QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|
|
|
Large accelerated filer
|
☐ |
Accelerated filer ☐
|
||
|
☒ |
Smaller reporting company
|
||
Emerging growth company
|
ITEM |
PAGE | |
PART I - FINANCIAL INFORMATION
|
||
Item 1.
|
1
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1
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||
2
|
||
3
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4
|
||
5
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||
6
|
||
Item 2.
|
28
|
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Item 3.
|
45
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Item 4.
|
45
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PART II - OTHER INFORMATION
|
||
Item 1.
|
46
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Item 1A.
|
46
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Item 2.
|
46
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Item 3.
|
46
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Item 4.
|
46
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Item 5.
|
46
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Item 6.
|
47
|
|
48
|
2022 Form 10-K
|
Annual Report on Form 10-K for the year ended December 31, 2022
|
ACL
|
Allowance for Credit Losses
|
ACLL
|
Allowance for Credit Losses on Loans, a component of ACL
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
Bank
|
The Old Point National Bank of Phoebus
|
CECL
|
Current Expected Credit Losses
|
CET1
|
Common Equity Tier 1
|
Company
|
Old Point Financial Corporation and its subsidiaries
|
CBB
|
Community Bankers Bank
|
CBLR
|
Community Bank Leverage Ratio Framework
|
COVID-19
|
Novel coronavirus disease 2019
|
EGRRCPA
|
Economic Growth, Regulatory Relief, and Consumer Protection Act
|
EPS
|
Earnings per share
|
ESPP
|
Employee Stock Purchase Plan
|
Exchange Act
|
Securities Exchange Act of 1934, as amended
|
FASB
|
Financial Accounting Standards Board
|
FDIC
|
Federal Deposit Insurance Corporation
|
FHLB
|
Federal Home Loan Bank
|
FRB
|
Federal Reserve Bank
|
GAAP
|
Generally Accepted Accounting Principles
|
Incentive Stock Plan
|
Old Point Financial Corporation 2016 Incentive Stock Plan
|
IRLC
|
Interest Rate Lock Commitments
|
NIM
|
Net Interest Margin
|
Notes
|
The Company’s 3.50% fixed-to-floating rate subordinated notes due 2031
|
OAEM
|
Other Assets Especially Mentioned
|
OREO
|
Other Real Estate Owned
|
ROE
|
Return on Average Equity
|
SEC
|
U.S. Securities and Exchange Commission
|
SOFR
|
Secured overnight financing rate
|
TDR
|
Troubled Debt Restructuring
|
Wealth
|
Old Point Trust & Financial Services N.A.
|
September 30,
|
December 31,
|
|||||||
(dollars in thousands, except share data)
|
2023
|
2022
|
||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest-bearing due from banks
|
|
|
||||||
Federal funds sold
|
|
|
||||||
Cash and cash equivalents
|
|
|
||||||
Securities available-for-sale, at fair value
|
|
|
||||||
Restricted securities, at cost
|
|
|
||||||
Loans held for sale
|
|
|
||||||
Loans, net
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Premises and equipment, held for sale
|
|
|
||||||
Bank-owned life insurance
|
|
|
||||||
Goodwill
|
|
|
||||||
Core deposit intangible, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities & Stockholders' Equity
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing deposits
|
$
|
|
$
|
|
||||
Savings deposits
|
|
|
||||||
Time deposits
|
|
|
||||||
Total deposits
|
|
|
||||||
Overnight repurchase agreements
|
|
|
||||||
Federal funds purchased and other short-term borrowings | ||||||||
Federal Home Loan Bank advances
|
|
|
||||||
Long-term borrowings
|
|
|
||||||
Accrued expenses and other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders' equity:
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss, net
|
(
|
)
|
(
|
)
|
||||
Total stockholders' equity
|
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
|
$
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited, dollars in thousands, except share and per share data)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Interest and dividend income:
|
||||||||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Due from banks
|
|
|
|
|
||||||||||||
Federal funds sold
|
|
|
|
|
||||||||||||
Securities:
|
||||||||||||||||
Taxable
|
|
|
|
|
||||||||||||
Tax-exempt
|
|
|
|
|
||||||||||||
Dividends and interest on all other securities
|
|
|
|
|
||||||||||||
Total interest and dividend income
|
|
|
|
|
||||||||||||
Interest expense:
|
||||||||||||||||
Checking and savings deposits
|
|
|
|
|
||||||||||||
Time deposits
|
|
|
|
|
||||||||||||
Federal funds purchased, securities sold under agreements to repurchase and other borrowings
|
|
|
|
|
||||||||||||
Federal Home Loan Bank advances |
