QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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( State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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Page
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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2
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3
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4
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5
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6
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Item 2.
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36
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Item 3.
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54
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Item 4.
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56
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PART II.
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56
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Item 1.
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56
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Item 1A.
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56
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Item 2.
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58
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Item 3.
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58
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Item 4.
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58
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Item 5.
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58
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Item 6.
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59
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59
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Assets
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June 30,
2023
(unaudited)
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December 31,
2022
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||||||
Cash and due from banks
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$
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$
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||||
Interest-bearing time deposits in other banks
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|
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||||||
Available-for-sale debt securities
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||||||||
Loans, net of allowance for credit losses of $
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||||||
Loans held for sale
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||||||||
Premises and equipment, net
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||||||||
Nonmarketable equity securities
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Core deposit intangibles
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||||||||
Goodwill
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||||||
Interest receivable and other assets
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Total assets
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$
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$
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||||
Liabilities and Shareholders’ Equity
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||||||||
Deposits
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||||||||
Noninterest-bearing
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$
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$
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Interest-bearing
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Total deposits
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Income taxes payable
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Interest payable and other liabilities
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Total liabilities
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Shareholders’ equity
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||||||||
Common stock, $
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||||||
Additional paid-in capital
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||||||
Retained earnings
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||||||
Accumulated other comprehensive loss
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( |
) | ( |
) | ||||
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||||||||
Total shareholders’ equity
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||||||
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||||||||
Total liabilities and shareholders’ equity
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$
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$
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Three months ended
June 30,
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Six
months ended
June 30,
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||||||||||||||
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2023
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2022
|
2023
|
2022
|
||||||||||||
Interest Income
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||||||||||||||||
Loans, including fees
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$
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$
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$
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$
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||||||||
Interest-bearing time deposits in other banks
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|
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||||||||||||
Debt securities, taxable
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||||||||||||||||
Debt securities, tax-exempt
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||||||||||||||||
Other interest and dividend income
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||||||||||||
Total interest income
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||||||||||||
Interest Expense
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||||||||||||||||
Deposits
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||||||||||||
Total interest expense
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||||||||||||
Net Interest Income
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||||||||||||
Provision for Credit Losses
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||||||||||||
Net Interest Income After Provision for Credit Losses
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Noninterest Income
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||||||||||||||||
Mortgage lending income
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||||||||||||
Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities
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( |
) | ( |
) | ( |
) | ||||||||||
Service charges on deposit accounts
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Other
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Total noninterest income
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Noninterest Expense
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||||||||||||||||
Salaries and employee benefits
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||||||||||||
Furniture and equipment
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||||||||||||
Occupancy
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||||||||||||
Data and item processing
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||||||||||||
Accounting, marketing and legal fees
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Regulatory assessments
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Advertising and public relations
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Travel, lodging and entertainment
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Other
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Total noninterest expense
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||||||||||||
Income Before Taxes
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||||||||||||
Income tax expense
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||||||||||||
Net Income
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$
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$
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$
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$
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||||||||
Earnings per common share - basic
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$
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$
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$
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$
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||||||||
Earnings per common share - diluted
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||||||||||||
Weighted average common shares outstanding - basic
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Weighted average common shares outstanding - diluted
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||||||||||||
Other Comprehensive Income (Loss)
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||||||||||||||||
Unrealized gains (losses) on securities, net of tax benefit of $
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$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Reclassification adjustment for realized (gain)loss included in net income, net of tax of $
|
( |
) | ||||||||||||||
Other comprehensive income (loss)
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$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Comprehensive Income
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$ | $ | $ | $ |
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
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2023
|
2022
|
2023
|
2022
|
||||||||||||
Common Stock (Shares)
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||||||||||||||||
Balance at beginning of period
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||||||||||||
Exercise of employee stock options
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||||||||||||||||
Shares issued for restricted stock units
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Shares acquired and canceled
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( |
) | ( |
) | ( |
) | ||||||||||
Balance at end of period
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||||||||||||
Common Stock (Amount)
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||||||||||||||||
Balance at beginning of period
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$
|
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$
|
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$
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$
|
|
||||||||
Shares issued for restricted stock units and employee stock options
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|
|||||||||||||||
Balance at end of period
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$
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$
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$
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$
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|
||||||||
Additional Paid-in Capital
|
||||||||||||||||
Balance at beginning of period
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$
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$
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$
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$
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||||||||
Shares purchased and retired for restricted stock units
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( |
) | ( |
) | ( |
) | ||||||||||
Exercise of stock options
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||||||||||||||||
Stock-based compensation expense
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||||||||||||
Balance at end of period
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$
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$
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$
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$
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||||||||
Retained Earnings
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||||||||||||||||
Balance at beginning of period
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$
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$
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$
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$
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||||||||
Net income
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|
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||||||||||||
of $
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- | - | ( |
) | - | |||||||||||
Cash dividends declared ($
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(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Accumulated Other Comprehensive Income (Loss) |
||||||||||||||||
Balance at beginning of period
|
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||
Comprehensive income (loss)
|
( |
) | ( |
) | ( |
) | ||||||||||
Balance at end of period
|
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Total Shareholders’ equity
|
$
|
|
$
|
|
$
|
|
$
|
|
Six Months Ended
June 30,
|
||||||||
2023
|
2022
|
|||||||
Operating Activities
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||
Depreciation and amortization
|
|
|
||||||
Provision for credit losses
|
|
|
||||||
Amortization of premiums and discounts on securities
|
||||||||
Gain on sales of loans
|
(
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)
|
(
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)
|
||||
Net loss on sale of available-for-sale debt securities
|
||||||||
Stock-based compensation expense
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|
|
||||||
Gain on sale of premises and equipment
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( |
) | ||||||
Cash receipts from the sale of loans originated for sale
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|
|
||||||
Cash disbursements for loans originated for sale
|
(
|
)
|
(
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)
|
||||
Deferred income tax benefit
|
(
|
)
|
(
|
)
|
||||
Changes in
|
||||||||
Interest receivable and other assets
|
(
|
)
|
|
|||||
Interest payable and other liabilities
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|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
Investing Activities
|
||||||||
Maturities of interest-bearing time deposits in other banks
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|
|
||||||
Purchases of interest-bearing time deposits in other banks
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( |
) | ( |
) | ||||
Proceeds from sale of available-for-sale debt securities
|
||||||||
Maturities, prepayments and calls of available-for-sale debt securities
|
||||||||
Purchases of available-for-sale debt securities
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( |
) | ||||||
Net change in loans
|
(
|
)
|
(
|
)
|
||||
Purchases of premises and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from sale of premises and equipment | ||||||||
Change in nonmarketable equity securities
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(
|
)
|
|
|||||
Net cash used in investing activities
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(
|
)
|
(
|
)
|
||||
Financing Activities
|
||||||||
Net change in deposits
|
|
|
||||||
Cash distributions
|
(
|
)
|
(
|
)
|
||||
Shares purchased and retired for restricted stock units
|
( |
) | ||||||
Exercise of stock options
|
||||||||
Common stock issued for restricted stock units
|
||||||||
Net cash provided by financing activities
|
|
|
||||||
Net Increase/(Decrease) in Cash and Due from Banks
|
|
(
|
)
|
|||||
Cash and Due from Banks, Beginning of Period
|
|
|
||||||
Cash and Due from Banks, End of Period
|
$
|
|
$
|
|
||||
Supplemental Disclosure of Cash Flows Information
|
||||||||
Interest paid
|
$
|
|
$
|
|
||||
Income taxes paid
|
$ | $ | ||||||
Dividends declared and not paid
|
$
|
|
$
|
|
||||
Measurement period goodwill adjustment
|
$ | ( |
) | $ |
Note 1:
|
Nature
of Operations and Summary of Significant Accounting Policies
|
January 1, 2023
|
||||||||||||
As Reported
Under ASC 326
|
Pre ASC 326
Adoption
|
Impact of ASC
326 Adoption
|
||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
||||||
1 - 4 family real estate
|
|
|
(
|
)
|
||||||||
Commercial real estate - other
|
|
|
(
|
)
|
||||||||
Total commercial real estate
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Commercial & industrial
|
|
|
|
|||||||||
Agricultural
|
|
|
(
|
)
|
||||||||
Consumer
|
|
|
(
|
)
|
||||||||
Allowance for credit losses on loans
|
$
|
|
$
|
|
$
|
|
||||||
Allowance for credit losses on off-balance sheet credit exposures (unfunded commitments), see Note (6) and Note (11)
|
|
|
|
|||||||||
Total Impact
|
$
|
|
$
|
|
$
|
|
●
|
Segment loans into pools according to similar risk characteristics;
|
●
|
Develop historical loss rates for each loan pool segment;
|
●
|
Incorporate the impact of forecasts;
|
●
|
Incorporate the impact of other qualitative factors; and
|
●
|
Calculate and review pool specific allowance for credit loss estimate.
