10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File No.    001-38985    

First Seacoast Bancorp

(Exact Name of Registrant as Specified in Its Charter)

United States of America	84-2404519
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
633 Central Avenue, Dover, New Hampshire	03820
(Address of Principal Executive Offices)	(Zip Code)

(603) 742-4680

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:  

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	FSEA	The Nasdaq Stock Market, LLC

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.    YES ☒    NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    YES   ☒   NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES  ☐   NO  ☒

6,012,266 shares of the Registrant’s common stock, par value $0.01 per share, were outstanding as of November 1, 2021, of which 3,345,925 shares were owned by First Seacoast Bancorp, MHC.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements	2
	Consolidated Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020	2
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	46
PART II.	OTHER INFORMATION	47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
	Signatures	49

1

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FIRST SEACOAST BANCORP AND SUBSIDIARIES

CONSOLIDATED Balance Sheets

(Dollars in thousands)	(Unaudited) September 30, 2021			December 31, 2020
ASSETS
Cash and due from banks	$	30,695		$	5,996
Interest bearing time deposits with other banks		1,245			2,488
Securities available-for-sale, at fair value		77,546			55,470
Federal Home Loan Bank stock		2,022			1,796
Loans		372,950			368,142
Less allowance for loan losses		(3,528	)		(3,342	)
Net loans		369,422			364,800
Land, building and equipment, net		4,695			5,078
Bank-owned life insurance		4,441			4,356
Accrued interest receivable		1,443			1,412
Other assets		2,155			1,666
Total assets	$	493,664		$	443,062
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing deposits	$	92,320		$	64,571
Interest bearing deposits		296,780			262,810
Total deposits		389,100			327,381
Advances from Federal Home Loan Bank		39,032			34,127
Advances from Federal Reserve Bank		—			18,195
Mortgagors’ tax escrow		2,033			1,420
Deferred compensation liability		1,672			1,667
Other liabilities		2,031			1,411
Total liabilities		433,868			384,201
Stockholders' Equity:
Preferred Stock, $.01 par value, 10,000,000 shares authorized as of    September 30, 2021 and December 31, 2020; none issued and    outstanding as of September 30, 2021 and December 31, 2020		—			—
Common Stock, $.01 par value, 90,000,000 shares authorized as of    September 30, 2021 and December 31, 2020; 6,083,500 shares issued and    6,012,559 shares outstanding as of September 30, 2021 and 6,083,500 shares    issued and 6,058,024 outstanding as of December 31, 2020, respectively		61			61
Additional paid-in capital		25,603			25,606
Equity capital		36,396			34,192
Accumulated other comprehensive income		464			1,381
Treasury stock, at cost: 70,941 and 25,476 shares outstanding as    of September 30, 2021 and December 31, 2020, respectively		(671	)		(233	)
Unearned compensation - ESOP: 205,682 and 214,625 shares    unallocated at September 30, 2021 and December 31, 2020, respectively		(2,057	)		(2,146	)
Total stockholders' equity		59,796			58,861
Total liabilities and stockholders' equity	$	493,664		$	443,062

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

2

FIRST SEACOAST BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2021		2020		2021		2020
Interest and dividend income:
Interest and fees on loans	$	3,503	$	3,624	$	10,728	$	10,839
Interest on debt securities:
Taxable		134		68		276		219
Non-taxable		215		234		659		648
Total interest on debt securities		349		302		935		867
Dividends		8		19		10		97
Total interest and dividend income		3,860		3,945		11,673		11,803
Interest expense:
Interest on deposits		136		330		464		1,264
Interest on borrowings		99		174		283		689
Total interest expense		235		504		747		1,953
Net interest and dividend income		3,625		3,441		10,926		9,850
Provision for loan losses		60		110		145		385
Net interest and dividend income after provision for    loan losses		3,565		3,331		10,781		9,465
Noninterest income:
Customer service fees		236		250		725		707
Gain on sale of loans		25		95		113		313
Securities gains, net		—		8		535		291
Income from bank-owned life insurance		45		44		85		69
Loan servicing income		38		12		122		5
Investment services fees		62		43		180		142
Other income		25		13		50		38
Total noninterest income		431		465		1,810		1,565
Noninterest expense:
Salaries and employee benefits		2,073		2,019		5,824		5,971
Director compensation		70		69		198		194
Occupancy expense		136		146		473		470
Equipment expense		138		143		419		433
Marketing		85		98		286		256
Data processing		345		297		1,016		856
Deposit insurance fees		28		32		87		79
Professional fees and assessments		253		232		734		652
Debit card fees		46		57		137		173
Employee travel and education expenses		38		25		81		79
Other expense		184		204		566		559
Total noninterest expense		3,396		3,322		9,821		9,722
Income before income tax expense		600		474		2,770		1,308
Income tax expense		137		82		566		128
Net income	$	463	$	392	$	2,204	$	1,180
Earnings per share:
Basic	$	0.08	$	0.07	$	0.38	$	0.20
Diluted	$	0.08	$	0.07	$	0.38	$	0.20
Weighted Average Shares:
Basic		5,807,665		5,865,894		5,820,875		5,862,913
Diluted		5,807,665		5,865,894		5,820,875		5,862,913

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

3

FIRST SEACOAST BANCORP AND SUBSIDIARIES

CONSOLIDATED Statements of COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2021			2020			2021			2020
Net income	$	463		$	392		$	2,204		$	1,180
Other comprehensive income (loss), net of income taxes:
Unrealized (losses) gains on securities available-for- sale:
Unrealized holding (losses) gains on securities available-for-sale    arising during the period net of income taxes of $(275),    $(43), $(382) and $214, respectively		(750	)		(113	)		(1,037	)		575
Reclassification adjustment for losses (gains) and net    amortization or accretion on securities available-for-sale    included in net income net of income taxes of $(48), $(29), $12    and $7, respectively		129			78			(29	)		(18	)
Total unrealized (losses) gains on securities available-for-sale		(621	)		(35	)		(1,066	)		557
Derivatives:
Change in interest rate swaps net of income taxes of $(1),    $(0), $46 and $(45), respectively		(2	)		—			125			(119	)
Reclassification adjustment for net interest expense on swaps included    in net income net of income taxes of $(4), $-0-, $(9) and $-0-,    respectively		11			—			24			—
Total change in interest rate swaps		9			—			149			(119	)
Other comprehensive (loss) income		(612	)		(35	)		(917	)		438
Comprehensive (loss) income	$	(149	)	$	357		$	1,287		$	1,618

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

4

FIRST SEACOAST BANCORP AND SUBSIDIARIES

CONSOLIDATED Statements of Changes in STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)	Shares of Common Stock			Common Stock		Additional Paid-in Capital			Equity Capital		Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Unearned Compensation - ESOP			Total Stockholders' Equity
Balance June 30, 2021		6,016,022		$	60	$	25,603		$	35,933	$	1,076		$	(636	)	$	(2,086	)	$	59,950
Net income		—			—		—			463		—			—			—			463
Other comprehensive loss		—			—		—			—		(612	)		—			—			(612	)
Treasury stock activity		(3,463	)		1		—			—		—			(35	)		—			(34	)
ESOP shares earned - 2,981 shares		—			—		—			—		—			—			29			29
Balance September 30, 2021		6,012,559		$	61	$	25,603		$	36,396	$	464		$	(671	)	$	(2,057	)	$	59,796
Balance December 31, 2020		6,058,024		$	61	$	25,606		$	34,192	$	1,381		$	(233	)	$	(2,146	)	$	58,861
Net income		—			—		—			2,204		—			—			—			2,204
Other comprehensive loss		—			—		—			—		(917	)		—			—			(917	)
Treasury stock activity		(45,465	)		—		—			—		—			(438	)		—			(438	)
ESOP shares earned - 8,943 shares		—			—		(3	)		—		—			—			89			86
Balance September 30, 2021		6,012,559		$	61	$	25,603		$	36,396	$	464		$	(671	)	$	(2,057	)	$	59,796
Balance June 30, 2020		6,083,500		$	61	$	25,622		$	33,901	$	994		$	—		$	(2,206	)	$	58,372
Net income		—			—		—			392		—			—			—			392
Other comprehensive loss		—			—		—			—		(35	)		—			—			(35	)
ESOP shares earned - 2,981 shares		—			—		(12	)		—		—			—			30			18
Balance September 30, 2020		6,083,500		$	61	$	25,610		$	34,293	$	959		$	—		$	(2,176	)	$	58,747
Balance December 31, 2019		6,083,500		$	61	$	25,636		$	33,113	$	521		$	—		$	(2,265	)	$	57,066
Net income		—			—		—			1,180		—			—			—			1,180
Other comprehensive income		—			—		—			—		438			—			—			438
ESOP shares earned - 8,943 shares		—			—		(26	)		—		—			—			89			63
Balance September 30, 2020		6,083,500		$	61	$	25,610		$	34,293	$	959		$	—		$	(2,176	)	$	58,747

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

5

FIRST SEACOAST BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
(Dollars in thousands)	2021			2020
Cash flows from operating activities:
Net income	$	2,204		$	1,180
Adjustments to reconcile net income to net cash provided by operating activities:
ESOP expense		86			63
Depreciation		419			433
Net amortization of bond premium		494			266
Provision for loan losses		145			385
Gain on sale of loans		(113	)		(313	)
Securities gains, net		(535	)		(291	)
Proceeds from loans sold		4,365			11,596
Origination of loans sold		(4,252	)		(11,283	)
Increase in bank-owned life insurance		(85	)		(69	)
(Increase) decrease in deferred loan costs		(687	)		884
Deferred tax expense (benefit)		166			(379	)
Increase in accrued interest receivable		(31	)		(268	)
(Increase) decrease in other assets		(313	)		370
Decrease in deferred compensation liability		5			6
Increase in other liabilities		824			435
Net cash provided by operating activities		2,692			3,015
Cash flows from investing activities:
Proceeds from sales, maturities and principal payments from securities available-for-sale		19,127			22,208
Purchase of securities available-for-sale		(42,625	)		(33,547	)
Purchase of property and equipment		(36	)		(269	)
Loan purchases		(12,279	)		(9,901	)
Loan originations and principal collections, net		8,158			(24,428	)
Recoveries of loans previously charged off		41			20
Net (purchase) redemption of Federal Home Loan Bank stock		(226	)		415
Proceeds from sales of interest bearing time deposits with other banks		1,243			247
Net cash used by investing activities		(26,597	)		(45,255	)
Cash flows from financing activities:
Net increase in NOW, demand deposits, money market and savings accounts		53,076			67,396
Net increase (decrease) in certificates of deposit		8,643			(9,559	)
Increase in mortgagors’ escrow accounts		613			1,321
Treasury stock purchases		(438	)		—
Proceeds from short-term FHLB advances		25,000			5,000
Proceeds from long-term FHLB advances		5,000			20,585
Payments on short-term FHLB advances		(25,095	)		(34,907	)
Payments on long-term FHLB advances		—			(10,000	)
Proceeds from short-term FRB advances		—			25,713
Payments on short-term FRB advances		(18,195	)		—
Net cash provided by financing activities		48,604			65,549
Net change in cash and cash equivalents		24,699			23,309
Cash and cash equivalents at beginning of period		5,996			4,009
Cash and cash equivalents at end of period	$	30,695		$	27,318
Supplemental disclosure of cash flow information:
Cash activities:
Cash paid for interest	$	782		$	1,922
Cash paid for income taxes		318			247
Noncash activities:
Effect of change in fair value of securities available-for-sale:
Securities available-for-sale		(1,463	)		764
Deferred taxes		397			(207	)
Other comprehensive (loss) income		(1,066	)		557
Effect of change in fair value of interest rate swaps:
Interest rate swaps		204			(164	)
Deferred taxes		(55	)		45
Other comprehensive income (loss)		149			(119	)

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

6

FIRST SEACOAST BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements include the accounts of First Seacoast Bancorp (the “Company”), its wholly-owned subsidiary, First Seacoast Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, FSB Service Corporation, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim consolidated financial information, general practices within the banking industry and with instructions for Form 10-Q and Regulation S-X.  Accordingly, these interim financial statements do not include all the information or footnotes required by U.S. GAAP for annual financial statements. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of these consolidated financial statements have been included. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 26, 2021.

Corporate Structure

The Company is the federally-chartered holding company for the Bank (formerly named Federal Savings Bank). Effective July 16, 2019, pursuant to a Plan of Reorganization from Mutual Savings Bank to Mutual Holding Company and Stock Issuance Plan, the Bank reorganized into the mutual holding company structure, and the Company completed a concurrent stock offering.    

The Bank offers a full range of banking and wealth management services to its customers. The Bank focuses on four core services that center around customer needs. The core services include residential lending, commercial banking, personal banking and wealth management. The Bank offers a full range of commercial and consumer banking services through its network of five full-service branch locations.

Investment management services are offered at the Company’s full-service wealth management office in Dover, New Hampshire. The assets held for wealth management customers are not assets of the Company and, accordingly, are not reflected in the accompanying balance sheets. Assets under management totaled approximately $67.2 million and $58.4 million at September 30, 2021 and December 31, 2020, respectively. On August 17, 2021, the Bank entered into a definitive agreement with an investment advisory and wealth management firm (the “seller”) to purchase certain of its client accounts and client relationships for a purchase price of $344,000, of which $172,000 was paid at closing. This amount is included in other assets at September 30, 2021. Each client account has been assigned a value, and as each client transfers to the Bank, 85% of this value will be paid to the seller. By May 31, 2022, or upon mutual agreement that the transition of client accounts is complete, whichever is earlier, the balance of the purchase price will be paid to the seller. As of September 30, 2021, no client accounts have transferred to the Bank. The client accounts purchased contain assets under management valued at approximately $27.1 million as of September 30, 2021. The client accounts purchased are recorded as a customer list intangible asset. Identifiable intangible assets that are subject to amortization will be reviewed for impairment, at least annually, based on their fair value. Any impairment will be recognized as a charge to earnings and the adjusted carrying amount of the intangible asset will become its new accounting basis. The remaining useful life of the intangible asset will also be evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company is amortizing the customer list intangible on a straight-line basis over a ten-year period.

The Bank is engaged principally in the business of attracting deposits from the public and investing those funds in various types of loans, including residential and commercial real estate loans, and a variety of commercial and consumer loans. The Bank also invests its deposits and borrowed funds in investment securities. Deposits at the Bank are insured by the Federal Deposit and Insurance Corporation (“FDIC”) for the maximum amount permitted by law.

Banking services, the Company’s only reportable operating segment, is managed as a single strategic unit.

7

Recently Adopted Accounting Standards

As an “emerging growth company,” as defined in Title 1 of Jumpstart Our Business Startups (JOBS) Act, the Company has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards without an extended transition period. As of September 30, 2021, there was no significant difference in the comparability of the Company’s consolidated financial statements as a result of this extended transition period except for the accounting treatment for measuring and recording the Company’s allowance for loan losses. The Company measures and records an allowance for loan losses based upon the incurred loss model while other public companies may be required to calculate their allowance for loan losses based upon the current expected credit loss (“CECL”) model. The CECL approach requires an estimate of the loan loss expected over the life of the loan while the incurred loss approach delays the recognition of a loan loss until it is probable a loss event has incurred. The Company’s status as an “emerging growth company” will end on the earlier of: (i) the last day of the fiscal year of the Company during which it had total annual gross revenues of $1.07 billion (as adjusted for inflation) or more; (ii) the last day of the fiscal year of the Company following the fifth anniversary of the effective date of the Company’s initial public offering (which will be December 31, 2024 for the Company); (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

In August 2017, the FASB issued Accounting Standards Update (ASU) 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.”  The amendments in ASU 2017-12 apply to any entity that elects to apply hedge accounting in accordance with U.S. GAAP. The main changes introduced by ASU 2017-12 eliminate the requirement to separately measure and report hedge ineffectiveness and requires companies to present all of the elements of hedge accounting that affect earnings in the same income statement line as the hedged item. The standard also permits hedge accounting for strategies for which hedge accounting was not historically permitted and includes new alternatives for measuring the hedged item for fair value hedges of interest rate risk. Furthermore, the standard eases the requirements for effectiveness testing, hedge documentation, applying the critical terms match method and introduces new alternatives that will permit companies to reduce the risk of material error corrections if they misapply the shortcut method. The adoption of this ASU on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Yet To Be Adopted

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements.

In January 2021, the FASB issued ASU 2021-1, “Reference Rate Reform (Topic 848) (Scope),” which clarifies certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting applied to derivatives that are affected by the discounting transition.  This ASU becomes effective immediately for all entities on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2020, the FASB issued ASU No. 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities,” as a limited deferral of the effective dates, for one year, of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” and ASU No. 2016-02, “Leases (Topic 842),” to provide immediate, near-term relief for certain entities for whom these ASU’s are either currently or imminently effective as a result of COVID-19. The Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as of January 1, 2019.  The Company does not expect the adoption of ASU No. 2016-02, “Leases (Topic 842),” to have a material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance to ease the potential burden in accounting due to reference rate reform. The guidance in this update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made, and hedging relationships entered into, on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard.

8

In February 2020, the FASB issued ASU 2020-2, “Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).”  This ASU adds an SEC paragraph pursuant to the issuance of SEC SAB Topic No. 119 to the FASB Codification Topic 326 and updates the SEC section of the Codification for the change in the effective dates of Topic 842.  This ASU primarily details guidance on what SEC staff would expect a registrant to perform and document when measuring and recording its allowance for credit losses for financial assets recorded at amortized cost.

In January 2020, the FASB issued ASU 2020-1, “Investments – Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions Between Topic 321, Topic 323, and T 815 (A Consensus of the Emerging Issues Task Force),” which clarifies the interaction among the accounting standards for equity securities, equity method investments and certain derivatives.  This ASU becomes effective for public entities for fiscal years beginning after December 15, 2020 and all other entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies accounting for income taxes by removing specific technical exceptions. The guidance removes the need for companies to analyze whether (1) the exception to the incremental approach for intra-period tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) the exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses apply in a given period. The amendments in this ASU are effective for smaller reporting companies for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses,” to increase stakeholder awareness of the improvements made to the various amendments to Topic 326 and to clarify certain areas of guidance as companies transition to the new standard. Also during November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):  Effective Dates,” finalizing various effective date deferrals for private companies, not-for-profit organizations and certain smaller reporting companies applying the credit losses (CECL), leases and hedging standards.  The effective date for ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” is deferred to years beginning after December 15, 2022. The effective dates for ASU 2016-02, “Leases (Topic 842)” is deferred to fiscal years beginning after December 15, 2021.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires that credit

9

losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of income as the amounts expected to be collected change. The ASU was originally to be effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” extending the implementation date by one year for smaller reporting companies and clarifying that operating lease receivables are outside the scope of Accounting Standards Codification Topic 326. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13, while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

2. Cash and Due From Banks

At September 30, 2021 and December 31, 2020, cash and due from banks totaled $30.7 million and $6.0 million, respectively. The Company pledged cash collateral to derivative counterparties totaling $526,000 and $525,000 at September 30, 2021 and December 31, 2020, respectively. See Note 12 for a discussion of the Company’s derivative and hedging activities.

3. Securities Available-for-Sale

The amortized cost and fair value of securities available-for-sale, and the corresponding amounts of gross unrealized gains and losses, are as follows as of September 30, 2021 and December 31, 2020:

	September 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	5,638	$	—	$	(78	)	$	5,560
U.S. Government agency small business administration    pools guaranteed by SBA		4,053		51		(25	)		4,079
Collateralized mortgage obligations issued by the FHLMC    and FNMA		2,970		3		(22	)		2,951
Residential mortgage backed securities		21,404		44		(386	)		21,062
Municipal bonds		42,913		1,234		(253	)		43,894
	$	76,978	$	1,332	$	(764	)	$	77,546

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	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	997	$	—	$	(24	)	$	973
U.S. Government agency small business administration    pools guaranteed by SBA		2,399		71		—			2,470
Collateralized mortgage obligations issued by the FHLMC		938		11		—			949
Residential mortgage backed securities		5,100		49		(13	)		5,136
Municipal bonds		44,005		1,944		(7	)		45,942
	$	53,439	$	2,075	$	(44	)	$	55,470

The amortized cost and fair values of available-for-sale securities at September 30, 2021 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(Dollars in thousands)
September 30, 2021
Due after one year through five years	$	—	$	—
Due after five years through ten years		6,601		6,573
Due after ten years		41,950		42,881
Total U.S. Government-sponsored enterprises    obligations and municipal bonds		48,551		49,454
U.S. Government agency small business pools guaranteed    by SBA		4,053		4,079
Collateralized mortgage obligations issued by the FHLMC    and FNMA		2,970		2,951
Residential mortgage backed securities		21,404		21,062
Total	$	76,978	$	77,546

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The following is a summary of gross unrealized losses and fair value for those investments with unrealized losses, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020:

	Less than 12 Months							More than 12 Months							Total
	Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in thousands)
September 30, 2021
U.S. Government sponsored enterprises    obligations		6	$	4,606	$	(35	)		2	$	954	$	(43	)	$	5,560	$	(78	)
U.S. Government agency small business    administration pools guaranteed by    SBA		2		1,992		(25	)		—		—		—			1,992		(25	)
Collateralized mortgage obligations    issued by the FHLMC and FNMA		3		2,286		(22	)		—		—		—			2,286		(22	)
Residential mortgage backed securities		19		17,125		(323	)		1		2,339		(63	)		19,464		(386	)
Municipal bonds		18		16,625		(253	)		—		—		—			16,625		(253	)
		48	$	42,634	$	(658	)		3	$	3,293	$	(106	)	$	45,927	$	(764	)
December 31, 2020
U.S. Government sponsored enterprises    obligations		2	$	973	$	(24	)		—	$	—	$	—		$	973	$	(24	)
U.S. Government agency small business    administration pools guaranteed by    SBA		—		—		—			—		—		—			—		—
Collateralized mortgage obligations    issued by the FHLMC		—		—		—			—		—		—			—		—
Residential mortgage backed securities		1		3,102		(13	)		—		—		—			3,102		(13	)
Municipal bonds		4		2,381		(7	)		—		—		—			2,381		(7	)
		7	$	6,456	$	(44	)		—	$	—	$	—		$	6,456	$	(44	)

In evaluating whether investments have suffered an other-than-temporary decline, management evaluated the amount of the decline compared to cost, the length of time and extent to which fair value has been less than cost, the underlying creditworthiness of the issuer, the fair values exhibited during the year and estimated future fair values. In general, management concluded the declines are due to coupon rates compared to market rates and current economic conditions. The Company does not intend to sell investments with unrealized losses, and it is more likely than not that the Company will not be required to sell these investments before recovery of their amortized cost basis. Based on evaluations of the underlying issuers’ financial condition, current trends and economic conditions, management does not believe any securities suffered an other-than-temporary decline in value as of September 30, 2021 or December 31, 2020.

Proceeds from sales, maturities, principal payments received and gross realized gains and losses on available-for-sale securities were as follows for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
	(Dollars in thousands)
Proceeds from sales, maturities, and principal payments      received on securities available-for-sale	$	684	$	2,788	$	19,127		$	22,208
Gross realized gains		—		8		588			295
Gross realized losses		—		—		(53	)		(4	)
Net realized gains	$	—	$	8	$	535		$	291

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As of September 30, 2021 and December 31, 2020, there were no holdings that were issued by a single state or political subdivision which comprised more than 10% of the total fair value of the Company’s available-for-sale securities.

4. Loans

The Bank’s lending activities are primarily conducted in and around Dover, New Hampshire and in the areas surrounding its branches. The Bank grants commercial real estate loans, multifamily 5+ dwelling unit loans, commercial and industrial loans, acquisition, development and land loans, 1–4 family residential loans, home equity line of credit loans and consumer loans. Most loans are collateralized by real estate. The ability and willingness of real estate, commercial and construction loan borrowers to honor their repayment commitments is generally dependent on the health of the real estate sector in the borrowers’ geographic area and the general economy.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported, and in March 2020, the COVID-19 outbreak was declared a pandemic. On March 27, 2020, the Small Business Administration (“SBA”) established a loan program in response to the COVID-19 pandemic, the Paycheck Protection Program (“PPP”), which was added to the SBA’s 7(a) loan program by of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (such loans, “PPP loans”). The PPP, a nearly $350 billion program, was designed to aid small- and medium-sized businesses through federally guaranteed SBA loans distributed through banks. On December 27, 2020, the 2021 Consolidated Appropriations Act was signed, which extended relief provisions contained in the CARES act to the earlier of 60 days after the national emergency termination date or January 1, 2022. This legislation also included a $900 billion relief package and the extension of certain relief provisions from the March 2020 CARES Act that were set to expire at the end of 2020, including the extension of the eviction moratorium and $286 billion of additional PPP funds. The Consolidated Appropriations Act also continued to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a troubled debt restructuring (“TDR”) and suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes. During the nine months ended September 30, 2021 and the year ended December 31, 2020, the Bank originated 134 and 286 PPP loans, respectively, with aggregate outstanding principal balances of $13.1 million and $33.0 million, respectively. As of September 30, 2021 and December 31, 2020, total PPP loan principal balances were $9.4 million and $21.2 million, respectively, and are included in commercial and industrial loans (C+I).

Loans consisted of the following at September 30, 2021 and December 31, 2020:

	September 30, 2021			December 31, 2020
	(Dollars in thousands)
Commercial real estate (CRE)	$	66,442		$	66,166
Multifamily (MF)		9,730			6,619
Commercial and industrial (C+I)		30,358			45,262
Acquisition, development, and land (ADL)		25,109			23,145
1-4 family residential (RES)		228,204			213,718
Home equity line of credit (HELOC)		7,334			9,583
Consumer (CON)		4,381			2,944
Total loans		371,558			367,437
Net deferred loan costs		1,392			705
Allowance for loan losses		(3,528	)		(3,342	)
Total loans, net	$	369,422		$	364,800

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Changes in the allowance for loan losses (“ALL”) for the three and nine months ended September 30, 2021 and 2020, by portfolio segment, are summarized as follows:

(Dollars in thousands)	CRE			MF		C+I			ADL			RES		HELOC			CON			Unallocated		Total
Balance, June 30, 2021	$	792		$	91	$	218		$	191		$	1,750	$	78		$	52		$	294	$	3,466
Provision for loan losses		(45	)		—		(8	)		36			68		(34	)		22			21		60
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		1			—			—		—			1			—		2
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance June 30, 2020		740			52		278			223			1,690		58			29			83		3,153
Provision for loan losses		(37	)		3		(28	)		(81	)		68		17			26			142		110
Charge-offs		—			—		—			—			—		—			(17	)		—		(17	)
Recoveries		—			—		—			—			—		—			—			—		—
Balance, September 30, 2020		703			55		250			142			1,758		75			38			225		3,246
Balance, December 31, 2020		753			60		267			174			1,656		78			52			302		3,342
Provision for loan losses		(6	)		31		(94	)		53			162		(34	)		20			13		145
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		38			—			—		—			3			—		41
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance, December 31, 2019		781			23		350			145			1,503		52			18			3		2,875
Provision for loan losses		(78	)		32		(100	)		(3	)		237		23			52			222		385
Charge-offs		—			—		—			—			—		—			(34	)		—		(34	)
Recoveries		—			—		—			—			18		—			2			—		20
Balance, September 30, 2020	$	703		$	55	$	250		$	142		$	1,758	$	75		$	38		$	225	$	3,246

As of September 30, 2021 and December 31, 2020, information about loans and the ALL, by portfolio segment, are summarized below:

(Dollars in thousands)	CRE		MF		C+I		ADL		RES		HELOC		CON		Unallocated		Total
September 30, 2021 Loan Balances
Individually evaluated for impairment	$	108	$	—	$	31	$	—	$	—	$	—	$	—	$	—	$	139
Collectively evaluated for impairment		66,334		9,730		30,327		25,109		228,204		7,334		4,381		—		371,419
Total	$	66,442	$	9,730	$	30,358	$	25,109	$	228,204	$	7,334	$	4,381	$	—	$	371,558
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		747		91		211		227		1,818		44		75		315		3,528
Total	$	747	$	91	$	211	$	227	$	1,818	$	44	$	75	$	315	$	3,528
December 31, 2020 Loan Balances
Individually evaluated for impairment	$	117	$	—	$	822	$	—	$	62	$	—	$	—	$	—	$	1,001
Collectively evaluated for impairment		66,049		6,619		44,440		23,145		213,656		9,583		2,944		—		366,436
Total	$	66,166	$	6,619	$	45,262	$	23,145	$	213,718	$	9,583	$	2,944	$	—	$	367,437
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		753		60		267		174		1,656		78		52		302		3,342
Total	$	753	$	60	$	267	$	174	$	1,656	$	78	$	52	$	302	$	3,342

The following is an aging analysis of past due loans by portfolio segment as of September 30, 2021: 

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,442	$	66,442	$	—
MF		—		—		—		—		9,730		9,730		—
C+I		—		—		—		—		30,358		30,358		—
ADL		—		—		—		—		25,109		25,109		—
RES		—		—		—		—		228,204		228,204		—
HELOC		119		—		—		119		7,215		7,334		—
CON		—		—		—		—		4,381		4,381		—
	$	119	$	—	$	—	$	119	$	371,439	$	371,558	$	—

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The following is an aging analysis of past due loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,166	$	66,166	$	—
MF		—		—		—		—		6,619		6,619		—
C+I		—		—		822		822		44,440		45,262		822
ADL		—		—		—		—		23,145		23,145		—
RES		42		—		62		104		213,614		213,718		62
HELOC		143		—		—		143		9,440		9,583		—
CON		—		—		—		—		2,944		2,944		—
	$	185	$	—	$	884	$	1,069	$	366,368	$	367,437	$	884

There were no loans collateralized by residential real estate property in the process of foreclosure at September 30, 2021 or December 31, 2020.

The following table provides information on impaired loans as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Recorded Carrying Value		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
September 30, 2021
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		—		—		—		—		—
ADL		—		—		—		—		—
RES		—		—		—		21		3
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	—	$	—	$	—	$	21	$	3
December 31, 2020
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		822		938		—		909		—
ADL		—		—		—		—		—
RES		62		62		—		64		5
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	884	$	1,000	$	—	$	973	$	5

Credit Quality Information

The Bank utilizes a ten-grade internal loan rating system for its commercial real estate, multifamily, commercial and industrial and acquisition, development, and land loans. Residential real estate, home equity line of credit and consumer loans are considered “pass” rated loans until they become delinquent. Once delinquent, loans can be rated an 8, 9 or 10 as applicable.

