United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
or
For the transition period from to
Commission File No.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer | |
(Address of Principal Executive Offices) | (Zip Code) |
(
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer ☐ |
| 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
As of May 1, 2022, there were
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
ITEM 1.
Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition (Unaudited)
(In thousands, except share and per share data)
March 31, | December 31, | ||||||
| 2022 |
| 2021 | ||||
Assets | |||||||
Cash and due from banks | $ | | $ | | |||
Available for sale securities (at fair value) |
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Loans receivable (net of allowance for loan losses of $ |
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Federal Home Loan Bank stock |
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Accrued interest receivable |
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Cash surrender value of life insurance |
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Deferred tax assets (net of valuation allowance of $ |
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Premises and equipment, net |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Total assets | $ | | $ | | |||
Liabilities and Stockholders’ Equity |
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Liabilities |
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Deposits |
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Non-interest bearing | $ | | $ | | |||
Interest bearing |
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Total deposits |
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Mortgagors’ escrow accounts |
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Advances from the Federal Home Loan Bank |
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Subordinated debt |
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Accrued expenses and other liabilities |
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Total liabilities |
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Stockholders’ Equity |
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Preferred stock (par value $ | |||||||
Common stock (par value $ |
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Additional paid-in capital |
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Unearned common stock held by the employee stock ownership plan | ( | ( | |||||
Retained earnings |
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Accumulated other comprehensive loss: |
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Net unrealized loss on available for sale securities, net of taxes |
| ( |
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Defined benefit pension plan, net of taxes |
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Total accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
See accompanying notes to consolidated financial statements
1
Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Income (Unaudited)
(In thousands, except share and per share data)
Three Months Ended March 31, | ||||||
| 2022 |
| 2021 | |||
Interest and Dividend Income | ||||||
Interest and fees on loans | $ | | $ | | ||
Interest and dividends on securities |
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Other income |
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Total interest and dividend income |
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Interest Expense |
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Interest expense on deposits |
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Interest expense on borrowings |
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Total interest expense |
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Net interest income |
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Provision for (credit to) loan losses |
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Net interest income after provision for (credit to) loan losses |
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Non-interest Income |
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Service charges on deposit accounts |
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Net gain on sales of loans |
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Increase in cash surrender value of life insurance |
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Gain on disposal of premises and equipment |
| — |
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Gain on life insurance |
| — |
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Investment advisory income |
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Other |
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Total non-interest income |
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Non-interest Expense |
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Salaries and employee benefits |
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Occupancy |
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Data processing |
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Professional fees |
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Marketing |
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FDIC deposit insurance and other insurance |
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Other real estate owned expense |
| — |
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Amortization of intangible assets |
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Other |
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Total non-interest expense |
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Income before income taxes |
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Provision for income taxes |
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Net income | $ | | $ | | ||
Earnings per common share: | ||||||
Basic | $ | | $ | | ||
Diluted | $ | | $ | | ||
Weighted average shares outstanding, basic | | | ||||
Weighted average shares outstanding, diluted | | |
See accompanying notes to consolidated financial statements
2
Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands, except share and per share data)
Three Months Ended March 31, | |||||||
| 2022 |
| 2021 | ||||
Net Income | $ | | $ | | |||
Other Comprehensive (Loss) Income: |
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Unrealized holding losses arising during the period |
| ( |
| ( | |||
Reclassification adjustment for losses included in net realized loss on sales and calls of securities on the consolidated statements of income |
| — |
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Net unrealized losses on available for sale securities |
| ( |
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Tax effect (a) |
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Unrealized losses on available for sale securities, net of tax |
| ( |
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Defined benefit pension plan: |
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Actuarial losses arising during the period |
| — |
| ( | |||
Reclassification adjustment for amortization of net actuarial loss (b) |
| — |
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Total |
| — |
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Tax effect (c) |
| — |
| — | |||
Defined benefit pension plan gains, net of tax |
| — |
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Other comprehensive loss |
| ( |
| ( | |||
Total Comprehensive (Loss) Income | $ | ( | $ | |
(a) |
(b) |
(c) | Includes $ |
See accompanying notes to consolidated financial statements
3
Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(In thousands, except share and per share data)
Unearned | Accumulated |
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Additional | Common | Other | |||||||||||||||||
Common | Paid-in | Stock Held | Retained | Comprehensive | |||||||||||||||
| Stock |
| Capital | by the ESOP |
| Earnings |
| Loss |
| Total | |||||||||
Balance at December 31, 2020 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | |||||||
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Net income |
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Other comprehensive loss | — |
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ESOP shares committed to be allocated |
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Share-based compensation expense | — |
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Balance at March 31, 2021 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | |||||||
Balance at December 31, 2021 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | |||||||
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Net income | — | — | — | | — | | |||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||
ESOP shares committed to be allocated | — | | | — | — | | |||||||||||||
Share-based compensation expense | — | | — | — | — | | |||||||||||||
Balance at March 31, 2022 | $ | | $ | | $ | ( | $ | | $ | ( | $ | |
See accompanying notes to consolidated financial statements
4
Rhinebeck Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Unaudited)
(In thousands, except share and per share data)
Three Months Ended March 31, | ||||||
| 2022 |
| 2021 | |||
Cash Flows from Operating Activities | ||||||
Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Amortization and accretion of premiums and discounts on investments, net |
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Provision for (credit to) loan losses |
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Loans originated for sale |
| ( |
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Proceeds from sale of loans |
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Net gain on sale of loans |
| ( |
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Amortization of intangible assets |
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Depreciation and amortization |
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Gain from disposal of premises and equipment |
| — |
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Deferred income tax benefit |
| ( |
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Increase in cash surrender value of insurance |
| ( |
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Decrease (increase) in accrued interest receivable |
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Expense of earned ESOP shares |
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Share-based compensation expense | | | ||||
Decrease (increase) in other assets |
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Increase in accrued expenses and other liabilities |
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Net cash provided by operating activities |
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Cash Flows from Investing Activities |
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Proceeds from sales and calls of securities |
| — |
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Proceeds from maturities and principal repayments of securities |
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Purchases of securities |
| ( |
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Net redemptions of FHLB Stock |
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Net (increase) decrease in loans |
| ( |
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Purchases of bank premises and equipment |
| ( |
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Net proceeds from life insurance | — | | ||||
Net cash received from acquisition (Note 2) | — | | ||||
Proceeds from sale of other real estate owned |
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Net cash used in investing activities |
| ( |
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Cash Flows from Financing Activities |
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Net increase in demand deposits, NOW, money market and savings accounts |
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Net decrease in time deposits |
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Decrease in mortgagors' escrow accounts |
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Net decrease in short-term debt |
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Net decrease in long-term debt |
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Net cash provided by financing activities |
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Net decrease in cash and due from banks |
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Cash and Due from Banks |
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Beginning balance |
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Ending balance | $ | | $ | | ||
Supplemental Disclosures of Cash Flow Information |
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Cash paid for: |
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Cash paid for interest | $ | | $ | | ||
Cash paid (received) for income taxes | $ | | $ | ( | ||
Noncash Investing Activities |
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Fair value of assets acquired | $ | — | $ | | ||
Fair value of liabilities assumed | $ | — | $ | |
See accompanying notes to consolidated financial statements
5
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
1. Nature of Business and Significant Accounting Policies
The financial statements include the accounts of Rhinebeck Bancorp, Inc. (the “Company”), a stock holding company, and its wholly-owned subsidiary, Rhinebeck Bank (the “Bank”), a New York chartered stock savings bank. The primary purpose of the Company is to act as a holding company for the Bank. The Bank provides a full range of banking and financial services to consumer and commercial customers through its
The unaudited consolidated financial statements reflect all adjustments, which in the opinion of management, are necessary for a fair presentation of the results of the interim periods and are of a normal and recurring nature. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other period.
The unaudited financial statements and other financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements, and related notes, of Rhinebeck Bancorp, Inc. at and for the year ended December 31, 2021 contained in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 22, 2022.
For more information regarding the Company’s significant accounting policies, see the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission. As of March 31, 2022, the critical accounting policies of the Company have not changed materially from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021.
Basis of Financial Statements Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated statements of financial condition and reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the evaluation of goodwill for impairment and the valuation of deferred tax assets.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
On March 12, 2021, the Bank completed a branch purchase and assumption transaction with ConnectOne Bank. Management concluded that the acquisition represented a business combination, which is accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date. For additional information, see Note 2.
6
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
Reclassifications
Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation.
COVID-19
Significant progress has been made to combat the outbreak of COVID-19; however, the global pandemic has adversely impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If there is a resurgence in the virus or variant strains of the virus increase, the Company could experience further adverse effects on its business, financial condition, results of operations and cash flows. It is not possible to know the full extent of the impact of COVID-19 and the effects it will have on the Company's future operations.
Impact of Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 on “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires credit losses on most financial assets be measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (“CECL”) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. The measurement of expected credit losses is based upon relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. On October 16, 2019, the FASB approved a delay for conversion to the CECL methodology to January 2023 for smaller reporting companies, other public business entities, private companies and non-profits. The Company is currently assessing the effect of ASU No. 2016-13 and has engaged with a software vendor to assist in its efforts.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”. The amendments in Update 2016-13 require that an entity measure and record the lifetime expected credit losses on an asset upon origination or acquisition, and, as a result, credit losses from loans modified as troubled debt restructurings (“TDRs”) have been incorporated into the allowance for credit losses. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, “Receivables—Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this Update should be applied prospectively, except as provided in the next sentence. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. ASU 2022-02 is effective for the Company in 2023 upon adoption of ASU 2016-13. The Company does not expect the new guidance to have a material impact on the consolidated financial statements.
7
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
Emerging Growth Company Status
As an emerging growth company, the Company may delay adoption of new or revised financial accounting standards until such date that the standards are required to be adopted by non-issuer companies. If such standards would not apply to non-issuer companies, no deferral would be applicable. The Company is taking advantage of the benefits of the extended transition periods allowed under the Jumpstart Our Business Startups Act.
Accordingly, the Company’s consolidated financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. The effective dates of the recent accounting standards reflect those that relate to non-issuer companies.
8
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
2. Acquisition
On October 26, 2020, the Bank entered into a branch purchase and assumption agreement with ConnectOne Bank, the wholly-owned subsidiary of ConnectOne Bancorp, Inc., to acquire
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the March 12, 2021 transaction with ConnectOne, and reflects all adjustments made to the fair value of the opening balance sheet through March 31, 2022:
March 12, | |||
Fair value of consideration transferred, assets acquired and liabilities assumed | 2021 | ||
Total cash received on acquisition | $ | | |
Assets acquired | |||
Fixed assets | | ||
Reimbursed expenses | | ||
Core deposit intangible(1) | | ||
Total assets acquired | | ||
Liabilities assumed | |||
Deposits | | ||
Mark-to-market adjustment | | ||
Total liabilities assumed | | ||
Net liabilities acquired | ( | ||
Goodwill recognized | $ | |
_____________________________
(1) | The core deposit intangible was determined to have an estimated life of approximately |
The Company incurred $
9
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
3. Investment Securities
The amortized cost, gross unrealized gains and losses and fair values of available for sale securities are as follows:
March 31, 2022 | ||||||||||||
Gross | Gross | |||||||||||
Unrealized | Unrealized | |||||||||||
| Amortized Cost |
| Gains |
| Losses |
| Fair Value | |||||
U.S. Treasury securities | $ | | $ | | $ | ( | $ | | ||||
U.S. government agency mortgage-backed securities–residential | | | ( | | ||||||||
U.S. government agency securities |
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Municipal securities(1) |
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Corporate bonds |
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Other |
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Total | $ | | $ | | $ | ( | $ | |
| December 31, 2021 | |||||||||||
Gross | Gross | |||||||||||
Unrealized | Unrealized | |||||||||||
| Amortized Cost |
| Gains |
| Losses |
| Fair Value | |||||
U.S. Treasury securities | $ | | $ | | $ | ( | $ | | ||||
U.S. government agency mortgage-backed securities–residential | | | ( | | ||||||||
U.S. government agency securities | |
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Municipal securities(1) |
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Corporate bonds | |
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Other | |
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Total | $ | | $ | | $ | ( | $ | |
(1) |
The following table presents the fair value and unrealized losses of the Company’s available for sale securities with gross unrealized losses aggregated by the length of time the individual securities have been in a continuous unrealized loss position:
March 31, 2022 | ||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||
| Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | |||||||
U.S. Treasury securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
U.S. government agency mortgage-backed securities-residential | | ( | | ( | | ( | ||||||||||||
U.S. government agency securities | | ( | | ( | | ( | ||||||||||||
Municipal securities | | ( | | ( | | ( | ||||||||||||
Corporate bonds | | ( | | ( | | ( | ||||||||||||
Total | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( |
10
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
| December 31, 2021 | |||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||
| Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | |||||||
U.S. Treasury securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
U.S. government agency mortgage-backed securities-residential | | ( | | ( | | ( | ||||||||||||
U.S. government agency securities | | ( | — | — | | ( | ||||||||||||
Municipal securities | | ( | — | — | | ( | ||||||||||||
Corporate bonds | | ( | — | — | | ( | ||||||||||||
Total | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( |
At March 31, 2022, the Company had
Management believes that none of the unrealized losses on available for sale securities are other-than-temporary because substantially all of the unrealized losses in the Company’s investment portfolio relate to market interest rate changes on debt and mortgage-backed securities issued either directly by the government or from government sponsored enterprises. The Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity; therefore, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2022.
The amortized cost and fair value of available for sale debt securities at March 31, 2022 and December 31, 2021, by contractual maturities, are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be called or repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary:
March 31, 2022 | December 31, 2021 | |||||||||||
| Amortized Cost |
| Fair Value |
| Amortized Cost |
| Fair Value | |||||
Maturity: | ||||||||||||
Within 1 year | $ | | $ | | $ | | $ | | ||||
After 1 but within 5 years |
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After 5 but within 10 years |
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After 10 years |
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Total Maturities |
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Mortgage-backed securities |
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Other |
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Total | $ | | $ | | $ | | $ | |
At March 31, 2022 and December 31, 2021, available for sale securities with a carrying value of $
During the three months ended March 31, 2021, there was $
11
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
4. Loans and Allowance for Loan Losses
A summary of the Company’s loan portfolio is as follows:
March 31, | December 31, | ||||||
| 2022 |
| 2021 | ||||
Commercial real estate loans: |
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Construction | $ | | $ | | |||
Non-residential |
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Multi-family |
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Residential real estate loans |
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Commercial and industrial loans(1) |
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Consumer loans: |
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Indirect automobile |
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Home equity |
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Other consumer |
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Total gross loans |
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Net deferred loan costs |
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Allowance for loan losses |
| ( |
| ( | |||
Total net loans | $ | | $ | |
(1) | Includes $ |
At March 31, 2022 and December 31, 2021, the unpaid principal balances of loans held for sale, included in the residential real estate category above, were $
The following tables present the classes of the loan portfolio summarized by the pass category and the criticized and classified categories of special mention and substandard within the internal risk system:
March 31, 2022 | ||||||||||||
| Pass |
| Special Mention |
| Substandard |
| Total | |||||
Commercial real estate: |
|
|
|
| ||||||||
Construction | $ | | $ | — | $ | — | $ | | ||||
Non-residential | | | | | ||||||||
Multifamily |
| |
| — |
| — |
| | ||||
Residential real estate |
| |
| — |
| |
| | ||||
Commercial and industrial |
| |
| |
| |
| | ||||
Consumer: |
|
|
|
|
|
|
| |||||
Indirect automobile |
| |
| — |
| |
| | ||||
Home equity |
| |
| — |
| |
| | ||||
Other consumer |
| |
| — |
| |
| | ||||
Total | $ | | $ | | $ | | $ | |
12
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
| December 31, 2021 | |||||||||||
| Pass |
| Special Mention |
| Substandard |
| Total | |||||
Commercial real estate: |
|
|
|
| ||||||||
Construction | $ | | $ | — | $ | — | $ | | ||||
Non-residential | | | | | ||||||||
Multifamily |
| |
| — |
| — |
| | ||||
Residential real estate |
| |
| — |
| |
| | ||||
Commercial and industrial |
| |
| |
| |
| | ||||
Consumer: |
|
|
|
|
|
|
| |||||
Indirect automobile |
| |
| — |
| |
| | ||||
Home equity |
| |
| — |
| |
| | ||||
Other consumer |
| |
| — |
| |
| | ||||
Total | $ | | $ | | $ | | $ | |
Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments.
