XML 22 R13.htm IDEA: XBRL DOCUMENT v3.22.2.2
LOANS
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
LOANS

NOTE 5 – LOANS

Loans are summarized as follows at September 30, 2022 and December 31, 2021:

 

 

 

September 30,
2022

 

 

December 31,
2021

 

Real estate:

 

(unaudited)

 

Residential First Mortgage

 

$

452,252,121

 

 

$

319,968,234

 

Commercial and Multi-Family Real Estate

 

 

167,043,470

 

 

 

175,375,419

 

Construction

 

 

59,957,043

 

 

 

41,384,687

 

Commercial and Industrial

 

 

1,908,487

 

 

 

7,905,524

 

Consumer:

 

 

 

 

 

 

Home Equity and Other Consumer

 

 

28,386,461

 

 

 

27,728,979

 

Total loans

 

 

709,547,582

 

 

 

572,362,843

 

Allowance for loan losses

 

 

(2,428,174

)

 

 

(2,153,174

)

Net loans

 

$

707,119,408

 

 

$

570,209,669

 

 

As a qualified Small Business Administration lender, the Bank was automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). During 2020, the Bank received and processed 113 PPP applications totaling approximately $10.5 million. The Bank participated in the second round of PPP loans and during the first half of 2021, the Bank received and processed 54 applications totaling $6.9 million. Since origination, the Bank has processed forgiveness applications for $13.4 million and the outstanding balance of PPP loans at September 30, 2022 and December 31, 2021 was $282,000 and $5.8 million, respectively, which are included in the table above under commercial and industrial loans.

 

The Bank has granted loans to officers and directors of the Bank. At September 30, 2022 and December 31, 2021, such loans totaled $1,756,594 and $577,143, respectively. At September 30, 2022 and December 31, 2021 deferred loan fees were $2,894,450 and $1,249,233, respectively.

 

Purchased credit impaired ("PCI") loans are loans acquired at a discount primarily due to deteriorated credit quality. These loans are initially recorded at fair value at acquisition, based upon the present value of expected future cash flows, with no related allowance for loan losses. PCI loans acquired in the Gibraltar Bank acquisition totaled $4.6 million at September 30, 2022.

 

The following table presents changes in accretable yield for PCI loans for the nine months ended September 30, 2022 and 2021.

 

 

 

Three Months Ended
September 30, 2022

 

 

Nine Months Ended
September 30, 2022

 

 

Three Months Ended
September 30, 2021

 

 

Nine Months Ended
September 30, 2021

 

Balance at the beginning of period

 

$

151,854

 

 

$

170,075

 

 

$

200,000

 

 

$

—

 

Acquisition

 

 

—

 

 

 

—

 

 

 

—

 

 

 

217,789

 

Accretion

 

 

(15,277

)

 

 

(33,498

)

 

 

(27,306

)

 

 

(45,095

)

Reclassification of non-accretable discount

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at the end of period

 

$

136,577

 

 

$

136,577

 

 

$

172,694

 

 

$

172,694

 

 

 

NOTE 5 – LOANS (Continued)

The following table presents the activity in the allowance for loan losses by portfolio segments for the three months ended September 30, 2022 and 2021.

 

 

 

Residential
First
Mortgage

 

 

Commercial
and Multi-
Family Real
Estate

 

 

Construction

 

 

Commercial
and
Industrial

 

 

Home Equity & Other

 

 

Total

 

Three months
 September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,251,924

 

 

$

680,000

 

 

$

232,000

 

 

$

7,000

 

 

$

82,250

 

 

$

2,253,174

 

Provision for loan losses (credit)

 

 

161,850

 

 

 

(32,000

)

 

 

36,500

 

 

 

(1,100

)

 

 

9,750

 

 

 

175,000

 

Loans charged off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total ending allowance balance

 

$

1,413,774

 

 

$

648,000

 

 

$

268,500

 

 

$

5,900

 

 

$

92,000

 

 

$

2,428,174

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,126,694

 

 

$

853,000

 

 

$

54,000

 

 

$

8,480

 

 

$

86,000

 

 

$

2,128,174

 

Provision for loan losses (credit)

 

 

195,880

 

 

 

(295,500

)

 

 

121,500

 

 

 

320

 

 

 

2,800

 

 

 

25,000

 

Loans charged off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total ending allowance balance

 

$

1,322,574

 

 

$

557,500

 

 

$

175,500

 

 

$

8,800

 

 

$

88,800

 

 

$

2,153,174

 

 

The following table presents the activity in the allowance for loan losses by portfolio segments for the nine months ended September 30, 2022 and 2021.