Loans rated 1 through 6: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 7: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 8: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Bank will sustain some loss if the weakness is not corrected.

15

Loans rated 9: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 10: Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted and should be charged off.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on its commercial and industrial, commercial real estate and multifamily loans. On a periodic basis, the Bank engages an independent third party to review a significant portion of loans within these segments and to assess the credit risk management practices of its commercial lending department. Management uses the results of these reviews as part of its annual review process and overall credit risk administration.

On a quarterly basis, the Bank formally reviews the ratings on its applicable residential real estate and home equity loans if they have become classified as non-accrual. Criteria used to determine ratings consist of loan-to-value ratios and days delinquent.

The following presents the internal risk rating of loans by portfolio segment as of September 30, 2021:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,608	$	2,726	$	108	$	66,442
MF		9,730		—		—		9,730
C+I		30,327		—		31		30,358
ADL		25,109		—		—		25,109
RES		228,204		—		—		228,204
HELOC		7,334		—		—		7,334
CON		4,381		—		—		4,381
Total	$	368,693	$	2,726	$	139	$	371,558

The following presents the internal risk rating of loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,191	$	2,858	$	117	$	66,166
MF		6,619		—		—		6,619
C+I		41,021		4,083		158		45,262
ADL		23,145		—		—		23,145
RES		213,656		—		62		213,718
HELOC		9,583		—		—		9,583
CON		2,944		—		—		2,944
Total	$	360,159	$	6,941	$	337	$	367,437

In response to the COVID-19 pandemic, the Bank has implemented a short-term loan modification program to provide temporary payment relief to certain of our borrowers who meet the program's qualifications. In April 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, issued an interagency statement titled “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus,” that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors (ASC 310-40),” a restructuring of debt constitutes a troubled debt restructuring, or TDR, if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The regulatory agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered TDRs. These include short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms or other delays in payment that are insignificant.

Additionally, Section 4013 of the CARES Act, that became law on March 27, 2020, further provides banks with the option to elect either or both of the following from March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after

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the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates (extended to January 1, 2022 by the 2021 Consolidated Appropriations Act):

(i) to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR; and/or

(ii) to suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

If a bank elects a suspension noted above, the suspension (i) will be effective for the term of the loan modification, but solely with respect to any modification, including a forbearance arrangement, an interest rate modification, a repayment plan and any other similar arrangement that defers or delays the payment of principal or interest, that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019 and (ii) will not apply to any adverse impact on the credit of a borrower that is not related to the COVID–19 pandemic. The Company has applied this guidance to qualifying loan modifications.

The program has been offered to both retail and commercial borrowers. The majority of short-term loan modifications for retail loan borrowers consist of deferred payments (which may include principal, interest and escrow), which are capitalized to the loan balance and recovered through the re-amortization of the monthly payment at the end of the deferral period. For commercial loan borrowers, the majority of short-term modifications consist of allowing the borrower to make interest-only payments with the deferred principal to be due at maturity or repaid as the monthly payment is re-amortized at the next interest reset date as is applicable to the individual loan structure. Alternatively, commercial loan borrowers may defer their full monthly payment similar to the retail loan program outlined above. All loans modified under these programs are maintained on full accrual status during the deferral period. As of September 30, 2021, there were no loans with outstanding modifications for temporary payment relief.

Certain directors and executive officers of the Company and entities in which they have significant ownership interests are customers of the Bank. Loans outstanding to these persons and entities at September 30, 2021 and December 31, 2020 were $5.0 million and $5.3 million, respectively.  

5. Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of such loans were $41.5 million and $45.8 million at September 30, 2021 and December 31, 2020, respectively. Substantially all of these loans were originated by the Bank and sold to third parties on a non-recourse basis with servicing rights retained. These retained servicing rights are recorded as a servicing asset and are initially recorded at fair value (see Note 13, Fair Value of Assets and Liabilities, for more information). Changes to the balance of mortgage servicing rights are recorded in loan servicing income (loss) in the Company’s consolidated statements of income.

The Bank’s mortgage servicing activities include: collecting principal, interest and escrow payments from borrowers; making tax and insurance payments on behalf of borrowers; monitoring delinquencies and executing foreclosure proceedings; and accounting for and remitting principal and interest payments to investors. Loan servicing income (loss), including late and ancillary fees, was $38,000 and $12,000 for the three months ended September 30, 2021 and 2020, respectively, and $122,000 and $5,000 for the nine months ended September 30, 2021 and 2020, respectively. The Bank’s residential mortgage investor loan servicing portfolio is primarily comprised of fixed rate loans concentrated in the Bank’s market areas.

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The following summarizes activity in mortgage servicing rights for the three and nine months ended September 30, 2021 and 2020:

(Dollars in thousands)	2021			2020
Balance, June 30,	$	303		$	329
Additions		13			21
Payoffs		(12	)		(15	)
Change in fair value due to change in assumptions		11			(25	)
Balance, September 30,		315			310
Balance, January 1,		273			397
Additions		43			110
Payoffs		(44	)		(72	)
Change in fair value due to change in assumptions		43			(125	)
Balance, September 30,	$	315		$	310

6. Deposits

Deposits consisted of the following at September 30, 2021 and December 31, 2020:

(Dollars in thousands)	September 30, 2021		December 31, 2020
NOW and demand deposits	$	200,290	$	161,336
Money market deposits		74,264		69,320
Savings deposits		57,235		48,057
Time deposits of $250,000 and greater		6,679		10,119
Time deposits less than $250,000		50,632		38,549
	$	389,100	$	327,381

At September 30, 2021, the scheduled maturities of time deposits were as follows:

(Dollars in thousands)
2021	$	27,816
2022		21,220
2023		3,769
2024		1,056
2025		1,651
2026		1,799
	$	57,311

There were $15.0 million and $-0- of brokered deposits included in time deposits at September 30, 2021 and December 31, 2020, respectively.

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7. Borrowings

Federal Home Loan Bank (“FHLB”)

A summary of borrowings from the FHLB is as follows:

		September 30, 2021
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,000		2021	0.31% – fixed
	2,262		2022	0.00% – fixed
	5,000		2023	0.45% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00 % – fixed
	200		2030	0.00 % – fixed
$	39,032

		December 31, 2020
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,095		2021	0.39% (fixed) to 0.42% (variable)
	2,262		2022	0.00% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00% – fixed
	200		2030	0.00% – fixed
$	34,127

All borrowings from the FHLB are secured by a blanket security agreement on qualified collateral, principally residential mortgage loans and certain U.S. government sponsored mortgage-backed securities, in an aggregate amount equal to outstanding advances. The Bank’s unused remaining available borrowing capacity at the FHLB was approximately $97.0 million and $112.6 million at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021 and December 31, 2020, the Bank had sufficient collateral at the FHLB to support its obligations and was in compliance with the FHLB’s collateral pledging program.

Included in the above advances at September 30, 2021 and December 31, 2020 is a $10.0 million long-term advance, with an interest rate of 1.39%, which is callable by the FHLB on December 6, 2021 and quarterly thereafter, and a $10.0 million long-term advance, with an interest rate of 1.35%, which is callable by the FHLB on November 10, 2021 and quarterly thereafter. As of September 30, 2021 and December 31, 2020, borrowings include $4.0 million of advances through the FHLB’s Jobs for New England program where certain qualifying small business loans that create or preserve jobs, expand woman-, minority- or veteran- owned businesses or otherwise stimulate the economy in New England communities are offered at an interest rate of 0%.

During the nine months ended September 30, 2021, the Bank entered into two $5.0 million forward starting advances with the FHLB, at a rate of 0.44% beginning November 15, 2021 and December 20, 2021 with maturity dates of May 15, 2023 and March 20, 2023, respectively.   

At September 30, 2021, the Bank had an overnight line of credit with the FHLB that may be drawn up to $3.0 million. Additionally, the Bank had a total of $5.0 million of unsecured Fed Funds borrowing lines of credit with two correspondent banks. The entire balance of all these credit facilities was available at September 30, 2021.

Federal Reserve Bank of Boston (“FRB”)

The Bank established a Paycheck Protection Program Liquidity Facility (“PPPLF”). The PPPLF allowed the Bank to request advances from the FRB. Under the PPPLF, advances were secured by pledges of PPP Loans. The interest rate applicable to any advance made under the PPPLF was 35 basis points. As of September 30, 2021, $-0- of PPPLF advances are outstanding. As of December 31, 2020, $18.2 million of PPPLF advances were outstanding and collateralized by 110 PPP loans. Maturities of PPPLF advances were tied to the maturity of the underlying PPP loans and accelerated as the PPP loans were forgiven.  

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8. Employee Benefits

Employee Stock Ownership Plan

The Company established the First Seacoast Bank Employee Stock Ownership Plan (“ESOP”) to provide eligible employees of the Company the opportunity to own Company common stock.  The ESOP is a tax-qualified retirement plan for the benefit of Company employees.  Contributions are allocated to eligible participants on the basis of compensation, subject to federal limits.  The number of shares committed to be released per year through 2038 is 11,924.

The ESOP funded its purchase of 238,473 shares through a loan from the Company equal to 100% of the aggregate purchase price of the common stock.  The ESOP trustee will repay the loan principally through the Bank’s contributions to the ESOP over the remaining loan term that matures on December 31, 2038.  At September 30, 2021 and December 31, 2020, the remaining principal balance on the ESOP debt was $2.2 million.  

Under applicable accounting requirements, the Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants’ accounts under the plan.  Total compensation expense recognized in connection with the ESOP for the three months ended September 30, 2021 and 2020 was $29,000 and $18,000, respectively, and $86,000 and $63,000 for the nine months ended September 30, 2021 and 2020, respectively.   

	September 30, 2021		December 31, 2020
Shares held by the ESOP include the following:
Allocated		23,848		11,924
Committed to be allocated		8,943		11,924
Unallocated		205,682		214,625
Total		238,473		238,473

The fair value of unallocated shares was approximately $2.0 and $1.9 million at September 30, 2021 and December 31, 2020, respectively.

401(k) Plan

The Company sponsors a 401(k) defined contribution plan for substantially all employees pursuant to which employees of the Company could elect to make contributions to the plan subject to Internal Revenue Service limits. The Company makes matching and profit-sharing contributions to eligible participants in accordance with plan provisions. The Company’s contributions for the three months ended September 30, 2021 and 2020 were $49,000 and $56,000, respectively, and $140,000 and $150,000 for the nine months ended September 30, 2021 and 2020, respectively.

Pension Plan

The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (The Pentegra DB Plan), a tax-qualified defined benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413 (c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

The funded status (fair value of plan assets divided by funding target) as of July 1, 2021 is as follows:

2021 Valuation Report 104.99 % (1)

(1) Fair value of plan assets reflects any contributions received through June 30, 2021.

Based upon the funded status of the Pentegra DB Plan as of July 1, 2021, no funding improvement plan or rehabilitation plan has been implemented or is pending as of September 30, 2021.

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Total pension plan expense for the three months ended September 30, 2021 and 2020 was $90,000, and $270,000 and $279,000 for the nine months ended September 30, 2021 and 2020, respectively, and is included in salaries and employee benefits expense in the accompanying consolidated statements of income. The Company did not pay a surcharge to the Pentegra DB Plan during the three or nine months ended September 30, 2021.

The Company enacted a “hard freeze” for the Pentegra DB Plan as of December 31, 2018, eliminating all future service-related accruals for participants. Prior to this enactment the Company maintained a “soft freeze” status that continued service-related accruals for its active participants with no new participants permitted into the Pentegra DB Plan. The Company estimates a contribution amount of approximately $270,000 for the fiscal year ending December 31, 2021.

Equity Incentive Plan

Effective May 27, 2021, the Company adopted the First Seacoast Bancorp 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the granting of incentive and non-statutory stock options to purchase shares of common stock or the granting of shares of restricted stock awards and restricted stock units.

The 2021 Plan authorizes the issuance or delivery to participants of up to 417,327 shares of common stock. Of this number, the maximum number of shares of common stock that may be issued pursuant to the exercise of stock options is 298,091 shares, and the maximum number of shares of common stock that may be issued as restricted stock awards or restricted stock units is 119,236 shares.

The exercise price of stock options may not be less than the fair market value on the date the stock option is granted. Further, stock options may not be granted with a term that is longer than 10 years.

As of September 30, 2021, no awards have been made under the 2021 Plan.

Supplemental Executive Retirement Plans

Salary Continuation Plan

The Company maintains a nonqualified supplemental retirement plan for its current President and its former President. The plan provides supplemental retirement benefits payable in installments over a period of years upon retirement or death. The recorded liability at September 30, 2021 and December 31, 2020 relating to this supplemental retirement plan was $631,000 and $607,000, respectively. The discount rate used to determine the Company’s obligation was 5.00%. The projected rate of salary increase for its current President was 3%. The expense of this salary retirement plan was $20,000 and $16,000 for the three months ended September 30, 2021 and 2020, respectively, and $61,000 and $66,000 for the nine months ended September 30, 2021 and 2020, respectively.

Executive Supplemental Retirement Plan

The recorded liability at September 30, 2021 and December 31, 2020 relating to the supplemental retirement plan for the Bank’s former President was $85,000 and $132,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% at September 30, 2021 and December 31, 2020.  The expense of this salary retirement plan was $1,000 and $2,000 for the three months ended September 30, 2021 and 2020, respectively, and $4,000 and $6,000 for the nine months ended September 30, 2021 and 2020, respectively.

Endorsement Method Split Dollar Plan

The Company has an endorsement method split dollar plan for a former President. The recorded liability at September 30, 2021 and December 31, 2020 relating to this supplemental executive benefit agreement was $34,000. The expense of this supplemental plan was $-0- for the three months ended September 30, 2021 and 2020, and $1,000 and $-0- for the nine months ended September 30, 2021 and 2020, respectively.

Directors Deferred Supplemental Retirement Plan

The Company has a supplemental retirement plan for eligible directors that provides for monthly benefits based upon years of service to the Company, subject to certain limitations as set forth in the agreements. The present value of these future payments is being accrued over the estimated period of service. The estimated liability at September 30, 2021 and December 31, 2020 relating to this plan was $542,000 and $573,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% at September 30, 2021 and December 31, 2020. Total supplemental retirement plan expense amounted to $17,000 and $18,000 for the three months ended September 30, 2021 and 2020, respectively, and $51,000 and $46,000 for the nine months ended September 30, 2021 and 2020, respectively.

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Additionally, the Company has a deferred director’s fee plan, which allows members of the board of directors to defer the receipt of fees that otherwise would be paid to them in cash. At September 30, 2021 and December 31, 2020, the total deferred director’s fees amounted to $379,000 and $321,000, respectively.

9. Other Comprehensive Income

The Company reports certain items as “other comprehensive income” (“OCI”) and reflects total comprehensive income (loss) in the consolidated financial statements for all periods containing elements of other comprehensive income (loss). The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax expense (benefit) allocated to each component of other comprehensive income (loss):

Reclassification Adjustment	Three Months Ended September 30, 2021			Three Months Ended September 30, 2020			Affected Line Item in Statements of Income
	(Dollars in thousands)
Gains on securities available-for-sale	$	—		$	(8	)	Securities gains, net
Tax effect		—			2		Income tax expense
		—		$	(6	)	Net income
Net amortization of bond premium		177			115		Interest on debt securities
Tax effect		(48	)		(31	)	Income tax expense
		129			84		Net income
Net interest expense on swaps		15			—		Interest expense on borrowings
Tax effect		(4	)		—		Income tax expense
		11			—		Net income
Total reclassification adjustments	$	140		$	78
	Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
Gains on securities available-for-sale	$	(535	)	$	(291	)	Securities gains, net
Tax effect		146			79		Income tax expense
		(389	)		(212	)	Net income
Net amortization of bond premium		494			266		Interest on debt securities
Tax effect		(134	)		(72	)	Income tax expense
		360			194		Net income
Net interest expense on swaps		33			—		Interest expense on borrowings
Tax effect		(9	)		—		Income tax expense
		24			—		Net income
Total reclassification adjustments	$	(5	)	$	(18	)

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The following tables present the changes in each component of OCI for the periods indicated:

(Dollars in thousands)	Net Unrealized Gains (Losses) on AFS Securities(1)			Net Unrealized Losses on Cash Flow Hedges(1)			OCI(1)
Balance at June 30, 2021	$	1,036		$	40		$	1,076
Other comprehensive loss before       reclassification		(750	)		(2	)		(752	)
Amounts reclassified from OCI		129			11			140
Other comprehensive (loss) income		(621	)		9			(612	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at June 30, 2020	$	1,113		$	(119	)	$	994
Other comprehensive (loss) income before       reclassification		(114	)		5			(109	)
Amounts reclassified from OCI		79			(5	)		74
Other comprehensive (loss) income		(35	)		—			(35	)
Balance at September 30, 2020	$	1,078		$	(119	)	$	959
Balance at December 31, 2020	$	1,481		$	(100	)	$	1,381
Other comprehensive (loss) income before       reclassification		(1,037	)		125			(912	)
Amounts reclassified from OCI		(29	)		24			(5	)
Other comprehensive (loss) income		(1,066	)		149			(917	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at December 31, 2019	$	521		$	—		$	521
Other comprehensive income (loss) before       reclassification		575			(119	)		456
Amounts reclassified from OCI		(18	)		—			(18	)
Other comprehensive income (loss)		557			(119	)		438
Balance at September 30, 2020	$	1,078		$	(119	)	$	959

(1) All amounts are net of tax

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10. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below). As of September 30, 2021, the most recent notification from the Office of the Comptroller of the Currency categorized the Bank, as well capitalized under the regulatory framework, for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum capital amounts and ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category. Management believes that, as of September 30, 2021 and December 31, 2020, the Bank met all capital adequacy requirements to which it was subject, including the capital conservation buffer, at those dates.

The following table presents actual and required capital ratios as of September 30, 2021 and December 31, 2020 for the Bank under the Basel Committee on Banking Supervisions capital guidelines for U.S. banks (“Basel III Capital Rules”) as fully phased-in on January 1, 2019. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

						Minimum Capital					Minimum Capital Required For Capital Adequacy Plus Capital Conservation Buffer
	Actual					Requirement					Fully Phased-In
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2021
Total Capital (to risk-weighted assets)	$	52,826		17.99	%	$	23,496		8.00	%	$	30,839		10.50	%
Tier 1 Capital (to risk-weighted assets)		49,243		16.77			17,622		6.00			24,965		8.50
Tier 1 Capital (to average assets)		49,243		10.07			19,558		4.00			19,558		4.00
Common Equity Tier 1 (to risk-weighted assets)		49,243		16.77			13,217		4.50			20,559		7.00

						Minimum Capital					Minimum To Be Well Capitalized Under Prompt Corrective
	Actual					Requirement					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2020
Total Capital (to risk-weighted assets)	$	50,612		17.92	%	$	22,593		8.00	%	$	29,653		10.50	%
Tier 1 Capital (to risk-weighted assets)		47,222		16.72			16,945		6.00			24,005		8.50
Tier 1 Capital (to average assets)		47,222		10.59			17,836		4.00			17,836		4.00
Common Equity Tier 1 (to risk-weighted assets)		47,222		16.72			12,709		4.50			19,769		7.00

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11. Common Stock Repurchases

On September 23, 2020, the board of directors of the Company authorized the repurchase of up to 136,879 shares of the Company’s outstanding common stock, which equals approximately 2.3% of all shares then outstanding and approximately 5.0% of the then outstanding shares owned by stockholders other than the MHC. As of September 30, 2021, the Company had repurchased 70,941 shares. The Company holds repurchased shares in its treasury.

The Company’s repurchases of its common stock made during the quarter ended September 30, 2021 are set forth in the table below:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs
July 1, 2021 - July 31, 2021		2,766	$	9.86		2,766		66,635
August 1, 2021 - August 31, 2021		418		9.82		418		66,217
September 1, 2021 - September 30, 2021		279		9.89		279		65,938
Total		3,463				3,463

12. Derivatives and Hedging Activities

Derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation. The Company utilizes interest rate swap agreements as part of its asset liability management strategy. Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal. These derivative instruments are designated as cash flow hedges with changes in the fair value of the derivative recorded in other comprehensive income (loss) and recognized in earnings when the hedged transaction affects earnings. The hedges were determined to be effective and the Company expects the hedges to remain effective during the remaining terms of the swaps.

The Company entered into two $5 million notional interest rate swaps that have been designated as cash flow hedges on 90-day advances from FHLB. The purpose of these cash flow hedges is to reduce potential interest rate risk by swapping a variable rate borrowing to a fixed rate. Management deemed it prudent to limit the variability of these interest payments by entering into these interest rate swap agreements. These agreements provide for the Company to receive payments at a variable rate determined by a specific index (three-month LIBOR) in exchange for making payments at a fixed rate. Publication of LIBOR is expected to cease in June of 2023. The swap agreements allow for substitution of an alternative reference rate such as the secured overnight financing rate (“SOFR”) at that time.

The changes in the fair value of interest rate swaps are reported in other comprehensive income (loss) and are subsequently reclassified into interest expense in the period that the hedged transactions affect earnings. During the next twelve months, the Company estimates that an additional $56,000 will be reclassified as an increase to interest expense. The change in fair value for these derivative instruments for the three months ended September 30, 2021 and 2020, was $12,000 and $-0-, respectively, and $204,000 and $(164,000) for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021 and December 31, 2020, the fair value of interest rate swap derivatives resulted in an asset of $67,000 and a liability of $137,000, respectively, and is recorded in other assets or other liabilities, respectively.

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The following tables summarizes the Company’s derivatives associated with its interest rate risk management activities:

				September 30, 2021
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	16	$	—
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	51	$	—
Total Hedging    Instruments				$	10,000	$	67	$	—
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	10,000

				December 31, 2020
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	—	$	68
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	—	$	69
Total Hedging    Instruments				$	10,000	$	—	$	137
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	5,000

The following tables summarize the effect of cash flow hedge accounting on the consolidated statements of income for the three and nine months ended September 30, 2021 and 2020:

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Three Months Ended September 30,					Three Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(15	)	$	—	N/A	N/A

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Nine Months Ended September 30,					Nine Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(33	)	$	—	N/A	N/A

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The credit risk associated with these interest rate swaps is the risk of default by the counterparty. To minimize this risk, the Company only enters into interest rate swaps agreements with highly rated counterparties that management believes to be creditworthy. The notional amounts of these agreements do not represent amounts exchanged by the parties and, therefore, are not a measure of the potential loss exposure. Risk management results for the three and nine months ended September 30, 2021 and 2020, related to the balance sheet hedging of $10.0 million and $5 million of 90 day FHLB advances, included in borrowings, respectively, indicate that the hedge was 100% effective and there was no component of the derivative instruments’ unrealized gain or loss which was excluded from the assessment of hedge effectiveness. The Company’s arrangement with its counterparty requires it to post cash or other assets as collateral for its interest rate swap contracts in a net liability position based on their aggregate fair value and the Company’s credit rating. At September 30, 2021 and December 31, 2020, the Company posted $526,000 and $525,000, respectively, of cash to the counterparty as collateral on its interest rate swap contracts which was presented within cash and due from banks on the consolidated balance sheets.

13. Fair Values of Assets and Liabilities

Determination of Fair Value

The fair value of an asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from one level to another. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value of cash flows or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the observability and reliability of the assumptions used to determine fair value.

Level 1 - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 - Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Level 3 inputs are unobservable inputs for the asset or liability.

For assets and liabilities, fair value is based upon the lowest level of observable input that is significant to the fair value measurement.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon models that primarily use, as inputs, observable market-based parameters. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and, therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented therein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all the Company’s financial assets and financial liabilities carried at fair value at September 30, 2021 and December 31, 2020.

Financial Assets and Financial Liabilities: Financial assets and financial liabilities measured at fair value on a recurring basis include the following:

Securities Available-for-Sale: The Company’s investment in U.S. Government-sponsored entities bonds, U.S Government agency small business administration pools guaranteed by the SBA, collateralized mortgage obligations issued by the FHLMC, residential mortgage-backed securities and other municipal bonds is generally classified within Level 2 of the fair value

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hierarchy. For these securities, the Company obtains fair value measurements from independent pricing services. The fair value measurements consider observable data that may include reported trades, dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument’s terms and conditions.

Mortgage Servicing Rights: Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes interest rate, prepayment speed and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data (see Note 5, Loan Servicing, for more information). These assumptions are inherently sensitive to change as these unobservable inputs are not based on quoted prices in active markets or otherwise observable.

Derivative Instruments and Hedges: The valuation of these instruments is determined using the discounted cash flow method on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
September 30, 2021
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	5,560	$	—	$	5,560	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		4,079		—		4,079		—
Collateralized mortgage obligations issued by the    FHLMC and FNMA		2,951		—		2,951		—
Residential mortgage backed securities		21,062		—		21,062		—
Municipal bonds		43,894		—		43,894		—
Other assets:
Mortgage servicing rights		315		—		—		315
Derivatives		67		—		67		—

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
December 31, 2020
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	973	$	—	$	973	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		2,470		—		2,470		—
Collateralized mortgage obligations issued by the    FHLMC		949		—		949		—
Residential mortgage backed securities		5,136		—		5,136		—
Municipal bonds		45,942		—		45,942		—
Other assets:
Mortgage servicing rights		273		—		—		273
Other Liabilities:
Derivatives		137		—		137		—

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For the nine months ended September 30, 2021 and 2020, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(Dollars in thousands)	Mortgage Servicing Rights (1)
Balance as of January 1, 2021	$	273
Included in net income		42
Balance as of September 30, 2021	$	315
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2021	$	—
Balance as of January 1, 2020	$	397
Included in net income		(87	)
Balance as of September 30, 2020	$	310
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2020	$	—

(1) Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing income (loss) in the Company’s consolidated statements of income.

For Level 3 assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

	September 30, 2021
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing    Rights	Discounted Cash Flow	Prepayment Rate	7.77% - 26.24%	14.56%	$	315
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.15% - 4.06%	3.32%
		Default Rate	0.08% - 0.14%	0.13%

	December 31, 2020
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing Rights	Discounted Cash Flow	Prepayment Rate	14.05% - 29.77%	20.97%	$	273
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.91% - 5.13%	4.12%
		Default Rate	0.08% - 0.14%	0.13%

(1) Unobservable inputs for mortgage servicing rights were weighted by loan amount.

The significant unobservable inputs used in the fair value measurement of the Company’s mortgage servicing rights are the weighted-average prepayment rate, weighted-average discount rate, weighted average delinquency rate and weighted-average default rate. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement.  Although the prepayment rate and the discount rate are not directly interrelated, they generally move in opposite directions of each other.

The Company estimates the fair value of mortgage servicing rights by using a discounted cash flow model to calculate the present value of estimated future net servicing income. Observable and unobservable inputs are entered into this model as prescribed by an independent third party to arrive at an estimated fair value. See Note 5, Loan Servicing, for a rollforward of our Level 3 item and related inputs and assumptions used to determine fair value at September 30, 2021.

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Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets measured at fair value on a non-recurring basis during the reported periods may include certain impaired loans reported at the fair value of the underlying collateral. Fair value is measured using appraised values of collateral and adjusted as necessary by management based on unobservable inputs for specific properties. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, real estate collateral related nonrecurring fair value measurement adjustments have generally been classified as Level 3.

Estimates of fair value used for other collateral supporting commercial loans generally are based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. Financial assets measured at fair value on a non-recurring basis during the reported periods also include loans held for sale. Residential mortgage loans held for sale are recorded at the lower of cost or fair value and are therefore measured at fair value on a non-recurring basis. The fair values for loans held for sale are estimated based on commitments in effect from investors or prevailing market prices for loans with similar terms to borrowers of similar credit quality and are included in Level 3. At September 30, 2021 and December 31, 2020, there were no assets measured at fair value on a non-recurring basis.

Non-Financial Assets and Non-Financial Liabilities: The Company has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Non-financial assets measured at fair value on a non-recurring basis generally include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for loan losses and certain foreclosed assets which, subsequent to their initial recognition, are remeasured at fair value through a write-down included in other non-interest expense. There were no foreclosed assets at September 30, 2021 or December 31, 2020.

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. ASU 2016-01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The exit price notion is a market-based measurement of fair value that is represented by the price to sell an asset or transfer a liability in the principal market (or most advantageous market in the absence of a principal market) on the measurement date. At September 30, 2021 and December 31, 2020, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

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Summary of Fair Values of Financial Instruments not Carried at Fair Value

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at September 30, 2021 and December 31, 2020 are as follows:

(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2021
Financial Assets:
Cash and due from banks	$	30,695	$	30,695	$	30,695	$	—	$	—
Interest-bearing time deposits with other banks		1,245		1,245		—		1,245		—
Federal Home Loan Bank stock		2,022		2,022		—		2,022		—
Bank-owned life insurance		4,441		4,441		—		4,441		—
Loans, net		369,422		368,975		—		—		368,975
Accrued interest receivable		1,443		1,443		1,443		—		—
Financial Liabilities:
Deposits	$	389,100	$	389,191	$	331,790	$	57,401	$	—
Advances from Federal Home Loan Bank		39,032		39,314		—		39,314		—
Mortgagors’ tax escrow		2,033		2,033		—		2,033		—
December 31, 2020
Financial Assets:
Cash and due from banks	$	5,996	$	5,996	$	5,996	$	—	$	—
Interest-bearing time deposits with other banks		2,488		2,488		—		2,488		—
Federal Home Loan Bank stock		1,796		1,796		—		1,796		—
Bank-owned life insurance		4,356		4,356		—		4,356		—
Loans, net		364,800		365,116		—		—		365,116
Accrued interest receivable		1,412		1,412		1,412		—		—
Financial Liabilities:
Deposits	$	327,381	$	327,696	$	278,713	$	48,983	$	—
Advances from Federal Home Loan Bank		34,127		34,832		—		34,832		—
Advances from Federal Reserve Bank		18,195		18,199		—		18,199		—
Mortgagors’ tax escrow		1,420		1,420		—		1,420		—

14. Subsequent Events

From October 1, 2021 through November 1, 2021, the Company repurchased an additional 293 shares of common stock pursuant to its repurchase plan at an average cost of $9.80 per share.