The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:
March 31, 2022 | ||||||||||||||||||
Greater Than | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days Past | Total Loans | |||||||||||||||
| Current |
| Past Due |
| Past Due |
| Due |
| Receivable |
| Non-accrual | |||||||
Commercial real estate: |
|
|
|
|
|
| ||||||||||||
Construction | $ | | $ | — | $ | — | $ | — | $ | | $ | — | ||||||
Non-residential | | | — | | | | ||||||||||||
Multifamily | | — | — | — | | — | ||||||||||||
Residential real estate |
| |
| |
| |
| |
| |
| | ||||||
Commercial and industrial |
| |
| |
| |
| |
| |
| | ||||||
Consumer: |
|
|
|
|
|
|
|
|
|
| ||||||||
Indirect automobile |
| |
| | |
| |
| |
| | |||||||
Home equity |
| |
| |
| |
| |
| |
| | ||||||
Other consumer |
| |
| |
| |
| |
| |
| | ||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | |
13
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
December 31, 2021 | ||||||||||||||||||
Greater Than | ||||||||||||||||||
30-59 Days | 60-89 Days | 90 Days Past | Total Loans | |||||||||||||||
| Current |
| Past Due |
| Past Due |
| Due |
| Receivable |
| Non-accrual | |||||||
Commercial real estate: |
|
|
|
|
|
| ||||||||||||
Construction | $ | | $ | — | $ | — | $ | — | $ | | $ | — | ||||||
Non-residential | | | | | | | ||||||||||||
Multifamily | | — | — | — | | — | ||||||||||||
Residential real estate |
| |
| |
| |
| |
| |
| | ||||||
Commercial and industrial |
| |
| |
| — |
| |
| |
| | ||||||
Consumer: |
|
|
|
|
|
|
|
|
|
| ||||||||
Indirect automobile |
| |
| | |
| |
| |
| | |||||||
Home equity |
| |
| |
| |
| |
| |
| | ||||||
Other consumer |
| |
| |
| |
| |
| |
| | ||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | |
The following tables summarize information regarding impaired loans by loan portfolio class:
March 31, 2022 | ||||||||||||
Recorded | Unpaid Principal | Related | Average Recorded | |||||||||
| Investment |
| Balance |
| Allowance |
| Investment | |||||
With no related allowance recorded: | ||||||||||||
Commercial real estate: | ||||||||||||
Non-residential | $ | | $ | | $ | — | $ | | ||||
Residential real estate |
| |
| |
| — |
| | ||||
Commercial and industrial |
| |
| |
| — |
| | ||||
Consumer: |
|
|
|
|
|
| ||||||
Indirect automobile |
| |
| |
| — |
| | ||||
Home equity |
| |
| |
| — |
| | ||||
Other consumer |
| |
| |
| — |
| | ||||
Total | $ | | $ | | $ | — | $ | | ||||
With an allowance recorded: |
|
|
|
|
|
|
|
| ||||
Commercial and industrial | $ | — | $ | — | $ | — | $ | | ||||
Consumer: |
|
|
|
|
|
| ||||||
Indirect automobile | | | | | ||||||||
Other consumer |
| |
| |
| |
| | ||||
Total | $ | | $ | | $ | | $ | | ||||
Total: |
|
|
|
|
|
|
|
| ||||
Commercial real estate: |
|
|
|
|
|
|
|
| ||||
Non-residential | $ | | $ | | $ | — | $ | | ||||
Residential real estate |
| |
| |
| — |
| | ||||
Commercial and industrial |
| |
| |
| — |
| | ||||
Consumer: |
|
|
|
|
|
|
|
| ||||
Indirect automobile |
| |
| |
| |
| | ||||
Home equity |
| |
| |
| — |
| | ||||
Other consumer |
| |
| |
| |
| | ||||
Total | $ | | $ | | $ | | $ | |
14
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
December 31, 2021 | ||||||||||||
Recorded | Unpaid Principal | Related | Average Recorded | |||||||||
| Investment |
| Balance |
| Allowance |
| Investment | |||||
With no related allowance recorded: |
|
|
|
| ||||||||
Commercial real estate: |
|
|
|
| ||||||||
Non-residential | $ | | $ | | $ | — | $ | | ||||
Residential real estate |
| |
| |
| — |
| | ||||
Commercial and industrial |
| |
| |
| — |
| | ||||
Consumer: |
|
|
|
|
|
| ||||||
Indirect automobile |
| |
| |
| — |
| | ||||
Home equity |
| |
| |
| — |
| | ||||
Other consumer |
| |
| |
| — |
| | ||||
Total | $ | | $ | | $ | — | $ | | ||||
With an allowance recorded: |
|
|
|
|
|
|
|
| ||||
Commercial real estate: |
|
|
|
|
|
|
|
| ||||
Commercial and industrial | $ | — | $ | — | $ | — | $ | | ||||
Consumer: |
|
|
|
|
|
|
| |||||
Indirect automobile | | | | | ||||||||
Total | $ | | $ | | $ | | $ | | ||||
Total: |
|
|
|
|
|
|
|
| ||||
Commercial real estate: |
|
|
|
|
|
|
|
| ||||
Non-residential | $ | | $ | | $ | — | $ | | ||||
Residential real estate |
| |
| |
| — |
| | ||||
Commercial and industrial |
| |
| |
| — |
| | ||||
Consumer: |
|
|
|
|
|
|
|
| ||||
Indirect automobile |
| |
| |
| |
| | ||||
Home equity |
| |
| |
| — |
| | ||||
Other consumer |
| |
| |
| — |
| | ||||
Total | $ | | $ | | $ | | $ | |
A loan is considered impaired when based on current information and events it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans and loans modified as TDRs. Loan modifications, which resulted in these loans being considered TDRs, are primarily in the form of rate concessions and extensions of maturity dates that are made specifically due to hardships experienced by the customer. The Company does not generally recognize interest income on a loan in an impaired status. At March 31, 2022 and December 31, 2021,
15
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying statements of financial condition. The Company and participating lenders share ratably in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At March 31, 2022 and December 31, 2021, the Company was servicing loans for participants aggregating $
Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $
The Company services certain loans that it has sold without recourse to third parties. The aggregate balances of loans serviced for others were $
The balances of capitalized servicing rights, included in other assets at March 31, 2022 and December 31, 2021, were $
The following tables summarize the segments of the loan portfolio and the allowance for loan losses, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment and the activity in the allowance for loan losses for the periods then ended:
Commercial | Residential | Commercial | ||||||||||||||||
| Real Estate |
| Real Estate |
| and Industrial |
| Indirect |
| Consumer |
| Totals | |||||||
Three months ended March 31, 2022 | ||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
(Credit to) provision for loan losses | ( | ( | | | | | ||||||||||||
Loans charged-off | — | ( | — | ( | ( | ( | ||||||||||||
Recoveries |
| — |
| |
| — |
| |
| |
| | ||||||
Ending balance | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loans deemed impaired | $ | — | $ | — | $ | — | $ | | $ | | $ | | ||||||
Loans not deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Loan receivables: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Ending balance | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Loans not deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | |
16
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
Commercial | Residential | Commercial | ||||||||||||||||
| Real Estate |
| Real Estate |
| and Industrial |
| Indirect | Consumer |
| Totals | ||||||||
Three months ended March 31, 2021 | ||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Beginning balance | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
(Credit to) provision for loan losses | ( | | | | ( | ( | ||||||||||||
Loans charged-off | — | — | — | ( | ( | ( | ||||||||||||
Recoveries |
| — |
| |
| — |
| |
| |
| | ||||||
Ending balance | $ | | $ | | $ | | $ | | $ | | $ | |
Commercial | Residential | Commercial | ||||||||||||||||
| Real Estate |
| Real Estate |
| and Industrial |
| Indirect |
| Consumer |
| Totals | |||||||
December 31, 2021 | ||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Loans deemed impaired | $ | — | $ | — | $ | — | $ | | $ | — | $ | | ||||||
Loans not deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Loan receivables: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Ending balance | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Ending balance: |
|
|
|
|
|
|
|
|
|
|
| |||||||
Loans deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Loans not deemed impaired | $ | | $ | | $ | | $ | | $ | | $ | |
In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the periods presented were not material.
17
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
5. Goodwill and Intangible Assets
The changes in the carrying value of goodwill are as follows:
Three months ended | Year Ended | ||||||
March 31, | December 31, | ||||||
|
| 2022 |
| 2021 | |||
Beginning balance | $ | | $ | | |||
Acquisition activity |
| — |
| | |||
|
|
|
| ||||
Ending balance | $ | | $ | | |||
|
|
|
| ||||
Accumulated impairment | $ | | $ | |
The Company evaluated goodwill and determined that
The changes in the carrying value of the customer list and core deposit intangibles are as follows:
Three Months Ended | Year Ended | |||||
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Beginning balance | $ | | $ | | ||
Acquisition activity | — | | ||||
Amortization |
| ( |
| ( | ||
|
|
|
| |||
Ending balance | $ | | $ | | ||
Accumulated amortization and impairment | $ | | $ | |
Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized over their estimated useful lives. Purchased customer accounts primarily consist of records and files that contain information about investment holdings. The values assigned to customer lists and core deposit intangibles is based upon the application of the income approach. The intangibles are expected to have useful lives of approximately
As of March 31, 2022, the future amortization expense for amortizable intangible assets for the respective years is as follows:
2022 |
| $ | |
2023 |
| | |
2024 |
| | |
2025 |
| | |
2026 |
| | |
Thereafter | | ||
Total | $ | |
18
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
6. Premises and Equipment
Premises and equipment are summarized as follows:
March 31, | December 31, | ||||||
| 2022 |
| 2021 | ||||
Land | $ | | $ | | |||
Buildings and improvements |
| |
| | |||
Furniture, fixtures and equipment |
| |
| | |||
Construction in process |
| |
| | |||
Total |
| |
| | |||
Less accumulated depreciation |
| ( |
| ( | |||
Net | $ | | $ | |
7. Deposits
Deposits balances are summarized as follows:
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Non-interest bearing demand deposits | $ | | $ | | ||
Interest bearing accounts: |
|
|
|
| ||
NOW |
| |
| | ||
Savings |
| |
| | ||
Money market |
| |
| | ||
Time certificates of deposit |
| |
| | ||
Total interest bearing accounts |
| |
| | ||
Total deposits | $ | | $ | |
Included in time certificates of deposit at March 31, 2022 and December 31, 2021 were reciprocal deposits totaling $
Contractual maturities of time certificates of deposit at March 31, 2022 are summarized below:
March 31, | |||
| 2022 | ||
Within 1 year | $ | | |
1 – 2 years |
| | |
2 – 3 years |
| | |
3 – 4 years |
| | |
4 – 5 years |
| | |
Total | $ | |
19
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
8. Long-Term Debt and FHLB Stock
FHLB Borrowings and Stock
The Bank is a member of the FHLB. At March 31, 2022 and December 31, 2021, the Bank had access to a preapproved secured line of credit with the FHLB of $
December 31, 2021, the Bank had pledged assets of $
The outstanding principal amounts and the related terms and rates at March 31, 2022 were as follows:
Term |
| Principal |
| Maturity |
| Rate |
| Due in one year | |||
3 year amortizing | $ | | May 16, 2022 |
| | % | $ | | |||
3 year bullet | | May 16, 2022 | | % | | ||||||
3 year amortizing | | February 28, 2023 | | % | | ||||||
Total | $ | | Weighted Average Rate |
| | % | $ | |
The Bank is required to maintain an investment in capital stock of the FHLB, as collateral, in an amount equal to a certain percentage of its outstanding debt. FHLB stock is considered restricted stock and is carried at cost. The Bank evaluates FHLB stock for impairment based on the ultimate recovery ability of the cost.
Subordinated Debt
In addition to the Bank, the Company has
The subordinated debt securities of $
As it is anticipated that LIBOR will be discontinued after 2022, the Company is reviewing the agreements for the above debt to determine alternative reference rates and does not anticipate there will be a significant financial statement impact.
Other Borrowings
The Bank has an unsecured, uncommitted $
20
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The Bank also has an unsecured, uncommitted $
9. Employee Benefits
Pension Plan
The Bank maintains a noncontributory defined benefit pension plan covering substantially all of its employees 21 years of age or older who had completed at least one year of service as of June 30, 2012, the effective date on which the Board of Directors of the Bank voted to freeze the defined benefit plan.
The following table sets forth the plan’s funded status and amounts recognized in the Company’s consolidated statements of financial condition:
March 31, | December 31, | ||||||
| 2022 |
| 2021 | ||||
Projected and accumulated benefit obligation | $ | ( | $ | ( | |||
Plan assets at fair value |
| |
| | |||
Funded status included in accrued expenses and other liabilities | $ | ( | $ | ( |
The net periodic pension cost and amounts recognized in other comprehensive income are as follows:
Three months ended March 31, | |||||||
| 2022 |
| 2021 | ||||
Interest cost | $ | | $ | | |||
Expected return on plan assets |
| ( |
| ( | |||
Amortization of unrecognized loss |
| |
| | |||
Net periodic (benefit) cost | $ | ( | $ | |
The expected long-term rate of return on plan assets has been determined by applying historical average investment returns from published indexes relating to the current allocation of assets in the plan. Plan assets are invested in pooled separate accounts consisting of underlying investments in
As of March 31, 2022, the investment funds included
The assets of the plan are invested under the supervision of the Company’s investment committee in accordance with the investment policy statement. The investment options of the plan are chosen in a manner consistent with generally accepted standards of fiduciary responsibility. The investment performance of the Company’s individual investment managers, with the assistance of the Company’s investment consultant, is monitored on a quarterly basis and is reviewed at least annually relative to the objectives and guidelines as stated in the Company’s investment policy statement.
The Company did not make a contribution to the plan in the first three months of 2022 or 2021.
21
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The fair value of the Company’s pension plan assets, by fair value hierarchy, are as follows:
March 31, 2022 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets: | ||||||||||||
Investment in separate accounts | ||||||||||||
Fixed income | $ | | $ | — | $ | — | $ | | ||||
Equity |
| |
| — |
| — |
| | ||||
Total assets at fair value | $ | | $ | — | $ | — | $ | |
December 31, 2021 | ||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Assets: | ||||||||||||
Investment in separate accounts | ||||||||||||
Fixed income | $ | | $ | — | $ | — | $ | | ||||
Equity |
| |
| — |
| — |
| | ||||
Total assets at fair value | $ | | $ | — | $ | — | $ | |
The pooled separate accounts are valued at the net asset per unit based on either the observable net asset value of the underlying investment or the net asset value of the underlying pool of securities. Net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities and then divided by the number of shares outstanding.
For a detailed disclosure on the Bank’s pension and employee benefits plans, please refer to Note 10 of the Company’s Consolidated Financial Statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K.
Defined Contribution Plan
The Bank sponsors a 401(k) defined contribution plan. Participants are permitted, in accordance with the provisions of Section 401(k) of the Internal Revenue Code, to contribute up to
22
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
Deferred Compensation Arrangements
Directors’ Plan
The Bank’s Deferred Compensation Plan for Fees of Directors, as amended and restated effective January 1, 2005 (the “Directors’ Plan”), covers directors who elect to defer receipt of all or a portion of their fees until separation from service. Upon resignation, retirement, or death, the participant’s total deferred compensation, including earnings thereon, will be paid out. At March 31, 2022 and December 31, 2021, total amounts due to participants of $
Executive Long-Term Incentive and Retention Plan
The Bank maintains an Executive Long-Term Incentive and Retention Plan (the “Executive Plan”). Participation in the Executive Plan is limited to officers of the Company designated as participants by the Board of Directors and who filed a properly completed and executed participation agreement in accordance with the terms of the Executive Plan. Under the Executive Plan, the Board of Directors may grant annual incentive awards equal to a percentage of a participant’s base salary at the rate in effect on the last day of the Executive Plan year, as determined by the Board of Directors based on the attainment of criteria established annually by the Board of Directors. Incentive awards under the Executive Plan are credited to the participant’s incentive benefit account as of the last day of the Executive Plan year to which the award relates and earn interest at a rate determined annually by the Board of Directors. Participants vest in their benefit accounts in accordance with the vesting schedule approved by the Board of Directors, which ranges from
Group Term Replacement Plan
Under the terms of the “Group Term Replacement Plan”, the Company provides postretirement life insurance benefits to certain officers. The liability related to these postretirement benefits is being accrued over the individual participants’ service period and aggregated $
Other Director and Officer Postretirement Benefits
The Company has individual fee continuation agreements with certain directors and a supplemental retirement agreement with an executive officer which provide for fixed postretirement benefits to be paid to the directors and the officer, or their beneficiaries, for periods ranging from
23
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
and 2021, respectively, related to these benefits, which are included in other non-interest expenses in the consolidated statements of income.
Employee Stock Ownership Plan
On January 1, 2019, the Bank established an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Company stock. The plan is a tax-qualified retirement plan for the benefit of Bank employees. On January 16, 2019, the Company granted a loan to the ESOP for the purchase of
Shares held by the ESOP include the following:
Three months ended | Year ended | |||
March 31, | December 31, | |||
| 2022 |
| 2021 | |
Allocated | |
| | |
Committed to be allocated | |
| | |
Unallocated | |
| | |
Paid out to participants | ( | ( | ||
Total shares | |
| |
The fair value of unallocated shares was $
Total compensation expense recognized in connection with the ESOP for the three months ended March 31, 2022 and 2021 was $
Share-Based Compensation Plan
On May 26, 2020, stockholders of the Company approved the 2020 Equity Incentive Plan (the “EIP”). The EIP authorizes the issuance or delivery to participants of up to
Pursuant to terms of the EIP, on August 25, 2020, the Board of Directors granted restricted stock and stock options to employees and directors. All of the awards vest annually over a
24
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The fair value of each option granted under the EIP is estimated on the date of grant using the Black-Scholes Option-Pricing Model. The expected volatility is based on the historical volatility of a peer group of comparable SEC-reporting bank holding companies. The dividend yield assumption is based on the Company’s expectation of dividend payouts. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The Company has elected to recognize forfeitures as they occur.
A summary of options under the 2020 EIP as of March 31, 2022 is presented below:
Weighted - | Weighted-Average | ||||||
Number of | Average | Remaining Contractual | |||||
Shares | Exercise Price | Term (in Years) | |||||
Options outstanding at beginning of year | | $ | | ||||
Options granted | - | - | - | ||||
Options exercised | - | - | - | ||||
Options Expired | ( | | - | ||||
Options outstanding at March 31, 2022 | | $ | | ||||
Options exercisable at March 31, 2022 | | $ | |
At March 31, 2022, the aggregate intrinsic value of the shares outstanding, which fluctuates based on changes in the fair market value of the Company’s stock, was $
As of March 31, 2022, there was $
The following table summarizes the Company’s restricted stock activity for the three months ended March 31, 2022:
|
| Weighted-Average | |||
Number | Grant Date | ||||
of Shares | Fair Value per Share | ||||
Non-vested restricted stock at beginning of year | | $ | | ||
Granted | - |
| - | ||
Vested | - |
| - | ||
Forfeited | - |
| - | ||
Non-vested restricted stock at March 31, 2022 | | $ | |
As of March 31, 2022, there was $
For the three months ended March 31, 2022, share-based compensation of options and restricted stock under the plan totaled $
25
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
10. Leases
As of March 31, 2022, the Company leases real estate for
The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s leases have maturities which range from 2024 to 2041, some of which include lessee options to extend the lease term. If 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 right-of-use asset and lease liability. The weighted average remaining life of the lease terms for these leases was
For the three months ended March 31, 2022 and 2021, total operating lease costs were $
Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2022 were as follows:
Years ending December 31: |
| ||
2022 | $ | | |
2023 |
| | |
2024 |
| | |
2025 |
| | |
2026 |
| | |
Thereafter |
| | |
Total future minimum lease payments | | ||
Amounts representing interest | ( | ||
Present Value of Net Future Minimum Lease Payments | $ | |
26
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
11. Commitments and Contingencies and Derivatives
Legal Matters
The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations.
Employment Agreements
The Company has entered into employment agreements with certain officers. The agreements provide for base salaries and incentive compensation based on performance criteria outlined in the agreements. The agreements also provide for insurance and various other benefits.
Financial Instruments with Off-Balance-Sheet Risk
In the normal course of business, the Company is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include standby letters of credit and commitments to extend credit, which include new loan commitments and undisbursed portions of construction loans and other lines of credit. These financial instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the statements of financial condition. The contractual amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
The contractual amounts of commitments to extend credit represent the amounts of potential loss should the contract be fully drawn upon, the customer defaults and the value of any existing collateral become worthless. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.
Financial instruments whose contract amounts represent off-balance sheet credit risk are as follows:
March 31, | December 31, | ||||||
| 2022 |
| 2021 | ||||
Commitments to extend credit summarized as follows: | |||||||
Future loan commitments | $ | | $ | | |||
Undisbursed construction loans |
| |
| | |||
Undisbursed home equity lines of credit |
| |
| | |||
Undisbursed commercial and other line of credit |
| |
| | |||
Standby letters of credit |
| |
| | |||
Total | $ | | $ | |
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
27
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include residential and commercial property, deposits and securities.