|
Note
2:
|
Recent Events, Including Mergers and
Acquisitions
|
Estimated Fair Value
|
||||
(in thousands)
|
||||
Assets Acquired
|
||||
Cash and cash equivalents
|
$
|
|
||
Available-for-sale debt securities
|
|
|||
Federal funds sold
|
|
|||
Loans
|
|
|||
Premises and equipment
|
|
|||
Core deposit intangible
|
|
|||
Prepaid expenses and other assets
|
|
|||
Total assets acquiried
|
$ |
|
||
Liabilities Assumed
|
||||
Deposits
|
$
|
|
||
Accounts payable and accrued expenses
|
|
|||
Total liabilities assumed
|
$ |
|
||
Net assets acquired
|
$
|
|
||
Consideration transferred
|
|
|||
Goodwill
|
$ |
|
Note 3: |
Restriction on Cash and Due from Banks
|
Note 4: |
Earnings per Share
|
As of and for the three months
ended June 30,
|
As of and for the six months
ended June 30,
|
|||||||||||||||
2023
|
2022
|
2023 |
2022 |
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Numerator
|
||||||||||||||||
Net income
|
$ | $ | $ | $ | ||||||||||||
Denominator
|
||||||||||||||||
Weighted-average shares outstanding for basic earnings per share
|
||||||||||||||||
Dilutive effect of stock compensation (1)
|
||||||||||||||||
Denominator for diluted earnings per share
|
||||||||||||||||
Earnings per common share
|
||||||||||||||||
Basic
|
$ | $ | $ | $ | ||||||||||||
Diluted
|
$ | $ | $ | $ |
(in thousands)
|
Amortized Cost
|
Gross Unrealized
Gains
|
Gross Unrealized
Losses
|
Fair Value
|
||||||||||||
Available-for-sale as of June 30, 2023
|
||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Mortgage-backed securities(1)(2)
|
|
|
(
|
)
|
|
|||||||||||
State and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
U.S. Treasuries
|
|
|
(
|
)
|
|
|||||||||||
Corporate debt securities
|
|
|
(
|
)
|
|
|||||||||||
Total available-for-sale
|
|
|
(
|
)
|
|
|||||||||||
Total debt securities
|
|
|
(
|
)
|
|
(in thousands)
|
Amortized Cost
|
Gross Unrealized
Gains
|
Gross Unrealized
Losses
|
Fair Value
|
||||||||||||
Available-for-sale as of December 31, 2022
|
||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Mortgage-backed securities(1)(2)
|
|
|
(
|
)
|
|
|||||||||||
State and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
U.S. Treasuries
|
|
|
(
|
)
|
|
|||||||||||
Corporate debt securities
|
|
|
(
|
)
|
|
|||||||||||
Total available-for-sale
|
|
|
(
|
)
|
|
|||||||||||
Total debt securities
|
|
|
(
|
)
|
|
(in thousands)
|
Amortized Cost
|
Fair Value
|
||||||
Available-for-sale as of June 30, 2023
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Mortgage-backed securities
|
|
|
||||||
Total available-for-sale
|
|
|
(in thousands)
|
Amortized Cost
|
Fair Value
|
||||||
Available-for-sale as of December 31, 2022
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Mortgage-backed securities
|
|
|
||||||
Total available-for-sale
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Proceeds from sales, maturities, prepayments and calls
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Gross realized gains on sales, prepayments and calls
|
|
|
|
|
||||||||||||
Gross realized losses on sales, prepayments and calls
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Total realized (losses), net
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
(in thousands) |
June 30,
2023
|
December 31,
2022
|
||||||
Book value of pledged securities
|
$
|
|
$
|
|
Less than Twelve Months
|
Twelve Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Available-for-sale as of June 30, 2023
|
||||||||||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||||||||
Mortgage-backed securities
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
State and political subdivisions(1)
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||
U.S. Treasuries
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Corporate debt securities
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||
Total available-for-sale
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
Less than Twelve Months
|
Twelve Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Available-for-sale as of December 31, 2022
|
||||||||||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
||||||||||
Mortgage-backed securities
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||
State and political subdivisions
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||
U.S. Treasuries
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||
Corporate debt securities
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||
Total available-for-sale
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
Note 6: |
Loans and Allowance for Credit Losses
|
June 30,
2023
|
December 31,
2022
|
|||||||
Construction & development
|
$
|
|
$
|
|
||||
1 - 4 family real estate
|
|
|
||||||
Commercial real estate - other
|
|
|
||||||
Total commercial real estate
|
$ |
|
$ |
|
||||
Commercial & industrial
|
|
|
||||||
Agricultural
|
|
|
||||||
Consumer
|
|
|
||||||
Gross loans
|
|
|
||||||
Less allowance for credit losses
|
(
|
)
|
(
|
)
|
||||
Less deferred loan fees
|
(
|
)
|
(
|
)
|
||||
Net loans
|
$
|
|
$
|
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
June 30, 2023
|
||||||||||||||||||||||||||||
Loans
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Charge-offs
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
|
|
|
(
|
)
|
|
|
|||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Unfunded Commitments
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Provision (credit) for credit losses
|
( |
) | ( |
) | ||||||||||||||||||||||||
Balance, end of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total Allowance for Credit Losses
|
$ | $ | $ | $ | $ | $ | $ |
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
June 30, 2022
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Charge-offs
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Provision (credit) for credit losses
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
June 30, 2023
|
||||||||||||||||||||||||||||
Loans
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Impact of CECL adoption
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Charge-offs
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
|
|
|
(
|
)
|
|
|
|||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Unfunded Commitments
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Impact of CECL adoption
|
||||||||||||||||||||||||||||
Provision (credit) for credit losses
|
( |
) | ( |
) | ||||||||||||||||||||||||
Balance, end of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total Allowance for Credit Losses | $ | $ | $ | $ | $ | $ | $ |
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
June 30, 2022
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Charge-offs
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Provision (credit) for credit losses
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
• |
Grade 1 (Pass) – These loans generally conform to Bank policies, and are characterized by policy conforming advance rates on collateral, and have well-defined repayment sources. In addition, these
credits are extended to borrowers and/or guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.