On October 8, 2021, the Bank purchased $5.9 million of brokered deposits, for a term of four years, at an annual rate of 0.50%. The brokered deposits are callable, at the option of the Bank, in whole, prior to the maturity date beginning on January 8, 2022 and quarterly thereafter. On October 25, 2021, the Bank purchased $1.7 million of brokered deposits, for a term of 4.5 years, at an annual rate of 0.65%. The brokered deposits are callable, at the option of the Bank, in whole, prior to the maturity date beginning on January 25, 2022 and quarterly thereafter.

On October 15, 2021, the Bank purchased $2.0 million of 3.125% fixed-to-floating subordinated notes due on October 15, 2031, issued by a bank holding company. The interest rate is fixed at 3.125% for five years and payable semi-annually in arrears on April 15 and October 15 of each year beginning April 15, 2022. The subordinated note is not redeemable by the issuer, in whole or in part, prior to October 15, 2026, except in certain defined circumstances. On or after October 15, 2026, the subordinated note is redeemable at the option of the issuer, in whole or in part, with proper notice. On October 15, 2026, the interest rate on the subordinated note becomes floating and equal to the three-month term SOFR rate plus 225 basis points payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year beginning January 15, 2027.

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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 is intended to assist in understanding the Company’s consolidated financial condition at September 30, 2021 and consolidated results of operations for the three and nine months ended September 30, 2021 and 2020. It should be read in conjunction with our unaudited consolidated financial statements and accompanying notes presented elsewhere in this report and with the Company’s audited consolidated financial statements and accompanying notes presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed on March 26, 2021 with the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation.

Overview

Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings from the FHLB, in one- to four-family residential real estate loans, commercial real estate and multi-family loans, acquisition, development and land loans, commercial and industrial loans, home equity loans and lines of credit and consumer loans.  In recent years, we have increased our focus, consistent with what we believe to be conservative underwriting standards, on originating higher yielding commercial real estate and commercial and industrial loans.

We conduct our operations from four full-service banking offices in Strafford County, New Hampshire and one full-service banking office in Rockingham County, New Hampshire. We consider our primary lending market area to be Strafford and Rockingham Counties in New Hampshire and York County in Southern Maine.

COVID-19 Pandemic

In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization. The spread of COVID-19 has created a global public health crisis that has resulted in unprecedented uncertainty, volatility and disruption in financial markets and in governmental, commercial and consumer activity in the United States and globally, including the markets that we serve. Governmental responses to the pandemic have included orders closing businesses not deemed essential and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions, together with responses to the pandemic by businesses and individuals, have resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses that have led to a loss of revenues and a rapid increase in unemployment, material decreases in oil and gas prices and in business valuations, disrupted global supply chains, market downturns and volatility, changes in consumer behavior related to pandemic fears, related emergency response legislation and an expectation that Federal Reserve policy will maintain a low interest rate environment for the foreseeable future.

We have taken deliberate actions to ensure that we have the balance sheet strength to serve our customers and communities, including increases in liquidity and reserves supported by a strong capital position. Some of our business and consumer customers are still experiencing varying degrees of financial distress. In order to protect the health of our customers and employees, and to comply with applicable government directives, we have modified our business practices, including restricting employee travel, directing employees to work from home insofar as is possible and implementing our business continuity plans and protocols to the extent necessary.

On March 27, 2020, the CARES Act was signed into law. It contains substantial tax and spending provisions intended to address the impact of the COVID-19 pandemic. The CARES Act includes the PPP, a nearly $350 billion program designed to aid small- and medium-sized businesses through federally guaranteed SBA loans distributed through banks. These loans are intended to guarantee eight weeks of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills. On December 27, 2020, the 2021 Consolidated Appropriations Act was signed, which extended relief to the earlier of 60 days after the national emergency termination date or January 1, 2022. This legislation included a $900 billion relief package and the extension of certain relief provisions from the March 2020 CARES Act that were set to expire at the end of 2020, including the extension of the eviction moratorium and $286 billion of additional PPP funds. During the nine months ended September 30, 2021 and the year ended December 31, 2020, the Bank originated 134 and 286 PPP loans, respectively, with aggregate outstanding principal balances of $13.1 million and $33.0 million, respectively. As of September 30, 2021 and December 31, 2020, total PPP loan principal balances of $9.4 million and $21.2 million, respectively, and are included in commercial and industrial loans (C+I).  

In response to the COVID-19 pandemic, we implemented a short-term loan modification program to provide temporary payment relief to certain borrowers who meet the program's qualifications. In April 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, issued an interagency statement titled Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus, that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors (ASC 310-40),” a restructuring of debt constitutes a troubled debt restructuring, or TDR, if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.  The regulatory agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in

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response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered TDRs. These include short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms or other delays in payment that are insignificant.

Additionally, Section 4013 of the CARES Act, that became law on March 27, 2020, further provides banks with the option to elect either or both of the following, from March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates:

(iii) to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR; and/or

(iv) to suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

The 2021 Consolidated Appropriations Act also continued to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR and suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

If a bank elects a suspension noted above, the suspension (i) will be effective for the term of the loan modification, but solely with respect to any modification, including a forbearance arrangement, an interest rate modification, a repayment plan and any other similar arrangement that defers or delays the payment of principal or interest, that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019; and (ii) will not apply to any adverse impact on the credit of a borrower that is not related to the COVID–19 pandemic. The Company has applied this guidance to qualifying loan modifications.

The short-term loan modification program was offered to both retail and commercial borrowers. The majority of short-term loan modifications for retail loan borrowers consisted of deferred payments (which may include principal, interest and escrow), which are capitalized to the loan balance and recovered through the re-amortization of the monthly payment at the end of the deferral period. For commercial loan borrowers, the majority of short-term modifications consisted of allowing the borrower to make interest-only payments with the deferred principal to be due at maturity or repaid as the monthly payment is re-amortized at the next interest reset date as is applicable to the individual loan structure. Alternatively, commercial loan borrowers could defer their full monthly payment similar to the retail loan program outlined above. All loans modified under these programs are maintained on full accrual status during the deferral period. As of September 30, 2021, there were no loans with outstanding modifications for temporary payment relief.

We continue to monitor the impact of COVID-19 closely, as well as any effects that may result from the CARES and Consolidated Appropriations Acts; however, the extent to which the COVID-19 pandemic will impact our operations and financial results during the remainder of 2021 and beyond is highly uncertain.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “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.

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 areas, that are worse than expected;

• the extent, severity or duration of the COVID-19 pandemic on us and on our customers, employees and third-party service providers;

• changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

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• 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 implement and change our business strategies;

• competition among depository and other financial institutions;

• inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations or increase the level of defaults, losses and prepayments on loans we have made and make;

• adverse changes in the securities or secondary mortgage markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements and insurance premiums;

• changes in the quality or composition of our loan or investment portfolios;

• technological changes that may be more difficult or expensive than expected;

• the inability of third-party providers to perform as expected;

• our ability to manage market risk, credit risk and operational risk in the current economic environment;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• system failures or breaches of our network security;

• electronic fraudulent activity within the financial services industry;

• our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire 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 future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.  

Critical Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

Our critical accounting policies involve the calculation of the allowance for loan losses and the measurement of the fair value of financial instruments. A detailed description of these critical accounting policies can be found in Note 2 of the Company’s consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

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Comparison of Financial Condition at September 30, 2021 (unaudited) and December 31, 2020

Total Assets. Total assets were $493.7 million as of September 30, 2021, an increase of $50.6 million, or 11.4%, compared to total assets of $443.1 million at December 31, 2020. The increase was due primarily to a $4.6 million increase in net loans, a $24.7 million increase in cash and due from banks and a $22.1 million increase in securities available-for-sale.

Cash and Due From Banks. Cash and due from banks increased $24.7 million, or 411.9%, to $30.7 million at September 30, 2021 from $6.0 million at December 31, 2020. This increase primarily resulted from a $61.7 million increase in deposits offset by a $13.3 million decrease in borrowings, a $4.6 million increase in net loans and a $22.1 million increase in securities available-for-sale for the nine months ended September 30, 2021.  

Available-for-Sale Securities. Available-for-sale securities increased by $22.1 million, or 39.8%, to $77.5 million at September 30, 2021 from $55.5 million at December 31, 2020. This increase was primarily due to net investments purchases of $23.5 million offset by a $1.5 million decrease in net unrealized gains within the portfolio during the nine months ended September 30, 2021.

Net Loans. Net loans increased $4.6 million, or 1.3%, to $369.4 million at September 30, 2021 from $364.8 million at December 31, 2020. During the nine months ended September 30, 2021, we originated $102.5 million of loans (including $13.1 million of PPP loans, which are classified as commercial and industrial loans). We also purchased $10.7 million of one- to four-family residential mortgage loans collateralized by properties located in the greater Boston market during the nine months ended September 30, 2021. We also purchased $1.6 million of consumer loans collateralized by manufactured housing units located in our market area during the nine months ended September 30, 2021. Net deferred loan costs increased $687,000, or 97.4%, to $1.4 million at September 30, 2021 from $705,000 at December 31, 2020 primarily due to deferred costs on one- to four-family residential mortgage loans partially offset by fees received from the SBA for processing PPP loans.

One- to four-family residential mortgage loans increased $14.5 million, or 6.8%, to $228.2 million at September 30, 2021 from $213.7 million at December 31, 2020. Commercial real estate mortgage loans increased $276,000, or 0.4%, to $66.4 million at September 30, 2021 from $66.2 million at December 31, 2020. Multi-family loans increased $3.1 million, or 47.0%, to $9.7 million at September 30, 2021 from $6.6 million at December 31, 2020. Commercial and industrial loans, due primarily to the forgiveness of PPP loans, decreased $14.9 million, or 32.9%, to $30.4 million at September 30, 2021 from $45.3 million at December 31, 2020. Acquisition, development, and land loans increased $2.0 million, or 8.5%, to $25.1 million at September 30, 2021 from $23.1 million at December 31, 2020. Home equity loans and lines of credit decreased $2.2 million, or 23.5%, to $7.3 million at September 30, 2021 from $9.6 million at December 31, 2020. Consumer loans increased $1.4 million, or 48.8%, to $4.4 million at September 30, 2021 from $2.9 million at December 31, 2020.

Our strategy to grow the balance sheet continues to be through originations and, to a lesser extent, purchases of one- to four-family residential mortgage loans, while also diversifying into higher yielding commercial real estate mortgage loans and commercial and industrial loans to improve net margins and manage interest rate risk. We also continue to sell selected, conforming 15-year and 30-year residential fixed rate mortgage loans to the secondary market on a servicing retained basis, providing us a recurring source of revenue from loan servicing income and gains on the sale of such loans.

Our allowance for loan losses increased $186,000 to $3.5 million at September 30, 2021 from $3.3 million at December 31, 2020.  The Company measures and records its allowance for loan losses based upon an incurred loss model. Under this approach, loan loss is recognized when it is probable that a loss event was incurred.  This approach also considers qualitative adjustments to the quantitative baseline determined by the model. The Company considers the impact of current environmental factors at the measurement date that did not exist over the period from which historical experience was used. Relevant factors include, but are not limited to, concentrations of credit risk (geographic, large borrower and industry), economic trends and conditions, changes in underwriting standards, experience and depth of lending staff, trends in delinquencies and the level of criticized loans. Given the many economic uncertainties regarding the COVID-19 pandemic, the Company continued to maintain relevant adjustments made in prior periods to its qualitative factors in the measurement of its allowance for loan losses at September 30, 2021 that balanced the need to recognize an allowance during this unprecedented economic situation while adhering to an incurred loss recognition and measurement principle which prohibits the recognition of future or lifetime losses.  

The Company has limited or no direct exposure to industries that have been hardest hit by the COVID-19 pandemic, including oil and gas/energy, credit cards, airlines, cruise ships, arts/entertainment/recreation, casinos and shopping malls. As of September 30, 2021, our exposure to the transportation and hospitality/restaurant industries amounted to less than 5% of our gross loan portfolio.   

Deposits. Our deposits are generated primarily from residents within our primary market area. We offer a selection of deposit accounts, including non-interest-bearing and interest-bearing checking accounts, savings accounts, money market accounts and certificates of deposit, for both individuals and businesses.

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Deposits increased $61.7 million, or 18.9%, to $389.1 million at September 30, 2021 from $327.4 million at December 31, 2020 primarily as a result of an increase in NOW and demand deposits and time deposits. Core deposits (defined as deposits other than time deposits) increased $53.1 million, or 19.0%, to $331.8 million at September 30, 2021 from $278.7 million at December 31, 2020. The increase was due to an increase of $33.2 million in commercial deposits and a $28.5 million increase in retail deposits. As of September 30, 2021, savings deposits increased $9.2 million, money market deposits increased $4.9 million, NOW and demand deposit accounts increased $39.0 million and time deposits increased $8.6 million. There were $15.0 million and $-0- of brokered deposits included in time deposits at September 30, 2021 and December 31, 2020, respectively.

Borrowings. Total borrowings decreased $13.3 million, or 25.4%, to $39.0 million at September 30, 2021 from $52.3 million at December 31, 2020. Advances from FHLB increased $4.9 million, or 14.4%, to $39.0 million at September 30, 2021 from $34.1 million at December 31, 2020. Advances from the FRB decreased $18.2 million, or 100.0%, to $0 at September 30, 2021 from $18.2 million at December 31, 2020 .

Total Stockholders’ Equity. Total stockholders’ equity increased $935,000, or 1.6%, to $59.8 million at September 30, 2021 from $58.9 million at December 31, 2020. This increase was due primarily to net income of $2.2 million, offset by the repurchase of $438,000 of the Company’s common stock at cost and an other comprehensive loss of $917,000 related to net changes in the fair value of available-for-sale securities and interest rate swap contracts for the nine months ended September 30, 2021.

Nonperforming Assets. Non-performing assets include loans that are 90 or more days past due or on non-accrual status, including troubled debt restructurings on non-accrual status, and real estate and other loan collateral acquired through foreclosure and repossession. Troubled debt restructurings include loans for which either a portion of interest or principal has been forgiven or loans modified at interest rates materially less than current market rates.

Management determines that a loan is impaired or nonperforming when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent. When a loan is determined to be impaired, the measurement of the loan in the allowance for loan losses is based on present value of expected future cash flows, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. Non-accrual loans are loans for which collectability is questionable and, therefore, interest on such loans will no longer be recognized on an accrual basis. 

We generally cease accruing interest on our loans when contractual payments of principal or interest have become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. Interest received on non-accrual loans generally is applied against principal or applied to interest on a cash basis. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for at least six consecutive months and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Nonperforming loans were $-0- and $884,000, or 0.00% and 0.24% of total loans, at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021 and December 31, 2020, we had no troubled debt restructurings or foreclosed assets. At December 31, 2020, nonperforming loans consisted primarily of an SBA-guaranteed commercial and industrial loan, which had an outstanding balance of $822,000 and was secured by all business assets and personal real estate holdings of the guarantors. The SBA guaranteed 75% of this loan balance. Although this loan was performing according to its original terms at December 31, 2020, it was considered nonperforming due to the financial condition and prospects of the borrower. This loan was repaid in full during the nine months ended September 30, 2021 with proceeds from the sale of certain personal real estate holdings of the guarantors.

Comparison of Operating Results for the Three Months Ended September 30, 2021 and September 30, 2020

Net Income. Net income was $463,000 for the three months ended September 30, 2021, compared to net income of $392,000 for the three months ended September 30, 2020, an increase of $71,000, or 18.1%. The increase was due to a $234,000 increase in net interest and dividend income after provision for loan losses, offset by a decrease in noninterest income of $34,000, an increase in noninterest expense of $74,000 and an increase in income tax expense of $55,000 during the three months ended September 30, 2021.

Interest and Dividend Income. Interest and dividend income decreased $85,000, or 2.2%, to $3.9 million for the three months ended September 30, 2021 and 2020. This decrease was due to a $121,000 decrease in interest and fees on loans. Interest and fees on loans for the three months ended September 30, 2021 and 2020 included $263,000 and $248,000 of interest and fees earned on PPP loans, respectively.

Average interest-earning assets increased $20.6 million, to $478.7 million for the three months ended September 30, 2021 from $458.0 million for the three months ended September 30, 2020. The annualized yield on interest earning-assets decreased 22 basis

36

points to 3.23% for the three months ended September 30, 2021 from 3.45% for the three months ended September 30, 2020. Average loan balances decreased $7.1 million, to $373.4 million for the three months ended September 30, 2021 from $380.5 million for the three months ended September 30, 2020. The weighted average annualized yield for the loan portfolio decreased 6 basis points to 3.75% for the three months ended September 30, 2021 from 3.81% for the three months ended September 30, 2020 primarily as a result of a decrease in market interest rates and low- yielding PPP loans. The weighted average annualized yield for the investment portfolio decreased to 1.83% for the three months ended September 30, 2021 from 2.21% for the three months ended September 30, 2020.

Interest Expense. Total interest expense decreased $269,000, or 53.4%, to $235,000 for the three months ended September 30, 2021 from $504,000 for the three months ended September 30, 2020. Interest expense on deposits decreased $194,000, or 58.8% to $136,000 for the three months ended September 30, 2021 from $330,000 for the three months ended September 30, 2020 due to a decrease in deposit rates partially offset by an increase in interest-bearing deposit balances. The average balance of interest-bearing deposits increased to $295.7 million for the three months ended September 30, 2021 from $273.5 million for the three months ended September 30, 2020, an increase of $22.1 million, or 8.1%, primarily as a result of an increase in the average balance of commercial deposits due, in part, to the deposit of PPP loan proceeds. The weighted average annualized rate of interest-bearing deposits decreased to 0.18% for the three months ended September 30, 2021 from 0.48% for the three months ended September 30, 2020 primarily as a result of a decrease in market interest rates.

Interest expense on borrowings consists of interest on advances from the FHLB and the FRB. Interest expense on borrowings decreased $75,000, or 43.1% to $99,000 for the three months ended September 30, 2021 from $174,000 for the three months ended September 30, 2020, primarily due to the retirement of $18 million of long-term borrowings from the FHLB in advance of their scheduled maturities during the fourth quarter of 2020. The interest rates on the borrowings retired during the fourth quarter of 2020 were above current market rates and were scheduled to mature in 2024 and 2025. We were able to retire these borrowings without incurring prepayment penalties. The average balance of borrowings decreased $32.2 million, or 44.6%, to $40.0 million for the three months ended September 30, 2021 from $72.3 million for the three months ended September 30, 2020. The weighted average annualized rate of borrowings increased to 0.99% for the three months ended September 30, 2021 from 0.96% for the three months ended September 30, 2020 primarily due to the repayment of low interest-bearing PPPLF advances in full during the three months ended September 30, 2021.

Net Interest and Dividend Income. Net interest and dividend income increased $184,000, or 5.3%, to $3.6 million for the three months ended September 30, 2021 from $3.4 million for the three months ended September 30, 2020. This increase was due to an $20.6 million, or 4.5%, increase in the balance of interest-earning assets offset by an increase of $10.0 million, or 2.9%, in interest-bearing liabilities during the three months ended September 30, 2021. Annualized net interest margin increased to 3.03% for the three months ended September 30, 2021 from 3.01% for the three months ended September 30, 2020.

Provision for Loan Losses. Based on management’s analysis of the allowance for loan losses, a $60,000 provision for loan losses was recorded for the three months ended September 30, 2021, compared to $110,000 for the three months ended September 30, 2020. The provision for loan losses for the three months ended September 30, 2021 and 2020 was based primarily on adjustments in 2020 to our qualitative factors reflecting economic uncertainties as a result of COVID-19.

Non-Interest Income. Non-interest income decreased $34,000, or 7.3%, to $431,000 for the three months ended September 30, 2021 compared to $465,000 for the three months ended September 30, 2020. The decrease in non-interest income during the three months ended September 30, 2021 was due primarily to a $70,000 decrease in gain on sale of loans and a $14,000 decrease in customer service fees, offset by a $19,000 increase in investment services fees and a $26,000 increase to loan servicing income, reflecting an increase in the fair value of our mortgage servicing intangible asset during the three months ended September 30, 2021.  

Non-Interest Expense. Non-interest expense increased $74,000, or 2.2%, to $3.4 million for the three months ended September 30, 2021 from $3.3 million for the three months ended September 30, 2020. The increase was primarily due to a $54,000, or 2.7%, increase in salaries and employee benefits, a $48,000, or 16.2%, increase in data processing, partially offset by a $13,000, or 13.3%, decrease in marketing and an $11,000, or 19.3%, decrease in debit card fees. The increase in salary and employee benefits during the three months ended September 30, 2021, was primarily due to normal salary increases offset by the elimination of certain positions and early retirements.

Income Taxes. Income tax expense of $137,000 was recorded for the three months ended September 30, 2021 compared to $82,000 for the three months ended September 30, 2020. The effective tax rate was 22.8% and 17.3% for the three months ended September 30, 2021 and 2020, respectively. The increase in income tax expense was due primarily to the increase in income before income tax expense. Income before income tax expense increased $126,000, or 26.6%, to $600,000 for the three months ended September 30, 2021 from $474,000 for the three months ended September 30, 2020. The increase in the effective tax rate for the three

37

months ended September 30, 2021 as compared to the three months ended September 30, 2020 was primarily due to a lack of a state net operating loss carry forward in the current period as it was utilized in 2020.

38

Average Balance Sheets

The following tables set forth average balance sheets, average yields and costs and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial.  All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or interest expense.

	For the Three Months Ended September 30,
	2021								2020
	Average Outstanding Balance			Interest		Average Yield/Rate			Average Outstanding Balance			Interest		Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans	$	373,438		$	3,503		3.75	%	$	380,533		$	3,624		3.81	%
Securities		72,014			330		1.83	%		50,935			281		2.21	%
Other		33,206			27		0.33	%		26,542			40		0.60	%
Total interest-earning assets		478,658			3,860		3.23	%		458,010			3,945		3.45	%
Non-interest-earning assets		11,734								11,456
Total assets	$	490,392							$	469,466
Interest-bearing liabilities:
NOW and demand deposits	$	107,973		$	33		0.12	%	$	90,700		$	55		0.24	%
Money market deposits		73,939			28		0.15	%		79,786			85		0.43	%
Savings accounts		56,196			9		0.06	%		47,874			8		0.07	%
Certificates of deposit		57,542			66		0.46	%		55,184			182		1.32	%
Total interest-bearing deposits		295,650			136		0.18	%		273,544			330		0.48	%
Borrowings		40,047			99		0.99	%		72,257			174		0.96	%
Other		1,626			—		—			1,519			—		—
Total interest-bearing liabilities		337,323			235		0.28	%		347,320			504		0.58	%
Non-interest-bearing deposits		88,618								58,987
Other noninterest-bearing liabilities		3,965								4,308
Total liabilities		429,906								410,615
Total stockholders' equity		60,486								58,851
Total liabilities and stockholders' equity	$	490,392							$	469,466
Net interest income				$	3,625							$	3,441
Net interest rate spread (1)							2.95	%							2.86	%
Net interest-earning assets (2)	$	141,335							$	110,690
Net interest margin (3)							3.03	%							3.01	%
Average interest-earning assets to interest-bearing liabilities		141.90	%							131.87	%

(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

39

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the years 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 total 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.

	Three Months Ended September 30, 2021 vs. 2020
	Increase (Decrease) Due to Change in
	Volume			Rate			Total
(Dollars in thousands)
Interest-earning assets:
Loans	$	(67	)	$	(54	)	$	(121	)
Securities		102			(53	)		49
Other		8			(21	)		(13	)
Total interest-earning assets		43			(128	)		(85	)
Interest-bearing liabilities:
NOW and demand deposits		9			(31	)		(22	)
Money market deposits		(6	)		(51	)		(57	)
Savings accounts		1			—			1
Certificates of deposit		7			(123	)		(116	)
Total interest-bearing deposits		11			(205	)		(194	)
Borrowings		(80	)		5			(75	)
Total interest-bearing liabilities		(69	)		(200	)		(269	)
Change in net interest income	$	112		$	72		$	184

Comparison of Operating Results for the Nine Months Ended September 30, 2021 and 2020

Net Income. Net income was $2.2 million for the nine months ended September 30, 2021, compared to $1.2 million for the nine months ended September 30, 2020, an increase of $1.0 million, or 86.8%. The increase was due to a $1.3 million increase in net interest and dividend income after provision for loan losses and an increase in noninterest income of $245,000 offset by an increase in noninterest expenses of $99,000 and an increase in income tax expense of $438,000 during the nine months ended September 30, 2021.

Interest and Dividend Income. Interest and dividend income decreased $130,000, or 1.1%, to $11.7 million for the nine months ended September 30, 2021 from $11.8 million for the nine months ended September 30, 2020. The decrease was due primarily to a $111,000, or 1.0%, decrease in interest and fees on loans. Interest and fees on loans for the nine months ended September 30, 2021 and 2020 included $972,000 and $445,000 of interest and fees earned on PPP loans, respectively.

Average interest-earning assets increased $27.6 million, to $462.4 million for the nine months ended September 30, 2021 from $434.8 million for the nine months ended September 30, 2020. The annualized yield on interest earning-assets decreased 25 basis points to 3.37% for the nine months ended September 30, 2021 from 3.62% for the nine months ended September 30, 2020. The weighted average annualized yield for the loan portfolio decreased 10 basis points to 3.84% for the nine months ended September 30, 2021 from 3.94% for the nine months ended September 30, 2020 primarily as a result of a decrease in market interest rates and low- yielding PPP loans. The weighted average annualized yield for the investment portfolio decreased to 1.87% for the nine months ended September 30, 2021 from 2.39% for the nine months ended September 30, 2020 due primarily to the reinvestment of proceeds from sales and maturities into lower yielding investments as a result of a decrease in market interest rates.

Interest Expense. Total interest expense decreased $1.2 million, or 61.8%, to $747,000 for the nine months ended September 30, 2021 from $2.0 million for the nine months ended September 30, 2020. Interest expense on deposits decreased $800,000 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due to a decrease in deposit rates partially offset by an increase in interest-bearing deposit balances. The average balance of interest-bearing deposits increased $33.1 million, or 12.8%, to $291.1 million for the nine months ended September 30, 2021 from $258.1 million for the nine months ended September 30, 2020, primarily as a result of an increase in the average balance of commercial deposits due, in part, to the deposit of PPP loan proceeds. The weighted average annualized rate on deposits decreased to 0.21% for the nine months ended September 30, 2021 from 0.65% for the nine months ended September 30, 2020 primarily as a result a decrease in market interest rates.  

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Interest expense on borrowings decreased $406,000, or 58.9%, to $283,000 for the nine months ended September 30, 2021 from $689,000 for the nine months ended September 30, 2020 primarily due to the retirement of $18 million of long-term borrowings from the FHLB in advance of their scheduled maturities during the fourth quarter of 2020. The average balance of borrowings decreased $30.5 million, or 41.7%, to $42.5 million for the nine months ended September 30, 2021 from $73.0 million for the nine months ended September 30, 2020. The weighted average annualized rate of borrowings decreased to 0.89% for the nine months ended September 30, 2021 from 1.26% for the nine months ended September 30, 2020 primarily due to a decrease in market interest rates and low interest-bearing PPPLF advances.

Net Interest and Dividend Income. Net interest and dividend income increased $1.1 million, or 10.9%, to $10.9 million for the nine months ended September 30, 2021 from $9.9 million for the nine months ended September 30, 2020. This increase was primarily due to a $27.6 million, or 6.4%, increase in the balance of interest-earning assets offset by an increase of $3.2 million, or 1.0%, in interest-bearing liabilities during the nine months ended September 30, 2021. Annualized net interest margin increased to 3.15% for the nine months ended September 30, 2021 from 3.02% for the nine months ended September 30, 2020.

Provision for Loan Losses. Based on management’s analysis of the allowance for loan losses, an $145,000 provision for loan losses was recorded for the nine months ended September 30, 2021, compared to $385,000 for the nine months ended September 30, 2020. The provision for loan losses recorded for the nine months ended September 30, 2021 and 2020 was based primarily on adjustments to our qualitative factors for economic uncertainties as a result of COVID-19.

Non-Interest Income. Non-interest income increased $245,000, or 15.7%, to $1.8 million for the nine months ended September 30, 2021 compared to $1.6 million for the nine months ended September 30, 2020. The increase in non-interest income during the nine months ended September 30, 2021 was due primarily to a $244,000 increase in securities gains, net, a $117,000 increase in loan servicing income, reflecting an increase in the fair value of our mortgage servicing intangible asset, a $38,000 increase in investment services fees and an $18,000 increase in customer service fees, offset by a $200,000 decrease in gain on sale of loans during the nine months ended September 30, 2021.

Non-Interest Expense. Non-interest expense increased $99,000, or 1.0%, to $9.8 million for the nine months ended September 30, 2021 compared to $9.7 million for the nine months ended September 30, 2020. The increase in non-interest expense during the nine months ended September 30, 2021 was primarily due to a $160,000, or 18.7%, increase in data processing, an $82,000, or 12.6%, increase in professional fees and assessments and a $30,000, or 11.7%, increase in marketing, partially offset by a decrease in salaries and employee benefits of $147,000, or 2.5%. The decrease in salaries and employee benefits during the nine months ended September 30, 2021 was due to the elimination of certain positions and early retirements, offset by normal salary increases.

Income Taxes. An income tax expense of $566,000 was recorded for the nine months ended September 30, 2021 compared to $128,000 for the nine months ended September 30, 2020. The effective tax rate was 20.4% and 9.8% for the nine months ended September 30, 2021 and 2020, respectively. Income before income tax expense increased $1.5 million, or 111.8%, to $2.8 million for the nine months ended September 30, 2021 from $1.3 million for the nine months ended September 30, 2020. The increase in the effective tax rate for the nine months ended September 30, 2021 as compared to the prior period was primarily due to a lack of state net operating loss carry forward in the current period as it was utilized in 2020.