Interest Rate Swaps
The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate loan agreement to a fixed-rate loan agreement. Under these agreements, the Company simultaneously enters into a variable-rate loan and interest rate swap agreements with a customer. The Company then enters into a corresponding and offsetting swap agreement with a third party to hedge its exposure created by the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC Topic 815, Derivatives and Hedging, and are marked to market through earnings. The fair values of the swaps are recorded as both an asset and a liability, in other assets and other liabilities, respectively, in equal amounts for these transactions. The accrued interest
Summary information regarding these derivatives is presented below:
March 31, | December 31, | |||||||
2022 | 2021 | |||||||
Notational amount | $ | | $ | | ||||
Fair value | $ | | $ | | ||||
Weighted average pay rates | % | % | ||||||
Weighted average receive rates | % | % | ||||||
Weighted average maturity (in years) | ||||||||
Number of Contracts |
28
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
12. Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the tables below) of total, common equity Tier 1 and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of March 31, 2022 and December 31, 2021, that the Bank met all capital adequacy requirements to which they are subject.
The most recent notification from the Federal Deposit Insurance Corporation (“FDIC”) categorized the Bank as “well capitalized” under the regulatory framework. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, common equity Tier 1, Tier I risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since then, which management believes have changed the Bank’s category.
The Bank’s actual capital amounts and ratios were:
To be Well Capitalized under |
| |||||||||||||||
For Capital Adequacy | Prompt Corrective Action |
| ||||||||||||||
Actual | Purposes | Provisions |
| |||||||||||||
| Amount |
| Ratio |
| Amount |
| Ratio |
| Amount |
| Ratio |
| ||||
March 31, 2022 |
| |||||||||||||||
Rhinebeck Bank |
|
|
| |||||||||||||
Total capital (to risk-weighted assets) | $ | |
| | % | $ | |
| | % | $ | |
| | % | |
Tier 1 capital (to risk-weighted assets) |
| |
| | % |
| |
| | % |
| |
| | % | |
Common equity tier one capital (to risk weighted assets) |
| |
| | % |
| |
| | % |
| |
| | % | |
Tier 1 capital (to average assets) |
| |
| | % |
| |
| | % |
| |
| | % |
December 31, 2021 |
| |||||||||||||||
Rhinebeck Bank |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total capital (to risk-weighted assets) | $ | |
| | % | $ | |
| | % | $ | |
| | % | |
Tier 1 capital (to risk-weighted assets) |
| |
| | % |
| |
| | % |
| |
| | % | |
Common equity tier one capital (to risk weighted assets) |
| |
| | % |
| |
| | % |
| |
| | % | |
Tier 1 capital (to average assets) |
| |
| | % |
| |
| | % |
| |
| | % |
29
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
13. Fair Value
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. A description of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below.
Cash and Due from Banks
The carrying amount is a reasonable estimate of fair value.
Available for Sale Securities
Where quoted prices are available in an active market for identical securities, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include marketable equity securities and U.S. Treasury obligations. If quoted prices are not available, then fair values are estimated by using pricing models (i.e., matrix pricing) or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. Examples of such instruments include government agency bonds, mortgage-backed securities and municipal bonds. Level 3 securities include securities for which significant unobservable inputs are utilized. Available for sale securities are recorded at fair value on a recurring basis.
FHLB Stock
The carrying value of FHLB stock approximates fair value based on the redemption provisions of the FHLB.
Loans
Loans receivable are carried at cost. For variable rate loans which reprice frequently carrying values are a reasonable estimate of fair values, adjusted for credit losses inherent in the portfolios. The fair value of fixed rate loans is estimated by discounting the future cash flows using the year end rates, estimated using local market data, at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for credit losses inherent in the portfolios. The Company does not record loans at fair value on a recurring basis. However, from time to time, nonrecurring fair value adjustments to collateral-dependent impaired loans are recorded to reflect partial write-downs based on the observable market price or current appraised value of collateral.
Other Real Estate Owned
Other real estate owned represents real estate acquired through foreclosure and is carried at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values, based upon the lowest level of input that is utilized in the fair value measurements.
Mortgage Servicing Rights
The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. Mortgage servicing rights are carried at the lower of amortized cost or estimated fair value and are included in other assets on the consolidated statements of financial condition.
30
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
Deposits
Deposit liabilities are carried at cost. The fair value of NOW, savings and money market deposits is the amount payable on demand at the reporting date. The fair value of time certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities estimated using local market data to a schedule of aggregated expected maturities on such deposits.
Mortgagors’ escrow account
The fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered on deposited escrow accounts of similarly expected maturities.
Advances from the FHLB
The fair value of the advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances.
Subordinated Debt
Based on the floating rate characteristic of these instruments, the carrying value is considered to approximate fair value.
Off-Balance-Sheet Instruments
Fair values for off-balance-sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings. Such amounts are not significant.
Loan level interest rate Swaps
The fair value is based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves.
31
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The following tables detail the assets that are carried at fair value on a recurring basis as of the periods shown and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
Quoted Prices in | ||||||||||||
Active Markets | Significant | Significant | ||||||||||
for Identical | Observable | Unobservable | ||||||||||
| Balance |
| Assets (Level 1) |
| Inputs (Level 2) |
| Inputs (Level 3) | |||||
March 31, 2022 | ||||||||||||
Assets: | ||||||||||||
U.S. Treasury securities | $ | | $ | | $ | — | $ | — | ||||
U.S. government agency mortgage-backed securities-residential | | — | | — | ||||||||
U.S. government agency securities |
| |
| — |
| |
| — | ||||
Municipal securities |
| |
| — |
| |
| | ||||
Corporate Bonds | | — | | — | ||||||||
Other |
| |
| — |
| |
| — | ||||
Total available for sale securities | | | | | ||||||||
Loan level interest rate swaps | | — | | — | ||||||||
Total assets | $ | | $ | | $ | | $ | | ||||
Liabilities: | ||||||||||||
Loan level interest rate swaps | $ | | $ | — | $ | | $ | — | ||||
Total liabilities | $ | | $ | — | $ | | $ | — |
| December 31, 2021 | |||||||||||
Assets: | ||||||||||||
U.S. Treasury securities | $ | | $ | | $ | — | $ | — | ||||
U.S. government agency mortgage-backed securities – residential | | — | | — | ||||||||
U.S. government agency securities |
| |
| — |
| |
| — | ||||
Municipal securities |
| |
| — |
| |
| | ||||
Corporate Bonds | | — | | — | ||||||||
Other |
| |
| — |
| |
| — | ||||
Total available for sale securities | | | | | ||||||||
Loan level interest rate swaps | | — | | — | ||||||||
Total assets | $ | | $ | | $ | | $ | | ||||
Liabilities: | ||||||||||||
Loan level interest rate swaps | $ | | $ | — | $ | | $ | — | ||||
Total liabilities | $ | | $ | — | $ | | $ | — |
32
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
Quoted Prices in | ||||||||||||
Active Markets | Significant | Significant | ||||||||||
for Identical | Observable | Unobservable | ||||||||||
| Balance |
| Assets (Level 1) |
| Inputs (Level 2) |
| Inputs (Level 3) | |||||
March 31, 2022 | ||||||||||||
Impaired loans, with specific reserves | $ | | $ | | $ | | $ | | ||||
Total | $ | | $ | | $ | | $ | |
| December 31, 2021 | |||||||||||
Impaired loans, with specific reserves | $ | | $ | | $ | | $ | | ||||
Total | $ | | $ | | $ | | $ | |
Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans
had recorded investments of $
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
Quantitative Information About Level 3 Fair Value Measurements | |||||||||
Fair Value | Valuation | Unobservable | Range | ||||||
| Estimate |
| Techniques |
| Input |
| (Weighted Average) | ||
March 31, 2022 | |||||||||
Impaired loans | $ | |
| (1) | Liquidation expenses | (3) | |||
Appraisal adjustments | (2) | ||||||||
December 31, 2021 | |||||||||
Impaired loans | $ | |
| (1) | Liquidation expenses | (3) | |||
Appraisal adjustments | (2) |
(1) | Fair value is generally through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable. |
(2) | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraised value. |
(3) | Estimated costs to sell. |
The Company discloses fair value information about financial instruments, whether or not recognized in the statements of financial condition, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.
The estimated fair value amounts for 2022 and 2021 have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than amounts reported at each year-end.
33
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
The information presented should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.
As of the following dates, the carrying value and fair values of the Company’s financial instruments were:
March 31, | December 31, | |||||||||||
2022 | 2021 | |||||||||||
| Carrying Value |
| Fair Value |
| Carrying Value |
| Fair Value | |||||
Financial Assets: |
|
|
|
| ||||||||
Cash and due from banks (Level 1) | $ | | $ | | $ | | $ | | ||||
Available for sale securities (Level 1) |
| |
| |
| |
| | ||||
Available for sale securities (Level 2) |
| |
| |
| |
| | ||||
Available for sale securities (Level 3) |
| |
| |
| |
| | ||||
Loan level interest rate swaps (Level 2) | | | | | ||||||||
FHLB stock (Level 2) |
| |
| |
| |
| | ||||
Loans, net (Level 3) |
| |
| |
| |
| | ||||
Mortgage servicing rights (Level 3) |
| |
| |
| |
| | ||||
Financial Liabilities: |
|
|
|
|
|
|
|
| ||||
Deposits (Level 2) |
| |
| |
| |
| | ||||
Mortgagors' escrow accounts (Level 2) |
| |
| |
| |
| | ||||
FHLB advances (Level 2) |
| |
| |
| |
| | ||||
Subordinated debt (Level 2) |
| |
| |
| |
| | ||||
Loan level interest rate swaps (Level 2) | | | | |
14. Accumulated Other Comprehensive Loss
The activity in accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 is as follows:
Accumulated Other Comprehensive Loss(1) | |||||||||
Unrealized (losses) | |||||||||
gains on | |||||||||
Defined Benefit | available for sale | ||||||||
| Pension Plan |
| securities |
| Total | ||||
Balance at December 31, 2021 | $ | ( | $ | ( | $ | ( | |||
Other comprehensive loss before reclassifications |
| — |
| ( |
| ( | |||
Period change |
| — |
| ( |
| ( | |||
Balance at March 31, 2022 | $ | ( | $ | ( | $ | ( | |||
Balance at December 31, 2020 | $ | ( | $ | | $ | ( | |||
Other comprehensive loss before reclassifications |
| ( |
| ( |
| ( | |||
Amounts reclassified from accumulated other comprehensive loss |
| |
| — |
| | |||
Period change |
| |
| ( |
| ( | |||
Balance at March 31, 2021 | $ | ( | $ | ( | $ | ( |
(1) All amounts are net of tax. Related income tax expense or benefit is calculated using an income tax rate of
34
Rhinebeck Bancorp, Inc. and Subsidiary
Notes to Consolidated Financial Statements (Unaudited)
(In thousands, except share and per share data)
15. Earnings Per Share
Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental shares (computed using the treasury method) that would have been outstanding if all potentially dilutive common stock equivalents (such as options) were issued during the period. Unearned ESOP shares are not deemed outstanding for earnings per share calculations.
Three Months Ended March 31, | ||||||
2022 |
| 2021 | ||||
Net income applicable to common stock | $ | | $ | | ||
|
|
|
| |||
Average number of common shares outstanding |
| |
| | ||
Less: Average unearned ESOP shares |
| |
| | ||
Average number of common shares outstanding used to calculate basic earnings per common share |
| |
| | ||
Additional common stock equivalents (nonvested stock) used to calculate diluted earnings per share | | | ||||
Additional common stock equivalents (stock options) used to calculate diluted earnings per share | | | ||||
Weighted-average common shares and common stock equivalents used to calculate diluted earnings per share | | | ||||
|
|
|
| |||
Earnings per Common share: |
|
|
|
| ||
Basic | $ | | $ | | ||
Diluted | $ | | $ | |
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
General
Management’s discussion and analysis of financial condition and results of operations at March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021 is intended to assist in understanding the financial condition and results of operations of the Company and the Bank. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” "intend," “predict,” “forecast,” “improve,” “continue,” "will," "would," "should," "could," "may" and words of similar meaning. These forward-looking statements include, but are not limited to:
● statements of our goals, intentions and expectations;
● statements regarding our business plans, prospects, growth and operating strategies;
● statements regarding the quality of our loan and investment portfolios; and
● estimates of our risks and future costs and benefits.
These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Forward looking statements, by their nature, are subject to risks and uncertainties.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
● general economic conditions, either nationally or in our market area, that are worse than expected, including as a result of the ongoing coronavirus pandemic;
● changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses;
● our ability to access cost-effective funding;
● fluctuations in real estate values and both residential and commercial real estate market conditions;
● demand for loans and deposits in our market area;
● our ability to continue to implement our business strategies;
● competition among depository and other financial institutions;
36
● inflation and changes in market interest rates that reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary market;
● adverse changes in the securities markets;
● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, Federal Deposit Insurance Corporation premiums and capital requirements;
● | negative financial impact from unfavorable regulatory penalties and/or settlement; |
● our ability to manage interest rate risk, market risk, credit risk and operational risk;
● our ability to enter new markets successfully and capitalize on growth opportunities;
● our ability to successfully integrate into our operations any assets, liabilities or systems we may acquire, as well as new management personnel or customers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;
● changes in consumer spending, borrowing and savings habits;
● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;
● our ability to retain key employees;
● our compensation expense associated with equity allocated or awarded to our employees; and
● changes in the financial condition, results of operations or prospects of issuers of securities that we own.
Further, given its ongoing and dynamic nature, it is difficult to predict the continuing impact of the COVID-19 pandemic on our business. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:
● | demand for our products and services may decline, making it difficult to grow assets and income; |
● | the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; |
● | loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; |
● | collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; |
● | our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; |
● | our investment advisory fees may decline with continuing market turmoil; |
37
● | our cyber security risks are increased as the result of an increase in the number of employees working remotely; |
● | FDIC premiums may increase if the agency experiences additional resolution costs; and |
● | we may experience loss or unavailability of employees, executive officers or directors. |
Additional factors that may affect our results are discussed in our Annual Report on Form 10-K under the heading “Risk Factors.” Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Accordingly, you should not place undue reliance on such statements.
Critical Accounting Policies
For a detailed disclosure regarding the Company’s critical accounting policies, see Part 2, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission. As of March 31, 2022, the critical accounting policies of the Company have not changed materially from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021.
Comparison of Financial Condition at March 31, 2022 and December 31, 2021
Total Assets. Total assets were $1.28 billion at both March 31, 2022 and December 31, 2021, with a small increase of $318,000. The increase was primarily related to increases in loans receivable and deferred tax assets, offset by decreases in cash and due from banks and available for sale securities.
Cash and Due from Banks. Cash and due from banks decreased $4.7 million, or 6.6%, to $67.4 million at March 31, 2022 from $72.1 million at December 31, 2021 primarily due to an decrease in deposits held at the Federal Reserve Bank of New York as excess funds were used to purchase securities.
Investment Securities Available for Sale. Investment securities available for sale decreased $3.2 million, or 1.2%, to $277.0 million at March 31, 2022 from $280.3 million at December 31, 2021. This decrease was primarily due to calls and maturities of $16.5 million and an increase of $13.8 million in unrealized market losses, partially offset by $27.2 million in purchases.
Net Loans. Total net loans receivable were $860.2 million at March 31, 2022, an increase of $5.2 million, or 0.6%, as compared to $855.0 million at December 31, 2021. The increase was primarily due to increases of $22.5 million, or 5.9%, in indirect automobile loans and $3.4 million, or 1.4%, in non-residential commercial real estate loans, while commercial loans and multi-family loans decreased $13.7 million and $7.0 million, respectively.
Non-accrual loans and non-performing assets increased $47,000, or 0.7%, to $6.7 million at March 31, 2022. We had no other real estate owned in at the end of either period.
Total Liabilities. Total liabilities increased $9.0 million, or 0.8%, to $1.16 billion at March 31, 2022, primarily due to an increase in deposits of $10.6 million and an increase in accrued expenses and other liabilities of $1.9 million, partially offset by a decrease in advances from the FHLB of $2.1 million and a decrease in mortgagors’ escrow accounts of $1.4 million.
Deposits. Deposits increased $10.6 million, or 1.0%, to $1.11 billion at March 31, 2022. Interest bearing accounts grew $20.8 million, or 2.6%, to $808.0 million while non-interest bearing balances decreased $10.2 million, or 3.2%, finishing the first three months of 2022 at $304.6 million. Of the interest bearing accounts, transaction accounts including NOW, savings and money market accounts increased $35.2 million, which was partially offset by a decrease in time
38
deposits of $14.4 million. The continued growth in the deposits was primarily due to the addition of four branches during 2021.
Borrowed Funds. Advances from the FHLB decreased $2.1 million, or 11.7%, from $18.0 million at December 31, 2021 to $15.9 million at March 31, 2022, as the Company was able to utilize increased deposits to fund asset growth.
Stockholders’ Equity. Stockholders' equity decreased $8.7 million to $117.3 million at March 31, 2022, primarily due to an increase in the net unrealized loss on available for sale securities of $10.9 million partially offset by $2.1 million in net income. At March 31, 2022, the Company’s book value per share was $10.38 and the Company’s ratio of stockholders’ equity-to-total assets was 9.15%. Unearned common stock held by the Bank’s employee stock ownership plan was $3.7 million at March 31, 2022.
Comparison of Operating Results for the Three Months Ended March 31, 2022 and 2021
Net Income. Net income for the three months ended March 31, 2022 decreased $1.3 million, or 38.2%, to $2.1 million, or $0.19 per diluted share, compared to net income of $3.3 million, or $0.31 per diluted share, for the three months ended March 31, 2021. Interest and dividend income decreased $78,000, or 0.7%, interest expense decreased $410,000, or 32.3%, the provision for loan losses increased $290,000, non-interest income decreased $530,000, or 23.7%, while other expenses and taxes increased $780,000, or 8.9%, between comparable quarters.
Net Interest Income. Net interest income increased $332,000, or 3.4%, to $10.1 million for the three months ended March 31, 2022, compared to $9.8 million for the quarter ended March 31, 2021. The ratio of average interest-earning assets to average interest-bearing liabilities improved 0.9% to 145.18% while our net interest margin decreased by 23 basis points to 3.42% when comparing the first quarter of 2022 to the same period in 2021.
Interest Income. Interest income decreased $78,000, or 0.7%, to $11.0 million for the three months ended March 31, 2022 from $11.1 million for the comparable 2021 period. An increase in interest and dividends on securities was offset by a decrease in interest and fees on loans. The average yield decreased by 41 basis points to 3.71%, which was offset by an increase in the average balances of interest-earning assets of $111.3 million, or 10.2%, to $1.20 billion.