||||||||||||||||
Long-term borrowings | ||||||||||||||||
Total interest expense
|
|
|
|
|
||||||||||||
Net interest income
|
|
|
|
|
||||||||||||
Provision for credit losses
|
|
|
|
|
||||||||||||
Net interest income after provision for credit losses
|
|
|
|
|
||||||||||||
Noninterest income:
|
||||||||||||||||
Fiduciary and asset management fees
|
|
|
|
|
||||||||||||
Service charges on deposit accounts
|
|
|
|
|
||||||||||||
Other service charges, commissions and fees
|
|
|
|
|
||||||||||||
Bank-owned life insurance income
|
|
|
|
|
||||||||||||
Mortgage banking income
|
|
|
|
|
||||||||||||
Gain (loss) on sale of available-for-sale securities, net |
( |
) | ||||||||||||||
Loss on sale of repossessed assets |
( |
) | ||||||||||||||
Gain on sale of fixed assets |
||||||||||||||||
Other operating income
|
|
|
|
|
||||||||||||
Total noninterest income
|
|
|
|
|
||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
|
|
|
|
||||||||||||
Occupancy and equipment
|
|
|
|
|
||||||||||||
Data processing
|
|
|
|
|
||||||||||||
Customer development
|
|
|
|
|
||||||||||||
Professional services
|
|
|
|
|
||||||||||||
Employee professional development
|
|
|
|
|
||||||||||||
Other taxes
|
|
|
|
|
||||||||||||
ATM and other losses
|
|
|
|
|
||||||||||||
Other operating expenses
|
|
|
|
|
||||||||||||
Total noninterest expense
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Basic Earnings per Share:
|
||||||||||||||||
Weighted average shares outstanding
|
|
|
|
|
||||||||||||
Net income per share of common stock
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted Earnings per Share:
|
||||||||||||||||
Weighted average shares outstanding
|
|
|
|
|
||||||||||||
Net income per share of common stock
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(unaudited, dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive loss, net of tax
|
||||||||||||||||
Net unrealized loss on available-for-sale securities
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Reclassification for (gain) loss included in net income
|
( |
) | ||||||||||||||
Other comprehensive loss, net of tax
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Comprehensive income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
Accumulated
|
||||||||||||||||||||||||
Shares of
|
Additional | Other | ||||||||||||||||||||||
Common | Common |
Paid-in
|
Retained
|
Comprehensive
|
||||||||||||||||||||
(unaudited, dollars in thousands, except share and per share data) |
Stock
|
Stock
|
Capital
|
Earnings
|
Loss
|
Total
|
||||||||||||||||||
Three Months Ended September 30, 2023
|
||||||||||||||||||||||||
Balance at June 30, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Employee Stock Purchase Plan share issuance
|
|
|
|
|
|
|
||||||||||||||||||
Restricted stock vested |
( |
) | ||||||||||||||||||||||
Share-based compensation expense
|
-
|
|
|
|
|
|
||||||||||||||||||
Cash dividends ($
|
-
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Balance at end of period
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Three Months Ended September 30, 2022
|
||||||||||||||||||||||||
Balance at June 30, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Employee Stock Purchase Plan share issuance
|
|
|
|
|
|
|
||||||||||||||||||
Common stock purchased | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Restricted stock vested | ||||||||||||||||||||||||
Share-based compensation expense
|
-
|
|
|
|
|
|
||||||||||||||||||
Cash dividends ($
|
-
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Balance at end of period
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Accumulated | ||||||||||||||||||||||||
Shares of |
Additional |
Other |
||||||||||||||||||||||
Common
|
Common |
Paid-in
|
Retained |
Comprehensive
|
||||||||||||||||||||
(dollars in thousands, except share and per share data) |
Stock
|
Stock
|
Capital
|
Earnings |
Income (Loss)
|
Total | ||||||||||||||||||
Nine Months Ended September 30, 2023
|
||||||||||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Impact of adoption of | - |
( |
) | ( |
) | |||||||||||||||||||
Employee Stock Purchase Plan share issuance
|
|
|
|
|
|
|
||||||||||||||||||
Restricted stock vested
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
Share-based compensation expense
|
-
|
|
|
|
|
|
||||||||||||||||||
Cash dividends ($
|
-
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Balance at end of period
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Nine Months Ended September 30, 2022
|
||||||||||||||||||||||||
Balance at December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Employee Stock Purchase Plan share issuance
|
|
|
|
|
|
|
||||||||||||||||||
Common stock purchased |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Restricted stock vested