|
• |
Grade
2 (Watch) – These
loans are still considered “Pass” credits; however, various factors such as industry stress, material changes in cash flow or financial conditions, or deficiencies in loan documentation, or other risk issues determined by the Lending
Officer, Commercial Loan Committee (CLC), or Credit Quality Committee (CQC) warrant a heightened sense and frequency of monitoring.
|
• |
Grade
3 (Special Mention)
– These loans must have observable weaknesses or evidence of imprudent handling or structural issues. The weaknesses require close attention and the remediation of those weaknesses is necessary. No risk of probable loss exists.
Credits in this category are expected to quickly migrate to a “2” or a “4” as this is viewed as a transitory loan grade.
|
• |
Grade
4 (Substandard) –
These loans are not adequately protected by the sound worth and debt service capacity of the borrower, but may be well secured. They have defined weaknesses relative to cash flow, collateral, financial condition, or other factors that
might jeopardize repayment of all of the principal and interest on a timely basis. There is the possibility that a future loss will occur if weaknesses are not remediated.
|
As of June 30, 2023
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving Loans Amortized Cost Basis
|
Total
|
||||||||||||||||||||||||
Construction & development
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total construction & development
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
1 - 4 family real estate
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total 1 - 4 family real estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Commerical real estate - other
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total commerical real estate - other
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Commerical and industrial
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total commerical and industrial
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Agriculural
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total agriculural
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total consumer
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total current-period gross charge-offs
|
$ | $ | $ | $ | $ | $ | $ | $ |
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
|||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||
1 (Pass)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Past Due
|
Total Loans |
|||||||||||||||||||||||||||
30–59
Days
|
60–89
Days
|
Greater than
90 Days
|
Total
|
Current
|
Total
Loans
|
> 90 Days &
Accruing
|
||||||||||||||||||||||
June 30, 2023
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
1 - 4 family real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate - other
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial & industrial(1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
1 - 4 family real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate - other
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial & industrial(1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Collateral Type
|
||||||||||||||||||||
Real Estate
|
Business Assets
|
Other Assets
|
Total
|
Specific Allocation
|
||||||||||||||||
June 30, 2023
|
||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Amortized
|
Amortized
|
|||||||||||||||||||||||
Amortized |
Cost Basis |
Cost Basis | Total |
Interest |
||||||||||||||||||||
Cost
|
with No
|
with an
|
Recorded
|
Related
|
Income
|
|||||||||||||||||||
Basis
|
Allowance
|
Allowance
|
Investment
|
Allowance
|
Recognized
|
|||||||||||||||||||
June 30, 2023
|
||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|
||||||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|
||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Unpaid Principal Balance |
Recorded Investment
with No
Allowance
|
Recorded Investment
with
an Allowance
|
Total Recorded Investment |
Related Allowance |
Average
Recorded Investment
|
Interest Income Recognized |
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | |||||||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|
||||||||||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|
||||||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
||||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Nonaccrual loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Troubled-debt restructurings (1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Accruing loans 90 or more days past due
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total nonperforming loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
Note 7: |
Shareholders’ Equity
|
Six Months Ended
June 30,
|
||||||||
2023
|
2022
|
|||||||
Number of shares repurchased | ||||||||
Average price of shares repurchased
|
$
|
|
$
|
|
||||
Shares remaining to be repurchased |
Actual
|
Minimum
Capital Requirements
|
With Capital
Conservation Buffer
|
Minimum
To Be Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
As of June 30, 2023
|
||||||||||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
$
|
|
|
%
|
|||||||||||||||||||
Tier I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
CET I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
Tier I capital to average assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|
|
%
|
|||||||||||||||||||||
As of December 31, 2022
|
||||||||||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
$
|
|
|
%
|
|||||||||||||||||||
Tier I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
CET I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
Tier I capital to average assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|
|
%
|
Note 8:
|
Related-Party Transactions
|
Note 9:
|
Employee Benefits
|
Options
|
Wgtd. Avg.
Exercise Price
|
Wgtd. Avg.
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Six Months Ended June 30, 2023
|
||||||||||||||||
Outstanding at December 31, 2022
|
|
$
|
|
|||||||||||||
Options Granted
|
|
|
||||||||||||||
Options Exercised
|
|
|
||||||||||||||
Options Forfeited
|
(
|
)
|
|
|||||||||||||
Outstanding at June 30, 2023
|
|
|
|
$
|
|
|||||||||||
Exercisable at June 30, 2023
|
|
|
|
$
|
|
For the Six Months Ended | ||||
June 30,
2023
|
||||
Risk-free interest rate
|
|
%
|
||
Dividend yield
|
|
%
|
||
Stock price volatility
|
|
%
|
||
Expected term
|
|
|
Number of
Shares
|
Wgtd. Avg.
Grant Date
Fair Value
|
||||||
Six Months Ended June 30, 2023
|
||||||||
Outstanding at December 31, 2022
|
|
$
|
|
|||||
Shares granted
|
|
|
||||||
Shares vested
|
(
|
)
|
|
|||||
Shares forfeited
|
(
|
)
|
|
|||||
End of the period balance
|
|
$
|
|
Number of
Shares
|
Wgtd. Avg.
