sold investment securities for proceeds of $15.3 million and realized gains of $5.0 thosuand. During the six months ended June 30, 2022, the Company sold investment securities for proceeds of $154.4 million and realized losses of $1.3 million.

13

The amortized cost and estimated fair value of debt securities at June 30, 2023 and December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities for residential mortgage backed securities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. These securities are therefore not presented by maturity classification.

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities available-for-sale
Less than 1 year	$	-	$	-	$	1,055	$	1,054
1 to 5 years		157,725		141,928		141,565		127,459
5 to 10 years		60,877		53,410		77,174		68,737
After 10 years		74,638		65,195		89,286		78,600
		293,240		260,533		309,080		275,850
Residential mortgage-backed securities		432,357		370,985		449,348		390,037
Total available-for-sale	$	725,597	$	631,518	$	758,428	$	665,887

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities held-to-maturity
5 to 10 years	$	13,942	$	11,340	$	10,208	$	8,118
After 10 years		48,924		38,967		52,685		41,095
		62,866		50,307		62,893		49,213
Residential mortgage-backed securities		66,356		53,259		68,688		56,064
Total held-to-maturity	$	129,222	$	103,566	$	131,581	$	105,277

14

Note 5 – Loans, Allowance for Credit Losses and Credit Quality

Major classifications of loans at June 30, 2023 and December 31, 2022 are summarized as follows (amounts in thousands):

	June 30, 2023						December 31, 2022
	Amount			% of Total			Amount			% of Total
Residential real estate:
Closed-end 1-4 family - first lien	$	678,180			33.6	%	$	573,033			32.2	%
Closed-end 1-4 family - junior lien		11,485			0.6	%		9,422			0.5	%
Multi-family		15,576			0.6	%		14,106			0.8	%
Total residential real estate		705,241			34.8	%		596,561			33.5	%
Commercial real estate:
Nonfarm nonresidential		542,045			26.8	%		497,766			28.0	%
Farmland		57,773			2.9	%		53,691			3.0	%
Total commercial real estate		599,818			29.7	%		551,457			31.0	%
Construction and land development:
Residential		120,426			6.0	%		121,363			6.8	%
Other		157,262			7.8	%		135,127			7.6	%
Total construction and land development		277,688			13.8	%		256,490			14.4	%
Home equity lines of credit		77,806			3.9	%		64,215			3.6	%
Commercial loans:
Other commercial loans		239,210			11.8	%		193,053			10.9	%
Agricultural		61,561			3.0	%		56,946			3.2	%
State, county, and municipal loans		39,555			2.0	%		40,964			2.3	%
Total commercial loans		340,326			16.8	%		290,963			16.4	%
Consumer loans		53,673			2.7	%		49,592			2.8	%
Total gross loans		2,054,552			101.7	%		1,809,278			101.7	%
Allowance for credit losses		(26,889	)		-1.3	%		(24,310	)		-1.4	%
Net discounts		(154	)		0.0	%		(279	)		0.0	%
Net deferred loan fees		(7,159	)		-0.4	%		(5,872	)		-0.3	%
Net loans	$	2,020,350			100.0	%	$	1,778,817			100.0	%

The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general trade area. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market. Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to-income, collateral type and loan-to-value ratios for consumer loans.

The loan portfolio has been disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are three primary loan portfolio segments that include real estate, commercial, and consumer. A class is generally determined based on the initial measurement attribute, risk characteristic of the loan, and the Company’s method for monitoring and assessing credit risk. Classes within the real estate portfolio segment include residential real estate, commercial real estate, construction and land development and home equity lines of credit. The portfolio segments of non-real estate commercial loans and consumer loans have not been further segregated by class.

The following describe risk characteristics relevant to each of the portfolio segments:

Real estate - As discussed below, the Company offers various types of real estate loan products. All loans within this portfolio segment are particularly sensitive to the valuation of real estate:

Residential real estate and home equity lines of credit are repaid by various means such as through a borrower’s income, sale of the property, or rental income derived from the property.

15

Commercial real estate loans include both owner-occupied commercial real estate loans and other commercial real estate loans secured by income producing properties. Owner-occupied commercial real estate loans to operating businesses are long-term financing of land and buildings. These loans are repaid by cash flow generated from the business operation. Real estate loans for income-producing properties such as office and industrial buildings and retail shopping centers are repaid from rent income derived from the properties. Loans secured by farmland are repaid by various means such as through a borrower’s income, sale of the property, or rental income derived from the property.

Construction and land development loans are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio class includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral.

Commercial loans - The commercial loan portfolio segment includes commercial and industrial loans, agricultural loans and loans to states and municipalities. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows or tax revenues. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly by cash flows from the customers’ business operations.

Consumer loans - The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures.

Under the current expected credit losses (CECL) methodology, the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The following tables present the balance in the allowance for credit losses by portfolio segment. It also includes the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment and based on impairment method for the periods indicated below (amounts in thousands).

	Real Estate Mortgage Loans
					Construction			Home equity
					and land			lines
Allowance for Credit Losses	Residential		Commercial		development			of credit		Commercial			Consumer			Total
Balance - December 31, 2022 prior to adoption of ASC 326	$	5,088	$	10,057	$	3,377		$	562	$	4,778		$	448		$	24,310
Impact of adopting ASC 326		-		-		-			-		73			7			80
Provision for credit loss		771		876		430			239		160			146			2,622
Loan charge-offs		-		-		(196	)		-		(162	)		(40	)		(398	)
Loan recoveries		-		78		-			-		186			11			275
Balance - June 30, 2023	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Ending balance:
Individually evaluated for impairment	$	-	$	632	$	-		$	-	$	292		$	39		$	963
Collectively evaluated for impairment		5,859		10,379		3,611			801		4,743			533			25,926
Total	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Loans:
Individually evaluated for impairment	$	1,687	$	6,914	$	165		$	200	$	554		$	39		$	9,559
Collectively evaluated for impairment		703,554		592,904		277,523			77,606		339,772			53,634			2,044,993
Total	$	705,241	$	599,818	$	277,688		$	77,806	$	340,326		$	53,673		$	2,054,552

16

	Real Estate Mortgage Loans
						Construction		Home equity
						and land		lines
Allowance for Loan Losses	Residential			Commercial		development		of credit		Commercial			Consumer		Total
Balance - December 31, 2021	$	2,596		$	8,038	$	2,992	$	396	$	6,486		$	414	$	20,922
Provision (credit) for loan losses		1,062			265		361		66		(824	)		-		930
Loan charge-offs		(42	)		-		-		-		(148	)		-		(190	)
Loan recoveries		-			63		5		-		34			13		115
Balance - June 30, 2022	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Ending balance:
Individually evaluated for impairment	$	8		$	244	$	2	$	-	$	43		$	48	$	345
Collectively evaluated for impairment		3,608			8,122		3,356		462		5,505			379		21,432
Total	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Loans:
Individually evaluated for impairment	$	779		$	5,261	$	-	$	103	$	257		$	48	$	6,448
Collectively evaluated for impairment		422,586			437,437		241,078		53,064		254,088			45,113		1,453,366
Acquired loans with deteriorated credit quality		10			-		6		-		-			-		16
Total	$	423,375		$	442,698	$	241,084	$	53,167	$	254,345		$	45,161	$	1,459,830

The Company's unfunded lending commitments are unconditionally cancellable and therefore no allowance for credit losses has been recorded.

The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Bank measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by call report code and then risk grade grouping. Risk grade is grouped within each call report code by pass, watch, special mention, substandard, and doubtful. Other loan types are separated into their own cohorts due to specific risk characteristics for that pool of loans.

The Bank has elected a non-discounted cash flow methodology with a probability of default (PD) and loss-given default (LGD) for all cohorts. The PD calculation looks at the historical loan portfolio at particular points in time (each month during the lookback period) to determine the probability that loans in a certain cohort will default over the next 12-month period. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. Currently, the Bank’s historical data is insufficient due to a minimal amount of default activity or zero defaults, therefore management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Bank’s historical PDs.

The LGD calculation looks at actual losses (net charge-offs) experienced over the entire lookback period for each cohort of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. All defaults (non-accrual, charge-off, or greater than 90 days past due) occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event (i.e. nonaccrual or charge-off). Due to the very limited charge-off history, management uses index LGDs comprised of rates derived from the LGD experience of other community banks in place of the Bank’s historical LGDs.

The Bank utilizes reasonable and supportable forecasts of future economic conditions when estimating the allowance for credit losses on loans. The calculation includes a 12-month PD forecast based on the peer index regression model comparing peer defaults to the national unemployment rate. After the forecast period, PD rates revert on a straight-line basis back to long-term historical average rates over 12 months.

17

The Bank recognizes that all significant factors that affect the collectability of the loan portfolio must be considered to determine the estimated credit losses as of the evaluation date. Furthermore, the methodology, in and of itself and even when selectively adjusted by comparison to market and peer data, does not provide a sufficient basis to determine the estimated credit losses. The Bank adjusts the modeled historical losses by a qualitative adjustment to incorporate all significant risks to form a sufficient basis to estimate the credit losses. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience, loan review and audit results, asset quality and portfolio trends, loan portfolio growth, and concentrations, trends in underlying collateral, as well as external factors and economic conditions not already captured.

Loans that do not share risk characteristics are evaluated on an individual basis. Generally, this population includes loans on non-accrual status, however, they can also include any loan that does not share risk characteristics with its respective pool. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of the collateral at the reporting date unadjusted for selling costs as appropriate. When the expected source of repayment is from a source other than the underlying collateral, impairment will generally be measured based on the present value of expected proceeds discounted at the contractual interest rate.

The loss allocations for individually assessed and collectively assessed loans are totaled to determine the total required allowance for credit losses. This total is compared to the current allowance on the Bank’s books and adjustments made accordingly by a charge or credit to the provision for credit losses.

18

Treatment of Pandemic-related Loan Modifications Pursuant to the CARES Act and Interagency Statement

Section 4013 of the CARES Act, enacted on March 27, 2020, provided that, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act terminates (the “applicable period”), we may elect to suspend GAAP for loan modifications related to the pandemic that would otherwise be categorized as troubled debt restructurings (TDR) and suspend any determination of a loan modified as a result of the effects of the pandemic as being a TDR, including impairment for accounting purposes. The suspension wasapplicable for the term of the loan modification that occurred during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. The suspension was not applicable to any adverse impact on the credit of a borrower that was not related to the pandemic.

In addition, our banking regulators and other financial regulators, on March 22, 2020 and revised April 7, 2020, issued a joint interagency statement titled the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” that encouraged financial institutions to work prudently with borrowers who were unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. Pursuant to the interagency statement, loan modifications that did not meet the conditions of Section 4013 of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. Specifically, the agencies confirmed with the staff of the Financial Accounting Standards Board that short-term modifications made in good faith in response to the pandemic to borrowers who were current prior to any relief were not TDRs under GAAP. This included short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that were insignificant. Borrowers considered current were those that were less than 30 days past due on their contractual payments at the time a modification program was implemented. Appropriate allowances for loan and lease losses were expected to be maintained. With regard to loans not otherwise reportable as past due, financial institutions were not expected to designate loans with deferrals granted due to the pandemic as past due because of the deferral. The interagency statement also stated that during short-term pandemic-related loan modifications, these loans generally should not be reported as nonaccrual.

We have received requests from our borrowers for loan and lease deferrals and modifications including the deferral of principal payments or the deferral of principal and interest payments for terms generally around 90-180 days. Requests are evaluated individually and approved modifications are based on the unique circumstances of each borrower. In total, the Bank placed approximately $167 million of loans on a loan deferral plan as part of COVID-19 modifications. As of June 30, 2023, however, none of these loans remain on deferral. In accordance with Section 4013 of the CARES Act and the interagency statement, we have not accounted for such loans as TDRs, nor have we designated them as past due or nonaccrual. The risk ratings for these loans are evaluated regularly and evaluated for impairment if deemed necessary.

19

The following table presents collateral dependent impaired loans by class of loans as of June 30, 2023 (amounts in thousands). Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The Company considers all impaired loans to be collateral dependent.

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	614	$	614	$	614	$	-	$	-
Commercial real estate		3,087		3,087		639		2,448		632
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		3,701		3,701		1,253		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		523		523		-		523		261
Consumer loans		-		-		-		-		-
Total Loans	$	4,424	$	4,424	$	1,453	$	2,971	$	893

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,073	$	1,073	$	1,073	$	-	$	-
Commercial real estate		3,827		3,827		3,827		-		-
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		5,065		5,065		5,065		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		31		31		-		31		31
Consumer loans		39		39		-		39		39
Total Loans	$	5,135	$	5,135	$	5,065	$	70	$	70

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,687	$	1,687	$	1,687	$	-	$	-
Commercial real estate		6,914		6,914		4,466		2,448		632
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		8,766		8,766		6,318		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		554		554		-		554		292
Consumer loans		39		39		-		39		39
Total Loans	$	9,559	$	9,559	$	6,518	$	3,041	$	963

20

The following table presents collateral dependent impaired loans by class of loans as of December 31, 2022 (amounts in thousands).

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	239	$	239	$	239	$	-	$	-
Commercial real estate		599		599		373		226		241
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		838		838		612		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		-		-		-		-		-
Consumer loans		-		-		-		-		-
Total Loans	$	838	$	838	$	612	$	226	$	241

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,012	$	1,012	$	1,012	$	-	$	-
Commercial real estate		6,178		6,178		6,178		-		-
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		7,380		7,380		7,380		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,022	$	8,022	$	7,380	$	642	$	364

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,251	$	1,251	$	1,251	$	-	$	-
Commercial real estate		6,777		6,777		6,551		226		241
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		8,218		8,218		7,992		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,860	$	8,860	$	7,992	$	868	$	605

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The following table presents the average recorded investment in impaired loans and the interest income recognized on impaired loans in the six months ended June 30, 2023 and 2022 by loan category (amounts in thousands).

	Six Months Ended						Six Months Ended
	June 30, 2023						June 30, 2022
	Average		Ending				Average		Ending
	Recorded		Recorded		Interest		Recorded		Recorded		Interest
	Investment		Investment		Income		Investment		Investment		Income
Mortgage loans on real estate:
Residential real estate	$	1,585	$	1,687	$	28	$	1,234	$	779	$	16
Commercial real estate		6,806		6,914		234		5,655		5,261		259
Construction and land development		177		165		7		292		-		8
Total mortgage loans on real estate		8,568		8,766		269		7,181		6,040		283
Home equity lines of credit		67		200		-		169		103		-
Commercial loans		580		554		1		291		257		8
Consumer loans		43		39		1		91		48		2
Total Loans	$	9,258	$	9,559	$	271	$	7,732	$	6,448	$	293

The following tables present the performance status of loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

As of June 30, 2023	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	704,137	$	1,104	$	705,241
Commercial real estate		596,731		3,087		599,818
Construction and land development		277,680		8		277,688
Total mortgage loans on real estate		1,578,548		4,199		1,582,747
Home equity lines of credit		77,585		221		77,806
Commercial loans		339,803		523		340,326
Consumer loans		53,585		88		53,673
Total Loans	$	2,049,521	$	5,031	$	2,054,552

As of December 31, 2022	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	595,792	$	769	$	596,561
Commercial real estate		550,858		599		551,457
Construction and land development		256,481		9		256,490
Total mortgage loans on real estate		1,403,131		1,377		1,404,508
Home equity lines of credit		64,166		49		64,215
Commercial loans		290,897		66		290,963
Consumer loans		49,590		2		49,592
Total Loans	$	1,807,784	$	1,494	$	1,809,278

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The following tables present the aging of loans and non-accrual loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

	Accruing Loans
As of June 30, 2023	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	702,146	$	1,991	$	-	$	1,104	$	705,241	$	1,104
Commercial real estate		596,731		-		-		3,087		599,818		639
Construction and land development		277,510		170		-		8		277,688		8
Total mortgage loans on real estate		1,576,387		2,161		-		4,199		1,582,747		1,751
Home equity lines of credit		76,735		850		-		221		77,806		221
Commercial loans		339,446		357		-		523		340,326		-
Consumer loans		53,283		302		-		88		53,673		88
Total Loans	$	2,045,851	$	3,670	$	-	$	5,031	$	2,054,552	$	2,060

	Accruing Loans
As of December 31, 2022	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	594,055	$	1,737	$	72	$	697	$	596,561	$	454
Commercial real estate		545,354		5,504		-		599		551,457		-
Construction and land development		255,989		492		-		9		256,490		9
Total mortgage loans on real estate		1,395,398		7,733		72		1,305		1,404,508		463
Home equity lines of credit		64,016		150		-		49		64,215		26
Commercial loans		290,485		412		66		-		290,963		-
Consumer loans		49,251		339		-		2		49,592		2
Total Loans	$	1,799,150	$	8,634	$	138	$	1,356	$	1,809,278	$	491

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The Bank categorizes loans in risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Bank uses the following definitions for its risk ratings:

Special Mention - Weakness exists that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. Collateral values generally afford adequate coverage but may not be immediately marketable.

Substandard - Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.

Doubtful - Specific weaknesses characterized as Substandard that are severe enough to make collection in full unlikely. There is no reliable secondary source of full repayment. Loans classified as doubtful will be placed on non-accrual, analyzed and fully or partially charged-off based on review of collateral and other relevant factors.

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Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.

The following table presents loan balances classified by credit quality indicator, loan type and based on year of origination as of June 30, 2023 (amounts in thousands).

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Residential real estate
Pass	$	121,287	$	330,453	$	128,876	$	74,139	$	18,763	$	25,562	$	-	$	699,080
Special Mention		1,069		1,641		536		15		28		349		-		3,638
Substandard		36		887		225		340		539		496		-		2,523
Doubtful		-		-		-		-		-		-		-		-
Total residential real estate	$	122,392	$	332,981	$	129,637	$	74,494	$	19,330	$	26,407	$	-	$	705,241
Commercial real estate
Pass	$	52,058	$	198,873	$	106,828	$	102,620	$	53,490	$	75,239	$	-	$	589,108
Special Mention		766		-		-		910		-		1,972		-		3,648
Substandard		201		775		214		186		52		5,634		-		7,062
Doubtful		-		-		-		-		-		-		-		-
Total commercial real estate	$	53,025	$	199,648	$	107,042	$	103,716	$	53,542	$	82,845	$	-	$	599,818
Construction and land development
Pass	$	60,772	$	164,502	$	34,659	$	6,636	$	3,152	$	6,872	$	-	$	276,593
Special Mention		211		564		99		-		24		14		-		912
Substandard		-		165		8		10		-		-		-		183
Doubtful		-		-		-		-		-		-		-		-
Total construction and land development	$	60,983	$	165,231	$	34,766	$	6,646	$	3,176	$	6,886	$	-	$	277,688
Current-period gross charge-offs	$	-	$	-	$	196	$	-	$	-	$	-	$	-	$	196
Home equity lines of credit
Pass	$	17,320	$	27,248	$	12,906	$	5,527	$	3,330	$	11,049	$	-	$	77,380
Special Mention		-		100		-		-		-		-		-		100
Substandard		-		200		50		-		-		76		-		326
Doubtful		-		-		-		-		-		-		-		-
Total home equity lines of credit	$	17,320	$	27,548	$	12,956	$	5,527	$	3,330	$	11,125	$	-	$	77,806
Commercial loans
Pass	$	75,769	$	117,619	$	55,688	$	51,949	$	12,210	$	20,564	$	-	$	333,799
Special Mention		186		371		507		458		148		4,231		-		5,901
Substandard		72		-		-		27		-		527		-		626
Doubtful		-		-		-		-		-		-		-		-
Total commercial loans	$	76,027	$	117,990	$	56,195	$	52,434	$	12,358	$	25,322	$	-	$	340,326
Current-period gross charge-offs	$	116	$	46	$	-	$	-	$	-	$	-	$	-	$	162
Consumer loans
Pass	$	14,480	$	18,195	$	10,384	$	4,769	$	2,431	$	2,984	$	-	$	53,243
Special Mention		37		139		36		19		7		4		-		242
Substandard		21		69		29		20		-		49		-		188
Doubtful		-		-		-		-		-		-		-		-
Total consumer loans	$	14,538	$	18,403	$	10,449	$	4,808	$	2,438	$	3,037	$	-	$	53,673
Current-period gross charge-offs	$	-	$	38	$	-	$	2	$	-	$	-	$	-	$	40
Total Loans
Pass	$	341,686	$	856,890	$	349,341	$	245,640	$	93,376	$	142,270	$	-	$	2,029,203
Special Mention		2,269		2,815		1,178		1,402		207		6,570		-		14,441
Substandard		330		2,096		526		583		591		6,782		-		10,908
Doubtful		-		-		-		-		-		-		-		-
Total loans	$	344,285	$	861,801	$	351,045	$	247,625	$	94,174	$	155,622	$	-	$	2,054,552
Current-period gross charge-offs	$	116	$	84	$	196	$	2	$	-	$	-	$	-	$	398

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As of December 31, 2022, the risk category of loans by class of loans is as follows (amounts in thousands):

As of December 31, 2022	Pass		Special Mention		Substandard		Doubtful		Total
Mortgage loans on real estate:
Residential real estate	$	591,882	$	2,648	$	2,031	$	-	$	596,561
Commercial real estate		539,777		4,706		6,974		-		551,457
Construction and land development		256,200		77		213		-		256,490
Total mortgage loans on real estate		1,387,859		7,431		9,218		-		1,404,508
Home equity lines of credit		63,861		212		142		-		64,215
Commercial loans		283,359		7,008		596		-		290,963
Consumer loans		49,206		238		148		-		49,592
Total Loans	$	1,784,285	$	14,889	$	10,104	$	-	$	1,809,278

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Note 6 – Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, foreclosed assets, and repossessed assets. These nonrecurring fair value adjustments typically involve application of the lower of cost or market accounting or write-downs of individual assets.

Fair Value Hierarchy

The Company groups assets and liabilities 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. These levels are:

Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

The following is a description of valuation methodologies used for assets and liabilities recorded or disclosed at fair value:

Cash and cash equivalents – For disclosure purposes, for cash, due from banks, interest-bearing deposits and federal funds sold, the carrying amount is a reasonable estimate of fair value.

Certificates of deposit in banks – For disclosure purposes, the carrying amount of certificates of deposit is a reasonable estimate of fair value.

Investment Securities – Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange and securities that are traded by dealers or brokers in active over-the-counter market funds. Level 2 securities include mortgage-backed securities issued by government sponsored enterprises and municipal bonds. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Loans and mortgage loans held for sale – The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for credit losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. When a loan is identified as individually impaired, management measures impairment using one of three methods. These methods include collateral value, market value of similar debt, and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. As of June 30, 2023 and December 31, 2022, impaired loans were evaluated based on the fair value of the collateral. Impaired loans for which an allowance is established based on the fair value of collateral, or loans that were charged down according to the fair value of collateral, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price, the Company records the impaired loan as nonrecurring Level 2. When the fair value is based on an appraised value, the Company records the impaired loan as nonrecurring Level 3.

For disclosure purposes, the fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. For variable rate loans, the carrying amount is a reasonable estimate of fair value. Mortgage loans held-for-sale are carried at cost, which is a reasonable estimate of fair value.

Accrued interest receivable – For disclosure purposes, the fair value of the accrued interest on investments and loans is the carrying value.

Bank owned life insurance – For disclosure purposes, the fair value of the cash surrender value of bank owned life insurance policies is equivalent to the carrying value.

Foreclosed assets – Other real estate properties and miscellaneous repossessed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based

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upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price, the Company records the foreclosed asset as nonrecurring Level 2. When the fair value is based on an appraised value or management’s estimate of value, the Company records the foreclosed asset as nonrecurring Level 3.

Restricted equity securities – It is not practical to determine the fair value of restricted equity securities due to restrictions placed on transferability.

Deposits – For disclosure purposes, the fair value for demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities.

Securities sold under agreements to repurchase – For disclosure purposes, the carrying amounts of securities sold under agreements to repurchase approximate their fair values.

Federal Home Loan Bank advances – For disclosure purposes, the fair value of Federal Home Loan Bank advances is estimated using discounted cash flow analyses using interest rates offered for borrowings with similar maturities.

Federal Reserve Bank Discount Window Borrowings – For disclosure purposes, the fair value of the Federal Reserve Bank discount window borrowings is based on the quoted value for similar remaining maturities provided by the Federal Reserve Bank.

Note payable - For disclosure purposes, the carrying amount of the note payable approximates fair value.

Subordinated debentures – For disclosure purposes, the fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered for similar subordinated debenture offerings.

Accrued interest payable – For disclosure purposes, the fair value of the accrued interest payable on deposits is the carrying value.

Commitments to extend credit and standby letters of credit – Because commitments to extend credit and standby letters of credit are generally short-term and made using variable rates, the carrying value and estimated fair value associated with these instruments are immaterial.

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Assets and liabilities measured at fair value on a recurring basis – The only assets and liabilities measured at fair value on a recurring basis are our securities available-for-sale. There were no transfers between levels during the period. Information related to the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows: (amounts in thousands)

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	370,985	$	-	$	370,985	$	-
U.S. treasury securities		117,609		-		117,609		-
U.S. government sponsored enterprises		64,262		-		64,262		-
State, county, and municipal		63,410		-		63,410		-
Corporate debt obligations		15,252		-		9,898		5,354
Totals	$	631,518	$	-	$	626,164	$	5,354

	Fair Value Measurements At Reporting Date Using:
December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	390,037	$	-	$	390,037	$	-
U.S. treasury securities		117,629		-		117,629		-
U.S. government sponsored enterprises		66,362		-		66,362		-
State, county, and municipal		75,863		-		75,863		-
Corporate debt obligations		15,996		-		10,375		5,621
Totals	$	665,887	$	-	$	660,266	$	5,621

The Company's policy is to recognize transfers in and transfers out of levels 1, 2, and 3 as of the end of a reporting period. There were no transfers between levels from December 31, 2022 to June 30, 2023 (amounts in thousands):

	Significant Unobservable Inputs (Level 3)
	June 30, 2023			December 31, 2022
Fair value, beginning of period	$	5,621		$	-
Transfers into Level 3		-			5,621
Changes in unrealized gains/losses included in other comprehensive (loss) income for assets and liabilities still held at period-end		(267	)		-
Fair value, end of period	$	5,354		$	5,621

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Assets measured at fair value on a nonrecurring basis – The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below as of June 30, 2023 and December 31, 2022 (amounts in thousands):

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,596	$	-	$	-	$	8,596
Foreclosed assets		546		-		-		546
Totals	$	9,142	$	-	$	-	$	9,142

December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,255	$	-	$	-	$	8,255
Foreclosed assets		609		-		-		609
Totals	$	8,864	$	-	$	-	$	8,864

The Company has estimated the fair values of these assets using Level 3 inputs, specifically the appraised value of the collateral. Impaired loan balances represent those collateral dependent impaired loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the impaired loan for the amount of the credit loss. For Level 3 assets measured at fair value on a non-recurring basis as of June 30, 2023 and December 31, 2022 for the valuation technique, we used appraisals. For the significant unobservable input, we used appraisal discounts, and weighted average input of 15-20% was used for the period ended June 30, 2023 and December 31, 2022.

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The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments as of June 30, 2023 and December 31, 2022 are as follows (amounts in thousands):

			Estimated Fair Value
June 30, 2023	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	105,723	$	105,723	$	-	$	-
Certificates of deposit in banks		3,669		-		3,669		-
Securities held-to-maturity		129,222		-		103,566		-
Securities available-for-sale		631,518		-		626,164		5,354
Loans held-for-sale		8,536		-		8,536		-
Loans receivable, net		2,020,350		-		1,951,162		8,596
Accrued interest receivable		10,206		-		10,206		-
Bank owned life insurance		47,023		-		47,023		-
Restricted equity securities		8,454		-		-		8,454
Financial liabilities:
Deposits		2,681,906		-		2,483,292		-
Securities sold under agreements to repurchase		16,642		-		16,642		-
Federal Home Loan Bank advances		155,000		-		147,131		-
Federal Reserve Bank discount window borrowings		20,000		-		19,997		-
Note payable		12,000				12,000
Subordinated debentures		39,456		-		30,472		-
Accrued interest payable		1,605		-		1,605		-

			Estimated Fair Value
December 31, 2022	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	74,826	$	74,826	$	-	$	-
Certificates of deposit in banks		4,165		-		4,165		-
Securities held-to-maturity		131,581		-		105,277		-
Securities available-for-sale		665,887		-		660,266		5,621
Loans held-for-sale		3,413		-		3,413		-
Loans receivable, net		1,778,817		-		1,708,410		8,255
Accrued interest receivable		10,083		-		10,083		-
Bank owned life insurance		46,395		-		46,395		-
Restricted equity securities		5,685		-		-		5,685
Financial liabilities:
Deposits		2,514,199		-		2,307,026		-
Securities sold under agreements to repurchase		8,181		-		8,181		-
Federal Home Loan Bank advances		95,000		-		95,091		-
Federal Reserve Bank discount window borrowings		25,000		-		25,000		-
Subordinated debentures		39,419		-		31,039		-
Accrued interest payable		1,296		-		1,296		-

The estimated fair values of the standby letters of credit and loan commitments on which the committed interest rate is less than the current market rate are insignificant as of June 30, 2023 and December 31, 2022.

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change 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.

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Note 7 – Recently Adopted Accounting Pronouncements

In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments eliminate the accounting guidance for TDR recognition in Subtopic 310-40, Receivables – Trouble Debt Restructurings by Creditors by entities that have adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. For public business entities, the amendments require disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The Company adopted ASU 2022-02 effective January 1, 2023 on a prospective basis. Adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

The Company adopted ASU 2016-13 and all subsequent amendments thereto effective January 1, 2023, using the modified retrospective method for all financial assets measured at amortized cost and off balance sheet credit exposures. Amounts for periods beginning on or after January 1, 2023, are presented under ASU 2016-13 and all prior period information is presented in accordance with previously applicable GAAP. At January 1, 2023, the Company recognized a cumulative adjustment to retained earnings of $24 thousand, net of tax, attributable to an increase in the allowance for credit losses of $80 thousand and an increase in deferred tax assets of $8 thousand. Included in the $80 thousand increase in the allowance for credit losses is $48 thousand that was recognized on purchased with credit deterioration (PCD) loans previously classified as purchased credit impaired (PCI) with a corresponding adjustment to the gross carrying amount of the loans. The Company adopted ASU 2016-13 using the prospective transition approach for PCD loans, which did not require re-evaluation of whether loans previously classified as PCI loans met the criteria of PCD assets at the date of adoption. The remaining noncredit discount will be accreted into interest income over the life of the individual loans beginning January 1, 2023

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Note 8 – Recently Issued Accounting Pronouncements

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 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. The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits. ASU 2023-02 is effective for public entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. The Company is assessing its tax credit investments for whether they qualify for proportional amortization treatment and plans to adopt the amendments soon after. The Company does not currently believe the amendments will have a material impact on its consolidated financial statements.

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Note 9 – Defined Contribution Plan

The Company provides a 401(k) employee stock ownership plan (ESOP), which covers substantially all of the Company’s employees who are eligible, as to age and length of service. A participant may elect to make contributions up to $22.5 thousand and $20.5 thousand of the participant’s annual compensation in 2023 and 2022, respectively. The Company makes contributions up to 3% of each participant’s annual compensation and the Company matches 50% of the next 2% contributed by the employee. Contributions to the plan by the Company were approximately $462 thousand and $371 thousand for the six months ended June 30, 2023 and 2022, respectively. Outstanding shares of the Company’s common stock allocated to participants at June 30, 2023 and December 31, 2022 totaled 154,293 and 154,997 shares respectively, and there were no unallocated shares. These shares are treated as outstanding for purposes of calculating earnings per share and dividends on these shares are included in the Consolidated Statements of Stockholders’ Equity.

The Company’s ESOP includes a put option for shares of the Company’s common stock distributed from the ESOP. Shares are distributed from the ESOP primarily to separate vested participants and certain eligible participants who elect to diversify their account balances. Since the Company’s common stock is not currently traded on an established securities market, if the owners of distributed shares desire to sell their shares, the Company is required to purchase the shares at fair value during two put option periods following the distribution of the shares from the ESOP. The first put option period is within sixty days following the distribution of the shares from the ESOP. The second put option period begins on the first day of the fifth month of the plan year for a sixty day period. The fair value of distributed shares subject to the put option totaled $0 as of June 30, 2023 and December 31, 2022. The cost of the ESOP shares totaled $4.05 million and $4.16 million as of June 30, 2023 and December 31, 2022, respectively. Due to the Company’s obligation under the put option, the distributed shares and ESOP shares are classified as temporary equity in the mezzanine section of the consolidated statements of financial condition and totaled $4.05 million and $4.16 million as of June 30, 2023 and December 31, 2022, respectively. The fair value of the ESOP shares totaled $5.90 million and $5.93 million as of June 30, 2023 and December 31, 2022, respectively.

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Note 10 – Loans Held for Sale

The Company has entered into agreements with secondary market investors to deliver loans on a “best efforts delivery” basis. When a rate is committed to a borrower, it is based on the best price that day and locked with the investor for the customer for a thirty day period. In the event the loan is not delivered to the investor, the Company has no risk or exposure with the investor. The fair values of the Company’s agreements with investors and rate lock commitments to customers as of June 30, 2023 and December 31, 2022, respectively, were not material.

Note 11 – Leases

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

Lessee Accounting

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches and office space with terms extending through 2036. Substantially all of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated statements of condition as a right-of-use (ROU) asset and a corresponding lease liability. The Company elected to use the optional transition method, which allowed for a modified retrospective method of adoption with an immaterial cumulative effect adjustment to retained earnings without restating comparable periods. The Company also elected the relief package of practical expedients for which there is no requirement to reassess existence of leases, their classification, and initial direct costs. The Company also applied the exemption for short-term leases with a term of less than one year and therefore we do not recognize a lease liability or right-of-use asset on the balance sheet but instead recognize lease payments as an expense over the lease term as appropriate.

The following table represents the consolidated statements of condition classification of the Company’s ROU assets and lease liabilities. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated statements of condition.

Lease Right-of-Use Assets	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease right-of-use assets	Other Assets	$	3,494	$	3,582
Lease Liabilities	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease liabilities	Accrued interest payable and other liabilities	$	3,643	$	3,716

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The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

	June 30, 2023			December 31, 2022
Weighted-average remaining lease term for operating leases	8.69 Years			9.62 Years
Weighted-average discount rate for operating leases		6.00	%		6.00	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2023 are as follows:

	Operating Leases
July 1, 2023 - June 30, 2024	$	828
July 1, 2024 - June 30, 2025		700
July 1, 2025 - June 30, 2026		577
July 1, 2026 - June 30, 2027		426
July 1, 2027 - June 30, 2028		393
Afterward		1,989
Total future minimum lease payments		4,913
Amounts representing interest		(1,270	)
Present value of net future minimum lease payments	$	3,643

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes thereto for the year ended December 31, 2022, which are contained in the Annual Report on Form 10-K for the year ended December 31, 2022. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Factors that could cause such differences are discussed in our 2022 Annual Report on Form 10-K under “Part I, Item 1A - Risk Factors.” We assume no obligation to update any of these forward-looking statements.