 

 

Residential
First
Mortgage

 

 

Commercial
and Multi-
Family Real
Estate

 

 

Construction

 

 

Commercial
and
Industrial

 

 

Home Equity & Other

 

 

Total

 

Nine months
September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,092,474

 

 

$

768,600

 

 

$

195,000

 

 

$

9,400

 

 

$

87,700

 

 

$

2,153,174

 

Provision for loan losses (credit)

 

 

321,300

 

 

 

(120,600

)

 

 

73,500

 

 

 

(3,500

)

 

 

4,300

 

 

 

275,000

 

Loans charged off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total ending allowance balance

 

$

1,413,774

 

 

$

648,000

 

 

$

268,500

 

 

$

5,900

 

 

$

92,000

 

 

$

2,428,174

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,254,174

 

 

$

841,000

 

 

$

45,000

 

 

$

14,000

 

 

$

87,000

 

 

$

2,241,174

 

Provision for loan losses (credit)

 

 

68,400

 

 

 

(283,500

)

 

 

130,500

 

 

 

(5,200

)

 

 

1,800

 

 

 

(88,000

)

Loans charged off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total ending allowance balance

 

$

1,322,574

 

 

$

557,500

 

 

$

175,500

 

 

$

8,800

 

 

$

88,800

 

 

$

2,153,174

 

 

NOTE 5 – LOANS (Continued)

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segments and based on impairment method as of September 30, 2022 and December 31, 2021:

 

 

 

Residential
First
Mortgage

 

 

Commercial
and Multi-
Family Real
Estate

 

 

Construction

 

 

Commercial
and
Industrial

 

 

Home Equity & Other consumer

 

 

Total

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending allowance balance
   attributable to loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for
   impairment

 

$

35,859

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

35,859

 

Collectively evaluated for
   impairment

 

 

1,377,915

 

 

 

648,000

 

 

 

268,500

 

 

 

5,900

 

 

 

92,000

 

 

 

2,392,315

 

Acquired with deteriorated
   credit quality

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total ending allowance balance

 

$

1,413,774

 

 

$

648,000

 

 

$

268,500

 

 

$

5,900

 

 

$

92,000

 

 

$

2,428,174

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated
   for impairment

 

$

825,797

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

18,100

 

 

$

843,897

 

Loans collectively evaluated
   for impairment

 

 

448,179,566

 

 

 

165,680,523

 

 

 

59,957,043

 

 

 

1,908,487

 

 

 

28,335,160

 

 

 

704,060,779

 

Loans acquired with deteriorated
   credit quality

 

 

3,246,758

 

 

 

1,362,947

 

 

 

—

 

 

 

—

 

 

 

33,201

 

 

 

4,642,906

 

Total ending loan balance

 

$

452,252,121

 

 

$

167,043,470

 

 

$

59,957,043

 

 

$

1,908,487

 

 

$

28,386,461

 

 

$

709,547,582

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending allowance balance
   attributable to loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for
   impairment

 

$

35,859

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

35,859

 

Collectively evaluated for
   impairment

 

 

1,056,615

 

 

 

768,600

 

 

 

195,000

 

 

 

9,400

 

 

 

87,700

 

 

 

2,117,315

 

Total ending allowance balance

 

$

1,092,474

 

 

$

768,600

 

 

$

195,000

 

 

$

9,400

 

 

$

87,700

 

 

$

2,153,174

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated
   for impairment

 

$

1,099,793

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

18,507

 

 

$

1,118,300

 

Loans collectively evaluated
   for impairment

 

 

314,754,870

 

 

 

173,962,424

 

 

 

41,384,687

 

 

 

7,866,263

 

 

 

27,710,472

 

 

 

565,678,716

 

Loans acquired with deteriorated
   credit quality

 

 

4,113,571

 

 

 

1,412,995

 

 

 

—

 

 

 

39,261

 

 

 

—

 

 

 

5,565,827

 

Total ending loan balance

 

$

319,968,234

 

 

$

175,375,419

 

 

$

41,384,687

 

 

$

7,905,524

 