Grant Date
Fair Value
|
|||||||
Six Months Ended June 30, 2022
|
||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||
Shares granted
|
|
|
||||||
Shares vested
|
(
|
)
|
|
|||||
Shares forfeited
|
|
|
||||||
End of the period balance
|
|
$
|
|
Note 10: |
Disclosures About Fair Value of Assets and Liabilities
|
Level 1 |
Quoted prices
in active markets for identical assets or liabilities
|
Level 2 |
Observable
inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities
|
Level 3 |
Unobservable
inputs supported by little or no market activity and significant to the fair value of the assets or liabilities
|
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
June 30, 2023
|
||||||||||||||||
Impaired loans (collateral- dependent)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2022
|
||||||||||||||||
Impaired loans (collateral- dependent)
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Weighted-
Average
|
|||||||
June 30, 2023
|
||||||||||
Collateral-dependent impaired loans
|
$
|
|
Appraisals from comparable assets
|
Estimated cost to sell
|
%
|
|||||
December 31, 2022
|
||||||||||
Collateral-dependent impaired loans
|
$
|
|
Appraisals from comparable assets
|
Estimated cost to sell
|
% |
Carrying |
Fair Value Measurements
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
June 30, 2023
|
||||||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest-bearing time
|
||||||||||||||||||||
deposits in other banks
|
|
|
|
|
|
|||||||||||||||
Loans, net of allowance
|
|
|
|
|
|
|||||||||||||||
Loans held for sale
|
||||||||||||||||||||
Nonmarketable equity securities
|
|
|
|
|
|
|||||||||||||||
Interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest payable
|
|
|
|
|
|
|||||||||||||||
December 31, 2022
|
||||||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest-bearing time
deposits in other banks
|
|
|
|
|
|
|||||||||||||||
Loans, net of allowance
|
|
|
|
|
|
|||||||||||||||
Nonmarketable equity securities
|
|
|
|
|
|
|||||||||||||||
Interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest payable
|
|
|
|
|
|
Note 11: |
Financial Instruments with Off-Balance Sheet Risk
|
June 30,
2023
|
December 31,
2022
|
|||||||
Commitments to extend credit
|
$
|
|
$
|
|
||||
Financial and performance standby letters of credit
|
|
|
||||||
$
|
|
$
|
|
Note 12: |
Significant Estimates and Concentrations
|
|
Net Interest Margin
|
|||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
||||||||||||||||||||||
Average
Balance |
Interest
Income/ Expense |
Average
Yield/ Rate |
Average
Balance |
Interest
Income/ Expense |
Average
Yield/ Rate |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Interest-Earning Assets:
|
||||||||||||||||||||||||
Short-term investments
|
$
|
174,920
|
$
|
2,371
|
5.44
|
%
|
$
|
130,961
|
$
|
262
|
0.81
|
%
|
||||||||||||
Debt securities, taxable
|
153,424
|
701
|
1.83
|
174,583
|
571
|
1.31
|
||||||||||||||||||
Debt securities, tax exempt(1)
|
19,744
|
85
|
1.73
|
22,244
|
85
|
1.53
|
||||||||||||||||||
Loans held for sale
|
68
|
-
|
-
|
279
|
-
|
-
|
||||||||||||||||||
Total loans(2)
|
1,283,341
|
26,885
|
8.40
|
1,090,053
|
15,754
|
5.80
|
||||||||||||||||||
Total interest-earning assets
|
1,631,497
|
$
|
30,042
|
7.39
|
1,418,120
|
16,672
|
4.72
|
|||||||||||||||||
Noninterest-earning assets
|
25,050
|
25,341
|
||||||||||||||||||||||
Total assets
|
$
|
1,656,547
|
$
|
1,443,461
|
||||||||||||||||||||
Funding sources:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Transaction accounts
|
$
|
817,819
|
6,860
|
3.36
|
%
|
$
|
693,619
|
555
|
0.32
|
%
|
||||||||||||||
Time deposits
|
265,396
|
2,684
|
4.06
|
183,494
|
323
|
0.71
|
||||||||||||||||||
Total interest-bearing deposits
|
1,083,215
|
9,544
|
3.53
|
877,113
|
878
|
0.40
|
||||||||||||||||||
Total interest-bearing liabilities
|
$
|
1,083,215
|
9,544
|
3.53
|
$
|
877,113
|
878
|
0.40
|
||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
$
|
403,207
|
$
|
429,388
|
||||||||||||||||||||
Other noninterest-bearing liabilities
|
12,180
|
6,925
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
415,387
|
436,313
|
||||||||||||||||||||||
Shareholders' equity
|
157,945
|
130,035
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,656,547
|
$
|
1,443,461
|
||||||||||||||||||||
Net interest income
|
$
|
20,498
|
$
|
15,794
|
||||||||||||||||||||
Net interest spread
|
3.85
|
%
|
4.32
|
%
|
||||||||||||||||||||
Net interest margin
|
5.04
|
%
|
4.47
|
%
|
(1) |
Taxable-equivalent yield of 2.29% as of June 30, 2023, applying a 24.5% effective tax rate
|
(2) |
Non-accrual loans of $7.3 million and $9.5 million as of June 30, 2023 and June 30, 2022, respectively, are included in loans.
|
- |
Interest income on total loans totaled $26.9 million, an increase of $11.1 million or 70.7%, due to an increase in average loans of $193.3 million, or 17.7%, and increased loan yields;
|
- |
Loan yields totaled 8.40% compared to 5.80% for the same period in 2022, primarily due to the continued fed rate hikes;
|
- |
Interest income on debt securities totaled $786,000, an increase of $130,000 or 19.8%, as a result of debt securities purchased during the first quarter of 2022;
|
- |
Net interest margin for the second quarter of 2023 was 5.04% compared to 4.47% for the second quarter of 2022.
|
|
Net Interest Margin
|
|||||||||||||||||||||||
|
For the Six Months Ended June 30,
|
|||||||||||||||||||||||
|
2023
|
2022
|
||||||||||||||||||||||
|
Average
Balance |
Interest
Income/ Expense |
Average
Yield/ Rate |
Average
Balance |
Interest
Income/ Expense |
Average
Yield/ Rate |
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
Interest-Earning Assets:
|
||||||||||||||||||||||||
Short-term investments
|
$
|
154,896
|
$
|
3,606
|
4.69
|
%
|
$
|
159,157
|
$
|
348
|
0.44
|
%
|
||||||||||||
Debt securities, taxable
|
153,478
|
1,407
|
1.85
|
132,086
|
935
|
1.43
|
||||||||||||||||||
Debt securities, tax exempt(1)
|
20,030
|
172
|
1.73
|
22,487
|
183
|
1.64
|
||||||||||||||||||
Loans held for sale
|
56
|
-
|
-
|
383
|
-
|
-
|
||||||||||||||||||
Total loans(2)
|
1,277,245
|
52,237
|
8.25
|
1,047,220
|
30,131
|
5.80
|
||||||||||||||||||
Total interest-earning assets
|
1,605,705
|
57,422
|
7.21
|
1,361,333
|
31,597
|
4.68
|
||||||||||||||||||
Noninterest-earning assets
|
24,299
|
24,506
|
||||||||||||||||||||||
Total assets
|
$
|
1,630,004
|
$
|
1,385,839
|
||||||||||||||||||||
Funding sources:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Transaction accounts
|
$
|
810,736
|
12,612
|
3.14
|
%
|
$
|
667,159
|
1,012
|
0.31
|
%
|
||||||||||||||
Time deposits
|
239,720
|
4,306
|
3.62
|
176,587
|
583
|
0.67
|
||||||||||||||||||
Total interest-bearing deposits
|
1,050,456
|
16,918
|
3.25
|
843,746
|
1,595
|
0.38
|
||||||||||||||||||
Total interest-bearing liabilities
|
1,050,456
|
16,918
|
3.25
|
843,746
|
1,595
|
0.38
|
||||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
414,383
|
405,674
|
||||||||||||||||||||||
Other noninterest-bearing liabilities
|
11,659
|
6,615
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
426,042
|
412,289
|
||||||||||||||||||||||
Shareholders' equity
|
153,506
|
129,804
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,630,004
|
$
|
1,385,839
|
||||||||||||||||||||
Net interest income
|
$
|
40,504
|
$
|
30,002
|
||||||||||||||||||||
Net interest spread
|
3.96
|
%
|
4.30
|
%
|
||||||||||||||||||||
Net interest margin
|
5.09
|
%
|
4.44
|
%
|
(1) |
Taxable-equivalent yield of 2.27% as of June 30, 2023, applying a 24.0% effective tax rate
|
(2) |
Non-accrual loans of $7.3 million and $9.5 million as of June 30, 2023 and June 30, 2022, respectively, are included in loans.