The following discussion pertains to our historical results on a consolidated basis. However, because we conduct all of our material business operations through our subsidiaries, the discussion and analysis relates to activities primarily conducted at the subsidiary level.

All dollar amounts in the tables in this section are in thousands of dollars, except per share data, yields, percentages and rates or when specifically identified. As used in this Item, the words “we,” “us,” “our,” the “Company,” “RFC,” “River” and similar terms refer to River Financial Corporation and its consolidated affiliate, unless the context indicates otherwise.

Current Developments regarding COVID-19

As a result of the COVID-19 pandemic and its continuing concerns as well as the potential adverse effects it may have on our customers, including our loan and depositor relationships, we continue to assess how such developments could affect our business and operations. We have taken the following steps to operate in an environment that is safe for both our employees and customers (and the public in general) and have implemented guidelines and programs to assist our customers and help ensure the safe and sound operation of our Bank.

Daily Operations

1. We have established social distancing policies in keeping with federal and state of Alabama guidelines to help ensure the health of our employees. To the extent possible, we have encouraged our employees to work remotely, and we believe such steps have been welcomed by, and helpful to, our employees.

2. Currently, our lobbies at our main office and branches and public areas are open to walk-in business and other in-person visits by customers. Among other things, customers may have in-person meetings at our facilities, consistent with social distancing policies, including customers who may wish to have access to their safe deposit boxes. We have installed plexiglass in lobby areas for employees that have regular contact with customers and masks are available for both employees and customers as needed.

3. Our drive-through facilities at all our locations remain open for customer service, and we believe that the drive-through option for customers has worked well. All of our ATM locations are operative.

We expect to continue with the foregoing procedures until both the federal and state guidance provides comfort that a return to a more normal operation environment is advisable and we, too, are comfortable with such return.

Participation in Government Programs

We are participating in several government programs designed to assist customers, to bolster the economy and to provide protection for the Bank.

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Paycheck Protection Program

The Bank participated as a lender in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) as established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP was established under the CARES Act to provide unsecured low interest rate loans to small businesses that have been impacted by the COVID-19 pandemic. The PPP loans are 100% guaranteed by the SBA. The loans have a fixed interest rate of 1% and payments of interest and principal are deferred until the earlier of the date the SBA remits the forgiveness amount to the lender, the forgiveness application is denied, or if no forgiveness application is filed, ten months from the end of the covered period. If originated before June 5, 2020, loans matured two years from origination, and if origination occurred on or after June 5, 2020, loans mature five years from origination. PPP loans are forgiven by the SBA (which makes forgiveness payments directly to the lender) to the extent the borrower uses the proceeds of the loan for certain purposes (primarily to fund payroll costs) during a certain time period following origination and maintains certain employee and compensation levels. Lenders receive processing fees from the SBA for originating the PPP loans which were based on a percentage of the loan amount. On December 27, 2020, legislation was enacted that renewed the PPP and allocated additional appropriations for both new first-time PPP loans under the existing PPP and second-draw PPP loans for certain eligible borrowers that had previously received a PPP loan. As of June 30, 2023, the Bank has approximately 16 PPP loans in the aggregate amount of approximately $432 thousand outstanding. At December 31, 2022, the Bank had approximately 27 PPP loans in the aggregate amount of approximately $781 thousand outstanding.

Our Business

We are a bank holding company headquartered in Prattville, Alabama. We engage in the business of banking through our wholly-owned banking subsidiary, River Bank & Trust, which we may refer to as the “Bank” or “River Bank.” Through the Bank, we provide a broad array of financial services to businesses, business owners, professionals, and consumers. As of June 30, 2023, we operated twenty-two full-service banking offices in Alabama in the cities of Montgomery, Prattville, Millbrook, Wetumpka, Auburn, Opelika, Gadsden, Alexander City, Daphne, Clanton, Dothan, Enterprise, Mobile, Decatur, Huntsville, Saraland, and Birmingham, Alabama.

Segments

While our chief decision makers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment. Because the overall banking operations comprise substantially all of the consolidated operations, no separate segment disclosures are presented in the accompanying consolidated financial statements.

Overview of Second Quarter 2023 Results

Net income was $7.6 million in the quarter ended June 30, 2023, compared with $7.5 million in the quarter ended June 30, 2022. Several significant measures from the 2023 second quarter include:

•Net interest margin (taxable equivalent) of 2.68%, compared with 3.34% for the second quarter of 2022.

•Net interest income decrease of $261.0 thousand for the quarter ended June 30, 2023, representing a -1.34% rate of decrease over the quarter ended June 30, 2022.

•Annualized return on average earning assets for the quarter ended June 30, 2023 of 1.05% compared with 1.27% for the quarter ended June 30, 2022.

•Annualized return on average equity for the quarter ended June 30, 2023 of 20.77% compared with 20.56% for the quarter ended June 30, 2022.

•Loan increase of $136.7 million during the quarter ended June 30, 2023, representing a 28.63% annualized growth rate.

•Securities decrease of $39.5 million during the quarter ended June 30, 2023, representing a 19.75% annualized decrease for the quarter.

•Deposit increase of $18.0 million during the quarter ended June 30, 2023, representing a 2.70% annualized growth rate.

•Stockholders’ equity decrease of $617.0 thousand during the quarter ended June 30, 2023 representing a 1.72% annualized decrease.

•Book value per share of $22.01 at June 30, 2023, compared with $20.76 per share at December 31, 2022.

•Tangible book value per share of $17.58 at June 30, 2023, compared with $16.27 at December 31, 2022.

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Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared based on the application of certain accounting policies, the most significant of which are described in the notes to the financial statements for the year ended December 31, 2022, which are contained in our Annual Report filed on Form 10-K. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variation and may significantly affect our reported results and financial position for the current period or future periods. The use of estimates, assumptions, and judgment is necessary when financial assets and liabilities are required to be recorded at or adjusted to reflect fair value. Assets carried at fair value inherently result in more financial statement volatility. Fair values and information used to record valuation adjustments for certain assets and liabilities are based on quoted market prices or are provided by other independent third-party sources, when available. When such information is not available, management estimates valuation adjustments. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on our future financial condition and results of operations.

The following briefly describes the more complex policies involving a significant amount of judgments about valuation and the application of complex accounting standards and interpretations.

Allowance for Credit Losses

The allowance for credit losses has been determined in accordance with GAAP. The Company is responsible for the timely and periodic determination of the amount of the allowance for credit losses. Management believes that the allowance for credit losses is adequate to cover expected credit losses over the life of the loan portfolio. Although management evaluates available information to determine the adequacy of the allowance for credit losses, the level of allowance is an estimate which is subject to significant judgment and short-term change. Because of uncertainties associated with local and national economic forecasts, the operating and regulatory environment, collateral values and future cash flows from the loan portfolio, it is possible that a material change could occur in the allowance for credit losses in the near term. The evaluation of the adequacy of loan collateral is often based upon estimates and appraisals. Because of changing economic conditions, the valuations determined from such estimates and appraisals may also change.

Accordingly, the Company may ultimately incur losses that vary from management’s current estimates. Adjustments to the allowance for credit losses will be reported in the period in which such adjustments become known and can be reasonably estimated. All loan losses are charged to the allowance for credit losses when the loss actually occurs or when the collectability of the principal is unlikely. Recoveries are credited to the allowance at the time of recovery. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses. As a result of such examinations, the Company may need to recognize additions to the allowance for credit losses based on the regulators’ judgments.

In estimating the allowance for credit losses, the Company relies on models and economic forecasts developed by external parties as the primary driver of the allowance for credit losses. These models and forecasts are based on nationwide sets of data. Economic forecasts can change significantly over an economic cycle and have a significant level of uncertainty associated with them. The performance of the models is dependent on the variables used in the models being reasonable proxies for the loan portfolio’s performance. However, these variables may not capture all sources of risk within the portfolio. As a result, the Company reviews the results and makes qualitative adjustments to the models to capture limitations of the models as necessary. Such qualitative factors may include adjustments to better capture the imprecision associated with the economic forecasts, and the ability of the models to capture emerging risks within the portfolio that may not be represented in the data. These judgments are evaluated through Company’s review process, and revised on a quarterly basis to account for changes in facts and circumstances. It is difficult to estimate how potential changes in any one of the quantitative inputs or qualitative factors might affect the overall allowance for credit losses and the Company’s current assessments may not reflect the potential future impact of changes to those inputs or factors.

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Investment Securities Impairment

Effective January 1, 2023, the Company estimates and recognizes an allowance for credit losses for held-to-maturity (HTM) debt securities pursuant to ASU No. 2016-13. The Company has a zero loss expectation for its HTM securities portfolio, except for U.S. State and Municipal securities, and therefore it is not required to estimate an allowance for credit losses related to these securities. For HTM securities that do not have a zero loss expectation, the allowance for credit losses is based on the security’s amortized cost, excluding interest receivable, and represents the portion of the amortized cost that the Company does not expect to collect over the life of the security. The allowance for credit losses is determined using average industry credit ratings and historical loss experience, and is initially recognized upon acquisition of the securities, and subsequently remeasured on a recurring basis. The Company evaluates available for sale (AFS) debt securities that experienced a decline in fair value below amortized cost for credit impairment. In performing an assessment of whether any decline in fair value is due to a credit loss, the Company considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level, such as credit deterioration of the issuer, explicit or implicit guarantees by the federal government or collateral underlying the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than the amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive (loss) income, net of tax. The Company recognizes a credit impairment if the Company has the intent to sell the security, or it is more likely than not that the Bank will be required to sell the security before recovery of its amortized cost. Prior to the adoption of ASU No. 2016-13 Management evaluated AFS and HTM debt securities for other-than-temporary-impairment on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.

Income Taxes

Deferred income tax assets and liabilities are computed using the asset and liability method, which recognizes a liability or asset representing the tax effects, based on current tax law, of future deductible or taxable amounts attributable to events recognized in the financial statements. A valuation allowance may be established to the extent necessary to reduce the deferred tax asset to a level at which it is “more likely than not” that the tax assets or benefits will be realized. Realization of tax benefits depends on having sufficient taxable income, available tax loss carrybacks or credits, the reversing of taxable temporary differences and/or tax planning strategies within the reversal period, and whether current tax law allows for the realization of recorded tax benefits.

Business Combinations

Assets purchased and liabilities assumed in a business combination are recorded at their fair value. The fair value of a loan portfolio acquired in a business combination requires greater levels of management estimates and judgment than the remainder of purchased assets or assumed liabilities. On the date of acquisition, when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments, the difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference. We must estimate expected cash flows at each reporting date. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges and adjusted accretable yield which will have a positive impact on interest income. In addition, purchased loans without evidence of credit deterioration are also handled under this method.

Comparison of the Results of Operations for the six months ended June 30, 2023 and 2022

The following is a narrative discussion and analysis of significant changes in our results of operations for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Net Income

During the three months ended June 30, 2023, our net income was $7.6 million, compared to $7.5 million for the three months ended June 30, 2022, an increase of $127.0 thousand, or 1.69%. The primary reason for the increase in net income for the second quarter of 2023 as compared to the second quarter of 2022 was an increase in noninterest income offset by an increase in noninterest expense. Total noninterest income for the second quarter of 2023 was $8.0 million compared to $3.3 million for the quarter ended June 30, 2022. This increase in noninterest income was primarily the result of a $3.7 million Community Development Financial Insituation award received in the second quarter of 2023. Total noninterest expense in the second quarter of 2023 increased $3.9 million, or 31.70%, from the second quarter of 2022. The most significant increase was an increase of $2.0 million in salaries and employee benefits. During the three months ended June 30, 2023, net interest income was $19.2 million compared to $19.5 million for the three months ended June 30, 2022, a decrease of $261.0 thousand, or -1.34%. This decrease is a result of higher costs of deposit funding. The provision for credit losses also increased approximately $381.0 thousand from the second quarter of 2022 to the second quarter of 2023. The increase in the provision for credit loss was a result of the loan growth during the second quarter of 2023.

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During the six months ended June 30, 2023, our net income was $12.7 million, compared to $15.3 million for the six months ended June 30, 2022, a decrease of $2.5 million, or -16.51%. The primary reason for the decrease in net income for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 was an increase in noninterest expense offset by an increase in noninterest income. Total noninterest expense in the first six months of 2023 increased $6.8 million, or 28.79%, from the first six months of 2022 . The most significant increase was an increase of $3.5 million in salaries and employee benefits. Total noninterest income for the first six months of 2023 was $11.1 million compared to $6.8 million in the first six months of 2022 . This increase in noninterest income was primarily the result of a $3.7 million Community Development Financial Insituation award recognized in 2023. During this period in 2023, net interest income was $38.3 million compared to $37.4 million for the same period in 2022, an increase of $841.0 thousand, or 2.25%. This increase is a result of higher levels of loan volume and other earning assets from organic growth. The provision for loan losses increased approximately $1.7 million from the second quarter of 2022 to the second quarter of 2023.

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Net Interest Income and Net Interest Margin Analysis

The largest component of our net income is net interest income – the difference between the income earned on interest earning assets and the interest paid on deposits and borrowed funds used to support assets. Net interest income divided by average interest earning assets represents our net interest margin. The major factors that affect net interest income and net interest margin are changes in volumes, the yield on interest earning assets and the cost of interest bearing liabilities. Our net interest margin can also be affected by economic conditions, the competitive environment, loan demand, and deposit flow. Management’s ability to respond to changes in these factors by using effective asset-liability management techniques is critical to maintaining the stability of the net interest margin and the primary source of earnings. This is discussed in greater detail under the heading “Interest Sensitivity and Market Risk”.

Comparison of net interest income for the three months ended June 30, 2023 and 2022

The following table shows, for the three months ended June 30, 2023 and 2022, the average balances of each principal category of our earning assets and interest bearing liabilities and the average taxable equivalent yields on assets and average costs of liabilities. These yields and costs are calculated by dividing the income or expense by the average daily balance of the associated assets or liabilities (amounts in thousands).

	Three Months Ended June 30, 2023								Three Months Ended June 30, 2022
			Interest								Interest
	Average		Income/			Average			Average		Income/			Average
	Balance		Expense			Yield/Rate			Balance		Expense			Yield/Rate
Interest earning assets
Loans	$	1,972,833	$	26,938			5.44	%	$	1,386,522	$	16,793			4.86	%
Mortgage loans held for sale		9,200		80			3.47	%		12,372		104			3.36	%
Investment securities:
Taxable securities		798,192		3,612			1.82	%		862,231		3,399			1.58	%
Tax-exempt securities		69,915		497			2.85	%		78,708		543			2.76	%
Interest bearing balances in other banks		20,776		239			4.62	%		24,180		60			0.99	%
Federal funds sold		34,558		444			5.16	%		-		-			0.00	%
Total interest earning assets	$	2,905,474	$	31,810			4.37	%	$	2,364,013	$	20,899			3.55	%
Interest bearing liabilities
Interest bearing transaction accounts	$	630,441	$	1,715			1.09	%	$	537,029	$	107			0.08	%
Savings and money market accounts		846,508		4,121			1.95	%		815,461		391			0.19	%
Time deposits		495,886		4,006			3.24	%		244,844		275			0.45	%
Short-term borrowings		17,276		131			3.09	%		10,734		7			0.23	%
Federal Home Loan Bank advances		137,857		1,731			5.03	%		16,484		41			1.00	%
Subordinated debt		40,000		418			4.19	%		40,000		418			4.20	%
Note payable		12,000		248			8.28	%		-		-			0.00	%
Total interest bearing liabilities	$	2,179,968	$	12,370			2.28	%	$	1,664,552	$	1,239			0.30	%
Noninterest-bearing funding of earning assets		725,506		-			0.00	%		699,461		-			0.00	%
Total cost of funding earning assets	$	2,905,474	$	12,370			1.71	%	$	2,364,013	$	1,239			0.21	%
Net interest rate spread							2.09	%							3.25	%
Net interest income/margin (taxable equivalent)			$	19,440			2.68	%			$	19,660			3.34	%
Tax equivalent adjustment				(217	)							(176	)
Net interest income/margin			$	19,223			2.63	%			$	19,484			3.31	%

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The following table reflects, for the three months ended June 30, 2023 and 2022, the changes in our net interest income due to variances in the volume of interest earning assets and interest bearing liabilities and variances in the associated rates earned or paid on these assets and liabilities (amounts in thousands).

	Three Months Ended June 30, 2023 vs.
	Three Months Ended June 30, 2022
				Variance
				due to
	Volume			Yield/Rate			Total
Interest earning assets
Loans	$	7,292		$	2,853		$	10,145
Mortgage loans held for sale		(27	)		3			(24	)
Investment securities:
Taxable securities		(265	)		478			213
Tax-exempt securities		(62	)		16			(46	)
Interest bearing balances in other banks		(9	)		188			179
Federal funds sold		(7	)		451			444
Total interest earning assets	$	6,922		$	3,989		$	10,911
Interest bearing liabilities
Interest bearing transaction accounts	$	19		$	1,589		$	1,608
Savings and money market accounts		16			3,714			3,730
Time deposits		283			3,448			3,731
Short-term borrowings		1			123			124
Federal Home Loan Bank advances		306			1,384			1,690
Subordinated debentures		2			(2	)		-
Note payable		-			248			248
Total interest bearing liabilities	$	627		$	10,504		$	11,131
Net interest income
Net interest income (taxable equivalent)	$	6,295		$	(6,515	)	$	(220	)
Taxable equivalent adjustment		(35	)		(6	)		(41	)
Net interest income	$	6,260		$	(6,521	)	$	(261	)

Total interest income for the three months ended June 30, 2023 was $31.6 million and total interest expense was $12.4 million, resulting in net interest income of $19.2 million for the period. For the same period of 2022, total interest income was $20.7 million and total interest expense was $1.2 million, resulting in net interest income of $19.5 million for the period. This represents a -1.34% decrease in net interest income when comparing the same period from 2023 and 2022. When comparing the variances related to interest income for the three months ended June 30, 2023 and 2022, the increase was primarily attributed to increases in average volumes in loans. The volume related increase in interest income for the three months ended June 30, 2023 was accompanied by an increase in the yield on loans and investment securities. When comparing variances related to interest expense for the three months ended June 30, 2023 and 2022, the increase primarily resulted from an increase in deposit and borrowing rates in 2023.

43

Comparison of net interest income for the six months ended June 30, 2023 and 2022

The following table shows, for the six months ended June 30, 2023 and 2022, the average balances of each principal category of our earning assets and interest bearing liabilities and the average taxable equivalent yields on assets and average costs of liabilities. These yields and costs are calculated by dividing the income or expense by the average daily balance of the associated assets or liabilities (amounts in thousands).

	Six Months Ended June 30, 2023								Six Months Ended June 30, 2022
			Interest								Interest
	Average		Income/			Average			Average		Income/			Average
	Balance		Expense			Yield/Rate			Balance		Expense			Yield/Rate
Interest earning assets
Loans	$	1,911,975	$	50,723			5.35	%	$	1,337,917	$	32,206			4.85	%
Mortgage loans held for sale		8,090		139			3.46	%		13,879		209			3.04	%
Investment securities:
Taxable securities		803,963		7,269			1.82	%		856,302		6,572			1.55	%
Tax-exempt securities		75,738		1,112			2.96	%		83,669		1,177			2.84	%
Interest bearing balances in other banks		37,870		856			4.56	%		28,421		85			0.60	%
Federal funds sold		23,702		597			5.08	%		2,780		2			0.15	%
Total interest earning assets	$	2,861,338	$	60,696			4.29	%	$	2,322,968	$	40,251			3.50	%
Interest bearing liabilities
Interest bearing transaction accounts	$	630,166	$	3,235			1.04	%	$	532,198	$	211			0.08	%
Savings and money market accounts		835,129		7,215			1.74	%		794,413		758			0.19	%
Time deposits		483,852		7,212			3.01	%		256,139		619			0.49	%
Securities sold under repurchase agreements		15,876		230			2.92	%		10,376		11			0.21	%
Federal Home Loan Bank advances		116,674		2,918			5.04	%		8,287		41			1.00	%
Subordinated debentures		40,000		833			4.20	%		40,000		837			4.22	%
Note payable		8,260		335			0.00	%		-		-			0.00	%
Total interest bearing liabilities	$	2,129,957	$	21,978			2.08	%	$	1,641,413	$	2,477			0.30	%
Noninterest-bearing funding of earning assets		731,381		-			0.00	%		681,555		-			0.00	%
Total cost of funding earning assets	$	2,861,338	$	21,978			1.55	%	$	2,322,968	$	2,477			0.22	%
Net interest rate spread							2.21	%							3.20	%
Net interest income/margin (taxable equivalent)			$	38,718			2.73	%			$	37,774			3.28	%
Tax equivalent adjustment				(458	)							(355	)
Net interest income/margin			$	38,260			2.70	%			$	37,419			3.25	%

44

The following table reflects, for the six months ended June 30, 2023 and 2022, the changes in our net interest income due to variances in the volume of interest earning assets and interest bearing liabilities and variances in the associated rates earned or paid on these assets and liabilities (amounts in thousands).

	Six Months Ended June 30, 2023 vs.
	Six Months Ended June 30, 2022
				Variance
				due to
	Volume			Yield/Rate			Total
Interest earning assets
Loans	$	13,966		$	4,551		$	18,517
Mortgage loans held for sale		(87	)		17			(70	)
Investment securities:
Taxable securities		(379	)		1,076			697
Tax-exempt securities		(114	)		49			(65	)
Interest bearing balances in other banks		27			744			771
Federal funds sold		40			555			595
Total interest earning assets	$	13,453		$	6,992		$	20,445
Interest bearing liabilities
Interest bearing transaction accounts	$	39		$	2,985		$	3,024
Savings and money market accounts		38			6,419			6,457
Time deposits		555			6,038			6,593
Short-term debt		(7	)		226			219
Federal Home Loan Bank advances		(27	)		2,904			2,877
Subordinated debentures		2			(6	)		(4	)
Note payable		-			335			335
Total interest bearing liabilities	$	600		$	18,901		$	19,501
Net interest income
Net interest income (taxable equivalent)	$	12,853		$	(11,909	)	$	944
Taxable equivalent adjustment		(103	)		-			(103	)
Net interest income	$	12,750		$	(11,909	)	$	841

Total interest income for the six months ended June 30, 2023 was $60.2 million and total interest expense was $22.0 million, resulting in net interest income of $38.3 million for the period. For the same period of 2022, total interest income was $39.9 million and total interest expense was $2.5 million, resulting in net interest income of $37.4 million for the period. This represents a 2.25% increase in net interest income when comparing the same period from 2023 and 2022. When comparing the variances related to interest income for the six months ended June 30, 2023 and 2022, the increase was primarily attributed to increases in average volumes in loans. The volume related increase in interest income for the six months ended June 30, 2023 was accompanied by an increase in the yield on loans and investment securities. When comparing variances related to interest expense for the six months ended June 30, 2023 and 2022, the increase primarily resulted from an increase in deposit and borrowing rates in 2023.

45

Provision for Credit Losses

On January 1, 2023, we adopted ASC 326, which introduces the current expected credit losses (CECL) methodology and requires us to estimate all expected credit losses over the remaining life of our loans. Accordingly, the provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation, is adequate to provide coverage for all expected credit losses. As a result of evaluating the allowance for credit losses at June 30, 2023, management recorded a provision for credit losses of $1.3 million in the second quarter of 2023 compared to $930.0 thousand in the second quarter of 2022. The increase in provision for credit losses allocated was primarily due to continued loan growth in new markets for the Bank. In management’s evaluation, our allowance for credit losses reflects an amount we believe appropriate, based on our allowance assessment methodology, to adequately cover all expected future losses as of the date the allowance is determined.

Noninterest Income

In addition to net interest income, we generate various types of noninterest income from our operations. Our banking operations generate revenue from service charges and fees mainly on deposit accounts. Our mortgage division generates revenue from originating and selling mortgage loans. Our investment brokerage division generates revenue through a revenue-sharing relationship with a registered broker-dealer. We also own life insurance policies on several key employees and record income on the increase in the cash surrender value of these policies.

The following table sets forth the principal components of noninterest income for the periods indicated (amounts in thousands).

	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2023		2022			2023		2022
Service charges and fees	$	1,885	$	1,731		$	3,623	$	3,334
Investment brokerage revenue		138		260			301		403
Mortgage operations		930		1,402			1,580		3,301
Bank owned life insurance income		319		307			629		610
Net gain (loss) on sales of investment securities		5		(678	)		5		(1,266	)
Other noninterest income		4,695		276			4,914		423
Total noninterest income	$	7,972	$	3,298		$	11,052	$	6,805

Noninterest income for the three months ended June 30, 2023 was $8.0 million compared to $3.3 million for the same period in 2022. The most significant increase in other noninterest income was due to a $3.7 million Community Development Financial Insituation award while the most significant decrease was a $472 thousand decrease in mortgage operations revenue.

Noninterest income for the six months ended June 30, 2023 was $11.1 million compared to $6.8 million for the same period in 2022. The most significant increase in other noninterest income was due to a $3.7 million Community Development Financial Insituation award while the most significant decrease was a $1.7 million decrease in mortgage operations revenue.

46

Noninterest Expense

Noninterest expenses consist primarily of salaries and employee benefits, building occupancy and equipment expenses, advertising and promotion expenses, data processing expenses, legal and professional services and miscellaneous other operating expenses.

The following table sets forth the principal components of noninterest expense for the periods indicated (amounts in thousands).

	For the Three Months					For the Six Months
	Ended June 30,					Ended June 30,
	2023		2022			2023		2022
Salaries and employee benefits	$	9,461	$	7,483		$	18,029	$	14,490
Occupancy expenses		922		645			1,830		1,290
Equipment rentals, depreciation, and maintenance		505		363			977		679
Telephone and communications		139		125			280		211
Advertising and business development		326		225			621		376
Data processing		930		873			1,950		1,722
Foreclosed assets, net		25		(40	)		35		(42	)
Federal deposit insurance and other regulatory assessments		723		289			1,294		654
Legal and other professional services		636		296			1,001		607
Other operating expense		2,342		1,897			4,324		3,571
Total noninterest expense	$	16,009	$	12,156		$	30,341	$	23,558

Noninterest expense for the three months ended June 30, 2023 totaled $16.0 million compared with $12.2 million for the same period of 2022. The overall increase was primarily a result of increases in salaries and employee benefits. Salaries and employee benefits increased $2.0 million, or 26.43%, to $9.5 million in the second quarter of 2023 from $7.5 million in the second quarter of 2022. The number of full-time equivalent employees increased from approximately 290 at June 30, 2022 to approximately 340 at June 30, 2023 for an increase of approximately 17.24%.

Noninterest expense for the six months ended June 30, 2023 totaled $30.3 million compared with $23.6 million for the same period of 2022. The increase was primarily a result of increases in salaries and employee benefits expense. Salaries and employee benefits increased $3.5 million, or 24.42%, to $18.0 million in the first six months of 2023 from $14.5 million in the first six months of 2022.

Provision for Income Taxes

We recognized income tax expense of $2.2 million for the three months ended June 30, 2023, compared to $2.2 million for the three months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2023 was 22.7% compared to 22.6% for the same period in 2022. The effective tax rate is affected by levels of items of income that are not subject to federal and/or state taxation and by levels of items of expense that are not deductible for federal and/or state income tax purposes.

We recognized income tax expense of $3.6 million for the six months ended June 30, 2023, compared to $4.5 million for the six months ended June 30, 2022. The effective tax rate for the six months ended June 30, 2023 was 22.1% compared to 22.7% for the same period in 2022. The effective tax rate is affected by levels of items of income that are not subject to federal and/or state taxation and by levels of items of expense that are not deductible for federal and/or state income tax purposes.

47

Comparison of Financial Condition at June 30, 2023 and December 31, 2022

Overview

Our total assets increased $251.4 million, or 8.87%, from December 31, 2022 to June 30, 2023. Loans, net of deferred fees and discounts, increased $244.1 million, or 13.54%, from December 31, 2022 to June 30, 2023. Securities available-for-sale decreased by $34.4 million, or -5.16%, and securities held-to-maturity decreased by $2.4 million, or -1.79%, from December 31, 2022 to June 30, 2023, respectively. Cash and cash equivalents increased $30.9 million, or 41.29% from December 31, 2022 to June 30, 2023. Total deposits increased $167.7 million, or 6.67%, from December 31, 2022 to June 30, 2023 which funded a majority of our loan growth. Total stockholders’ equity increased $8.7 million, or 6.52% from December 31, 2022 to June 30, 2023.

Investment Securities

We use our securities portfolio primarily to enhance our overall yield on interest-earning assets and as a source of liquidity, as a tool to manage our balance sheet sensitivity and regulatory capital ratios, and as a base upon which to pledge assets for public deposits. When our liquidity position exceeds current needs and our expected loan demand, other investments are considered as a secondary earnings alternative. As investments mature, they are used to meet current cash needs, or they are reinvested to maintain our desired liquidity position. We have designated the majority of our securities as available-for-sale to provide flexibility, in case an immediate need for liquidity arises, and we believe that the composition of the portfolio offers needed flexibility in managing our liquidity position and interest rate sensitivity without adversely impacting our regulatory capital levels. In certain cases, we have designated securities as held-to-maturity to protect capital from changes in the value of the securities portfolio. Securities available-for-sale are reported at fair value with unrealized gains or losses reported as a separate component of other comprehensive loss, net of related deferred taxes while securities held-to-maturity are reported at amortized cost. Purchase premiums and discounts are recognized in income using the interest method over the terms of the securities.

During the six months ended June 30, 2023, we purchased investment securities totaling $5.0 million and sold investment securities with proceeds received of $15.3 million including net realized gains of $5.0 thousand.

The following tables summarize the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of debt securities at June 30, 2023 and December 31, 2022 (amounts in thousands).

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	432,357	$	63	$	(61,435	)	$	370,985
U.S. treasury securities		130,843		-		(13,234	)		117,609
U.S. govt. sponsored enterprises		70,838		-		(6,576	)		64,262
State, county, and municipal		73,770		-		(10,360	)		63,410
Corporate debt obligations		17,789		11		(2,548	)		15,252
Total available-for-sale	$	725,597	$	74	$	(94,153	)	$	631,518

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	66,356	$	-	$	(13,097	)	$	53,259
State, county, and municipal		62,866		-		(12,559	)		50,307
Total held-to-maturity	$	129,222	$	-	$	(25,656	)	$	103,566

48

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	449,348	$	-	$	(59,311	)	$	390,037
U.S. treasury securities		130,971		-		(13,342	)		117,629
U.S. govt. sponsored enterprises		72,889		-		(6,527	)		66,362
State, county, and municipal		87,347		71		(11,555	)		75,863
Corporate debt obligations		17,873		16		(1,893	)		15,996
Total available-for-sale	$	758,428	$	87	$	(92,628	)	$	665,887
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	68,688	$	-	$	(12,624	)	$	56,064
State, county, and municipal		62,893		-		(13,680	)		49,213
Total held-to-maturity	$	131,581	$	-	$	(26,304	)	$	105,277

49

Loans

Loans are the largest category of interest earning assets and typically provide higher yields than other types of interest earning assets. Associated with the higher loan yields are the inherent credit and liquidity risks which management attempts to control and counterbalance. Total loans averaged $1.97 billion during the three months ended June 30, 2023, or 67.9% of average interest earning assets, as compared to $1.39 billion, or 58.7% of average interest earning assets, for the three months ended June 30, 2022. At June 30, 2023, total loans, net of deferred loan fees and discounts, were $2.05 billion, compared to $1.80 billion at December 31, 2022, an increase of $244.1 million, or 13.54%.

The organic, or non-acquired, growth in our loan portfolio is attributable both to our ability to attract new customers and to our ability to benefit from the overall growth in our markets. We seek to build relationships with new customers, maintain and even improve our relationships with existing customers, and encourage our bankers to be involved in their communities. We expect our bankers to recognize business development efforts and to maintain healthy relationships with clients, and our philosophy is to be responsive to customer needs by providing decisions in a timely manner. In addition to our business development efforts, many of the markets that we serve have shown signs of economic recovery over the last few years.

The following table provides a summary of the loan portfolio as of June 30, 2023, and December 31, 2022.

	June 30, 2023						December 31, 2022
	Amount			% of Total			Amount			% of Total
Residential real estate:
Closed-end 1-4 family - first lien	$	678,180			33.6	%	$	573,033			32.2	%
Closed-end 1-4 family - junior lien		11,485			0.6	%		9,422			0.5	%
Multi-family		15,576			0.6	%		14,106			0.8	%
Total residential real estate		705,241			34.8	%		596,561			33.5	%
Commercial real estate:
Nonfarm nonresidential		542,045			26.8	%		497,766			28.0	%
Farmland		57,773			2.9	%		53,691			3.0	%
Total commercial real estate		599,818			29.7	%		551,457			31.0	%
Construction and land development:
Residential		120,426			6.0	%		121,363			6.8	%
Other		157,262			7.8	%		135,127			7.6	%
Total construction and land development		277,688			13.8	%		256,490			14.4	%
Home equity lines of credit		77,806			3.9	%		64,215			3.6	%
Commercial loans:
Other commercial loans		239,210			11.8	%		193,053			10.9	%
Agricultural		61,561			3.0	%		56,946			3.2	%
State, county, and municipal loans		39,555			2.0	%		40,964			2.3	%
Total commercial loans		340,326			16.8	%		290,963			16.4	%
Consumer loans		53,673			2.7	%		49,592			2.8	%
Total gross loans		2,054,552			101.7	%		1,809,278			101.7	%
Allowance for credit losses		(26,889	)		-1.3	%		(24,310	)		-1.4	%
Net discounts		(154	)		0.0	%		(279	)		0.0	%
Net deferred loan fees		(7,159	)		-0.4	%		(5,872	)		-0.3	%
Net loans	$	2,020,350			100.0	%	$	1,778,817			100.0	%

In this context, a “real estate loan” is defined as any loan, secured by real estate, regardless of the purpose of the loan. It is common practice for financial institutions in our market areas, and for our Bank, to obtain a security interest or lien in real estate whenever possible, in addition to any other available collateral. This collateral is taken to reinforce the likelihood of the ultimate repayment of the loan and tends to increase the magnitude of the real estate loan portfolio component. In general, we prefer real estate collateral to many other potential collateral sources, such as accounts receivable, inventory and equipment.

50

Real estate loans are the largest component of our loan portfolio and include residential real estate loans, commercial real estate loans, and construction and land development loans. At June 30, 2023, this category totaled $1.6 billion, or 77.04% of total gross loans, compared to $1.4 billion, or 77.63%, at December 31, 2022. Real estate loans increased $178.2 million, or 12.69%, during the period December 31, 2022 to June 30, 2023. Commercial loans increased $49.4 million, or 16.97% during the same period. Our management team and lending officers have a great deal of experience and expertise in real estate lending and commercial lending.