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
Share-based compensation expense
|
-
|
|
|
|
|
|
||||||||||||||||||
Cash dividends ($
|
-
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Balance at end of period
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Nine Months Ended September 30,
|
||||||||
(unaudited, dollars in thousands)
|
2023
|
2022
|
||||||
Operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization of right of use lease asset
|
|
|
||||||
Accretion related to acquisition, net
|
|
|
||||||
Amortization of subordinated debt issuance costs |
||||||||
Provision for credit losses
|
|
|
||||||
Loss on sale of securities, net |
||||||||
Net amortization of securities
|
|
|
||||||
Decrease in loans held for sale, net |
|
|
||||||
Net gain on disposal of premises and equipment |
( |
) | ||||||
Net gain on write-down/sale of repossessed assets |
||||||||
Income from bank owned life insurance
|
(
|
)
|
(
|
)
|
||||
Stock compensation expense
|
|
|
||||||
Increase in other assets |
(
|
)
|
(
|
)
|
||||
Increase in accrued expenses and other liabilities
|
|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
Investing activities:
|
||||||||
Purchases of available-for-sale securities
|
(
|
)
|
(
|
)
|
||||
Purchase of redemption of restricted securities, net |
(
|
)
|
(
|
)
|
||||
Proceeds from maturities and calls of available-for-sale securities
|
|
|
||||||
Proceeds from sales of available-for-sale securities
|
|
|
||||||
Paydowns on available-for-sale securities
|
|
|
||||||
Net increase in loans held for investment
|
(
|
)
|
(
|
)
|
||||
Purchases of bank-owned life insurance |
( |
) | ||||||
Purchases of premises and equipment | ( |
) | ( |
) | ||||
Proceeds from sale of premises and equipment |
||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Financing activities:
|
||||||||
(Decrease) increase in noninterest-bearing deposits
|
(
|
)
|
|
|||||
Increase in savings deposits
|
|
|
||||||
Increase (decrease) in time deposits
|
|
(
|
)
|
|||||
Decrease in federal funds purchased, repurchase agreements and other borrowings, net
|
(
|
)
|
(
|
)
|
||||
Increase in Federal Home Loan Bank advances | ||||||||
Repayment of Federal Home Loan Bank advances | ( |
) | ||||||
Repayment of Federal Reserve Bank borrowings
|
|
(
|
)
|
|||||
Proceeds from Employee Stock Purchase Plan issuance
|
|
|
||||||
Repurchase of common stock
|
( |
) | ||||||
Cash dividends paid on common stock
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental discolsures of cash flow information
|
||||||||
Cash payments for:
|
||||||||
Interest
|
$
|
|
$
|
|
||||
Supplemental schedule of noncash transactions
|
||||||||
Unrealized gain (loss) on securities available-for-sale
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Former bank property transferred from fixed assets to held for sale assets
|
$
|
|
$
|
|
||||
Right of use lease asset and liability |
$ | $ | ||||||
Impact of adoption of ASC 326
|
$
|
|
$
|
|
December 31, 2022
|
January 1, 2023
|
|||||||||||
(dollars in thousands)
|
As Previously
Reported
(Incurred Loss)
|
Impact of
CECL Adoption
|
As Reported
Under CECL
|
|||||||||
Assets
|
||||||||||||
Loans
|
||||||||||||
Commercial and industrial
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Real estate construction
|
|
|
|
|||||||||
Real estate mortgage
|
|
|
|
|||||||||
Real estate commercial
|
|
|
|
|||||||||
Consumer
|
|
(
|
)
|
|
||||||||
Other
|
|
(
|
)
|
|
||||||||
Allowance for credit losses on loans
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||
Allowance for credit losses on unfunded credit exposure
|
|
|
|
|||||||||
Total allowance for credit losses
|
$
|
|
$
|
|
$
|
|
September 30, 2023
|
||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
(dollars in thousands)
|
Cost
|
Gains
|
(Losses)
|
Value
|
||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Obligations of U.S. Government agencies
|
|
|
(
|
)
|
|
|||||||||||
Obligations of state and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Money market investments
|
|
|
|
|
||||||||||||
Corporate bonds and other securities
|
|
|
(
|
)
|
|
|||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
December 31, 2022
|
||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
(dollars in thousands)
|
Cost
|
Gains
|
(Losses)
|
Value
|
||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Obligations of U.S. Government agencies
|
|
|
(
|
)
|
|
|||||||||||
Obligations of state and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Money market investments
|
|
|
|
|
||||||||||||
Corporate bonds and other securities
|
|
|
(
|
)
|
|
|||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
September 30, 2023
|
||||||||
Amortized | Fair | |||||||
(dollars in thousands)