41

Average Balance Sheets

The following tables set forth average balance sheets, average yields and costs and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or interest expense.

	For the Nine Months Ended September 30,
	2021								2020
	Average Outstanding Balance			Interest		Average Yield/Rate			Average Outstanding Balance			Interest		Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans	$	372,257		$	10,728		3.84	%	$	367,015		$	10,839		3.94	%
Securities		62,655			878		1.87	%		44,676			800		2.39	%
Other		27,515			67		0.32	%		23,113			164		0.95	%
Total interest-earning assets		462,427			11,673		3.37	%		434,804			11,803		3.62	%
Non-interest-earning assets		11,855								11,975
Total assets	$	474,282							$	446,779
Interest-bearing liabilities:
NOW and demand deposits	$	105,714		$	101		0.13	%	$	82,295		$	152		0.25	%
Money market deposits		73,241			83		0.15	%		72,911			381		0.70	%
Savings accounts		53,449			25		0.06	%		44,455			22		0.07	%
Certificates of deposit		58,744			255		0.58	%		58,411			709		1.62	%
Total interest-bearing deposits		291,148			464		0.21	%		258,072			1,264		0.65	%
Borrowings		42,508			283		0.89	%		72,967			689		1.26	%
Other		2,226			—		—			1,614			—		—
Total interest-bearing liabilities		335,882			747		0.30	%		332,653			1,953		0.78	%
Non-interest-bearing deposits		74,837								52,080
Other noninterest-bearing liabilities		3,800								3,860
Total liabilities		414,519								388,593
Total stockholders' equity		59,763								58,186
Total liabilities and stockholders' equity	$	474,282							$	446,779
Net interest income				$	10,926							$	9,850
Net interest rate spread (1)							3.07	%							2.84	%
Net interest-earning assets (2)	$	126,545							$	102,151
Net interest margin (3)							3.15	%							3.02	%
Average interest-earning assets to    interest-bearing liabilities		137.68	%							130.71	%

(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

42

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the years 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 total 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.

	Nine Months Ended September 30, 2021 vs. 2020
	Increase (Decrease) Due to Change in
	Volume			Rate			Total
(Dollars in thousands)
Interest-earning assets:
Loans	$	153		$	(264	)	$	(111	)
Securities		276			(198	)		78
Other		27			(124	)		(97	)
Total interest-earning assets		456			(586	)		(130	)
Interest-bearing liabilities:
NOW and demand deposits		36			(87	)		(51	)
Money market deposits		2			(300	)		(298	)
Savings accounts		4			(1	)		3
Certificates of deposit		4			(458	)		(454	)
Total interest-bearing deposits		46			(846	)		(800	)
Borrowings		(238	)		(168	)		(406	)
Total interest-bearing liabilities		(192	)		(1,014	)		(1,206	)
Change in net interest income	$	648		$	428		$	1,076

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from maturities of securities. We also rely on borrowings from the FHLB as supplemental sources of funds. At September 30, 2021 and December 31, 2020, we had $39.0 million and $34.1 million outstanding in advances from the FHLB, respectively, and the ability to borrow an additional $97.0 million and $112.6 million, respectively. At September 30, 2021 and December 31, 2020, we also had $-0- and $18.2 million of PPPLF advances secured by pledges of PPP loans from the FRB, respectively. Additionally, at September 30, 2021 and December 31, 2020, we had an overnight line of credit with the FHLB for up to $3.0 million and unsecured Fed Funds borrowing lines of credit with two correspondent banks for up to $5.0 million. At September 30, 2021 and December 31, 2020, there were no outstanding balances under any of these additional credit facilities.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. Our most liquid assets are cash and cash equivalents and available-for-sale investment securities. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided by operating activities was $2.7 million and $3.0 million for the nine months ended September 30, 2021 and 2020, respectively. Net cash used by investing activities, which consists primarily of disbursements for loan originations and purchases, net of principal collections, and the purchase of securities available for sale, offset by proceeds from the sale and maturity of securities available for sale, was $26.6 million and $45.3 million for the nine months ended September 30, 2021 and 2020, respectively. Net cash provided by financing activities, consisting of activity in deposit accounts and FHLB and FRB advances, was $48.6 million and $65.5 million for the nine months ended September 30, 2021 and 2020, respectively.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily. We anticipate that we will have sufficient funds to meet our current funding commitments. COVID-19 has impacted our business and that of many of our customers, and the ultimate impact will depend on future developments, which remain uncertain, including the scope and duration of the pandemic and actions taken by governmental authorities in response to it. Our current strategy to increase core deposits and the continued use of FHLB advances, as well as brokered certificates of deposit as needed, to fund loan growth.

43

The net proceeds from the 2019 stock offering significantly increased our liquidity and capital resources. Over time, the initial level of liquidity is expected to be reduced as net proceeds from the stock offering are used for general corporate purposes, including the funding of loans. However, due to the increase in equity resulting from the net proceeds raised in the stock offering, as well as other factors associated with the stock offering, our return on equity for the nine months ended September 30, 2021 was adversely affected.

First Seacoast Bancorp is a separate legal entity from First Seacoast Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At September 30, 2021, the Company (on an unconsolidated basis) had liquid assets of $9.7 million. On September 23, 2020, the board of directors of the Company authorized the repurchase of up to 136,879 shares of the Company’s outstanding common stock, which equals approximately 2.3% of all shares currently outstanding and approximately 5.0% of the currently outstanding shares owned by stockholders other than the MHC. See Note 11 of the unaudited consolidated financial statements appearing under Item 1 of this quarterly report for a discussion of the Company’s common stock repurchases. As of September 30, 2021, the Company had repurchased 70,941 shares of its common stock at a weighted average share price of $9.45 per share.

At September 30, 2021, First Seacoast Bank exceeded all its regulatory capital requirements. See Note 10 of the unaudited consolidated financial statements appearing under Item 1 of this quarterly report. Management is not aware of any conditions or events that would change First Seacoast Bank’s categorization as well-capitalized.

Off-Balance Sheet Arrangements

As a financial services provider, we routinely are a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our potential future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

General.  Most 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 established a management-level Asset/Liability Management Committee (the “ALCO”), which takes responsibility for overseeing the asset/liability management process and related procedures. The ALCO meets on at least a quarterly basis and reviews asset/liability strategies, liquidity positions, alternative funding sources, interest rate risk measurement reports, capital levels and economic trends at both national and local levels. Our interest rate risk position is also monitored quarterly by the board of directors.

We try to 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; promoting core deposit products; selling a portion of fixed-rate one- to four-family residential real estate loans; maintaining investments as available-for-sale; diversifying our loan portfolio; utilizing interest rate swaps; and strengthening our capital position. By following these strategies, we believe that we are better positioned to react to changes in market interest rates.

Net Portfolio Value Simulation.  We analyze our sensitivity to changes in interest rates through a net portfolio value of equity (“NPV”) model. NPV 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 NPV ratio represents the dollar amount of our NPV divided by the present value of our total assets for a given interest rate scenario. NPV attempts to quantify our economic value using a discounted cash flow methodology, while the NPV ratio reflects that value as a form of capital ratio. We estimate what our NPV would be at a specific date. We then calculate what the NPV would 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 NPV under the assumptions that interest rates increase 100, 200, 300 and 400 basis points from current market rates and that interest rates decrease 100 basis points from current market rates.

44

The following table presents the estimated changes in our net portfolio value that would result from changes in market interest rates as of September 30, 2021.

	Net Portfolio Value (“NPV”)								NPV as Percent of Portfolio Value of Assets
Basis Point (“bp”) Change in Interest Rates	Dollar Amount		Dollar Change			Percent Change			NPV Ratio			Change
	(Dollars in thousands)
400 bp	$	47,109	$	(7,185	)		(13.2	)%		11.0	%		9
300 bp		50,086		(4,208	)		(7.8	)		11.3			35
200 bp		52,803		(1,491	)		(2.7	)		11.4			52
100 bp		54,951		657			1.2			11.4			53
0		54,294		—			—			10.9			—
(100) bp		43,316		(10,978	)		(20.2	)		8.5			(237	)

The percent change to NPV in the -100 bp change in interest rates scenario was -20.2% at September 30, 2021 versus a policy limit of -10.0%.  An extremely low interest rate environment may artificially reduce the calculated inherent value of the Bank’s non-maturity deposits, which can inordinately impact the sensitivity of the NPV resulting in a mathematical aberration.  

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 way 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 particular 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 NPV and will differ from actual results.

Economic Value of Equity. Like most financial institutions, our profitability depends to a large extent upon our net interest income, which is the difference between our interest income on interest-earning assets, such as loans and securities, and our interest expense on interest-bearing liabilities adjusted for the value of off-balance sheet contracts, such as deposits and borrowed funds. Accordingly, our results of operations depend largely on movements in market interest rates and our ability to manage our interest-rate sensitive assets and liabilities in response to these movements. Factors such as inflation, and instability in financial markets, among other factors beyond our control, may affect interest rates.

In a rising interest rate environment, we would expect that the rates on our deposits and borrowings would reprice upwards faster than the rates on our long-term loans and investments, which would be expected to compress our interest rate spread and have a negative effect on our profitability. Furthermore, increases in interest rates may adversely affect the ability of our borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase. Conversely, decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk as we may have to redeploy such loan or securities proceeds into lower-yielding assets, which might also negatively impact our income. If interest rates rise, we expect that our economic value of equity would decrease. Economic value of equity 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. The Company’s economic value of equity analysis as of September 30, 2021 estimated that, in the event of an instantaneous 200 basis point increase in interest rates, the Company would experience a 2.7% decrease in economic value of equity. At the same date, our analysis estimated that, in the event of an instantaneous 100 basis point decrease in interest rates, the Company would experience a 20.2% decrease in the economic value of equity. As noted above, we believe this decrease is a mathematical aberration due to the current extremely low interest rate environment.

Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in the level of interest rates also may negatively affect our ability to originate real estate loans, the value of our assets and our ability to realize gains from the sale of our assets, all of which ultimately affect our earnings. Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results.

45

Item 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures. As of September 30, 2021, the Company conducted an evaluation, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934). Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2021 for recording, processing, summarizing and reporting the information the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in SEC rules and forms.

The effectiveness of a system of disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Due to such inherent limitations, there can be no assurance that any system of disclosure controls and procedures will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.

Changes in Internal Controls over Financial Reporting. During the quarter ended September 30, 2021, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting

46

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not involved in any pending legal proceedings as a plaintiff or a defendant other than routine legal proceedings occurring in the ordinary course of business. At September 30, 2021, we were not involved in any legal proceedings the outcome of which we believe would be material to our consolidated financial condition or results of operations.

Item 1A. Risk Factors

Not applicable, as First Seacoast Bancorp is a “smaller reporting company.”

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the Company’s repurchases of its outstanding shares of common stock during the quarter ended September 30, 2021.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs
July 1, 2021 - July 31, 2021		2,766	$	9.86		2,766		66,635
August 1, 2021 - August 31, 2021		418		9.82		418		66,217
September 1, 2021 - September 30, 2021		279		9.89		279		65,938
Total		3,463				3,463

There were no sales of unregistered securities during the three months ended September 30, 2021.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

47

Item 6. Exhibits

Exhibit Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials for the quarter ended September 30, 2021, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Equity Capital, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements
104	Cover Page Interactive Data Files (embedded within Inline XBRL document)

48

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST SEACOAST BANCORP
Date:  November 12, 2021	/s/ James R. Brannen
	James R. Brannen
	President and Chief Executive Officer
Date: November 12, 2021	/s/ Richard M. Donovan
	Richard M. Donovan
	Senior Vice President and Chief Financial Officer

49

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James R. Brannen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Seacoast Bancorp;

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

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

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

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

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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(s) 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:

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.

Date:  November 12, 2021	/s/ James R. Brannen
	James R. Brannen
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard M. Donovan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Seacoast Bancorp;

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

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

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

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

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (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(s) 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:

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.

Date:  November 12, 2021	/s/ Richard M. Donovan
	Richard M. Donovan
	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, James R. Brannen, President and Chief Executive Officer of First Seacoast Bancorp (the “Company”), hereby certify in my capacity as an executive officer of the Company that I have reviewed the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Report”) and that, to the best of my knowledge:

1. The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 12, 2021	/s/ James R. Brannen
	James R. Brannen
	President and Chief Executive Officer

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

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Richard M. Donovan, Senior Vice President and Chief Financial Officer of First Seacoast Bancorp (the “Company”), hereby certify in my capacity as an executive officer of the Company that I have reviewed the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Report”) and that, to the best of my knowledge:

1. The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 12, 2021	/s/ Richard M. Donovan
	Richard M. Donovan
	Senior Vice President and Chief Financial Officer

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

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Nov. 01, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Trading Symbol	FSEA
Title of 12(b) Security	Common stock, $0.01 par value per share
Security Exchange Name	NASDAQ
Entity Registrant Name	First Seacoast Bancorp
Entity Central Index Key	0001769267
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Common Stock, Shares Outstanding		6,012,266
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Ex Transition Period	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	X1
Entity File Number	001-38985
Entity Address, Address Line One	633 Central Avenue
Entity Address, City or Town	Dover
Entity Address, State or Province	NH
City Area Code	603
Local Phone Number	742-4680
Entity Address, Postal Zip Code	03820
Entity Tax Identification Number	84-2404519

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks		$ 30,695	$ 5,996
Interest bearing time deposits with other banks		1,245	2,488
Securities available-for-sale, at fair value		77,546	55,470
Federal Home Loan Bank stock		2,022	1,796
Loans		372,950	368,142
Less allowance for loan losses		(3,528)	(3,342)
Net loans		369,422	364,800
Land, building and equipment, net		4,695	5,078
Bank-owned life insurance		4,441	4,356
Accrued interest receivable		1,443	1,412
Other assets		2,155	1,666
Total assets		493,664	443,062
Deposits:
Non-interest bearing deposits		92,320	64,571
Interest bearing deposits		296,780	262,810
Total deposits		389,100	327,381
Advances from Federal Home Loan Bank		39,032	34,127
Advances from Federal Reserve Bank			18,195
Mortgagors’ tax escrow		2,033	1,420
Deferred compensation liability		1,672	1,667
Other liabilities		2,031	1,411
Total liabilities		433,868	384,201
Stockholders' Equity:
Preferred Stock, $.01 par value, 10,000,000 shares authorized as of September 30, 2021 and December 31, 2020; none issued and outstanding as of September 30, 2021 and December 31, 2020
Common Stock, $.01 par value, 90,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 6,083,500 shares issued and 6,012,559 shares outstanding as of September 30, 2021 and 6,083,500 shares issued and 6,058,024 outstanding as of December 31, 2020, respectively		61	61
Additional paid-in capital		25,603	25,606
Equity capital		36,396	34,192
Accumulated other comprehensive income	[1]	464	1,381
Treasury stock, at cost: 70,941 and 25,476 shares outstanding as of September 30, 2021 and December 31, 2020, respectively		(671)	(233)
Unearned compensation - ESOP: 205,682 and 214,625 shares unallocated at September 30, 2021 and December 31, 2020, respectively		(2,057)	(2,146)
Total stockholders' equity		59,796	58,861
Total liabilities and stockholders' equity		$ 493,664	$ 443,062

[1] All amounts are net of tax

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock par value per share	$ 0.01	$ 0.01
Common stock,number of shares authorized	90,000,000	90,000,000
Common stock,number of shares issued	6,083,500	6,083,500
Common stock, number of shares outstanding	6,012,559	6,058,024
Treasury Stock Shares Outstanding	70,941	25,476
ESOP,Unearned Compensation,Shares	205,682	214,625

XML

CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest and dividend income:
Interest and fees on loans	$ 3,503,000	$ 3,624,000	$ 10,728,000	$ 10,839,000
Interest on debt securities:
Taxable	134,000	68,000	276,000	219,000
Non-taxable	215,000	234,000	659,000	648,000
Total interest on debt securities	349,000	302,000	935,000	867,000
Dividends	8,000	19,000	10,000	97,000
Total interest and dividend income	3,860,000	3,945,000	11,673,000	11,803,000
Interest expense:
Interest on deposits	136,000	330,000	464,000	1,264,000
Interest on borrowings	99,000	174,000	283,000	689,000
Total interest expense	235,000	504,000	747,000	1,953,000
Net interest and dividend income	3,625,000	3,441,000	10,926,000	9,850,000
Provision for loan losses	60,000	110,000	145,000	385,000
Net interest and dividend income after provision for loan losses	3,565,000	3,331,000	10,781,000	9,465,000
Noninterest income:
Customer service fees	236,000	250,000	725,000	707,000
Gain on sale of loans	25,000	95,000	113,000	313,000
Securities gains, net		8,000	535,000	291,000
Income from bank-owned life insurance	45,000	44,000	85,000	69,000
Loan servicing income	38,000	12,000	122,000	5,000
Investment services fees	62,000	43,000	180,000	142,000
Other income	25,000	13,000	50,000	38,000
Total noninterest income	431,000	465,000	1,810,000	1,565,000
Noninterest expense:
Salaries and employee benefits	2,073,000	2,019,000	5,824,000	5,971,000
Director compensation	70,000	69,000	198,000	194,000
Occupancy expense	136,000	146,000	473,000	470,000
Equipment expense	138,000	143,000	419,000	433,000
Marketing	85,000	98,000	286,000	256,000
Data processing	345,000	297,000	1,016,000	856,000
Deposit insurance fees	28,000	32,000	87,000	79,000
Professional fees and assessments	253,000	232,000	734,000	652,000
Debit card fees	46,000	57,000	137,000	173,000
Employee travel and education expenses	38,000	25,000	81,000	79,000
Other expense	184,000	204,000	566,000	559,000
Total noninterest expense	3,396,000	3,322,000	9,821,000	9,722,000
Income before income tax expense	600,000	474,000	2,770,000	1,308,000
Income tax expense	137,000	82,000	566,000	128,000
Net income	$ 463,000	$ 392,000	$ 2,204,000	$ 1,180,000
Earnings per share:
Basic	$ 0.08	$ 0.07	$ 0.38	$ 0.20
Diluted	$ 0.08	$ 0.07	$ 0.38	$ 0.20
Weighted Average Shares:
Basic	5,807,665	5,865,894	5,820,875	5,862,913
Diluted	5,807,665	5,865,894	5,820,875	5,862,913

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income		$ 463	$ 392	$ 2,204	$ 1,180
Other comprehensive income (loss), net of income taxes:
Unrealized holding (losses) gains on securities available-for-sale arising during the period net of income taxes of $(275), $(43), $(382) and $214, respectively		(750)	(113)	(1,037)	575
Reclassification adjustment for losses (gains) and net amortization or accretion on securities available-for-sale included in net income net of income taxes of $(48), $(29), $12 and $7, respectively		129	78	(29)	(18)
Total unrealized (losses) gains on securities available-for-sale		(621)	(35)	(1,066)	557
Change in interest rate swaps net of income taxes of $(1), $(0), $46 and $(45), respectively		(2)		125	(119)
Reclassification adjustment for net interest expense on swaps included in net income net of income taxes of $(4), $-0-, $(9) and $-0-, respectively		11		24
Total change in interest rate swaps		9		149	(119)
Other comprehensive (loss) income	[1]	(612)	(35)	(917)	438
Comprehensive (loss) income		$ (149)	$ 357	$ 1,287	$ 1,618

[1] All amounts are net of tax

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]
Unrealized holding gains (losses) on securities available-for-sale arising during the period net of income taxes	$ (275)	$ (43)	$ (382)	$ 214
Reclassification adjustment for gains and losses and net amortization or accretion on securities available-for-sale included in net income net of income taxes	(48)	(29)	12	7
Change in interest rate swaps net of income taxes	(1)	0	46	(45)
Reclassification adjustment for net interest expense on swaps included in net income net of income taxes	$ (4)	$ 0	$ (9)	$ 0

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total		Common Stock [Member]	Additional Paid-in Capital [Member]	Equity Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Unearned Compensation ESOP [Member]
Beginning Balance at Dec. 31, 2019	$ 57,066		$ 61	$ 25,636	$ 33,113	$ 521		$ (2,265)
Beginning Balance (shares) at Dec. 31, 2019			6,083,500
Net income	1,180				1,180
Other comprehensive income (loss)	438	[1]				438
ESOP shares earned	63			(26)				89
Ending Balance at Sep. 30, 2020	58,747		$ 61	25,610	34,293	959		(2,176)
Ending Balance (shares) at Sep. 30, 2020			6,083,500
Beginning Balance at Jun. 30, 2020	58,372		$ 61	25,622	33,901	994		(2,206)
Beginning Balance (shares) at Jun. 30, 2020			6,083,500
Net income	392				392
Other comprehensive income (loss)	(35)	[1]				(35)
ESOP shares earned	18			(12)				30
Ending Balance at Sep. 30, 2020	58,747		$ 61	25,610	34,293	959		(2,176)
Ending Balance (shares) at Sep. 30, 2020			6,083,500
Beginning Balance at Dec. 31, 2020	58,861		$ 61	25,606	34,192	1,381	$ (233)	(2,146)
Beginning Balance (shares) at Dec. 31, 2020			6,058,024
Net income	2,204				2,204
Other comprehensive income (loss)	(917)	[1]				(917)
Treasury stock activity	$ (438)						(438)
Treasury stock activity (shares)	(3,463)		(45,465)
ESOP shares earned	$ 86			(3)				89
Ending Balance at Sep. 30, 2021	59,796		$ 61	25,603	36,396	464	(671)	(2,057)
Ending Balance (shares) at Sep. 30, 2021			6,012,559
Beginning Balance at Jun. 30, 2021	59,950		$ 60	25,603	35,933	1,076	(636)	(2,086)
Beginning Balance (shares) at Jun. 30, 2021			6,016,022
Net income	463				463
Other comprehensive income (loss)	(612)	[1]				(612)
Treasury stock activity	(34)		$ 1				(35)
Treasury stock activity (shares)			(3,463)
ESOP shares earned	29							29
Ending Balance at Sep. 30, 2021	$ 59,796		$ 61	$ 25,603	$ 36,396	$ 464	$ (671)	$ (2,057)
Ending Balance (shares) at Sep. 30, 2021			6,012,559

[1] All amounts are net of tax

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement Of Stockholders Equity [Abstract]
Number of shares committed to be released each year,ESOP	2,981	2,981	8,943	8,943

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income	$ 2,204	$ 1,180
Adjustments to reconcile net income to net cash provided by operating activities:
ESOP expense	86	63
Depreciation	419	433
Net amortization of bond premium	494	266
Provision for loan losses	145	385
Gain on sale of loans	(113)	(313)
Securities gains, net	(535)	(291)
Proceeds from loans sold	4,365	11,596
Origination of loans sold	(4,252)	(11,283)
Increase in bank-owned life insurance	(85)	(69)
(Increase) decrease in deferred loan costs	(687)	884
Deferred tax expense (benefit)	166	(379)
Increase in accrued interest receivable	(31)	(268)
(Increase) decrease in other assets	(313)	370
Decrease in deferred compensation liability	5	6
Increase in other liabilities	824	435
Net cash provided by operating activities	2,692	3,015
Cash flows from investing activities:
Proceeds from sales, maturities and principal payments from securities available-for-sale	19,127	22,208
Purchase of securities available-for-sale	(42,625)	(33,547)
Purchase of property and equipment	(36)	(269)
Loan purchases	(12,279)	(9,901)
Loan originations and principal collections, net	8,158	(24,428)
Recoveries of loans previously charged off	41	20
Net (purchase) redemption of Federal Home Loan Bank stock	(226)	415
Proceeds from sales of interest bearing time deposits with other banks	1,243	247
Net cash used by investing activities	(26,597)	(45,255)
Cash flows from financing activities:
Net increase in NOW, demand deposits, money market and savings accounts	53,076	67,396
Net increase (decrease) in certificates of deposit	8,643	(9,559)
Increase in mortgagors’ escrow accounts	613	1,321
Treasury stock purchases	(438)
Net cash provided by financing activities	48,604	65,549
Net change in cash and cash equivalents	24,699	23,309
Cash and cash equivalents at beginning of period	5,996	4,009
Cash and cash equivalents at end of period	30,695	27,318
Cash activities:
Cash paid for interest	782	1,922
Cash paid for income taxes	318	247
Effect of change in fair value of securities available-for-sale:
Securities available-for-sale	(1,463)	764
Deferred taxes	397	(207)
Total unrealized (losses) gains on securities available-for-sale	(1,066)	557
Effect of change in fair value of interest rate swaps:
Interest rate swaps	204	(164)
Deferred taxes	(55)	45
Other comprehensive income (loss)	149	(119)
Federal Home Loan Bank Advances [Member]
Cash flows from financing activities:
Proceeds from short-term FHLB advances	25,000	5,000
Proceeds from long-term FHLB advances	5,000	20,585
Payments on short-term FHLB advances	(25,095)	(34,907)
Payments on long-term FHLB advances		(10,000)
Federal Reserve Bank Advances
Cash flows from financing activities:
Proceeds from short-term FHLB advances		$ 25,713
Payments on short-term FHLB advances	$ (18,195)

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

The accompanying unaudited consolidated financial statements include the accounts of First Seacoast Bancorp (the “Company”), its wholly-owned subsidiary, First Seacoast Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, FSB Service Corporation, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim consolidated financial information, general practices within the banking industry and with instructions for Form 10-Q and Regulation S-X.  Accordingly, these interim financial statements do not include all the information or footnotes required by U.S. GAAP for annual financial statements. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of these consolidated financial statements have been included. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 26, 2021.

Corporate Structure

The Company is the federally-chartered holding company for the Bank (formerly named Federal Savings Bank). Effective July 16, 2019, pursuant to a Plan of Reorganization from Mutual Savings Bank to Mutual Holding Company and Stock Issuance Plan, the Bank reorganized into the mutual holding company structure, and the Company completed a concurrent stock offering.    

The Bank offers a full range of banking and wealth management services to its customers. The Bank focuses on four core services that center around customer needs. The core services include residential lending, commercial banking, personal banking and wealth management. The Bank offers a full range of commercial and consumer banking services through its network of five full-service branch locations.

Investment management services are offered at the Company’s full-service wealth management office in Dover, New Hampshire. The assets held for wealth management customers are not assets of the Company and, accordingly, are not reflected in the accompanying balance sheets. Assets under management totaled approximately $67.2 million and $58.4 million at September 30, 2021 and December 31, 2020, respectively. On August 17, 2021, the Bank entered into a definitive agreement with an investment advisory and wealth management firm (the “seller”) to purchase certain of its client accounts and client relationships for a purchase price of $344,000, of which $172,000 was paid at closing. This amount is included in other assets at September 30, 2021. Each client account has been assigned a value, and as each client transfers to the Bank, 85% of this value will be paid to the seller. By May 31, 2022, or upon mutual agreement that the transition of client accounts is complete, whichever is earlier, the balance of the purchase price will be paid to the seller. As of September 30, 2021, no client accounts have transferred to the Bank. The client accounts purchased contain assets under management valued at approximately $27.1 million as of September 30, 2021. The client accounts purchased are recorded as a customer list intangible asset. Identifiable intangible assets that are subject to amortization will be reviewed for impairment, at least annually, based on their fair value. Any impairment will be recognized as a charge to earnings and the adjusted carrying amount of the intangible asset will become its new accounting basis. The remaining useful life of the intangible asset will also be evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company is amortizing the customer list intangible on a straight-line basis over a ten-year period.

The Bank is engaged principally in the business of attracting deposits from the public and investing those funds in various types of loans, including residential and commercial real estate loans, and a variety of commercial and consumer loans. The Bank also invests its deposits and borrowed funds in investment securities. Deposits at the Bank are insured by the Federal Deposit and Insurance Corporation (“FDIC”) for the maximum amount permitted by law.

Banking services, the Company’s only reportable operating segment, is managed as a single strategic unit.

Recently Adopted Accounting Standards

As an “emerging growth company,” as defined in Title 1 of Jumpstart Our Business Startups (JOBS) Act, the Company has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards without an extended transition period. As of September 30, 2021, there was no significant difference in the comparability of the Company’s consolidated financial statements as a result of this extended transition period except for the accounting treatment for measuring and recording the Company’s allowance for loan losses. The Company measures and records an allowance for loan losses based upon the incurred loss model while other public companies may be required to calculate their allowance for loan losses based upon the current expected credit loss (“CECL”) model. The CECL approach requires an estimate of the loan loss expected over the life of the loan while the incurred loss approach delays the recognition of a loan loss until it is probable a loss event has incurred. The Company’s status as an “emerging growth company” will end on the earlier of: (i) the last day of the fiscal year of the Company during which it had total annual gross revenues of $1.07 billion (as adjusted for inflation) or more; (ii) the last day of the fiscal year of the Company following the fifth anniversary of the effective date of the Company’s initial public offering (which will be December 31, 2024 for the Company); (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

In August 2017, the FASB issued Accounting Standards Update (ASU) 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.”  The amendments in ASU 2017-12 apply to any entity that elects to apply hedge accounting in accordance with U.S. GAAP. The main changes introduced by ASU 2017-12 eliminate the requirement to separately measure and report hedge ineffectiveness and requires companies to present all of the elements of hedge accounting that affect earnings in the same income statement line as the hedged item. The standard also permits hedge accounting for strategies for which hedge accounting was not historically permitted and includes new alternatives for measuring the hedged item for fair value hedges of interest rate risk. Furthermore, the standard eases the requirements for effectiveness testing, hedge documentation, applying the critical terms match method and introduces new alternatives that will permit companies to reduce the risk of material error corrections if they misapply the shortcut method. The adoption of this ASU on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Yet To Be Adopted

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements.

In January 2021, the FASB issued ASU 2021-1, “Reference Rate Reform (Topic 848) (Scope),” which clarifies certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting applied to derivatives that are affected by the discounting transition.  This ASU becomes effective immediately for all entities on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2020, the FASB issued ASU No. 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities,” as a limited deferral of the effective dates, for one year, of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” and ASU No. 2016-02, “Leases (Topic 842),” to provide immediate, near-term relief for certain entities for whom these ASU’s are either currently or imminently effective as a result of COVID-19. The Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as of January 1, 2019.  The Company does not expect the adoption of ASU No. 2016-02, “Leases (Topic 842),” to have a material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance to ease the potential burden in accounting due to reference rate reform. The guidance in this update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made, and hedging relationships entered into, on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard.