|
- |
Interest income on total loans totaled $52.2 million, an increase of $22.1 million or 73.4%, due to an increase in average loans of $230 million, or 22.0%, and increased loan yields;
|
- |
Loan yields totaled 8.25% compared to 5.80% for the same period in 2022, primarily due to the continued fed rate hikes;
|
- |
Interest income on debt securities totaled $1.6 million an increase of $461,000 or 41.2%, as a result of debt securities purchased during the first quarter of 2022; and
|
- |
Net interest margin for the first six months of 2023 was 5.09% compared to 4.44% for the same period in 2022.
|
|
Analysis of Changes in Interest Income and Expenses
|
|||||||||||
|
For the Three Months Ended
June 30, 2023 vs 2022
|
|||||||||||
|
Change due to:
|
|||||||||||
|
Volume(1)
|
Rate(1)
|
Interest
Variance
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||
Increase (decrease) in interest income:
|
||||||||||||
Short-term investments
|
$
|
89
|
$
|
2,020
|
$
|
2,109
|
||||||
Debt securities
|
(168
|
)
|
298
|
130
|
||||||||
Total loans
|
2,795
|
8,336
|
11,131
|
|||||||||
Total increase (decrease) in interest income
|
2,716
|
10,654
|
13,370
|
|||||||||
Increase (decrease) in interest expense:
|
||||||||||||
Deposits:
|
||||||||||||
Transaction accounts
|
99
|
6,206
|
6,305
|
|||||||||
Time deposits
|
145
|
2,216
|
2,361
|
|||||||||
Total interest-bearing deposits
|
244
|
8,422
|
8,666
|
|||||||||
Total increase (decrease) in interest expense
|
244
|
8,422
|
8,666
|
|||||||||
Increase (Decrease) in net interest income
|
$
|
2,472
|
$
|
2,232
|
$
|
4,704
|
|
Analysis of Changes in Interest Income and Expenses
|
|||||||||||
|
For the Six Months Ended
June 30, 2023 vs 2022
|
|||||||||||
|
Change due to:
|
|||||||||||
|
Volume(1)
|
Rate(1)
|
Interest
Variance
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||
Increase (decrease) in interest income:
|
||||||||||||
Short-term investments
|
$
|
(9
|
)
|
$
|
3,267
|
$
|
3,258
|
|||||
Debt securities
|
288
|
173
|
461
|
|||||||||
Total loans
|
6,616
|
15,490
|
22,106
|
|||||||||
Total increase (decrease) in interest income
|
6,895
|
18,930
|
25,825
|
|||||||||
Increase (decrease) in interest expense:
|
||||||||||||
Deposits:
|
||||||||||||
Transaction accounts
|
221
|
11,379
|
11,600
|
|||||||||
Time deposits
|
210
|
3,513
|
3,723
|
|||||||||
Total interest-bearing deposits
|
431
|
14,892
|
15,323
|
|||||||||
Total increase (decrease) in interest expense
|
431
|
14,892
|
15,323
|
|||||||||
Increase (Decrease) in net interest income
|
$
|
6,464
|
$
|
4,038
|
$
|
10,502
|
|
As of June 30, 2023
|
|||||||||||||||||||||||||||||||||||||||
|
Within One Year
|
After One Year But
Within Five Years
|
After Five Years But
Within Ten Years
|
After Ten Years
|
Total
|
|||||||||||||||||||||||||||||||||||
|
Amount
|
Yield *
|
Amount
|
Yield *
|
Amount
|
Yield *
|
Amount
|
Yield *
|
Amount
|
Yield *
|
||||||||||||||||||||||||||||||
Available-for-sale
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. Federal agencies
|
$
|
35
|
2.43
|
%
|
$
|
119
|
2.88
|
%
|
$
|
-
|
0
|
%
|
$
|
-
|
0
|
%
|
$
|
154
|
2.78
|
%
|
||||||||||||||||||||
Mortgage-backed securities
|
-
|
3.72
|
10,025
|
1.33
|
3,055
|
1.47
|
22,901
|
1.69
|
35,981
|
1.57
|
||||||||||||||||||||||||||||||
State and political subdivisions
|
2,738
|
1.66
|
14,356
|
1.22
|
9,363
|
1.50
|
274
|
1.53
|
26,731
|
1.37
|
||||||||||||||||||||||||||||||
U.S. Treasuries
|
97,430
|
1.19
|
1,774
|
1.01
|
3,475
|
1.11
|
-
|
-
|
102,679
|
1.18
|
||||||||||||||||||||||||||||||
Corporate debt securities
|
-
|
-
|
-
|
-
|
4,378
|
3.36
|
-
|
-
|
4,378
|
3.36
|
||||||||||||||||||||||||||||||
Total
|
$
|
100,203
|
1.20
|
%
|
$
|
26,274
|
1.25
|
%
|
$
|
20,271
|
1.86
|
%
|
$
|
23,175
|
1.69
|
%
|
$
|
169,923
|
1.36
|
%
|
||||||||||||||||||||
Percentage of total
|
58.97
|
%
|
15.46
|
%
|
11.93
|
%
|
13.64
|
%
|
100.00
|
%
|
|
For the Three Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2023
|
2022
|
$ Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Noninterest income:
|
||||||||||||||||
Mortgage lending income
|
$
|
112
|
$
|
95
|
$
|
17
|
17.89
|
%
|
||||||||
Gain (Loss) on sales of available-for-sale debt securities
|
(7
|
)
|
10
|
(17
|
)
|
-170.00
|
%
|
|||||||||
Service charges on deposit accounts
|
199
|
219
|
(20
|
)
|
-9.13
|
%
|
||||||||||
Other income and fees
|
490
|
368
|
122
|
33.15
|
%
|
|||||||||||
Total noninterest income
|
$
|
794
|
$
|
692
|
$
|
102
|
14.74
|
%
|
|
For the Six Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2023
|
2022
|
$ Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Noninterest income:
|
||||||||||||||||
Mortgage lending income
|
$
|
166
|
$
|
261
|
$
|
(95
|
)
|
-36.40
|
%
|
|||||||
Gain (Loss) on sales of available-for-sale debt securities
|
(8
|
)
|
(117
|
)
|
109
|
-93.16
|
%
|
|||||||||
Service charges on deposit accounts
|
434
|
468
|
(34
|
)
|
-7.26
|
%
|
||||||||||
Other income and fees
|
874
|
755
|
119
|
15.76
|
%
|
|||||||||||
Total noninterest income
|
$
|
1,466
|
$
|
1,367
|
$
|
99
|
7.24
|
%
|
|
For the Three Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2023
|
2022
|
$ Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
$
|
4,709
|
$
|
4,126
|
$
|
583
|
14.13
|
%
|
||||||||
Furniture and equipment
|
251
|
386
|
(135
|
)
|
-34.97
|
%
|
||||||||||
Occupancy
|
599
|
571
|
28
|
4.90
|
%
|
|||||||||||
Data and item processing
|
469
|
559
|
(90
|
)
|
-16.10
|
%
|
||||||||||
Accounting, marketing, and legal fees
|
179
|
209
|
(30
|
)
|
-14.35
|
%
|