The federal regulatory agencies recently issued two “guidance” documents that have a significant impact on real estate related lending and, thus, on the operations of the Bank. One part of the guidance could require lenders to restrict lending secured primarily by certain categories of commercial real estate to a level of 300% of their capital or to raise additional capital. This factor, combined with the current economic environment, could affect the Bank’s lending strategy away from, or to limit its expansion of, commercial real estate lending, which has been a material part of River Financial Corporation’s lending strategy. This could also have a negative impact on our lending and profitability. Management actively monitors the composition of the Bank’s loan portfolio, focusing on concentrations of credit, and the results of that monitoring activity are periodically reported to the Board of Directors.

The other guidance relates to the structuring of certain types of mortgages that allow negative amortization of consumer mortgage loans. Although the Bank does not engage at present in lending using these types of instruments, the guidance could have the effect of making the Bank less competitive in consumer mortgage lending if the local market is driving the demand for such an offering.

The repayment of loans is a source of additional liquidity for us. The following table sets forth our variable rate and fixed rate loans maturing within specific intervals at June 30, 2023.

LOAN MATURITY AND SENSITIVITY TO CHANGES IN INTEREST RATES

			Over one		Over five
	One year		year through		years through		Over fifteen
Variable Rate Loans:	or less		five years		fifteen years		years		Total
Residential real estate:
Closed-end 1-4 family - first lien	$	2,267	$	1,548	$	4,533	$	333,789	$	342,137
Closed-end 1-4 family - junior lien		146		-		44		461		651
Multi-family		544		-		262		-		806
Total residential real estate		2,957		1,548		4,839		334,250		343,594
Commercial real estate:
Nonfarm nonresidential		2,419		13,655		1,414		-		17,488
Farmland		1,547		1,697		-		248		3,492
Total commercial real estate		3,966		15,352		1,414		248		20,980
Construction and land development:
Residential		22,223		62		174		46,979		69,438
Other		3,168		9,804		5,088		51		18,111
Total construction and land development		25,391		9,866		5,262		47,030		87,549
Home equity lines of credit		3,611		5,877		49,722		-		59,210
Commercial loans:
Other commercial loans		58,257		13,378		8,738		-		80,373
Agricultural		35,711		1,330		-		-		37,041
State, county, and municipal loans		-		-		-		-		-
Total commercial loans		93,968		14,708		8,738		-		117,414
Consumer loans		1,815		570		56		-		2,441
Total gross variable rate loans	$	131,708	$	47,921	$	70,031	$	381,528	$	631,188

51

			Over one		Over five
	One year		year through		years through		Over fifteen
Fixed Rate Loans:	or less		five years		fifteen years		years		Total
Residential real estate:
Closed-end 1-4 family - first lien	$	16,429	$	137,412	$	74,713	$	107,489	$	336,043
Closed-end 1-4 family - junior lien		1,170		7,448		1,647		569		10,834
Multi-family		742		8,843		4,607		578		14,770
Total residential real estate		18,341		153,703		80,967		108,636		361,647
Commercial real estate:
Nonfarm nonresidential		25,029		240,040		254,407		5,081		524,557
Farmland		878		32,416		20,918		69		54,281
Total commercial real estate		25,907		272,456		275,325		5,150		578,838
Construction and land development:
Residential		47,494		2,641		462		391		50,988
Other		26,043		65,323		47,184		601		139,151
Total construction and land development		73,537		67,964		47,646		992		190,139
Home equity lines of credit		275		3,207		15,059		55		18,596
Commercial loans:
Other commercial loans		18,944		101,298		38,595		-		158,837
Agricultural		7,596		14,909		2,015		-		24,520
State, county, and municipal loans		3,875		9,325		26,355		-		39,555
Total commercial loans		30,415		125,532		66,965		-		222,912
Consumer loans		4,482		28,895		17,717		138		51,232
Total fixed rate gross loans	$	152,957	$	651,757	$	503,679	$	114,971	$	1,423,364
			Over one		Over five
	One year		year through		years through		Over fifteen
Total Loans:	or less		five years		fifteen years		years		Total
Residential real estate:
Closed-end 1-4 family - first lien	$	18,696	$	138,960	$	79,246	$	441,278	$	678,180
Closed-end 1-4 family - junior lien		1,316		7,448		1,691		1,030		11,485
Multi-family		1,286		8,843		4,869		578		15,576
Total residential real estate		21,298		155,251		85,806		442,886		705,241
Commercial real estate:
Nonfarm nonresidential		27,448		253,695		255,821		5,081		542,045
Farmland		2,425		34,113		20,918		317		57,773
Total commercial real estate		29,873		287,808		276,739		5,398		599,818
Construction and land development:
Residential		69,717		2,703		636		47,370		120,426
Other		29,211		75,127		52,272		652		157,262
Total construction and land development		98,928		77,830		52,908		48,022		277,688
Home equity lines of credit		3,886		9,084		64,781		55		77,806
Commercial loans:
Other commercial loans		77,201		114,676		47,333		-		239,210
Agricultural		43,307		16,239		2,015		-		61,561
State, county, and municipal loans		3,875		9,325		26,355		-		39,555
Total commercial loans		124,383		140,240		75,703		-		340,326
Consumer loans		6,297		29,465		17,773		138		53,673
Total gross loans	$	284,665	$	699,678	$	573,710	$	496,499	$	2,054,552

The information presented in the table above is based upon the contractual maturities of the individual loans, which may be subject to renewal at their contractual maturity. Renewal of such loans is subject to review and credit approval, as well as modification of terms at their maturity. Consequently, we believe that this treatment presents fairly the maturity structure of the loan portfolio.

52

Allowance for Credit Losses, Provision for Credit Losses and Asset Quality

Allowance for credit losses and provision for credit losses

The allowance for credit losses represents management’s estimate of probable inherent credit losses in the loan portfolio. Management determines the allowance based on an ongoing evaluation of risk as it correlates to potential losses within the portfolio. Increases to the allowance for credit losses are made by charges to the provision for credit losses. Loans deemed to be uncollectible are charged against the allowance. Recoveries of previously charged-off amounts are credited to the allowance for credit losses.

Management utilizes a review process for the loan portfolio to identify loans that are deemed to be impaired. A loan is considered impaired when it is probable that the Bank will be unable to collect the scheduled payments of principal and interest due under the contractual terms of the loan agreement or when the loan is deemed to be a troubled debt restructuring. For loans and loan relationships deemed to be impaired that are $100 thousand or greater, management determines the estimated value of the underlying collateral, less estimated costs to acquire and sell the collateral, or the estimated net present value of the cash flows expected to be received on the loan or loan relationship. These amounts are compared to the current investment in the loan and a specific allowance for the deficiency, if any, is specifically included in the analysis of the allowance for credit losses. For loans and loan relationships less than $100 thousand that are deemed to be impaired, management applies a general loss factor of 15% and includes that amount in the analysis of the allowance for credit losses rather than specifically measuring the impairment for each loan or loan relationship.

All other loans are deemed to be unimpaired and are grouped into various homogeneous risk pools primarily utilizing regulatory reporting classification codes. The Bank’s historical loss factors are calculated for each of the risk pools based on the percentage of net losses experienced as a percentage of the average loans outstanding. The time periods utilized in these historical loss factor calculations are subjective and vary according to management’s estimate of the impact of current economic cycles. As every loan has a risk of loss, minimum loss factors are estimated based on long term trends for the Bank, the banking industry, and the economy. The greater of the calculated historical loss factors or the minimum loss factors are applied to the unimpaired loan amounts currently outstanding for the risk pool and included in the analysis of the allowance for credit losses. In addition, certain qualitative adjustments may be included by management as additional loss factors. These adjustments may include, among other things, changes in loan policy, loan administration, loan geographic or industry concentrations, loan growth rates, and experience levels of our lending officers. Although we have not seen any significant changes in credit quality as a result of the pandemic, management has added several significant qualitative adjustments to our allowance for credit loss calculation that are related to the uncertainties of how the pandemic will affect our loan quality. As a result of these qualitative adjustments, our provision for credit losses and the allowance for credit losses increased significantly during pandemic. The loss allocations for specifically impaired loans, smaller impaired loans not specifically measured for impairment, and unimpaired loans are totaled to determine the total required allowance for credit losses. This total is compared to the current allowance on the Bank’s books and adjustments made accordingly by a charge or credit to the provision for credit losses.

Management believes the data it uses in determining the allowance for credit losses is sufficient to estimate potential losses in the loan portfolio; however, actual results could differ from management’s estimate.

53

The following table presents a summary of changes in the allowance for credit losses for the periods indicated (amounts in thousands).

	As of and for the						As of and for the
	Three Months Ended:						Six Months Ended:
	June 30,			June 30,			June 30,			June 30,
	2023			2022			2023			2022
Allowance for credit losses at beginning of period	$	25,634		$	20,894		$	24,310		$	20,922
Impact of adopting ASC 326		80			-		$	80
Charge-offs:
Mortgage loans on real estate:
Residential real estate		-			42			-			42
Commercial real estate		-			-			-			-
Construction and land development		196			-			196			-
Total mortgage loans on real estate		196			42			196			42
Home equity lines of credit		-			-			-			-
Commercial		95			86			162			148
Consumer		6			-			40			-
Total		297			128			398			190
Recoveries:
Mortgage loans on real estate:
Residential real estate		-			-			-			-
Commercial real estate		1			58			78			63
Construction and land development		-			1			-			5
Total mortgage loans on real estate		1			59			78			68
Home equity lines of credit		-			-			-			-
Commercial		153			18			186			34
Consumer		7			4			11			13
Total		161			81			275			115
Net charge-offs		136			47			123			75
Provision for credit losses		1,311			930			2,622			930
Allowance for credit losses at end of period	$	26,889		$	21,777		$	26,889		$	21,777
Total loans outstanding, net of deferred loan fees		2,047,239			1,454,484			2,047,239			1,454,484
Average loans outstanding, net of deferred loan fees		1,972,833			1,386,522			1,911,975			1,337,917
Allowance for credit losses to period end loans		1.31	%		1.50	%		1.31	%		1.50	%
Net charge-offs to average loans (annualized)		0.03	%		0.01	%		0.01	%		0.01	%

Allocation of the Allowance for Credit Losses

While no portion of the allowance for credits losses is in any way restricted to any individual loan or group of loans and the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the allowance for credit losses to specific loan categories as of the dates indicated (amounts in thousands).

	June 30, 2023					December 31, 2022
			Percent of					Percent of
	Amount		Total			Amount		Total
Mortgage loans on real estate:
Residential real estate	$	5,859		21.8	%	$	5,088		20.9	%
Commercial real estate		11,011		41.0	%		10,057		41.4	%
Construction and land development		3,611		13.4	%		3,377		13.9	%
Total mortgage loans on real estate		20,481		76.2	%		18,522		76.2	%
Home equity lines of credit		801		3.0	%		562		2.3	%
Commercial		5,035		18.7	%		4,778		19.7	%
Consumer		572		2.1	%		448		1.8	%
Total	$	26,889		100.0	%	$	24,310		100.0	%

54

Nonperforming Assets

The following table presents our nonperforming assets as of the dates indicated (amounts in thousands):

	June 30,						December 31,
	2023			2022			2022
Nonaccrual loans	$	5,031		$	1,487		$	1,356
Accruing loans past due 90 days or more		-			-			138
Total nonperforming loans		5,031			1,487			1,494
Foreclosed assets		546			529			609
Total nonperforming assets	$	5,577		$	2,016		$	2,103
Allowance for credit losses to period end loans		1.31	%		1.50	%		1.35	%
Allowance for credit losses to period end nonperforming loans		534.47	%		1464.49	%		1627.18	%
Net charge-offs (recoveries) to average loans (annualized)		0.01	%		0.01	%		0.03	%
Nonperforming assets to period end loans and foreclosed property		0.27	%		0.14	%		0.12	%
Nonperforming loans to period end loans		0.25	%		0.10	%		0.08	%
Nonperforming assets to total assets		0.18	%		0.08	%		0.07	%
Period end loans		2,047,239			1,454,484			1,803,127
Period end total assets		3,084,757			2,501,400			2,833,382
Allowance for credit losses		26,889			21,777			24,310
Average loans for the period		1,911,975			1,337,917			1,486,478
Net charge-offs for the period		123			75			452
Period end loans plus foreclosed property		2,047,785			1,455,013			1,803,736

Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that the collection of interest is doubtful. In addition to consideration of these factors, loans that are past due 90 days or more are generally placed on nonaccrual status. When a loan is placed on nonaccrual status, all accrued interest on the loan is reversed and deducted from earnings as a reduction of reported interest income. No additional interest is accrued on the loan balance until collection of both principal and interest becomes reasonably certain. Payments received while a loan is on nonaccrual status will generally be applied to the outstanding principal balance. When a problem loan is finally resolved, there may ultimately be an actual write-down or charge-off of the principal balance of the loan that would necessitate additional charges to the allowance for credit losses.

55

Deposits

Deposits, which include noninterest bearing demand deposits, interest bearing demand deposits, money market accounts, savings accounts, and time deposits, are the principal source of funds for the Bank. We offer a variety of products designed to attract and retain customers, with primary focus on building and expanding client relationships. Management continues to focus on establishing a comprehensive relationship with consumer and business borrowers, seeking deposits as well as lending relationships.

The following table details the composition of our deposit portfolio as of June 30, 2023, and December 31, 2022.

	June 30, 2023					December 31, 2022
			Percent of					Percent of
	Amount		Total			Amount		Total
Demand deposits, non-interest bearing	$	670,935		24.9	%	$	672,956		26.8	%
Demand deposits, interest bearing		658,430		24.6	%		610,944		24.3	%
Money market accounts		725,963		27.1	%		664,855		26.4	%
Savings deposits		120,747		4.5	%		120,030		4.8	%
Time certificates of $250 thousand or more		229,483		8.6	%		125,661		5.0	%
Other time certificates		276,348		10.3	%		319,753		12.7	%
Totals	$	2,681,906		100.0	%	$	2,514,199		100.0	%

Total deposits were $2.68 billion at June 30, 2023, an increase of $167.7 million from December 31, 2022 with the increase resulting mainly in the balances of money market accounts and time deposit accounts. Some of our demand deposit accounts are seasonal and have expected balance fluctuations. The seasonality of these demand deposits is related to property tax collections and to agricultural production.

The following table presents the Bank’s time certificates of deposits by various maturities as of June 30, 2023 (amounts in thousands).

	All Time Deposits		Time Deposits $100 or more		Time Deposits less than $100
Three months or less	$	138,771	$	122,592	$	16,179
Greater than three months through six months		102,624		86,697		15,927
Greater than six months through one year		174,015		140,210		33,805
Greater than one year through three years		83,816		66,491		17,325
Greater than three years		6,605		3,924		2,681
Total	$	505,831	$	419,914	$	85,917

56

Other Funding Sources

We supplement our deposit funding with wholesale funding when needed for balance sheet planning and management or when the terms are attractive and will not disrupt our offering rates in our markets. A source we have used for wholesale funding is the Federal Home Loan Bank of Atlanta (FHLB). The line of credit with the FHLB is secured by pledges of various loans in our loan portfolio. At June 30, 2023, the FHLB line of credit available was $338.4 million and at December 31, 2022 it was $326.8 million. As of June 30, 2023 and December 31, 2022, we had $155 million and $95 million Federal Home Loan Bank advances outstanding, respectively. We also have lines of credit for federal funds borrowings with other banks that totaled $88.5 million at both June 30, 2023 and December 31, 2022. Furthermore, we have pledged certain loans to the Federal Reserve Bank (FRB) to secure a line of credit. At June 30, 2023, the FRB line of credit available was $143.1 million and at December 31, 2022, the FRB line of credit available was $133.1 million. Another source that we have used for wholesale funding is the Federal Reserve Bank discount window. At June 30, 2023 and December 31, 2022, we had $20 million and $25 million borrowings outstanding with the Federal Reserve Bank discount window, respectively.

On August 9, 2021, the Company entered into a line of credit agreement with ServisFirst Bank for $10 million. The line of credit agreement was amended on March 17, 2023 to increase the line to $20 million. The line of credit is to be used for general capital needs and investments. The line when drawn will require quarterly payments of interest only and matures on March 17, 2024. The interest rate floats at Wall Street Journal Prime with a floor of 3.25%. The line of credit is secured by 51% of the Company’s stock.

Principal payments on the ServisFirst Bank Loan are due as follows:

July 1, 2023 - June 30, 2024	$	12,000
July 1, 2024 - June 30, 2025		-
July 1, 2025 - June 30, 2026		-
July 1, 2026 - June 30, 2027		-
July 1, 2027 - June 30, 2028		-
Afterward		-
Total	$	12,000

On March 9, 2021, River Financial Corporation (“the Company”) entered into a Subordinated Note Purchase Agreement (the “Purchase Agreement”) with the purchasers signatory thereto providing for a private placement of $40 million in aggregate principal amount of 4.00% fixed-to-floating rate Subordinated Notes due March 15, 2031 (the “Notes”). The Notes were issued by the Company to the purchasers at a price equal to 100% of their face amount. Interest on the Notes will accrue from March 9, 2021, and the Company will pay interest semi-annually on March 15th and September 15th of each year, beginning on September 15, 2021, until the Notes mature. The Notes will bear interest at a fixed rate of 4.00% per year, from and including March 9, 2021 to, but excluding, March 15, 2026. From and including March 15, 2026, but excluding the maturity date or early redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term SOFR plus 342 basis points. The Notes may not be prepaid by the Company prior to March 15, 2026. From and after March 15, 2026, the Company may prepay all or, from time to time, any part of the Notes at 100% of the principal amount (plus accrued interest) without penalty, subject to any requirement under Federal Reserve Board regulations to obtain prior approval from the Board of Governors of the Federal Reserve System before making any prepayment. The Notes may also be prepaid by the Company at any time after the occurrence of an event that would preclude the Notes from being included in the Tier 2 Capital of the Company. The Purchase Agreement contains customary representations and warranties, events of default, and affirmative and negative covenants, including the requirement that, subject to certain limitations, the Company restructure any portion of the Notes that ceases to be deemed Tier 2 Capital. The Company used approximately $19.7 million of the net proceeds from the issuance of the Notes to pay off its note with CenterState Bank dated October 31, 2018, including interest accrued on such notes, and the remaining proceeds for general corporate purposes, including providing capital to support the organic growth of its bank subsidiary, River Bank.

57

Liquidity

Market and public confidence in our financial strength and financial institutions in general will largely determine our access to appropriate levels of liquidity. This confidence is significantly dependent on our ability to maintain sound asset quality and appropriate levels of capital reserves.

Liquidity is defined as the ability to meet anticipated customer demands for funds under credit commitments and deposit withdrawals at a reasonable cost and on a timely basis. We measure our liquidity position by giving consideration to both on- and off-balance sheet sources of and demands for funds on a daily, weekly and monthly basis.

Liquidity risk involves the risk of being unable to fund assets with the appropriate duration and rate-based liabilities, as well as the risk of not being able to meet unexpected cash needs. Liquidity planning and management are necessary to ensure the ability to fund operations cost-effectively and to meet current and future potential obligations such as loan commitments and unexpected deposit outflows. In this process, we focus on assets and liabilities and on the manner in which they combine to provide adequate liquidity to meet our needs.

Funds are available from a number of basic banking activity sources, including the core deposit base, the repayment and maturity of loans, and investment cash flows. Other funding sources include federal funds borrowings, brokered certificates of deposit and borrowings from the FHLB and FRB.

Cash and cash equivalents at June 30, 2023 and December 31, 2022, were $105.7 million and $74.8 million, respectively. Based on recorded cash and cash equivalents, management believes River Financial Corporation’s liquidity resources were sufficient at June 30, 2023 to fund loans and meet other cash needs as necessary.

Off-Balance Sheet Arrangements

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized by the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. In most cases, the Company requires collateral or other security to support financial instruments with credit risk.

Financial instruments whose contract amount represents credit risk at June 30, 2023 and December 31, 2022 were as follows (amounts in thousands):

	June 30, 2023		December 31, 2022
Commitments to extend credit	$	419,310	$	420,670
Stand-by and performance letters of credit		5,334		5,027
Total	$	424,644	$	425,697

58

Contractual Obligations

While our liquidity monitoring and management considers both present and future demands for and sources of liquidity, the following table of contractual commitments focuses only on future obligations as of June 30, 2023 (amounts in thousands).

			Due after 1		Due after 3
	Due in 1		through		through		Due after
	year or less		3 years		5 years		5 years		Total
Deposits without a stated maturity	$	2,176,075	$	-	$	-	$	-	$	2,176,075
Certificates of deposit of less than $100		65,911		17,325		2,681		-		85,917
Certificates of deposit of $100 or more		349,499		66,491		3,924		-		419,914
Securities sold under agreements to repurchase		16,642		-		-		-		16,642
Note payable		12,000		-		-		-		12,000
Federal Home Loan Bank advances		95,000		-		-		60,000		155,000
Federal Reserve Bank disocunt window borrowings		20,000		-		-		-		20,000
Subordinated debt, net of loan costs		-		-		-		39,456		39,456
Operating leases		818		1,255		816		1,989		4,878
Total contractual obligations	$	2,735,945	$	85,071	$	7,421	$	101,445	$	2,929,882

Capital Position and Dividends

At June 30, 2023 and December 31, 2022, total stockholders’ equity was $142.8 million and $134.0 million, respectively. The increase of approximately $8.7 million resulted mainly from the net change in retained earnings and accumulated other comprehensive loss for the six months ended June 30, 2023. Retained earnings for the first six months of 2023 increased $9.5 million and accumulated other comprehensive loss increased $1.0 million. The ratio of stockholders’ equity to total assets was 4.63% and 4.73% at June 30, 2023 and December 31, 2022, respectively.

River Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Certain items such as goodwill and other intangible assets are deducted from total capital in arriving at the various regulatory capital measures such as Common Equity Tier 1 capital, Tier 1 capital, and total risk-based capital. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on River Financial Corporation’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, River Bank must meet specific capital guidelines that involve quantitative measures of the bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory regulations and guidelines. River Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

River Bank is eligible to utilize the community bank leverage ratio (CBLR) framework. The Bank has evaluated this option and has elected not to utilize the CBLR framework at this time, but may do so in the future.

59

Quantitative measures, established by regulation to ensure capital adequacy effective January 1, 2015, require River Financial Corporation and River Bank to maintain minimum amounts and ratios (set forth in the table below) of total risk based capital, Common Equity Tier 1 capital, and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations), and of Tier 1 capital (as defined in the regulations) to average assets (as defined in the regulations).

Management believes, as of June 30, 2023, that the Company and Bank meet all capital adequacy requirements to which they are subject. The following table presents the Company's and Bank’s capital amounts and ratios as of June 30, 2023 with the required minimum levels for capital adequacy purposes including the phase in of the capital conservation buffer under Basel III and minimum levels to be well capitalized (as defined) under the regulatory prompt corrective action regulations.

As of June 30, 2023:
									To Be Well Capitalized
						Required For Capital			Under Prompt Corrective
	Actual					Adequacy Purposes			Action Regulations (1)
	Amount		Ratio			Amount		Ratio	Amount		Ratio
River Financial Corporation:
Total Capital (To Risk-Weighted Assets)	$	257,148		11.690	%	$	230,971	>= 10.500%	N/A		N/A
Common Equity Tier 1 Capital (To Risk-Weighted Assets)		190,259		8.650	%		153,967	>= 7.000%	N/A		N/A
Tier 1 Capital (To Risk-Weighted Assets)		190,259		8.650	%		186,960	>= 8.500%	N/A		N/A
Tier 1 Capital (To Average Assets)		190,259		6.400	%		118,912	>= 4.000%	N/A		N/A
River Bank:
Total Capital (To Risk-Weighted Assets)	$	267,701		12.166	%	$	231,038	>= 10.500%	$	220,037	>= 10.00%
Common Equity Tier 1 Capital (To Risk-Weighted Assets)		240,811		10.944	%		154,026	>= 7.000%		143,024	>= 6.50%
Tier 1 Capital (To Risk-Weighted Assets)		240,811		10.944	%		187,032	>= 8.500%		176,030	>= 8.00%
Tier 1 Capital (To Average Assets)		240,811		8.105	%		118,852	>= 4.000%		148,564	>= 5.00%
(1) the prompt corrective action provisions are applicable at the Bank level only.

Management believes, as of December 31, 2022, that the Bank met all capital adequacy requirements to which it was subject at the time. The following table presents the Bank’s capital amounts and ratios as of December 31, 2022 with the required minimum levels for capital adequacy purposes and minimum levels to be well capitalized (as defined) under the prompt corrective action regulations.

As of December 31, 2022:
									To Be Well Capitalized
						Required For Capital			Under Prompt Corrective
	Actual					Adequacy Purposes			Action Regulations
	Amount		Ratio			Amount		Ratio	Amount		Ratio
Total Capital (To Risk-Weighted Assets)	$	242,168		12.296	%	$	206,789	>= 10.500%	$	196,942	>= 10.00%
Common Equity Tier 1 Capital (To Risk-Weighted Assets)		217,858		11.062	%		137,860	>= 7.000%		128,013	>= 6.50%
Tier 1 Capital (To Risk-Weighted Assets)		217,858		11.062	%		167,401	>= 8.500%		157,554	>= 8.00%
Tier 1 Capital (To Average Assets)		217,858		8.120	%		107,315	>= 4.000%		134,144	>= 5.00%

River Financial Corporation’s principal source of funds for dividend payments and debt service is dividends received from River Bank. There are statutory limitations on the payment of dividends by River Bank to River Financial Corporation. As of June 30, 2023, the maximum amount the Bank could dividend to River Financial Corporation without prior regulatory authority approval was approximately $63.7 million. In addition to dividend restrictions, federal statutes prohibit unsecured loans from banks to bank holding companies.

During the six months ending June 30, 2023 there were 18,000 incentive stock options issued with a weighted average exercise price of $33.54 per share. During the same period, there were 22,900 incentive stock options exercised at a weighted average exercise price of $14.33 per share. During the same period, there were 600 incentive stock options forfeited at a weighted average exercise price of $27.00 per share. A total of 338,179 incentive stock options were outstanding as of June 30, 2023 with a weighted average exercise price of $25.21 per share and a weighted average remaining life of 5.52 years.

During the six months ending June 30, 2023 there were 13,000 restricted stock grants issued with a weighted average exercise price of $33.47 per share. During the same time period, there were 2,000 stock grants that vested with a weighted average exercise price of $32.35. During the same time period, there were 400 stock grants forfeited with a weighted average exercise price of $31.20. A total of 65,733 restricted stock grants remained nonvested as of June 30, 2023 with a weighted average exercise price of $31.96 per share and a weighted average remaining life of 2.88 years.

60

Interest Sensitivity and Market Risk

Management monitors and manages the pricing and maturity of our assets and liabilities in order to diminish the potential adverse impact that changes in interest rates could have on net interest income. The principal monitoring technique employed by the Bank is simulation analysis.

In simulation analysis, we review each asset and liability category and its projected behavior in various different interest rate environments. These projected behaviors are based on management’s past experience and on current competitive environments, including the various environments in the different markets in which we compete. Using projected behavior and differing rate scenarios as inputs, the simulation analysis generates projections of net interest income. We also periodically verify the validity of this approach by comparing actual results with those that were projected in previous models.

Another technique used in interest rate management, but to a lesser degree than simulation analysis, is the measurement of the interest sensitivity “gap”, which is the positive or negative dollar difference between assets and liabilities that are subject to interest rate repricing within a given period of time. Interest rate sensitivity can be managed by repricing assets and liabilities, selling securities available for sale, replacing an asset or liability at maturity or by adjusting the interest rate during the life of an asset or liability.

We evaluate interest rate sensitivity risk and then formulate guidelines regarding asset generation and repricing, and sources and prices of off-balance sheet commitments in order to maintain interest sensitivity risk at levels deemed prudent by management. We use computer simulations to measure the net income effect of various rate scenarios. The modeling reflects interest rate changes and the related impact on net income over specified periods of time.

The following table illustrates our interest rate sensitivity at June 30, 2023, assuming the relevant assets and liabilities are collected and paid, respectively, based upon historical experience rather than their stated maturities (amounts in thousands).

	0-1 Mos			1-3 Mos			3-12 Mos			1-2 Yrs			2-3 Yrs			>3 Yrs			Total
Interest earning assets
Loans	$	294,789		$	91,581		$	312,172		$	299,834		$	244,500		$	804,363		$	2,047,239
Securities		35,255			16,034			38,705			55,788			109,600			505,358			760,740
Certificates of deposit in banks		-			229			1,740			-			1,250			450			3,669
Cash balances in banks		30,505			-			-			-			-			-			30,505
Total interest earning assets	$	385,549		$	107,844		$	352,617		$	355,622		$	355,350		$	1,310,171		$	2,867,153
Interest bearing liabilities
Interest bearing transaction accounts	$	176,156		$	15,468		$	69,603		$	92,806		$	78,317		$	226,080		$	658,430
Savings and money market accounts		321,794			16,794			75,561			100,746			100,746			231,069			846,710
Time deposits		77,843			61,357			274,846			76,055			7,400			8,330			505,831
Securities sold under agreements to repurchase		16,642			-			-			-			-			-			16,642
Federal Home Loan Bank advances		-			-			40,000			55,000			-			60,000			155,000
Federal Reserve Bank discount window borrowings		20,000			-			-			-			-			-			20,000
Note payable		-			-			12,000			-			-			-			12,000
Subordinated debentures, net of loan costs		-			-			-			-			-			39,456			39,456
Total interest bearing liabilities	$	612,435		$	93,619		$	472,010		$	324,607		$	186,463		$	564,935		$	2,254,069
Interest sensitive gap
Period gap	$	(226,886	)	$	14,225		$	(119,393	)	$	31,015		$	168,887		$	745,236		$	613,084
Cumulative gap	$	(226,886	)	$	(212,661	)	$	(332,054	)	$	(301,039	)	$	(132,152	)	$	613,084
Cumulative gap - Rate Sensitive Assets/ Rate    Sensitive Liabilities		-7.9	%		-7.4	%		-11.6	%		-10.5	%		-4.6	%		21.4	%

The Bank generally benefits from increasing market interest rates when it has an asset-sensitive gap (a positive number) and generally benefits from decreasing market interest rates when it is liability sensitive (a negative number). As shown in the table above, the Bank is liability sensitive on a cumulative basis throughout the one year time frame. The interest sensitivity analysis presents only a static view of the timing and repricing opportunities, without taking into consideration that changes in interest rates do not affect all assets and liabilities equally. For example, rates paid on a substantial portion of core deposits may change contractually within a relatively short time frame, but those are viewed by management as significantly less interest sensitive than market-based rates such as those paid on non-core deposits. For this and other reasons, management relies more upon the simulations analysis (as noted above) in managing interest rate risk. Net interest income may be impacted by other significant factors in a given interest rate environment, including changes in volume and mix of interest earning assets and interest bearing liabilities.

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The Bank’s earnings are dependent, to a large degree, on its net interest income, which is the difference between interest income earned on all interest earning assets, primarily loans and securities, and interest paid on all interest bearing liabilities, primarily deposits. Market risk is the risk of loss from adverse changes in market prices and interest rates. Our market risk arises primarily from inherent interest rate risk in our lending, investing and deposit gathering activities. We seek to reduce our exposure to market risk through actively monitoring and managing interest rate risk. Management relies on simulations analysis to evaluate the impact of varying levels of prevailing interest rates and the sensitivity of specific earning assets and interest bearing liabilities to changes in those prevailing rates. Simulation analysis consists of evaluating the impact on net interest income given changes from 400 basis points below the current prevailing rates to 400 basis points above current prevailing interest rates. Management makes certain assumptions as to the effect varying levels of interest rates have on certain interest earning assets and interest bearing liabilities, which assumptions consider both historical experience and consensus estimates of outside sources.

The following table illustrates the results of our simulation analysis to determine the extent to which market risk would affect net interest income for the next twelve months if prevailing interest rates increased or decreased by the specified amounts from current rates. As noted above, this model uses estimates and assumptions in asset and liability account rate reactions to changes in pr58evailing interest rates. However, to isolate the market risk inherent in the balance sheet, the model assumes that no growth in the balance sheet occurs during the projection period. This model also assumes an immediate and parallel shift in interest rates, which would result in no change in the shape or slope of the interest rate yield curve. Because of the inherent use of the estimates and assumptions in the simulation model to derive this market risk information, the actual results of the future impact of market risk on our net interest income may differ from that found in the table. Given the current level of prevailing interest rates, management believes prevailing market rates falling 300 basis points and 400 basis points are not reasonable assumptions. All other simulated prevailing interest rates changes modeled indicate a level of sensitivity of the Bank’s net interest income to those changes that is acceptable to management and within established Bank policy limits as of both dates shown.

	Impact on net interest income
	As of			As of
	June 30, 2023			December 31, 2022
Change in prevailing rates:
+ 400 basis points		(7.67	)%		(14.25	)%
+ 300 basis points		(5.69	)%		(10.55	)%
+ 200 basis points		(3.67	)%		(6.96	)%
+ 100 basis points		(1.73	)%		(3.49	)%
+ 0 basis points		-			-
- 100 basis points		1.73	%		2.68	%
- 200 basis points		3.14	%		4.58	%
- 300 basis points		4.10	%		2.00	%
- 400 basis points		5.21	%		(3.21	)%

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This item is not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has carried out an evaluation under the supervision and with participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even the effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2023, the Company’s disclosure controls and procedures are effective in ensuring that material information relating to the Company required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods and is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the six months ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company is a party to legal proceedings. At the present time the Company is not part of any proceeding which the Company deems to be material.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that could materially affect the Company’s business, financial condition or future results as well as those in the Company’s Report on Form 10-Q for the quarter ended June 30, 2023. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.

The risk factors in our Annual Report on Form 10-K for the year ended December 31, 2022 should be reviewed, especially in the context of the risk factors set forth below.

Possible Effects of the Continuing COVID-19 Pandemic

The current COVID-19 pandemic could result in negative effects on our financial condition and results of operations.

As a result of the COVID-19 pandemic, we have instituted procedures, consistent with federal, state and local government guidelines, to institute social distancing among employees and customers, and encourage employees to work from home when possible. A majority of employees are no longer working from home. We believe these measures have been undertaken to date with minimal negative effects on our operations and have been well received by employees and customers. We believe our daily operations and services to customers have not been materially interrupted in an adverse way, but we cannot be certain of the long-term effects of such procedures.

Because of the potential negative effects of the COVID-19 pandemic on the economy, including rising unemployment and closings of non-essential businesses during the pandemic, we may experience an adverse effect on our loans.