In February 2020, the FASB issued ASU 2020-2, “Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).”  This ASU adds an SEC paragraph pursuant to the issuance of SEC SAB Topic No. 119 to the FASB Codification Topic 326 and updates the SEC section of the Codification for the change in the effective dates of Topic 842.  This ASU primarily details guidance on what SEC staff would expect a registrant to perform and document when measuring and recording its allowance for credit losses for financial assets recorded at amortized cost.

In January 2020, the FASB issued ASU 2020-1, “Investments – Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions Between Topic 321, Topic 323, and T 815 (A Consensus of the Emerging Issues Task Force),” which clarifies the interaction among the accounting standards for equity securities, equity method investments and certain derivatives.  This ASU becomes effective for public entities for fiscal years beginning after December 15, 2020 and all other entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies accounting for income taxes by removing specific technical exceptions. The guidance removes the need for companies to analyze whether (1) the exception to the incremental approach for intra-period tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) the exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses apply in a given period. The amendments in this ASU are effective for smaller reporting companies for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses,” to increase stakeholder awareness of the improvements made to the various amendments to Topic 326 and to clarify certain areas of guidance as companies transition to the new standard. Also during November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):  Effective Dates,” finalizing various effective date deferrals for private companies, not-for-profit organizations and certain smaller reporting companies applying the credit losses (CECL), leases and hedging standards.  The effective date for ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” is deferred to years beginning after December 15, 2022. The effective dates for ASU 2016-02, “Leases (Topic 842)” is deferred to fiscal years beginning after December 15, 2021.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires that credit

losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of income as the amounts expected to be collected change. The ASU was originally to be effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” extending the implementation date by one year for smaller reporting companies and clarifying that operating lease receivables are outside the scope of Accounting Standards Codification Topic 326. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13, while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

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Cash and Due From Banks

9 Months Ended

Sep. 30, 2021

Cash And Due From Banks [Abstract]

Cash And Due From Banks

2. Cash and Due From Banks

At September 30, 2021 and December 31, 2020, cash and due from banks totaled $30.7 million and $6.0 million, respectively. The Company pledged cash collateral to derivative counterparties totaling $526,000 and $525,000 at September 30, 2021 and December 31, 2020, respectively. See Note 12 for a discussion of the Company’s derivative and hedging activities.

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Securities Available-for-Sale

9 Months Ended

Sep. 30, 2021

Available For Sale Securities [Abstract]

Securities Available for Sale

3. Securities Available-for-Sale

The amortized cost and fair value of securities available-for-sale, and the corresponding amounts of gross unrealized gains and losses, are as follows as of September 30, 2021 and December 31, 2020:

	September 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	5,638	$	—	$	(78	)	$	5,560
U.S. Government agency small business administration    pools guaranteed by SBA		4,053		51		(25	)		4,079
Collateralized mortgage obligations issued by the FHLMC    and FNMA		2,970		3		(22	)		2,951
Residential mortgage backed securities		21,404		44		(386	)		21,062
Municipal bonds		42,913		1,234		(253	)		43,894
	$	76,978	$	1,332	$	(764	)	$	77,546

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	997	$	—	$	(24	)	$	973
U.S. Government agency small business administration    pools guaranteed by SBA		2,399		71		—			2,470
Collateralized mortgage obligations issued by the FHLMC		938		11		—			949
Residential mortgage backed securities		5,100		49		(13	)		5,136
Municipal bonds		44,005		1,944		(7	)		45,942
	$	53,439	$	2,075	$	(44	)	$	55,470

The amortized cost and fair values of available-for-sale securities at September 30, 2021 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(Dollars in thousands)
September 30, 2021
Due after one year through five years	$	—	$	—
Due after five years through ten years		6,601		6,573
Due after ten years		41,950		42,881
Total U.S. Government-sponsored enterprises    obligations and municipal bonds		48,551		49,454
U.S. Government agency small business pools guaranteed    by SBA		4,053		4,079
Collateralized mortgage obligations issued by the FHLMC    and FNMA		2,970		2,951
Residential mortgage backed securities		21,404		21,062
Total	$	76,978	$	77,546

The following is a summary of gross unrealized losses and fair value for those investments with unrealized losses, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020:

	Less than 12 Months							More than 12 Months							Total
	Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in thousands)
September 30, 2021
U.S. Government sponsored enterprises    obligations		6	$	4,606	$	(35	)		2	$	954	$	(43	)	$	5,560	$	(78	)
U.S. Government agency small business    administration pools guaranteed by    SBA		2		1,992		(25	)		—		—		—			1,992		(25	)
Collateralized mortgage obligations    issued by the FHLMC and FNMA		3		2,286		(22	)		—		—		—			2,286		(22	)
Residential mortgage backed securities		19		17,125		(323	)		1		2,339		(63	)		19,464		(386	)
Municipal bonds		18		16,625		(253	)		—		—		—			16,625		(253	)
		48	$	42,634	$	(658	)		3	$	3,293	$	(106	)	$	45,927	$	(764	)
December 31, 2020
U.S. Government sponsored enterprises    obligations		2	$	973	$	(24	)		—	$	—	$	—		$	973	$	(24	)
U.S. Government agency small business    administration pools guaranteed by    SBA		—		—		—			—		—		—			—		—
Collateralized mortgage obligations    issued by the FHLMC		—		—		—			—		—		—			—		—
Residential mortgage backed securities		1		3,102		(13	)		—		—		—			3,102		(13	)
Municipal bonds		4		2,381		(7	)		—		—		—			2,381		(7	)
		7	$	6,456	$	(44	)		—	$	—	$	—		$	6,456	$	(44	)

In evaluating whether investments have suffered an other-than-temporary decline, management evaluated the amount of the decline compared to cost, the length of time and extent to which fair value has been less than cost, the underlying creditworthiness of the issuer, the fair values exhibited during the year and estimated future fair values. In general, management concluded the declines are due to coupon rates compared to market rates and current economic conditions. The Company does not intend to sell investments with unrealized losses, and it is more likely than not that the Company will not be required to sell these investments before recovery of their amortized cost basis. Based on evaluations of the underlying issuers’ financial condition, current trends and economic conditions, management does not believe any securities suffered an other-than-temporary decline in value as of September 30, 2021 or December 31, 2020.

Proceeds from sales, maturities, principal payments received and gross realized gains and losses on available-for-sale securities were as follows for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
	(Dollars in thousands)
Proceeds from sales, maturities, and principal payments      received on securities available-for-sale	$	684	$	2,788	$	19,127		$	22,208
Gross realized gains		—		8		588			295
Gross realized losses		—		—		(53	)		(4	)
Net realized gains	$	—	$	8	$	535		$	291

As of September 30, 2021 and December 31, 2020, there were no holdings that were issued by a single state or political subdivision which comprised more than 10% of the total fair value of the Company’s available-for-sale securities.

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Loans

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Loans

4. Loans

The Bank’s lending activities are primarily conducted in and around Dover, New Hampshire and in the areas surrounding its branches. The Bank grants commercial real estate loans, multifamily 5+ dwelling unit loans, commercial and industrial loans, acquisition, development and land loans, 1–4 family residential loans, home equity line of credit loans and consumer loans. Most loans are collateralized by real estate. The ability and willingness of real estate, commercial and construction loan borrowers to honor their repayment commitments is generally dependent on the health of the real estate sector in the borrowers’ geographic area and the general economy.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported, and in March 2020, the COVID-19 outbreak was declared a pandemic. On March 27, 2020, the Small Business Administration (“SBA”) established a loan program in response to the COVID-19 pandemic, the Paycheck Protection Program (“PPP”), which was added to the SBA’s 7(a) loan program by of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (such loans, “PPP loans”). The PPP, a nearly $350 billion program, was designed to aid small- and medium-sized businesses through federally guaranteed SBA loans distributed through banks. On December 27, 2020, the 2021 Consolidated Appropriations Act was signed, which extended relief provisions contained in the CARES act to the earlier of 60 days after the national emergency termination date or January 1, 2022. This legislation also included a $900 billion relief package and the extension of certain relief provisions from the March 2020 CARES Act that were set to expire at the end of 2020, including the extension of the eviction moratorium and $286 billion of additional PPP funds. The Consolidated Appropriations Act also continued to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a troubled debt restructuring (“TDR”) and suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes. During the nine months ended September 30, 2021 and the year ended December 31, 2020, the Bank originated 134 and 286 PPP loans, respectively, with aggregate outstanding principal balances of $13.1 million and $33.0 million, respectively. As of September 30, 2021 and December 31, 2020, total PPP loan principal balances were $9.4 million and $21.2 million, respectively, and are included in commercial and industrial loans (C+I).

Loans consisted of the following at September 30, 2021 and December 31, 2020:

	September 30, 2021			December 31, 2020
	(Dollars in thousands)
Commercial real estate (CRE)	$	66,442		$	66,166
Multifamily (MF)		9,730			6,619
Commercial and industrial (C+I)		30,358			45,262
Acquisition, development, and land (ADL)		25,109			23,145
1-4 family residential (RES)		228,204			213,718
Home equity line of credit (HELOC)		7,334			9,583
Consumer (CON)		4,381			2,944
Total loans		371,558			367,437
Net deferred loan costs		1,392			705
Allowance for loan losses		(3,528	)		(3,342	)
Total loans, net	$	369,422		$	364,800

Changes in the allowance for loan losses (“ALL”) for the three and nine months ended September 30, 2021 and 2020, by portfolio segment, are summarized as follows:

(Dollars in thousands)	CRE			MF		C+I			ADL			RES		HELOC			CON			Unallocated		Total
Balance, June 30, 2021	$	792		$	91	$	218		$	191		$	1,750	$	78		$	52		$	294	$	3,466
Provision for loan losses		(45	)		—		(8	)		36			68		(34	)		22			21		60
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		1			—			—		—			1			—		2
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance June 30, 2020		740			52		278			223			1,690		58			29			83		3,153
Provision for loan losses		(37	)		3		(28	)		(81	)		68		17			26			142		110
Charge-offs		—			—		—			—			—		—			(17	)		—		(17	)
Recoveries		—			—		—			—			—		—			—			—		—
Balance, September 30, 2020		703			55		250			142			1,758		75			38			225		3,246
Balance, December 31, 2020		753			60		267			174			1,656		78			52			302		3,342
Provision for loan losses		(6	)		31		(94	)		53			162		(34	)		20			13		145
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		38			—			—		—			3			—		41
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance, December 31, 2019		781			23		350			145			1,503		52			18			3		2,875
Provision for loan losses		(78	)		32		(100	)		(3	)		237		23			52			222		385
Charge-offs		—			—		—			—			—		—			(34	)		—		(34	)
Recoveries		—			—		—			—			18		—			2			—		20
Balance, September 30, 2020	$	703		$	55	$	250		$	142		$	1,758	$	75		$	38		$	225	$	3,246

As of September 30, 2021 and December 31, 2020, information about loans and the ALL, by portfolio segment, are summarized below:

(Dollars in thousands)	CRE		MF		C+I		ADL		RES		HELOC		CON		Unallocated		Total
September 30, 2021 Loan Balances
Individually evaluated for impairment	$	108	$	—	$	31	$	—	$	—	$	—	$	—	$	—	$	139
Collectively evaluated for impairment		66,334		9,730		30,327		25,109		228,204		7,334		4,381		—		371,419
Total	$	66,442	$	9,730	$	30,358	$	25,109	$	228,204	$	7,334	$	4,381	$	—	$	371,558
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		747		91		211		227		1,818		44		75		315		3,528
Total	$	747	$	91	$	211	$	227	$	1,818	$	44	$	75	$	315	$	3,528
December 31, 2020 Loan Balances
Individually evaluated for impairment	$	117	$	—	$	822	$	—	$	62	$	—	$	—	$	—	$	1,001
Collectively evaluated for impairment		66,049		6,619		44,440		23,145		213,656		9,583		2,944		—		366,436
Total	$	66,166	$	6,619	$	45,262	$	23,145	$	213,718	$	9,583	$	2,944	$	—	$	367,437
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		753		60		267		174		1,656		78		52		302		3,342
Total	$	753	$	60	$	267	$	174	$	1,656	$	78	$	52	$	302	$	3,342

The following is an aging analysis of past due loans by portfolio segment as of September 30, 2021: 

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,442	$	66,442	$	—
MF		—		—		—		—		9,730		9,730		—
C+I		—		—		—		—		30,358		30,358		—
ADL		—		—		—		—		25,109		25,109		—
RES		—		—		—		—		228,204		228,204		—
HELOC		119		—		—		119		7,215		7,334		—
CON		—		—		—		—		4,381		4,381		—
	$	119	$	—	$	—	$	119	$	371,439	$	371,558	$	—

The following is an aging analysis of past due loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,166	$	66,166	$	—
MF		—		—		—		—		6,619		6,619		—
C+I		—		—		822		822		44,440		45,262		822
ADL		—		—		—		—		23,145		23,145		—
RES		42		—		62		104		213,614		213,718		62
HELOC		143		—		—		143		9,440		9,583		—
CON		—		—		—		—		2,944		2,944		—
	$	185	$	—	$	884	$	1,069	$	366,368	$	367,437	$	884

There were no loans collateralized by residential real estate property in the process of foreclosure at September 30, 2021 or December 31, 2020.

The following table provides information on impaired loans as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Recorded Carrying Value		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
September 30, 2021
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		—		—		—		—		—
ADL		—		—		—		—		—
RES		—		—		—		21		3
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	—	$	—	$	—	$	21	$	3
December 31, 2020
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		822		938		—		909		—
ADL		—		—		—		—		—
RES		62		62		—		64		5
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	884	$	1,000	$	—	$	973	$	5

Credit Quality Information

The Bank utilizes a ten-grade internal loan rating system for its commercial real estate, multifamily, commercial and industrial and acquisition, development, and land loans. Residential real estate, home equity line of credit and consumer loans are considered “pass” rated loans until they become delinquent. Once delinquent, loans can be rated an 8, 9 or 10 as applicable.

Loans rated 1 through 6: Loans in these categories are considered “pass” rated loans with low to average risk.

Loans rated 7: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management.

Loans rated 8: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Bank will sustain some loss if the weakness is not corrected.

Loans rated 9: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable.

Loans rated 10: Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted and should be charged off.

On an annual basis, or more often if needed, the Bank formally reviews the ratings on its commercial and industrial, commercial real estate and multifamily loans. On a periodic basis, the Bank engages an independent third party to review a significant portion of loans within these segments and to assess the credit risk management practices of its commercial lending department. Management uses the results of these reviews as part of its annual review process and overall credit risk administration.

On a quarterly basis, the Bank formally reviews the ratings on its applicable residential real estate and home equity loans if they have become classified as non-accrual. Criteria used to determine ratings consist of loan-to-value ratios and days delinquent.

The following presents the internal risk rating of loans by portfolio segment as of September 30, 2021:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,608	$	2,726	$	108	$	66,442
MF		9,730		—		—		9,730
C+I		30,327		—		31		30,358
ADL		25,109		—		—		25,109
RES		228,204		—		—		228,204
HELOC		7,334		—		—		7,334
CON		4,381		—		—		4,381
Total	$	368,693	$	2,726	$	139	$	371,558

The following presents the internal risk rating of loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,191	$	2,858	$	117	$	66,166
MF		6,619		—		—		6,619
C+I		41,021		4,083		158		45,262
ADL		23,145		—		—		23,145
RES		213,656		—		62		213,718
HELOC		9,583		—		—		9,583
CON		2,944		—		—		2,944
Total	$	360,159	$	6,941	$	337	$	367,437

In response to the COVID-19 pandemic, the Bank has implemented a short-term loan modification program to provide temporary payment relief to certain of our borrowers who meet the program's qualifications. In April 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, issued an interagency statement titled “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus,” that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors (ASC 310-40),” a restructuring of debt constitutes a troubled debt restructuring, or TDR, if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The regulatory agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief, are not to be considered TDRs. These include short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms or other delays in payment that are insignificant.

Additionally, Section 4013 of the CARES Act, that became law on March 27, 2020, further provides banks with the option to elect either or both of the following from March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after

the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates (extended to January 1, 2022 by the 2021 Consolidated Appropriations Act):

(i) to suspend the requirements under U.S. GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR; and/or

(ii) to suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

If a bank elects a suspension noted above, the suspension (i) will be effective for the term of the loan modification, but solely with respect to any modification, including a forbearance arrangement, an interest rate modification, a repayment plan and any other similar arrangement that defers or delays the payment of principal or interest, that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019 and (ii) will not apply to any adverse impact on the credit of a borrower that is not related to the COVID–19 pandemic. The Company has applied this guidance to qualifying loan modifications.

The program has been offered to both retail and commercial borrowers. The majority of short-term loan modifications for retail loan borrowers consist of deferred payments (which may include principal, interest and escrow), which are capitalized to the loan balance and recovered through the re-amortization of the monthly payment at the end of the deferral period. For commercial loan borrowers, the majority of short-term modifications consist of allowing the borrower to make interest-only payments with the deferred principal to be due at maturity or repaid as the monthly payment is re-amortized at the next interest reset date as is applicable to the individual loan structure. Alternatively, commercial loan borrowers may defer their full monthly payment similar to the retail loan program outlined above. All loans modified under these programs are maintained on full accrual status during the deferral period. As of September 30, 2021, there were no loans with outstanding modifications for temporary payment relief.

Certain directors and executive officers of the Company and entities in which they have significant ownership interests are customers of the Bank. Loans outstanding to these persons and entities at September 30, 2021 and December 31, 2020 were $5.0 million and $5.3 million, respectively.  

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Loan Servicing

9 Months Ended

Sep. 30, 2021

Transfers And Servicing [Abstract]

Loan Servicing

5. Loan Servicing

Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of such loans were $41.5 million and $45.8 million at September 30, 2021 and December 31, 2020, respectively. Substantially all of these loans were originated by the Bank and sold to third parties on a non-recourse basis with servicing rights retained. These retained servicing rights are recorded as a servicing asset and are initially recorded at fair value (see Note 13, Fair Value of Assets and Liabilities, for more information). Changes to the balance of mortgage servicing rights are recorded in loan servicing income (loss) in the Company’s consolidated statements of income.

The Bank’s mortgage servicing activities include: collecting principal, interest and escrow payments from borrowers; making tax and insurance payments on behalf of borrowers; monitoring delinquencies and executing foreclosure proceedings; and accounting for and remitting principal and interest payments to investors. Loan servicing income (loss), including late and ancillary fees, was $38,000 and $12,000 for the three months ended September 30, 2021 and 2020, respectively, and $122,000 and $5,000 for the nine months ended September 30, 2021 and 2020, respectively. The Bank’s residential mortgage investor loan servicing portfolio is primarily comprised of fixed rate loans concentrated in the Bank’s market areas.

The following summarizes activity in mortgage servicing rights for the three and nine months ended September 30, 2021 and 2020:

(Dollars in thousands)	2021			2020
Balance, June 30,	$	303		$	329
Additions		13			21
Payoffs		(12	)		(15	)
Change in fair value due to change in assumptions		11			(25	)
Balance, September 30,		315			310
Balance, January 1,		273			397
Additions		43			110
Payoffs		(44	)		(72	)
Change in fair value due to change in assumptions		43			(125	)
Balance, September 30,	$	315		$	310

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Deposits

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Deposits

6. Deposits

Deposits consisted of the following at September 30, 2021 and December 31, 2020:

(Dollars in thousands)	September 30, 2021		December 31, 2020
NOW and demand deposits	$	200,290	$	161,336
Money market deposits		74,264		69,320
Savings deposits		57,235		48,057
Time deposits of $250,000 and greater		6,679		10,119
Time deposits less than $250,000		50,632		38,549
	$	389,100	$	327,381

At September 30, 2021, the scheduled maturities of time deposits were as follows:

(Dollars in thousands)
2021	$	27,816
2022		21,220
2023		3,769
2024		1,056
2025		1,651
2026		1,799
	$	57,311

There were $15.0 million and $-0- of brokered deposits included in time deposits at September 30, 2021 and December 31, 2020, respectively.

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Borrowings

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Borrowings

7. Borrowings

Federal Home Loan Bank (“FHLB”)

A summary of borrowings from the FHLB is as follows:

		September 30, 2021
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,000		2021	0.31% – fixed
	2,262		2022	0.00% – fixed
	5,000		2023	0.45% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00 % – fixed
	200		2030	0.00 % – fixed
$	39,032

		December 31, 2020
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,095		2021	0.39% (fixed) to 0.42% (variable)
	2,262		2022	0.00% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00% – fixed
	200		2030	0.00% – fixed
$	34,127

All borrowings from the FHLB are secured by a blanket security agreement on qualified collateral, principally residential mortgage loans and certain U.S. government sponsored mortgage-backed securities, in an aggregate amount equal to outstanding advances. The Bank’s unused remaining available borrowing capacity at the FHLB was approximately $97.0 million and $112.6 million at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021 and December 31, 2020, the Bank had sufficient collateral at the FHLB to support its obligations and was in compliance with the FHLB’s collateral pledging program.

Included in the above advances at September 30, 2021 and December 31, 2020 is a $10.0 million long-term advance, with an interest rate of 1.39%, which is callable by the FHLB on December 6, 2021 and quarterly thereafter, and a $10.0 million long-term advance, with an interest rate of 1.35%, which is callable by the FHLB on November 10, 2021 and quarterly thereafter. As of September 30, 2021 and December 31, 2020, borrowings include $4.0 million of advances through the FHLB’s Jobs for New England program where certain qualifying small business loans that create or preserve jobs, expand woman-, minority- or veteran- owned businesses or otherwise stimulate the economy in New England communities are offered at an interest rate of 0%.

During the nine months ended September 30, 2021, the Bank entered into two $5.0 million forward starting advances with the FHLB, at a rate of 0.44% beginning November 15, 2021 and December 20, 2021 with maturity dates of May 15, 2023 and March 20, 2023, respectively.   

At September 30, 2021, the Bank had an overnight line of credit with the FHLB that may be drawn up to $3.0 million. Additionally, the Bank had a total of $5.0 million of unsecured Fed Funds borrowing lines of credit with two correspondent banks. The entire balance of all these credit facilities was available at September 30, 2021.

Federal Reserve Bank of Boston (“FRB”)

The Bank established a Paycheck Protection Program Liquidity Facility (“PPPLF”). The PPPLF allowed the Bank to request advances from the FRB. Under the PPPLF, advances were secured by pledges of PPP Loans. The interest rate applicable to any advance made under the PPPLF was 35 basis points. As of September 30, 2021, $-0- of PPPLF advances are outstanding. As of December 31, 2020, $18.2 million of PPPLF advances were outstanding and collateralized by 110 PPP loans. Maturities of PPPLF advances were tied to the maturity of the underlying PPP loans and accelerated as the PPP loans were forgiven.  

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Employee Benefits

9 Months Ended

Sep. 30, 2021

Compensation And Retirement Disclosure [Abstract]

Employee Benefits

8. Employee Benefits

Employee Stock Ownership Plan

The Company established the First Seacoast Bank Employee Stock Ownership Plan (“ESOP”) to provide eligible employees of the Company the opportunity to own Company common stock.  The ESOP is a tax-qualified retirement plan for the benefit of Company employees.  Contributions are allocated to eligible participants on the basis of compensation, subject to federal limits.  The number of shares committed to be released per year through 2038 is 11,924.

The ESOP funded its purchase of 238,473 shares through a loan from the Company equal to 100% of the aggregate purchase price of the common stock.  The ESOP trustee will repay the loan principally through the Bank’s contributions to the ESOP over the remaining loan term that matures on December 31, 2038.  At September 30, 2021 and December 31, 2020, the remaining principal balance on the ESOP debt was $2.2 million.  

Under applicable accounting requirements, the Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants’ accounts under the plan.  Total compensation expense recognized in connection with the ESOP for the three months ended September 30, 2021 and 2020 was $29,000 and $18,000, respectively, and $86,000 and $63,000 for the nine months ended September 30, 2021 and 2020, respectively.   

	September 30, 2021		December 31, 2020
Shares held by the ESOP include the following:
Allocated		23,848		11,924
Committed to be allocated		8,943		11,924
Unallocated		205,682		214,625
Total		238,473		238,473

The fair value of unallocated shares was approximately $2.0 and $1.9 million at September 30, 2021 and December 31, 2020, respectively.

401(k) Plan

The Company sponsors a 401(k) defined contribution plan for substantially all employees pursuant to which employees of the Company could elect to make contributions to the plan subject to Internal Revenue Service limits. The Company makes matching and profit-sharing contributions to eligible participants in accordance with plan provisions. The Company’s contributions for the three months ended September 30, 2021 and 2020 were $49,000 and $56,000, respectively, and $140,000 and $150,000 for the nine months ended September 30, 2021 and 2020, respectively.

Pension Plan

The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (The Pentegra DB Plan), a tax-qualified defined benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan. The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413 (c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

The funded status (fair value of plan assets divided by funding target) as of July 1, 2021 is as follows:

2021 Valuation Report 104.99 % (1)

(1) Fair value of plan assets reflects any contributions received through June 30, 2021.

Based upon the funded status of the Pentegra DB Plan as of July 1, 2021, no funding improvement plan or rehabilitation plan has been implemented or is pending as of September 30, 2021.

Total pension plan expense for the three months ended September 30, 2021 and 2020 was $90,000, and $270,000 and $279,000 for the nine months ended September 30, 2021 and 2020, respectively, and is included in salaries and employee benefits expense in the accompanying consolidated statements of income. The Company did not pay a surcharge to the Pentegra DB Plan during the three or nine months ended September 30, 2021.

The Company enacted a “hard freeze” for the Pentegra DB Plan as of December 31, 2018, eliminating all future service-related accruals for participants. Prior to this enactment the Company maintained a “soft freeze” status that continued service-related accruals for its active participants with no new participants permitted into the Pentegra DB Plan. The Company estimates a contribution amount of approximately $270,000 for the fiscal year ending December 31, 2021.

Equity Incentive Plan

Effective May 27, 2021, the Company adopted the First Seacoast Bancorp 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the granting of incentive and non-statutory stock options to purchase shares of common stock or the granting of shares of restricted stock awards and restricted stock units.

The 2021 Plan authorizes the issuance or delivery to participants of up to 417,327 shares of common stock. Of this number, the maximum number of shares of common stock that may be issued pursuant to the exercise of stock options is 298,091 shares, and the maximum number of shares of common stock that may be issued as restricted stock awards or restricted stock units is 119,236 shares.

The exercise price of stock options may not be less than the fair market value on the date the stock option is granted. Further, stock options may not be granted with a term that is longer than 10 years.

As of September 30, 2021, no awards have been made under the 2021 Plan.

Supplemental Executive Retirement Plans

Salary Continuation Plan

The Company maintains a nonqualified supplemental retirement plan for its current President and its former President. The plan provides supplemental retirement benefits payable in installments over a period of years upon retirement or death. The recorded liability at September 30, 2021 and December 31, 2020 relating to this supplemental retirement plan was $631,000 and $607,000, respectively. The discount rate used to determine the Company’s obligation was 5.00%. The projected rate of salary increase for its current President was 3%. The expense of this salary retirement plan was $20,000 and $16,000 for the three months ended September 30, 2021 and 2020, respectively, and $61,000 and $66,000 for the nine months ended September 30, 2021 and 2020, respectively.

Executive Supplemental Retirement Plan

The recorded liability at September 30, 2021 and December 31, 2020 relating to the supplemental retirement plan for the Bank’s former President was $85,000 and $132,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% at September 30, 2021 and December 31, 2020.  The expense of this salary retirement plan was $1,000 and $2,000 for the three months ended September 30, 2021 and 2020, respectively, and $4,000 and $6,000 for the nine months ended September 30, 2021 and 2020, respectively.

Endorsement Method Split Dollar Plan

The Company has an endorsement method split dollar plan for a former President. The recorded liability at September 30, 2021 and December 31, 2020 relating to this supplemental executive benefit agreement was $34,000. The expense of this supplemental plan was $-0- for the three months ended September 30, 2021 and 2020, and $1,000 and $-0- for the nine months ended September 30, 2021 and 2020, respectively.

Directors Deferred Supplemental Retirement Plan

The Company has a supplemental retirement plan for eligible directors that provides for monthly benefits based upon years of service to the Company, subject to certain limitations as set forth in the agreements. The present value of these future payments is being accrued over the estimated period of service. The estimated liability at September 30, 2021 and December 31, 2020 relating to this plan was $542,000 and $573,000, respectively. The discount rate used to determine the Company’s obligation was 6.25% at September 30, 2021 and December 31, 2020. Total supplemental retirement plan expense amounted to $17,000 and $18,000 for the three months ended September 30, 2021 and 2020, respectively, and $51,000 and $46,000 for the nine months ended September 30, 2021 and 2020, respectively.

Additionally, the Company has a deferred director’s fee plan, which allows members of the board of directors to defer the receipt of fees that otherwise would be paid to them in cash. At September 30, 2021 and December 31, 2020, the total deferred director’s fees amounted to $379,000 and $321,000, respectively.