Interest Expense. Interest expense decreased $410,000, or 32.3%, from $1.3 million for the quarter ended March 31, 2021, to $860,000 for the quarter ended March 31, 2022. Interest rates on interest-bearing liabilities decreased 26 basis points to an average of 0.42% for the quarter ended March 31, 2022, which was offset by an increase in the average balance of total interest-bearing liabilities of $70.1 million, or 9.3%, to $826.1 million.
Provision for Loan Losses. The provision for loan losses increased by $290,000, from a credit to the provision of $69,000 for the quarter ended March 31, 2021 to an expense of $221,000 for the current quarter. The credit for the first quarter of 2021 was primarily attributable to a decline in loan balances, exclusive of PPP loans, a reduction in specific allocations to the allowance for loan losses and a general improvement in the economic conditions as our customers showed signs of recovering from the pandemic. The expense in the first quarter of 2022 was primarily due to growth in our indirect automobile and non-residential commercial real estate loan balances and changes to the qualitative factors impacting our multi-family real estate loan portfolio.
Net charge-offs for the quarter ended March 31, 2022 totaled $80,000 compared to $303,000 for the comparable period in 2021. The decrease was primarily due to a $143,000 recovery of a residential mortgage loan, pricing gains on the sales of repossessed vehicles as used car prices have risen significantly, and an improvement in the overall economic environment.
39
Non-Interest Income. Non-interest income totaled $1.7 million for the three months ended March 31, 2022, a decrease of $530,000, or 23.7%, from the comparable period in the prior year, due primarily to a decrease in the net gain on sales of mortgage loans as a result of a decline in loan volume when compared to the first quarter in 2021 due to the higher interest rate environment and the lack of available housing inventory in our market area. For the quarter ended March 31, 2022, the gain on sales of mortgage loans decreased $659,000, or 62.2%, as the Company sold $10.9 million of residential mortgage loans in the first quarter of 2022 as compared to $24.7 million in the first quarter of 2021. Gains related to the collection of life insurance proceeds of $195,000 and on the disposal of premises and equipment of $17,000, both of which only occurred in the first quarter of 2021, also contributed to the relative decrease in non-interest income. These decreases were partially offset by an increase in investment advisory income of $123,000, or 56.7%, and an increase in service charges on deposit accounts, which increased $97,000, or 15.9%, as transaction volume increased and the ability to charge fees increased.
Non-Interest Expense. For the first quarter of 2022, non-interest expense totaled $9.1 million, an increase of $1.2 million, or 14.5%, over the comparable 2021 period. The increase was primarily due to an increase in salaries and benefits of $927,000, or 20.2%, due to the four new branches opened in 2021 as well as annual merit increases, production incentives and employee benefit increases. Also, the competitive pressures of the local job market has contributed to general increases in wages. For the three months ended March 31, 2022, occupancy expenses increased $144,000, or 15.1%, as a result of the additional rent, depreciation and other expenses related to the branch expansion. The addition of branches was also primarily responsible for increased data processing costs of $91,000 and increased marketing fees of $29,000. These increases were partially offset by decreased professional fees of $14,000 and a decrease in other non-interest expenses of $49,000, or 3.7%.
Income Taxes. Income taxes decreased by $372,000 for the three months ended March 31, 2022 as compared to the comparable period in 2021 as our income before income taxes decreased. Our effective tax rate for the three months ended March 31, 2022 was 17.9% compared to 19.8% for the three months ended March 31, 2021.
40
Average Balance Sheets for the Three Months Ended March 31, 2022 and 2021
The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances, the yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income (dollars in thousands).
For the Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
| Average |
| Interest and |
|
| Average |
| Interest and |
|
| |||||||
Balance | Dividends | Yield/Cost(3) | Balance | Dividends | Yield/Cost(3) | ||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest bearing depository accounts | $ | 49,343 | $ | 19 |
| 0.16 | % | $ | 84,266 | $ | 19 |
| 0.09 | % | |||
Loans(1) |
| 859,810 |
| 10,081 |
| 4.76 | % |
| 880,712 |
| 10,670 |
| 4.91 | % | |||
Available for sale securities |
| 290,227 |
| 874 |
| 1.22 | % |
| 123,086 |
| 363 |
| 1.20 | % | |||
Total interest-earning assets | 1,199,380 | 10,974 |
| 3.71 | % | 1,088,064 | 11,052 |
| 4.12 | % | |||||||
Non-interest-earning assets |
| 78,061 |
|
|
|
|
| 57,927 |
|
|
|
| |||||
Total assets | $ | 1,277,441 |
|
|
|
| $ | 1,145,991 |
|
|
|
| |||||
Liabilities and equity: |
|
|
|
|
|
|
|
|
|
|
|
| |||||
NOW accounts | $ | 158,501 | $ | 55 |
| 0.14 | % | $ | 137,701 | $ | 60 |
| 0.18 | % | |||
Money market accounts |
| 302,634 |
| 365 |
| 0.49 | % |
| 205,663 |
| 327 |
| 0.64 | % | |||
Savings accounts |
| 185,523 |
| 69 |
| 0.15 | % |
| 161,425 |
| 67 |
| 0.17 | % | |||
Certificates of deposit |
| 150,333 |
| 236 |
| 0.64 | % |
| 192,056 |
| 548 |
| 1.16 | % | |||
Total interest-bearing deposits |
| 796,991 |
| 725 |
| 0.37 | % |
| 696,845 |
| 1,002 |
| 0.58 | % | |||
Escrow accounts |
| 7,347 |
| 20 |
| 1.10 | % |
| 6,820 |
| 19 |
| 1.13 | % | |||
Federal Home Loan Bank advances |
| 16,649 |
| 85 |
| 2.07 | % |
| 47,253 |
| 221 |
| 1.90 | % | |||
Subordinated debt |
| 5,155 |
| 30 |
| 2.36 | % |
| 5,155 |
| 28 |
| 2.20 | % | |||
Other interest-bearing liabilities |
| 29,151 |
| 135 |
| 1.88 | % |
| 59,228 |
| 268 |
| 1.84 | % | |||
Total interest-bearing liabilities | 826,142 | 860 |
| 0.42 | % | 756,073 | 1,270 |
| 0.68 | % | |||||||
Non-interest-bearing deposits |
| 305,329 |
|
|
|
|
| 253,365 |
|
|
|
| |||||
Other non-interest-bearing liabilities |
| 21,068 |
|
|
|
|
| 18,374 |
|
|
|
| |||||
Total liabilities | 1,152,539 |
|
|
|
| 1,027,812 |
|
|
|
| |||||||
Total stockholders’ equity |
| 124,902 |
|
|
|
|
| 118,179 |
|
|
|
| |||||
Total liabilities and stockholders’ equity | $ | 1,277,441 |
|
|
|
| $ | 1,145,991 |
|
|
|
| |||||
Net interest income |
|
| $ | 10,114 |
|
|
|
| $ | 9,782 |
|
| |||||
Interest rate spread |
|
|
|
|
| 3.29 | % |
|
|
|
|
| 3.44 | % | |||
Net interest margin(2) |
|
|
|
|
| 3.42 | % |
|
|
|
|
| 3.65 | % | |||
Average interest-earning assets to average interest-bearing liabilities |
|
|
|
|
| 145.18 | % |
|
|
|
|
| 143.91 | % |
(1) | Non-accruing loans are included in the outstanding loan balance. |
(2) | Represents the difference between interest earned and interest paid, divided by average total interest earning assets. |
(3) | Annualized. |
41
Rate/Volume Analysis
The following tables present the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume (in thousands).
Three Months Ended March 31, 2022 | ||||||||||
Compared to Three Months Ended | ||||||||||
March 31, 2021 | ||||||||||
Increase (Decrease) | ||||||||||
Due to | ||||||||||
| Volume |
| Rate |
| Net | |||||
Interest income: |
|
|
|
|
|
| ||||
Interest bearing depository accounts | $ | (10) | $ | 10 | $ | — | ||||
Loans receivable |
| (250) |
| (339) |
| (589) | ||||
Marketable securities |
| 503 |
| 8 |
| 511 | ||||
Total interest-earning assets |
| 243 |
| (321) |
| (78) | ||||
Interest expense: |
|
|
|
|
|
| ||||
Deposits |
| 46 |
| (322) |
| (276) | ||||
Escrow accounts |
| 1 |
| — |
| 1 | ||||
Federal Home Loan Bank advances |
| (155) |
| 19 |
| (136) | ||||
Subordinated debt |
| — |
| 1 |
| 1 | ||||
Total interest-bearing liabilities |
| (108) |
| (302) |
| (410) | ||||
Net increase in net interest income | $ | 351 | $ | (19) | $ | 332 |
Management of Market Risk
General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, the Board of Directors maintains a management-level Asset/Liability Management Committee (the “ALCO”), which takes primary responsibility for reviewing the Company’s asset/liability management process and related procedures, establishing and monitoring reporting systems and ascertaining that established asset/liability strategies are being maintained. On at least a quarterly basis, the ALCO reviews and reports asset/liability management outcomes from various modeling scenarios. This committee also implements any changes in strategies and reviews the performance of any specific asset/liability management actions that have been implemented.
We manage our interest rate risk to minimize the exposure of our earnings and capital to changes in market interest rates. We have implemented the following strategies to manage our interest rate risk: originating loans with adjustable interest rates or with shorter terms, promoting core deposit products, and adjusting the interest rates and maturities of funding sources, as necessary. By following these strategies, we believe that we are better positioned to react to changes in market interest rates.
42
Net Economic Value Simulation. We analyze the Bank’s sensitivity to changes in interest rates through a net economic value of equity (“EVE”) model. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. The EVE ratio represents the dollar amount of our EVE divided by the present value of our total assets for a given interest rate scenario. EVE attempts to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital ratio. We estimate what our EVE would be at a specific date. We then forecast what the EVE might be at the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate the EVE under scenarios where interest rates increase 100, 200, 300 and 400 basis points from current market rates and where interest rates decrease 100 basis points from current market rates.
The following table presents the estimated changes in the Bank’s EVE that would result from changes in market interest rates at March 31, 2022 (dollars in thousands).
Net Economic |
| ||||||||||||
Value as Percent of |
| ||||||||||||
Net Economic Value | of Assets |
| |||||||||||
| Dollar |
| Dollar |
| Percent |
| EVE |
| Percent |
| |||
Basis Point Change in Interest Rates | Amount | Change | Change | Ratio | Change |
| |||||||
400 | $ | 161,330 | $ | (5,814) |
| (3.5) | % | 13.68 | % | 4.7 | % | ||
300 |
| 164,243 |
| (2,901) |
| (1.7) | % | 13.66 | % | 4.5 | % | ||
200 |
| 166,106 |
| (1,038) |
| (0.6) | % | 13.55 | % | 3.6 | % | ||
100 |
| 167,736 |
| 592 |
| 0.4 | % | 13.39 | % | 2.5 | % | ||
0 |
| 167,144 |
| — |
| — | % | 13.07 | % | — | % | ||
(100) | $ | 138,713 | $ | (28,431) |
| (17.0) | % | 10.62 | % | (18.7) | % |
Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above table assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and will likely differ from actual results.
Liquidity Management
We maintain liquid assets at levels we consider adequate to meet both our short-term and long-term liquidity needs. We adjust our liquidity levels to fund deposit outflows, repay our borrowings and to fund loan commitments. We also adjust liquidity as appropriate to meet asset and liability management objectives.
Our primary sources of liquidity are deposits, loan sales, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, earnings and funds provided from operations, as well as access to FHLB advances and other borrowings. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan sales and prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by our competition. We set the interest rates on our deposits to maintain a desired level of total deposits.
As reported in the Consolidated Statements of Cash Flows, our cash flows are classified for financial reporting purposes as operating, investing, or financing cash flows. Net cash provided by operating activities was $7.5 million and $2.6 million for the three-month periods ended March 31, 2022 and 2021, respectively. These amounts differ from our net income because of a variety of cash receipts and disbursements that did not affect net income for the respective periods. Net cash used for investing activities was $19.4 million and $35.7 for the three-month periods ended March 31, 2022 and 2021, respectively, principally reflecting our investment security and loan activities in the respective periods. We also received $32.8 million in cash from the acquisition of two branches in 2021. Cash outlays for the purchase of securities
43
decreased from $88.4 million for the three-month period ended March 31, 2021 to $27.2 million for the period ended March 31, 2022. Cash proceeds from principal repayments, maturities and sales of investment securities amounted to $16.5 million and $14.4 million in the three months ended March 31, 2022 and 2021, respectively. We had cash flows from a net increase in loans of $8.2 million for the three months ended March 31, 2022 compared to a net decrease of $4.9 million for the three months ended March 31, 2021. Deposit and borrowing cash flows have traditionally comprised most of our financing activities which resulted in net cash provided of $7.1 million in the three months ended March 31, 2022, and $29.4 million in comparable 2021 period.
At March 31, 2022, we had the following main sources of availability of liquid funds and borrowings:
(In thousands) |
| Total | |
Available liquid funds: |
| ||
Cash and due from banks | $ | 67,365 | |
Unencumbered securities | 270,713 | ||
Amount available from the Paycheck Protection Plan Loan Facility | 13,756 | ||
Availability of borrowings: | |||
Zions Bank line of credit | 10,000 | ||
Pacific Coast Bankers Bank line of credit | 50,000 | ||
Other secured FHLB credit facility | 159,430 | ||
Total available sources of funds | $ | 571,264 |
The following table summarizes our main contractual obligations and other commitments to make future payments as of March 31, 2022. The amount of the obligations presented in the table reflect principal amounts only and exclude the amount of interest we are obligated to pay. Also excluded from the table are a number of obligations to be settled in cash. These excluded items are reflected in our consolidated balance sheet and include deposits with no stated maturity, trade payables, and accrued interest payable.
March 31, 2022 | ||||||||||||
(In thousands) |
| Total |
| One Year or Less |
| After One but within Five Years |
| After 5 Years | ||||
Payments Due: |
|
|
|
| ||||||||
Federal Home Loan Bank advances | $ | 15,928 | $ | 15,928 | $ | — | $ | — | ||||
Operating lease agreements | 8,982 | 640 | 3,272 | 5,070 | ||||||||
Subordinated debt | 5,155 | — | — | 5,155 | ||||||||
Time deposits with stated maturity dates | 142,501 | 107,282 | 35,219 | — | ||||||||
Total contractual obligations | $ | 172,566 | $ | 123,850 | $ | 38,491 | $ | 10,225 |
We also have obligations under our post retirement plan as described in Note 9 to the consolidated financial statements. The post retirement benefit payments represent actuarially determined future payments to eligible plan participants. We froze our pension plan in 2012.
Impact of Inflation and Changing Prices
The financial statements and related notes of Rhinebeck Bancorp, Inc. have been prepared in accordance with GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.
44
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding market risk, see “Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operation- Management of Market Risk.”
Item 4. Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2022. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.
During the three months ended March 31, 2022, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
45
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
Periodically, there have been various claims and lawsuits against us, such as employment related issues, claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incidental to our business. At March 31, 2022, we were not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.
Item 1A. Risk Factors
There have been no material changes in risk factors applicable to the Company from those disclosed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
46
Item 6. Exhibits
3.1 | |
3.2 | |
4.0 | |
31.1 | Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | |
101.0 | The following materials for the period ended March 31, 2022, formatted in inline XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements |
104.0 | The cover page from Rhinebeck Bancorp’s Form 10-Q for the quarterly period ended March 31, 2022, formatted in inline XBRL (contained in Exhibit 101.0) |
47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| RHINEBECK BANCORP, INC. | |
|
| |
Date: May 12, 2022 | /s/ Michael J. Quinn | |
| Michael J. Quinn | |
|
| |
Date: May 12, 2022 | /s/ Michael J. McDermott | |
| Michael J. McDermott |
48
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael J. Quinn, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Rhinebeck Bancorp, Inc.;
2. Based on my knowledge, this report 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 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 15(d)-15(e)) for the registrant 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 subsidiary, 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 the 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.
May 12, 2022 | | /s/ Michael J. Quinn |
| Michael J. Quinn | |
| President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael J. McDermott, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Rhinebeck Bancorp, Inc.;
2. Based on my knowledge, this report 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 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 15(d)-15(e)) for the registrant 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 subsidiary, 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 the 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.
May 12, 2022 | /s/ Michael J. McDermott |
| Michael J. McDermott |
| Chief Financial Officer |
Exhibit 32.1
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. § 1350, Michael J. Quinn, President and Chief Executive Officer of Rhinebeck Bancorp, Inc. (the “Company”), and Michael J. McDermott, Chief Financial Officer of the Company, each certify in their capacity as officers of the Company that they have reviewed the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2022 (the “Report”) and that, to the best of their knowledge:
(1) the Report fully complies with the requirements of Sections 13(a) 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.
May 12, 2022 | /s/ Michael J. Quinn |
| Michael J. Quinn |
| President and Chief Executive Officer |
| |
May 12, 2022 | /s/ Michael J. McDermott |
| Michael J. McDermott |
| Chief Financial Officer |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.