|
Cost
|
Value
|
||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Other securities, restricted
|
|
|
||||||
$
|
|
$
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Realized gains on sales of securities |
$ |
$ |
$ |
$ |
||||||||||||
Realized losses on sales of securities
|
(
|
)
|
|
|
(
|
)
|
|
|
||||||||
Net realized gain (loss)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
September 30, 2023
|
||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
Number
|
|||||||||||||||||||||||||
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
of
|
||||||||||||||||||||||
(dollars in thousands)
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Securities
|
|||||||||||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|||||||||||||||
Obligations of U.S. Government agencies
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Obligations of state and political subdivisions
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Corporate bonds and other securities
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total securities available-for-sale
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31, 2022
|
||||||||||||||||||||||||||||
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
Number
|
|||||||||||||||||||||||||
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
of
|
||||||||||||||||||||||
(dollars in thousands)
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Securities
|
|||||||||||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|||||||||||||||
Obligations of U.S. Government agencies
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Obligations of state and political subdivisions
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Corporate bonds and other securities
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total securities available-for-sale
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
September 30,
|
December 31,
|
|||||||
(dollars in thousands)
|
2023
|
2022
|
||||||
Mortgage loans on real estate:
|
||||||||
Residential 1-4 family
|
$
|
|
$
|
|
||||
Commercial - owner occupied
|
|
|
||||||
Commercial - non-owner occupied
|
|
|
||||||
Multifamily
|
|
|
||||||
Construction and land development
|
|
|
||||||
Second mortgages
|
|
|
||||||
Equity lines of credit
|
|
|
||||||
Total mortgage loans on real estate
|
|
|
||||||
Commercial and industrial loans
|
|
|
||||||
Consumer automobile loans
|
|
|
||||||
Other consumer loans
|
|
|
||||||
Other (1)
|
|
|
||||||
Total loans, net of deferred fees (2)
|
|
|
||||||
Less: Allowance for credit losses on loans
|
|
|
||||||
Loans, net of allowance and deferred fees (2)
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
(dollars in thousands)
|
30 - 59 Days
Past Due
|
60 - 89 Days
Past Due
|
90 or More
Days Past
Due and still
Accruing
|
Nonaccrual
(2)
|
Total Current
Loans (1)
|
Total
Loans |
||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial - owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - non-owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
Multifamily
|
|
|
|
|
|
|
||||||||||||||||||
Construction and land development
|
|
|
|
|
|
|
||||||||||||||||||
Second mortgages
|
|
|
|
|
|
|
||||||||||||||||||
Equity lines of credit
|
|
|
|
|
|
|
||||||||||||||||||
Total mortgage loans on real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial and industrial loans
|
|
|
|
|
|
|
||||||||||||||||||
Consumer automobile loans
|
|
|
|
|
|
|
||||||||||||||||||
Other consumer loans
|
|
|
|
|
|
|
||||||||||||||||||
Other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
Nonaccrual
|
||||||||||||||||
(dollars in thousands)
|
January 1, 2023
|
September 30, 2023
|
Nonaccrual with
no ACLL
|
90 Days and still
Accruing
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Construction and land development
|
|
|
|
|
||||||||||||
Equity lines of credit
|
|
|
|
|
||||||||||||
Total mortgage loans on real estate
|
|
|
|
|
||||||||||||
Commercial and industrial loans
|
|
|
|
|
||||||||||||
Consumer automobile loans
|
|
|
|
|
||||||||||||
Other consumer loans |
||||||||||||||||
Other |
||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
• |
Commercial: commercial and industrial, real estate - construction and land
development, real estate – commercial (owner occupied and non-owner occupied), and other loans
|
• |
Consumer: real estate – mortgage, and consumer loans
|
• |
Commercial and industrial: Commercial and industrial loans carry
risks associated with the successful operation of a business or project, in addition to other risks associated with the ownership of a business. The repayment of these loans may be dependent upon the profitability and cash flows of the
business. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision.