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Other Comprehensive Income

9 Months Ended

Sep. 30, 2021

Disclosure Of Other Comprehensive Income Loss [Abstract]

Other Comprehensive Income

9. Other Comprehensive Income

The Company reports certain items as “other comprehensive income” (“OCI”) and reflects total comprehensive income (loss) in the consolidated financial statements for all periods containing elements of other comprehensive income (loss). The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax expense (benefit) allocated to each component of other comprehensive income (loss):

Reclassification Adjustment	Three Months Ended September 30, 2021			Three Months Ended September 30, 2020			Affected Line Item in Statements of Income
	(Dollars in thousands)
Gains on securities available-for-sale	$	—		$	(8	)	Securities gains, net
Tax effect		—			2		Income tax expense
		—		$	(6	)	Net income
Net amortization of bond premium		177			115		Interest on debt securities
Tax effect		(48	)		(31	)	Income tax expense
		129			84		Net income
Net interest expense on swaps		15			—		Interest expense on borrowings
Tax effect		(4	)		—		Income tax expense
		11			—		Net income
Total reclassification adjustments	$	140		$	78
	Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
Gains on securities available-for-sale	$	(535	)	$	(291	)	Securities gains, net
Tax effect		146			79		Income tax expense
		(389	)		(212	)	Net income
Net amortization of bond premium		494			266		Interest on debt securities
Tax effect		(134	)		(72	)	Income tax expense
		360			194		Net income
Net interest expense on swaps		33			—		Interest expense on borrowings
Tax effect		(9	)		—		Income tax expense
		24			—		Net income
Total reclassification adjustments	$	(5	)	$	(18	)

The following tables present the changes in each component of OCI for the periods indicated:

(Dollars in thousands)	Net Unrealized Gains (Losses) on AFS Securities(1)			Net Unrealized Losses on Cash Flow Hedges(1)			OCI(1)
Balance at June 30, 2021	$	1,036		$	40		$	1,076
Other comprehensive loss before       reclassification		(750	)		(2	)		(752	)
Amounts reclassified from OCI		129			11			140
Other comprehensive (loss) income		(621	)		9			(612	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at June 30, 2020	$	1,113		$	(119	)	$	994
Other comprehensive (loss) income before       reclassification		(114	)		5			(109	)
Amounts reclassified from OCI		79			(5	)		74
Other comprehensive (loss) income		(35	)		—			(35	)
Balance at September 30, 2020	$	1,078		$	(119	)	$	959
Balance at December 31, 2020	$	1,481		$	(100	)	$	1,381
Other comprehensive (loss) income before       reclassification		(1,037	)		125			(912	)
Amounts reclassified from OCI		(29	)		24			(5	)
Other comprehensive (loss) income		(1,066	)		149			(917	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at December 31, 2019	$	521		$	—		$	521
Other comprehensive income (loss) before       reclassification		575			(119	)		456
Amounts reclassified from OCI		(18	)		—			(18	)
Other comprehensive income (loss)		557			(119	)		438
Balance at September 30, 2020	$	1,078		$	(119	)	$	959

(1) All amounts are net of tax

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Regulatory Matters

9 Months Ended

Sep. 30, 2021

Disclosure Of Regulatory Matters [Abstract]

Regulatory Matters

10. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below). As of September 30, 2021, the most recent notification from the Office of the Comptroller of the Currency categorized the Bank, as well capitalized under the regulatory framework, for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum capital amounts and ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category. Management believes that, as of September 30, 2021 and December 31, 2020, the Bank met all capital adequacy requirements to which it was subject, including the capital conservation buffer, at those dates.

The following table presents actual and required capital ratios as of September 30, 2021 and December 31, 2020 for the Bank under the Basel Committee on Banking Supervisions capital guidelines for U.S. banks (“Basel III Capital Rules”) as fully phased-in on January 1, 2019. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

						Minimum Capital					Minimum Capital Required For Capital Adequacy Plus Capital Conservation Buffer
	Actual					Requirement					Fully Phased-In
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2021
Total Capital (to risk-weighted assets)	$	52,826		17.99	%	$	23,496		8.00	%	$	30,839		10.50	%
Tier 1 Capital (to risk-weighted assets)		49,243		16.77			17,622		6.00			24,965		8.50
Tier 1 Capital (to average assets)		49,243		10.07			19,558		4.00			19,558		4.00
Common Equity Tier 1 (to risk-weighted assets)		49,243		16.77			13,217		4.50			20,559		7.00

						Minimum Capital					Minimum To Be Well Capitalized Under Prompt Corrective
	Actual					Requirement					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2020
Total Capital (to risk-weighted assets)	$	50,612		17.92	%	$	22,593		8.00	%	$	29,653		10.50	%
Tier 1 Capital (to risk-weighted assets)		47,222		16.72			16,945		6.00			24,005		8.50
Tier 1 Capital (to average assets)		47,222		10.59			17,836		4.00			17,836		4.00
Common Equity Tier 1 (to risk-weighted assets)		47,222		16.72			12,709		4.50			19,769		7.00

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Common Stock Repurchases

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Common Stock Repurchases

11. Common Stock Repurchases

On September 23, 2020, the board of directors of the Company authorized the repurchase of up to 136,879 shares of the Company’s outstanding common stock, which equals approximately 2.3% of all shares then outstanding and approximately 5.0% of the then outstanding shares owned by stockholders other than the MHC. As of September 30, 2021, the Company had repurchased 70,941 shares. The Company holds repurchased shares in its treasury.

The Company’s repurchases of its common stock made during the quarter ended September 30, 2021 are set forth in the table below:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs
July 1, 2021 - July 31, 2021		2,766	$	9.86		2,766		66,635
August 1, 2021 - August 31, 2021		418		9.82		418		66,217
September 1, 2021 - September 30, 2021		279		9.89		279		65,938
Total		3,463				3,463

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

12. Derivatives and Hedging Activities

Derivatives are recognized as either assets or liabilities on the balance sheet and are measured at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation. The Company utilizes interest rate swap agreements as part of its asset liability management strategy. Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal. These derivative instruments are designated as cash flow hedges with changes in the fair value of the derivative recorded in other comprehensive income (loss) and recognized in earnings when the hedged transaction affects earnings. The hedges were determined to be effective and the Company expects the hedges to remain effective during the remaining terms of the swaps.

The Company entered into two $5 million notional interest rate swaps that have been designated as cash flow hedges on 90-day advances from FHLB. The purpose of these cash flow hedges is to reduce potential interest rate risk by swapping a variable rate borrowing to a fixed rate. Management deemed it prudent to limit the variability of these interest payments by entering into these interest rate swap agreements. These agreements provide for the Company to receive payments at a variable rate determined by a specific index (three-month LIBOR) in exchange for making payments at a fixed rate. Publication of LIBOR is expected to cease in June of 2023. The swap agreements allow for substitution of an alternative reference rate such as the secured overnight financing rate (“SOFR”) at that time.

The changes in the fair value of interest rate swaps are reported in other comprehensive income (loss) and are subsequently reclassified into interest expense in the period that the hedged transactions affect earnings. During the next twelve months, the Company estimates that an additional $56,000 will be reclassified as an increase to interest expense. The change in fair value for these derivative instruments for the three months ended September 30, 2021 and 2020, was $12,000 and $-0-, respectively, and $204,000 and $(164,000) for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021 and December 31, 2020, the fair value of interest rate swap derivatives resulted in an asset of $67,000 and a liability of $137,000, respectively, and is recorded in other assets or other liabilities, respectively.

The following tables summarizes the Company’s derivatives associated with its interest rate risk management activities:

				September 30, 2021
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	16	$	—
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	51	$	—
Total Hedging    Instruments				$	10,000	$	67	$	—
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	10,000

				December 31, 2020
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	—	$	68
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	—	$	69
Total Hedging    Instruments				$	10,000	$	—	$	137
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	5,000

The following tables summarize the effect of cash flow hedge accounting on the consolidated statements of income for the three and nine months ended September 30, 2021 and 2020:

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Three Months Ended September 30,					Three Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(15	)	$	—	N/A	N/A

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Nine Months Ended September 30,					Nine Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(33	)	$	—	N/A	N/A

The credit risk associated with these interest rate swaps is the risk of default by the counterparty. To minimize this risk, the Company only enters into interest rate swaps agreements with highly rated counterparties that management believes to be creditworthy. The notional amounts of these agreements do not represent amounts exchanged by the parties and, therefore, are not a measure of the potential loss exposure. Risk management results for the three and nine months ended September 30, 2021 and 2020, related to the balance sheet hedging of $10.0 million and $5 million of 90 day FHLB advances, included in borrowings, respectively, indicate that the hedge was 100% effective and there was no component of the derivative instruments’ unrealized gain or loss which was excluded from the assessment of hedge effectiveness. The Company’s arrangement with its counterparty requires it to post cash or other assets as collateral for its interest rate swap contracts in a net liability position based on their aggregate fair value and the Company’s credit rating. At September 30, 2021 and December 31, 2020, the Company posted $526,000 and $525,000, respectively, of cash to the counterparty as collateral on its interest rate swap contracts which was presented within cash and due from banks on the consolidated balance sheets.

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Fair Values of Assets and Liabilities

9 Months Ended

Sep. 30, 2021

Disclosure Of Fair Values Of Assets And Liabilities [Abstract]

Fair Values of Assets and Liabilities

13. Fair Values of Assets and Liabilities

Determination of Fair Value

The fair value of an asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from one level to another. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value of cash flows or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the observability and reliability of the assumptions used to determine fair value.

Level 1 - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 - Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Level 3 inputs are unobservable inputs for the asset or liability.

For assets and liabilities, fair value is based upon the lowest level of observable input that is significant to the fair value measurement.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon models that primarily use, as inputs, observable market-based parameters. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and, therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented therein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value is set forth below. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all the Company’s financial assets and financial liabilities carried at fair value at September 30, 2021 and December 31, 2020.

Financial Assets and Financial Liabilities: Financial assets and financial liabilities measured at fair value on a recurring basis include the following:

Securities Available-for-Sale: The Company’s investment in U.S. Government-sponsored entities bonds, U.S Government agency small business administration pools guaranteed by the SBA, collateralized mortgage obligations issued by the FHLMC, residential mortgage-backed securities and other municipal bonds is generally classified within Level 2 of the fair value

hierarchy. For these securities, the Company obtains fair value measurements from independent pricing services. The fair value measurements consider observable data that may include reported trades, dealer quotes, market spreads, cash flows, the U.S. treasury yield curve, trading levels, market consensus prepayment speeds, credit information and the instrument’s terms and conditions.

Mortgage Servicing Rights: Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes interest rate, prepayment speed and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data (see Note 5, Loan Servicing, for more information). These assumptions are inherently sensitive to change as these unobservable inputs are not based on quoted prices in active markets or otherwise observable.

Derivative Instruments and Hedges: The valuation of these instruments is determined using the discounted cash flow method on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
September 30, 2021
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	5,560	$	—	$	5,560	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		4,079		—		4,079		—
Collateralized mortgage obligations issued by the    FHLMC and FNMA		2,951		—		2,951		—
Residential mortgage backed securities		21,062		—		21,062		—
Municipal bonds		43,894		—		43,894		—
Other assets:
Mortgage servicing rights		315		—		—		315
Derivatives		67		—		67		—

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
December 31, 2020
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	973	$	—	$	973	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		2,470		—		2,470		—
Collateralized mortgage obligations issued by the    FHLMC		949		—		949		—
Residential mortgage backed securities		5,136		—		5,136		—
Municipal bonds		45,942		—		45,942		—
Other assets:
Mortgage servicing rights		273		—		—		273
Other Liabilities:
Derivatives		137		—		137		—

For the nine months ended September 30, 2021 and 2020, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(Dollars in thousands)	Mortgage Servicing Rights (1)
Balance as of January 1, 2021	$	273
Included in net income		42
Balance as of September 30, 2021	$	315
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2021	$	—
Balance as of January 1, 2020	$	397
Included in net income		(87	)
Balance as of September 30, 2020	$	310
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2020	$	—

(1) Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing income (loss) in the Company’s consolidated statements of income.

For Level 3 assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

	September 30, 2021
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing    Rights	Discounted Cash Flow	Prepayment Rate	7.77% - 26.24%	14.56%	$	315
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.15% - 4.06%	3.32%
		Default Rate	0.08% - 0.14%	0.13%

	December 31, 2020
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing Rights	Discounted Cash Flow	Prepayment Rate	14.05% - 29.77%	20.97%	$	273
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.91% - 5.13%	4.12%
		Default Rate	0.08% - 0.14%	0.13%

(1) Unobservable inputs for mortgage servicing rights were weighted by loan amount.

The significant unobservable inputs used in the fair value measurement of the Company’s mortgage servicing rights are the weighted-average prepayment rate, weighted-average discount rate, weighted average delinquency rate and weighted-average default rate. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement.  Although the prepayment rate and the discount rate are not directly interrelated, they generally move in opposite directions of each other.

The Company estimates the fair value of mortgage servicing rights by using a discounted cash flow model to calculate the present value of estimated future net servicing income. Observable and unobservable inputs are entered into this model as prescribed by an independent third party to arrive at an estimated fair value. See Note 5, Loan Servicing, for a rollforward of our Level 3 item and related inputs and assumptions used to determine fair value at September 30, 2021.

Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets measured at fair value on a non-recurring basis during the reported periods may include certain impaired loans reported at the fair value of the underlying collateral. Fair value is measured using appraised values of collateral and adjusted as necessary by management based on unobservable inputs for specific properties. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, real estate collateral related nonrecurring fair value measurement adjustments have generally been classified as Level 3.

Estimates of fair value used for other collateral supporting commercial loans generally are based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. Financial assets measured at fair value on a non-recurring basis during the reported periods also include loans held for sale. Residential mortgage loans held for sale are recorded at the lower of cost or fair value and are therefore measured at fair value on a non-recurring basis. The fair values for loans held for sale are estimated based on commitments in effect from investors or prevailing market prices for loans with similar terms to borrowers of similar credit quality and are included in Level 3. At September 30, 2021 and December 31, 2020, there were no assets measured at fair value on a non-recurring basis.

Non-Financial Assets and Non-Financial Liabilities: The Company has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Non-financial assets measured at fair value on a non-recurring basis generally include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for loan losses and certain foreclosed assets which, subsequent to their initial recognition, are remeasured at fair value through a write-down included in other non-interest expense. There were no foreclosed assets at September 30, 2021 or December 31, 2020.

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. ASU 2016-01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The exit price notion is a market-based measurement of fair value that is represented by the price to sell an asset or transfer a liability in the principal market (or most advantageous market in the absence of a principal market) on the measurement date. At September 30, 2021 and December 31, 2020, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

Summary of Fair Values of Financial Instruments not Carried at Fair Value

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at September 30, 2021 and December 31, 2020 are as follows:

(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2021
Financial Assets:
Cash and due from banks	$	30,695	$	30,695	$	30,695	$	—	$	—
Interest-bearing time deposits with other banks		1,245		1,245		—		1,245		—
Federal Home Loan Bank stock		2,022		2,022		—		2,022		—
Bank-owned life insurance		4,441		4,441		—		4,441		—
Loans, net		369,422		368,975		—		—		368,975
Accrued interest receivable		1,443		1,443		1,443		—		—
Financial Liabilities:
Deposits	$	389,100	$	389,191	$	331,790	$	57,401	$	—
Advances from Federal Home Loan Bank		39,032		39,314		—		39,314		—
Mortgagors’ tax escrow		2,033		2,033		—		2,033		—
December 31, 2020
Financial Assets:
Cash and due from banks	$	5,996	$	5,996	$	5,996	$	—	$	—
Interest-bearing time deposits with other banks		2,488		2,488		—		2,488		—
Federal Home Loan Bank stock		1,796		1,796		—		1,796		—
Bank-owned life insurance		4,356		4,356		—		4,356		—
Loans, net		364,800		365,116		—		—		365,116
Accrued interest receivable		1,412		1,412		1,412		—		—
Financial Liabilities:
Deposits	$	327,381	$	327,696	$	278,713	$	48,983	$	—
Advances from Federal Home Loan Bank		34,127		34,832		—		34,832		—
Advances from Federal Reserve Bank		18,195		18,199		—		18,199		—
Mortgagors’ tax escrow		1,420		1,420		—		1,420		—

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Subsequent Events

9 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

From October 1, 2021 through November 1, 2021, the Company repurchased an additional 293 shares of common stock pursuant to its repurchase plan at an average cost of $9.80 per share.

On October 8, 2021, the Bank purchased $5.9 million of brokered deposits, for a term of four years, at an annual rate of 0.50%. The brokered deposits are callable, at the option of the Bank, in whole, prior to the maturity date beginning on January 8, 2022 and quarterly thereafter. On October 25, 2021, the Bank purchased $1.7 million of brokered deposits, for a term of 4.5 years, at an annual rate of 0.65%. The brokered deposits are callable, at the option of the Bank, in whole, prior to the maturity date beginning on January 25, 2022 and quarterly thereafter.

On October 15, 2021, the Bank purchased $2.0 million of 3.125% fixed-to-floating subordinated notes due on October 15, 2031, issued by a bank holding company. The interest rate is fixed at 3.125% for five years and payable semi-annually in arrears on April 15 and October 15 of each year beginning April 15, 2022. The subordinated note is not redeemable by the issuer, in whole or in part, prior to October 15, 2026, except in certain defined circumstances. On or after October 15, 2026, the subordinated note is redeemable at the option of the issuer, in whole or in part, with proper notice. On October 15, 2026, the interest rate on the subordinated note becomes floating and equal to the three-month term SOFR rate plus 225 basis points payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year beginning January 15, 2027.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of First Seacoast Bancorp (the “Company”), its wholly-owned subsidiary, First Seacoast Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, FSB Service Corporation, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim consolidated financial information, general practices within the banking industry and with instructions for Form 10-Q and Regulation S-X.  Accordingly, these interim financial statements do not include all the information or footnotes required by U.S. GAAP for annual financial statements. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of these consolidated financial statements have been included. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 26, 2021.

Corporate Structure

Corporate Structure

The Company is the federally-chartered holding company for the Bank (formerly named Federal Savings Bank). Effective July 16, 2019, pursuant to a Plan of Reorganization from Mutual Savings Bank to Mutual Holding Company and Stock Issuance Plan, the Bank reorganized into the mutual holding company structure, and the Company completed a concurrent stock offering.    

The Bank offers a full range of banking and wealth management services to its customers. The Bank focuses on four core services that center around customer needs. The core services include residential lending, commercial banking, personal banking and wealth management. The Bank offers a full range of commercial and consumer banking services through its network of five full-service branch locations.

Investment management services are offered at the Company’s full-service wealth management office in Dover, New Hampshire. The assets held for wealth management customers are not assets of the Company and, accordingly, are not reflected in the accompanying balance sheets. Assets under management totaled approximately $67.2 million and $58.4 million at September 30, 2021 and December 31, 2020, respectively. On August 17, 2021, the Bank entered into a definitive agreement with an investment advisory and wealth management firm (the “seller”) to purchase certain of its client accounts and client relationships for a purchase price of $344,000, of which $172,000 was paid at closing. This amount is included in other assets at September 30, 2021. Each client account has been assigned a value, and as each client transfers to the Bank, 85% of this value will be paid to the seller. By May 31, 2022, or upon mutual agreement that the transition of client accounts is complete, whichever is earlier, the balance of the purchase price will be paid to the seller. As of September 30, 2021, no client accounts have transferred to the Bank. The client accounts purchased contain assets under management valued at approximately $27.1 million as of September 30, 2021. The client accounts purchased are recorded as a customer list intangible asset. Identifiable intangible assets that are subject to amortization will be reviewed for impairment, at least annually, based on their fair value. Any impairment will be recognized as a charge to earnings and the adjusted carrying amount of the intangible asset will become its new accounting basis. The remaining useful life of the intangible asset will also be evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. The Company is amortizing the customer list intangible on a straight-line basis over a ten-year period.

The Bank is engaged principally in the business of attracting deposits from the public and investing those funds in various types of loans, including residential and commercial real estate loans, and a variety of commercial and consumer loans. The Bank also invests its deposits and borrowed funds in investment securities. Deposits at the Bank are insured by the Federal Deposit and Insurance Corporation (“FDIC”) for the maximum amount permitted by law.

Banking services, the Company’s only reportable operating segment, is managed as a single strategic unit.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

As an “emerging growth company,” as defined in Title 1 of Jumpstart Our Business Startups (JOBS) Act, the Company has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards without an extended transition period. As of September 30, 2021, there was no significant difference in the comparability of the Company’s consolidated financial statements as a result of this extended transition period except for the accounting treatment for measuring and recording the Company’s allowance for loan losses. The Company measures and records an allowance for loan losses based upon the incurred loss model while other public companies may be required to calculate their allowance for loan losses based upon the current expected credit loss (“CECL”) model. The CECL approach requires an estimate of the loan loss expected over the life of the loan while the incurred loss approach delays the recognition of a loan loss until it is probable a loss event has incurred. The Company’s status as an “emerging growth company” will end on the earlier of: (i) the last day of the fiscal year of the Company during which it had total annual gross revenues of $1.07 billion (as adjusted for inflation) or more; (ii) the last day of the fiscal year of the Company following the fifth anniversary of the effective date of the Company’s initial public offering (which will be December 31, 2024 for the Company); (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

In August 2017, the FASB issued Accounting Standards Update (ASU) 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.”  The amendments in ASU 2017-12 apply to any entity that elects to apply hedge accounting in accordance with U.S. GAAP. The main changes introduced by ASU 2017-12 eliminate the requirement to separately measure and report hedge ineffectiveness and requires companies to present all of the elements of hedge accounting that affect earnings in the same income statement line as the hedged item. The standard also permits hedge accounting for strategies for which hedge accounting was not historically permitted and includes new alternatives for measuring the hedged item for fair value hedges of interest rate risk. Furthermore, the standard eases the requirements for effectiveness testing, hedge documentation, applying the critical terms match method and introduces new alternatives that will permit companies to reduce the risk of material error corrections if they misapply the shortcut method. The adoption of this ASU on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Yet To Be Adopted

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements.

In January 2021, the FASB issued ASU 2021-1, “Reference Rate Reform (Topic 848) (Scope),” which clarifies certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting applied to derivatives that are affected by the discounting transition.  This ASU becomes effective immediately for all entities on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2020, the FASB issued ASU No. 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities,” as a limited deferral of the effective dates, for one year, of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” and ASU No. 2016-02, “Leases (Topic 842),” to provide immediate, near-term relief for certain entities for whom these ASU’s are either currently or imminently effective as a result of COVID-19. The Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as of January 1, 2019.  The Company does not expect the adoption of ASU No. 2016-02, “Leases (Topic 842),” to have a material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance to ease the potential burden in accounting due to reference rate reform. The guidance in this update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made, and hedging relationships entered into, on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard.

In February 2020, the FASB issued ASU 2020-2, “Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).”  This ASU adds an SEC paragraph pursuant to the issuance of SEC SAB Topic No. 119 to the FASB Codification Topic 326 and updates the SEC section of the Codification for the change in the effective dates of Topic 842.  This ASU primarily details guidance on what SEC staff would expect a registrant to perform and document when measuring and recording its allowance for credit losses for financial assets recorded at amortized cost.

In January 2020, the FASB issued ASU 2020-1, “Investments – Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions Between Topic 321, Topic 323, and T 815 (A Consensus of the Emerging Issues Task Force),” which clarifies the interaction among the accounting standards for equity securities, equity method investments and certain derivatives.  This ASU becomes effective for public entities for fiscal years beginning after December 15, 2020 and all other entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies accounting for income taxes by removing specific technical exceptions. The guidance removes the need for companies to analyze whether (1) the exception to the incremental approach for intra-period tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) the exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses apply in a given period. The amendments in this ASU are effective for smaller reporting companies for fiscal years beginning after December 15, 2021. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses,” to increase stakeholder awareness of the improvements made to the various amendments to Topic 326 and to clarify certain areas of guidance as companies transition to the new standard. Also during November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):  Effective Dates,” finalizing various effective date deferrals for private companies, not-for-profit organizations and certain smaller reporting companies applying the credit losses (CECL), leases and hedging standards.  The effective date for ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” is deferred to years beginning after December 15, 2022. The effective dates for ASU 2016-02, “Leases (Topic 842)” is deferred to fiscal years beginning after December 15, 2021.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires that credit

losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of income as the amounts expected to be collected change. The ASU was originally to be effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” extending the implementation date by one year for smaller reporting companies and clarifying that operating lease receivables are outside the scope of Accounting Standards Codification Topic 326. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” to increase stakeholders’ awareness of the amendments and to expedite improvements to the Codification. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses, Topic 326.” This ASU addresses certain stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13, while still providing financial statement users with decision-useful information. On October 16, 2019, the FASB approved a proposal to delay the implementation of this standard for smaller reporting companies to years beginning after December 15, 2022. Early adoption is permitted. Upon adoption, however, the Company will apply the standard’s provisions as a cumulative effect adjustment to equity capital as of the first reporting period in which the guidance is effective. Upon adoption, the Company expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in the assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company is reviewing the requirements of ASU 2016-13 and is developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. At this time, the Company anticipates the allowance for loan losses will increase as a result of the implementation of this ASU; however, until its evaluation is complete, the magnitude of the increase will be unknown.

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Securities Available-for-Sale (Tables)

9 Months Ended

Sep. 30, 2021

Available For Sale Securities [Abstract]

Schedule of amortized cost and fair value of securities available-for-sale

The amortized cost and fair value of securities available-for-sale, and the corresponding amounts of gross unrealized gains and losses, are as follows as of September 30, 2021 and December 31, 2020:

	September 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	5,638	$	—	$	(78	)	$	5,560
U.S. Government agency small business administration    pools guaranteed by SBA		4,053		51		(25	)		4,079
Collateralized mortgage obligations issued by the FHLMC    and FNMA		2,970		3		(22	)		2,951
Residential mortgage backed securities		21,404		44		(386	)		21,062
Municipal bonds		42,913		1,234		(253	)		43,894
	$	76,978	$	1,332	$	(764	)	$	77,546

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
U.S. Government-sponsored enterprises obligations	$	997	$	—	$	(24	)	$	973
U.S. Government agency small business administration    pools guaranteed by SBA		2,399		71		—			2,470
Collateralized mortgage obligations issued by the FHLMC		938		11		—			949
Residential mortgage backed securities		5,100		49		(13	)		5,136
Municipal bonds		44,005		1,944		(7	)		45,942
	$	53,439	$	2,075	$	(44	)	$	55,470

Summary of gross unrealized losses and fair value for those investments with unrealized losses

The following is a summary of gross unrealized losses and fair value for those investments with unrealized losses, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020:

	Less than 12 Months							More than 12 Months							Total
	Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in thousands)
September 30, 2021
U.S. Government sponsored enterprises    obligations		6	$	4,606	$	(35	)		2	$	954	$	(43	)	$	5,560	$	(78	)
U.S. Government agency small business    administration pools guaranteed by    SBA		2		1,992		(25	)		—		—		—			1,992		(25	)
Collateralized mortgage obligations    issued by the FHLMC and FNMA		3		2,286		(22	)		—		—		—			2,286		(22	)
Residential mortgage backed securities		19		17,125		(323	)		1		2,339		(63	)		19,464		(386	)
Municipal bonds		18		16,625		(253	)		—		—		—			16,625		(253	)
		48	$	42,634	$	(658	)		3	$	3,293	$	(106	)	$	45,927	$	(764	)
December 31, 2020
U.S. Government sponsored enterprises    obligations		2	$	973	$	(24	)		—	$	—	$	—		$	973	$	(24	)
U.S. Government agency small business    administration pools guaranteed by    SBA		—		—		—			—		—		—			—		—
Collateralized mortgage obligations    issued by the FHLMC		—		—		—			—		—		—			—		—
Residential mortgage backed securities		1		3,102		(13	)		—		—		—			3,102		(13	)
Municipal bonds		4		2,381		(7	)		—		—		—			2,381		(7	)
		7	$	6,456	$	(44	)		—	$	—	$	—		$	6,456	$	(44	)

Summary of sales proceeds and gross realized gains and losses on available for sale securities

Proceeds from sales, maturities, principal payments received and gross realized gains and losses on available-for-sale securities were as follows for the three and nine months ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021			2020
	(Dollars in thousands)
Proceeds from sales, maturities, and principal payments      received on securities available-for-sale	$	684	$	2,788	$	19,127		$	22,208
Gross realized gains		—		8		588			295
Gross realized losses		—		—		(53	)		(4	)
Net realized gains	$	—	$	8	$	535		$	291

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Loans (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consisted of the following at September 30, 2021 and December 31, 2020:

	September 30, 2021			December 31, 2020
	(Dollars in thousands)
Commercial real estate (CRE)	$	66,442		$	66,166
Multifamily (MF)		9,730			6,619
Commercial and industrial (C+I)		30,358			45,262
Acquisition, development, and land (ADL)		25,109			23,145
1-4 family residential (RES)		228,204			213,718
Home equity line of credit (HELOC)		7,334			9,583
Consumer (CON)		4,381			2,944
Total loans		371,558			367,437
Net deferred loan costs		1,392			705
Allowance for loan losses		(3,528	)		(3,342	)
Total loans, net	$	369,422		$	364,800

Schedule of Allowance For Loans And Leases Receivable Classification

Changes in the allowance for loan losses (“ALL”) for the three and nine months ended September 30, 2021 and 2020, by portfolio segment, are summarized as follows:

(Dollars in thousands)	CRE			MF		C+I			ADL			RES		HELOC			CON			Unallocated		Total
Balance, June 30, 2021	$	792		$	91	$	218		$	191		$	1,750	$	78		$	52		$	294	$	3,466
Provision for loan losses		(45	)		—		(8	)		36			68		(34	)		22			21		60
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		1			—			—		—			1			—		2
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance June 30, 2020		740			52		278			223			1,690		58			29			83		3,153
Provision for loan losses		(37	)		3		(28	)		(81	)		68		17			26			142		110
Charge-offs		—			—		—			—			—		—			(17	)		—		(17	)
Recoveries		—			—		—			—			—		—			—			—		—
Balance, September 30, 2020		703			55		250			142			1,758		75			38			225		3,246
Balance, December 31, 2020		753			60		267			174			1,656		78			52			302		3,342
Provision for loan losses		(6	)		31		(94	)		53			162		(34	)		20			13		145
Charge-offs		—			—		—			—			—		—			—			—		—
Recoveries		—			—		38			—			—		—			3			—		41
Balance, September 30, 2021		747			91		211			227			1,818		44			75			315		3,528
Balance, December 31, 2019		781			23		350			145			1,503		52			18			3		2,875
Provision for loan losses		(78	)		32		(100	)		(3	)		237		23			52			222		385
Charge-offs		—			—		—			—			—		—			(34	)		—		(34	)
Recoveries		—			—		—			—			18		—			2			—		20
Balance, September 30, 2020	$	703		$	55	$	250		$	142		$	1,758	$	75		$	38		$	225	$	3,246

As of September 30, 2021 and December 31, 2020, information about loans and the ALL, by portfolio segment, are summarized below:

(Dollars in thousands)	CRE		MF		C+I		ADL		RES		HELOC		CON		Unallocated		Total
September 30, 2021 Loan Balances
Individually evaluated for impairment	$	108	$	—	$	31	$	—	$	—	$	—	$	—	$	—	$	139
Collectively evaluated for impairment		66,334		9,730		30,327		25,109		228,204		7,334		4,381		—		371,419
Total	$	66,442	$	9,730	$	30,358	$	25,109	$	228,204	$	7,334	$	4,381	$	—	$	371,558
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		747		91		211		227		1,818		44		75		315		3,528
Total	$	747	$	91	$	211	$	227	$	1,818	$	44	$	75	$	315	$	3,528
December 31, 2020 Loan Balances
Individually evaluated for impairment	$	117	$	—	$	822	$	—	$	62	$	—	$	—	$	—	$	1,001
Collectively evaluated for impairment		66,049		6,619		44,440		23,145		213,656		9,583		2,944		—		366,436
Total	$	66,166	$	6,619	$	45,262	$	23,145	$	213,718	$	9,583	$	2,944	$	—	$	367,437
ALL related to the loans
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		753		60		267		174		1,656		78		52		302		3,342
Total	$	753	$	60	$	267	$	174	$	1,656	$	78	$	52	$	302	$	3,342

Past Due Financing Receivables

The following is an aging analysis of past due loans by portfolio segment as of September 30, 2021: 

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,442	$	66,442	$	—
MF		—		—		—		—		9,730		9,730		—
C+I		—		—		—		—		30,358		30,358		—
ADL		—		—		—		—		25,109		25,109		—
RES		—		—		—		—		228,204		228,204		—
HELOC		119		—		—		119		7,215		7,334		—
CON		—		—		—		—		4,381		4,381		—
	$	119	$	—	$	—	$	119	$	371,439	$	371,558	$	—

The following is an aging analysis of past due loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	30-59 Days		60-89 Days		90 + Days		Total Past Due		Current		Total Loans		Non-Accrual Loans
CRE	$	—	$	—	$	—	$	—	$	66,166	$	66,166	$	—
MF		—		—		—		—		6,619		6,619		—
C+I		—		—		822		822		44,440		45,262		822
ADL		—		—		—		—		23,145		23,145		—
RES		42		—		62		104		213,614		213,718		62
HELOC		143		—		—		143		9,440		9,583		—
CON		—		—		—		—		2,944		2,944		—
	$	185	$	—	$	884	$	1,069	$	366,368	$	367,437	$	884

Impaired Financing Receivables

The following table provides information on impaired loans as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Recorded Carrying Value		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
September 30, 2021
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		—		—		—		—		—
ADL		—		—		—		—		—
RES		—		—		—		21		3
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	—	$	—	$	—	$	21	$	3
December 31, 2020
With no related allowance recorded:
CRE	$	—	$	—	$	—	$	—	$	—
MF		—		—		—		—		—
C+I		822		938		—		909		—
ADL		—		—		—		—		—
RES		62		62		—		64		5
HELOC		—		—		—		—		—
CON		—		—		—		—		—
Total impaired loans	$	884	$	1,000	$	—	$	973	$	5

Financing Receivable Credit Quality Indicators

The following presents the internal risk rating of loans by portfolio segment as of September 30, 2021:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,608	$	2,726	$	108	$	66,442
MF		9,730		—		—		9,730
C+I		30,327		—		31		30,358
ADL		25,109		—		—		25,109
RES		228,204		—		—		228,204
HELOC		7,334		—		—		7,334
CON		4,381		—		—		4,381
Total	$	368,693	$	2,726	$	139	$	371,558

The following presents the internal risk rating of loans by portfolio segment as of December 31, 2020:

(Dollars in thousands)	Pass		Special Mention		Substandard		Total
CRE	$	63,191	$	2,858	$	117	$	66,166
MF		6,619		—		—		6,619
C+I		41,021		4,083		158		45,262
ADL		23,145		—		—		23,145
RES		213,656		—		62		213,718
HELOC		9,583		—		—		9,583
CON		2,944		—		—		2,944
Total	$	360,159	$	6,941	$	337	$	367,437

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Loan Servicing (Tables)

9 Months Ended

Sep. 30, 2021

Transfers And Servicing [Abstract]

Schedule of Servicing Assets at Fair Value

The following summarizes activity in mortgage servicing rights for the three and nine months ended September 30, 2021 and 2020:

(Dollars in thousands)	2021			2020
Balance, June 30,	$	303		$	329
Additions		13			21
Payoffs		(12	)		(15	)
Change in fair value due to change in assumptions		11			(25	)
Balance, September 30,		315			310
Balance, January 1,		273			397
Additions		43			110
Payoffs		(44	)		(72	)
Change in fair value due to change in assumptions		43			(125	)
Balance, September 30,	$	315		$	310

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Deposits (Tables)

9 Months Ended

Sep. 30, 2021

Deposits [Abstract]

Deposit Liabilities

Deposits consisted of the following at September 30, 2021 and December 31, 2020:

(Dollars in thousands)	September 30, 2021		December 31, 2020
NOW and demand deposits	$	200,290	$	161,336
Money market deposits		74,264		69,320
Savings deposits		57,235		48,057
Time deposits of $250,000 and greater		6,679		10,119
Time deposits less than $250,000		50,632		38,549
	$	389,100	$	327,381

Maturities of Time Deposits

At September 30, 2021, the scheduled maturities of time deposits were as follows:

(Dollars in thousands)
2021	$	27,816
2022		21,220
2023		3,769
2024		1,056
2025		1,651
2026		1,799
	$	57,311

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank

A summary of borrowings from the FHLB is as follows:

		September 30, 2021
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,000		2021	0.31% – fixed
	2,262		2022	0.00% – fixed
	5,000		2023	0.45% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00 % – fixed
	200		2030	0.00 % – fixed
$	39,032

		December 31, 2020
Principal Amounts		Maturity Dates		Interest Rates
		(Dollars in thousands)
$	10,095		2021	0.39% (fixed) to 0.42% (variable)
	2,262		2022	0.00% – fixed
	10,800		2024	0.00% to 1.39% – fixed
	10,520		2025	0.00% to 1.35% – fixed
	250		2028	0.00% – fixed
	200		2030	0.00% – fixed
$	34,127

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2021

Compensation And Retirement Disclosure [Abstract]

Schedule of Company Compensation Expense for the ESOP

the Company records compensation expense for the ESOP equal to fair market value of shares when they are committed to be released from the suspense account to participants’ accounts under the plan.

	September 30, 2021		December 31, 2020
Shares held by the ESOP include the following:
Allocated		23,848		11,924
Committed to be allocated		8,943		11,924
Unallocated		205,682		214,625
Total		238,473		238,473

Schedule of Funded Status Valuation Report Percentage

The funded status (fair value of plan assets divided by funding target) as of July 1, 2021 is as follows:

2021 Valuation Report 104.99 % (1)

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2021

Disclosure Of Other Comprehensive Income Loss [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax expense (benefit) allocated to each component of other comprehensive income (loss):

Reclassification Adjustment	Three Months Ended September 30, 2021			Three Months Ended September 30, 2020			Affected Line Item in Statements of Income
	(Dollars in thousands)
Gains on securities available-for-sale	$	—		$	(8	)	Securities gains, net
Tax effect		—			2		Income tax expense
		—		$	(6	)	Net income
Net amortization of bond premium		177			115		Interest on debt securities
Tax effect		(48	)		(31	)	Income tax expense
		129			84		Net income
Net interest expense on swaps		15			—		Interest expense on borrowings
Tax effect		(4	)		—		Income tax expense
		11			—		Net income
Total reclassification adjustments	$	140		$	78
	Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
Gains on securities available-for-sale	$	(535	)	$	(291	)	Securities gains, net
Tax effect		146			79		Income tax expense
		(389	)		(212	)	Net income
Net amortization of bond premium		494			266		Interest on debt securities
Tax effect		(134	)		(72	)	Income tax expense
		360			194		Net income
Net interest expense on swaps		33			—		Interest expense on borrowings
Tax effect		(9	)		—		Income tax expense
		24			—		Net income
Total reclassification adjustments	$	(5	)	$	(18	)

Summary of Changes in Component of AOCI

The following tables present the changes in each component of OCI for the periods indicated:

(Dollars in thousands)	Net Unrealized Gains (Losses) on AFS Securities(1)			Net Unrealized Losses on Cash Flow Hedges(1)			OCI(1)
Balance at June 30, 2021	$	1,036		$	40		$	1,076
Other comprehensive loss before       reclassification		(750	)		(2	)		(752	)
Amounts reclassified from OCI		129			11			140
Other comprehensive (loss) income		(621	)		9			(612	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at June 30, 2020	$	1,113		$	(119	)	$	994
Other comprehensive (loss) income before       reclassification		(114	)		5			(109	)
Amounts reclassified from OCI		79			(5	)		74
Other comprehensive (loss) income		(35	)		—			(35	)
Balance at September 30, 2020	$	1,078		$	(119	)	$	959
Balance at December 31, 2020	$	1,481		$	(100	)	$	1,381
Other comprehensive (loss) income before       reclassification		(1,037	)		125			(912	)
Amounts reclassified from OCI		(29	)		24			(5	)
Other comprehensive (loss) income		(1,066	)		149			(917	)
Balance at September 30, 2021	$	415		$	49		$	464
Balance at December 31, 2019	$	521		$	—		$	521
Other comprehensive income (loss) before       reclassification		575			(119	)		456
Amounts reclassified from OCI		(18	)		—			(18	)
Other comprehensive income (loss)		557			(119	)		438
Balance at September 30, 2020	$	1,078		$	(119	)	$	959

(1) All amounts are net of tax

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Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2021

Disclosure Of Regulatory Matters [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

						Minimum Capital					Minimum Capital Required For Capital Adequacy Plus Capital Conservation Buffer
	Actual					Requirement					Fully Phased-In
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2021
Total Capital (to risk-weighted assets)	$	52,826		17.99	%	$	23,496		8.00	%	$	30,839		10.50	%
Tier 1 Capital (to risk-weighted assets)		49,243		16.77			17,622		6.00			24,965		8.50
Tier 1 Capital (to average assets)		49,243		10.07			19,558		4.00			19,558		4.00
Common Equity Tier 1 (to risk-weighted assets)		49,243		16.77			13,217		4.50			20,559		7.00

						Minimum Capital					Minimum To Be Well Capitalized Under Prompt Corrective
	Actual					Requirement					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2020
Total Capital (to risk-weighted assets)	$	50,612		17.92	%	$	22,593		8.00	%	$	29,653		10.50	%
Tier 1 Capital (to risk-weighted assets)		47,222		16.72			16,945		6.00			24,005		8.50
Tier 1 Capital (to average assets)		47,222		10.59			17,836		4.00			17,836		4.00
Common Equity Tier 1 (to risk-weighted assets)		47,222		16.72			12,709		4.50			19,769		7.00

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Common Stock Repurchases (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Schedule of Repurchase of Common Stock

The Company’s repurchases of its common stock made during the quarter ended September 30, 2021 are set forth in the table below:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs
July 1, 2021 - July 31, 2021		2,766	$	9.86		2,766		66,635
August 1, 2021 - August 31, 2021		418		9.82		418		66,217
September 1, 2021 - September 30, 2021		279		9.89		279		65,938
Total		3,463				3,463

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of the Company's Derivatives Associated with its Interest Rate Risk Management Activities

The following tables summarizes the Company’s derivatives associated with its interest rate risk management activities:

				September 30, 2021
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	16	$	—
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	51	$	—
Total Hedging    Instruments				$	10,000	$	67	$	—
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	10,000

				December 31, 2020
(Dollars in thousands)	Start Date	Maturity Date	Rate	Notional		Other Assets		Other Liabilities
Debt Hedging
Hedging Instruments:
Interest Rate Swap 2020	4/13/2020	4/13/2025	0.68%	$	5,000	$	—	$	68
Interest Rate Swap 2021	4/13/2021	4/13/2026	0.74%	$	5,000	$	—	$	69
Total Hedging    Instruments				$	10,000	$	—	$	137
Hedged Items:
Variability in cash flows    related to 90-day FHLB    advances				N/A		$	—	$	5,000

Summary of the Effect of Cash Flow Hedge Accounting

The following tables summarize the effect of cash flow hedge accounting on the consolidated statements of income for the three and nine months ended September 30, 2021 and 2020:

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Three Months Ended September 30,					Three Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(15	)	$	—	N/A	N/A

	Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships
	Nine Months Ended September 30,					Nine Months Ended September 30,
	2021					2020
(Dollars in thousands)	Interest Income (Expense)			Other Income (Expense)		Interest Income (Expense)	Other Income (Expense)
The effects of cash flow hedging:
Gain (loss) on cash flow hedging          relationships:
Amount reclassified from          OCI into expense	$	(33	)	$	—	N/A	N/A

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Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value, by Balance Sheet Grouping

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
September 30, 2021
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	5,560	$	—	$	5,560	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		4,079		—		4,079		—
Collateralized mortgage obligations issued by the    FHLMC and FNMA		2,951		—		2,951		—
Residential mortgage backed securities		21,062		—		21,062		—
Municipal bonds		43,894		—		43,894		—
Other assets:
Mortgage servicing rights		315		—		—		315
Derivatives		67		—		67		—

	Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
December 31, 2020
Securities available-for-sale:
U.S. Government-sponsored enterprises obligations	$	973	$	—	$	973	$	—
U.S Government agency small business administration    pools guaranteed by the SBA		2,470		—		2,470		—
Collateralized mortgage obligations issued by the    FHLMC		949		—		949		—
Residential mortgage backed securities		5,136		—		5,136		—
Municipal bonds		45,942		—		45,942		—
Other assets:
Mortgage servicing rights		273		—		—		273
Other Liabilities:
Derivatives		137		—		137		—

Summary of Significant Unobservable Inputs used in Level 3 Assets Measured at Fair Value on Recurring Basis

For Level 3 assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

	September 30, 2021
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing    Rights	Discounted Cash Flow	Prepayment Rate	7.77% - 26.24%	14.56%	$	315
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.15% - 4.06%	3.32%
		Default Rate	0.08% - 0.14%	0.13%

	December 31, 2020
(Dollars in thousands)	Valuation Technique	Description	Range	Weighted Average (1)	Fair Value
Mortgage Servicing Rights	Discounted Cash Flow	Prepayment Rate	14.05% - 29.77%	20.97%	$	273
		Discount Rate	9.00% - 9.00%	9.00%
		Delinquency Rate	3.91% - 5.13%	4.12%
		Default Rate	0.08% - 0.14%	0.13%

(1) Unobservable inputs for mortgage servicing rights were weighted by loan amount.

Fair Value Measurements, Recurring and Nonrecurring

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at September 30, 2021 and December 31, 2020 are as follows:

(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2021
Financial Assets:
Cash and due from banks	$	30,695	$	30,695	$	30,695	$	—	$	—
Interest-bearing time deposits with other banks		1,245		1,245		—		1,245		—
Federal Home Loan Bank stock		2,022		2,022		—		2,022		—
Bank-owned life insurance		4,441		4,441		—		4,441		—
Loans, net		369,422		368,975		—		—		368,975
Accrued interest receivable		1,443		1,443		1,443		—		—
Financial Liabilities:
Deposits	$	389,100	$	389,191	$	331,790	$	57,401	$	—
Advances from Federal Home Loan Bank		39,032		39,314		—		39,314		—
Mortgagors’ tax escrow		2,033		2,033		—		2,033		—
December 31, 2020
Financial Assets:
Cash and due from banks	$	5,996	$	5,996	$	5,996	$	—	$	—
Interest-bearing time deposits with other banks		2,488		2,488		—		2,488		—
Federal Home Loan Bank stock		1,796		1,796		—		1,796		—
Bank-owned life insurance		4,356		4,356		—		4,356		—
Loans, net		364,800		365,116		—		—		365,116
Accrued interest receivable		1,412		1,412		1,412		—		—
Financial Liabilities:
Deposits	$	327,381	$	327,696	$	278,713	$	48,983	$	—
Advances from Federal Home Loan Bank		34,127		34,832		—		34,832		—
Advances from Federal Reserve Bank		18,195		18,199		—		18,199		—
Mortgagors’ tax escrow		1,420		1,420		—		1,420		—

Fair Value, Inputs, Level 3 [Member]

Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

For the nine months ended September 30, 2021 and 2020, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(Dollars in thousands)	Mortgage Servicing Rights (1)
Balance as of January 1, 2021	$	273
Included in net income		42
Balance as of September 30, 2021	$	315
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2021	$	—
Balance as of January 1, 2020	$	397
Included in net income		(87	)
Balance as of September 30, 2020	$	310
Total unrealized net gains (losses) included in net income    related to assets still held as of September 30, 2020	$	—

(1) Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing income (loss) in the Company’s consolidated statements of income.

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Summary of Significant Accounting Policies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2021 USD ($) Service	Aug. 17, 2021 USD ($)	Dec. 31, 2020 USD ($)
Accounting Policies [Abstract]
Number of core services | Service	4
Assets Under Management	$ 67,200		$ 58,400
Agreement to purchase client accounts and client relationships		$ 344,000
Payment for purchase of client account and client relationships at closing	$ 172,000
Percentage of value to be paid to seller	85.00%
Assets from client accounts purchase value	$ 27,100
Emerging growth of company status	(i) the last day of the fiscal year of the Company during which it had total annual gross revenues of $1.07 billion (as adjusted for inflation) or more; (ii) the last day of the fiscal year of the Company following the fifth anniversary of the effective date of the Company’s initial public offering (which will be December 31, 2024 for the Company); (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which the Company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

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Cash and Due From Banks - Additional Information (Detail) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Cash And Due From Banks [Abstract]
Cash and due from banks	$ 30,695,000	$ 5,996,000
Cash collateral from counterparties	$ 526,000	$ 525,000

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Securities Available-for-Sale - Schedule of amortized cost and fair value of securities available-for-sale (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Amortized Cost	$ 76,978	$ 53,439
Gross Unrealized Gains	1,332	2,075
Gross Unrealized Losses	(764)	(44)
Fair Values	77,546	55,470
U.S. Government-sponsored enterprises obligations [Member]
Amortized Cost	5,638	997
Gross Unrealized Losses	(78)	(24)
Fair Values	5,560	973
U.S. Government agency small business administration pools guaranteed by SBA [Member]
Amortized Cost	4,053	2,399
Gross Unrealized Gains	51	71
Gross Unrealized Losses	(25)
Fair Values	4,079	2,470
Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Amortized Cost	2,970	938
Gross Unrealized Gains	3	11
Gross Unrealized Losses	(22)
Fair Values	2,951	949
Residential mortgage backed securities [Member]
Amortized Cost	21,404	5,100
Gross Unrealized Gains	44	49
Gross Unrealized Losses	(386)	(13)
Fair Values	21,062	5,136
Municipal bonds [Member]
Amortized Cost	42,913	44,005
Gross Unrealized Gains	1,234	1,944
Gross Unrealized Losses	(253)	(7)
Fair Values	$ 43,894	$ 45,942

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Securities Available-for-Sale - Schedule of amortized cost and fair values of available-for-sale securities by contractual maturity (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Due after five years through ten years, Amortized Cost	$ 6,601
Due after ten years, Amortized Cost	41,950
Total U.S. Government-sponsored enterprises obligations and municipal bonds, Amortized Cost	48,551
Mortgage-backed securities, Amortized Cost	76,978	$ 53,439
Due after five years through ten years, Fair Value	6,573
Due after ten years, Fair Value	42,881
Total U.S. Government-sponsored enterprises obligations and municipal bonds, Fair Value	49,454
Mortgage-backed securities, Fair Value	77,546	55,470
U.S. Government agency small business pools guaranteed by SBA [Member]
Mortgage-backed securities, Amortized Cost	4,053	2,399
Mortgage-backed securities, Fair Value	4,079	2,470
Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Mortgage-backed securities, Amortized Cost	2,970	938
Mortgage-backed securities, Fair Value	2,951	949
Residential mortgage-backed securities
Mortgage-backed securities, Amortized Cost	21,404	5,100
Mortgage-backed securities, Fair Value	$ 21,062	$ 5,136

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Securities Available-for-Sale - Summary of gross unrealized losses and fair value for those investments with unrealized losses (Detail) $ in Thousands	Sep. 30, 2021 USD ($) Number	Dec. 31, 2020 USD ($) Number
Less than 12 Months, Number of Securities | Number	48	7
Less than 12 Months, Fair Value	$ 42,634	$ 6,456
Less than 12 Months, Unrealized Losses	$ (658)	(44)
More than 12 Months, Number of Securities | Number	3
More than 12 Months, Fair Value	$ 3,293
More than 12 Months, Unrealized Losses	(106)
Total, Fair Value	45,927	6,456
Total, Unrealized Losses	$ (764)	$ (44)
U.S. Government-sponsored enterprises obligations [Member]
Less than 12 Months, Number of Securities | Number	6	2
Less than 12 Months, Fair Value	$ 4,606	$ 973
Less than 12 Months, Unrealized Losses	$ (35)	(24)
More than 12 Months, Number of Securities | Number	2
More than 12 Months, Fair Value	$ 954
More than 12 Months, Unrealized Losses	(43)
Total, Fair Value	5,560	973
Total, Unrealized Losses	$ (78)	$ (24)
U.S. Government agency small business administration pools guaranteed by SBA [Member]
Less than 12 Months, Number of Securities | Number	2
Less than 12 Months, Fair Value	$ 1,992
Less than 12 Months, Unrealized Losses	(25)
Total, Fair Value	1,992
Total, Unrealized Losses	$ (25)
Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Less than 12 Months, Number of Securities | Number	3
Less than 12 Months, Fair Value	$ 2,286
Less than 12 Months, Unrealized Losses	(22)
Total, Fair Value	2,286
Total, Unrealized Losses	$ (22)
Residential mortgage backed securities [Member]
Less than 12 Months, Number of Securities | Number	19	1
Less than 12 Months, Fair Value	$ 17,125	$ 3,102
Less than 12 Months, Unrealized Losses	$ (323)	(13)
More than 12 Months, Number of Securities | Number	1
More than 12 Months, Fair Value	$ 2,339
More than 12 Months, Unrealized Losses	(63)
Total, Fair Value	19,464	3,102
Total, Unrealized Losses	$ (386)	$ (13)
Municipal bonds [Member]
Less than 12 Months, Number of Securities | Number	18	4
Less than 12 Months, Fair Value	$ 16,625	$ 2,381
Less than 12 Months, Unrealized Losses	(253)	(7)
Total, Fair Value	16,625	2,381
Total, Unrealized Losses	$ (253)	$ (7)

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Securities Available-for-Sale - Summary of sales proceeds and gross realized gains and losses on available for sale securities (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Available For Sale Securities [Abstract]
Proceeds from sales, maturities and principal payments from securities available-for-sale	$ 684	$ 2,788	$ 19,127	$ 22,208
Gross realized gains		8	588	295
Gross realized losses			(53)	(4)
Net realized gains		$ 8	$ 535	$ 291

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Securities Available-for-Sale - Additional Information (Detail) - Security	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Available For Sale Securities [Abstract]
Number of holdings more than ten percentage of fair value of securities issued by single issuer	0	0

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Loans - Additional Information (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) Number Loan	Dec. 31, 2020 USD ($) Number	Mar. 27, 2020 USD ($)
Temporary payment relief provided for number of loans | Loan	0
Loans outstanding	$ 5,000	$ 5,300
Residential Real Estate [Member]
Loans collateralized by real estate	$ 0	$ 0
Paycheck Protection Program [Member]
CARES Act number of guaranteed loans | Number	134	286
CARES Act aggregate guaranteed outstanding loans	$ 13,100	$ 33,000
CARES Act amount of relief package	900,000,000
CARES Act amount of additional loan	286,000,000
Paycheck Protection Program [Member] | Commercial and Industrial Loans [Member]
CARES Act aggregate guaranteed outstanding loans	$ 9,400	$ 21,200	$ 350,000

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Loans - Schedule of Accounts, Notes, Loans and Financing Receivable (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Total loans	$ 371,558		$ 367,437
Net deferred loan costs	1,392		705
Allowance for loan losses	(3,528)	$ (3,466)	(3,342)	$ (3,246)	$ (3,153)	$ (2,875)
Net loans	369,422		364,800
CRE [Member]
Total loans	66,442		66,166
Allowance for loan losses	(747)	(792)	(753)	(703)	(740)	(781)
MF [Member]
Total loans	9,730		6,619
Allowance for loan losses	(91)	(91)	(60)	(55)	(52)	(23)
C+I [Member]
Total loans	30,358		45,262
Allowance for loan losses	(211)	(218)	(267)	(250)	(278)	(350)
ADL [Member]
Total loans	25,109		23,145
Allowance for loan losses	(227)	(191)	(174)	(142)	(223)	(145)
RES [Member]
Total loans	228,204		213,718
Allowance for loan losses	(1,818)	(1,750)	(1,656)	(1,758)	(1,690)	(1,503)
HELOC [Member]
Total loans	7,334		9,583
Allowance for loan losses	(44)	(78)	(78)	(75)	(58)	(52)
CON [Member]
Total loans	4,381		2,944
Allowance for loan losses	$ (75)	$ (52)	$ (52)	$ (38)	$ (29)	$ (18)

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Loans - Transactions In The Allowance For Loan Losses ("ALL") (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Balance	$ 3,466	$ 3,153	$ 3,342	$ 2,875
Provision for loan losses	60	110	145	385
Charge-offs		(17)		(34)
Recoveries	2		41	20
Balance	3,528	3,246	3,528	3,246
CRE [Member]
Balance	792	740	753	781
Provision for loan losses	(45)	(37)	(6)	(78)
Balance	747	703	747	703
MF [Member]
Balance	91	52	60	23
Provision for loan losses		3	31	32
Balance	91	55	91	55
C+I [Member]
Balance	218	278	267	350
Provision for loan losses	(8)	(28)	(94)	(100)
Recoveries	1		38
Balance	211	250	211	250
ADL [Member]
Balance	191	223	174	145
Provision for loan losses	36	(81)	53	(3)
Balance	227	142	227	142
RES [Member]
Balance	1,750	1,690	1,656	1,503
Provision for loan losses	68	68	162	237
Recoveries				18
Balance	1,818	1,758	1,818	1,758
HELOC [Member]
Balance	78	58	78	52
Provision for loan losses	(34)	17	(34)	23
Balance	44	75	44	75
CON [Member]
Balance	52	29	52	18
Provision for loan losses	22	26	20	52
Charge-offs		(17)		(34)
Recoveries	1		3	2
Balance	75	38	75	38
Unallocated Financing Receivables
Balance	294	83	302	3
Provision for loan losses	21	142	13	222
Balance	$ 315	$ 225	$ 315	$ 225

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Loans - Information About Loans And The ALL By Portfolio Segment Are Summarized (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Individually evaluated for impairment	$ 139		$ 1,001
Collectively evaluated for impairment	371,419		366,436
Total	371,558		367,437
Collectively evaluated for impairment	3,528		3,342
Total	3,528	$ 3,466	3,342	$ 3,246	$ 3,153	$ 2,875
CRE [Member]
Individually evaluated for impairment	108		117
Collectively evaluated for impairment	66,334		66,049
Total	66,442		66,166
Collectively evaluated for impairment	747		753
Total	747	792	753	703	740	781
MF [Member]
Collectively evaluated for impairment	9,730		6,619
Total	9,730		6,619
Collectively evaluated for impairment	91		60
Total	91	91	60	55	52	23
C+I [Member]
Individually evaluated for impairment	31		822
Collectively evaluated for impairment	30,327		44,440
Total	30,358		45,262
Collectively evaluated for impairment	211		267
Total	211	218	267	250	278	350
ADL [Member]
Collectively evaluated for impairment	25,109		23,145
Total	25,109		23,145
Collectively evaluated for impairment	227		174
Total	227	191	174	142	223	145
RES [Member]
Individually evaluated for impairment			62
Collectively evaluated for impairment	228,204		213,656
Total	228,204		213,718
Collectively evaluated for impairment	1,818		1,656
Total	1,818	1,750	1,656	1,758	1,690	1,503
HELOC [Member]
Collectively evaluated for impairment	7,334		9,583
Total	7,334		9,583
Collectively evaluated for impairment	44		78
Total	44	78	78	75	58	52
CON [Member]
Collectively evaluated for impairment	4,381		2,944
Total	4,381		2,944
Collectively evaluated for impairment	75		52
Total	75	52	52	38	29	18
Unallocated Financing Receivables
Collectively evaluated for impairment	315		302
Total	$ 315	$ 294	$ 302	$ 225	$ 83	$ 3

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Loans - Analysis Of Past Due Loans By Portfolio Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Total	$ 371,558	$ 367,437
Non-Accrual Loans		884
30-59 Days Past Due [Member]
Total Past Due	119	185
Greater than 90 Days [Member]
Total Past Due		884
Total Past Due
Total Past Due	119	1,069
Current
Total Past Due	371,439	366,368
CRE [Member]
Total	66,442	66,166
CRE [Member] | Current
Total Past Due	66,442	66,166
MF [Member]
Total	9,730	6,619
MF [Member] | Current
Total Past Due	9,730	6,619
C+I [Member]
Total	30,358	45,262
Non-Accrual Loans		822
C+I [Member] | Greater than 90 Days [Member]
Total Past Due		822
C+I [Member] | Total Past Due
Total Past Due		822
C+I [Member] | Current
Total Past Due	30,358	44,440
ADL [Member]
Total	25,109	23,145
ADL [Member] | Current
Total Past Due	25,109	23,145
RES [Member]
Total	228,204	213,718
Non-Accrual Loans		62
RES [Member] | 30-59 Days Past Due [Member]
Total Past Due		42
RES [Member] | Greater than 90 Days [Member]
Total Past Due		62
RES [Member] | Total Past Due
Total Past Due		104
RES [Member] | Current
Total Past Due	228,204	213,614
HELOC [Member]
Total	7,334	9,583
HELOC [Member] | 30-59 Days Past Due [Member]
Total Past Due	119	143
HELOC [Member] | Total Past Due
Total Past Due	119	143
HELOC [Member] | Current
Total Past Due	7,215	9,440
CON [Member]
Total	4,381	2,944
CON [Member] | Current
Total Past Due	$ 4,381	$ 2,944