Rising unemployment, the closing, even if temporary, of non-essential businesses, and the overall negative effect on the economy could result in the inability of some of our customers to meet their loan obligations to our Bank. Loan modifications and payment deferrals provide our borrowers with temporary relief, but such relief may be insufficient, depending on the length and severity of the COVID-19 pandemic and its effects on the economy. In addition to loan deferrals and modifications, we participated in certain government programs designed to bolster the economy during the pandemic, such as the PPP, which was intended to fund borrowers’ payrolls and certain operating expenses, not to support existing borrowers’ loans. Our customers’ participation in other government programs also may stabilize their cash flows during any continuation of the pandemic, but may not prevent significant loan delinquencies and losses. In addition, we have loans which are not covered by any government guarantee protection program. Thus, we could experience various impairments of such loans, including a delay in payments of principal and interest, the inability of borrowers to pay the loans in full, the loss in value of collateral securing such loans, and the inability to sell such collateral at a reasonable price if the collateral is taken in foreclosure. All of the foregoing could have adverse consequences on our income and eventually on our capital.

Although we are participating in certain government programs to assist customers and borrowers, we may nevertheless incur long-term adverse results.

We have received requests from our borrowers for loan and lease deferrals and modifications including the deferral of principal payments or the deferral of principal and interest payments for terms generally 90-180 days. Requests are evaluated individually and approved modifications are based on the unique circumstances of each borrower. We are committed to working with our clients to allow time to work through the challenges of this pandemic. In keeping with guidance from regulators, we are also working with COVID-19 affected customers to waive fees from a variety of sources, such as but not limited to, insufficient funds and overdraft fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crises. We are unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact our fee income in future periods. Thus, it is uncertain what future impact these measures related to COVID-19 difficulties will have on our financial condition, results of operations and reserve for loan and lease losses.

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As a participating lender in the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP), River Financial and River Bank are subject to additional risks of litigation from the Bank’s customers or other parties regarding the Bank’s processing of loans for the PPP and risks that the SBA may not fund some PPP loan guaranties

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted, which included a loan program administered through the SBA referred to as the PPP. Under the PPP, small businesses and other entities and individuals could apply for unsecured, low-interest rate loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. Borrowers are eligible for up to 100% forgiveness on PPP loans if certain conditions are met. The PPP loans are 100% guaranteed by the SBA. The Bank participated as a lender in the PPP. The PPP opened on April 3, 2020. The PPP was launched by SBA and the US Department of Treasury in an expedient timeframe and because of the short timeframe between the passing of the CARES Act and the opening of the PPP, there was ambiguity in the laws, rules and guidance regarding the operation of the PPP, which exposes us to risks relating to noncompliance with the PPP. Since the opening of the PPP, several other larger banks have been subject to litigation regarding the process and procedures that such banks used in processing applications for the PPP. River Financial and River Bank may be exposed to the risk of similar litigation, from both customers and non-customers that approached the Bank regarding PPP loans, regarding its process and procedures used in processing applications for the PPP. If any such litigation is filed against us and is not resolved in a favorable manner, it may result in significant financial liability or adversely affect our reputation. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP-related litigation could have a material adverse effect on our business, financial condition and results of operations. The Bank also has credit risk on PPP loans if a determination is made by the SBA that there is a material deficiency in the manner in which the loan was originated, funded, or serviced by the Bank. In the event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a material deficiency in the manner in which the PPP loan was originated, funded, or serviced by the Bank, the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from the Bank. There is also a risk that not all PPP loans will be forgiven and any unforgiven amount will remain on the Bank’s balance sheet preventing such funds from being redeployed into higher-earning assets.

The continuation of the pandemic could have longer-term and unforeseen results.

The continuation of the COVID-19 pandemic, or a resurgence of the pandemic, could have longer adverse effects on our capital, income and relationships with customers. There could be longer term effects which are unforeseen at the present time.

The COVID-19 pandemic could adversely affect our growth plans.

The pandemic’s effect on the economy could deter our growth plans. We have always planned upon and anticipated solid growth organically, including the opening of new branches when opportunities arise along with the development of further business opportunities where we currently have branches. In addition, we have grown by making select acquisitions of other banks, and we have planned to be alert for future acquisition opportunities. The COVID-19 pandemic, its adverse effects on the economy, both short-term and long-term, and uncertainty by the public in general of the stability of the economy could hinder such growth plans.

The COVID-19 pandemic could adversely affect us in other areas where we may be uncertain of the effects.

In addition to the risks noted above, the COVID-19 pandemic could affect us in a number of other areas of our operations with consequences at the present time of which we cannot be certain. These include: the effectiveness, or lack thereof, of the current COVID-19 vaccination efforts; the general economic stability of our geographic markets; a change in demand for financial products in general; fewer financial resources that are generally available to small and medium size business; changes in government monetary policy; interest rate fluctuations; the need for additional increases in our allowance for credit losses; a reduction in values set forth in appraisals that provide back-up for loans; stress on our liquidity caused by a reduction in deposits as customers need additional cash for their own liquidity needs; increased cyber and payment fraud risk; and increased oversight on our internal controls and procedures to ensure that we are taking necessary steps to manage any increased risks associated with the COVID-19 pandemic.

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The Federal Reserve has implemented significant economic strategies that have affected interest rates, inflation, asset values, and the shape of the yield curve.

During 2022, the Federal Reserve transitioned to a tightening policy. It raised short term rates significantly and rapidly throughout the year. Those actions triggered a significant decline in the values of most categories of U.S. stocks and bonds; significantly raised recessionary expectations for the U.S.; and inverted the yield curve in the U.S. for much of the last two quarters of 2022. Effects on the yield curve often are most pronounced at the short end of the curve, which is of particular importance to us and other banks. Among other things, easing strategies are intended to lower interest rates, expand the money supply, and stimulate economic activity, while tightening strategies are intended to increase interest rates, discourage borrowing, tighten the money supply, and restrain economic activity. However, in 2022, short term rates rose faster than long term rates to the point that the yield curve inverted for much of the final two quarters of 2022. This sort of phenomenon—where short term rates rise more strongly and rapidly than long-term rates can follow—is relatively uncommon. It is unclear when long term rates are likely to catch up. Many external factors may interfere with the effects of these plans or cause them to be changed, sometimes quickly. Such factors include significant economic trends or events. For 2023, the Federal Reserve has not yet indicated when it will stop, or at least pause, raising short term rates, although the rate of increases has slowed. These economic strategies have had, and will continue to have, a significant impact on our business and on many of our clients. As exemplified by the March 2023 bank failures in the U.S., such strategies also can affect the financial systems in ways that may be difficult to predict.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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Item 6. Exhibits.

Exhibit Number	Description
3.1	Certificate of Incorporation of River Financial Corporation included as Exhibit 3.1 in the River Financial Corporation Form 8-K filed May 18, 2023 and incorporated herein by reference.
3.2	Bylaws of River Financial Corporation included as Exhibit 3.2 in the River Financial Corporation 8-K filed May 18, 2023 and incorporated herein by reference.
4.1	Article IV and Article V of the Certificates of Incorporation filed at Exhibit 3.1 to the Registrants’ Form 8-K filed May 18, 2023, and Article II and Article VI of the Bylaws included as Exhibit 3.2 of the Registrants’ Form 8-K filed May 18, 2023, and incorporated herein by reference.
10.1	River Financial 2006 Stock Compensation Plan filed as Exhibit 10.1 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.2	River Financial Change in Control Agreement for Jimmy Stubbs filed as Exhibit 10.2 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.3	River Financial Change in Control Agreement for Kenneth H. Givens filed as Exhibit 10.3 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.4	River Financial Change in Control Agreement for Joel K. Winslett filed as Exhibit 10.4 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.5	River Financial Change in Control Agreement for Ray Smith filed as Exhibit 10.5 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.6	River Financial Change in Control Agreement for Boles Pegues filed as Exhibit 10.6 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.7	River Financial Employment Term Sheet for Ray Smith filed as Exhibit 10.7 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.8	River Financial Employment Term Sheet for Boles Pegues filed as Exhibit 10.8 to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.9	River Bank & Trust Form of Warrant Agreement, assumed by River Financial filed as Exhibit 10.9 to the Registrant’s Registration statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.10	River Financial 2015 Incentive Stock Compensation Plan filed as Annex E to the Registrant’s Registration Statement on Form S-4, registration no. 333-205986 filed on July 31, 2015 and incorporated herein by reference.
10.11	Loan Agreement between River Financial Corporation and CenterState Bank (now SouthState Bank) filed as Exhibit 10.1 to the Registrant’s Form 8-K/A filed November 2, 2018 and incorporated herein by reference.
10.12	Form of Subordinated Note Purchase Agreement, dated March 9, 2021, between River Financial Corporation and certain accredited investors, included as Exhibit 10.1 in the River Financial Corporation Form 8-K, filed on March 10, 2021 and incorporated herein by reference.
10.13	Loan and Security Agreement, dated August 9, 2021, between River Financial Corporation and ServisFirst Bank, included as Exhibit 10.13 in the River Financial Corporation Form 10-K, filed on March 15, 2022 and incorporated herein by reference.
31.1**	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.

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31.2**	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32 **	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Schedules omitted. Registrant agrees to furnish a copy of any omitted schedule to the SEC upon request.

** Filed herewith.

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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.

	RIVER FINANCIAL CORPORATION
Date: August 8, 2023	By:	/s/ James M. Stubbs
		James M. Stubbs
		Chief Executive Officer (principal executive officer)
Date: August 8, 2023	By:	/s/ Jason B. Davis
		Jason B. Davis
		Chief Financial Officer

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EX-3.1

CERTIFICATE OF INCORPORATION

(Amended and Restated as of May 18, 2023)

OF

RIVER FINANCIAL CORPORATION

Article I
name

The name of this corporation (the "Corporation") is:

River Financial Corporation

Article II
Duration

The Corporation shall have perpetual duration and existence.

Article III
OBJECTS AND PURPOSES

The objects and nature of the business and the purposes and powers of the Corporation are to act as a bank holding company and to engage in any lawful activity and to exercise all powers permitted to it by the Alabama Business Corporation Law.

Article IV
CAPITAL STOCK

4.1The total number of shares of all classes of capital stock ("Shares") which the Corporation shall have the authority to issue is 16,000,000, consisting of 15,000,000 shares of $1.00 par value common stock ("Common Stock") and 1,000,000 shares of preferred stock (“Preferred Stock”).

4.2Dividends upon all classes and series of shares shall be payable only when, as and if declared by the Board of Directors from funds lawfully available therefor, which funds shall include, without limitation, the Corporation’s capital surplus. Dividends upon shares of any class or series of shares may be paid in cash, property, or shares of any class or series of shares of the Corporation, as may be determined by resolution or resolutions of the Board of Directors.

4.3Written restrictions on the global transfer or registration of transfer of the Corporation’s capital stock, securities or evidences of indebtedness or any interest therein may be imposed by the Corporation, entered into as part of an agreement, adopted as by‑Laws, or recognized by the Corporation as the Corporation’s Board of Directors may determine by resolution or resolutions. Any such transfer restrictions shall be noted conspicuously on the security or evidence of indebtedness.

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4.4The board of directors is authorized, at any time and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series with such designations, preferences, voting powers and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as are stated and expressed in the resolution or resolutions providing for the issuance of such Preferred Stock adopted by the board of directors, and as are not stated and expressed in this Amended and Restated Certificate of Incorporation or any amendment thereto, including, but not limited to, determination of any of the following:

(1) the distinctive serial designation and the number of shares constituting a series;

(2) the dividend rate or rates, whether dividends are cumulative (and if so on what terms and conditions), the payment date or dates for dividends and the participating or other special rights, if any, with respect to dividends;

(3) the voting rights, full or limited, if any, of the shares of the series, which could include the right to elect a specified number of directors in any case if dividends on the series are not paid for in a specified period of time;

(4) whether the shares of the series are redeemable and, if so, the price or prices at which, and the terms and conditions on which, the shares may be redeemed, which prices, terms and conditions may vary under different conditions and at different redemption dates;

(5) the amount or amounts, if any, payable upon the shares of the series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation prior to any payment or distribution of the assets of the Corporation to any class or classes of stock of the Corporation ranking junior to the series;

(6) whether the shares of the series are entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of shares of the series and the amount of the fund and the manner of its application, including the price or prices at which the shares of the series may be redeemed or purchased through the application of the fund;

(7) whether the shares are convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation and the conversion price or prices, or the rates of exchange, and the adjustments thereof, if any, at which the conversion or exchange may be made, and any other terms and conditions of the conversion or exchange; and

(8) any other preferences, privileges and powers, and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of a series, as the board of directors may deem advisable and as are not inconsistent with the provisions of this Amended and Restated Certificate of Incorporation.

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Article V
No Preemptive Rights

A holder of the Corporation’s Common Stock shall not have the preemptive right to purchase its proportion of the issuance of any class of shares, including treasury shares, according to the proportion of its holdings of such class.

Article VI
Special Provisions

6.1A director shall not be held personally liable to the Corporation or its stockholders for monetary damages for any action taken, or any failure to take any action as a director, except this provision shall not eliminate the liability of a director for (i) the amount of a financial benefit received by a director to which he or she is not entitled; (ii) an intentional infliction of harm on the Corporation or the stockholders; (iii) a violation of Section 10A-2A-8.32 of the Alabama Business Corporation Law; (iv) an intentional violation of criminal law; or (vi) a violation of 12 C.F.R. Part 359 or any payment or benefit relating to the imposition of penalties under the Alabama Banking Code. It is the intention that the directors of the Corporation be protected from personal liability to the fullest extent permitted by the Alabama Business Corporation Law as it now or hereafter exists. If at any time in the future the Alabama Business Corporation Law is modified to permit further or additional limitations on the extent to which directors may be held personally liable to the Corporation, the protection afforded by this Section 6.01 shall be expanded to afford the maximum protection permitted under such law. Any repeal or modification of this Section 6.01 by the stockholders of the Corporation shall be prospective only, and shall not diminish the rights, or expand the personal liability of a director of the Corporation with respect to any act or omission occurring prior to the time of such repeal or modification.

Article VII
Registered Office and Agent

The address of the Corporation’s initial registered office shall be 2611 Legends Drive, Prattville, AL 36066, and its initial registered agent at such address shall be James M. Stubbs.

Principal Office

The principal office of the Corporation shall be located initially at 2611 Legends Drive, Prattville, Alabama 36066, but may be moved from time to time by majority vote of the board of directors.

Article VIII
Directors

All of the authority of the Corporation shall be exercised by or under the direction of the Board of Directors. For their own governance, the Directors may adopt bylaws that are not inconsistent with these Articles. The Bylaws shall establish a variable range for the Board of Directors by fixing a minimum number of 7 Directors and maximum number of 12 Directors. The Board may change the number of Directors within the variable range.

ARTICLE IX

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9.1 Indemnification

(a) The Corporation shall indemnify all persons who may be indemnified by the Corporation to the full extent required or permitted by law, including but not limited to the indemnification provided in Sections 10A-2A-8.50 through 10A-2A-8.59 of the ABCL (as it presently or subsequently exists).

(b) In addition to the above, and without restricting the power or duty of the Corporation to provide indemnification, the Corporation shall:

(i) Indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, including appeals and whether formal or informal by reason of the fact that he is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee or employee of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including reasonable attorneys' fees), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by him in connection with such claim, action, suit or proceeding if he conducted himself in good faith and he reasonably believed (1) in the case of conduct in his official capacity with the Corporation, that his conduct was in the best interests of the Corporation, (2) in the case of conduct with respect to an employee benefit plan, that his conduct was for a purpose that was in the best interests of the participants and beneficiaries, and (3) in all other cases (except a criminal action or proceeding), that his conduct was at least not opposed to the Corporation's best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any claim, action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the person did not conduct himself in good faith and in a manner in which he reasonably believed (1) in the case of conduct in his official capacity with the Corporation, that his conduct was not in the best interests of the Corporation, (2) in the case of conduct with respect to an employee benefit plan, that his conduct was for a purpose that was not in the best interests of the participants and beneficiaries, and (3) in all other cases (except a criminal action or proceeding), that his conduct was opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The Corporation may not, however, indemnify a person if (1) in connection with any claim, action, suit or proceeding by or in the right of the Corporation, if the person was adjudged liable to the Corporation or (2) in connection with any other claim, action, suit or proceeding charging improper personal benefit to the person, whether or not involving action in his official capacity, if the person was adjudged liable on the basis that a personal benefit was improperly received by him.

(ii) Indemnify any director, officer or employee of the Corporation against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with any action, suit, or proceeding referred to in paragraph (i) of this subsection or in defense of any claim, issue or matter therein, to the extent that he has been successful on the merits or otherwise in defense of any such action, suit or proceedings, or in defense of any claim, issue or matter therein. Any indemnification under paragraph (i) of this subsection, unless ordered by a court, shall be made by

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the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer or employee is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraph (i) of this subsection. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such claim, action, suit or proceeding, or (2) if such a quorum is not obtainable, by majority vote of a committee duly designated by the board of directors (in which designated directors who are parties to such action may participate) consisting solely of two or more directors not at the time parties to the action, or (3) by special legal counsel, selected by the board of directors or its committee in the manner prescribed in (1) or (2) or, if a quorum of the board of directors cannot be obtained under (1) and a committee cannot be designated under (2), selected by a majority vote of the full board of directors (in which selected directors who are parties to the action may participate, or (4) by the stockholders, but shares owned by or voted under the control of directors, officers or employees who are at the time parties to the action may not be voted on the determination. (In the case of a stockholder vote, a majority of the shares that are entitled to vote on the transaction by virtue of not being owned by or under the control of such directors constitutes a quorum for the purpose of taking action under this provision).

(iii) Indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed claim, action, suit or proceeding if the court in which such action was brought or another court of competent jurisdiction determines that the person is entitled to mandatory indemnification under Section 10A-2A-8.52 of the Alabama Business Corporation Law or that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the applicable standard of conduct in paragraph (i) of this subsection or was adjudged liable to the Corporation.

(c) In addition to the above provisions of this Section, and without restricting the power or duty of the Corporation to provide indemnification thereunder, unless prohibited by law, the Corporation may indemnify any director, officer or employee under such circumstances and to the extent approved by the holders of a majority of the shares of stock of the Corporation; provided, however, that the shares of stock of the person or persons proposed to be indemnified shall not be included for the purpose of determining what constitutes a majority and such shares shall not be voted on the issue. Indemnification may be provided under this subsection (c) notwithstanding the fact that it has been denied, expressly or by implication, under subsections (a) or (b) of this Section.

(d) Expenses (including attorneys' fees) incurred in defending a civil or criminal claim, action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such claim, action, suit or proceeding as authorized in the manner provided in subsections (b) and (c) of this Section upon (1) if authorized pursuant to subsection (b), receipt of a written affirmation by the director, officer or employee of good faith belief that he has met the appropriate standard of conduct provided in subsection (b), (2) receipt of an undertaking by or on behalf of the director, officer or employee to repay such amount if and to the extent that it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in subsections (b) and (c) of this Section, and (3) a determination that the facts then known to those making the determination would not prevent indemnification under this Certificate of Incorporation.

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9.2 The indemnification authorized by this Section shall not be deemed exclusive of and shall be in addition to any other right to which those indemnified may be entitled under any statute, rule of law, provision of the Certificate of Incorporation, By‑Laws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer or employee of the Corporation and shall inure to the benefit of the heirs, executors, administrators, and personal representatives of such a person.

9.3 The Corporation may purchase and maintain insurance or furnish similar protection (including but not limited to trust funds, self‑insurance reserves, or the like) on behalf of any person who is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee or employee of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Section or under Sections 10A-2A-8.50 through 10A-2A-8.59 of the Alabama Business Corporation Law, or as such Sections may hereafter exist.

9.4 The Corporation may indemnify agents of the Corporation as set forth in this Article IX, provided the board of directors authorizes such indemnification, and the terms thereof.

9.5 For purposes of this Certificate of Incorporation, the phrase official capacity shall mean (i) with respect to a director, the office of director in the Corporation; and (ii) when used with respect to an individual other than a director, the office in the Corporation held by an officer or the employment or agency relationship undertaken by the employee on behalf of the Corporation. Official capacity does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise. The use of the pronouns “he” or “his” shall also include “she” or “hers.”

[Signature page to follow.]

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Dated and effective as of May 18, 2023.

RIVER FINANCIAL CORPORATION

By:

Jimmy Stubbs

Chief Executive Officer

This Instrument Prepared by:

Michael D. Waters, Esq.

Jones Walker, LLP

420 20th Street North, Suite 1100

Birmingham, AL 35203

(205) 244-5210

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EX-3.2

RIVER FINANCIAL CORPORATION

AMENDED AND RESTATED BY‑LAWS

EFFECTIVE AS OF MAY 18, 2023

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TABLE OF CONTENTS

Table of Contents

Page

ARTICLE I		1
Offices		1
1.1.	Registered Office	1
1.2.	Principal Office	1
1.3.	Other Offices	1
ARTICLE II		1
Meetings of Stockholders		1
2.1.	Location	1
2.2	Annual Meetings	1
2.3.	Special Meetings	1
2.4.	Notice of Stockholders’ Meetings	1
2.5.	Stockholder List	2
2.6.	Business of Special Meetings	2
2.7.	Quorum of Stockholders	2
2.8.	Action by Stockholders	2
2.9.	Voting	2
2.10.	Waiver of Notice	2
2.11.	Action by Stockholders Without a Meeting	2
2.12	Record Date	3
2.13	Nature of Business at Meeting of Stockholders	3
2.14	Nomination of Directors	5
ARTICLE III		7
Board of Directors		7
3.1.	General Powers, Number, Tenure and Qualifications	7
3.2	Vacancies	7
3.3	Location of Meetings	7
3.4.	Organizational Meeting	7
3.5.	Regular Meetings	8
3.6.	Special Meetings	8
3.7.	Meetings by Conference Telephone, etc	8
3.8.	Quorum of Directors	8
3.9.	Action Without a Meeting	8
3.10.	Committees	9
3.11.	Committee Meetings, Minutes and Reports	9
3.12.	Compensation	9
3.13.	Transactions with Directors or Officers	9
ARTICLE IV		9
Notices		9
4.1.	Manner of Giving Notice	9
4.2.	Waiver of Notice	10

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ARTICLE V		10
Officers		10
5.1.	Number.	10
5.2.	Election	10
5.3.	Appointive Officers	10
5.4.	Compensation	10
5.5	Term, Removal, Resignation and Vacancies	10
5.6.	Chairman of the Board	11
5.7.	Vice Chairman.	11
5.8.	President and Chief Executive Officer	11
5.9.	Vice Presidents	11
5.10.	Treasurer	12
5.11.	Assistant Treasurers	12
5.12.	Secretary.	12
5.13.	Assistant Secretary	12
5.14.	Corporation, Officer and Employee Bonds	13
5.15	Execution of Instruments	13
5.16.	Receipts, Checks, Drafts, etc	13
ARTICLE VI		14
Capital Stock		14
6.1	Certificates for Stock	14
6.2	Transfers of Stock	14
6.3	Regulations	15
6.4	Lost, Destroyed and Mutilated Certificates	15
ARTICLE VII		15
General Provisions		15
7.1.	Declaration of Distributions	15
7.2.	Annual Reports to Stockholders	15
7.3.	Fiscal Year	15
7.4.	Corporation Seal	15
ARTICLE VIII		16
Amendment of By-Laws		16

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RIVER FINANCIAL CORPORATION

AMENDED AND RESTATED BYLAWS

May 18, 2023

ARTICLE I

Offices

1.1. Registered Office. The registered office of the Corporation, as designated in the Certificate of Incorporation, may be changed from time to time by resolution of the Board of Directors and by filing notice of such change as required by law.

1.2. Principal Office. The Corporation's principal office will be in the City of Prattville, County of Elmore, and State of Alabama.

1.3. Other Offices. The Corporation may also have offices at such other places both within and without the State of Alabama as the Board of Directors may from time to time determine or the business of the Corporation may require to the extent not prohibited by law.

ARTICLE II

Meetings of Stockholders

2.1. Location. All meetings of stockholders shall be held at the Corporation's principal office, or at such other place either within or without the State of Alabama as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting.

2.2 Annual Meetings. The annual meeting of stockholders shall be held in the third week of the month of May. At the annual meeting, the stockholders shall elect a Board of Directors by plurality vote, and shall transact any other business as may properly come before the meeting.

2.3. Special Meetings. Special meetings of stockholders for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may only be called by the Chairman, the Chief Executive Officer or the Board of Directors.

2.4. Notice of Stockholders Meetings. Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the Chief Executive Officer or the Secretary, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the

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stockholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid. See Article IV for further information regarding permitted notices.

2.5. Stockholder List. The officer having charge of the stock transfer books for shares of the Corporation shall prepare an alphabetical list of the names of all its stockholders who are entitled to notice of a stockholders' meeting. The list must be arranged by voting group (and within each voting group by class or series of shares) and show the address of and number of shares held by each stockholder. The stockholders' list must be available for inspection by any stockholder, beginning two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the Corporation's principal office or at a place identified in the meeting notice or on a reasonably accessible electronic network. A stockholder, or his or her agent or attorney, is entitled on written demand to inspect and, for a proper purpose, to copy the list, during regular hours and at its expense, during the period it is available for inspection. The Corporation shall make the list available at the meeting, and any stockholder, or his or her agent or attorney, is entitled to inspect the list at any time during the meeting or any adjournment thereof. The stock transfer records of the Corporation shall be prima facie evidence as to who are the stockholders entitled to examine the stockholders' list or transfer records or to vote at any meeting of stockholders. See § 2.12 for record date settings.

2.6. Business of Special Meetings. Business transacted at any special meeting of stockholders shall be limited to the business within the purposes described in the notice.

2.7. Quorum of Stockholders. A majority of the shares entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum with respect to that matter.

2.8. Action by Stockholders. If a quorum exists, the affirmative action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast approving the action, unless the vote of a greater number is required by the Certificate of Incorporation.

2.9. Voting. Each stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each Share having voting power held by such stockholder. A proxy may be appointed by an instrument in writing subscribed by such stockholder or his duly authorized attorney‑in‑fact. The proxy holder need not be a stockholder. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

2.10. Waiver of Notice. Whenever any notice is required to be given to any stockholder, a waiver thereof in writing signed by the person or persons entitled to such notice may be given, whether before or after the date and time stated in the notice and delivered to the Corporation. A stockholder's attendance at a meeting: (i) waives objection to lack of notice or defective notice of the meeting, unless the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting and (2) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter before action is taken on the matter.

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2.11. Action by Stockholders Without a Meeting. Any action required to be taken at a meeting of stockholders of the Corporation may be taken without a meeting and without prior notice if the action is taken by the holders of outstanding stock having not less than the minimum number of votes that would be required to authorize or take action at a meeting. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders approving the action and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. The record date for determining the stockholders entitled to take action without a meeting is the date the first stockholder signs the consent.

2.12 Record Date. For the purpose of determining stockholders entitled to notice of a stockholders’ meeting, to demand a special meeting, to vote, or to take any other action, the Board of Directors of the Corporation may fix the record date but not to exceed, in any case, seventy (70) days before the meeting or action requiring a determination of stockholders. A determination of stockholders entitled to notice of or to vote at a stockholders’ meeting is effective for any adjournment of the meeting unless the Board fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting.

2.13 Nature of Business at Meeting of Stockholders.Only such business (other than nominations for election to the Board of Directors, which must comply with the provisions of Section 2.14), may be transacted at an Annual Meeting or Special Meeting as is (a) specified in the notice of meeting (or any amendment or supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting or Special Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.13 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 2.13. Notwithstanding the foregoing, at a Special Meeting, only such business shall be conducted as is specified in the notice of meeting (or any amendment or supplement thereto).

In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation (the “Secretary”).

To be timely, a stockholder’s notice to the Secretary must be delivered to, or be mailed and received at, the principal executive offices of the Corporation (a) in the case of an Annual Meeting, not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding Annual Meeting; provided, however, that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

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To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each matter such stockholder proposes to bring before the Annual Meeting, a brief description of the business desired to be brought before the Annual Meeting (including the specific text of any resolutions or actions proposed for consideration and if such business includes a proposal to amend the Certificate of Incorporation, as amended, or these By-Laws, the specific language of the proposed amendment) and the reasons for conducting such business at the Annual Meeting, and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made, (i) the name and record address of such person as they appear on the Corporation’s books, (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such person or any affiliates or associates of such person, in such business, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting, and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such person with respect to the proposed business to be brought by such person before the Annual Meeting pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder. As used in the By-laws, “affiliates” and “associates” shall have the meaning given in Rule 12b-2 of the Exchange Act.

A stockholder providing notice of business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.13 shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of the Annual Meeting.

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No business shall be conducted at the Annual Meeting or a Special Meeting except business brought before the Annual Meeting or Special Meeting in accordance with the procedures set forth in this Section 2.13; provided, however, that, once business has been properly brought before the Annual Meeting or Special Meeting in accordance with such procedures, nothing in this Section 2.13 shall be deemed to preclude discussion by any stockholder of any such business. If the chairperson of an Annual Meeting or a Special Meeting determines that business was not properly brought before the Annual Meeting or Special Meeting in accordance with the foregoing procedures, the chairperson shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

Nothing contained in this Section 2.13 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor provision of law), but only if such Rule applies.

2.14 Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation, as amended. Nominations of persons for election to the Board of Directors may be made at any Annual Meeting, by or at the direction of the Board of Directors (or any duly authorized committee thereof) or by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.14 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 2.14.

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary.

To be timely, a stockholder’s notice to the Secretary must be delivered to, or be mailed and received at, the principal executive offices of the Corporation (a) in the case of an Annual Meeting, not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding Annual Meeting; provided, however, that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting called for the purpose of electing directors, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of

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all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, and (iv) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, (i) the name and record address of such person as they appear on the Corporation’s books, (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of all stock of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any proposed nominee or any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, and any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to nominate the persons named in its notice, and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. If requested by the Corporation, each proposed nominee shall complete and deliver promptly to

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the Corporation a questionnaire in form and substance similar to any such questionnaire completed by persons nominated for election as a director of the Corporation by the Board of Directors.

A stockholder providing notice of any nomination proposed to be made at an Annual Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.14 shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting, and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of such Annual Meeting.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.14. If the chairperson of an Annual Meeting for the election of directors determines that a nomination was not made in accordance with the foregoing procedures, the chairperson shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

ARTICLE III

Board of Directors

3.1. General Powers, Number, Tenure and Qualifications. All corporate powers shall be exercised by or under authority of, and the business and affairs of the Corporation shall be managed under the direction of, its Board of Directors, comprised of not less than seven (7) nor more than twelve (12) persons. Directors shall be natural persons of the age of at least nineteen (19) but need not be residents of the State of Alabama or stockholders of the Corporation. Directors shall be elected at each annual meeting of the stockholders, and shall hold office for one year terms or until their successors are elected and qualified.

3.2 Vacancies. If a vacancy occurs on the Board: (i) the stockholders may fill the vacancy, whether resulting from an increase in the number of directors or otherwise; (ii) the board of directors may fill the vacancy, or (iii) if the directors remaining in office constitute fewer than a quorum of the Board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. A director elected to fill a vacancy shall be elected to serve until the next annual meeting of stockholders. If there are no directors in office, then the stockholders may hold a special meeting to elect directors.

3.3 Location of Meetings. Meetings of the Board of Directors, regular or special, shall be held at the Corporation's principal office unless otherwise specified in the notice thereof, in which event the meeting shall be held where specified in the notice, either within or without the State of Alabama.

3.4. Organizational Meeting. The first meeting of each newly‑elected Board of Directors shall be held immediately after and in the same place as the annual meeting of Stockholders. No

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notice of such meeting shall be necessary to the newly‑elected directors in order to legally constitute the meeting, provided a quorum is present.

3.5. Regular Meetings. Regular meetings of the Board of Directors shall be held on the day and time specified by resolution of the Board of Directors. No notice of regular meetings need be given, unless the time and place of such meetings are other than those stated therein.

3.6. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman or Chief Executive Officer or any two (2) or more directors on twenty‑four (24) hours' personal, telephonic, telegraphic or written notice delivered to each director specifying the date, time and place of the meeting. The notice need not describe the purpose of the special meeting. Attendance at or participation by a director at a special meeting (i) waives objection to lack of any required notice or defective notice of the meeting, unless the director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting; and (ii) waives objection to consideration of a particular matter at the meeting that is not within the purpose described in the meeting notice, unless the director objects to considering the matter before action is taken on the matter.

3.7. Meetings by Conference Telephone, etc. Meetings of the Board of Directors and of any committee thereof (of any type, time or purpose) may be held by means of a conference telephone, video, Internet or other communication by which all directors participating may simultaneously hear each other during the meeting. Participation by such means shall constitute presence in person at any such meeting.

3.8. Quorum of Directors. A majority of the fixed number of directors shall constitute a quorum for the transaction of business. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board unless the Certificate of Incorporation require the vote of a greater number of directors. A director is, unless established to the contrary, presumed present for quorum purposes for the remainder of the meeting at which he has been present for any purpose. A director who is present at a meeting of the Board or any committee of the Board when corporate action is taken is deemed to assent to the action taken unless (i) the director objects at the beginning of the meeting (or promptly upon arrival) to holding it or transacting business at the meeting; (ii) the dissent or abstention from action taken is entered in the minutes of the meeting; or (iii) the director delivers written notice of dissent or abstention to the presiding officer of the meeting before its adjournment or to the Corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

3.9. Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if the action is taken by all members of the Board (or committee) and evidenced by one or more consents in writing, setting forth the action so taken, shall be signed by each member of the Board or committee, as the case may be, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken is effective when the last director signs the consent, unless the consent specifies a different effective date. Such consent shall have the same effect as a unanimous vote.

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3.10. Committees. The Board of Directors may create one (1) or more committees, each committee to consist of one (1) or more directors, who serve at the pleasure of the Board. The creation of a committee and appointment of members to it must be approved by the greater of (i) a majority of all the directors in office when the action is taken or (ii) the number of directors required by the Certificate of Incorporation or By‑Laws to take action. To the extent specified by the Board of Directors or in the Certificate of Incorporation or By‑Laws, each committee may exercise the powers of the Board of Directors; except that no such committee shall have the authority of the Board of Directors with reference to (1) authorizing distributions except within limits specified by the Board of Directors, (2) approving or proposing to stockholders actions requiring approval by stockholders, (3) filling vacancies on the board of directors or on any of its committees, (4) amending or restating the certificate of incorporation, or (5) adopting, amending or repealing these By‑Laws.

3.11. Committee Meetings, Minutes and Reports. Meetings of any committee of the Board may be called by the Chief Executive Officer, or by the chairman of the committee, at any time upon personal, telephonic, telegraphic, written or such other notice as may be determined by such committee. A majority of the members of each committee may fix such committee's rules of procedure, determine its manner of acting, and fix the time and place, whether within or without the State of Alabama, of its meetings. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors whenever required or requested.