||||||||||
Regulatory assessments
|
339
|
226
|
113
|
50.00
|
%
|
|||||||||||
Advertising and public relations
|
52
|
121
|
(69
|
)
|
-57.02
|
%
|
||||||||||
Travel, lodging and entertainment
|
110
|
74
|
36
|
48.65
|
%
|
|||||||||||
Other expense
|
669
|
691
|
(22
|
)
|
-3.18
|
%
|
||||||||||
Total noninterest expense
|
$
|
7,377
|
$
|
6,963
|
$
|
414
|
5.95
|
%
|
|
For the Six Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
|
2023
|
2022
|
$ Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
$
|
9,389
|
$
|
8,152
|
$
|
1,237
|
15.17
|
%
|
||||||||
Furniture and equipment
|
500
|
744
|
(244
|
)
|
-32.80
|
%
|
||||||||||
Occupancy
|
1,318
|
1,122
|
196
|
17.47
|
%
|
|||||||||||
Data and item processing
|
856
|
946
|
(90
|
)
|
-9.51
|
%
|
||||||||||
Accounting, marketing, and legal fees
|
478
|
442
|
36
|
8.14
|
%
|
|||||||||||
Regulatory assessments
|
734
|
422
|
312
|
73.93
|
%
|
|||||||||||
Advertising and public relations
|
200
|
231
|
(31
|
)
|
-13.42
|
%
|
||||||||||
Travel, lodging and entertainment
|
171
|
122
|
49
|
40.16
|
%
|
|||||||||||
Other expense
|
1,381
|
1,202
|
179
|
14.89
|
%
|
|||||||||||
Total noninterest expense
|
$
|
15,027
|
$
|
13,383
|
$
|
1,644
|
12.28
|
%
|
|
As of June 30,
|
As of December 31
|
||||||||||||||
|
2023
|
2022
|
||||||||||||||
|
Amount
|
% of Total
|
Amount
|
% of Total
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Construction & development
|
$
|
123,825
|
9.7
|
%
|
$
|
163,203
|
12.8
|
%
|
||||||||
1-4 family real estate
|
88,026
|
6.9
|
%
|
76,928
|
6.0
|
%
|
||||||||||
Commercial real estate - other
|
487,850
|
38.1
|
%
|
439,001
|
34.5
|
%
|
||||||||||
Total commercial real estate
|
699,701
|
54.7
|
%
|
679,132
|
53.3
|
%
|
||||||||||
Commercial & industrial
|
503,749
|
39.4
|
%
|
513,011
|
40.3
|
%
|
||||||||||
Agricultural
|
60,204
|
4.7
|
%
|
66,145
|
5.2
|
%
|
||||||||||
Consumer
|
15,185
|
1.2
|
%
|
14,949
|
1.2
|
%
|
||||||||||
Gross loans
|
1,278,839
|
100.0
|
%
|
1,273,237
|
100.0
|
%
|
||||||||||
Less: unearned income, net
|
(2,557
|
)
|
(2,781
|
)
|
||||||||||||
Total Loans, net of unearned income
|
1,276,282
|
1,270,456
|
||||||||||||||
Less: Allowance for credit losses
|
(16,377
|
)
|
(14,734
|
)
|
||||||||||||
Net loans
|
$
|
1,259,905
|
$
|
1,255,722
|
|
As of June 30, 2023
|
|||||||||||||||||||||||||||||||||||
|
Due in One Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Fifteen Years
|
Due after Fifteen Years
|
||||||||||||||||||||||||||||||||
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Construction & development
|
$
|
6,040
|
$
|
75,349
|
$
|
9,171
|
$
|
31,787
|
$
|
-
|
$
|
856
|
$
|
-
|
$
|
622
|
$
|
123,825
|
||||||||||||||||||
1-4 family real estate
|
8,074
|
13,893
|
35,402
|
19,186
|
300
|
5,534
|
-
|
5,637
|
88,026
|
|||||||||||||||||||||||||||
Commercial real estate - other
|
22,042
|
82,797
|
126,638
|
220,780
|
142
|
21,212
|
-
|
14,239
|
487,850
|
|||||||||||||||||||||||||||
Total commercial real estate
|
36,156
|
172,039
|
171,211
|
271,753
|
442
|
27,602
|
-
|
20,498
|
699,701
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Commercial & industrial
|
39,789
|
256,930
|
36,091
|
156,342
|
3,622
|
10,351
|
-
|
624
|
503,749
|
|||||||||||||||||||||||||||
Agricultural
|
7,843
|
27,667
|
9,149
|
11,544
|
60
|
1,036
|
-
|
2,905
|
60,204
|
|||||||||||||||||||||||||||
Consumer
|
2,362
|
21
|
5,849
|
117
|
686
|
2,885
|
81
|
3,184
|
15,185
|
|||||||||||||||||||||||||||
Gross loans
|
$
|
86,150
|
$
|
456,657
|
$
|
222,300
|
$
|
439,756
|
$
|
4,810
|
$
|
41,874
|
$
|
81
|
$
|
27,211
|
$
|
1,278,839
|
|
As of December 31, 2022
|
|||||||||||||||||||||||||||||||||||
|
Due in One Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Fifteen Years
|
Due after Fifteen Years
|
||||||||||||||||||||||||||||||||
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Construction & development
|
$
|
11,749
|
$
|
81,002
|
$
|
7,556
|
$
|
57,439
|
$
|
-
|
$
|
1,160
|
$
|
-
|
$
|
4,297
|
$
|
163,203
|
||||||||||||||||||
1-4 family real estate
|
10,550
|
12,664
|
24,741
|
15,782
|
314
|
6,606
|
-
|
6,271
|
76,928
|
|||||||||||||||||||||||||||
Commercial real estate - other
|
2,680
|
59,870
|
131,105
|
207,819
|
6,635
|
17,146
|
-
|
13,746
|
439,001
|
|||||||||||||||||||||||||||
Total commerical real estate
|
24,979
|
153,536
|
163,402
|
281,040
|
6,949
|
24,912
|
-
|
24,314
|
679,132
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Commercial & industrial
|
43,823
|
234,573
|
60,275
|
159,571
|
3,745
|
10,390
|
-
|
634
|
513,011
|
|||||||||||||||||||||||||||
Agricultural
|
1,798
|
17,514
|
8,767
|
33,270
|
469
|
980
|
140
|
3,207
|
66,145
|
|||||||||||||||||||||||||||
Consumer
|
1,683
|
22
|
6,310
|
156
|
587
|
2,860
|
82
|
3,249
|
14,949
|
|||||||||||||||||||||||||||
Gross loans
|
$
|
72,283
|
$
|
405,645
|
$
|
238,754
|
$
|
474,037
|
$
|
11,750
|
$
|
39,142
|
$
|
222
|
$
|
31,404
|
$
|
1,273,237
|
|
For the Six Months Ended
June 30, |
|||||||
|
2023
|
2022
|
||||||
(Dollars in thousands)
|
||||||||
Balance at beginning of the period
|
$
|
14,734
|
$
|
10,316
|
||||
Impact of CECL adoption
|
250
|
-
|
||||||
Provision for credit losses for loans
|
1,409
|
495
|
||||||
Charge-offs:
|
||||||||
Construction & development
|
-
|
-
|
||||||
1-4 family real estate
|
-
|
-
|
||||||
Commercial real estate - other
|
-
|
-
|
||||||
Commercial & industrial
|
-
|
-
|
||||||
Agricultural
|
(7
|
)
|
-
|
|||||
Consumer
|
(16
|
)
|
(6
|
)
|
||||
Total charge-offs
|
(23
|
)
|
(6
|
)
|
||||
Recoveries:
|
||||||||