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Loans - Provides Information On Impaired Loans (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Recorded Carrying Value		$ 884
Unpaid Principal Balance		1,000
Average Recorded Investment	$ 21	973
Interest Income Recognized	3	5
C+I [Member]
Recorded Carrying Value		822
Unpaid Principal Balance		938
Average Recorded Investment		909
RES [Member]
Recorded Carrying Value		62
Unpaid Principal Balance		62
Average Recorded Investment	21	64
Interest Income Recognized	$ 3	$ 5

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Loans - Internal Risk Rating Of Loans By Portfolio Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Total Loans	$ 371,558	$ 367,437
Pass [Member]
Total Loans	368,693	360,159
Special Mention [Member]
Total Loans	2,726	6,941
Substandard [Member]
Total Loans	139	337
CRE [Member]
Total Loans	66,442	66,166
CRE [Member] | Pass [Member]
Total Loans	63,608	63,191
CRE [Member] | Special Mention [Member]
Total Loans	2,726	2,858
CRE [Member] | Substandard [Member]
Total Loans	108	117
MF [Member]
Total Loans	9,730	6,619
MF [Member] | Pass [Member]
Total Loans	9,730	6,619
C+I [Member]
Total Loans	30,358	45,262
C+I [Member] | Pass [Member]
Total Loans	30,327	41,021
C+I [Member] | Special Mention [Member]
Total Loans		4,083
C+I [Member] | Substandard [Member]
Total Loans	31	158
ADL [Member]
Total Loans	25,109	23,145
ADL [Member] | Pass [Member]
Total Loans	25,109	23,145
RES [Member]
Total Loans	228,204	213,718
RES [Member] | Pass [Member]
Total Loans	228,204	213,656
RES [Member] | Substandard [Member]
Total Loans		62
HELOC [Member]
Total Loans	7,334	9,583
HELOC [Member] | Pass [Member]
Total Loans	7,334	9,583
CON [Member]
Total Loans	4,381	2,944
CON [Member] | Pass [Member]
Total Loans	$ 4,381	$ 2,944

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Loan Servicing - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Transfers And Servicing [Abstract]
Transferred financial assets principal amount outstanding	$ 41,500,000		$ 41,500,000		$ 45,800,000
Loan servicing income	$ 38,000	$ 12,000	$ 122,000	$ 5,000

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Loan Servicing - Summary Of Activity In Mortgage Servicing Rights (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Transfers And Servicing [Abstract]
Balance, beginning of year	$ 303	$ 329	$ 273	$ 397
Additions	13	21	43	110
Payoffs	(12)	(15)	(44)	(72)
Change in fair value due to change in assumptions	11	(25)	43	(125)
Balance, end of year	$ 315	$ 310	$ 315	$ 310

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Deposits - Deposit Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Deposits [Abstract]
NOW and demand deposits	$ 200,290	$ 161,336
Money market deposits	74,264	69,320
Savings deposits	57,235	48,057
Time deposits of $250,000 and greater	6,679	10,119
Time deposits less than $250,000	50,632	38,549
Total deposits	$ 389,100	$ 327,381

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Deposits - Time Deposit Maturities (Detail) $ in Thousands	Sep. 30, 2021 USD ($)
Deposits [Abstract]
2021	$ 27,816
2022	21,220
2023	3,769
2024	1,056
2025	1,651
2026	1,799
Total	$ 57,311

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Deposits - Additional information (Detail) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Time Deposits [Member]
Brokered deposits	$ 15,000,000.0	$ 0

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Borrowings - Schedule of Federal Home Loan Bank Advances by Branch of FHLB Bank (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Principal Amounts	$ 39,032	$ 34,127
Federal Home Loan Bank Advances One
Principal Amounts	$ 10,000	$ 10,095
Maturity Dates	2021	2021
Interest Rates	0.31%
Federal Home Loan Bank Advances One | Minimum [Member]
Interest Rates		0.39%
Federal Home Loan Bank Advances One | Maximum [Member]
Interest Rates		0.42%
Federal Home Loan Bank Advances Two
Principal Amounts	$ 2,262	$ 2,262
Maturity Dates	2022	2022
Interest Rates	0.00%	0.00%
Federal Home Loan Bank Advances Three
Principal Amounts	$ 5,000	$ 10,800
Maturity Dates	2023	2024
Interest Rates	0.45%
Federal Home Loan Bank Advances Three | Minimum [Member]
Interest Rates		0.00%
Federal Home Loan Bank Advances Three | Maximum [Member]
Interest Rates		1.39%
Federal Home Loan Bank Advances Four
Principal Amounts	$ 10,800	$ 10,520
Maturity Dates	2024	2025
Federal Home Loan Bank Advances Four | Minimum [Member]
Interest Rates	0.00%	0.00%
Federal Home Loan Bank Advances Four | Maximum [Member]
Interest Rates	1.39%	1.35%
Federal Home Loan Bank Advances Five
Principal Amounts	$ 10,520	$ 250
Maturity Dates	2025	2028
Interest Rates		0.00%
Federal Home Loan Bank Advances Five | Minimum [Member]
Interest Rates	0.00%
Federal Home Loan Bank Advances Five | Maximum [Member]
Interest Rates	1.35%
Federal Home Loan Bank Advances Six
Principal Amounts	$ 250	$ 200
Maturity Dates	2028	2030
Interest Rates	0.00%	0.00%
Federal Home Loan Bank Advances Seven
Principal Amounts	$ 200	$ 34,127
Maturity Dates	2030
Interest Rates	0.00%

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Borrowings - Additional Information (Detail)			9 Months Ended	12 Months Ended
	Dec. 20, 2021 USD ($)	Nov. 15, 2021 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($) Loan
Banks unused remaining borrowing capacity			$ 97,000,000.0	$ 112,600,000
Federal home loan bank, advances, callable maturity date	Mar. 20, 2023	May 15, 2023
Advances from Federal Home Loan Bank			39,032,000	34,127,000
Principal Amounts			39,032,000	$ 34,127,000
Federal home loan bank maximum borrowing capacity			3,000.0
Fed Funds Borrowing [Member]
Fed funds borrowing capacity			$ 5,000.0
PPPLF [Member]
CARES Act loan interest rate			0.35%	0.35%
CARES Act loan advances			$ 0	$ 18,200,000
CARES Act collateralized loans | Loan				110
FHLB Advances Maturity September Seven Two Thousand Twenty One Callable [Member]
Long term Federal Home Loan Bank Advances Noncurrent			$ 10,000,000.0	$ 10,000,000
Interest rate			1.39%	1.39%
Federal home loan bank, advances, callable maturity date			Dec. 06, 2021	Dec. 06, 2021
FHLB Advances Maturity August Ten Two Thousand Twenty One Callable [Member]
Long term Federal Home Loan Bank Advances Noncurrent			$ 10,000,000.0	$ 10,000,000
Interest rate			1.35%	1.35%
Federal home loan bank, advances, callable maturity date			Nov. 10, 2021	Nov. 10, 2021
New England Program [Member]
Interest rate			0.00%	0.00%
Advances from Federal Home Loan Bank			$ 4,000,000.0	$ 4,000,000
Principal Amounts			$ 4,000,000.0	$ 4,000,000
FHLB Advances Maturity May Fifteen Two Thousand Twenty Three [Member]
Interest rate		0.44%
Advances from Federal Home Loan Bank		$ 5,000.0
Principal Amounts		$ 5,000.0
FHLB Advances Maturity March Twenty Two Thousand Twenty Three [Member]
Interest rate	0.44%
Advances from Federal Home Loan Bank	$ 5,000,000
Principal Amounts	$ 5,000,000

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Employee Benefits - Additional information (Detail) - USD ($)		3 Months Ended		9 Months Ended		12 Months Ended
	May 27, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Number of shares committed to be released each year,ESOP		8,943		8,943			11,924
Employee stock option unallocated shares fair value		$ 2,000,000.0		$ 2,000,000.0			$ 1,900,000
Defined Benefit Plan, Plan Assets, Contributions by Employer		49,000	$ 56,000	140,000	$ 150,000
Deferred Compensation Liability, Current and Noncurrent		1,672,000		1,672,000			1,667,000
2021 Equity Incentive Plan [Member]
Equity incentive plan, number of shares authorized	417,327
Equity incentive plan, stock option expiration period	10 years
Equity incentive plan, awards issued under the plan	0
2021 Equity Incentive Plan [Member] | Stock Option [Member]
Equity incentive plan, number of shares authorized	298,091
2021 Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]
Equity incentive plan, number of shares authorized	119,236
Scenario Forecast [Member]
Defined Benefit Plan, Plan Assets, Contributions by Plan Participant						$ 270,000
Pentegra DB Plan [Member]
Pension Cost (Reversal of Cost)		90,000	270,000	279,000	279,000
Salary Continuation Plan [Member] | Supplemental Employee Retirement Plan [Member]
Liability, Defined Benefit Plan		$ 631,000		$ 631,000			607,000
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate		5.00%		5.00%
Employee Salary Incremental Percent		3.00%		3.00%
Defined Contribution Plan, Cost		$ 20,000	16,000	$ 61,000	66,000
Executive Supplemental Retirement Plan | Supplemental Employee Retirement Plan [Member]
Liability, Defined Benefit Plan		$ 85,000		$ 85,000			$ 132,000
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate		6.25%		6.25%			6.25%
Defined Contribution Plan, Cost		$ 1,000	2,000	$ 4,000	6,000
Endorsement Method Split Dollar Plan [Member] | Supplemental Employee Retirement Plan [Member]
Pension Cost (Reversal of Cost)		0	0	1,000	0
Liability, Defined Benefit Plan		34,000		34,000			$ 34,000
Deferred Directors Supplemental Retirement Plan [Member] | Supplemental Employee Retirement Plan [Member]
Pension Cost (Reversal of Cost)		17,000	18,000	51,000	46,000
Liability, Defined Benefit Plan		$ 542,000		$ 542,000			$ 573,000
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate		6.25%		6.25%			6.25%
Deferred Compensation Liability, Current and Noncurrent		$ 379,000		$ 379,000			$ 321,000
First Seacoast Bank Employee Stock Ownership Plan [Member]
Number of shares committed to be released each year,ESOP		11,924		11,924
Employee stock option compensation recognized		$ 29,000	$ 18,000	$ 86,000	$ 63,000
Employee stock option plan [Member]
Stock Repurchase				238,473
Remaining loan maturity date				Dec. 31, 2038
Percentage of Purchase price common stock				100.00%
Remaining Principal Balance of Debt		$ 2,200,000		$ 2,200,000			$ 2,200,000

XML

Employee Benefits - Schedule of Company Compensation Expense for the ESOP (Detail) - shares	Sep. 30, 2021	Dec. 31, 2020
Employee Stock Ownership Plan E S O P Shares In E S O P [Abstract]
Allocated	23,848	11,924
Committed to be allocated	8,943	11,924
Unallocated	205,682	214,625
Total	238,473	238,473

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Employee Benefits - Fair Value of Plan Assets Divided by Funding Target (Detail)	Jul. 01, 2021
Pension Plan [Member]
Percentage of funding status	104.99%	[1]

[1] Fair value of plan assets reflects any contributions received through June 30, 2021.

XML

Other Comprehensive Income - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disclosure Of Other Comprehensive Income Loss [Abstract]
Gains on securities available-for-sale		$ (8)	$ (535)	$ (291)
Tax effect		2	146	79
Net income (loss)		(6)	(389)	(212)
Net amortization of bond premium	$ 177	115	494	266
Tax effect	(48)	(31)	(134)	(72)
Net income (loss)	129	84	360	194
Net interest expense on swaps	15		33
Tax effect	(4)		(9)
Net income (loss)	(11)		(24)
Total reclassification adjustments	$ 140	$ 78	$ (5)	$ (18)

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Other Comprehensive Income - Summary of Changes in Component of AOCI (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Balance at the beginning of the period	[1]	$ 1,076	$ 994	$ 1,381	$ 521
Other comprehensive loss before reclassification	[1]	(752)	(109)	(912)	456
Amounts reclassified from OCI	[1]	140	74	(5)	(18)
Other comprehensive income (loss)	[1]	(612)	(35)	(917)	438
Balance at the end of the period	[1]	464	959	464	959
Net Unrealized Gains (Losses) on AFS Securities [Member]
Balance at the beginning of the period	[1]	1,036	1,113	1,481	521
Other comprehensive loss before reclassification	[1]	(750)	(114)	(1,037)	575
Amounts reclassified from OCI	[1]	129	79	(29)	(18)
Other comprehensive income (loss)	[1]	(621)	(35)	(1,066)	557
Balance at the end of the period	[1]	415	1,078	415	1,078
Net Unrealized Losses on Cash Flow Hedges [Member]
Balance at the beginning of the period	[1]	40	(119)	(100)
Other comprehensive loss before reclassification	[1]	(2)	5	125	(119)
Amounts reclassified from OCI	[1]	11	(5)	24
Other comprehensive income (loss)	[1]	9		149	(119)
Balance at the end of the period	[1]	$ 49	$ (119)	$ 49	$ (119)

[1] All amounts are net of tax

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Regulatory Matters - Schedule of Regulatory Capital Requirements (Detail) $ in Thousands	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Actual, Total Capital (to risk- weighted assets)	$ 52,826	$ 50,612
Actual, Tier 1 Capital (to risk- weighted assets)	49,243	47,222
Actual, Tier 1 Capital (to average assets)	49,243	47,222
Actual, Common Equity Tier 1 (to risk-weighted assets)	$ 49,243	$ 47,222
Actual Ratio, Total Capital (to risk- weighted assets)	17.99	17.92
Actual Ratio, Tier 1 Capital (to risk- weighted assets)	16.77	16.72
Actual Ratio, Tier 1 Capital (to average assets)	10.07	10.59
Actual Ratio, Common Equity Tier 1 (to risk-weighted assets)	16.77	16.72
Minimum Capital Requirement, Total Capital (to risk-weighted assets)	$ 23,496	$ 22,593
Minimum Capital Requirement, Tier 1 Capital (to risk-weighted assets)	17,622	16,945
Minimum Capital Requirement, Tier 1 Capital (to average assets)	19,558	17,836
Minimum Capital Requirement, Common Equity Tier 1 (to risk-weighted assets)	$ 13,217	$ 12,709
Minimum Capital Requirement Ratio, Total Capital (to risk-weighted assets)	8.00	8.00
Minimum Capital Requirement Ratio, Tier 1 Capital (to risk-weighted assets)	6.00	6.00
Minimum Capital Requirement Ratio, Tier 1 Capital (to average assets)	4.00	4.00
Minimum Capital Requirement Ratio, Common Equity Tier 1 (to risk-weighted assets)	4.50%	4.50%
Minimum To Be Well Capitalized Under Prompt Corrective, Total Capital (to risk-weighted assets)		$ 29,653
Minimum To Be Well Capitalized Under Prompt Corrective, Tier I Capital (to risk-weighted assets)		24,005
Minimum To Be Well Capitalized Under Prompt Corrective, Tier I Capital (to average assets)		17,836
Minimum To Be Well Capitalized Under Prompt Corrective, Common Equity Tier 1 (to risk-weighted assets)		$ 19,769
Minimum To Be Well Capitalized Under Prompt Corrective Ratio, Total Capital (to risk-weighted assets)		10.50
Minimum To Be Well Capitalized Under Prompt Corrective Ratio, Tier I Capital (to risk-weighted assets)		8.50
Minimum To Be Well Capitalized Under Prompt Corrective Ratio, Tier I Capital (to average assets)		4.00
Minimum To Be Well Capitalized Under Prompt Corrective Ratio, Common Equity Tier 1 (to risk-weighted assets)		7.00%
Fully Phased-In
Minimum Capital Requirement, Total Capital (to risk-weighted assets)	$ 30,839
Minimum Capital Requirement, Tier 1 Capital (to risk-weighted assets)	24,965
Minimum Capital Requirement, Tier 1 Capital (to average assets)	19,558
Minimum Capital Requirement, Common Equity Tier 1 (to risk-weighted assets)	$ 20,559
Minimum Capital Requirement Ratio, Total Capital (to risk-weighted assets)	10.50
Minimum Capital Requirement Ratio, Tier 1 Capital (to risk-weighted assets)	8.50
Minimum Capital Requirement Ratio, Tier 1 Capital (to average assets)	4.00
Minimum Capital Requirement Ratio, Common Equity Tier 1 (to risk-weighted assets)	7.00%

XML

Common Stock Repurchases (Additional Information) (Detail) - shares	Sep. 30, 2021	Aug. 31, 2021	Jul. 31, 2021	Sep. 23, 2020
Equity Class Of Treasury Stock [Line Items]
Number of shares authorized for repurchase	65,938	66,217	66,635
Common Stock [Member]
Equity Class Of Treasury Stock [Line Items]
Percentage of repurchase of Common Stock				2.30%
Equity method investment ownership percentage				5.00%
Number of shares authorized for repurchase	70,941
Common Stock [Member] | Maximum [Member]
Equity Class Of Treasury Stock [Line Items]
Number of shares authorized for repurchase				136,879

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Common Stock Repurchases - Schedule of repurchases of common stock (Details) - $ / shares	1 Months Ended			9 Months Ended
	Sep. 30, 2021	Aug. 31, 2021	Jul. 31, 2021	Sep. 30, 2021
Equity [Abstract]
Total Number of Shares Purchased	279	418	2,766	3,463
Average Price Paid per Share	$ 9.89	$ 9.82	$ 9.86
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	279	418	2,766	3,463
Maximum Number of Shares that may Yet Be Purchased Under the Plans or Programs	65,938	66,217	66,635	65,938

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Derivatives and Hedging Activities - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) Derivative	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) Derivative	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Derivatives Fair Value [Line Items]
Interest rate swaps			$ 204,000	$ (164,000)
Cash collateral from counterparties	$ 526,000		526,000		$ 525,000
Interest Expense [Member]
Derivatives Fair Value [Line Items]
Interest rate swaps			56,000,000
Designated as Hedging Instrument | Interest Rate Swaps [Member]
Derivatives Fair Value [Line Items]
Notional	10,000,000		10,000,000		10,000,000
Interest rate swaps	12,000,000	$ 0	204,000,000	(164,000,000)
Other Liabilities					137,000
Designated as Hedging Instrument | Interest Rate Swaps [Member] | Other Liabilities [Member]
Derivatives Fair Value [Line Items]
Interest rate swap derivative liability	67,000,000		67,000,000		137,000,000
Designated as Hedging Instrument | Interest Rate Swap 2020 [Member]
Derivatives Fair Value [Line Items]
Notional	5,000,000		5,000,000		5,000,000
Other Liabilities					68,000
Designated as Hedging Instrument | Interest Rate Swap 2021 [Member]
Derivatives Fair Value [Line Items]
Notional	5,000,000		5,000,000		5,000,000
Other Liabilities					69,000
Cash Flow Hedges on 90-day Advances from FHLB [Member]
Derivatives Fair Value [Line Items]
Other Liabilities	$ 10,000,000		$ 10,000,000		$ 5,000,000
Cash Flow Hedges on 90-day Advances from FHLB [Member] | Designated as Hedging Instrument | Interest Rate Swaps [Member]
Derivatives Fair Value [Line Items]
Number of notional interest rate swaps | Derivative	2		2
Cash Flow Hedges on 90-day Advances from FHLB [Member] | Designated as Hedging Instrument | Interest Rate Swap 2020 [Member]
Derivatives Fair Value [Line Items]
Notional	$ 5,000,000		$ 5,000,000
Cash Flow Hedges on 90-day Advances from FHLB [Member] | Designated as Hedging Instrument | Interest Rate Swap 2021 [Member]
Derivatives Fair Value [Line Items]
Notional	5,000,000		5,000,000
Balance Sheet Hedges on 90-day Advances from FHLB [Member]
Derivatives Fair Value [Line Items]
Other Liabilities	$ 10,000,000.0	$ 5,000,000	$ 10,000,000.0	$ 5,000,000

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Derivatives and Hedging Activities - Summary of the Company's Derivatives Associated with its Interest Rate Risk Management Activities (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Cash Flow Hedges on 90-day Advances from FHLB [Member]
Derivatives Fair Value [Line Items]
Other Liabilities	$ 10,000	$ 5,000
Designated as Hedging Instrument | Interest Rate Swap 2020 [Member]
Derivatives Fair Value [Line Items]
Start Date	Apr. 13, 2020	Apr. 13, 2020
Maturity Date	Apr. 13, 2025	Apr. 13, 2025
Rate	0.68%	0.68%
Notional	$ 5,000	$ 5,000
Other Assets	16
Other Liabilities		$ 68
Designated as Hedging Instrument | Interest Rate Swap 2020 [Member] | Cash Flow Hedges on 90-day Advances from FHLB [Member]
Derivatives Fair Value [Line Items]
Notional	$ 5,000
Designated as Hedging Instrument | Interest Rate Swap 2021 [Member]
Derivatives Fair Value [Line Items]
Start Date	Apr. 13, 2021	Apr. 13, 2021
Maturity Date	Apr. 13, 2026	Apr. 13, 2026
Rate	0.74%	0.74%
Notional	$ 5,000	$ 5,000
Other Assets	51
Other Liabilities		69
Designated as Hedging Instrument | Interest Rate Swap 2021 [Member] | Cash Flow Hedges on 90-day Advances from FHLB [Member]
Derivatives Fair Value [Line Items]
Notional	5,000
Designated as Hedging Instrument | Interest Rate Swaps [Member]
Derivatives Fair Value [Line Items]
Notional	10,000	10,000
Other Assets	$ 67
Other Liabilities		$ 137

XML

Derivatives and Hedging Activities - Summary of the Effect of Cash Flow Hedge Accounting (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivatives Fair Value [Line Items]
Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships	$ 235	$ 504	$ 747	$ 1,953
Amount Reclassified from AOCI into Income
Derivatives Fair Value [Line Items]
Location and Amount of Gain or Loss Recognized in Income on Cash Flow Hedging Relationships	$ (15)		$ (33)

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Fair Values of Assets and Liabilities - Fair Value, by Balance Sheet Grouping (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Securities available-for-sale:
Securities available-for-sale, at fair value	$ 77,546	$ 55,470
U.S. Government-sponsored enterprises obligations [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	5,560	973
U.S. Government agency small business administration pools guaranteed by SBA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	4,079	2,470
Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	2,951	949
Residential mortgage backed securities [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	21,062	5,136
Municipal bonds [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	43,894	45,942
Fair Value, Measurements, Recurring [Member] | U.S. Government-sponsored enterprises obligations [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	5,560	973
Fair Value, Measurements, Recurring [Member] | U.S. Government agency small business administration pools guaranteed by SBA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	4,079	2,470
Fair Value, Measurements, Recurring [Member] | Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	2,951	949
Fair Value, Measurements, Recurring [Member] | Residential mortgage backed securities [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	21,062	5,136
Fair Value, Measurements, Recurring [Member] | Municipal bonds [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	43,894	45,942
Fair Value, Measurements, Recurring [Member] | Derivative [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	67
Other Liabilities:
Liabilities, Fair Value Disclosure		137
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | U.S. Government-sponsored enterprises obligations [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	5,560	973
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | U.S. Government agency small business administration pools guaranteed by SBA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	4,079	2,470
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Collateralized mortgage obligations issued by the FHLMC and FNMA [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	2,951	949
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Residential mortgage backed securities [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	21,062	5,136
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Municipal bonds [Member]
Securities available-for-sale:
Securities available-for-sale, at fair value	43,894	45,942
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Derivative [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	67
Other Liabilities:
Liabilities, Fair Value Disclosure		137
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	315	273
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	$ 315	$ 273

XML

Fair Values of Assets and Liabilities - Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Inputs, Level 3 [Member] - Fair Value, Measurements, Recurring [Member] - Mortgage-backed securities [Member] - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Beginning Balance	[1]	$ 273	$ 397
Included in net income	[1]	42	(87)
Ending Balance	[1]	$ 315	$ 310

[1] Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing income (loss) in the Company’s consolidated statements of income.

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Fair Values of Assets and Liabilities - Summary of Significant Unobservable Inputs used in Level 3 Assets Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Inputs, Level 3 [Member] - Fair Value, Measurements, Recurring [Member] $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Mortgage-backed securities [Member]
Mortgage Servicing Rights	[1]	$ 315	$ 273	$ 310	$ 397
Prepayment Rate [Member] | Mortgage-backed securities [Member]
Servicing Asset, Valuation Technique [Extensible List]		us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Mortgage Servicing Rights		$ 315	$ 273
Prepayment Rate [Member] | Minimum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0777	0.1405
Prepayment Rate [Member] | Maximum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.2624	0.2702
Prepayment Rate [Member] | Weighted Average [Member]
Mortgage Servicing Rights, Measuring Inputs	[2]	0.1456	20.97
Fair value valuation techniques		Prepayment Rate	Prepayment Rate
Discount Rate [Member] | Minimum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0900	0.0900
Discount Rate [Member] | Maximum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0900	0.0900
Discount Rate [Member] | Weighted Average [Member]
Mortgage Servicing Rights, Measuring Inputs	[2]	0.0900	9.00
Fair value valuation techniques		Discount Rate	Discount Rate
Delinquency Rate [Member] | Minimum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0315	0.0342
Delinquency Rate [Member] | Maximum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0406	0.0513
Delinquency Rate [Member] | Weighted Average [Member]
Mortgage Servicing Rights, Measuring Inputs	[2]	0.0332	4.12
Fair value valuation techniques		Delinquency Rate	Delinquency Rate
Default Rate [Member] | Minimum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0008	0.0008
Default Rate [Member] | Maximum [Member]
Mortgage Servicing Rights, Measuring Inputs		0.0014	0.0014
Default Rate [Member] | Weighted Average [Member]
Mortgage Servicing Rights, Measuring Inputs	[2]	0.0013	0.13
Fair value valuation techniques		Default Rate	Default Rate

[1] Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing income (loss) in the Company’s consolidated statements of income.

[2] Unobservable inputs for mortgage servicing rights were weighted by loan amount.

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Fair Values of Assets and Liabilities - Additional Information (Detail) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Non-financial assets and liabilities measured at fair value on a recurring basis	$ 0
Foreclosed assets	0	$ 0
Fair Value, Nonrecurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 0	$ 0

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Fair Values of Assets and Liabilities - Fair Value Measurements, Recurring and Nonrecurring (Detail) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financial Assets:
Cash and due from banks	$ 30,695	$ 5,996
Interest-bearing time deposits with other banks	1,245	2,488
Federal Home Loan Bank stock	2,022	1,796
Bank-owned life insurance	4,441	4,356
Loans, net	369,422	364,800
Accrued interest receivable	1,443	1,412
Financial Liabilities:
Total deposits	389,100	327,381
Advances from Federal Home Loan Bank	39,032	34,127
Mortgagors’ tax escrow	2,033	1,420
Advances from Federal Reserve Bank		18,195
Financial Liabilities:
Advances from Federal Home Loan Bank	39,032	34,127
Cash and due from banks [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	30,695	5,996
Interest-bearing time deposits with other banks [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	1,245	2,488
Federal Home Loan Bank stock [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	2,022	1,796
Bank-owned life insurance [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	4,441	4,356
Loans, net [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	368,975	365,116
Accrued interest receivable [member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	1,443	1,412
Deposits [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	389,191	327,696
Federal Home Loan Bank Borrowings [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	39,314	34,832
Mortgagors' tax escrow [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	2,033	1,420
Federal Reserve Bank Advances
Financial Liabilities:
Advances from Federal Home Loan Bank		18,199
Financial Liabilities:
Advances from Federal Home Loan Bank		18,199
Fair Value, Inputs, Level 1 [Member] | Cash and due from banks [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	30,695	5,996
Fair Value, Inputs, Level 1 [Member] | Accrued interest receivable [member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	1,443	1,412
Fair Value, Inputs, Level 1 [Member] | Deposits [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	331,790	278,713
Fair Value, Inputs, Level 2 [Member] | Interest-bearing time deposits with other banks [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	1,245	2,488
Fair Value, Inputs, Level 2 [Member] | Federal Home Loan Bank stock [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	2,022	1,796
Fair Value, Inputs, Level 2 [Member] | Bank-owned life insurance [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	4,441	4,356
Fair Value, Inputs, Level 2 [Member] | Deposits [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	57,401	48,983
Fair Value, Inputs, Level 2 [Member] | Federal Home Loan Bank Borrowings [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	39,314	34,832
Fair Value, Inputs, Level 2 [Member] | Mortgagors' tax escrow [Member]
Financial Liabilities:
Financial Liabilities Fair Value Disclosure	2,033	1,420
Fair Value, Inputs, Level 2 [Member] | Federal Reserve Bank Advances
Financial Liabilities:
Advances from Federal Home Loan Bank		18,199
Financial Liabilities:
Advances from Federal Home Loan Bank		18,199
Fair Value, Inputs, Level 3 [Member] | Loans, net [Member]
Assets, Fair Value Disclosure
Assets, Fair Value Disclosure	$ 368,975	$ 365,116

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Subsequent Events - Additional Information (Detail) - USD ($)				1 Months Ended
	Oct. 25, 2021	Oct. 15, 2021	Oct. 08, 2021	Nov. 01, 2021	Sep. 30, 2021	Aug. 31, 2021	Jul. 31, 2021	Dec. 31, 2020
Subsequent Event [Line Items]
Average Price Paid per Share					$ 9.89	$ 9.82	$ 9.86
Time Deposits [Member]
Subsequent Event [Line Items]
Brokered deposits					$ 15,000,000.0			$ 0
Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase subordinated note		$ 2,000,000.0
Fixed to floating subordinated notes percentage		3.125%
Fixed to floating subordinated notes due		Oct. 15, 2031
Term of repayment		5 years
Subsequent Event [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Number of shares authorized for repurchase				293
Average Price Paid per Share				$ 9.80
Subsequent Event [Member] | Time Deposits [Member]
Subsequent Event [Line Items]
Brokered deposits	$ 1,700,000		$ 5,900,000
Term of brokered deposits	4 years 6 months		4 years
Interest rate of brokered deposits	0.65%		0.50%