3.12. Compensation. The Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attending each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

3.13. Transactions with Directors or Officers. A director's or officer’s contract or transaction with the Corporation (or a contract involving a related interest of a director or officer) shall not be void or voidable if the provisions of Section 10A-2A-8.60 of the Alabama Business Corporation Law (as it presently or subsequently exists) are satisfied.

ARTICLE IV

Notices

4.1. Manner of Giving Notice. Whenever notice is required to be given to any director or stockholder, such notice requirement can be satisfied by giving written notice unless oral notice is reasonable under the circumstances. A notice or other communication may be given by any method of delivery, except that notice or other communication by electronic transmission must be in accordance with § 10A-2A-1.41 of the ABCL.

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4.2. Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice and shall be delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Attendance by a stockholder or director at a meeting constitutes a waiver as set forth in § 10A-2A-7.06 of the ABCL.

ARTICLE V

Officers

5.1. Number. The Board of Directors shall elect the Corporation's officers. The Board of Directors or a duly appointed officer may appoint one or more officers or assistant officers. The Board of Directors shall delegate to one of the officers responsibility for preparing minutes of the directors' and stockholders' meetings and for authenticating records of the Corporation. Any number of offices may be held by the same person.

5.2. Election. The Board of Directors, at its annual organizational meeting, may choose a Chairman, Vice Chairman, Chief Executive Officer, President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as it deems necessary or desirable. If the officers, or any of them, for any reason should not be elected at the Board of Directors' organizational meeting, they may be elected at any regular or special meeting of the Board of Directors.

5.3. Appointive Officers. The Board may from time to time appoint or delegate the appointment of such other officers as it may deem necessary, including one or more Assistant Secretaries and one or more Assistant Treasurers. Such officers shall hold office for such period, have such authority and perform such duties, subject to the control of the Board, as are in these By‑Laws provided or as the Chairman of the Board, the Chief Executive Officer or the Board may from time to time prescribe. The Chief Executive Officer shall have authority to appoint and remove agents and employees and to prescribe their powers and duties and may authorize any other officer or officers to do so.

5.4. Compensation. The salaries and other compensation of the Corporation's principal officers shall be fixed by the Board of Directors, after taking account of any recommendations by any committee which is authorized to advise the Board with respect to compensation. The Board may from time to time delegate to any principal officer or to any committee power to fix the salaries and other compensation for all other Corporation officers, employees and agents. The action of the Board of Directors in so fixing officer compensation shall not be rendered invalid by reason of the fact that a director voted in favor of a resolution fixing his own salary or by reason of the fact that his presence was necessary to constitute a quorum of the Board.

5.5 Term, Removal, Resignation and Vacancies. The Corporation's officers shall hold office until their successors are elected and qualified. Any officer may be removed at any time with or without cause by the affirmative vote of a majority of the Board of Directors or by the appointing officer. An officer may resign at any time by giving notice to the Corporation. A

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resignation is effective when the notice is given unless the notice specifies a later effective date. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the Board may fill the pending vacancy before the effective date if the Board provides that the successor does not take office until the effective date. Any vacancy occurring in any office of the Corporation shall be filled in the manner prescribed in these By‑Laws for regular election or appointment to such office.

5.6. Chairman of the Board. The Chairman of the Board shall, when present, preside at all meetings of the Board of Directors, and of the stockholders. In general, he shall perform all the duties incident to the office of Chairman of the Board, and such other duties as the board may from time to time determine or as may be prescribed by these By‑Laws.

5.7. Vice Chairman. The Vice Chairman, in the absence, inability or disability of the Chairman, shall perform the Chairman's duties. The Vice Chairman shall have such other duties as may be prescribed by the Board of Directors from time to time.

5.8. President and Chief Executive Officer. The President shall be the chief executive officer of the Corporation, unless the Board of Directors also designates a Chief Executive Officer, who shall then serve as the chief executive officer. Both officers shall be subject to the control of the Board of Directors. The Chief Executive Officer, if appointed, shall determine the Corporation's basic policies, have general supervision of its business and affairs and be responsible for all internal operations of the Corporation, and the President shall have such duties as designated by the Board. The President and the Chief Executive Officer shall report to the Board of Directors. The Chief Executive Officer shall be responsible for personnel, and shall designate and assign the duties of the officers under his supervision, at the direction or with the approval of the Board of Directors.

Unless the Board of Directors shall provide otherwise, the Chief Executive Officer shall have the authority to execute bonds, mortgages and other contracts and instruments requiring a seal, under the seal of the Corporation; and shall have the authority to endorse, when sold, assigned, transferred, or otherwise disposed of, all certificates for shares of stock, bonds, securities or evidences of indebtedness issued by other corporations, associations, trusts, individuals or entities, whether public or private, or by any government or agency thereof, which are owned or held by the Corporation, and to make, execute and deliver all instruments of assignment or transfer of any stocks, bonds, securities, evidences of indebtedness, agreements, or other property owned or held by the Corporation in any capacity. He shall, under the supervision of the Board, be responsible for all investments of the Corporation and shall have full authority to do any and all things delegated to him by the Board of Directors or by any committee of the Board having authority.

5.9. Vice Presidents. The Vice Presidents, in order of their seniority or as designated by the Board of Directors, shall in the absence, inability or disability of the President, perform the duties and exercise the powers of said office, and when so acting shall be subject to all restrictions upon the President. At all other times the Vice Presidents shall perform such other duties and exercise such other powers as the Board of Directors may prescribe, or as the President may delegate.

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5.10. Treasurer. The Treasurer shall be the Corporation's chief financial officer and shall have the custody of such property and assets of the Corporation as may be entrusted to him by the Board of Directors or by the Chief Executive Officer. He shall, subject to the general supervision of the Board of Directors and any audit committee thereof, have general supervision and authority over the Corporation's books and accounts, its methods and systems of recording and keeping account of its business transactions and of its assets and liabilities, and within such authority, prepare and deliver all reports and returns required of the Corporation by law or by any governmental or regulatory authority pertaining to the condition of the Corporation and its assets and liabilities. He shall be responsible for preparing statements showing the Corporation's financial condition and results of operation, and shall furnish such reports and financial records as may be required or requested by the Board of Directors, the Chairman or the Chief Executive Officer. He shall receive and give receipt for funds due and payable to the Corporation, shall have charge and custody of all funds and securities of the Corporation and shall deposit all such funds in the Corporation's name in such banks and depositories selected or authorized by the Board. The Treasurer shall perform or cause to be performed all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board.

5.11. Assistant Treasurers. The Assistant Treasurer, or if there are more than one, the Assistant Treasurers in the order designated by the Board of Directors shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer, and at all other times shall perform such duties and have such powers as the Board of Directors, the Chairman, the Chief Executive Officer or the Treasurer may prescribe from time to time.

5.12. Secretary. The Secretary shall attend all meetings of the Board of Directors and of the stockholders, and shall keep the minutes of all proceedings of such meetings in books kept for these purposes, and shall perform like duties for the standing committees of the Board when required. The Secretary shall perform such other duties as may be prescribed by the Board of Directors, the Chairman or the Chief Executive Officer. He shall have custody of the corporate seal of the Corporation and shall affix the same to any instrument requiring it, and when so affixed, it may be attested by his signature or by the signature of any Assistant Secretary. The Secretary shall also keep a stock ledger containing the names of all persons who are now or hereafter become stockholders of the Corporation showing their places of residence, the respective number of shares held by them, and the time when they respectively became the holders of such shares.

5.13. Assistant Secretary. The Assistant Secretary, or if there are more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there is no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the power of the Secretary, and at all other times shall perform such other duties and have such other powers as the Board of Directors, the Chairman, the Chief Executive Officer or the Secretary may from time to time prescribe.

5.14. Corporation, Officer and Employee Bonds. The Board of Directors shall fix and prescribe the amount of bond, if any, that may be required of the Corporation, and of each officer and employee of the Corporation. Such bonds shall be made by a bonding company or companies

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authorized to make such bonds in Alabama or any other applicable jurisdiction, and in such form as may be approved by the Corporation's Board of Directors. The Board of Directors may in its discretion, require an increase in the amount of such bond or other additional bond and security, as the Board deems necessary, desirable or expedient for the better protection of the Corporation and those with whom it does business.

5.15 Execution of Instruments. The Chairman and the Chief Executive Officer are authorized, in their discretion, and to the extent permitted herein and by law, to do and perform any and all corporate and official acts in carrying on the Corporation's business, including, but not limited to, the authority to make, execute, acknowledge and deliver all deeds, mortgages, releases, bills of sale, assignments, transfers, leases, powers of attorney or of substitution, proxies to vote stock, or any other instrument in writing that may be necessary in the purchase, sale, lease, assignment, transfer, management or handling in any way of property of any description held or controlled by the Corporation, in any capacity. This shall include authority from time to time, to borrow money in such amounts, for such lengths of time, at such rates of interest and upon such terms and conditions as any said officer may deem proper, and to evidence the indebtedness thereby created by executing and delivering in the Corporation's name, promissory notes or other appropriate evidences of indebtedness. The enumeration herein of particular powers shall not restrict in any way the general powers and authority of said officers. The Board may authorize any other officer or officers or agent or agents to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be delegated by the person so authorized; but unless so authorized by the Board or these By‑Laws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount. In addition to the Treasurer, the Secretary or any Vice President, Assistant Treasurer or Assistant Secretary is authorized to attest the signature of the Chief Executive Officer or Chairman and to affix the corporate seal to any and all instruments requiring such attestation or execution under seal.

5.16. Receipts, Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, or agent or agents, as shall from time to time be determined by resolution of the Board. The Chief Executive Officer, any Vice President, the Treasurer, any Assistant Treasurer or any other officer or employee designated by the Board of Directors, is authorized and empowered on behalf of the Corporation and in its name to endorse checks and warrants, to draw drafts, to give receipts for money due and payable to the Corporation, and to sign such other papers and do such other acts as are necessary or appropriate to perform his duties.

ARTICLE VI

Capital Stock

6.1 Certificates for Stock. Shares of stock of the Corporation may be certificated or uncertificated, as provided under the Alabama Business Corporation Law (“ABCL”). Every holder of stock represented by certificates shall be entitled to have a certificate or certificates certifying the number and class of shares of stock of the Corporation owned by such holder, provided that the Board of Directors may provide for some or all of any class on series of stock to

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be uncertificated. Certificates, if issued, shall be in such form as the Board shall prescribe, certifying the number of shares of stock of the Corporation owned by stockholder. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the person who was at the time of signing the Chief Executive Officer or an executive officer and by the person who was at the time of signing the Secretary or an Assistant Secretary and its seal may be affixed thereto; provided, however, that the signature of such Chief Executive Officer of the Corporation and of such Secretary or Assistant Secretary and the seal of the Corporation may be facsimile. In case any officer or officers of the Corporation who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be such officer or officers. A record shall be kept of the respective names of the persons, firms or corporations owning the stock of the Corporation, the number of shares held by such persons, firms or corporations and the respective dates of issuance, and in case of cancellation, the respective dates of cancellation. Everyshare of stock surrendered to the Corporation for exchange or transfer shall be canceled and neither a new certificate or certificates nor uncertificated shares of stock shall be issued in exchange thereof until such stock shall have been so canceled except in cases provided for in Section 6.4 of this Article VI. Within a reasonable time after the issuance of uncertificated shares, to the extent required by the ABCL the Corporation shall furnish to the registered owner of the shares a written statement containing the information required by the ABCL to be set forth in certificates representing shares of such stock.

6.2 Transfers of Stock. Transfers of shares of the stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, or with a transfer clerk or a transfer agent appointed as in Section 6.3 of this Article VI provided, and upon payment of all taxes thereon and, in the case of certificated shares, surrender of the certificate or certificates for such shares properly endorsed or, in the case of uncertificated shares of stock, compliance with appropriate procedures for transferring shares in uncertificated form. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Within a reasonable time after the issuance of uncertificated shares, to the extent required by the ABCL the Corporation shall furnish to the registered owner of the shares a written statement containing the information required by the ABCL, to be set forth in certificates representing shares of such stock.

6.3 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of shares ofstock of the Corporation. The Board may appoint or authorize any officer or officers to appoint one or more transfer clerks, any of whom may be employees of the Corporation, or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them; provided, however, that the signature of any transfer clerk, transfer agent, or registrar may be facsimile. In case any transfer clerk, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have

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ceased to be such transfer clerk, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such transfer clerk, transfer agent, or registrar at the date of issue.

6.4 Lost, Destroyed and Mutilated Certificates. The owner of any certificated shares of stock of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Corporation may issue a new certificate of stock or uncertificated shares of stock in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed, and the Board may, in its discretion, require the owner of the lost or destroyed certificate, or his or her legal representatives, to give the Corporation a bond in such sum, limited or unlimited, and in such form and with such surety or sureties, as the Board shall in its uncontrolled discretion determine, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate, or the issuance of such new certificate or uncertificated shares of stock.”

ARTICLE VII

General Provisions

7.1. Declaration of Distributions. Except as otherwise expressly provided by the Certificate of Incorporation, distributions with respect to the Corporation's shares may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Distributions may be paid in cash, property, or in shares of the Corporation of any class or series.

7.2. Annual Reports to Stockholders. The Board of Directors shall cause the Corporation to make available to any stockholder, upon written request, annual financial statements for the most recent fiscal year of the corporation as set forth in Section 10A-2A-16.10 of the ABCL, including, without limitation, on the condition of reasonable restrictions on confidentiality.

7.3. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

7.4. Corporation Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the words "Seal" or "Corporate Seal" and "Alabama", as impressed in the margin hereof. The seal may be used by causing it or a facsimile thereof to be impressed, affixed, or reproduced or otherwise used on document or instrument.

ARTICLE VIII

Amendment of By-Laws

These By‑Laws may be altered, amended, added to, or repealed and new By‑Laws adopted by the Board of Directors as set forth in Section 10A-2A-10.20 of the ABCL. These By‑Laws also may be altered, amended, added to or repealed and new By‑Laws adopted by majority vote of the stockholders as set forth in Sections 10A-2A-10.20, 10A-2A-10.21 and 10A-2A-10.22 of the ABCL.

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, James M. Stubbs, certify that:

1. I have reviewed this report on Form 10-Q of River Financial Corporation;

2. Based on my knowledge, thisreport does not contain any untrue statement of a material fact or omitto state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this period report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	RIVER FINANCIAL CORPORATION
August 8, 2023	/s/James M. Stubbs
	James M. Stubbs
	Chief Executive Officer
	(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jason B. Davis, certify that:

1. I have reviewed this report on Form 10-Q of River Financial Corporation;

2. Based on my knowledge, thisreport does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this period report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	RIVER FINANCIAL CORPORATION
August 8, 2023	/s/Jason B. Davis
	Jason B. Davis
	Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT

CERTIFICATES PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of River Financial Corporation, an Alabama corporation (the “Company”), on Form 10-Q for the period ending June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), each of James M. Stubbs, Chief Executive Officer of the Company, and Jason B. Davis, Chief Financial Officer of the Company, do hereby certify, pursuant to §906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

(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.

RIVER FINANCIAL CORPORATION

/s/James M. Stubbs

James M. Stubbs

Chief Executive Officer

(principal executive officer)

Date: August 8, 2023

RIVER FINANCIAL CORPORATION

/s/Jason B. Davis

Jason B. Davis

Chief Financial Officer

(principal financial officer and accounting officer)

Date: August 8, 2023

A signed original of this written statement required by Section 906 has been provided to River Financial Corporation and will be retained by River Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 01, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Registrant Name	RIVER FINANCIAL CORPORATION
Entity Central Index Key	0001641601
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		6,669,981
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	333-205986
Entity Tax Identification Number	46-1422125
Entity Address, Address Line One	2611 Legends Drive
Entity Address, City or Town	Prattville
Entity Address, State or Province	AL
Entity Interactive Data Current	Yes
Entity Address, Postal Zip Code	36066
City Area Code	334
Local Phone Number	290-1012
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	AL

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Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 50,218	$ 31,952
Interest-bearing deposits in banks	30,505	42,874
Federal funds sold	25,000
Cash and cash equivalents	105,723	74,826
Certificates of deposit in banks	3,669	4,165
Securities held-to-maturity, at amortized cost	129,222	131,581
Securities available-for-sale, at fair value	631,518	665,887
Loans held for sale	8,536	3,413
Loans, net of unearned income and discounts	2,047,239	1,803,127
Less allowance for credit losses	(26,889)	(24,310)
Net loans	2,020,350	1,778,817
Premises and equipment, net	42,725	40,213
Accrued interest receivable	10,206	10,083
Bank owned life insurance	47,023	46,395
Foreclosed assets	546	609
Deferred income taxes, net	31,689	30,540
Core deposit intangible	1,755	2,116
Goodwill	27,817	27,817
Restricted equity securities	8,454	5,685
Other assets	15,524	11,235
Total assets	3,084,757	2,833,382
Liabilities and Shareholders' Equity
Noninterest-bearing deposits	670,935	672,956
Interest-bearing deposits	2,010,971	1,841,243
Total deposits	2,681,906	2,514,199
Securities sold under agreements to repurchase	16,642	8,181
Federal Home Loan Bank advances	155,000	95,000
Federal Reserve Bank discount window borrowings	20,000	25,000
Note payable	12,000
Subordinated debentures, net of loan costs	39,456	39,419
Accrued interest payable and other liabilities	12,943	13,397
Total liabilities	2,937,947	2,695,196
Common stock related to 401(k) Employee Stock Ownership Plan	4,048	4,160
Stockholders' Equity
Common stock ($1 par value; 15,000,000 and 10,000,000 shares authorized; 6,689,985 and 6,665,585 shares issued; 6,670,381 and 6,656,386 shares outstanding at June 30, 2023 and December 31, 2022, respectively)	6,690	6,666
Additional paid-in capital	104,688	104,294
Retained earnings	110,336	100,826
Accumulated other comprehensive loss	(72,581)	(71,564)
Unvested restricted stock	(1,594)	(1,730)
Treasury stock at cost (19,604 and 9,199 shares, respectively)	(729)	(306)
Common stock related to 401(k) Employee Stock Ownership Plan	(4,048)	(4,160)
Total stockholders' equity	142,762	134,026
Total equity	146,810	138,186
Total liabilities and stockholders' equity	$ 3,084,757	$ 2,833,382

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Consolidated Statements of Financial Condition (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	15,000,000	10,000,000
Common stock, shares issued	6,689,985	6,665,585
Common stock, shares outstanding	6,670,381	6,656,386
Treasury stock, shares	19,604	9,199

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Unaudited Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest income:
Loans, including fees	$ 26,924	$ 16,839	$ 50,675	$ 32,310
Taxable securities	3,612	3,399	7,269	6,572
Nontaxable securities	374	425	841	927
Federal funds sold	444		597	2
Other interest income	239	60	856	85
Total interest income	31,593	20,723	60,238	39,896
Interest expense:
Deposits	9,842	773	17,662	1,588
Short-term borrowings	131	7	230	11
Federal Home Loan Bank advances	1,731	41	2,918	41
Subordinated debentures	418	418	833	837
Note payable	248		335
Total interest expense	12,370	1,239	21,978	2,477
Net interest income	19,223	19,484	38,260	37,419
Provision for credit losses	1,311	930	2,622	930
Net interest income after provision for credit losses	17,912	18,554	35,638	36,489
Noninterest income:
Service charges and fees	1,885	1,731	3,623	3,334
Investment brokerage revenue	138	260	301	403
Mortgage operations	930	1,402	1,580	3,301
Bank owned life insurance income	319	307	629	610
Net gain (loss) on sales of investment securities	5	(678)	5	(1,266)
Other noninterest income	4,695	276	4,914	423
Total noninterest income	7,972	3,298	11,052	6,805
Noninterest expense:
Salaries and employee benefits	9,461	7,483	18,029	14,490
Occupancy expenses	922	645	1,830	1,290
Equipment rentals, depreciation, and maintenance	505	363	977	679
Telephone and communications	139	125	280	211
Advertising and business development	326	225	621	376
Data processing	930	873	1,950	1,722
Foreclosed assets, net	25	(40)	35	(42)
Federal deposit insurance and other regulatory assessments	723	289	1,294	654
Legal and other professional services	636	296	1,001	607
Other operating expenses	2,342	1,897	4,324	3,571
Total noninterest expense	16,009	12,156	30,341	23,558
Income before income taxes	9,875	9,696	16,349	19,736
Provision for income taxes	2,240	2,188	3,607	4,474
Net income	$ 7,635	$ 7,508	$ 12,742	$ 15,262
Basic net earnings per common share	$ 1.14	$ 1.13	$ 1.91	$ 2.3
Diluted net earnings per common share	$ 1.13	$ 1.11	1.88	2.27
Dividends per common share			$ 0.48	$ 0.44

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Unaudited Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 7,635	$ 7,508	$ 12,742	$ 15,262
Investment securities available-for-sale:
Net unrealized (losses) gains	(10,970)	(39,980)	(1,169)	(80,701)
Income tax effect	2,755	10,038	294	20,264
Reclassification adjustments for losses (gains) realized in net income	(5)	678	(5)	1,266
Income tax effect	1	(170)	1	(318)
Reclassification adjustment for accretion of unrealized holding loss included in accumulated other comprehensive loss from the transfer of securities from available-for-sale to held-to-maturity	(93)	(127)	(184)	(219)
Income tax effect	23	32	46	55
Other comprehensive loss, net of tax	(8,289)	(29,529)	(1,017)	(59,653)
Comprehensive (loss) income	$ (654)	$ (22,021)	$ 11,725	$ (44,391)

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Unaudited Consolidated Statements of Changes in Shareholders' Equity - 6 months ended Jun. 30, 2023 - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Unvested Restricted Stock	Common Stock	Additional Paid In Capital	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss	Treasury Stock	Common Stock Related to ESOP
Balance at Dec. 31, 2022	$ 134,026	$ (24)	$ (1,730)	$ 6,666	$ 104,294	$ 100,826	$ (24)	$ (71,564)	$ (306)	$ (4,160)
Accounting Standards Update [Extensible Enumeration]	us-gaap:AccountingStandardsUpdate201911Member	us-gaap:AccountingStandardsUpdate201911Member					us-gaap:AccountingStandardsUpdate201911Member
Net income	$ 12,742					12,742
Other comprehensive loss, net of tax	(1,017)							(1,017)
Exercise of stock options	327			23	304
Purchase of treasury stock	(571)								(571)
Restricted stock grants, net of forfeiture			(53)	1	52
Sale of treasury shares	160				12				148
Dividends declared	(3,208)					(3,208)
Stock-based compensation expense	215		189		26
Change for ESOP related shares	112									112
Balance at Jun. 30, 2023	$ 142,762		$ (1,594)	$ 6,690	$ 104,688	$ 110,336		$ (72,581)	$ (729)	$ (4,048)

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Unaudited Consolidated Statements of Changes in Shareholders' Equity (Parenthetical)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Statement of Stockholders' Equity [Abstract]
Exercise of stock options, shares	22,900
Purchase of treasury stock, shares	15,154
Restricted stock grants, shares	1,600
Sale of treasury shares	4,749
Dividends declared, per share | $ / shares	$ 0.48

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Unaudited Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows From Operating Activities:
Net income	$ 12,742,000	$ 15,262,000
Adjustments to reconcile net income to net cash from operating activities:
Provision for credit losses	2,622,000	930,000
Provision for losses on foreclosed assets	60,000
Amortization of securities	1,457,000	2,231,000
Accretion of securities	(235,000)	(261,000)
Realized net (gain) loss on sales of securities available-for-sale	(5,000)	1,266,000
Accretion of discount on acquired loans	(5,000)	(6,000)
Accretion of deferred loan fees / costs	(1,970,000)	(1,881,000)
Amortization of core deposit intangible asset	361,000	460,000
Amortization of debt issuance costs	38,000	37,000
Stock-based compensation expense	215,000	234,000
Bank owned life insurance income	(629,000)	(610,000)
Depreciation and amortization of premises and equipment	1,345,000	857,000
Gain on sales of foreclosed assets	(51,000)	(80,000)
Deferred income tax (benefit) expense	(808,000)	308,000
(Increase) decrease in operating assets and (decrease) increase in operating liabilities:
Loans held-for-sale	(5,123,000)	6,563,000
Accrued interest receivable	(123,000)	(70,000)
Other assets	(4,233,000)	1,466,000
Accrued interest payable and other liabilities	(454,000)	(316,000)
Net cash from operating activities	5,204,000	26,390,000
Cash Flows Used For Investing Activities:
Maturity of certificate of deposit	496,000	498,000
Activity in securities available-for-sale:
Sales of securities available-for-sale	15,252,000	154,392,000
Maturities, payments, calls of securities available-for-sale	21,299,000	42,212,000
Purchases of securities available-for-sale	(4,833,000)	(182,601,000)
Activity in securities held-to-maturity:
Maturities, payments, calls of securities held-to-maturity	2,433,000	3,228,000
Purchases of securities held-to-maturity		(12,764,000)
Loan principal originations, net	(242,689,000)	(186,644,000)
Proceeds from sale of foreclosed assets	485,000	444,000
Purchases of premises and equipment	(3,857,000)	(2,810,000)
Purchase of restricted equity securities, net	(2,769,000)	(916,000)
Net cash used for investing activities	(214,183,000)	(184,961,000)
Cash Flows From Financing Activities:
Net increase in deposits	167,707,000	134,686,000
Net decrease (increase) in securities sold under agreements to repurchase	8,461,000	(2,091,000)
Proceeds from Federal Home Loan Bank advances	190,000,000	30,000,000
Repayment of Federal Home Loan Bank advances	(130,000,000)	(10,000,000)
Proceeds from issuance of note payable	12,000,000
Proceeds from Federal Reserve Bank discount window borrowings	20,000,000
Repayment of Federal Reserve Bank discount window borrowings	(25,000,000)
Proceeds from exercise of common stock options	327,000	421,000
Purchase of treasury stock	(571,000)	(619,000)
Sale of treasury stock	160,000	677,000
Cash dividends	(3,208,000)	(2,918,000)
Net cash from financing activities	239,876,000	150,156,000
Net Change In Cash And Cash Equivalents	30,897,000	(8,415,000)
Cash and Cash Equivalents At Beginning Of Period	74,826,000	61,962,000
Cash and Cash Equivalents At End Of Period	105,723,000	53,547,000
Cash Payments For:
Interest paid to depositors	17,427,000	1,632,000
Interest paid on borrowings	4,041,000	412,000
Income taxes	3,930,000	820,000
Non-cash investing and financing activities:
Transfer of loans to foreclosed assets	431,000	637,000
Transfer of securities from available-for-sale to held-to-maturity		$ 78,047,000
Restricted stock grant	$ 53,000

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Basis of Presentation

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

General

The unaudited consolidated financial statements include the accounts of River Financial Corporation (“River” or the “Company”) and its wholly owned subsidiary, River Bank & Trust (“Bank”). The Bank provides a full range of commercial and consumer banking services primarily in the Montgomery, Alabama metropolitan area, Autauga, Baldwin, Chilton, Coffee, Elmore, Etowah, Houston, Jefferson, Lee, Madison, Mobile, Morgan and Tallapoosa counties and surrounding counties in Alabama. The Bank is primarily regulated by the Federal Deposit Insurance Corporation (FDIC) and undergoes periodic examinations by this regulatory agency and the Alabama Banking Department. The Company is regulated by the Federal Reserve Bank (FRB) and is also subject to periodic examinations.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly River Financial Corporation’s consolidated statements of financial condition, statements of income, statements of comprehensive (loss) income, statements of changes in stockholders’ equity and statements of cash flows for the periods presented, and all such adjustments are of a normal recurring nature. All material intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the entire year.

These interim consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and, therefore, certain information and note disclosures normally presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted or abbreviated. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes as of December 31, 2022, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, the allowance for credit losses, foreclosed asset valuations, useful lives for depreciation and amortization, fair value of financial instruments, deferred taxes, and contingencies. Estimates that are particularly susceptible to significant change for the Company include the determination of the allowance for credit losses, investment securities impairment, and assessment of deferred tax assets and liabilities, and therefore are critical accounting policies. Management does not anticipate any material changes to estimates in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: external market factors such as market interest rates and employment rates, changes to operating policies and procedures, economic conditions in our markets, and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period presented.

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Reclassifications

6 Months Ended

Jun. 30, 2023

Reclassifications [Abstract]

Reclassifications

Note 2 – Reclassifications

Certain prior period amounts have been reclassified to conform to the presentation used in 2023. These reclassifications had no material effect on the operations, financial condition or cash flows of the Company.

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Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Note 3 – Earnings Per Share

Basic earnings per common share are computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share are computed by dividing net income by the effect of the issuance of potential common shares that are dilutive and by the sum of the weighted-average number of shares of common stock outstanding. All shares owned by the Company’s 401(k) Employee Stock Ownership Plan (ESOP) are included in the earnings per share calculations.

The reconciliation of the components of the basic and diluted earnings per share is as follows (amounts in thousands):

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2023			2022	2023			2022
Net earnings available to common shareholders	$	7,635	$	7,508	$	12,742	$	15,262
Weighted average common shares outstanding		6,670,969		6,631,472		6,668,879		6,628,484
Dilutive effect of stock options		96,457		107,901		94,377		99,890
Diluted common shares		6,767,426		6,739,373		6,763,256		6,728,374
Basic earnings per common share	$	1.14	$	1.13	$	1.91	$	2.30
Diluted earnings per common share	$	1.13	$	1.11	$	1.88	$	2.27

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Investment Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 4 – Investment Securities

The following tables summarize the amortized cost and fair value of securities available-for-sale and securities held-to-maturity and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive (loss) income at June 30, 2023 and December 31, 2022 (amounts in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	432,357	$	63	$	(61,435	)	$	370,985
U.S. treasury securities		130,843		-		(13,234	)		117,609
U.S. govt. sponsored enterprises		70,838		-		(6,576	)		64,262
State, county, and municipal		73,770		-		(10,360	)		63,410
Corporate debt obligations		17,789		11		(2,548	)		15,252
Total available-for-sale	$	725,597	$	74	$	(94,153	)	$	631,518

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	66,356	$	-	$	(13,097	)	$	53,259
State, county, and municipal		62,866		-		(12,559	)		50,307
Total held-to-maturity	$	129,222	$	-	$	(25,656	)	$	103,566

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	449,348	$	-	$	(59,311	)	$	390,037
U.S. treasury securities		130,971		-		(13,342	)		117,629
U.S. govt. sponsored enterprises		72,889		-		(6,527	)		66,362
State, county, and municipal		87,347		71		(11,555	)		75,863
Corporate debt obligations		17,873		16		(1,893	)		15,996
Total available-for-sale	$	758,428	$	87	$	(92,628	)	$	665,887
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	68,688	$	-	$	(12,624	)	$	56,064
State, county, and municipal		62,893		-		(13,680	)		49,213
Total held-to-maturity	$	131,581	$	-	$	(26,304	)	$	105,277

The Company reassessed classification of certain investments, and effective February 2022, the Company transferred $75 million of residential mortgage-backed securities from available-for-sale to held-to-maturity. The transfer occurred at fair value. The related unrealized loss of $3.4 million included in accumulated other comprehensive (loss) income remained in accumulated other comprehensive (loss) income, to be amortized out of accumulated other comprehensive (loss) income with an offsetting entry to interest income as a yield adjustment through earnings over the remaining term of the securities. No gain or loss was recorded at the time of transfer.

Management evaluates securities for other-than-temporary impairment on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

The following tables summarize securities with unrealized and unrecognized losses as of June 30, 2023 and December 31, 2022 aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position (amounts in thousands):

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	13,228	$	573	$	355,326	$	60,862	$	368,554	$	61,435
U.S. treasury securities		-		-		117,609		13,234		117,609		13,234
U.S. govt. sponsored enterprises		12,738		81		51,524		6,495		64,262		6,576
State, county & municipal		2,387		72		61,023		10,288		63,410		10,360
Corporate debt obligations		920		31		12,877		2,517		13,797		2,548
Total available-for-sale	$	29,273	$	757	$	598,359	$	93,396	$	627,632	$	94,153
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	53,259	$	13,097	$	53,259	$	13,097
State, county & municipal		-		-		44,962		12,559		44,962		12,559
Total held-to-maturity	$	-	$	-	$	98,221	$	25,656	$	98,221	$	25,656
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	133,675	$	15,215	$	253,994	$	44,096	$	387,669	$	59,311
U.S. treasury securities		-		-		117,629		13,342		117,629		13,342
U.S. govt. sponsored enterprises		32,695		2,449		33,523		4,078		66,218		6,527
State, county & municipal		53,744		7,250		17,905		4,305		71,649		11,555
Corporate debt obligations		3,190		310		11,352		1,583		14,542		1,893
Total available-for-sale	$	223,304	$	25,224	$	434,403	$	67,404	$	657,707	$	92,628
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	56,064	$	12,624	$	56,064	$	12,624
State, county & municipal		10,057		2,706		33,811		10,974		43,868		13,680
Total held-to-maturity	$	10,057	$	2,706	$	89,875	$	23,598	$	99,932	$	26,304

The Company owned a total of 333 securities with unrealized losses of $119.8 million at June 30, 2023. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. As such, there is no allowance for credit losses on available for sale or held to maturity securities recognized as of June 30, 2023.

As of June 30, 2023 and December 31, 2022, securities with a carrying value of approximately $290.8 million and $242.3 million, respectively, were pledged to secure public deposits as required by law. At June 30, 2023 and December 31, 2022, the carrying value of securities pledged to secure repurchase agreements was approximately $27.0 million and $16.2 million, respectively.

During the six months ended June 30, 2023, the Company sold investment securities for proceeds of $15.3 million and realized gains of $5.0 thosuand. During the six months ended June 30, 2022, the Company sold investment securities for proceeds of $154.4 million and realized losses of $1.3 million.

The amortized cost and estimated fair value of debt securities at June 30, 2023 and December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities for residential mortgage backed securities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. These securities are therefore not presented by maturity classification.