Consolidated Statements of Financial Condition (Parentheticals) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for loan losses on loans receivable | $ 7,700 | $ 7,559 |
Deferred tax valuation allowance | $ 466 | $ 454 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, share authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 25,000,000 | 25,000,000 |
Common Stock, shares issued | 11,296,103 | 11,296,103 |
Common stock, shares outstanding | 11,296,103 | 11,296,103 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |||||
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Statement of Comprehensive Income [Abstract] | ||||||
Net Income | $ 2,053 | $ 3,321 | ||||
Other Comprehensive (Loss) Income: | ||||||
Unrealized holding losses arising during the period | (13,847) | (1,481) | ||||
Net unrealized losses on available for sale securities | (13,847) | (1,481) | ||||
Tax effect | [1] | 2,908 | 311 | |||
Unrealized losses on available for sale securities, net of tax | (10,939) | (1,170) | ||||
Defined benefit pension plan: | ||||||
Actuarial losses arising during the period | (89) | |||||
Reclassification adjustment for amortization of net actuarial loss | [2] | 90 | ||||
Total | 1 | |||||
Defined benefit pension plan gains, net of tax | 1 | |||||
Other comprehensive loss | (10,939) | (1,169) | ||||
Total Comprehensive (Loss) Income | $ (8,886) | $ 2,152 | ||||
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Consolidated Statements of Comprehensive Income (Parentheticals) - Related income tax expense - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
|
Tax effect of realized gains or losses | $ 0 | $ 0 |
Tax effect of amortization of net actuarial loss | $ 0 | $ 19 |
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands |
Common Stock |
Additional Paid-in Capital |
Unallocated common stock held by the ESOP |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2020 | $ 111 | $ 46,038 | $ (3,928) | $ 78,069 | $ (3,791) | $ 116,499 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 3,321 | 3,321 | ||||
Other comprehensive loss | (1,169) | (1,169) | ||||
ESOP shares committed to be allocated | (3) | 55 | 52 | |||
Share-based compensation expense | 153 | 153 | ||||
Balance at Mar. 31, 2021 | 111 | 46,188 | (3,873) | 81,390 | (4,960) | 118,856 |
Balance at Dec. 31, 2021 | 113 | 46,573 | (3,709) | 89,627 | (6,635) | 125,969 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 2,053 | 2,053 | ||||
Other comprehensive loss | (10,939) | (10,939) | ||||
ESOP shares committed to be allocated | 4 | 54 | 58 | |||
Share-based compensation expense | 152 | 152 | ||||
Balance at Mar. 31, 2022 | $ 113 | $ 46,729 | $ (3,655) | $ 91,680 | $ (17,574) | $ 117,293 |
Nature of Business and Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2022 | |
Nature of Business and Significant Accounting Policies | |
Nature of Business and Significant Accounting Policies | 1. Nature of Business and Significant Accounting Policies The financial statements include the accounts of Rhinebeck Bancorp, Inc. (the “Company”), a stock holding company, and its wholly-owned subsidiary, Rhinebeck Bank (the “Bank”), a New York chartered stock savings bank. The primary purpose of the Company is to act as a holding company for the Bank. The Bank provides a full range of banking and financial services to consumer and commercial customers through its fifteen branches and two representative offices located in Dutchess, Ulster, Orange, and Albany counties. Financial services, including investment advisory and financial product sales, are offered through a division of the Bank doing business as Rhinebeck Asset Management. The unaudited consolidated financial statements reflect all adjustments, which in the opinion of management, are necessary for a fair presentation of the results of the interim periods and are of a normal and recurring nature. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other period. The unaudited financial statements and other financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements, and related notes, of Rhinebeck Bancorp, Inc. at and for the year ended December 31, 2021 contained in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 22, 2022. For more information regarding the Company’s significant accounting policies, see the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission. As of March 31, 2022, the critical accounting policies of the Company have not changed materially from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021. Basis of Financial Statements Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated statements of financial condition and reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the evaluation of goodwill for impairment and the valuation of deferred tax assets. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. On March 12, 2021, the Bank completed a branch purchase and assumption transaction with ConnectOne Bank. Management concluded that the acquisition represented a business combination, which is accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date. For additional information, see Note 2. Reclassifications Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation. COVID-19 Significant progress has been made to combat the outbreak of COVID-19; however, the global pandemic has adversely impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If there is a resurgence in the virus or variant strains of the virus increase, the Company could experience further adverse effects on its business, financial condition, results of operations and cash flows. It is not possible to know the full extent of the impact of COVID-19 and the effects it will have on the Company's future operations. Impact of Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 on “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires credit losses on most financial assets be measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (“CECL”) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. The measurement of expected credit losses is based upon relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. On October 16, 2019, the FASB approved a delay for conversion to the CECL methodology to January 2023 for smaller reporting companies, other public business entities, private companies and non-profits. The Company is currently assessing the effect of ASU No. 2016-13 and has engaged with a software vendor to assist in its efforts. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”. The amendments in Update 2016-13 require that an entity measure and record the lifetime expected credit losses on an asset upon origination or acquisition, and, as a result, credit losses from loans modified as troubled debt restructurings (“TDRs”) have been incorporated into the allowance for credit losses. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, “Receivables—Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this Update should be applied prospectively, except as provided in the next sentence. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. ASU 2022-02 is effective for the Company in 2023 upon adoption of ASU 2016-13. The Company does not expect the new guidance to have a material impact on the consolidated financial statements.
Emerging Growth Company Status As an emerging growth company, the Company may delay adoption of new or revised financial accounting standards until such date that the standards are required to be adopted by non-issuer companies. If such standards would not apply to non-issuer companies, no deferral would be applicable. The Company is taking advantage of the benefits of the extended transition periods allowed under the Jumpstart Our Business Startups Act. Accordingly, the Company’s consolidated financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. The effective dates of the recent accounting standards reflect those that relate to non-issuer companies.
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Acquisition |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | 2. Acquisition On October 26, 2020, the Bank entered into a branch purchase and assumption agreement with ConnectOne Bank, the wholly-owned subsidiary of ConnectOne Bancorp, Inc., to acquire two branches located in Orange County, New York, as well as certain deposits and other assets and liabilities. The transaction closed on March 12, 2021 with the transfer of $33,863 of deposits. Management concluded that the acquisition represented a business combination, which was accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the March 12, 2021 transaction with ConnectOne, and reflects all adjustments made to the fair value of the opening balance sheet through March 31, 2022:
_____________________________
The Company incurred $71 of expenses in 2021 related to the acquisition. Acquisition expenses, including professional fees, are included in the total non-interest expense line item in the condensed consolidated statement of income. |
Investment Securities |
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Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | 3. Investment Securities The amortized cost, gross unrealized gains and losses and fair values of available for sale securities are as follows:
The following table presents the fair value and unrealized losses of the Company’s available for sale securities with gross unrealized losses aggregated by the length of time the individual securities have been in a continuous unrealized loss position:
At March 31, 2022, the Company had 241 individual available-for-sale securities in an unrealized loss position with unrealized losses totaling $17,375 with an aggregate depreciation of 6.43% from the Company’s amortized cost. Management believes that none of the unrealized losses on available for sale securities are other-than-temporary because substantially all of the unrealized losses in the Company’s investment portfolio relate to market interest rate changes on debt and mortgage-backed securities issued either directly by the government or from government sponsored enterprises. The Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity; therefore, the Company did not consider those investments to be other-than-temporarily impaired at March 31, 2022. The amortized cost and fair value of available for sale debt securities at March 31, 2022 and December 31, 2021, by contractual maturities, are presented below. Actual maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be called or repaid without any penalties. Because mortgage-backed securities are not due at a single maturity date, they are not included in the maturity categories in the following maturity summary:
At March 31, 2022 and December 31, 2021, available for sale securities with a carrying value of $5,333 and $8,316, respectively, were pledged to secure Federal Home Loan Bank of New York (“FHLB”) borrowings. In addition, at March 31, 2022 and December 31, 2021, $991 and $1,054 of available for sale securities were pledged to secure borrowings at the Federal Reserve Bank of New York (“FRB”), respectively. During the three months ended March 31, 2021, there was $2,000 in proceeds from the call of available for sale securities with no gross gains or realized. There were no sales or calls of available for sale securities during the three months ended March 31, 2022. |
Loans and Allowance for Loan Losses |
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Loans and Allowance for Loan Losses | 4. Loans and Allowance for Loan Losses A summary of the Company’s loan portfolio is as follows:
At March 31, 2022 and December 31, 2021, the unpaid principal balances of loans held for sale, included in the residential real estate category above, were $1,197 and $3,950, respectively. The following tables present the classes of the loan portfolio summarized by the pass category and the criticized and classified categories of special mention and substandard within the internal risk system:
Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:
The following tables summarize information regarding impaired loans by loan portfolio class:
A loan is considered impaired when based on current information and events it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans and loans modified as TDRs. Loan modifications, which resulted in these loans being considered TDRs, are primarily in the form of rate concessions and extensions of maturity dates that are made specifically due to hardships experienced by the customer. The Company does not generally recognize interest income on a loan in an impaired status. At March 31, 2022 and December 31, 2021, three loans totaling $1,409 and $1,440, included in impaired loans, were identified as TDRs. There were no new TDRs in 2021 or the first three months of 2022. At March 31, 2022 and December 31, 2021, all TDR loans were performing in accordance with their restructured terms. At March 31, 2022 and December 31, 2021, the Company had no commitments to advance additional funds to borrowers under TDR loans. The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying statements of financial condition. The Company and participating lenders share ratably in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At March 31, 2022 and December 31, 2021, the Company was servicing loans for participants aggregating $3,879 and $3,962, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $790 and $935 at March 31, 2022 and December 31, 2021, respectively. The Company services certain loans that it has sold without recourse to third parties. The aggregate balances of loans serviced for others were $315,695 and $314,953 as of March 31, 2022 and December 31, 2021, respectively. The balances of capitalized servicing rights, included in other assets at March 31, 2022 and December 31, 2021, were $2,641 and $2,633, respectively. Fair value exceeds carrying value, and thus, no impairment charges related to servicing rights were recognized during the period ended March 31, 2022 or the year ended December 31, 2021. The following tables summarize the segments of the loan portfolio and the allowance for loan losses, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment and the activity in the allowance for loan losses for the periods then ended:
In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the periods presented were not material. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The changes in the carrying value of goodwill are as follows:
The Company evaluated goodwill and determined that no write-down was required for the first three months of 2022 or the year ended December 31, 2021. The changes in the carrying value of the customer list and core deposit intangibles are as follows:
Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized over their estimated useful lives. Purchased customer accounts primarily consist of records and files that contain information about investment holdings. The values assigned to customer lists and core deposit intangibles is based upon the application of the income approach. The intangibles are expected to have useful lives of approximately 13 years. The Company recognized $27 and $13 of amortization expense related to its intangible assets for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the future amortization expense for amortizable intangible assets for the respective years is as follows:
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Premises and Equipment |
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Premises and Equipment | 6. Premises and Equipment Premises and equipment are summarized as follows:
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Deposits |
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Deposits | 7. Deposits Deposits balances are summarized as follows:
Included in time certificates of deposit at March 31, 2022 and December 31, 2021 were reciprocal deposits totaling $19,377 and $21,083, respectively, with original maturities of to three years. Time certificates of deposit in denominations of $250 or greater were $18,411 and $23,704 as of March 31, 2022 and December 31, 2021, respectively.Contractual maturities of time certificates of deposit at March 31, 2022 are summarized below:
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Long-Term Debt and FHLB Stock |
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Long-Term Debt and FHLB Stock | 8. Long-Term Debt and FHLB Stock FHLB Borrowings and Stock The Bank is a member of the FHLB. At March 31, 2022 and December 31, 2021, the Bank had access to a preapproved secured line of credit with the FHLB of $640,629 and $640,500, respectively. Borrowings under this line require collateralization through the pledge of specific loans and securities. At March 31, 2022 and December 31, 2021, the Bank had pledged assets of $175,355 and $170,385, respectively. The outstanding principal amounts and the related terms and rates at March 31, 2022 were as follows:
The Bank is required to maintain an investment in capital stock of the FHLB, as collateral, in an amount equal to a certain percentage of its outstanding debt. FHLB stock is considered restricted stock and is carried at cost. The Bank evaluates FHLB stock for impairment based on the ultimate recovery ability of the cost. No impairment was recognized at either March 31, 2022 or December 31, 2021. Subordinated Debt In addition to the Bank, the Company has one other wholly-owned subsidiary, RSB Capital Trust I (the “Trust”). In 2005, the Trust issued $5,000 of pooled trust preferred securities in a private placement and issued 155 shares of common stock at $1 par value per share, to the Company. The Trust, which has no independent assets or operations, was formed in 2005 for the sole purpose of issuing trust preferred securities and investing the proceeds thereof in an equivalent amount of junior subordinated debentures. The proceeds from the issuance of the trust preferred securities were down-streamed to the Bank and are currently considered Tier 1 capital for purposes of determining the Bank’s capital ratios. The duration of the Trust is 30 years. The subordinated debt securities of $5,155 are unsecured obligations of the Company and are subordinate and junior in right of payment to all present and future senior indebtedness of the Company. The Company has entered into a guarantee, which together with its obligations under the subordinated debt securities and the declaration of trust governing the Trust, including its obligations to pay costs, expenses, debts and liabilities, provides a full and unconditional guarantee of amounts on the capital securities. The subordinated debentures, which bear interest at three month LIBOR plus 2.00% (2.48% at March 31, 2022 and 2.16% at December 31, 2021) mature on May 23, 2035. As it is anticipated that LIBOR will be discontinued after 2022, the Company is reviewing the agreements for the above debt to determine alternative reference rates and does not anticipate there will be a significant financial statement impact. Other Borrowings The Bank has an unsecured, uncommitted $10,000 line of credit with Zions Bank. There were no advances outstanding under this line of credit at either March 31, 2022 or December 31, 2021. The Bank also has an unsecured, uncommitted $50,000 line of credit with Pacific Coast Bankers Bank. There were no advances outstanding under this line of credit at either March 31, 2022 or December 31, 2021. |
Employee Benefits |
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Employee Benefits | 9. Employee Benefits Pension Plan The Bank maintains a noncontributory defined benefit pension plan covering substantially all of its employees 21 years of age or older who had completed at least one year of service as of June 30, 2012, the effective date on which the Board of Directors of the Bank voted to freeze the defined benefit plan. The following table sets forth the plan’s funded status and amounts recognized in the Company’s consolidated statements of financial condition:
The net periodic pension cost and amounts recognized in other comprehensive income are as follows:
The expected long-term rate of return on plan assets has been determined by applying historical average investment returns from published indexes relating to the current allocation of assets in the plan. Plan assets are invested in pooled separate accounts consisting of underlying investments in ten diversified investment funds. As of March 31, 2022, the investment funds included seven equity funds and three fixed income bond funds, each with its own investment objectives, investment strategies and risks, as detailed in the Company’s investment policy statement. The Company determines the appropriate strategic asset allocation versus plan liabilities, as governed by the investment policy statement. The assets of the plan are invested under the supervision of the Company’s investment committee in accordance with the investment policy statement. The investment options of the plan are chosen in a manner consistent with generally accepted standards of fiduciary responsibility. The investment performance of the Company’s individual investment managers, with the assistance of the Company’s investment consultant, is monitored on a quarterly basis and is reviewed at least annually relative to the objectives and guidelines as stated in the Company’s investment policy statement. The Company did not make a contribution to the plan in the first three months of 2022 or 2021. The fair value of the Company’s pension plan assets, by fair value hierarchy, are as follows:
The pooled separate accounts are valued at the net asset per unit based on either the observable net asset value of the underlying investment or the net asset value of the underlying pool of securities. Net asset value is based on the value of the underlying assets owned by the fund, minus its liabilities and then divided by the number of shares outstanding. For a detailed disclosure on the Bank’s pension and employee benefits plans, please refer to Note 10 of the Company’s Consolidated Financial Statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K. Defined Contribution Plan The Bank sponsors a 401(k) defined contribution plan. Participants are permitted, in accordance with the provisions of Section 401(k) of the Internal Revenue Code, to contribute up to 25% of their earnings (as defined) into the plan with the Bank matching up to 6%, subject to Internal Revenue Service limitations. The Bank’s contributions charged to operations amounted to $294 and $255 for the three months ended March 31, 2022 and 2021, respectively. Deferred Compensation Arrangements Directors’ Plan The Bank’s Deferred Compensation Plan for Fees of Directors, as amended and restated effective January 1, 2005 (the “Directors’ Plan”), covers directors who elect to defer receipt of all or a portion of their fees until separation from service. Upon resignation, retirement, or death, the participant’s total deferred compensation, including earnings thereon, will be paid out. At March 31, 2022 and December 31, 2021, total amounts due to participants of $2,793 and $2,877, respectively, are included in accrued expenses and other liabilities. Total expenses related to the Directors’ Plan were $56 and $46 for the three months ended March 31, 2022 and 2021, respectively, which were included in other non-interest expense in the consolidated statements of income. Executive Long-Term Incentive and Retention Plan The Bank maintains an Executive Long-Term Incentive and Retention Plan (the “Executive Plan”). Participation in the Executive Plan is limited to officers of the Company designated as participants by the Board of Directors and who filed a properly completed and executed participation agreement in accordance with the terms of the Executive Plan. Under the Executive Plan, the Board of Directors may grant annual incentive awards equal to a percentage of a participant’s base salary at the rate in effect on the last day of the Executive Plan year, as determined by the Board of Directors based on the attainment of criteria established annually by the Board of Directors. Incentive awards under the Executive Plan are credited to the participant’s incentive benefit account as of the last day of the Executive Plan year to which the award relates and earn interest at a rate determined annually by the Board of Directors. Participants vest in their benefit accounts in accordance with the vesting schedule approved by the Board of Directors, which ranges from to five years of service. At March 31, 2022 and December 31, 2021, $1,576 and $1,545, respectively, is included in accrued expenses and other liabilities, which represents the cumulative amounts deferred and earnings thereon. The Company recognized expenses of $197 and $69 for the three months ended March 31, 2022 and 2021, respectively, related to this plan and which are included in salaries and employee benefits expense in the consolidated statements of income.Group Term Replacement Plan Under the terms of the “Group Term Replacement Plan”, the Company provides postretirement life insurance benefits to certain officers. The liability related to these postretirement benefits is being accrued over the individual participants’ service period and aggregated $1,435 and $1,423 at March 31, 2022 and December 31, 2021, respectively. The Company recognized expenses of $12 and $11 for the three-month periods ended March 31, 2022 and March 31, 2021, respectively, related to this plan, which are included in salaries and employee benefits expense in the consolidated statements of income. Other Director and Officer Postretirement Benefits The Company has individual fee continuation agreements with certain directors and a supplemental retirement agreement with an executive officer which provide for fixed postretirement benefits to be paid to the directors and the officer, or their beneficiaries, for periods ranging from 15 to 20 years. In addition, the Company has agreements with certain directors which provide for certain postretirement life insurance benefits. The liability related to these postretirement benefits is being accrued over the individual participants’ service period and aggregated $1,994 and $1,986 at March 31, 2022 and December 31, 2021, respectively. The Company recognized expenses of $19 and $18 for the three months ended March 31, 2022 and 2021, respectively, related to these benefits, which are included in other non-interest expenses in the consolidated statements of income. Employee Stock Ownership Plan On January 1, 2019, the Bank established an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Company stock. The plan is a tax-qualified retirement plan for the benefit of Bank employees. On January 16, 2019, the Company granted a loan to the ESOP for the purchase of 436,425 shares of the Company’s common stock at a price of $10.00 per share. The loan obtained by the ESOP from the Company is payable annually over 20 years at a rate per annum equal to the Prime Rate, reset annually on January 1st (3.25% at January 1, 2021). Loan payments are funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the ESOP loan at March 31, 2022 was $3,917. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares committed to be released annually is 21,821 through 2039. Shares held by the ESOP include the following:
The fair value of unallocated shares was $3,714 at March 31, 2022. Total compensation expense recognized in connection with the ESOP for the three months ended March 31, 2022 and 2021 was $58 and $52, respectively. Share-Based Compensation Plan On May 26, 2020, stockholders of the Company approved the 2020 Equity Incentive Plan (the “EIP”). The EIP authorizes the issuance or delivery to participants of up to 763,743 shares of Rhinebeck Bancorp common stock pursuant to grants of incentive and non-qualified stock options, restricted stock awards and restricted stock units. Of this number, the maximum number of shares of Rhinebeck Bancorp common stock that may be issued under the EIP pursuant to the exercise of stock options is 545,531 shares, and the maximum number of shares of Rhinebeck Bancorp common stock that may be issued as restricted stock awards or restricted stock units is 218,212 shares. These amounts represent 4.90% and 1.96%, respectively, of the number of shares of common stock issued in the stock offering of Rhinebeck Bancorp, including the shares issued to Rhinebeck Bancorp, MHC. Pursuant to terms of the EIP, on August 25, 2020, the Board of Directors granted restricted stock and stock options to employees and directors. All of the awards vest annually over a three-year period from the date of the grant and the term of each option is ten years. As of March 31, 2022, there were 102,146 stock options and 49,110 restricted stock awards that remain available for future grants. The fair value of each option granted under the EIP is estimated on the date of grant using the Black-Scholes Option-Pricing Model. The expected volatility is based on the historical volatility of a peer group of comparable SEC-reporting bank holding companies. The dividend yield assumption is based on the Company’s expectation of dividend payouts. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The Company has elected to recognize forfeitures as they occur. A summary of options under the 2020 EIP as of March 31, 2022 is presented below:
At March 31, 2022, the aggregate intrinsic value of the shares outstanding, which fluctuates based on changes in the fair market value of the Company’s stock, was $1,552. The aggregate intrinsic value represents the total pre-tax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of period and the weighted-average exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on March 31, 2022. As of March 31, 2022, there was $348 of unrecognized compensation cost related to the nonvested stock options granted under the 2020 EIP. The cost is expected to be recognized over a remaining period of 1.42 years. The following table summarizes the Company’s restricted stock activity for the three months ended March 31, 2022:
As of March 31, 2022, there was $518 of unrecognized compensation cost related to the nonvested restricted stock awards granted under the 2020 EIP. The cost is expected to be recognized over a remaining period of 1.40 years. For the three months ended March 31, 2022, share-based compensation of options and restricted stock under the plan totaled $152. |
Leases |
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Leases | 10. Leases As of March 31, 2022, the Company leases real estate for eight branch offices and two administrative offices under various lease agreements. All of our leases are classified as operating leases. The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s leases have maturities which range from 2024 to 2041, some of which include lessee options to extend the lease term. If 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 right-of-use asset and lease liability. The weighted average remaining life of the lease terms for these leases was 11.8 years and 12.0 years as of March 31, 2022 and December 31, 2021, respectively. As most of our leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at the lease commencement date. The Company utilized a weighted average discount rate of 2.51% in determining the lease liability as of March 31, 2022 and December 31, 2021, respectively. For the three months ended March 31, 2022 and 2021, total operating lease costs were $195 and $155 and were included in occupancy and other expense. Deferred rent liability was $136 and $145 at March 31, 2022 and December 31, 2021, respectively. The right-of-use asset, included in other assets, was $7,677 and $7,839 and the corresponding lease liability, included in accrued expenses and other liabilities, was $7,677 and $7,839 as of March 31, 2022 and December 31, 2021, respectively. Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2022 were as follows:
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Commitments and Contingencies and Derivatives |
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Commitments and Contingencies and Derivatives | 11. Commitments and Contingencies and Derivatives Legal Matters The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations. Employment Agreements The Company has entered into employment agreements with certain officers. The agreements provide for base salaries and incentive compensation based on performance criteria outlined in the agreements. The agreements also provide for insurance and various other benefits. Financial Instruments with Off-Balance-Sheet Risk In the normal course of business, the Company is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include standby letters of credit and commitments to extend credit, which include new loan commitments and undisbursed portions of construction loans and other lines of credit. These financial instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the statements of financial condition. The contractual amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The contractual amounts of commitments to extend credit represent the amounts of potential loss should the contract be fully drawn upon, the customer defaults and the value of any existing collateral become worthless. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Financial instruments whose contract amounts represent off-balance sheet credit risk are as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include residential and commercial property, deposits and securities. Interest Rate Swaps The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate loan agreement to a fixed-rate loan agreement. Under these agreements, the Company simultaneously enters into a variable-rate loan and interest rate swap agreements with a customer. The Company then enters into a corresponding and offsetting swap agreement with a third party to hedge its exposure created by the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC Topic 815, Derivatives and Hedging, and are marked to market through earnings. The fair values of the swaps are recorded as both an asset and a liability, in other assets and other liabilities, respectively, in equal amounts for these transactions. The accrued interest and of $29 and $12 related to our swaps is recorded in other assets and other liabilities as of March 31, 2022 and December 31, 2021, respectively.Summary information regarding these derivatives is presented below:
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Regulatory Matters |
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Regulatory Matters | 12. Regulatory Matters The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the tables below) of total, common equity Tier 1 and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of March 31, 2022 and December 31, 2021, that the Bank met all capital adequacy requirements to which they are subject. The most recent notification from the Federal Deposit Insurance Corporation (“FDIC”) categorized the Bank as “well capitalized” under the regulatory framework. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, common equity Tier 1, Tier I risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since then, which management believes have changed the Bank’s category. The Bank’s actual capital amounts and ratios were:
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Fair Value |
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Fair Value | 13. Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. A description of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial and non-financial instruments not recorded at fair value, is set forth below. Cash and Due from Banks The carrying amount is a reasonable estimate of fair value. Available for Sale Securities Where quoted prices are available in an active market for identical securities, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include marketable equity securities and U.S. Treasury obligations. If quoted prices are not available, then fair values are estimated by using pricing models (i.e., matrix pricing) or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. Examples of such instruments include government agency bonds, mortgage-backed securities and municipal bonds. Level 3 securities include securities for which significant unobservable inputs are utilized. Available for sale securities are recorded at fair value on a recurring basis. FHLB Stock The carrying value of FHLB stock approximates fair value based on the redemption provisions of the FHLB. Loans Loans receivable are carried at cost. For variable rate loans which reprice frequently carrying values are a reasonable estimate of fair values, adjusted for credit losses inherent in the portfolios. The fair value of fixed rate loans is estimated by discounting the future cash flows using the year end rates, estimated using local market data, at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for credit losses inherent in the portfolios. The Company does not record loans at fair value on a recurring basis. However, from time to time, nonrecurring fair value adjustments to collateral-dependent impaired loans are recorded to reflect partial write-downs based on the observable market price or current appraised value of collateral. Other Real Estate Owned Other real estate owned represents real estate acquired through foreclosure and is carried at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values, based upon the lowest level of input that is utilized in the fair value measurements. Mortgage Servicing Rights The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. Mortgage servicing rights are carried at the lower of amortized cost or estimated fair value and are included in other assets on the consolidated statements of financial condition. Deposits Deposit liabilities are carried at cost. The fair value of NOW, savings and money market deposits is the amount payable on demand at the reporting date. The fair value of time certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities estimated using local market data to a schedule of aggregated expected maturities on such deposits. Mortgagors’ escrow account The fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered on deposited escrow accounts of similarly expected maturities. Advances from the FHLB The fair value of the advances is estimated using a discounted cash flow calculation that applies current FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. Subordinated Debt Based on the floating rate characteristic of these instruments, the carrying value is considered to approximate fair value. Off-Balance-Sheet Instruments Fair values for off-balance-sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings. Such amounts are not significant. Loan level interest rate Swaps The fair value is based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves. The following tables detail the assets that are carried at fair value on a recurring basis as of the periods shown and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans had recorded investments of $306 and $389 with valuation allowances of $44 and $68, resulting fair values of $262 and $321 at March 31, 2022 and December 31, 2021, respectively. The valuation allowance represents specific allocations for the allowance for credit losses for impaired loans. The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
The Company discloses fair value information about financial instruments, whether or not recognized in the statements of financial condition, for which it is practicable to estimate that value. Certain financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The estimated fair value amounts for 2022 and 2021 have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than amounts reported at each year-end. The information presented should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. As of the following dates, the carrying value and fair values of the Company’s financial instruments were:
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Accumulated Other Comprehensive Loss |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | 14. Accumulated Other Comprehensive Loss The activity in accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 is as follows:
(1) All amounts are net of tax. Related income tax expense or benefit is calculated using an income tax rate of 21.0%.
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Earnings Per Share |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 15. Earnings Per Share Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed in a manner similar to that of basic earnings per share except that the weighted-average number of common shares outstanding is increased to include the number of incremental shares (computed using the treasury method) that would have been outstanding if all potentially dilutive common stock equivalents (such as options) were issued during the period. Unearned ESOP shares are not deemed outstanding for earnings per share calculations.
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Nature of Business and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Nature of Business and Significant Accounting Policies | |
Basis of Financial Statement Presentation | Basis of Financial Statements Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated statements of financial condition and reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the evaluation of goodwill for impairment and the valuation of deferred tax assets. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. On March 12, 2021, the Bank completed a branch purchase and assumption transaction with ConnectOne Bank. Management concluded that the acquisition represented a business combination, which is accounted for using the acquisition method, with the results of operations included in the Company’s consolidated financial statements as of the acquisition date. For additional information, see Note 2. |
Reclassifications | Reclassifications Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year’s presentation. |
COVID-19 | COVID-19 Significant progress has been made to combat the outbreak of COVID-19; however, the global pandemic has adversely impacted a broad range of industries in which the Company's customers operate and could still impair their ability to fulfill their financial obligations to the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If there is a resurgence in the virus or variant strains of the virus increase, the Company could experience further adverse effects on its business, financial condition, results of operations and cash flows. It is not possible to know the full extent of the impact of COVID-19 and the effects it will have on the Company's future operations. |
Impact of Recent Accounting Pronouncements | Impact of Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 on “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires credit losses on most financial assets be measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (“CECL”) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. The measurement of expected credit losses is based upon relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. On October 16, 2019, the FASB approved a delay for conversion to the CECL methodology to January 2023 for smaller reporting companies, other public business entities, private companies and non-profits. The Company is currently assessing the effect of ASU No. 2016-13 and has engaged with a software vendor to assist in its efforts. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”. The amendments in Update 2016-13 require that an entity measure and record the lifetime expected credit losses on an asset upon origination or acquisition, and, as a result, credit losses from loans modified as troubled debt restructurings (“TDRs”) have been incorporated into the allowance for credit losses. The amendments in this Update eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, “Receivables—Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, an entity must apply the loan refinancing and restructuring guidance in paragraphs 310-20-35-9 through 35-11 to determine whether a modification results in a new loan or a continuation of an existing loan. The amendments in this Update should be applied prospectively, except as provided in the next sentence. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. ASU 2022-02 is effective for the Company in 2023 upon adoption of ASU 2016-13. The Company does not expect the new guidance to have a material impact on the consolidated financial statements. |
Emerging Growth Company Status | Emerging Growth Company Status As an emerging growth company, the Company may delay adoption of new or revised financial accounting standards until such date that the standards are required to be adopted by non-issuer companies. If such standards would not apply to non-issuer companies, no deferral would be applicable. The Company is taking advantage of the benefits of the extended transition periods allowed under the Jumpstart Our Business Startups Act. Accordingly, the Company’s consolidated financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. The effective dates of the recent accounting standards reflect those that relate to non-issuer companies. |
Acquisition (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed |
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Investment Securities (Tables) |
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Investment Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost, gross unrealized gains and losses and fair values of available for sale securities |
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Schedule of gross unrealized losses and fair value, securities in continuous unrealized loss position |
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Schedule of maturities of debt securities |
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Loans and Allowance for Loan Losses (Tables) |
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Loans and Allowance for Loan Losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary loan portfolio | A summary of the Company’s loan portfolio is as follows:
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Schedule of loans by risk rating and portfolio segment |
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Schedule of classes of the loan portfolio by the aging categories of performing loans and nonaccrual loans |
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Schedule of information to impaired loans by loan portfolio class |
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Schedule of loan balances by segment |
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying value of goodwill |
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Schedule of changes in the carrying value of customer list and core deposit intangibles |
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Schedule of future amortization expense for amortizable intangible assets |
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Premises and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of premises and equipment |
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Deposits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deposits |
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Schedule of contractual maturities of time certificates of deposit |
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Long-Term Debt and FHLB Stock (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and FHLB Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding principal amounts and related terms of FHLBNY borrowings |
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Employee Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of plan's funded status and amounts recognized in consolidated statement of financial condition |
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Schedule of net periodic pension cost and amounts recognized in other comprehensive income |
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Schedule of fair value of pension plan assets, by fair value hierarchy | The fair value of the Company’s pension plan assets, by fair value hierarchy, are as follows:
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Schedule of employee stock ownership plan |
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Summary of options | A summary of options under the 2020 EIP as of March 31, 2022 is presented below:
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Summary of Company's restricted stock activity | The following table summarizes the Company’s restricted stock activity for the three months ended March 31, 2022:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Leases | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum payments for operating leases |
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Commitments and Contingencies and Derivatives (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies and Derivatives | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of contract amounts represent off-balance sheet credit risk |
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Schedule of information regarding derivatives |
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Regulatory Matters (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of actual capital amounts and ratios |
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets carried at fair value on a recurring basis |