Construction & development
|
-
|
-
|
||||||
1-4 family real estate
|
-
|
-
|
||||||
Commercial real estate - other
|
-
|
-
|
||||||
Commercial & industrial
|
-
|
-
|
||||||
Agricultural
|
2
|
-
|
||||||
Consumer
|
5
|
14
|
||||||
Total recoveries
|
7
|
14
|
||||||
Net recoveries (charge-offs)
|
(16
|
)
|
8
|
|||||
Balance at end of the period
|
$
|
16,377
|
$
|
10,819
|
||||
Net recoveries (charge-offs) to average loans
|
0.00
|
%
|
0.00
|
%
|
|
As of June 30,
|
As of December 31,
|
||||||||||||||
|
2023
|
2022
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Construction & development
|
$
|
1,592
|
9.7
|
%
|
$
|
1,889
|
12.8
|
%
|
||||||||
1-4 family real estate
|
1,116
|
6.8
|
%
|
890
|
6.0
|
%
|
||||||||||
Commercial real estate - Other
|
6,089
|
37.2
|
%
|
5,080
|
34.5
|
%
|
||||||||||
Commercial & industrial
|
6,712
|
41.0
|
%
|
5,937
|
40.3
|
%
|
||||||||||
Agricultural
|
601
|
3.7
|
%
|
765
|
5.2
|
%
|
||||||||||
Consumer
|
267
|
1.6
|
%
|
173
|
1.2
|
%
|
||||||||||
Total
|
$
|
16,377
|
100.0
|
%
|
$
|
14,734
|
100.0
|
%
|
|
As of
June 30, 2023
|
As of
December 31, 2022
|
||||||
|
(Dollars in thousands)
|
|||||||
Nonaccrual loans
|
$
|
7,290
|
$
|
8,039
|
||||
Accruing loans 90 or more days past due
|
9,975
|
9,941
|
||||||
Total nonperforming assets
|
$
|
17,265
|
$
|
17,980
|
||||
Ratio of nonperforming loans to total loans
|
1.35
|
%
|
1.42
|
%
|
||||
Ratio of nonaccrual loans to total loans
|
0.57
|
%
|
0.63
|
%
|
||||
Ratio of allowance for loan losses to total loans
|
1.28
|
%
|
1.16
|
%
|
||||
Ratio of allowance for loan losses to nonaccrual loans
|
224.65
|
%
|
183.28
|
%
|
||||
Ratio of nonperforming assets to total assets
|
1.03
|
%
|
1.13
|
%
|
As of June 30, 2023
|
||||||||||||||||||||||||||||
Loans 30-59
days past
due
|
Loans 60-89
days past
due
|
Loans 90+
days past due
|
Loans 90+
days past
due and
accruing
|
Total past due loans
|
Current
|
Total loans
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
123,825
|
$
|
123,825
|
||||||||||||||
1-4 family real estate
|
-
|
-
|
-
|
-
|
-
|
88,026
|
88,026
|
|||||||||||||||||||||
Commercial real estate
|
140
|
-
|
-
|
-
|
140
|
487,710
|
487,850
|
|||||||||||||||||||||
Commercial & industrial
|
17
|
-
|
9,894
|
9,894
|
9,911
|
493,838
|
503,749
|
|||||||||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
60,204
|
60,204
|
|||||||||||||||||||||
Consumer
|
-
|
28
|
81
|
81
|
109
|
15,076
|
15,185
|
|||||||||||||||||||||
Total
|
$
|
157
|
$
|
28
|
$
|
9,975
|
$
|
9,975
|
$
|
10,160
|
$
|
1,268,679
|
$
|
1,278,839
|
As of December 31, 2022
|
||||||||||||||||||||||||||||
Loans 30-59
days past due
|
Loans 60-89
days past
due
|
Loans 90+
days past
due
|
Loans 90+
days past
due and
accruing
|
Total Past Due Loans
|
Current
|
Total loans
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
163,203
|
$
|
163,203
|
||||||||||||||
1-4 family real estate
|
-
|
-
|
-
|
-
|
-
|
76,928
|
76,928
|
|||||||||||||||||||||
Commercial real estate
|
-
|
617
|
-
|
-
|
617
|
438,384
|
439,001
|
|||||||||||||||||||||
Commercial & industrial
|
21
|
-
|
9,923
|
9,923
|
9,944
|
503,067
|
513,011
|
|||||||||||||||||||||
Agricultural
|
4
|
-
|
-
|
-
|
4
|
66,141
|
66,145
|
|||||||||||||||||||||
Consumer
|
291
|
82
|
22
|
18
|
395
|
14,554
|
14,949
|
|||||||||||||||||||||
Total
|
$
|
316
|
$
|
699
|
$
|
9,945
|
$
|
9,941
|
$
|
10,960
|
$
|
1,262,277
|
$
|
1,273,237
|
|
As of June 30, 2023
|
|||||||||||||||||||
|
Pass
|
Watch
|
Special
mention
|
Substandard
|
Total
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Construction & development
|
$
|
123,028
|
$
|
-
|
$
|
797
|
$
|
-
|
$
|
123,825
|
||||||||||
1-4 family real estate
|
88,026
|
-
|
-
|
-
|
88,026
|
|||||||||||||||
Commercial real estate - Other
|
473,098
|
-
|
14,612
|
140
|
487,850
|
|||||||||||||||
Commercial & industrial
|
478,101
|
-
|
6,300
|
19,348
|
503,749
|
|||||||||||||||
Agricultural
|
59,987
|
217
|
-
|
-
|
60,204
|
|||||||||||||||
Consumer
|
15,076
|
-
|
-
|
109
|
15,185
|
|||||||||||||||
Total
|
$
|
1,237,316
|
$
|
217
|
$
|
21,709
|
$
|
19,597
|
$
|
1,278,839
|
|
As of December 31, 2022
|
|||||||||||||||||||
|
Pass
|
Watch
|
Special mention
|
Substandard
|
Total
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Construction & development
|
$
|
163,203
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
163,203
|
||||||||||
1-4 family real estate
|
76,928
|
-
|
-
|
-
|
76,928
|
|||||||||||||||
Commercial real estate - Other
|
397,295
|
14,976
|
24,747
|
1,983
|
439,001
|
|||||||||||||||
Commercial & industrial
|
493,412
|
-
|
584
|
19,015
|
513,011
|
|||||||||||||||
Agricultural
|
65,857
|
288
|
-
|
-
|
66,145
|
|||||||||||||||
Consumer
|
14,927
|
-
|
-
|
22
|
14,949
|
|||||||||||||||
Total
|
$
|
1,211,622
|
$
|
15,264
|
$
|
25,331
|
$
|
21,020
|
$
|
1,273,237
|
|
As of June 30,
|
December 31,
|
||||||||||||||
|
2023
|
2022
|
||||||||||||||
|
Amount
|
Percentage of Total
|
Amount
|
Percentage of Total
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
Noninterest-bearing demand
|
$
|
397,588
|
26.4
|
%
|
$
|
439,409
|
30.8
|
%
|
||||||||
Interest-bearing transaction deposits
|
690,849
|
45.8
|
%
|
669,852
|
46.7
|
%
|
||||||||||
Savings deposits
|
124,110
|
8.2
|
%
|
136,537
|
9.6
|
%
|
||||||||||
Time deposits ($250,000 or less)
|
212,689
|
14.1
|
%
|
140,929
|
9.9
|
%
|
||||||||||
Time deposits (more than $250,000)
|
82,989
|
5.5
|
%
|
42,573
|
3.0
|
%
|
||||||||||
Total interest-bearing deposits
|
1,110,637
|
73.6
|
%
|
989,891
|
69.2
|
%
|
||||||||||
Total deposits