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities available-for-sale
Less than 1 year	$	-	$	-	$	1,055	$	1,054
1 to 5 years		157,725		141,928		141,565		127,459
5 to 10 years		60,877		53,410		77,174		68,737
After 10 years		74,638		65,195		89,286		78,600
		293,240		260,533		309,080		275,850
Residential mortgage-backed securities		432,357		370,985		449,348		390,037
Total available-for-sale	$	725,597	$	631,518	$	758,428	$	665,887

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities held-to-maturity
5 to 10 years	$	13,942	$	11,340	$	10,208	$	8,118
After 10 years		48,924		38,967		52,685		41,095
		62,866		50,307		62,893		49,213
Residential mortgage-backed securities		66,356		53,259		68,688		56,064
Total held-to-maturity	$	129,222	$	103,566	$	131,581	$	105,277

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Loans, Allowance for Credit Losses and Credit Quality

6 Months Ended

Jun. 30, 2023

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans, Allowance for Credit Losses and Credit Quality

Note 5 – Loans, Allowance for Credit Losses and Credit Quality

Major classifications of loans at June 30, 2023 and December 31, 2022 are summarized as follows (amounts in thousands):

	June 30, 2023						December 31, 2022
	Amount			% of Total			Amount			% of Total
Residential real estate:
Closed-end 1-4 family - first lien	$	678,180			33.6	%	$	573,033			32.2	%
Closed-end 1-4 family - junior lien		11,485			0.6	%		9,422			0.5	%
Multi-family		15,576			0.6	%		14,106			0.8	%
Total residential real estate		705,241			34.8	%		596,561			33.5	%
Commercial real estate:
Nonfarm nonresidential		542,045			26.8	%		497,766			28.0	%
Farmland		57,773			2.9	%		53,691			3.0	%
Total commercial real estate		599,818			29.7	%		551,457			31.0	%
Construction and land development:
Residential		120,426			6.0	%		121,363			6.8	%
Other		157,262			7.8	%		135,127			7.6	%
Total construction and land development		277,688			13.8	%		256,490			14.4	%
Home equity lines of credit		77,806			3.9	%		64,215			3.6	%
Commercial loans:
Other commercial loans		239,210			11.8	%		193,053			10.9	%
Agricultural		61,561			3.0	%		56,946			3.2	%
State, county, and municipal loans		39,555			2.0	%		40,964			2.3	%
Total commercial loans		340,326			16.8	%		290,963			16.4	%
Consumer loans		53,673			2.7	%		49,592			2.8	%
Total gross loans		2,054,552			101.7	%		1,809,278			101.7	%
Allowance for credit losses		(26,889	)		-1.3	%		(24,310	)		-1.4	%
Net discounts		(154	)		0.0	%		(279	)		0.0	%
Net deferred loan fees		(7,159	)		-0.4	%		(5,872	)		-0.3	%
Net loans	$	2,020,350			100.0	%	$	1,778,817			100.0	%

The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general trade area. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market. Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to-income, collateral type and loan-to-value ratios for consumer loans.

The loan portfolio has been disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are three primary loan portfolio segments that include real estate, commercial, and consumer. A class is generally determined based on the initial measurement attribute, risk characteristic of the loan, and the Company’s method for monitoring and assessing credit risk. Classes within the real estate portfolio segment include residential real estate, commercial real estate, construction and land development and home equity lines of credit. The portfolio segments of non-real estate commercial loans and consumer loans have not been further segregated by class.

The following describe risk characteristics relevant to each of the portfolio segments:

Real estate - As discussed below, the Company offers various types of real estate loan products. All loans within this portfolio segment are particularly sensitive to the valuation of real estate:

Residential real estate and home equity lines of credit are repaid by various means such as through a borrower’s income, sale of the property, or rental income derived from the property.

Commercial real estate loans include both owner-occupied commercial real estate loans and other commercial real estate loans secured by income producing properties. Owner-occupied commercial real estate loans to operating businesses are long-term financing of land and buildings. These loans are repaid by cash flow generated from the business operation. Real estate loans for income-producing properties such as office and industrial buildings and retail shopping centers are repaid from rent income derived from the properties. Loans secured by farmland are repaid by various means such as through a borrower’s income, sale of the property, or rental income derived from the property.

Construction and land development loans are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio class includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral.

Commercial loans - The commercial loan portfolio segment includes commercial and industrial loans, agricultural loans and loans to states and municipalities. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows or tax revenues. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly by cash flows from the customers’ business operations.

Consumer loans - The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures.

Under the current expected credit losses (CECL) methodology, the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The following tables present the balance in the allowance for credit losses by portfolio segment. It also includes the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment and based on impairment method for the periods indicated below (amounts in thousands).

	Real Estate Mortgage Loans
					Construction			Home equity
					and land			lines
Allowance for Credit Losses	Residential		Commercial		development			of credit		Commercial			Consumer			Total
Balance - December 31, 2022 prior to adoption of ASC 326	$	5,088	$	10,057	$	3,377		$	562	$	4,778		$	448		$	24,310
Impact of adopting ASC 326		-		-		-			-		73			7			80
Provision for credit loss		771		876		430			239		160			146			2,622
Loan charge-offs		-		-		(196	)		-		(162	)		(40	)		(398	)
Loan recoveries		-		78		-			-		186			11			275
Balance - June 30, 2023	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Ending balance:
Individually evaluated for impairment	$	-	$	632	$	-		$	-	$	292		$	39		$	963
Collectively evaluated for impairment		5,859		10,379		3,611			801		4,743			533			25,926
Total	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Loans:
Individually evaluated for impairment	$	1,687	$	6,914	$	165		$	200	$	554		$	39		$	9,559
Collectively evaluated for impairment		703,554		592,904		277,523			77,606		339,772			53,634			2,044,993
Total	$	705,241	$	599,818	$	277,688		$	77,806	$	340,326		$	53,673		$	2,054,552

	Real Estate Mortgage Loans
						Construction		Home equity
						and land		lines
Allowance for Loan Losses	Residential			Commercial		development		of credit		Commercial			Consumer		Total
Balance - December 31, 2021	$	2,596		$	8,038	$	2,992	$	396	$	6,486		$	414	$	20,922
Provision (credit) for loan losses		1,062			265		361		66		(824	)		-		930
Loan charge-offs		(42	)		-		-		-		(148	)		-		(190	)
Loan recoveries		-			63		5		-		34			13		115
Balance - June 30, 2022	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Ending balance:
Individually evaluated for impairment	$	8		$	244	$	2	$	-	$	43		$	48	$	345
Collectively evaluated for impairment		3,608			8,122		3,356		462		5,505			379		21,432
Total	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Loans:
Individually evaluated for impairment	$	779		$	5,261	$	-	$	103	$	257		$	48	$	6,448
Collectively evaluated for impairment		422,586			437,437		241,078		53,064		254,088			45,113		1,453,366
Acquired loans with deteriorated credit quality		10			-		6		-		-			-		16
Total	$	423,375		$	442,698	$	241,084	$	53,167	$	254,345		$	45,161	$	1,459,830

The Company's unfunded lending commitments are unconditionally cancellable and therefore no allowance for credit losses has been recorded.

The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Bank measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by call report code and then risk grade grouping. Risk grade is grouped within each call report code by pass, watch, special mention, substandard, and doubtful. Other loan types are separated into their own cohorts due to specific risk characteristics for that pool of loans.

The Bank has elected a non-discounted cash flow methodology with a probability of default (PD) and loss-given default (LGD) for all cohorts. The PD calculation looks at the historical loan portfolio at particular points in time (each month during the lookback period) to determine the probability that loans in a certain cohort will default over the next 12-month period. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. Currently, the Bank’s historical data is insufficient due to a minimal amount of default activity or zero defaults, therefore management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Bank’s historical PDs.

The LGD calculation looks at actual losses (net charge-offs) experienced over the entire lookback period for each cohort of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. All defaults (non-accrual, charge-off, or greater than 90 days past due) occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event (i.e. nonaccrual or charge-off). Due to the very limited charge-off history, management uses index LGDs comprised of rates derived from the LGD experience of other community banks in place of the Bank’s historical LGDs.

The Bank utilizes reasonable and supportable forecasts of future economic conditions when estimating the allowance for credit losses on loans. The calculation includes a 12-month PD forecast based on the peer index regression model comparing peer defaults to the national unemployment rate. After the forecast period, PD rates revert on a straight-line basis back to long-term historical average rates over 12 months.

The Bank recognizes that all significant factors that affect the collectability of the loan portfolio must be considered to determine the estimated credit losses as of the evaluation date. Furthermore, the methodology, in and of itself and even when selectively adjusted by comparison to market and peer data, does not provide a sufficient basis to determine the estimated credit losses. The Bank adjusts the modeled historical losses by a qualitative adjustment to incorporate all significant risks to form a sufficient basis to estimate the credit losses. These qualitative adjustments may increase or reduce reserve levels and include adjustments for lending management experience, loan review and audit results, asset quality and portfolio trends, loan portfolio growth, and concentrations, trends in underlying collateral, as well as external factors and economic conditions not already captured.

Loans that do not share risk characteristics are evaluated on an individual basis. Generally, this population includes loans on non-accrual status, however, they can also include any loan that does not share risk characteristics with its respective pool. When management determines that foreclosure is probable and the borrower is experiencing financial difficulty, the expected credit losses are based on the fair value of the collateral at the reporting date unadjusted for selling costs as appropriate. When the expected source of repayment is from a source other than the underlying collateral, impairment will generally be measured based on the present value of expected proceeds discounted at the contractual interest rate.

The loss allocations for individually assessed and collectively assessed loans are totaled to determine the total required allowance for credit losses. This total is compared to the current allowance on the Bank’s books and adjustments made accordingly by a charge or credit to the provision for credit losses.

Treatment of Pandemic-related Loan Modifications Pursuant to the CARES Act and Interagency Statement

Section 4013 of the CARES Act, enacted on March 27, 2020, provided that, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act terminates (the “applicable period”), we may elect to suspend GAAP for loan modifications related to the pandemic that would otherwise be categorized as troubled debt restructurings (TDR) and suspend any determination of a loan modified as a result of the effects of the pandemic as being a TDR, including impairment for accounting purposes. The suspension wasapplicable for the term of the loan modification that occurred during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. The suspension was not applicable to any adverse impact on the credit of a borrower that was not related to the pandemic.

In addition, our banking regulators and other financial regulators, on March 22, 2020 and revised April 7, 2020, issued a joint interagency statement titled the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” that encouraged financial institutions to work prudently with borrowers who were unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. Pursuant to the interagency statement, loan modifications that did not meet the conditions of Section 4013 of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. Specifically, the agencies confirmed with the staff of the Financial Accounting Standards Board that short-term modifications made in good faith in response to the pandemic to borrowers who were current prior to any relief were not TDRs under GAAP. This included short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that were insignificant. Borrowers considered current were those that were less than 30 days past due on their contractual payments at the time a modification program was implemented. Appropriate allowances for loan and lease losses were expected to be maintained. With regard to loans not otherwise reportable as past due, financial institutions were not expected to designate loans with deferrals granted due to the pandemic as past due because of the deferral. The interagency statement also stated that during short-term pandemic-related loan modifications, these loans generally should not be reported as nonaccrual.

We have received requests from our borrowers for loan and lease deferrals and modifications including the deferral of principal payments or the deferral of principal and interest payments for terms generally around 90-180 days. Requests are evaluated individually and approved modifications are based on the unique circumstances of each borrower. In total, the Bank placed approximately $167 million of loans on a loan deferral plan as part of COVID-19 modifications. As of June 30, 2023, however, none of these loans remain on deferral. In accordance with Section 4013 of the CARES Act and the interagency statement, we have not accounted for such loans as TDRs, nor have we designated them as past due or nonaccrual. The risk ratings for these loans are evaluated regularly and evaluated for impairment if deemed necessary.

The following table presents collateral dependent impaired loans by class of loans as of June 30, 2023 (amounts in thousands). Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The Company considers all impaired loans to be collateral dependent.

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	614	$	614	$	614	$	-	$	-
Commercial real estate		3,087		3,087		639		2,448		632
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		3,701		3,701		1,253		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		523		523		-		523		261
Consumer loans		-		-		-		-		-
Total Loans	$	4,424	$	4,424	$	1,453	$	2,971	$	893

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,073	$	1,073	$	1,073	$	-	$	-
Commercial real estate		3,827		3,827		3,827		-		-
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		5,065		5,065		5,065		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		31		31		-		31		31
Consumer loans		39		39		-		39		39
Total Loans	$	5,135	$	5,135	$	5,065	$	70	$	70

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,687	$	1,687	$	1,687	$	-	$	-
Commercial real estate		6,914		6,914		4,466		2,448		632
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		8,766		8,766		6,318		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		554		554		-		554		292
Consumer loans		39		39		-		39		39
Total Loans	$	9,559	$	9,559	$	6,518	$	3,041	$	963

The following table presents collateral dependent impaired loans by class of loans as of December 31, 2022 (amounts in thousands).

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	239	$	239	$	239	$	-	$	-
Commercial real estate		599		599		373		226		241
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		838		838		612		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		-		-		-		-		-
Consumer loans		-		-		-		-		-
Total Loans	$	838	$	838	$	612	$	226	$	241

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,012	$	1,012	$	1,012	$	-	$	-
Commercial real estate		6,178		6,178		6,178		-		-
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		7,380		7,380		7,380		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,022	$	8,022	$	7,380	$	642	$	364

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,251	$	1,251	$	1,251	$	-	$	-
Commercial real estate		6,777		6,777		6,551		226		241
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		8,218		8,218		7,992		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,860	$	8,860	$	7,992	$	868	$	605

The following table presents the average recorded investment in impaired loans and the interest income recognized on impaired loans in the six months ended June 30, 2023 and 2022 by loan category (amounts in thousands).

	Six Months Ended						Six Months Ended
	June 30, 2023						June 30, 2022
	Average		Ending				Average		Ending
	Recorded		Recorded		Interest		Recorded		Recorded		Interest
	Investment		Investment		Income		Investment		Investment		Income
Mortgage loans on real estate:
Residential real estate	$	1,585	$	1,687	$	28	$	1,234	$	779	$	16
Commercial real estate		6,806		6,914		234		5,655		5,261		259
Construction and land development		177		165		7		292		-		8
Total mortgage loans on real estate		8,568		8,766		269		7,181		6,040		283
Home equity lines of credit		67		200		-		169		103		-
Commercial loans		580		554		1		291		257		8
Consumer loans		43		39		1		91		48		2
Total Loans	$	9,258	$	9,559	$	271	$	7,732	$	6,448	$	293

The following tables present the performance status of loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

As of June 30, 2023	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	704,137	$	1,104	$	705,241
Commercial real estate		596,731		3,087		599,818
Construction and land development		277,680		8		277,688
Total mortgage loans on real estate		1,578,548		4,199		1,582,747
Home equity lines of credit		77,585		221		77,806
Commercial loans		339,803		523		340,326
Consumer loans		53,585		88		53,673
Total Loans	$	2,049,521	$	5,031	$	2,054,552

As of December 31, 2022	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	595,792	$	769	$	596,561
Commercial real estate		550,858		599		551,457
Construction and land development		256,481		9		256,490
Total mortgage loans on real estate		1,403,131		1,377		1,404,508
Home equity lines of credit		64,166		49		64,215
Commercial loans		290,897		66		290,963
Consumer loans		49,590		2		49,592
Total Loans	$	1,807,784	$	1,494	$	1,809,278

The following tables present the aging of loans and non-accrual loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

	Accruing Loans
As of June 30, 2023	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	702,146	$	1,991	$	-	$	1,104	$	705,241	$	1,104
Commercial real estate		596,731		-		-		3,087		599,818		639
Construction and land development		277,510		170		-		8		277,688		8
Total mortgage loans on real estate		1,576,387		2,161		-		4,199		1,582,747		1,751
Home equity lines of credit		76,735		850		-		221		77,806		221
Commercial loans		339,446		357		-		523		340,326		-
Consumer loans		53,283		302		-		88		53,673		88
Total Loans	$	2,045,851	$	3,670	$	-	$	5,031	$	2,054,552	$	2,060

	Accruing Loans
As of December 31, 2022	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	594,055	$	1,737	$	72	$	697	$	596,561	$	454
Commercial real estate		545,354		5,504		-		599		551,457		-
Construction and land development		255,989		492		-		9		256,490		9
Total mortgage loans on real estate		1,395,398		7,733		72		1,305		1,404,508		463
Home equity lines of credit		64,016		150		-		49		64,215		26
Commercial loans		290,485		412		66		-		290,963		-
Consumer loans		49,251		339		-		2		49,592		2
Total Loans	$	1,799,150	$	8,634	$	138	$	1,356	$	1,809,278	$	491

The Bank categorizes loans in risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Bank uses the following definitions for its risk ratings:

Special Mention - Weakness exists that could cause future impairment, including the deterioration of financial ratios, past due status and questionable management capabilities. Collateral values generally afford adequate coverage but may not be immediately marketable.

Substandard - Specific and well-defined weaknesses exist that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.

Doubtful - Specific weaknesses characterized as Substandard that are severe enough to make collection in full unlikely. There is no reliable secondary source of full repayment. Loans classified as doubtful will be placed on non-accrual, analyzed and fully or partially charged-off based on review of collateral and other relevant factors.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.

The following table presents loan balances classified by credit quality indicator, loan type and based on year of origination as of June 30, 2023 (amounts in thousands).

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Residential real estate
Pass	$	121,287	$	330,453	$	128,876	$	74,139	$	18,763	$	25,562	$	-	$	699,080
Special Mention		1,069		1,641		536		15		28		349		-		3,638
Substandard		36		887		225		340		539		496		-		2,523
Doubtful		-		-		-		-		-		-		-		-
Total residential real estate	$	122,392	$	332,981	$	129,637	$	74,494	$	19,330	$	26,407	$	-	$	705,241
Commercial real estate
Pass	$	52,058	$	198,873	$	106,828	$	102,620	$	53,490	$	75,239	$	-	$	589,108
Special Mention		766		-		-		910		-		1,972		-		3,648
Substandard		201		775		214		186		52		5,634		-		7,062
Doubtful		-		-		-		-		-		-		-		-
Total commercial real estate	$	53,025	$	199,648	$	107,042	$	103,716	$	53,542	$	82,845	$	-	$	599,818
Construction and land development
Pass	$	60,772	$	164,502	$	34,659	$	6,636	$	3,152	$	6,872	$	-	$	276,593
Special Mention		211		564		99		-		24		14		-		912
Substandard		-		165		8		10		-		-		-		183
Doubtful		-		-		-		-		-		-		-		-
Total construction and land development	$	60,983	$	165,231	$	34,766	$	6,646	$	3,176	$	6,886	$	-	$	277,688
Current-period gross charge-offs	$	-	$	-	$	196	$	-	$	-	$	-	$	-	$	196
Home equity lines of credit
Pass	$	17,320	$	27,248	$	12,906	$	5,527	$	3,330	$	11,049	$	-	$	77,380
Special Mention		-		100		-		-		-		-		-		100
Substandard		-		200		50		-		-		76		-		326
Doubtful		-		-		-		-		-		-		-		-
Total home equity lines of credit	$	17,320	$	27,548	$	12,956	$	5,527	$	3,330	$	11,125	$	-	$	77,806
Commercial loans
Pass	$	75,769	$	117,619	$	55,688	$	51,949	$	12,210	$	20,564	$	-	$	333,799
Special Mention		186		371		507		458		148		4,231		-		5,901
Substandard		72		-		-		27		-		527		-		626
Doubtful		-		-		-		-		-		-		-		-
Total commercial loans	$	76,027	$	117,990	$	56,195	$	52,434	$	12,358	$	25,322	$	-	$	340,326
Current-period gross charge-offs	$	116	$	46	$	-	$	-	$	-	$	-	$	-	$	162
Consumer loans
Pass	$	14,480	$	18,195	$	10,384	$	4,769	$	2,431	$	2,984	$	-	$	53,243
Special Mention		37		139		36		19		7		4		-		242
Substandard		21		69		29		20		-		49		-		188
Doubtful		-		-		-		-		-		-		-		-
Total consumer loans	$	14,538	$	18,403	$	10,449	$	4,808	$	2,438	$	3,037	$	-	$	53,673
Current-period gross charge-offs	$	-	$	38	$	-	$	2	$	-	$	-	$	-	$	40
Total Loans
Pass	$	341,686	$	856,890	$	349,341	$	245,640	$	93,376	$	142,270	$	-	$	2,029,203
Special Mention		2,269		2,815		1,178		1,402		207		6,570		-		14,441
Substandard		330		2,096		526		583		591		6,782		-		10,908
Doubtful		-		-		-		-		-		-		-		-
Total loans	$	344,285	$	861,801	$	351,045	$	247,625	$	94,174	$	155,622	$	-	$	2,054,552
Current-period gross charge-offs	$	116	$	84	$	196	$	2	$	-	$	-	$	-	$	398

As of December 31, 2022, the risk category of loans by class of loans is as follows (amounts in thousands):

As of December 31, 2022	Pass		Special Mention		Substandard		Doubtful		Total
Mortgage loans on real estate:
Residential real estate	$	591,882	$	2,648	$	2,031	$	-	$	596,561
Commercial real estate		539,777		4,706		6,974		-		551,457
Construction and land development		256,200		77		213		-		256,490
Total mortgage loans on real estate		1,387,859		7,431		9,218		-		1,404,508
Home equity lines of credit		63,861		212		142		-		64,215
Commercial loans		283,359		7,008		596		-		290,963
Consumer loans		49,206		238		148		-		49,592
Total Loans	$	1,784,285	$	14,889	$	10,104	$	-	$	1,809,278

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Fair Value Measurements and Disclosures

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements and Disclosures

Note 6 – Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, foreclosed assets, and repossessed assets. These nonrecurring fair value adjustments typically involve application of the lower of cost or market accounting or write-downs of individual assets.

Fair Value Hierarchy

The Company groups assets and liabilities 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. These levels are:

Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

The following is a description of valuation methodologies used for assets and liabilities recorded or disclosed at fair value:

Cash and cash equivalents – For disclosure purposes, for cash, due from banks, interest-bearing deposits and federal funds sold, the carrying amount is a reasonable estimate of fair value.

Certificates of deposit in banks – For disclosure purposes, the carrying amount of certificates of deposit is a reasonable estimate of fair value.

Investment Securities – Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange and securities that are traded by dealers or brokers in active over-the-counter market funds. Level 2 securities include mortgage-backed securities issued by government sponsored enterprises and municipal bonds. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Loans and mortgage loans held for sale – The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for credit losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. When a loan is identified as individually impaired, management measures impairment using one of three methods. These methods include collateral value, market value of similar debt, and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. As of June 30, 2023 and December 31, 2022, impaired loans were evaluated based on the fair value of the collateral. Impaired loans for which an allowance is established based on the fair value of collateral, or loans that were charged down according to the fair value of collateral, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price, the Company records the impaired loan as nonrecurring Level 2. When the fair value is based on an appraised value, the Company records the impaired loan as nonrecurring Level 3.

For disclosure purposes, the fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. For variable rate loans, the carrying amount is a reasonable estimate of fair value. Mortgage loans held-for-sale are carried at cost, which is a reasonable estimate of fair value.

Accrued interest receivable – For disclosure purposes, the fair value of the accrued interest on investments and loans is the carrying value.

Bank owned life insurance – For disclosure purposes, the fair value of the cash surrender value of bank owned life insurance policies is equivalent to the carrying value.

Foreclosed assets – Other real estate properties and miscellaneous repossessed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based

upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price, the Company records the foreclosed asset as nonrecurring Level 2. When the fair value is based on an appraised value or management’s estimate of value, the Company records the foreclosed asset as nonrecurring Level 3.

Restricted equity securities – It is not practical to determine the fair value of restricted equity securities due to restrictions placed on transferability.

Deposits – For disclosure purposes, the fair value for demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities.

Securities sold under agreements to repurchase – For disclosure purposes, the carrying amounts of securities sold under agreements to repurchase approximate their fair values.

Federal Home Loan Bank advances – For disclosure purposes, the fair value of Federal Home Loan Bank advances is estimated using discounted cash flow analyses using interest rates offered for borrowings with similar maturities.

Federal Reserve Bank Discount Window Borrowings – For disclosure purposes, the fair value of the Federal Reserve Bank discount window borrowings is based on the quoted value for similar remaining maturities provided by the Federal Reserve Bank.

Note payable - For disclosure purposes, the carrying amount of the note payable approximates fair value.

Subordinated debentures – For disclosure purposes, the fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered for similar subordinated debenture offerings.

Accrued interest payable – For disclosure purposes, the fair value of the accrued interest payable on deposits is the carrying value.

Commitments to extend credit and standby letters of credit – Because commitments to extend credit and standby letters of credit are generally short-term and made using variable rates, the carrying value and estimated fair value associated with these instruments are immaterial.

Assets and liabilities measured at fair value on a recurring basis – The only assets and liabilities measured at fair value on a recurring basis are our securities available-for-sale. There were no transfers between levels during the period. Information related to the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows: (amounts in thousands)

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	370,985	$	-	$	370,985	$	-
U.S. treasury securities		117,609		-		117,609		-
U.S. government sponsored enterprises		64,262		-		64,262		-
State, county, and municipal		63,410		-		63,410		-
Corporate debt obligations		15,252		-		9,898		5,354
Totals	$	631,518	$	-	$	626,164	$	5,354

	Fair Value Measurements At Reporting Date Using:
December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	390,037	$	-	$	390,037	$	-
U.S. treasury securities		117,629		-		117,629		-
U.S. government sponsored enterprises		66,362		-		66,362		-
State, county, and municipal		75,863		-		75,863		-
Corporate debt obligations		15,996		-		10,375		5,621
Totals	$	665,887	$	-	$	660,266	$	5,621

The Company's policy is to recognize transfers in and transfers out of levels 1, 2, and 3 as of the end of a reporting period. There were no transfers between levels from December 31, 2022 to June 30, 2023 (amounts in thousands):

	Significant Unobservable Inputs (Level 3)
	June 30, 2023			December 31, 2022
Fair value, beginning of period	$	5,621		$	-
Transfers into Level 3		-			5,621
Changes in unrealized gains/losses included in other comprehensive (loss) income for assets and liabilities still held at period-end		(267	)		-
Fair value, end of period	$	5,354		$	5,621

Assets measured at fair value on a nonrecurring basis – The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below as of June 30, 2023 and December 31, 2022 (amounts in thousands):

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,596	$	-	$	-	$	8,596
Foreclosed assets		546		-		-		546
Totals	$	9,142	$	-	$	-	$	9,142

December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,255	$	-	$	-	$	8,255
Foreclosed assets		609		-		-		609
Totals	$	8,864	$	-	$	-	$	8,864

The Company has estimated the fair values of these assets using Level 3 inputs, specifically the appraised value of the collateral. Impaired loan balances represent those collateral dependent impaired loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the impaired loan for the amount of the credit loss. For Level 3 assets measured at fair value on a non-recurring basis as of June 30, 2023 and December 31, 2022 for the valuation technique, we used appraisals. For the significant unobservable input, we used appraisal discounts, and weighted average input of 15-20% was used for the period ended June 30, 2023 and December 31, 2022.

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments as of June 30, 2023 and December 31, 2022 are as follows (amounts in thousands):

			Estimated Fair Value
June 30, 2023	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	105,723	$	105,723	$	-	$	-
Certificates of deposit in banks		3,669		-		3,669		-
Securities held-to-maturity		129,222		-		103,566		-
Securities available-for-sale		631,518		-		626,164		5,354
Loans held-for-sale		8,536		-		8,536		-
Loans receivable, net		2,020,350		-		1,951,162		8,596
Accrued interest receivable		10,206		-		10,206		-
Bank owned life insurance		47,023		-		47,023		-
Restricted equity securities		8,454		-		-		8,454
Financial liabilities:
Deposits		2,681,906		-		2,483,292		-
Securities sold under agreements to repurchase		16,642		-		16,642		-
Federal Home Loan Bank advances		155,000		-		147,131		-
Federal Reserve Bank discount window borrowings		20,000		-		19,997		-
Note payable		12,000				12,000
Subordinated debentures		39,456		-		30,472		-
Accrued interest payable		1,605		-		1,605		-

			Estimated Fair Value
December 31, 2022	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	74,826	$	74,826	$	-	$	-
Certificates of deposit in banks		4,165		-		4,165		-
Securities held-to-maturity		131,581		-		105,277		-
Securities available-for-sale		665,887		-		660,266		5,621
Loans held-for-sale		3,413		-		3,413		-
Loans receivable, net		1,778,817		-		1,708,410		8,255
Accrued interest receivable		10,083		-		10,083		-
Bank owned life insurance		46,395		-		46,395		-
Restricted equity securities		5,685		-		-		5,685
Financial liabilities:
Deposits		2,514,199		-		2,307,026		-
Securities sold under agreements to repurchase		8,181		-		8,181		-
Federal Home Loan Bank advances		95,000		-		95,091		-
Federal Reserve Bank discount window borrowings		25,000		-		25,000		-
Subordinated debentures		39,419		-		31,039		-
Accrued interest payable		1,296		-		1,296		-

The estimated fair values of the standby letters of credit and loan commitments on which the committed interest rate is less than the current market rate are insignificant as of June 30, 2023 and December 31, 2022.

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change 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.

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Recently Adopted Accounting Pronouncements

6 Months Ended

Jun. 30, 2023

Change in Accounting Estimate [Abstract]

Recently Adopted Accounting Pronouncements

Note 7 – Recently Adopted Accounting Pronouncements

In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments eliminate the accounting guidance for TDR recognition in Subtopic 310-40, Receivables – Trouble Debt Restructurings by Creditors by entities that have adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. For public business entities, the amendments require disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The Company adopted ASU 2022-02 effective January 1, 2023 on a prospective basis. Adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.

On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

The Company adopted ASU 2016-13 and all subsequent amendments thereto effective January 1, 2023, using the modified retrospective method for all financial assets measured at amortized cost and off balance sheet credit exposures. Amounts for periods beginning on or after January 1, 2023, are presented under ASU 2016-13 and all prior period information is presented in accordance with previously applicable GAAP. At January 1, 2023, the Company recognized a cumulative adjustment to retained earnings of $24 thousand, net of tax, attributable to an increase in the allowance for credit losses of $80 thousand and an increase in deferred tax assets of $8 thousand. Included in the $80 thousand increase in the allowance for credit losses is $48 thousand that was recognized on purchased with credit deterioration (PCD) loans previously classified as purchased credit impaired (PCI) with a corresponding adjustment to the gross carrying amount of the loans. The Company adopted ASU 2016-13 using the prospective transition approach for PCD loans, which did not require re-evaluation of whether loans previously classified as PCI loans met the criteria of PCD assets at the date of adoption. The remaining noncredit discount will be accreted into interest income over the life of the individual loans beginning January 1, 2023

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Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Pronouncements

Note 8 – Recently Issued Accounting Pronouncements

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 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. The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits. ASU 2023-02 is effective for public entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. The Company is assessing its tax credit investments for whether they qualify for proportional amortization treatment and plans to adopt the amendments soon after. The Company does not currently believe the amendments will have a material impact on its consolidated financial statements.

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Defined Contribution Plan

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Defined Contribution Plan

Note 9 – Defined Contribution Plan

The Company provides a 401(k) employee stock ownership plan (ESOP), which covers substantially all of the Company’s employees who are eligible, as to age and length of service. A participant may elect to make contributions up to $22.5 thousand and $20.5 thousand of the participant’s annual compensation in 2023 and 2022, respectively. The Company makes contributions up to 3% of each participant’s annual compensation and the Company matches 50% of the next 2% contributed by the employee. Contributions to the plan by the Company were approximately $462 thousand and $371 thousand for the six months ended June 30, 2023 and 2022, respectively. Outstanding shares of the Company’s common stock allocated to participants at June 30, 2023 and December 31, 2022 totaled 154,293 and 154,997 shares respectively, and there were no unallocated shares. These shares are treated as outstanding for purposes of calculating earnings per share and dividends on these shares are included in the Consolidated Statements of Stockholders’ Equity.

The Company’s ESOP includes a put option for shares of the Company’s common stock distributed from the ESOP. Shares are distributed from the ESOP primarily to separate vested participants and certain eligible participants who elect to diversify their account balances. Since the Company’s common stock is not currently traded on an established securities market, if the owners of distributed shares desire to sell their shares, the Company is required to purchase the shares at fair value during two put option periods following the distribution of the shares from the ESOP. The first put option period is within sixty days following the distribution of the shares from the ESOP. The second put option period begins on the first day of the fifth month of the plan year for a sixty day period. The fair value of distributed shares subject to the put option totaled $0 as of June 30, 2023 and December 31, 2022. The cost of the ESOP shares totaled $4.05 million and $4.16 million as of June 30, 2023 and December 31, 2022, respectively. Due to the Company’s obligation under the put option, the distributed shares and ESOP shares are classified as temporary equity in the mezzanine section of the consolidated statements of financial condition and totaled $4.05 million and $4.16 million as of June 30, 2023 and December 31, 2022, respectively. The fair value of the ESOP shares totaled $5.90 million and $5.93 million as of June 30, 2023 and December 31, 2022, respectively.

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Loans Held for Sale

6 Months Ended

Jun. 30, 2023

Loans Held For Sale [Abstract]

Loans Held for Sale

Note 10 – Loans Held for Sale

The Company has entered into agreements with secondary market investors to deliver loans on a “best efforts delivery” basis. When a rate is committed to a borrower, it is based on the best price that day and locked with the investor for the customer for a thirty day period. In the event the loan is not delivered to the investor, the Company has no risk or exposure with the investor. The fair values of the Company’s agreements with investors and rate lock commitments to customers as of June 30, 2023 and December 31, 2022, respectively, were not material.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Note 11 – Leases

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

Lessee Accounting

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches and office space with terms extending through 2036. Substantially all of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated statements of condition as a right-of-use (ROU) asset and a corresponding lease liability. The Company elected to use the optional transition method, which allowed for a modified retrospective method of adoption with an immaterial cumulative effect adjustment to retained earnings without restating comparable periods. The Company also elected the relief package of practical expedients for which there is no requirement to reassess existence of leases, their classification, and initial direct costs. The Company also applied the exemption for short-term leases with a term of less than one year and therefore we do not recognize a lease liability or right-of-use asset on the balance sheet but instead recognize lease payments as an expense over the lease term as appropriate.

The following table represents the consolidated statements of condition classification of the Company’s ROU assets and lease liabilities. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated statements of condition.