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Schedule of assets carried at fair value and measured at fair value on a nonrecurring basis |
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Schedule of additional quantitative information about assets measured at fair value on a nonrecurring basis |
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Schedule of carrying value and fair values of the financial instruments |
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Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive loss components | The activity in accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 is as follows:
(1) All amounts are net of tax. Related income tax expense or benefit is calculated using an income tax rate of 21.0%. |
Earnings Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted |
|
Nature of Business and Significant Accounting Policies (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
item
| |
Nature of Business and Significant Accounting Policies | |
Number of branches | 15 |
Number of representative offices | 2 |
Acquisition (Narrative) (Details) - ConnectOne Bank $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021
USD ($)
|
Mar. 12, 2021
USD ($)
item
|
|
Business Acquisition [Line Items] | ||
Deposits | $ 33,863 | |
Expenses related to the acquisition | $ 71 | |
Monroe and Warwick, New York | ||
Business Acquisition [Line Items] | ||
Number of branch acquired | item | 2 |
Acquisition (Schedule of estimated fair values of the assets acquired and liabilities assumed) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 12, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Fair value of consideration transferred | |||||
Total cash received on acquisition | $ 32,767 | ||||
Liabilities assumed | |||||
Goodwill | $ 2,235 | $ 2,235 | $ 1,410 | ||
Useful life of purchased customer accounts | 13 years | ||||
ConnectOne Bank | |||||
Fair value of consideration transferred | |||||
Total cash received on acquisition | $ 32,767 | ||||
Assets acquired | |||||
Fixed assets | 113 | ||||
Reimbursed expenses | 9 | ||||
Core deposit intangible | 330 | ||||
Total assets acquired | 452 | ||||
Liabilities assumed | |||||
Deposits | 33,863 | ||||
Mark-to-market adjustment | 181 | ||||
Total liabilities assumed | 34,044 | ||||
Net liabilities acquired | (33,592) | ||||
Goodwill | $ 825 | ||||
ConnectOne Bank | Core deposit | |||||
Liabilities assumed | |||||
Useful life of purchased customer accounts | 13 years |
Investment Securities (Schedule of gross unrealized losses and fair value, securities in continuous unrealized loss position) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | $ 229,717 | $ 211,005 |
Less Than 12 Months Unrealized Losses | (13,566) | (3,539) |
12 Months or Longer Fair Value | 40,425 | 16,799 |
12 Months or Longer Unrealized Losses | (3,809) | (493) |
Fair Value | 270,142 | 227,804 |
Unrealized Losses | (17,375) | (4,032) |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 44,138 | 49,007 |
Less Than 12 Months Unrealized Losses | (1,001) | (268) |
12 Months or Longer Fair Value | 9,330 | 5,797 |
12 Months or Longer Unrealized Losses | (764) | (182) |
Fair Value | 53,468 | 54,804 |
Unrealized Losses | (1,765) | (450) |
U.S. government agency mortgage-backed securities-residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 151,239 | 139,019 |
Less Than 12 Months Unrealized Losses | (11,075) | (3,035) |
12 Months or Longer Fair Value | 28,282 | 11,002 |
12 Months or Longer Unrealized Losses | (2,878) | (311) |
Fair Value | 179,521 | 150,021 |
Unrealized Losses | (13,953) | (3,346) |
U.S. government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 22,744 | 14,625 |
Less Than 12 Months Unrealized Losses | (1,051) | (131) |
12 Months or Longer Fair Value | 929 | |
12 Months or Longer Unrealized Losses | (70) | |
Fair Value | 23,673 | 14,625 |
Unrealized Losses | (1,121) | (131) |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 3,380 | 2,469 |
Less Than 12 Months Unrealized Losses | (104) | (40) |
12 Months or Longer Fair Value | 1,491 | |
12 Months or Longer Unrealized Losses | (90) | |
Fair Value | 4,871 | 2,469 |
Unrealized Losses | (194) | (40) |
Corporate Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 8,216 | 5,885 |
Less Than 12 Months Unrealized Losses | (335) | (65) |
12 Months or Longer Fair Value | 393 | |
12 Months or Longer Unrealized Losses | (7) | |
Fair Value | 8,609 | 5,885 |
Unrealized Losses | $ (342) | $ (65) |
Investment Securities (Schedule of maturities of debt securities) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Amortized Cost | ||
Within 1 year | $ 17,681 | $ 12,729 |
After 1 but within 5 years | 59,926 | 67,912 |
After 5 but within 10 years | 21,817 | 22,595 |
After 10 years | 145 | 395 |
Total Maturities | 99,569 | 103,631 |
Mortgage-backed securities | 194,158 | 179,493 |
Other | 618 | 620 |
Amortized Cost | 294,345 | 283,744 |
Fair Value | ||
Within 1 year | 17,561 | 12,726 |
After 1 but within 5 years | 57,383 | 67,463 |
After 5 but within 10 years | 21,099 | 22,567 |
After 10 years | 145 | 394 |
Total Maturities | 96,188 | 103,150 |
Mortgage-backed securities | 180,209 | 176,491 |
Other | 640 | 642 |
Fair Value | $ 277,037 | $ 280,283 |
Investment Securities (Narrative) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
security
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Investment Securities | |||
Number of individual available-for-sale securities with unrealized losses | security | 241 | ||
Unrealized Losses | $ 17,375 | $ 4,032 | |
Aggregate percentage of depreciation | 6.43% | ||
Available for sale securities pledged to secure Federal Home Loan Bank of New York ("FHLBNY") borrowings | $ 5,333 | 8,316 | |
Available for sale securities pledged to secure Federal Reserve Bank of New York ("FRBNY") borrowings | 991 | $ 1,054 | |
Proceeds from the sale of available for sale securities and calls | $ 0 | $ 2,000 | |
Gains on sales of investment securities | 0 | ||
Losses on sales of investment securities | $ 0 |
Loans and Allowance for Loan Losses (Schedule of summary loan portfolio) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | $ 857,589 | $ 853,458 | ||
Net deferred loan costs | 10,301 | 9,068 | ||
Allowance for loan losses | (7,700) | (7,559) | $ (11,261) | $ (11,633) |
Total net loans | 860,190 | 854,967 | ||
Indirect automobile | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 404,582 | 382,088 | ||
Allowance for loan losses | (3,535) | (3,416) | (5,512) | (4,974) |
Commercial real estate | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 305,940 | 311,589 | ||
Allowance for loan losses | (3,314) | (3,317) | (4,162) | (5,354) |
Commercial real estate | Undisbursed construction loans | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 8,011 | 10,095 | ||
Commercial real estate | Non-residential | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 248,980 | 245,568 | ||
Commercial real estate | Multifamily | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 48,949 | 55,926 | ||
Residential | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 35,914 | 35,646 | ||
Allowance for loan losses | (55) | (54) | (131) | (117) |
Commercial and industrial | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 90,575 | 104,323 | ||
Allowance for loan losses | (743) | (725) | (1,319) | (1,050) |
Commercial and industrial | Small Business Administration Paycheck Protection Program | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 13,756 | 29,464 | ||
Consumer | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 20,578 | 19,812 | ||
Allowance for loan losses | (53) | (47) | $ (137) | $ (138) |
Consumer | Indirect automobile | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 404,582 | 382,088 | ||
Consumer | Home equity | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | 11,762 | 11,857 | ||
Consumer | Other consumer | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total gross loans | $ 8,816 | $ 7,955 |
Loans and Allowance for Loan Losses (Schedule of loans by risk rating and portfolio segment) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | $ 857,589 | $ 853,458 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 835,535 | 830,710 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 14,937 | 15,718 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 7,117 | 7,030 |
Indirect automobile | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 404,582 | 382,088 |
Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 305,940 | 311,589 |
Commercial real estate | Undisbursed construction loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 8,011 | 10,095 |
Commercial real estate | Undisbursed construction loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 8,011 | 10,095 |
Commercial real estate | Non-residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 248,980 | 245,568 |
Commercial real estate | Non-residential | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 235,827 | 232,253 |
Commercial real estate | Non-residential | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 9,683 | 10,341 |
Commercial real estate | Non-residential | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 3,470 | 2,974 |
Commercial real estate | Multifamily | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 48,949 | 55,926 |
Commercial real estate | Multifamily | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 48,949 | 55,926 |
Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 35,914 | 35,646 |
Residential | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 33,857 | 33,416 |
Residential | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 2,057 | 2,230 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 90,575 | 104,323 |
Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 84,523 | 98,171 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 5,254 | 5,377 |
Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 798 | 775 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 20,578 | 19,812 |
Consumer | Indirect automobile | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 404,582 | 382,088 |
Consumer | Indirect automobile | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 403,987 | 381,354 |
Consumer | Indirect automobile | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 595 | 734 |
Consumer | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 11,762 | 11,857 |
Consumer | Home equity | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 11,640 | 11,587 |
Consumer | Home equity | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 122 | 270 |
Consumer | Other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 8,816 | 7,955 |
Consumer | Other consumer | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | 8,741 | 7,908 |
Consumer | Other consumer | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans | $ 75 | $ 47 |
Loans and Allowance for Loan Losses (Schedule of classes of the loan portfolio by the aging categories of performing loans and nonaccrual loans) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | $ 857,589 | $ 853,458 |
Nonaccrual | 6,736 | 6,689 |
Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 845,184 | 839,966 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 5,809 | 6,697 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 1,308 | 1,643 |
Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 5,288 | 5,152 |
Indirect automobile | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 404,582 | 382,088 |
Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 305,940 | 311,589 |
Commercial real estate | Undisbursed construction loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 8,011 | 10,095 |
Commercial real estate | Undisbursed construction loans | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 8,011 | 10,095 |
Commercial real estate | Non-residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 248,980 | 245,568 |
Nonaccrual | 3,222 | 2,721 |
Commercial real estate | Non-residential | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 245,597 | 242,205 |
Commercial real estate | Non-residential | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 161 | 115 |
Commercial real estate | Non-residential | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 527 | |
Commercial real estate | Non-residential | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 3,222 | 2,721 |
Commercial real estate | Multifamily | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 48,949 | 55,926 |
Commercial real estate | Multifamily | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 48,949 | 55,926 |
Residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 35,914 | 35,646 |
Nonaccrual | 2,057 | 2,230 |
Residential | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 34,408 | 34,363 |
Residential | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 257 | 57 |
Residential | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 411 | 242 |
Residential | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 838 | 984 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 90,575 | 104,323 |
Nonaccrual | 665 | 687 |
Commercial and industrial | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 89,917 | 103,517 |
Commercial and industrial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 7 | 246 |
Commercial and industrial | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 100 | |
Commercial and industrial | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 551 | 560 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 20,578 | 19,812 |
Consumer | Indirect automobile | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 404,582 | 382,088 |
Nonaccrual | 595 | 734 |
Consumer | Indirect automobile | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 398,155 | 374,729 |
Consumer | Indirect automobile | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 5,121 | 5,977 |
Consumer | Indirect automobile | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 729 | 715 |
Consumer | Indirect automobile | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 577 | 667 |
Consumer | Home equity | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 11,762 | 11,857 |
Nonaccrual | 122 | 270 |
Consumer | Home equity | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 11,563 | 11,429 |
Consumer | Home equity | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 132 | 149 |
Consumer | Home equity | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 42 | 106 |
Consumer | Home equity | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 25 | 173 |
Consumer | Other consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total gross loans | 8,816 | 7,955 |
Nonaccrual | 75 | 47 |
Consumer | Other consumer | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 8,584 | 7,702 |
Consumer | Other consumer | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 131 | 153 |
Consumer | Other consumer | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 26 | 53 |
Consumer | Other consumer | Greater Than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 75 | $ 47 |
Loans and Allowance for Loan Losses (Schedule of information to impaired loans by loan portfolio class) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
With no related allowance recorded: | ||
Recorded Investment | $ 6,430 | $ 6,300 |
Unpaid Principal Balance | 8,414 | 8,236 |
Average Recorded Investment | 6,205 | 6,030 |
With an allowance recorded: | ||
Recorded Investment | 306 | 389 |
Unpaid Principal Balance | 316 | 395 |
Related Allowance | 44 | 68 |
Average Recorded Investment | 371 | 434 |
Total: | ||
Recorded Investment | 6,736 | 6,689 |
Unpaid Principal Balance | 8,730 | 8,631 |
Related Allowance | 44 | 68 |
Average Recorded Investment | 6,576 | 6,464 |
Commercial real estate | Non-residential | ||
With no related allowance recorded: | ||
Recorded Investment | 3,222 | 2,721 |
Unpaid Principal Balance | 4,328 | 3,797 |
Average Recorded Investment | 2,614 | 2,290 |
Total: | ||
Recorded Investment | 3,222 | 2,721 |
Unpaid Principal Balance | 4,328 | 3,797 |
Average Recorded Investment | 2,614 | 2,290 |
Residential | ||
With no related allowance recorded: | ||
Recorded Investment | 2,057 | 2,230 |
Unpaid Principal Balance | 2,628 | 2,786 |
Average Recorded Investment | 2,327 | 2,459 |
Total: | ||
Recorded Investment | 2,057 | 2,230 |
Unpaid Principal Balance | 2,628 | 2,786 |
Average Recorded Investment | 2,327 | 2,459 |
Commercial and industrial | ||
With no related allowance recorded: | ||
Recorded Investment | 665 | 687 |
Unpaid Principal Balance | 905 | 921 |
Average Recorded Investment | 700 | 674 |
With an allowance recorded: | ||
Average Recorded Investment | 71 | 148 |
Total: | ||
Recorded Investment | 665 | 687 |
Unpaid Principal Balance | 905 | 921 |
Average Recorded Investment | 771 | 822 |
Consumer | Indirect automobile | ||
With no related allowance recorded: | ||
Recorded Investment | 326 | 345 |
Unpaid Principal Balance | 389 | 408 |
Average Recorded Investment | 260 | 219 |
With an allowance recorded: | ||
Recorded Investment | 269 | 389 |
Unpaid Principal Balance | 279 | 395 |
Related Allowance | 43 | 68 |
Average Recorded Investment | 291 | 286 |
Total: | ||
Recorded Investment | 595 | 734 |
Unpaid Principal Balance | 668 | 803 |
Related Allowance | 43 | 68 |
Average Recorded Investment | 551 | 505 |
Consumer | Home equity | ||
With no related allowance recorded: | ||
Recorded Investment | 122 | 270 |
Unpaid Principal Balance | 123 | 276 |
Average Recorded Investment | 260 | 338 |
Total: | ||
Recorded Investment | 122 | 270 |
Unpaid Principal Balance | 123 | 276 |
Average Recorded Investment | 260 | 338 |
Consumer | Other consumer | ||
With no related allowance recorded: | ||
Recorded Investment | 38 | 47 |
Unpaid Principal Balance | 41 | 48 |
Average Recorded Investment | 44 | 50 |
With an allowance recorded: | ||
Recorded Investment | 37 | |
Unpaid Principal Balance | 37 | |
Related Allowance | 1 | |
Average Recorded Investment | 9 | |
Total: | ||
Recorded Investment | 75 | 47 |
Unpaid Principal Balance | 78 | 48 |
Related Allowance | 1 | |
Average Recorded Investment | $ 53 | $ 50 |
Loans and Allowance for Loan Losses (Schedule of loan balances by segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Allowance for loan losses: | |||
Beginning balance | $ 7,559 | $ 11,633 | |
(Credit to) provision for loan losses | 221 | (69) | |
Loans charged-off | (714) | (629) | |
Recoveries | 634 | 326 | |
Ending balance | 7,700 | 11,261 | |
Allowance for loan losses: | |||
Ending balance: Individually evaluated for impairment | 44 | $ 68 | |
Ending balance: Collectively evaluated for impairment | 7,656 | 7,491 | |
Loan receivables: | |||
Ending balance | 857,589 | 853,458 | |
Ending balance: Individually evaluated for impairment | 6,736 | 6,689 | |
Ending balance: Collectively evaluated for impairment | 850,853 | 846,769 | |
Indirect automobile | |||
Allowance for loan losses: | |||
Beginning balance | 3,416 | 4,974 | |
(Credit to) provision for loan losses | 295 | 857 | |
Loans charged-off | (647) | (626) | |
Recoveries | 471 | 307 | |
Ending balance | 3,535 | 5,512 | |
Allowance for loan losses: | |||
Ending balance: Individually evaluated for impairment | 43 | 68 | |
Ending balance: Collectively evaluated for impairment | 3,492 | 3,348 | |
Loan receivables: | |||
Ending balance | 404,582 | 382,088 | |
Ending balance: Individually evaluated for impairment | 595 | 734 | |
Ending balance: Collectively evaluated for impairment | 403,987 | 381,354 | |
Commercial real estate | |||
Allowance for loan losses: | |||
Beginning balance | 3,317 | 5,354 | |
(Credit to) provision for loan losses | (3) | (1,192) | |
Ending balance | 3,314 | 4,162 | |
Allowance for loan losses: | |||
Ending balance: Collectively evaluated for impairment | 3,314 | 3,317 | |
Loan receivables: | |||
Ending balance | 305,940 | 311,589 | |
Ending balance: Individually evaluated for impairment | 3,222 | 2,721 | |
Ending balance: Collectively evaluated for impairment | 302,718 | 308,868 | |
Residential | |||
Allowance for loan losses: | |||
Beginning balance | 54 | 117 | |
(Credit to) provision for loan losses | (109) | 11 | |
Loans charged-off | (44) | ||
Recoveries | 154 | 3 | |
Ending balance | 55 | 131 | |
Allowance for loan losses: | |||
Ending balance: Collectively evaluated for impairment | 55 | 54 | |
Loan receivables: | |||
Ending balance | 35,914 | 35,646 | |
Ending balance: Individually evaluated for impairment | 2,057 | 2,230 | |
Ending balance: Collectively evaluated for impairment | 33,857 | 33,416 | |
Commercial and industrial | |||
Allowance for loan losses: | |||
Beginning balance | 725 | 1,050 | |
(Credit to) provision for loan losses | 18 | 269 | |
Ending balance | 743 | 1,319 | |
Allowance for loan losses: | |||
Ending balance: Collectively evaluated for impairment | 743 | 725 | |
Loan receivables: | |||
Ending balance | 90,575 | 104,323 | |
Ending balance: Individually evaluated for impairment | 665 | 687 | |
Ending balance: Collectively evaluated for impairment | 89,910 | 103,636 | |
Consumer | |||
Allowance for loan losses: | |||
Beginning balance | 47 | 138 | |
(Credit to) provision for loan losses | 20 | (14) | |
Loans charged-off | (23) | (3) | |
Recoveries | 9 | 16 | |
Ending balance | 53 | $ 137 | |
Allowance for loan losses: | |||
Ending balance: Individually evaluated for impairment | 1 | ||
Ending balance: Collectively evaluated for impairment | 52 | 47 | |
Loan receivables: | |||
Ending balance | 20,578 | 19,812 | |
Ending balance: Individually evaluated for impairment | 197 | 317 | |
Ending balance: Collectively evaluated for impairment | 20,381 | 19,495 | |
Consumer | Indirect automobile | |||
Loan receivables: | |||
Ending balance | $ 404,582 | $ 382,088 |
Loans and Allowance for Loan Losses (Narrative) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022
USD ($)
loan
|
Dec. 31, 2021
USD ($)
loan
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of loans default | loan | 3 | 3 |
Amount of loan | $ 1,409 | $ 1,440 |
Number of new loans default | loan | 0 | 0 |
Loans and Leases Receivable, Impaired, Commitment to Lend | $ 0 | $ 0 |
Aggregate balances of loans serviced to participants | 3,879 | 3,962 |
Amount of consumer mortgages and loans secured by residential real estate properties in process of foreclosure | 790 | 935 |
Aggregate balances of loans serviced to third party | 315,695 | 314,953 |
Balance of capitalized servicing rights | 2,641 | 2,633 |
Mortgage Servicing Rights (MSR) Impairment (Recovery) | 0 | 0 |
Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unpaid principal balances of loans held for sale | $ 1,197 | $ 3,950 |
Goodwill and Intangible Assets (Schedule of changes in the carrying value of goodwill) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets | ||
Beginning balance | $ 2,235 | $ 1,410 |
Acquisition activity | 825 | |
Ending balance | 2,235 | 2,235 |
Accumulated impairment | 1,116 | 1,116 |
Impairment loss on goodwill | $ 0 | $ 0 |
Goodwill and Intangible Assets (Schedule of changes in the carrying value of customer list and core deposit intangibles) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ 433 | $ 199 | $ 199 |
Acquisition activity | 330 | ||
Amortization | (27) | $ (13) | (96) |
Ending balance | 406 | 433 | |
Accumulated amortization and impairment | $ 871 | $ 844 |
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets | |||
Amortization of Intangible Assets | $ 27 | $ 13 | $ 96 |
Useful life of purchased customer accounts | 13 years |
Goodwill and Intangible Assets (Schedule of future amortization expense for amortizable intangible assets) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Goodwill and Intangible Assets | |||
2022 | $ 72 | ||
2023 | 88 | ||
2024 | 79 | ||
2025 | 60 | ||
2026 | 29 | ||
Thereafter | 78 | ||
Total | $ 406 | $ 433 | $ 199 |
Premises and Equipment (Schedule of premises and equipment) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total | $ 45,730 | $ 45,151 |
Less accumulated depreciation | (26,348) | (25,968) |
Net | 19,382 | 19,183 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 3,732 | 3,732 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 27,213 | 27,151 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 14,406 | 14,107 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 379 | $ 161 |
Deposits (Schedule of deposits) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deposits | ||
Non-interest bearing demand deposits | $ 304,596 | $ 314,814 |
Interest bearing accounts: | ||
NOW | 162,449 | 158,615 |
Savings | 192,051 | 182,564 |
Money market | 311,023 | 289,107 |
Time certificates of deposit | 142,501 | 156,899 |
Total interest bearing accounts | 808,024 | 787,185 |
Total deposits | $ 1,112,620 | $ 1,101,999 |
Deposits (Schedule of contractual maturities of time certificates of deposit) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deposits | ||