|
$
|
1,508,225
|
100.0
|
%
|
$
|
1,429,300
|
100.0
|
%
|
|
As of June 30, 2023 Maturity Within:
|
|||||||||||||||||||
|
Three Months
|
Three to Six Months
|
Six to 12 Months
|
After 12 Months
|
Total
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Time deposits ($250,000 or less)
|
$
|
75,460
|
$
|
64,745
|
$
|
57,468
|
$
|
15,016
|
$
|
212,689
|
||||||||||
Time deposits (more than $250,000)
|
4,063
|
24,449
|
32,385
|
22,092
|
82,989
|
|||||||||||||||
Total time deposits
|
$
|
79,523
|
$
|
89,194
|
$
|
89,853
|
$
|
37,108
|
$
|
295,678
|
|
As of December 31, 2022 Maturity Within:
|
|||||||||||||||||||
|
Three Months
|
Three to Six Months
|
Six to 12 Months
|
After 12 Months
|
Total
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Time deposits ($250,000 or less)
|
$
|
58,184
|
$
|
25,333
|
$
|
38,844
|
$
|
18,568
|
$
|
140,929
|
||||||||||
Time deposits (more than $250,000)
|
12,292
|
5,579
|
17,001
|
7,701
|
42,573
|
|||||||||||||||
Total time deposits
|
$
|
70,476
|
$
|
30,912
|
$
|
55,845
|
$
|
26,269
|
$
|
183,502
|
Actual
|
With Capital
Conservation Buffer |
Minimum to be "Well-Capitalized" Under Prompt Corrective Action
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
As of June 30, 2023
|
||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
$
|
177,186
|
13.09
|
%
|
$
|
142,143
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Bank
|
177,186
|
13.10
|
%
|
142,037
|
10.50
|
%
|
$
|
135,273
|
10.00
|
%
|
||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
160,808
|
11.88
|
%
|
115,068
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
160,808
|
11.89
|
%
|
114,982
|
8.50
|
%
|
108,218
|
8.00
|
%
|
|||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
160,808
|
11.88
|
%
|
94,762
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
160,808
|
11.89
|
%
|
94,691
|
7.00
|
%
|
87,928
|
6.50
|
%
|
|||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||
Company
|
160,808
|
9.71
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||
Bank
|
160,808
|
9.71
|
%
|
N/A
|
N/A
|
82,811
|
5.00
|
%
|
|
Actual
|
With Capital
Conservation Buffer
|
Minimum to be "Well-Capitalized" Under Prompt Corrective Action
|
|||||||||||||||||||||
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||
As of December 31, 2022
|
||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
$
|
158,158
|
12.41
|
%
|
$
|
133,862
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Bank
|
158,158
|
12.42
|
%
|
133,756
|
10.50
|
%
|
$
|
127,387
|
10.00
|
%
|
||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
143,424
|
11.25
|
%
|
108,365
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
143,424
|
11.26
|
%
|
108,279
|
8.50
|
%
|
101,909
|
8.00
|
%
|
|||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Company
|
143,424
|
11.25
|
%
|
89,241
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
143,424
|
11.26
|
%
|
89,171
|
7.00
|
%
|
82,801
|
6.50
|
%
|
|||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||
Company
|
143,424
|
9.19
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||
Bank
|
143,424
|
9.18
|
%
|
N/A
|
N/A
|
78,111
|
5.00
|
%
|
|
Payments Due as of June 30, 2023
|
|||||||||||||||||||
|
Within One Year
|
One to Three Years
|
Three to Five Years
|
After Five Years
|
Total
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Deposits without a stated maturity
|
$
|
1,212,547
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,212,547
|
||||||||||
Time deposits
|
258,570
|
35,344
|
1,764
|
-
|
295,678
|
|||||||||||||||
Operating lease commitments
|
380
|
768
|
369
|
1,088
|
2,605
|
|||||||||||||||
Total contractual obligations
|
$
|
1,471,497
|
$
|
36,112
|
$
|
2,133
|
$
|
1,088
|
$
|
1,510,830
|
Payments Due as of December 31, 2022
|
||||||||||||||||||||
Within One Year
|
One to Three Years
|
Three to Five Years
|
After Five Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Deposits without a stated maturity
|
$
|
1,245,798
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,245,798
|
||||||||||
Time deposits
|
157,233
|
26,002
|
267
|
-
|
183,502
|
|||||||||||||||
Operating lease commitments
|
532
|
815
|
453
|
530
|
2,330
|
|||||||||||||||
Total contractual obligations
|
$
|
1,403,563
|
$
|
26,817
|
$
|
720
|
$
|
530
|
$
|
1,431,630
|
|
June 30,
|
December 31,
|
||||||
|
2023
|
2022
|
||||||
|
(Dollars in thousands)
|
|||||||
Commitments to extend credit
|
$
|
236,486
|
$
|
198,027
|
||||
Standby letters of credit
|
2,153
|
1,043
|
||||||
Total
|
$
|
238,639
|
$
|
199,070
|
June 30,
|
December 31,
|
||||||||||||||||
2023
|
2022
|
||||||||||||||||
Change in Interest Rates (Basis Points)
|
Percent Change
in Net Interest
Income
|
Percent Change
in Fair Value of
Equity
|
Percent Change
in Net Interest
Income
|
Percent Change
in Fair Value of
Equity
|
|||||||||||||
+400
|
22.87
|
%
|
19.76
|
%
|
13.41
|
%
|
20.90
|
%
|
|||||||||
+300
|
18.48
|
%
|
18.73
|
%
|
9.96
|
%
|
20.13
|
%
|
|||||||||
+200
|
14.05
|
%
|
17.60
|
%
|
6.50
|
%
|
19.17
|
%
|
|||||||||
+100
|
9.56
|
%
|
16.41
|
%
|
2.99
|
%
|
18.04
|
%
|
|||||||||
Base
|
4.93
|
%
|
15.09
|
%
|
-0.77
|
%
|
16.91
|
%
|
|||||||||
-100
|
-0.29
|
%
|
13.65
|
%
|
-4.82
|
%
|
15.25
|
%
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
BANK7 CORP.
|
|||
DATED:
|
August 9, 2023
|
By: /s/ Thomas L. Travis
|
|
Thomas L. Travis
|
|||
Vice Chairman and Chief Executive Officer
|
|||
DATED:
|
August 9, 2023
|
By: /s/ Kelly J. Harris
|
|
Kelly J. Harris
|
|||
Executive Vice President and Chief Financial Officer
|