Lease Right-of-Use Assets	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease right-of-use assets	Other Assets	$	3,494	$	3,582
Lease Liabilities	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease liabilities	Accrued interest payable and other liabilities	$	3,643	$	3,716

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

	June 30, 2023			December 31, 2022
Weighted-average remaining lease term for operating leases	8.69 Years			9.62 Years
Weighted-average discount rate for operating leases		6.00	%		6.00	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2023 are as follows:

	Operating Leases
July 1, 2023 - June 30, 2024	$	828
July 1, 2024 - June 30, 2025		700
July 1, 2025 - June 30, 2026		577
July 1, 2026 - June 30, 2027		426
July 1, 2027 - June 30, 2028		393
Afterward		1,989
Total future minimum lease payments		4,913
Amounts representing interest		(1,270	)
Present value of net future minimum lease payments	$	3,643

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Components of the Basic and Diluted Earnings Per Share

The reconciliation of the components of the basic and diluted earnings per share is as follows (amounts in thousands):

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2023			2022	2023			2022
Net earnings available to common shareholders	$	7,635	$	7,508	$	12,742	$	15,262
Weighted average common shares outstanding		6,670,969		6,631,472		6,668,879		6,628,484
Dilutive effect of stock options		96,457		107,901		94,377		99,890
Diluted common shares		6,767,426		6,739,373		6,763,256		6,728,374
Basic earnings per common share	$	1.14	$	1.13	$	1.91	$	2.30
Diluted earnings per common share	$	1.13	$	1.11	$	1.88	$	2.27

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Securities Available for Sale and Securities Held-to-Maturity

The following tables summarize the amortized cost and fair value of securities available-for-sale and securities held-to-maturity and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive (loss) income at June 30, 2023 and December 31, 2022 (amounts in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	432,357	$	63	$	(61,435	)	$	370,985
U.S. treasury securities		130,843		-		(13,234	)		117,609
U.S. govt. sponsored enterprises		70,838		-		(6,576	)		64,262
State, county, and municipal		73,770		-		(10,360	)		63,410
Corporate debt obligations		17,789		11		(2,548	)		15,252
Total available-for-sale	$	725,597	$	74	$	(94,153	)	$	631,518

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2023:
Securities held-to-maturity:
Residential mortgage-backed	$	66,356	$	-	$	(13,097	)	$	53,259
State, county, and municipal		62,866		-		(12,559	)		50,307
Total held-to-maturity	$	129,222	$	-	$	(25,656	)	$	103,566

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	449,348	$	-	$	(59,311	)	$	390,037
U.S. treasury securities		130,971		-		(13,342	)		117,629
U.S. govt. sponsored enterprises		72,889		-		(6,527	)		66,362
State, county, and municipal		87,347		71		(11,555	)		75,863
Corporate debt obligations		17,873		16		(1,893	)		15,996
Total available-for-sale	$	758,428	$	87	$	(92,628	)	$	665,887
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2022:
Securities held-to-maturity:
Residential mortgage-backed	$	68,688	$	-	$	(12,624	)	$	56,064
State, county, and municipal		62,893		-		(13,680	)		49,213
Total held-to-maturity	$	131,581	$	-	$	(26,304	)	$	105,277

Schedule of Details Concerning Investment Securities with Unrealized and Unrecognized Losses

The following tables summarize securities with unrealized and unrecognized losses as of June 30, 2023 and December 31, 2022 aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position (amounts in thousands):

	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2023:
Securities available-for-sale:
Residential mortgage-backed	$	13,228	$	573	$	355,326	$	60,862	$	368,554	$	61,435
U.S. treasury securities		-		-		117,609		13,234		117,609		13,234
U.S. govt. sponsored enterprises		12,738		81		51,524		6,495		64,262		6,576
State, county & municipal		2,387		72		61,023		10,288		63,410		10,360
Corporate debt obligations		920		31		12,877		2,517		13,797		2,548
Total available-for-sale	$	29,273	$	757	$	598,359	$	93,396	$	627,632	$	94,153
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	53,259	$	13,097	$	53,259	$	13,097
State, county & municipal		-		-		44,962		12,559		44,962		12,559
Total held-to-maturity	$	-	$	-	$	98,221	$	25,656	$	98,221	$	25,656
December 31, 2022:
Securities available-for-sale:
Residential mortgage-backed	$	133,675	$	15,215	$	253,994	$	44,096	$	387,669	$	59,311
U.S. treasury securities		-		-		117,629		13,342		117,629		13,342
U.S. govt. sponsored enterprises		32,695		2,449		33,523		4,078		66,218		6,527
State, county & municipal		53,744		7,250		17,905		4,305		71,649		11,555
Corporate debt obligations		3,190		310		11,352		1,583		14,542		1,893
Total available-for-sale	$	223,304	$	25,224	$	434,403	$	67,404	$	657,707	$	92,628
Securities held-to-maturity:
Residential mortgage-backed	$	-	$	-	$	56,064	$	12,624	$	56,064	$	12,624
State, county & municipal		10,057		2,706		33,811		10,974		43,868		13,680
Total held-to-maturity	$	10,057	$	2,706	$	89,875	$	23,598	$	99,932	$	26,304

Schedule of Amortized Cost and Estimated Fair Value of Debt Securities

The amortized cost and estimated fair value of debt securities at June 30, 2023 and December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities for residential mortgage backed securities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. These securities are therefore not presented by maturity classification.

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities available-for-sale
Less than 1 year	$	-	$	-	$	1,055	$	1,054
1 to 5 years		157,725		141,928		141,565		127,459
5 to 10 years		60,877		53,410		77,174		68,737
After 10 years		74,638		65,195		89,286		78,600
		293,240		260,533		309,080		275,850
Residential mortgage-backed securities		432,357		370,985		449,348		390,037
Total available-for-sale	$	725,597	$	631,518	$	758,428	$	665,887

	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)				(In Thousands)
Securities held-to-maturity
5 to 10 years	$	13,942	$	11,340	$	10,208	$	8,118
After 10 years		48,924		38,967		52,685		41,095
		62,866		50,307		62,893		49,213
Residential mortgage-backed securities		66,356		53,259		68,688		56,064
Total held-to-maturity	$	129,222	$	103,566	$	131,581	$	105,277

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Loans, Allowance for Loan Losses and Credit Quality (Tables)

6 Months Ended

Jun. 30, 2023

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule of Major Classifications of Loans

Major classifications of loans at June 30, 2023 and December 31, 2022 are summarized as follows (amounts in thousands):

	June 30, 2023						December 31, 2022
	Amount			% of Total			Amount			% of Total
Residential real estate:
Closed-end 1-4 family - first lien	$	678,180			33.6	%	$	573,033			32.2	%
Closed-end 1-4 family - junior lien		11,485			0.6	%		9,422			0.5	%
Multi-family		15,576			0.6	%		14,106			0.8	%
Total residential real estate		705,241			34.8	%		596,561			33.5	%
Commercial real estate:
Nonfarm nonresidential		542,045			26.8	%		497,766			28.0	%
Farmland		57,773			2.9	%		53,691			3.0	%
Total commercial real estate		599,818			29.7	%		551,457			31.0	%
Construction and land development:
Residential		120,426			6.0	%		121,363			6.8	%
Other		157,262			7.8	%		135,127			7.6	%
Total construction and land development		277,688			13.8	%		256,490			14.4	%
Home equity lines of credit		77,806			3.9	%		64,215			3.6	%
Commercial loans:
Other commercial loans		239,210			11.8	%		193,053			10.9	%
Agricultural		61,561			3.0	%		56,946			3.2	%
State, county, and municipal loans		39,555			2.0	%		40,964			2.3	%
Total commercial loans		340,326			16.8	%		290,963			16.4	%
Consumer loans		53,673			2.7	%		49,592			2.8	%
Total gross loans		2,054,552			101.7	%		1,809,278			101.7	%
Allowance for credit losses		(26,889	)		-1.3	%		(24,310	)		-1.4	%
Net discounts		(154	)		0.0	%		(279	)		0.0	%
Net deferred loan fees		(7,159	)		-0.4	%		(5,872	)		-0.3	%
Net loans	$	2,020,350			100.0	%	$	1,778,817			100.0	%

Summary of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method

The following tables present the balance in the allowance for credit losses by portfolio segment. It also includes the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment and based on impairment method for the periods indicated below (amounts in thousands).

	Real Estate Mortgage Loans
					Construction			Home equity
					and land			lines
Allowance for Credit Losses	Residential		Commercial		development			of credit		Commercial			Consumer			Total
Balance - December 31, 2022 prior to adoption of ASC 326	$	5,088	$	10,057	$	3,377		$	562	$	4,778		$	448		$	24,310
Impact of adopting ASC 326		-		-		-			-		73			7			80
Provision for credit loss		771		876		430			239		160			146			2,622
Loan charge-offs		-		-		(196	)		-		(162	)		(40	)		(398	)
Loan recoveries		-		78		-			-		186			11			275
Balance - June 30, 2023	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Ending balance:
Individually evaluated for impairment	$	-	$	632	$	-		$	-	$	292		$	39		$	963
Collectively evaluated for impairment		5,859		10,379		3,611			801		4,743			533			25,926
Total	$	5,859	$	11,011	$	3,611		$	801	$	5,035		$	572		$	26,889
Loans:
Individually evaluated for impairment	$	1,687	$	6,914	$	165		$	200	$	554		$	39		$	9,559
Collectively evaluated for impairment		703,554		592,904		277,523			77,606		339,772			53,634			2,044,993
Total	$	705,241	$	599,818	$	277,688		$	77,806	$	340,326		$	53,673		$	2,054,552

	Real Estate Mortgage Loans
						Construction		Home equity
						and land		lines
Allowance for Loan Losses	Residential			Commercial		development		of credit		Commercial			Consumer		Total
Balance - December 31, 2021	$	2,596		$	8,038	$	2,992	$	396	$	6,486		$	414	$	20,922
Provision (credit) for loan losses		1,062			265		361		66		(824	)		-		930
Loan charge-offs		(42	)		-		-		-		(148	)		-		(190	)
Loan recoveries		-			63		5		-		34			13		115
Balance - June 30, 2022	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Ending balance:
Individually evaluated for impairment	$	8		$	244	$	2	$	-	$	43		$	48	$	345
Collectively evaluated for impairment		3,608			8,122		3,356		462		5,505			379		21,432
Total	$	3,616		$	8,366	$	3,358	$	462	$	5,548		$	427	$	21,777
Loans:
Individually evaluated for impairment	$	779		$	5,261	$	-	$	103	$	257		$	48	$	6,448
Collectively evaluated for impairment		422,586			437,437		241,078		53,064		254,088			45,113		1,453,366
Acquired loans with deteriorated credit quality		10			-		6		-		-			-		16
Total	$	423,375		$	442,698	$	241,084	$	53,167	$	254,345		$	45,161	$	1,459,830

Summary of Collateral Dependent Impaired Loans by Class of Loans

The following table presents collateral dependent impaired loans by class of loans as of June 30, 2023 (amounts in thousands).

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	614	$	614	$	614	$	-	$	-
Commercial real estate		3,087		3,087		639		2,448		632
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		3,701		3,701		1,253		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		523		523		-		523		261
Consumer loans		-		-		-		-		-
Total Loans	$	4,424	$	4,424	$	1,453	$	2,971	$	893

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,073	$	1,073	$	1,073	$	-	$	-
Commercial real estate		3,827		3,827		3,827		-		-
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		5,065		5,065		5,065		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		31		31		-		31		31
Consumer loans		39		39		-		39		39
Total Loans	$	5,135	$	5,135	$	5,065	$	70	$	70

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Credit Losses
Mortgage loans on real estate:
Residential real estate	$	1,687	$	1,687	$	1,687	$	-	$	-
Commercial real estate		6,914		6,914		4,466		2,448		632
Construction and land development		165		165		165		-		-
Total mortgage loans on real estate		8,766		8,766		6,318		2,448		632
Home equity lines of credit		200		200		200		-		-
Commercial loans		554		554		-		554		292
Consumer loans		39		39		-		39		39
Total Loans	$	9,559	$	9,559	$	6,518	$	3,041	$	963

The following table presents collateral dependent impaired loans by class of loans as of December 31, 2022 (amounts in thousands).

Nonaccruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	239	$	239	$	239	$	-	$	-
Commercial real estate		599		599		373		226		241
Construction and land development		-		-		-		-		-
Total mortgage loans on real estate		838		838		612		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		-		-		-		-		-
Consumer loans		-		-		-		-		-
Total Loans	$	838	$	838	$	612	$	226	$	241

Accruing Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,012	$	1,012	$	1,012	$	-	$	-
Commercial real estate		6,178		6,178		6,178		-		-
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		7,380		7,380		7,380		-		-
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,022	$	8,022	$	7,380	$	642	$	364

Total Collateral Dependent Loans	Unpaid Principal Balance		Recorded Investment		Impaired Loans With No Allowance		Impaired Loans With Allowance		Allowance for Loan Losses
Mortgage loans on real estate:
Residential real estate	$	1,251	$	1,251	$	1,251	$	-	$	-
Commercial real estate		6,777		6,777		6,551		226		241
Construction and land development		190		190		190		-		-
Total mortgage loans on real estate		8,218		8,218		7,992		226		241
Home equity lines of credit		-		-		-		-		-
Commercial loans		595		595		-		595		317
Consumer loans		47		47		-		47		47
Total Loans	$	8,860	$	8,860	$	7,992	$	868	$	605

Summary of Average Recorded Investment and Interest Income Recognized on Impaired Loans

The following table presents the average recorded investment in impaired loans and the interest income recognized on impaired loans in the six months ended June 30, 2023 and 2022 by loan category (amounts in thousands).

	Six Months Ended						Six Months Ended
	June 30, 2023						June 30, 2022
	Average		Ending				Average		Ending
	Recorded		Recorded		Interest		Recorded		Recorded		Interest
	Investment		Investment		Income		Investment		Investment		Income
Mortgage loans on real estate:
Residential real estate	$	1,585	$	1,687	$	28	$	1,234	$	779	$	16
Commercial real estate		6,806		6,914		234		5,655		5,261		259
Construction and land development		177		165		7		292		-		8
Total mortgage loans on real estate		8,568		8,766		269		7,181		6,040		283
Home equity lines of credit		67		200		-		169		103		-
Commercial loans		580		554		1		291		257		8
Consumer loans		43		39		1		91		48		2
Total Loans	$	9,258	$	9,559	$	271	$	7,732	$	6,448	$	293

Schedule of Performance Status of Loans by Class of Loans

The following tables present the performance status of loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

As of June 30, 2023	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	704,137	$	1,104	$	705,241
Commercial real estate		596,731		3,087		599,818
Construction and land development		277,680		8		277,688
Total mortgage loans on real estate		1,578,548		4,199		1,582,747
Home equity lines of credit		77,585		221		77,806
Commercial loans		339,803		523		340,326
Consumer loans		53,585		88		53,673
Total Loans	$	2,049,521	$	5,031	$	2,054,552

As of December 31, 2022	Performing		Nonperforming		Total
Mortgage loans on real estate:
Residential real estate	$	595,792	$	769	$	596,561
Commercial real estate		550,858		599		551,457
Construction and land development		256,481		9		256,490
Total mortgage loans on real estate		1,403,131		1,377		1,404,508
Home equity lines of credit		64,166		49		64,215
Commercial loans		290,897		66		290,963
Consumer loans		49,590		2		49,592
Total Loans	$	1,807,784	$	1,494	$	1,809,278

Schedule of Aging of Loans and Non-Accrual Loans

The following tables present the aging of loans and non-accrual loans as of June 30, 2023 and December 31, 2022, by class of loans (amounts in thousands).

	Accruing Loans
As of June 30, 2023	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	702,146	$	1,991	$	-	$	1,104	$	705,241	$	1,104
Commercial real estate		596,731		-		-		3,087		599,818		639
Construction and land development		277,510		170		-		8		277,688		8
Total mortgage loans on real estate		1,576,387		2,161		-		4,199		1,582,747		1,751
Home equity lines of credit		76,735		850		-		221		77,806		221
Commercial loans		339,446		357		-		523		340,326		-
Consumer loans		53,283		302		-		88		53,673		88
Total Loans	$	2,045,851	$	3,670	$	-	$	5,031	$	2,054,552	$	2,060

	Accruing Loans
As of December 31, 2022	Current		30-89 Days Past Due		90+ Days Past Due		Nonaccrual Loans		Total Loans		Nonaccrual With No ACL
Mortgage loans on real estate:
Residential real estate	$	594,055	$	1,737	$	72	$	697	$	596,561	$	454
Commercial real estate		545,354		5,504		-		599		551,457		-
Construction and land development		255,989		492		-		9		256,490		9
Total mortgage loans on real estate		1,395,398		7,733		72		1,305		1,404,508		463
Home equity lines of credit		64,016		150		-		49		64,215		26
Commercial loans		290,485		412		66		-		290,963		-
Consumer loans		49,251		339		-		2		49,592		2
Total Loans	$	1,799,150	$	8,634	$	138	$	1,356	$	1,809,278	$	491

Schedule of Loan Balances Classified by Credit Quality Indicator, Risk Category, Loan Type and Based on Year of OriginatIion

The following table presents loan balances classified by credit quality indicator, loan type and based on year of origination as of June 30, 2023 (amounts in thousands).

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
Residential real estate
Pass	$	121,287	$	330,453	$	128,876	$	74,139	$	18,763	$	25,562	$	-	$	699,080
Special Mention		1,069		1,641		536		15		28		349		-		3,638
Substandard		36		887		225		340		539		496		-		2,523
Doubtful		-		-		-		-		-		-		-		-
Total residential real estate	$	122,392	$	332,981	$	129,637	$	74,494	$	19,330	$	26,407	$	-	$	705,241
Commercial real estate
Pass	$	52,058	$	198,873	$	106,828	$	102,620	$	53,490	$	75,239	$	-	$	589,108
Special Mention		766		-		-		910		-		1,972		-		3,648
Substandard		201		775		214		186		52		5,634		-		7,062
Doubtful		-		-		-		-		-		-		-		-
Total commercial real estate	$	53,025	$	199,648	$	107,042	$	103,716	$	53,542	$	82,845	$	-	$	599,818
Construction and land development
Pass	$	60,772	$	164,502	$	34,659	$	6,636	$	3,152	$	6,872	$	-	$	276,593
Special Mention		211		564		99		-		24		14		-		912
Substandard		-		165		8		10		-		-		-		183
Doubtful		-		-		-		-		-		-		-		-
Total construction and land development	$	60,983	$	165,231	$	34,766	$	6,646	$	3,176	$	6,886	$	-	$	277,688
Current-period gross charge-offs	$	-	$	-	$	196	$	-	$	-	$	-	$	-	$	196
Home equity lines of credit
Pass	$	17,320	$	27,248	$	12,906	$	5,527	$	3,330	$	11,049	$	-	$	77,380
Special Mention		-		100		-		-		-		-		-		100
Substandard		-		200		50		-		-		76		-		326
Doubtful		-		-		-		-		-		-		-		-
Total home equity lines of credit	$	17,320	$	27,548	$	12,956	$	5,527	$	3,330	$	11,125	$	-	$	77,806
Commercial loans
Pass	$	75,769	$	117,619	$	55,688	$	51,949	$	12,210	$	20,564	$	-	$	333,799
Special Mention		186		371		507		458		148		4,231		-		5,901
Substandard		72		-		-		27		-		527		-		626
Doubtful		-		-		-		-		-		-		-		-
Total commercial loans	$	76,027	$	117,990	$	56,195	$	52,434	$	12,358	$	25,322	$	-	$	340,326
Current-period gross charge-offs	$	116	$	46	$	-	$	-	$	-	$	-	$	-	$	162
Consumer loans
Pass	$	14,480	$	18,195	$	10,384	$	4,769	$	2,431	$	2,984	$	-	$	53,243
Special Mention		37		139		36		19		7		4		-		242
Substandard		21		69		29		20		-		49		-		188
Doubtful		-		-		-		-		-		-		-		-
Total consumer loans	$	14,538	$	18,403	$	10,449	$	4,808	$	2,438	$	3,037	$	-	$	53,673
Current-period gross charge-offs	$	-	$	38	$	-	$	2	$	-	$	-	$	-	$	40
Total Loans
Pass	$	341,686	$	856,890	$	349,341	$	245,640	$	93,376	$	142,270	$	-	$	2,029,203
Special Mention		2,269		2,815		1,178		1,402		207		6,570		-		14,441
Substandard		330		2,096		526		583		591		6,782		-		10,908
Doubtful		-		-		-		-		-		-		-		-
Total loans	$	344,285	$	861,801	$	351,045	$	247,625	$	94,174	$	155,622	$	-	$	2,054,552
Current-period gross charge-offs	$	116	$	84	$	196	$	2	$	-	$	-	$	-	$	398

As of December 31, 2022, the risk category of loans by class of loans is as follows (amounts in thousands):

As of December 31, 2022	Pass		Special Mention		Substandard		Doubtful		Total
Mortgage loans on real estate:
Residential real estate	$	591,882	$	2,648	$	2,031	$	-	$	596,561
Commercial real estate		539,777		4,706		6,974		-		551,457
Construction and land development		256,200		77		213		-		256,490
Total mortgage loans on real estate		1,387,859		7,431		9,218		-		1,404,508
Home equity lines of credit		63,861		212		142		-		64,215
Commercial loans		283,359		7,008		596		-		290,963
Consumer loans		49,206		238		148		-		49,592
Total Loans	$	1,784,285	$	14,889	$	10,104	$	-	$	1,809,278

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Fair Value Measurements and Disclosures (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Information related to the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows: (amounts in thousands)

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	370,985	$	-	$	370,985	$	-
U.S. treasury securities		117,609		-		117,609		-
U.S. government sponsored enterprises		64,262		-		64,262		-
State, county, and municipal		63,410		-		63,410		-
Corporate debt obligations		15,252		-		9,898		5,354
Totals	$	631,518	$	-	$	626,164	$	5,354

	Fair Value Measurements At Reporting Date Using:
December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available-for-sale:
Residential mortgage -backed	$	390,037	$	-	$	390,037	$	-
U.S. treasury securities		117,629		-		117,629		-
U.S. government sponsored enterprises		66,362		-		66,362		-
State, county, and municipal		75,863		-		75,863		-
Corporate debt obligations		15,996		-		10,375		5,621
Totals	$	665,887	$	-	$	660,266	$	5,621

Summary of Transfers between Levels

The Company's policy is to recognize transfers in and transfers out of levels 1, 2, and 3 as of the end of a reporting period. There were no transfers between levels from December 31, 2022 to June 30, 2023 (amounts in thousands):

	Significant Unobservable Inputs (Level 3)
	June 30, 2023			December 31, 2022
Fair value, beginning of period	$	5,621		$	-
Transfers into Level 3		-			5,621
Changes in unrealized gains/losses included in other comprehensive (loss) income for assets and liabilities still held at period-end		(267	)		-
Fair value, end of period	$	5,354		$	5,621

Schedule of Fair Value, Assets Measured on Non-Recurring Basis

Assets measured at fair value on a nonrecurring basis are included in the table below as of June 30, 2023 and December 31, 2022 (amounts in thousands):

	Fair Value Measurements At Reporting Date Using:
June 30, 2023	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,596	$	-	$	-	$	8,596
Foreclosed assets		546		-		-		546
Totals	$	9,142	$	-	$	-	$	9,142

December 31, 2022	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	8,255	$	-	$	-	$	8,255
Foreclosed assets		609		-		-		609
Totals	$	8,864	$	-	$	-	$	8,864

Summary of Estimated Fair values Related to Carrying or Notional Amounts of Financial Instruments

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments as of June 30, 2023 and December 31, 2022 are as follows (amounts in thousands):

			Estimated Fair Value
June 30, 2023	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	105,723	$	105,723	$	-	$	-
Certificates of deposit in banks		3,669		-		3,669		-
Securities held-to-maturity		129,222		-		103,566		-
Securities available-for-sale		631,518		-		626,164		5,354
Loans held-for-sale		8,536		-		8,536		-
Loans receivable, net		2,020,350		-		1,951,162		8,596
Accrued interest receivable		10,206		-		10,206		-
Bank owned life insurance		47,023		-		47,023		-
Restricted equity securities		8,454		-		-		8,454
Financial liabilities:
Deposits		2,681,906		-		2,483,292		-
Securities sold under agreements to repurchase		16,642		-		16,642		-
Federal Home Loan Bank advances		155,000		-		147,131		-
Federal Reserve Bank discount window borrowings		20,000		-		19,997		-
Note payable		12,000				12,000
Subordinated debentures		39,456		-		30,472		-
Accrued interest payable		1,605		-		1,605		-

			Estimated Fair Value
December 31, 2022	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	74,826	$	74,826	$	-	$	-
Certificates of deposit in banks		4,165		-		4,165		-
Securities held-to-maturity		131,581		-		105,277		-
Securities available-for-sale		665,887		-		660,266		5,621
Loans held-for-sale		3,413		-		3,413		-
Loans receivable, net		1,778,817		-		1,708,410		8,255
Accrued interest receivable		10,083		-		10,083		-
Bank owned life insurance		46,395		-		46,395		-
Restricted equity securities		5,685		-		-		5,685
Financial liabilities:
Deposits		2,514,199		-		2,307,026		-
Securities sold under agreements to repurchase		8,181		-		8,181		-
Federal Home Loan Bank advances		95,000		-		95,091		-
Federal Reserve Bank discount window borrowings		25,000		-		25,000		-
Subordinated debentures		39,419		-		31,039		-
Accrued interest payable		1,296		-		1,296		-

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Classification of Company's ROU assets and Lease Liabilities

The following table represents the consolidated statements of condition classification of the Company’s ROU assets and lease liabilities. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated statements of condition.

Lease Right-of-Use Assets	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease right-of-use assets	Other Assets	$	3,494	$	3,582
Lease Liabilities	Classification on Consolidated Statement of Condition	June 30, 2023		December 31, 2022
Operating lease liabilities	Accrued interest payable and other liabilities	$	3,643	$	3,716

Weighted Average Remaining Lease Term and Discount Rate for Operating Leases

	June 30, 2023			December 31, 2022
Weighted-average remaining lease term for operating leases	8.69 Years			9.62 Years
Weighted-average discount rate for operating leases		6.00	%		6.00	%

Summary of Future Minimum Payments for Operating Leases

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2023 are as follows:

	Operating Leases
July 1, 2023 - June 30, 2024	$	828
July 1, 2024 - June 30, 2025		700
July 1, 2025 - June 30, 2026		577
July 1, 2026 - June 30, 2027		426
July 1, 2027 - June 30, 2028		393
Afterward		1,989
Total future minimum lease payments		4,913
Amounts representing interest		(1,270	)
Present value of net future minimum lease payments	$	3,643

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Earnings Per Share - Components of the Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net earnings available to common shareholders	$ 7,635	$ 7,508	$ 12,742	$ 15,262
Weighted average common shares outstanding	6,670,969	6,631,472	6,668,879	6,628,484
Dilutive effect of stock options	96,457	107,901	94,377	99,890
Diluted common shares	6,767,426	6,739,373	6,763,256	6,728,374
Basic earnings per common share	$ 1.14	$ 1.13	$ 1.91	$ 2.3
Diluted earnings per common share	$ 1.13	$ 1.11	$ 1.88	$ 2.27

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Investment Securities - Schedule of Securities Available for Sale and Securities Held-to-Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	$ 725,597	$ 758,428
Securities available-for-sale, Gross Unrealized Gains	74	87
Securities available-for-sale, Gross Unrealized Losses	(94,153)	(92,628)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	631,518	665,887
Securities held-to-maturity, Amortized Cost	129,222	131,581
Securities held to maturity, Gross Unrealized Losses	(25,656)	(26,304)
Securities held-to-maturity, Residential mortgage-backed securities Fair Value	103,566	105,277
Residential Mortgage - Backed
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	432,357	449,348
Securities available-for-sale, Gross Unrealized Gains	63
Securities available-for-sale, Gross Unrealized Losses	(61,435)	(59,311)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	370,985	390,037
Securities held-to-maturity, Amortized Cost	66,356	68,688
Securities held to maturity, Gross Unrealized Losses	(13,097)	(12,624)
Securities held-to-maturity, Residential mortgage-backed securities Fair Value	53,259	56,064
U.S. Treasury Securities
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	130,843	130,971
Securities available-for-sale, Gross Unrealized Losses	(13,234)	(13,342)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	117,609	117,629
U.S. Govt. Sponsored Enterprises
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	70,838	72,889
Securities available-for-sale, Gross Unrealized Losses	(6,576)	(6,527)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	64,262	66,362
State, Country and Municipal
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	73,770	87,347
Securities available-for-sale, Gross Unrealized Gains		71
Securities available-for-sale, Gross Unrealized Losses	(10,360)	(11,555)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	63,410	75,863
Securities held-to-maturity, Amortized Cost	62,866	62,893
Securities held to maturity, Gross Unrealized Losses	(12,559)	(13,680)
Securities held-to-maturity, Residential mortgage-backed securities Fair Value	50,307	49,213
Corporate Debt Obligations
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	17,789	17,873
Securities available-for-sale, Gross Unrealized Gains	11	16
Securities available-for-sale, Gross Unrealized Losses	(2,548)	(1,893)
Securities available-for-sale, Residential mortgage -backed securities Fair Value	$ 15,252	$ 15,996

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Investment Securities - Additional Information (Details)		1 Months Ended	6 Months Ended
	Feb. 28, 2022 USD ($)	Feb. 28, 2022 USD ($)	Jun. 30, 2023 USD ($) Security	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Investments, Debt and Equity Securities [Abstract]
Number of securities owned | Security			333
Unrealized losses	$ 3,400,000	$ 3,400,000	$ 119,800,000
Transfer of securities from available-for-sale to held-to-maturity	$ 75,000,000			$ 78,047,000
Securities pledged to secure public deposits			290,800,000		$ 242,300,000
Securities pledged to secure repurchase agreements			27,000,000		$ 16,200,000
Proceeds from sales of investment securities			15,252,000	154,392,000
Realized investment gains (loss)		$ 0	(5,000)	$ 1,266,000
Allowance for credit loss on available for sale			0
Held to maturity securities recognized			$ 0

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Investment Securities - Schedule of Details Concerning Investment Securities with Unrealized and Unrecognized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Less than 12 Months, Fair Value	$ 29,273	$ 223,304
Securities available-for-sale, Less than 12 Months, Unrealized Losses	757	25,224
Securities available-for-sale, More Than 12 Months, Fair Value	598,359	434,403
Securities available-for-sale, More Than 12 Months, Unrealized Losses	93,396	67,404
Securities available for sale, Total, Fair Value	627,632	657,707
Securities available for sale, Total, Unrealized Losses	94,153	92,628
Securities held to maturity, Less than 12 Months, Fair Value		10,057
Securities held to maturity, Less than 12 Months, Unrealized Losses		2,706
Securities held to maturity, More Than 12 Months, Fair Value	98,221	89,875
Securities held to maturity, More Than 12 Months, Unrealized Losses	25,656	23,598
Securities held to maturity, Total, Fair Value	98,221	99,932
Securities held to maturity, Total, Unrealized Losses	25,656	26,304
Residential Mortgage - Backed
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Less than 12 Months, Fair Value	13,228	133,675
Securities available-for-sale, Less than 12 Months, Unrealized Losses	573	15,215
Securities available-for-sale, More Than 12 Months, Fair Value	355,326	253,994
Securities available-for-sale, More Than 12 Months, Unrealized Losses	60,862	44,096
Securities available for sale, Total, Fair Value	368,554	387,669
Securities available for sale, Total, Unrealized Losses	61,435	59,311
Securities held to maturity, More Than 12 Months, Fair Value	53,259	56,064
Securities held to maturity, More Than 12 Months, Unrealized Losses	13,097	12,624
Securities held to maturity, Total, Fair Value	53,259	56,064
Securities held to maturity, Total, Unrealized Losses	13,097	12,624
U.S. Treasury Securities
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, More Than 12 Months, Fair Value	117,609	117,629
Securities available-for-sale, More Than 12 Months, Unrealized Losses	13,234	13,342
Securities available for sale, Total, Fair Value	117,609	117,629
Securities available for sale, Total, Unrealized Losses	13,234	13,342
U.S. Govt. Sponsored Enterprises
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Less than 12 Months, Fair Value	12,738	32,695
Securities available-for-sale, Less than 12 Months, Unrealized Losses	81	2,449
Securities available-for-sale, More Than 12 Months, Fair Value	51,524	33,523
Securities available-for-sale, More Than 12 Months, Unrealized Losses	6,495	4,078
Securities available for sale, Total, Fair Value	64,262	66,218
Securities available for sale, Total, Unrealized Losses	6,576	6,527
State, Country and Municipal
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Less than 12 Months, Fair Value	2,387	53,744
Securities available-for-sale, Less than 12 Months, Unrealized Losses	72	7,250
Securities available-for-sale, More Than 12 Months, Fair Value	61,023	17,905
Securities available-for-sale, More Than 12 Months, Unrealized Losses	10,288	4,305
Securities available for sale, Total, Fair Value	63,410	71,649
Securities available for sale, Total, Unrealized Losses	10,360	11,555
Securities held to maturity, Less than 12 Months, Fair Value		10,057
Securities held to maturity, Less than 12 Months, Unrealized Losses		2,706
Securities held to maturity, More Than 12 Months, Fair Value	44,962	33,811
Securities held to maturity, More Than 12 Months, Unrealized Losses	12,559	10,974
Securities held to maturity, Total, Fair Value	44,962	43,868
Securities held to maturity, Total, Unrealized Losses	12,559	13,680
Corporate Debt Obligations
Schedule of Available for Sale Securities [Line Items]
Securities available-for-sale, Less than 12 Months, Fair Value	920	3,190
Securities available-for-sale, Less than 12 Months, Unrealized Losses	31	310
Securities available-for-sale, More Than 12 Months, Fair Value	12,877	11,352
Securities available-for-sale, More Than 12 Months, Unrealized Losses	2,517	1,583
Securities available for sale, Total, Fair Value	13,797	14,542
Securities available for sale, Total, Unrealized Losses	$ 2,548	$ 1,893

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Investment Securities - Schedule of Amortized Cost and Estimated Fair Value of Debt Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Securities available-for-sale
Securities available-for-sale, Less than 1 year, Amortized Cost		$ 1,055
Securities available-for-sale, 1 to 5 years, Amortized Cost	$ 157,725	141,565
Securities available-for-sale, 5 to 10 years, Amortized Cost	60,877	77,174
Securities available-for-sale, After 10 years, Amortized Cost	74,638	89,286
Securities available-for-sale, before Residential mortgage-backed securities	293,240	309,080
Securities available-for-sale, Residential mortgage-backed securities	725,597	758,428
Securities available-for-sale
Securities available-for-sale, Less than 1 year, Fair Value		1,054
Securities available-for-sale, 1 to 5 years, Fair Value	141,928	127,459
Securities available-for-sale, 5 to 10 years, Fair Value	53,410	68,737
Securities available-for-sale, After 10 years, Fair Value	65,195	78,600
Securities available-for-sale, before Residential mortgage-backed securities Fair Value	260,533	275,850
Securities available-for-sale, Residential mortgage -backed securities Fair Value	631,518	665,887
Securities held-to-maturity
Securities held-to-maturity, 5 to 10 years, Amortized Cost	13,942	10,208
Securities held-to-maturity, After 10 years, Amortized Cost	48,924	52,685
Securities held-to-maturity, before Residential mortgage-backed securities	62,866	62,893
Securities available-for-sale, Residential mortgage-backed securities	129,222	131,581
Securities held-to-maturity, at amortized cost	129,222	131,581
Securities held-to-maturity, 5 to 10 years, Fair Value	11,340	8,118
Securities held-to-maturity, After 10 years, Fair Value	38,967	41,095
Securities held-to-maturity, before Residential mortgage-backed securities Fair Value	50,307	49,213
Securities available-for-sale, Residential mortgage -backed securities Fair Value	103,566	105,277
Securities held-to-maturity, Residential mortgage-backed securities Fair Value	103,566	105,277
Residential Mortgage-Backed Securities
Securities available-for-sale
Securities available-for-sale, Residential mortgage-backed securities	432,357	449,348
Securities available-for-sale
Securities available-for-sale, Residential mortgage -backed securities Fair Value	370,985	390,037
Securities held-to-maturity
Securities available-for-sale, Residential mortgage-backed securities	66,356	68,688
Securities held-to-maturity, at amortized cost	66,356	68,688
Securities available-for-sale, Residential mortgage -backed securities Fair Value	53,259	56,064
Securities held-to-maturity, Residential mortgage-backed securities Fair Value	$ 53,259	$ 56,064