 

$

27,728,979

 

 

$

572,362,843

 

 

 

NOTE 5 – LOANS (Continued)

 

Impaired loans as of and for the three and nine months ended September 30, 2022 were as follows:

 

 

 

Loans
with no related
allowance recorded

 

 

Loans
with an
allowance recorded

 

 

Amount of
allowance for
loan losses allocated

 

Residential First Mortgage

 

$

1,206,747

 

 

$

172,489

 

 

$

35,859

 

Commercial and Multi-Family Real Estate

 

 

487,252

 

 

 

—

 

 

 

—

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and Industrial

 

 

—

 

 

 

—

 

 

 

—

 

Home Equity and Other Consumer

 

 

18,100

 

 

 

—

 

 

 

—

 

 

 

$

1,712,099

 

 

$

172,489

 

 

$

35,859

 

 

 

 

Average
of individually
impaired loans for the

 

 

 

Three Months Ended
September 30, 2022

 

 

Nine Months Ended
September 30, 2022

 

Residential First Mortgage

 

$

1,211,139

 

 

$

1,283,046

 

Commercial and Multi-Family Real Estate

 

 

488,051

 

 

 

488,190

 

Construction

 

 

—

 

 

 

—

 

Commercial and Industrial

 

 

—

 

 

 

—

 

Home Equity and Other Consumer

 

 

18,170

 

 

 

23,605

 

 

 

$

1,717,360

 

 

$

1,794,841

 

 

Impaired loans as of December 31, 2021 and for the three and nine months ended September 30, 2021 were as follows:

 

 

 

Loans
with no related
allowance recorded

 

 

Loans
with an
allowance recorded

 

 

Amount of
allowance for
loan losses allocated

 

Residential First Mortgage

 

$

1,486,469

 

 

$

174,776

 

 

$

35,859

 

Commercial and Multi-Family Real Estate

 

 

488,003

 

 

 

—

 

 

 

—

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and Industrial

 

 

—

 

 

 

—

 

 

 

—

 

Home Equity and Other Consumer

 

 

18,507

 

 

 

—

 

 

 

—

 

 

 

$

1,992,979

 

 

$

174,776

 

 

$

35,859

 

 

 

 

Average
of individually
impaired loans for the

 

 

 

Three months ended September 30, 2021

 

 

Nine months ended September 30, 2021

 

Residential First Mortgage

 

$

1,745,580

 

 

$

1,534,737

 

Commercial and Multi-Family Real Estate

 

 

111,267

 

 

 

148,084

 

Construction

 

 

—

 

 

 

—

 

Commercial and Industrial

 

 

—

 

 

 

—

 

Home Equity and Other Consumer

 

 

29,774

 

 

 

26,155

 

 

 

$

1,886,621

 

 

$

1,708,976

 

 

NOTE 5 – LOANS (Continued)

 

The Bank had three residential loans totaling $469,102 that were troubled debt restructurings (“TDRs”) as of September 30, 2022, with one loan totaling $172,489 with a specific reserve of $35,859. At December 31, 2021, the Bank had four residential loans totaling $728,288 that were TDRs and one loan totaling $174,776 with a specific reserve of $35,859. The Bank has not committed to lend additional amounts as of September 30, 2022 or December 31, 2021 to customers with outstanding loans that are classified as TDRs. There were no loans modified as TDRs during the nine months ended September 30, 2022 or 2021. There were no TDRs in payment default within twelve months following the modification during the nine months ended September 30, 2022 or 2021.

Interest income recognized on impaired loans for the three and nine months ended September 30, 2022 and September 30, 2021 was nominal.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more and still on accrual, excluding PCI loans, by class of loans as of September 30, 2022 and December 31, 2021:

 

 

 

Nonaccrual

 

 

Loans Past
Due 90 Days
or More Still
Accruing

 

September 30, 2022

 

 

 

 

 

 

Residential First Mortgage

 

$

825,797

 

 

$

—

 

Home Equity and Other Consumer

 

 

18,100

 

 

 

—

 

Total

 

$

843,897

 

 

$

—

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

Residential First Mortgage

 

$

846,037

 

 

$

—

 

Home Equity and Other Consumer

 

 

18,507

 

 

 

—

 

Total

 

$

864,544

 

 

$

—

 

 

The Bank had no other real estate owned at either September 30, 2022 or December 31, 2021.