Within 1 year | $ 107,282 | |
1 - 2 years | 16,947 | |
2 - 3 years | 9,662 | |
3 - 4 years | 6,356 | |
4 - 5 years | 2,254 | |
Total | $ 142,501 | $ 156,899 |
Deposits (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Deposits [Line Items] | ||
Reciprocal deposits | $ 19,377 | $ 21,083 |
Time certificates of deposit in denominations of $250 or greater | $ 18,411 | $ 23,704 |
Maximum | ||
Deposits [Line Items] | ||
Maturity terms | 3 years | |
Minimum | ||
Deposits [Line Items] | ||
Maturity terms | 1 year |
Long-Term Debt and FHLB Stock (Schedule of outstanding principal amounts and related terms of FHLBNY borrowings) (Details) - Federal Home Loan Bank of New York ("FHLBNY") $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |
Principal amount | $ 15,928 |
Rate | 2.09% |
Due in one year | $ 15,928 |
3 year amortizing on May 16, 2022 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |
Principal amount | $ 862 |
Rate | 2.49% |
Due in one year | $ 862 |
3 year bullet on May 16, 2022 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |
Principal amount | $ 10,000 |
Rate | 2.44% |
Due in one year | $ 10,000 |
3 year amortizing February 28, 2023 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | |
Principal amount | $ 5,066 |
Rate | 1.32% |
Due in one year | $ 5,066 |
Long-Term Debt and FHLB Stock (Narrative) (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022
USD ($)
subsidiary
$ / shares
|
Dec. 31, 2021
USD ($)
$ / shares
|
Dec. 31, 2005
USD ($)
$ / shares
shares
|
|
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Number Of Wholly Owned Subsidiaries | subsidiary | 1 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Zions Bank | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 10,000 | $ 10,000 | |
Line of credit facility, maximum amount outstanding during period | 0 | 0 | |
Pacific Community Bankers Bank | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Line of credit, maximum borrowing capacity | 50,000 | 50,000 | |
Line of credit facility, maximum amount outstanding during period | $ 0 | $ 0 | |
Subordinated Debt. | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Interest rate, variable rate basis | three month LIBOR | ||
Interest rate | 2.48% | 2.16% | |
Subordinated debt securities | $ 5,155 | ||
Stated maturity date | May 23, 2035 | ||
Subordinated Debt. | LIBOR | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Interest LIBOR rate | 2.00% | ||
Subordinated Debt. | RSB Capital Trust I | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Trust term | 30 years | ||
Subordinated Debt. | Private placement | RSB Capital Trust I | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Number of preferred securities issued | $ 5,000 | ||
Common stock issued | shares | 155 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | ||
Federal Home Loan Bank of New York ("FHLBNY") | |||
Long-Term Debt And Federal Home Loan Bank [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 640,629 | $ 640,500 | |
Amount of pledged assets | 175,355 | 170,385 | |
Impairment Related To Federal Home Loan Stock | $ 0 | $ 0 |
Employee Benefits (Schedule of plan's funded status and amounts recognized in consolidated statement of financial condition) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Employee Benefits | ||
Projected and accumulated benefit obligation | $ (20,810) | $ (23,055) |
Plan assets at fair value | 20,621 | 22,839 |
Funded status included in accrued expenses and other liabilities | $ (189) | $ (216) |
Employee Benefits (Schedule of net periodic pension (benefit) cost and amounts recognized in other comprehensive income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Employee Benefits | ||
Interest cost | $ 158 | $ 147 |
Expected return on plan assets | (252) | (236) |
Amortization of unrecognized loss | 67 | 90 |
Net periodic (benefit) cost | $ (27) | $ 1 |
Employee Benefits (Schedule of fair value of pension plan assets, by fair value hierarchy) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | $ 20,621 | $ 22,839 |
Defined Benefit Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | 20,621 | 22,839 |
Defined Benefit Pension Plan | Investment in separate accounts fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | 13,873 | 15,689 |
Defined Benefit Pension Plan | Investment in separate accounts equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | 6,748 | 7,150 |
Quoted Prices Active Markets for Identical Assets (Level 1) | Defined Benefit Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | 20,621 | 22,839 |
Quoted Prices Active Markets for Identical Assets (Level 1) | Defined Benefit Pension Plan | Investment in separate accounts fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | 13,873 | 15,689 |
Quoted Prices Active Markets for Identical Assets (Level 1) | Defined Benefit Pension Plan | Investment in separate accounts equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets at fair value | $ 6,748 | $ 7,150 |
Employee Benefits (Employee Stock Ownership Plan (ESOP) Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
Jan. 01, 2021 |
Jan. 16, 2019 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Number of share purchase under ESOP | 435,173 | 435,173 | |||
Committed to be allocated | 5,454 | 21,821 | |||
Compensation expense | $ 58 | $ 52 | |||
Employee Stock Ownership Plan (ESOP) | |||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||
Number of share purchase under ESOP | 436,425 | ||||
Common stock price per share | $ 10.00 | ||||
Terms of repurchase share under ESOP | 20 years | ||||
Interest rate | 3.25% | ||||
Balance of ESOP loan | $ 3,917 | ||||
Committed to be allocated | 21,821 | ||||
Fair value of unallocated shares | $ 3,714 | ||||
Compensation expense | $ 58 | $ 52 |
Employee Benefits (Schedule of employee stock ownership plan) (Details) - shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Employee Benefits | ||
Allocated | 65,463 | 43,642 |
Committed to be allocated | 5,454 | 21,821 |
Unallocated | 365,508 | 370,962 |
Paid out to participants | (1,252) | (1,252) |
Total shares | 435,173 | 435,173 |
Employee Benefits (Share-Based Compensation Plan Narrative) (Details) - 2020 EIP - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
May 26, 2020 |
Mar. 31, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 763,743 | |
Vesting period | 3 years | |
Maximum term | 10 years | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 545,531 | |
Percentage of shares of common stock issued | 4.90% | |
Available for future grants | 102,146 | |
Aggregate intrinsic value of options exercisable | $ 1,552 | |
Period for Recognition | 1 year 5 months 1 day | |
Unrecognized compensation cost related to the nonvested restricted stock awards granted | $ 348 | |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 218,212 | |
Percentage of shares of common stock issued | 1.96% | |
Available for future grants | 49,110 | |
Period for Recognition | 1 year 4 months 24 days | |
Unrecognized compensation cost related to the nonvested restricted stock awards granted | $ 518 | |
Allocated share-based compensation expense | $ 152 |
Employee Benefits (Narrative) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
fund
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Schedule Of Employee Benefits [Line Items] | |||
Number of investment funds | fund | 10 | ||
Number of equity funds | fund | 7 | ||
Number of fixed income funds | fund | 3 | ||
Percentage of internal revenue contribution | 25.00% | ||
Percentage of internal revenue service limitations | 6.00% | ||
Employer contribution in defined contribution plan | $ 294 | $ 255 | |
Accrued expenses and other liabilities | 22,731 | $ 20,872 | |
Non-interest expense | 9,105 | 7,953 | |
Postretirement Life Insurance [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Liability related to these postretirement benefits | 1,435 | 1,423 | |
Postemployment benefit expense | 12 | 11 | |
Postemployment Retirement Benefits [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Non-interest expense | 19 | 18 | |
Liability related to these postretirement benefits | 1,994 | 1,986 | |
Officer [Member] | Deferred Compensation, Share-based Payments [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Accrued expenses and other liabilities | 1,576 | 1,545 | |
Non-interest expense | 197 | 69 | |
Deferred Compensation Arrangement with Individual, by Type of Compensation, Pension and Other Postretirement Benefits [Member] | Director [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Accrued expenses and other liabilities | 2,793 | $ 2,877 | |
Non-interest expense | $ 56 | $ 46 | |
Minimum | Postemployment Retirement Benefits [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Post retirement benefit period | 15 years | ||
Minimum | Officer [Member] | Deferred Compensation, Share-based Payments [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Terms of services | 1 year | ||
Maximum | Postemployment Retirement Benefits [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Post retirement benefit period | 20 years | ||
Maximum | Officer [Member] | Deferred Compensation, Share-based Payments [Member] | |||
Schedule Of Employee Benefits [Line Items] | |||
Terms of services | 5 years |
Employee Benefits (Summary of options) (Details) - 2020 EIP - Stock options - $ / shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Number of Shares | ||
Options outstanding at beginning of year | 439,596 | |
Options Expired | (1,666) | |
Options outstanding at March 31, 2022 | 437,930 | 439,596 |
Options exercisable at March 31, 2022 | 142,331 | |
Weighted - Average Exercise Price | ||
Weighted - Average Exercise Price, beginning of year | $ 6.62 | |
Weighted - Average Exercise Price, expired | 6.57 | |
Weighted - Average Exercise Price, end of period | 6.62 | $ 6.62 |
Weighted - Average Exercise Price, exercisable | $ 6.62 | |
Weighted-Average Contractual Term | ||
Weighted-Average Contractual Term, outstanding | 8 years 5 months 1 day | 8 years 7 months 17 days |
Weighted-Average Contractual Term, exercisable | 8 years 5 months 1 day |
Employee Benefits (Summary of Company's restricted stock activity) (Details) - Restricted stock |
Mar. 31, 2022
$ / shares
shares
|
---|---|
Number of Shares | |
Balance at beginning of period (in shares) | shares | 112,520 |
Balance at end of period (in shares) | shares | 112,520 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 6.57 |
Balance at end of period (in dollars per share) | $ / shares | $ 6.57 |
Leases - Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
item
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Leases | |||
Number of leased branch offices | item | 8 | ||
Number of leased administrative offices | item | 2 | ||
Weighted average remaining life of the lease terms | 11 years 9 months 18 days | 12 years | |
Weighted average discount rate | 2.51% | 2.51% | |
Operating lease costs | $ 195 | $ 155 | |
Deferred rent liability | 136 | $ 145 | |
Operating lease right-of-use asset | $ 7,677 | $ 7,839 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets. | Other Assets. | |
Operating lease liability | $ 7,677 | $ 7,839 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
Leases - Future minimum payments for operating leases (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases | ||
2022 | $ 640 | |
2023 | 854 | |
2024 | 857 | |
2025 | 833 | |
2026 | 728 | |
Thereafter | 5,070 | |
Total future minimum lease payments | 8,982 | |
Amounts representing interest | (1,305) | |
Present Value of Net Future Minimum Lease Payments | $ 7,677 | $ 7,839 |
Commitments and Contingencies and Derivatives (Schedule of contract amounts represent off-balance sheet credit risk) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | $ 123,102 | $ 115,078 |
Future loan commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | 10,713 | 6,830 |
Undisbursed construction loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | 13,647 | 15,191 |
Undisbursed home equity lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | 10,070 | 11,048 |
Undisbursed commercial and other line of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | 85,883 | 78,941 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset | $ 2,789 | $ 3,068 |
Commitments and Contingencies and Derivatives (Schedule of information regarding derivatives) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022
USD ($)
contract
|
Dec. 31, 2021
USD ($)
contract
|
|
Derivative [Line Items] | ||
Accrued interest receivable | $ 3,256 | $ 3,366 |
Interest rate swap | ||
Derivative [Line Items] | ||
Notional amount | 26,792 | 26,842 |
Fair value | $ 1,179 | $ 644 |
Weighted average pay rates | 3.69% | 3.69% |
Weighted average receive rates | 2.38% | 2.26% |
Weighted average maturity (in years) | 9 years 6 months 14 days | 9 years 9 months 10 days |
Number of Contracts | contract | 7 | 7 |
Interest rate swap | Other assets | ||
Derivative [Line Items] | ||
Accrued interest receivable | $ 29 | $ 12 |
Interest rate swap | Other liabilities | ||
Derivative [Line Items] | ||
Accrued interest payable | $ 29 | $ 12 |
Regulatory Matters (Schedule of actual capital amounts and ratios) (Details) - Rhinebeck Bank $ in Thousands |
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
---|---|---|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total capital (to risk-weighted assets) Actual Amount | $ 132,876 | $ 130,217 |
Total capital (to risk-weighted assets) Actual Ratio | 13.47 | 13.54 |
Total capital (to risk-weighted assets) For Capital Adequacy Purposes Amount | $ 78,904 | $ 76,917 |
Total capital (to risk-weighted assets) For Capital Adequacy Purposes Ratio | 8.00 | 8.00 |
Total capital (to risk-weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Amount | $ 98,630 | $ 96,146 |
Total capital (to risk-weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 10.00 | 10.00 |
Tier 1 capital (to risk-weighted assets) Actual Amount | $ 125,176 | $ 122,658 |
Tier 1 capital (to risk-weighted assets) Actual Ratio | 12.69 | 12.76 |
Tier 1 capital (to risk-weighted assets) For Capital Adequacy Purposes Amount | $ 59,178 | $ 57,687 |
Tier 1 capital (to risk-weighted assets) For Capital Adequacy Purposes Ratio | 6.00 | 6.00 |
Tier 1 capital (to risk-weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Amount | $ 78,904 | $ 76,917 |
Tier 1 capital (to risk-weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 8.00 | 8.00 |
Common equity tier one capital (to risk weighted assets) Actual Amount | $ 125,176 | $ 122,658 |
Common equity tier one capital (to risk weighted assets) Actual Ratio | 12.69 | 12.76 |
Common equity tier one capital (to risk weighted assets) For Capital Adequacy Purposes Amount | $ 44,384 | $ 43,266 |
Common equity tier one capital (to risk weighted assets) For Capital Adequacy Purposes Ratio | 4.50% | 4.50% |
Common equity tier one capital (to risk weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Amount | $ 64,110 | $ 62,495 |
Common equity tier one capital (to risk weighted assets) To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 6.50% | 6.50% |
Tier 1 capital (to average assets) Actual Amount | $ 125,176 | $ 122,658 |
Tier 1 capital (to average assets) Actual Ratio | 9.75 | 9.65 |
Tier 1 capital (to average assets) For Capital Adequacy Purposes Amount | $ 51,355 | $ 50,865 |
Tier 1 capital (to average assets) For Capital Adequacy Purposes Ratio | 4.00 | 4.00 |
Tier 1 capital (to average assets) To be Well Capitalized under Prompt Corrective Action Provisions Amount | $ 64,194 | $ 63,582 |
Tier 1 capital (to average assets) To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 5.00 | 5.00 |
Fair Value (Schedule of assets carried at fair value on a recurring basis) (Details) - Recurring basis - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 278,216 | $ 280,927 |
Total liabilities | 1,179 | 644 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 53,468 | 59,825 |
U.S. government agency mortgage-backed securities-residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 180,209 | 176,491 |
U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 23,673 | 24,722 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,652 | 6,851 |
Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 12,395 | 11,752 |
Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 640 | 642 |
Unrealized gains (losses) on available for sale securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 277,037 | 280,283 |
Loan level interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,179 | 644 |
Total liabilities | 1,179 | 644 |
Quoted Prices Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 53,468 | 59,825 |
Quoted Prices Active Markets for Identical Assets (Level 1) | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 53,468 | 59,825 |
Quoted Prices Active Markets for Identical Assets (Level 1) | Unrealized gains (losses) on available for sale securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 53,468 | 59,825 |
Significant Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 224,603 | 220,957 |
Total liabilities | 1,179 | 644 |
Significant Observable Inputs (Level 2) | U.S. government agency mortgage-backed securities-residential | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 180,209 | 176,491 |
Significant Observable Inputs (Level 2) | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 23,673 | 24,722 |
Significant Observable Inputs (Level 2) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 6,507 | 6,706 |
Significant Observable Inputs (Level 2) | Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 12,395 | 11,752 |
Significant Observable Inputs (Level 2) | Other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 640 | 642 |
Significant Observable Inputs (Level 2) | Unrealized gains (losses) on available for sale securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 223,424 | 220,313 |
Significant Observable Inputs (Level 2) | Loan level interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,179 | 644 |
Total liabilities | 1,179 | 644 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 145 | 145 |
Significant Unobservable Inputs (Level 3) | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 145 | 145 |
Significant Unobservable Inputs (Level 3) | Unrealized gains (losses) on available for sale securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 145 | $ 145 |
Fair Value (Schedule of assets carried at fair value and measured at fair value on a nonrecurring basis) (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, recorded investments | $ 306 | $ 389 |
Related Allowance | 44 | 68 |
Nonrecurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 262 | 321 |
Nonrecurring basis | Impaired loans, with specific reserves | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 262 | 321 |
Impaired loans, recorded investments | 306 | 389 |
Related Allowance | 44 | 68 |
Nonrecurring basis | Quoted Prices Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 0 | 0 |
Nonrecurring basis | Quoted Prices Active Markets for Identical Assets (Level 1) | Impaired loans, with specific reserves | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 0 | 0 |
Nonrecurring basis | Significant Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 0 | 0 |
Nonrecurring basis | Significant Observable Inputs (Level 2) | Impaired loans, with specific reserves | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 0 | 0 |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | 262 | 321 |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | Impaired loans, with specific reserves | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held at fair value | $ 262 | $ 321 |
Fair Value (Schedule of additional quantitative information about assets measured at fair value on a nonrecurring basis) (Details) - Nonrecurring basis $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets held at fair value | $ 262 | $ 321 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets held at fair value | $ 262 | $ 321 |
Impaired Loans, Valuation Technique [Extensible List] | Appraisal of collateral | Appraisal of collateral |
Significant Unobservable Inputs (Level 3) | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Assets held at fair value | $ 262 | $ 321 |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Liquidation expenses | Minimum | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, unobservable input (in percent) | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Liquidation expenses | Maximum | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, unobservable input (in percent) | 0.06 | 0.06 |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Appraisal adjustments | Minimum | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, unobservable input (in percent) | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Appraisal adjustments | Maximum | Impaired loans | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, unobservable input (in percent) | 0.20 | 0.20 |
Fair Value (Schedule of carrying value and fair values of the financial instruments) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Quoted Prices Active Markets for Identical Assets (Level 1) | Carrying Value | ||
Financial Assets: | ||
Cash and due from banks | $ 67,365 | $ 72,091 |
Available for sale securities | 53,468 | 59,825 |
Quoted Prices Active Markets for Identical Assets (Level 1) | Fair Value | ||
Financial Assets: | ||
Cash and due from banks | 67,365 | 72,091 |
Available for sale securities | 53,468 | 59,825 |
Significant Observable Inputs (Level 2) | Carrying Value | ||
Financial Assets: | ||
Available for sale securities | 223,424 | 220,313 |
Loan level interest rate swaps | 1,179 | 644 |
FHLB stock | 1,227 | 1,322 |
Financial Liabilities: | ||
Deposits | 1,112,620 | 1,101,999 |
Mortgagors escrow accounts | 7,757 | 9,130 |
FHLB advances | 15,928 | 18,041 |
Subordinated debt | 5,155 | 5,155 |
Loan level interest rate swaps | 1,179 | 644 |
Significant Observable Inputs (Level 2) | Fair Value | ||
Financial Assets: | ||
Available for sale securities | 223,424 | 220,313 |
Loan level interest rate swaps | 1,179 | 644 |
FHLB stock | 1,227 | 1,322 |
Financial Liabilities: | ||
Deposits | 1,050,907 | 1,083,541 |
Mortgagors escrow accounts | 7,763 | 9,137 |
FHLB advances | 15,956 | 18,151 |
Subordinated debt | 5,155 | 5,155 |
Loan level interest rate swaps | 1,179 | 644 |
Significant Unobservable Inputs (Level 3) | Carrying Value | ||
Financial Assets: | ||
Available for sale securities | 145 | 145 |
Loans, net | 860,190 | 854,967 |
Mortgage servicing rights | 2,641 | 2,633 |
Significant Unobservable Inputs (Level 3) | Fair Value | ||
Financial Assets: | ||
Available for sale securities | 145 | 145 |
Loans, net | 859,452 | 855,542 |
Mortgage servicing rights | $ 5,568 | $ 4,892 |
Accumulated Other Comprehensive Loss (Schedule of accumulated other comprehensive loss activity) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ 125,969 | $ 116,499 |
Balance | $ 117,293 | $ 118,856 |
Income tax rate | 21.00% | 21.00% |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ (6,635) | $ (3,791) |
Other comprehensive loss before reclassifications | (10,939) | (1,240) |
Amounts reclassified from accumulated other comprehensive loss | 71 | |
Period change | (10,939) | (1,169) |
Balance | (17,574) | (4,960) |
Defined Benefit Pension Plan | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (3,901) | (4,784) |
Other comprehensive loss before reclassifications | (70) | |
Amounts reclassified from accumulated other comprehensive loss | 71 | |
Period change | 1 | |
Balance | (3,901) | (4,783) |
Unrealized (losses) gains on available for sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (2,734) | 993 |
Other comprehensive loss before reclassifications | (10,939) | (1,170) |
Period change | (10,939) | (1,170) |
Balance | $ (13,673) | $ (177) |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income applicable to common stock | $ 2,053 | $ 3,321 |
Average number of common shares outstanding | 11,183,583 | 11,133,290 |
Less: Average unearned ESOP shares | 368,235 | 390,056 |
Average number of common shares outstanding used to calculate basic earnings per common share | 10,815,348 | 10,743,234 |
Weighted-average common shares and common stock equivalents used to calculate diluted earnings per share | 11,009,312 | 10,875,116 |
Earnings per Common share: | ||
Basic (in dollars per share) | $ 0.19 | $ 0.31 |
Diluted (in dollars per share) | $ 0.19 | $ 0.31 |
Non vested Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Additional common stock equivalents used to calculate diluted earnings per share | 60,159 | 61,332 |
Stock options | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Additional common stock equivalents used to calculate diluted earnings per share | 133,805 | 70,550 |
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