XML

Loans, Allowance for Credit Losses and Credit Quality - Major Classifications of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 2,054,552	$ 1,809,278	$ 1,459,830
Allowance for credit losses	(26,889)	(24,310)	(21,777)	$ (20,922)
Net discounts	(154)	(279)
Net deferred loan fees	(7,159)	(5,872)
Net loans	$ 2,020,350	$ 1,778,817
Total gross loans percentage	101.70%	101.70%
Allowance for loan losses percentage	(1.30%)	(1.40%)
Net discounts percentage	0.00%	(0.00%)
Net deferred loan fees percentage	(0.40%)	(0.30%)
Net loans percentage	100.00%	100.00%
Home Equity Lines of Credit
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 77,806	$ 64,215	53,167
Allowance for credit losses	$ (801)	$ (562)	(462)	(396)
Total gross loans percentage	3.90%	3.60%
Residential Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 705,241	$ 596,561
Total gross loans percentage	34.80%	33.50%
Residential Real Estate | Closed-end 1-4 family - first lien
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 678,180	$ 573,033
Total gross loans percentage	33.60%	32.20%
Residential Real Estate | Closed-end 1-4 family - junior lien
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 11,485	$ 9,422
Total gross loans percentage	0.60%	0.50%
Residential Real Estate | Multi-family
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 15,576	$ 14,106
Total gross loans percentage	0.60%	0.80%
Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 599,818	$ 551,457
Total gross loans percentage	29.70%	31.00%
Commercial Real Estate | Nonfarm nonresidential
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 542,045	$ 497,766
Total gross loans percentage	26.80%	28.00%
Commercial Real Estate | Farmland
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 57,773	$ 53,691
Total gross loans percentage	2.90%	3.00%
Construction and Land Development
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 277,688	$ 256,490
Total gross loans percentage	13.80%	14.40%
Construction and Land Development | Residential
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 120,426	$ 121,363
Total gross loans percentage	6.00%	6.80%
Construction and Land Development | Other
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 157,262	$ 135,127
Total gross loans percentage	7.80%	7.60%
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 340,326	$ 290,963	254,345
Allowance for credit losses	$ (5,035)	$ (4,778)	(5,548)	(6,486)
Total gross loans percentage	16.80%	16.40%
Commercial Loans | Other commercial loans
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 239,210	$ 193,053
Total gross loans percentage	11.80%	10.90%
Commercial Loans | Agricultural
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 61,561	$ 56,946
Total gross loans percentage	3.00%	3.20%
Commercial Loans | State, county, and municipal loans
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 39,555	$ 40,964
Total gross loans percentage	2.00%	2.30%
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total gross loans	$ 53,673	$ 49,592	45,161
Allowance for credit losses	$ (572)	$ (448)	$ (427)	$ (414)
Total gross loans percentage	2.70%	2.80%

XML

Loans, Allowance for Credit Losses and Credit Quality - Additional Information (Details)	6 Months Ended
	Jun. 30, 2023 USD ($) Segment
Financing Receivable Modifications [Line Items]
Number of primary loan portfolio segments | Segment	3
Allowance for credit losses	$ 0
COVID-19
Financing Receivable Modifications [Line Items]
Loans placed under deferral plan	167,000,000
Loans receivable outstanding under loan deferral plan	$ 0
Minimum
Financing Receivable Modifications [Line Items]
Deferral term for principal and interest payments	90 days
Maximum | COVID-19
Financing Receivable Modifications [Line Items]
Deferral term for principal and interest payments	180 days

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Allowance for Loan Losses
Beginning Balance			$ 24,310	$ 20,922
Accounting Standards Update [Extensible Enumeration]			us-gaap:AccountingStandardsUpdate201911Member
Provision for credit loss	$ 1,311	$ 930	$ 2,622	930
Loan charge-offs			(398)	(190)
Loan recoveries			275	115
Ending Balance	26,889	21,777	26,889	21,777
Ending Balance, Individually evaluated for impairment	963	345	963	345
Ending Balance, Collectively evaluated for impairment	25,926	21,432	25,926	21,432
Total	26,889	21,777	26,889	21,777	$ 24,310
Loans, Individually evaluated for impairment	9,559	6,448	9,559	6,448
Loans, Collectively evaluated for impairment	2,044,993	1,453,366	2,044,993	1,453,366
Loans, Acquired loans with deteriorated credit quality		16		16
Total Loans	2,054,552	1,459,830	2,054,552	1,459,830	1,809,278
Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan Losses
Beginning Balance			$ 80
Accounting Standards Update [Extensible Enumeration]			us-gaap:AccountingStandardsUpdate201911Member
Total					80
Home Equity Lines of Credit
Allowance for Loan Losses
Beginning Balance			$ 562	396
Provision for credit loss			239	66
Ending Balance	801	462	801	462
Ending Balance, Collectively evaluated for impairment	801	462	801	462
Total	801	462	801	462	562
Loans, Individually evaluated for impairment	200	103	200	103
Loans, Collectively evaluated for impairment	77,606	53,064	77,606	53,064
Total Loans	77,806	53,167	77,806	53,167	64,215
Residential
Allowance for Loan Losses
Total Loans	705,241		705,241		596,561
Commercial
Allowance for Loan Losses
Total Loans	599,818		599,818		551,457
Construction and Land Development
Allowance for Loan Losses
Total Loans	277,688		277,688		256,490
Commercial Loans
Allowance for Loan Losses
Beginning Balance			$ 4,778	6,486
Accounting Standards Update [Extensible Enumeration]			us-gaap:AccountingStandardsUpdate201911Member
Provision for credit loss			$ 160	(824)
Loan charge-offs			(162)	(148)
Loan recoveries			186	34
Ending Balance	5,035	5,548	5,035	5,548
Ending Balance, Individually evaluated for impairment	292	43	292	43
Ending Balance, Collectively evaluated for impairment	4,743	5,505	4,743	5,505
Total	5,035	5,548	5,035	5,548	4,778
Loans, Individually evaluated for impairment	554	257	554	257
Loans, Collectively evaluated for impairment	339,772	254,088	339,772	254,088
Total Loans	340,326	254,345	340,326	254,345	290,963
Commercial Loans | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan Losses
Beginning Balance			73
Total					73
Consumer Loans
Allowance for Loan Losses
Beginning Balance			$ 448	414
Accounting Standards Update [Extensible Enumeration]			us-gaap:AccountingStandardsUpdate201911Member
Provision for credit loss			$ 146
Loan charge-offs			(40)
Loan recoveries			11	13
Ending Balance	572	427	572	427
Ending Balance, Individually evaluated for impairment	39	48	39	48
Ending Balance, Collectively evaluated for impairment	533	379	533	379
Total	572	427	572	427	448
Loans, Individually evaluated for impairment	39	48	39	48
Loans, Collectively evaluated for impairment	53,634	45,113	53,634	45,113
Total Loans	53,673	45,161	53,673	45,161	49,592
Consumer Loans | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan Losses
Beginning Balance			7
Total					7
Real Estate Mortgage Loans
Allowance for Loan Losses
Total Loans	1,582,747		1,582,747		1,404,508
Real Estate Mortgage Loans | Residential
Allowance for Loan Losses
Beginning Balance			5,088	2,596
Provision for credit loss			771	1,062
Loan charge-offs				42
Ending Balance	5,859	3,616	5,859	3,616
Ending Balance, Individually evaluated for impairment		8		8
Ending Balance, Collectively evaluated for impairment	5,859	3,608	5,859	3,608
Total	5,859	3,616	5,859	3,616	5,088
Loans, Individually evaluated for impairment	1,687	779	1,687	779
Loans, Collectively evaluated for impairment	703,554	422,586	703,554	422,586
Loans, Acquired loans with deteriorated credit quality		10		10
Total Loans	705,241	423,375	705,241	423,375	596,561
Real Estate Mortgage Loans | Commercial
Allowance for Loan Losses
Beginning Balance			10,057	8,038
Provision for credit loss			876	265
Loan recoveries			78	63
Ending Balance	11,011	8,366	11,011	8,366
Ending Balance, Individually evaluated for impairment	632	244	632	244
Ending Balance, Collectively evaluated for impairment	10,379	8,122	10,379	8,122
Total	11,011	8,366	11,011	8,366	10,057
Loans, Individually evaluated for impairment	6,914	5,261	6,914	5,261
Loans, Collectively evaluated for impairment	592,904	437,437	592,904	437,437
Total Loans	599,818	442,698	599,818	442,698	551,457
Real Estate Mortgage Loans | Construction and Land Development
Allowance for Loan Losses
Beginning Balance			3,377	2,992
Provision for credit loss			430	361
Loan charge-offs			(196)
Loan recoveries				5
Ending Balance	3,611	3,358	3,611	3,358
Ending Balance, Individually evaluated for impairment		2		2
Ending Balance, Collectively evaluated for impairment	3,611	3,356	3,611	3,356
Total	3,611	3,358	3,611	3,358	3,377
Loans, Individually evaluated for impairment	165		165
Loans, Collectively evaluated for impairment	277,523	241,078	277,523	241,078
Loans, Acquired loans with deteriorated credit quality		6		6
Total Loans	$ 277,688	$ 241,084	$ 277,688	$ 241,084	$ 256,490

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Collateral Dependent Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	$ 9,559	$ 8,860
Recorded Investment	9,559	8,860	$ 6,448
Impaired Loans With No Allowance	6,518	7,992
Impaired Loans With Allowance	3,041	868
Allowance for Loan Losses	963	605
Home Equity Lines of Credit
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	200
Recorded Investment	200		103
Impaired Loans With No Allowance	200
Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	554	595
Recorded Investment	554	595	257
Impaired Loans With Allowance	554	595
Allowance for Loan Losses	292	317
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	39	47
Recorded Investment	39	47	48
Impaired Loans With Allowance	39	47
Allowance for Loan Losses	39	47
Mortgage Loans on Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	8,766	8,218
Recorded Investment	8,766	8,218	6,040
Impaired Loans With No Allowance	6,318	7,992
Impaired Loans With Allowance	2,448	226
Allowance for Loan Losses	632	241
Mortgage Loans on Real Estate | Residential Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	1,687	1,251
Recorded Investment	1,687	1,251	779
Impaired Loans With No Allowance	1,687	1,251
Mortgage Loans on Real Estate | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	6,914	6,777
Recorded Investment	6,914	6,777	$ 5,261
Impaired Loans With No Allowance	4,466	6,551
Impaired Loans With Allowance	2,448	226
Allowance for Loan Losses	632	241
Mortgage Loans on Real Estate | Construction and Land Development
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	165	190
Recorded Investment	165	190
Impaired Loans With No Allowance	165	190
Collateral Dependent Non Accrual Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	4,424	838
Recorded Investment	4,424	838
Impaired Loans With No Allowance	1,453	612
Impaired Loans With Allowance	2,971	226
Allowance for Loan Losses	893	241
Collateral Dependent Non Accrual Loans | Home Equity Lines of Credit
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	200
Recorded Investment	200
Impaired Loans With No Allowance	200
Collateral Dependent Non Accrual Loans | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	523
Recorded Investment	523
Impaired Loans With Allowance	523
Allowance for Loan Losses	261
Collateral Dependent Non Accrual Loans | Mortgage Loans on Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	3,701	838
Recorded Investment	3,701	838
Impaired Loans With No Allowance	1,253	612
Impaired Loans With Allowance	2,448	226
Allowance for Loan Losses	632	241
Collateral Dependent Non Accrual Loans | Mortgage Loans on Real Estate | Residential Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	614	239
Recorded Investment	614	239
Impaired Loans With No Allowance	614	239
Collateral Dependent Non Accrual Loans | Mortgage Loans on Real Estate | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	3,087	599
Recorded Investment	3,087	599
Impaired Loans With No Allowance	639	373
Impaired Loans With Allowance	2,448	226
Allowance for Loan Losses	632	241
Accrued Collateral Dependent Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	5,135	8,022
Recorded Investment	5,135	8,022
Impaired Loans With No Allowance	5,065	7,380
Impaired Loans With Allowance	70	642
Allowance for Loan Losses	70	364
Accrued Collateral Dependent Loans | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	31	595
Recorded Investment	31	595
Impaired Loans With Allowance	31	595
Allowance for Loan Losses	31	317
Accrued Collateral Dependent Loans | Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	39	47
Recorded Investment	39	47
Impaired Loans With Allowance	39	47
Allowance for Loan Losses	39	47
Accrued Collateral Dependent Loans | Mortgage Loans on Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	5,065	7,380
Recorded Investment	5,065	7,380
Impaired Loans With No Allowance	5,065	7,380
Accrued Collateral Dependent Loans | Mortgage Loans on Real Estate | Residential Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	1,073	1,012
Recorded Investment	1,073	1,012
Impaired Loans With No Allowance	1,073	1,012
Accrued Collateral Dependent Loans | Mortgage Loans on Real Estate | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	3,827	6,178
Recorded Investment	3,827	6,178
Impaired Loans With No Allowance	3,827	6,178
Accrued Collateral Dependent Loans | Mortgage Loans on Real Estate | Construction and Land Development
Accounts Notes And Loans Receivable [Line Items]
Unpaid Principal Balance	165	190
Recorded Investment	165	190
Impaired Loans With No Allowance	$ 165	$ 190

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Average Recorded Investment and Interest Income recognized on Impaired Loans (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	$ 9,258	$ 7,732
Impaired loans, Ending recorded investment	9,559	6,448	$ 8,860
Impaired loans, Interest income	271	293
Home Equity Lines of Credit
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	67	169
Impaired loans, Ending recorded investment	200	103
Impaired loans, Interest income		0
Commercial Loans
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	580	291
Impaired loans, Ending recorded investment	554	257	595
Impaired loans, Interest income	1	8
Consumer Loans
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	43	91
Impaired loans, Ending recorded investment	39	48	47
Impaired loans, Interest income	1	2
Mortgage Loans on Real Estate
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	8,568	7,181
Impaired loans, Ending recorded investment	8,766	6,040	8,218
Impaired loans, Interest income	269	283
Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	1,585	1,234
Impaired loans, Ending recorded investment	1,687	779	1,251
Impaired loans, Interest income	28	16
Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	6,806	5,655
Impaired loans, Ending recorded investment	6,914	5,261	6,777
Impaired loans, Interest income	234	259
Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable Impaired [Line Items]
Impaired loans, Average recorded investment	177	292
Impaired loans, Ending recorded investment	165		$ 190
Impaired loans, Interest income	$ 7	$ 8

XML

Loans, Allowance for Credit Losses and Credit Quality - Schedule of Performance Status Of Loans by Class of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 2,054,552	$ 1,809,278	$ 1,459,830
Home Equity Lines of Credit
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	77,806	64,215	53,167
Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	705,241	596,561
Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	599,818	551,457
Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	277,688	256,490
Commercial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	340,326	290,963	254,345
Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	53,673	49,592	45,161
Mortgage Loans on Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,582,747	1,404,508
Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	705,241	596,561	423,375
Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	599,818	551,457	442,698
Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	277,688	256,490	$ 241,084
Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,049,521	1,807,784
Performing | Home Equity Lines of Credit
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	77,585	64,166
Performing | Commercial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	339,803	290,897
Performing | Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	53,585	49,590
Performing | Mortgage Loans on Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,578,548	1,403,131
Performing | Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	704,137	595,792
Performing | Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	596,731	550,858
Performing | Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	277,680	256,481
Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	5,031	1,494
Nonperforming | Home Equity Lines of Credit
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	221	49
Nonperforming | Commercial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	523	66
Nonperforming | Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	88	2
Nonperforming | Mortgage Loans on Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,199	1,377
Nonperforming | Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,104	769
Nonperforming | Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	3,087	599
Nonperforming | Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 8	$ 9

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Aging of Loans and Non-accrual Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	$ 5,031	$ 1,356
Total Loans	2,054,552	1,809,278	$ 1,459,830
Nonaccrual With No ACL	2,060	491
Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	3,670	8,634
Past Due 90 Days or More
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current		138
Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	2,045,851	1,799,150
Home Equity Lines of Credit
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	221	49
Total Loans	77,806	64,215	53,167
Nonaccrual With No ACL	221	26
Home Equity Lines of Credit | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	850	150
Home Equity Lines of Credit | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	76,735	64,016
Commercial Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Loans	599,818	551,457
Construction and Land Development
Financing Receivable Recorded Investment Past Due [Line Items]
Total Loans	277,688	256,490
Commercial Loans
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	523
Total Loans	340,326	290,963	254,345
Commercial Loans | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	357	412
Commercial Loans | Past Due 90 Days or More
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current		66
Commercial Loans | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	339,446	290,485
Consumer Loans
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	88	2
Total Loans	53,673	49,592	45,161
Nonaccrual With No ACL	88	2
Consumer Loans | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	302	339
Consumer Loans | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	53,283	49,251
Residential Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Loans	705,241	596,561
Mortgage Loans on Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	4,199	1,305
Total Loans	1,582,747	1,404,508
Nonaccrual With No ACL	1,751	463
Mortgage Loans on Real Estate | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	2,161	7,733
Mortgage Loans on Real Estate | Past Due 90 Days or More
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current		72
Mortgage Loans on Real Estate | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	1,576,387	1,395,398
Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	3,087	599
Total Loans	599,818	551,457	442,698
Nonaccrual With No ACL	639
Mortgage Loans on Real Estate | Commercial Real Estate | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current		5,504
Mortgage Loans on Real Estate | Commercial Real Estate | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	596,731	545,354
Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	8	9
Total Loans	277,688	256,490	241,084
Nonaccrual With No ACL	8	9
Mortgage Loans on Real Estate | Construction and Land Development | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	170	492
Mortgage Loans on Real Estate | Construction and Land Development | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	277,510	255,989
Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable Recorded Investment Past Due [Line Items]
Nonaccrual Loans	1,104	697
Total Loans	705,241	596,561	$ 423,375
Nonaccrual With No ACL	1,104	454
Mortgage Loans on Real Estate | Residential Real Estate | Past Due 30-89 Days
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	1,991	1,737
Mortgage Loans on Real Estate | Residential Real Estate | Past Due 90 Days or More
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current		72
Mortgage Loans on Real Estate | Residential Real Estate | Current
Financing Receivable Recorded Investment Past Due [Line Items]
Accruing Loans, Current	$ 702,146	$ 594,055

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Loan Balances Classified by Credit Quality Indicator, Risk Category, Loan Type and Based on Year of Origination (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Financing Receivable Recorded Investment [Line Items]
2023	$ 344,285
2022	861,801
2021	351,045
2020	247,625
2019	94,174
Prior	155,622
Total loans	2,054,552	$ 1,809,278	$ 1,459,830
Current-period gross charge-offs, year one	116
Current-period gross charge-offs, year two	84
Current-period gross charge-offs, year three	196
Current-period gross charge-offs, year four	2
Current-period gross charge-offs, total	398
Pass
Financing Receivable Recorded Investment [Line Items]
2023	341,686
2022	856,890
2021	349,341
2020	245,640
2019	93,376
Prior	142,270
Total loans	2,029,203	1,784,285
Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	2,269
2022	2,815
2021	1,178
2020	1,402
2019	207
Prior	6,570
Total loans	14,441	14,889
Substandard
Financing Receivable Recorded Investment [Line Items]
2023	330
2022	2,096
2021	526
2020	583
2019	591
Prior	6,782
Total loans	10,908	10,104
Home Equity Lines of Credit
Financing Receivable Recorded Investment [Line Items]
2023	17,320
2022	27,548
2021	12,956
2020	5,527
2019	3,330
Prior	11,125
Total loans	77,806	64,215	53,167
Home Equity Lines of Credit | Pass
Financing Receivable Recorded Investment [Line Items]
2023	17,320
2022	27,248
2021	12,906
2020	5,527
2019	3,330
Prior	11,049
Total loans	77,380	63,861
Home Equity Lines of Credit | Special Mention
Financing Receivable Recorded Investment [Line Items]
2022	100
Total loans	100	212
Home Equity Lines of Credit | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	200
2021	50
Prior	76
Total loans	326	142
Residential Real Estate
Financing Receivable Recorded Investment [Line Items]
Total loans	705,241	596,561
Commercial Real Estate
Financing Receivable Recorded Investment [Line Items]
Total loans	599,818	551,457
Construction and Land Development
Financing Receivable Recorded Investment [Line Items]
Total loans	277,688	256,490
Commercial Loans
Financing Receivable Recorded Investment [Line Items]
2023	76,027
2022	117,990
2021	56,195
2020	52,434
2019	12,358
Prior	25,322
Total loans	340,326	290,963	254,345
Current-period gross charge-offs, year one	116
Current-period gross charge-offs, year two	46
Current-period gross charge-offs, total	162
Commercial Loans | Pass
Financing Receivable Recorded Investment [Line Items]
2023	75,769
2022	117,619
2021	55,688
2020	51,949
2019	12,210
Prior	20,564
Total loans	333,799	283,359
Commercial Loans | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	186
2022	371
2021	507
2020	458
2019	148
Prior	4,231
Total loans	5,901	7,008
Commercial Loans | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	72
2020	27
Prior	527
Total loans	626	596
Consumer Loans
Financing Receivable Recorded Investment [Line Items]
2023	14,538
2022	18,403
2021	10,449
2020	4,808
2019	2,438
Prior	3,037
Total loans	53,673	49,592	45,161
Current-period gross charge-offs, year two	38
Current-period gross charge-offs, year four	2
Current-period gross charge-offs, total	40
Consumer Loans | Pass
Financing Receivable Recorded Investment [Line Items]
2023	14,480
2022	18,195
2021	10,384
2020	4,769
2019	2,431
Prior	2,984
Total loans	53,243	49,206
Consumer Loans | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	37
2022	139
2021	36
2020	19
2019	7
Prior	4
Total loans	242	238
Consumer Loans | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	21
2022	69
2021	29
2020	20
Prior	49
Total loans	188	148
Mortgage Loans on Real Estate
Financing Receivable Recorded Investment [Line Items]
Total loans	1,582,747	1,404,508
Mortgage Loans on Real Estate | Pass
Financing Receivable Recorded Investment [Line Items]
Total loans		1,387,859
Mortgage Loans on Real Estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total loans		7,431
Mortgage Loans on Real Estate | Substandard
Financing Receivable Recorded Investment [Line Items]
Total loans		9,218
Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable Recorded Investment [Line Items]
2023	122,392
2022	332,981
2021	129,637
2020	74,494
2019	19,330
Prior	26,407
Total loans	705,241	596,561	423,375
Mortgage Loans on Real Estate | Residential Real Estate | Pass
Financing Receivable Recorded Investment [Line Items]
2023	121,287
2022	330,453
2021	128,876
2020	74,139
2019	18,763
Prior	25,562
Total loans	699,080	591,882
Mortgage Loans on Real Estate | Residential Real Estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	1,069
2022	1,641
2021	536
2020	15
2019	28
Prior	349
Total loans	3,638	2,648
Mortgage Loans on Real Estate | Residential Real Estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	36
2022	887
2021	225
2020	340
2019	539
Prior	496
Total loans	2,523	2,031
Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable Recorded Investment [Line Items]
2023	53,025
2022	199,648
2021	107,042
2020	103,716
2019	53,542
Prior	82,845
Total loans	599,818	551,457	442,698
Mortgage Loans on Real Estate | Commercial Real Estate | Pass
Financing Receivable Recorded Investment [Line Items]
2023	52,058
2022	198,873
2021	106,828
2020	102,620
2019	53,490
Prior	75,239
Total loans	589,108	539,777
Mortgage Loans on Real Estate | Commercial Real Estate | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	766
2020	910
Prior	1,972
Total loans	3,648	4,706
Mortgage Loans on Real Estate | Commercial Real Estate | Substandard
Financing Receivable Recorded Investment [Line Items]
2023	201
2022	775
2021	214
2020	186
2019	52
Prior	5,634
Total loans	7,062	6,974
Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable Recorded Investment [Line Items]
2023	60,983
2022	165,231
2021	34,766
2020	6,646
2019	3,176
Prior	6,886
Total loans	277,688	256,490	$ 241,084
Current-period gross charge-offs, year three	196
Current-period gross charge-offs, total	196
Mortgage Loans on Real Estate | Construction and Land Development | Pass
Financing Receivable Recorded Investment [Line Items]
2023	60,772
2022	164,502
2021	34,659
2020	6,636
2019	3,152
Prior	6,872
Total loans	276,593	256,200
Mortgage Loans on Real Estate | Construction and Land Development | Special Mention
Financing Receivable Recorded Investment [Line Items]
2023	211
2022	564
2021	99
2019	24
Prior	14
Total loans	912	77
Mortgage Loans on Real Estate | Construction and Land Development | Substandard
Financing Receivable Recorded Investment [Line Items]
2022	165
2021	8
2020	10
Total loans	$ 183	$ 213

XML

Loans, Allowance for Credit Losses and Credit Quality - Summary of Risk Category of Loans by Class of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 2,054,552	$ 1,809,278	$ 1,459,830
Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,029,203	1,784,285
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	14,441	14,889
Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	10,908	10,104
Home Equity Lines of Credit
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	77,806	64,215	53,167
Home Equity Lines of Credit | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	77,380	63,861
Home Equity Lines of Credit | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	100	212
Home Equity Lines of Credit | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	326	142
Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	705,241	596,561
Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	599,818	551,457
Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	277,688	256,490
Commercial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	340,326	290,963	254,345
Commercial Loans | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	333,799	283,359
Commercial Loans | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	5,901	7,008
Commercial Loans | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	626	596
Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	53,673	49,592	45,161
Consumer Loans | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	53,243	49,206
Consumer Loans | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	242	238
Consumer Loans | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	188	148
Mortgage Loans on Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,582,747	1,404,508
Mortgage Loans on Real Estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		1,387,859
Mortgage Loans on Real Estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		7,431
Mortgage Loans on Real Estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		9,218
Mortgage Loans on Real Estate | Residential Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	705,241	596,561	423,375
Mortgage Loans on Real Estate | Residential Real Estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	699,080	591,882
Mortgage Loans on Real Estate | Residential Real Estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	3,638	2,648
Mortgage Loans on Real Estate | Residential Real Estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,523	2,031
Mortgage Loans on Real Estate | Commercial Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	599,818	551,457	442,698
Mortgage Loans on Real Estate | Commercial Real Estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	589,108	539,777
Mortgage Loans on Real Estate | Commercial Real Estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	3,648	4,706
Mortgage Loans on Real Estate | Commercial Real Estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	7,062	6,974
Mortgage Loans on Real Estate | Construction and Land Development
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	277,688	256,490	$ 241,084
Mortgage Loans on Real Estate | Construction and Land Development | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	276,593	256,200
Mortgage Loans on Real Estate | Construction and Land Development | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	912	77
Mortgage Loans on Real Estate | Construction and Land Development | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 183	$ 213

XML

Fair Value Measurement and Disclosures - Additional Information (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value transfers between levels transfers amount	$ 0	$ 0
Non-Recurring Basis | Significant Unobservable Inputs (Level 3) | Discount Rate | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Appraisal discounts and weighted average input rate	15	15
Non-Recurring Basis | Significant Unobservable Inputs (Level 3) | Discount Rate | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Appraisal discounts and weighted average input rate	20	20

XML

Fair Value Measurement and Disclosures - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 631,518	$ 665,887
U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	117,609	117,629
U.S. Government Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	64,262	66,362
State, Country and Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	63,410	75,863
Corporate Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	15,252	15,996
Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	631,518	665,887
Recurring Basis | Residential Mortgage -Backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	370,985	390,037
Recurring Basis | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	117,609	117,629
Recurring Basis | U.S. Government Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	64,262	66,362
Recurring Basis | State, Country and Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	63,410	75,863
Recurring Basis | Corporate Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	15,252	15,996
Recurring Basis | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	626,164	660,266
Recurring Basis | Significant Other Observable Inputs (Level 2) | Residential Mortgage -Backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	370,985	390,037
Recurring Basis | Significant Other Observable Inputs (Level 2) | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	117,609	117,629
Recurring Basis | Significant Other Observable Inputs (Level 2) | U.S. Government Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	64,262	66,362
Recurring Basis | Significant Other Observable Inputs (Level 2) | State, Country and Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	63,410	75,863
Recurring Basis | Significant Other Observable Inputs (Level 2) | Corporate Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	9,898	10,375
Recurring Basis | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	5,354	5,621
Recurring Basis | Significant Unobservable Inputs (Level 3) | Corporate Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 5,354	$ 5,621

XML

Fair Value Measurements and Disclosures - Summary of Transfers between Levels (Details) - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	$ 5,621
Transfers into Level 3		$ 5,621
Changes in unrealized gains/losses included in other comprehensive (loss) income for assets and liabilities still held at period-end	(267)
Fair value, end of period	$ 5,354	$ 5,621

XML

Fair Value Measurement and Disclosures - Schedule of Fair Value, Assets Measured on Non-Recurring Basis (Details) - Non-Recurring Basis - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 9,142	$ 8,864
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	9,142	8,864
Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,596	8,255
Impaired Loans | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,596	8,255
Foreclosed Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	546	609
Foreclosed Assets | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 546	$ 609

XML

Fair Value Measurement and Disclosures - Summary of Estimated Fair Values Related to Carrying or Notional Amounts of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial assets:
Securities held-to-maturity	$ 129,222	$ 131,581
Securities available-for-sale	631,518	665,887
Accrued interest receivable	10,206	10,083
Bank owned life insurance	47,023	46,395
Financial liabilities:
Securities sold under agreements to repurchase	16,642	8,181
Federal Reserve Bank discount window borrowings	20,000	25,000
Note payable	12,000
Subordinated debentures	39,456	39,419
Carrying Amount
Financial assets:
Cash and cash equivalents	105,723	74,826
Certificates of deposit in banks	3,669	4,165
Securities held-to-maturity	129,222	131,581
Securities available-for-sale	631,518	665,887
Loans held-for-sale	8,536	3,413
Loans receivable, net	2,020,350	1,778,817
Accrued interest receivable	10,206	10,083
Bank owned life insurance	47,023	46,395
Restricted equity securities	8,454	5,685
Financial liabilities:
Deposits	2,681,906	2,514,199
Securities sold under agreements to repurchase	16,642	8,181
Federal Home Loan Bank advances	155,000	95,000
Federal Reserve Bank discount window borrowings		25,000
Note payable	12,000
Subordinated debentures	39,456	39,419
Accrued interest payable	1,605	1,296
Estimate Fair Value | Quoted Prices In Active Markets For Identical Assets (Level 1)
Financial assets:
Cash and cash equivalents	105,723	74,826
Estimate Fair Value | Significant Other Observable Inputs (Level 2)
Financial assets:
Certificates of deposit in banks	3,669	4,165
Securities held-to-maturity	103,566	105,277
Securities available-for-sale	626,164	660,266
Loans held-for-sale	8,536	3,413
Loans receivable, net	1,951,162	1,708,410
Accrued interest receivable	10,206	10,083
Bank owned life insurance	47,023	46,395
Financial liabilities:
Deposits	2,483,292	2,307,026
Securities sold under agreements to repurchase	16,642	8,181
Federal Home Loan Bank advances	147,131	95,091
Federal Reserve Bank discount window borrowings	19,997	25,000
Note payable	12,000
Subordinated debentures	30,472	31,039
Accrued interest payable	1,605	1,296
Estimate Fair Value | Significant Unobservable Inputs (Level 3)
Financial assets:
Securities available-for-sale	5,354	5,621
Loans receivable, net	8,596	8,255
Restricted equity securities	$ 8,454	$ 5,685

XML

Recently Adopted Accounting Pronouncements Additional Information (Details) $ in Thousands	Jan. 01, 2023 USD ($)
Accounting Standards Update and Change in Accounting Principle [Abstract]
Cumulative adjustment to retained earnings	$ 24
Increase in the allowance of credit loss	80
Increase in deferred tax assets	8
Amount recognized on purchased with credit deterioration loans	$ 48

XML

Defined Contribution Plan - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, number of common stock outstanding, shares	6,670,381		6,656,386
Common stock related to 401(k) Employee Stock Ownership Plan	$ 4,050,000.00		$ 4,160,000
Employee Stock Ownership Plan
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, description	The Company makes contributions up to 3% of each participant’s annual compensation and the Company matches 50% of the next 2% contributed by the employee.
Maximum annual contributions amount per employee	$ 22,500	$ 20,500
Maximum annual contributions percentage per employee	3.00%
Employer matching percentage of compensation contributed	50.00%
Employer matching percentage of employees compensation contributed	2.00%
Contributions by company	$ 462,000	$ 371,000
Common stock related to 401(k) Employee Stock Ownership Plan	4,050,000.00		4,160,000
Fair Value of Common stock related to 401(k) Employee Stock Ownership Plan	$ 5,900,000		5,930,000
Employee Stock Ownership Plan | Defined Benefit Plans Adjustment
Defined Contribution Plan Disclosure [Line Items]
Number of periods available to purchase shares following distribution	2
Fair Value of Common stock related to 401(k) Employee Stock Ownership Plan	$ 0		$ 0
Stock Compensation Plan | Employee Stock Ownership Plan
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, number of common stock outstanding, shares	154,293		154,997
Defined contribution plan, number of common stock outstanding, shares unallocated	0		0

XML

Leases - Classification of Company's ROU assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets and Liabilities, Lessee [Abstract]
Operating lease right-of-use assets	$ 3,494	$ 3,582
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets	Other assets
Operating lease liabilities	$ 3,643	$ 3,716
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Accrued interest payable and other liabilities	Accrued interest payable and other liabilities

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Leases - Weighted Average Remaining Lease Term and Discount Rate for Operating Leases (Details)	Jun. 30, 2023	Dec. 31, 2022
Lessor, Operating Lease, Description [Abstract]
Weighted-average remaining lease term for operating leases	8 years 8 months 8 days	9 years 7 months 13 days
Weighted-average discount rate for operating leases	6.00%	6.00%

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Leases - Summary of Future Minimum Payments for Operating Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Operating Lease Liabilities, Payments Due [Abstract]
Operating Leases, July 1, 2023 - June 30, 2024	$ 828
Operating Leases, July 1, 2024 - June 30, 2025	700
Operating Leases, July 1, 2025 - June 30, 2026	577
Operating Leases, July 1, 2026 - June 30, 2027	426
Operating Leases, July 1, 2027 - June 30, 2028	393
Operating Leases, Afterward	1,989
Operating Leases, Total future minimum lease payments	4,913
Operating Leases, Amounts representing interest	(1,270)
Present value of net future minimum lease payments	$ 3,643	$ 3,716