NOTE 5 – LOANS (Continued)

 

The following table presents the aging of the recorded investment in past due loans as of September 30, 2022 and December 31, 2021, by class of loans:

 

 

 

30-59 Days
Past Due

 

 

60-89 Days
Past Due

 

 

Greater than
89 Days
Past Due

 

 

Total
Past Due

 

 

Loans Not
Past Due

 

 

PCI Loans

 

 

Total

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential First Mortgage

 

$

—

 

 

$

556,362

 

 

$

282,987

 

 

$

839,349

 

 

$

448,166,014

 

 

$

3,246,758

 

 

$

452,252,121

 

Commercial and Multi-Family Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

165,680,523

 

 

 

1,362,947

 

 

 

167,043,470

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

59,957,043

 

 

 

—

 

 

 

59,957,043

 

Commercial and Industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,908,487

 

 

 

—

 

 

 

1,908,487

 

Home Equity and Other Consumer

 

 

134,508

 

 

 

19,122

 

 

 

—

 

 

 

153,630

 

 

 

28,199,630

 

 

 

33,201

 

 

 

28,386,461

 

Total

 

$

134,508

 

 

$

575,484

 

 

$

282,987

 

 

$

992,979

 

 

$

703,911,697

 

 

$

4,642,906

 

 

$

709,547,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential First Mortgage

 

$

—

 

 

$

312,616

 

 

$

857,676

 

 

$

1,170,292

 

 

$

314,684,371

 

 

$

4,113,571

 

 

$

319,968,234

 

Commercial and Multi-Family Real Estate

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

173,962,424

 

 

 

1,412,995

 

 

 

175,375,419

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

41,384,687

 

 

 

—

 

 

 

41,384,687

 

Commercial and Industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,905,524

 

 

 

—

 

 

 

7,905,524

 

Home Equity and Other Consumer

 

 

27,529

 

 

 

—

 

 

 

—

 

 

 

27,529

 

 

 

27,662,189

 

 

 

39,261

 

 

 

27,728,979

 

Total

 

$

27,529

 

 

$

312,616

 

 

$

857,676

 

 

$

1,197,821

 

 

$

565,599,195

 

 

$

5,565,827

 

 

$

572,362,843

 

 

Loans greater than 89 days past due and loans on non-accrual are considered to be nonperforming.

Credit Quality Indicators

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. Commercial and multi-family real estate, commercial and industrial and construction loans are graded on an annual basis. Residential and consumer loans are primarily evaluated based on performance. Refer to the immediately preceding table for the aging of the recorded investment of these loan segments. The Bank uses the following definitions for risk ratings:

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be Pass rated loans.

NOTE 5 – LOANS (Continued)

Based on the most recent analysis performed, the risk category of loans by class is as follows:

 

 

 

Pass

 

 

Special
Mention

 

 

Substandard

 

 

Doubtful

 

 

Totals

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential First Mortgage

 

$

451,233,711

 

 

$

560,521

 

 

$

457,889

 

 

$

—

 

 

$

452,252,121

 

Commercial and Multi-Family Real Estate

 

 

167,043,470

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

167,043,470

 

Construction

 

 

59,957,043

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

59,957,043

 

Commercial and Industrial

 

 

1,908,487

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,908,487

 

Home Equity and Other Consumer

 

 

28,368,361

 

 

 

—

 

 

 

18,100

 

 

 

—

 

 

 

28,386,461

 

Total

 

$

708,511,072

 

 

$

560,521

 

 

$

475,989

 

 

$

—

 

 

$

709,547,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential First Mortgage

 

$

318,868,440

 

 

$

383,034

 

 

$

716,760

 

 

$

—

 

 

$

319,968,234

 

Commercial and Multi-Family Real Estate

 

 

174,173,925

 

 

 

—

 

 

 

1,201,494

 

 

 

—

 

 

 

175,375,419

 

Construction

 

 

41,384,687

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

41,384,687

 

Commercial and Industrial

 

 

7,905,524

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,905,524

 

Home Equity and Other Consumer

 

 

27,710,472

 

 

 

—

 

 

 

18,507

 

 

 

—

 

 

 

27,728,979

 

Total

 

$

570,043,048

 

 

$

383,034

 

 

$

1,936,761

 

 

$

—

 

 

$

572,362,843