|
• |
Real estate - construction and land development: Construction
loans carry risks that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may at any point in time be less than the principal amount of the loan.
Construction loans also bear the risk that the general contractor, who may or may not be the loan customer, may be unable to finish the construction project as planned because of financial pressure unrelated to the project.
|
• |
Real estate - commercial: Commercial real estate loans carry risks
associated with the successful operation of a business if owner occupied. If non-owner occupied, the repayment of these loans may be dependent upon the profitability and cash flow from rent receipts.
|
• |
Real estate - mortgage: Residential mortgage loans and equity
lines of credit carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral.
|
• |
Consumer loans: Consumer loans carry risks associated with the
continued credit-worthiness of the borrowers and the value of the collateral. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy.
|
• |
Other loans: Other loans are loans to mortgage companies, loans
for purchasing or carrying securities, and loans to insurance, investment and finance companies. These loans carry risks associated with the successful operation of a business. In addition, there is risk associated with the value of
collateral other than real estate which may depreciate over time, depend on interest rates or fluctuate in active trading markets.
|
For the Nine Months ended September 30, 2023 | ||||||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial
and Industrial
|
Real Estate
Construction
and Land
Development
|
Real Estate -
Mortgage (1)
|
Real Estate -
Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for credit losses on loans:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Day 1 impact of adoption of CECL
|
(
|
)
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||||||||||
Charge-offs
|
(
|
)
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision for loan losses
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Individually evaluated
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Loans Balances:
|
||||||||||||||||||||||||||||||||
Individually evaluated
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||||||
Collectively evaluated
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
Three Months Ended September 30,
|
Nine Months Ended September 30, | |||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2023 | 2022 |
||||||||||||
Provision for credit losses:
|
||||||||||||||||
Provision for loans
|
$
|
|
$
|
|
$ |
$ |
||||||||||
Provison (recovery) for unfunded commitments
|
|
|
( |
) | ||||||||||||
Total
|
$
|
|
$
|
|
$ |
$ |
• |
Pass: Loans are of acceptable risk.
|
• |
Other Assets Especially Mentioned (OAEM): Loans have potential weaknesses that deserve management’s close attention.
|
• |
Substandard: Loans reflect significant deficiencies due to several adverse trends of a financial, economic or managerial nature.
|
• |
Doubtful: Loans have all the weaknesses inherent in a substandard loan with added characteristics that make collection or liquidation in full
based on currently existing facts, conditions and values highly questionable or improbable.
|
• |
Loss: Loans have been identified for charge-off because they are considered uncollectible and of such little value that their continuance as
bankable assets is not warranted.
|
September 30, 2023
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving
Loans
|
Total
|
||||||||||||||||||||||||
Construction and land development
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total construction and land development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial real estate - owner occupied
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total commercial real estate - owner occupied
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial real estate - non-owner occupied
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total commercial real estate - non-owner occupied
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial and industrial
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Multifamily real estate
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total multifamily real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Residential 1-4 family
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total residential 1-4 family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer - automobile
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total consumer - automobile
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer - other
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total consumer - other
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Other
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total other
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total loans
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
OAEM
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30, 2023
|
||||||||||||||||||||||||||||||||
Current Period Charge-offs by Origination Year
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving
Loans
Amortized
Cost Basis
|
Total
|
||||||||||||||||||||||||
Commercial and industrial |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Consumer - automobile
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Consumer - other
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other (1)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
(dollars in thousands)
|
30 - 59 Days
Past Due
|
60 - 89 Days
Past Due
|
90 or More
Days Past
Due and still
Accruing
|
Nonaccrual
(2)
|
Total Current
Loans (1)
|
Total
Loans |
||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial - owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - non-owner occupied
|
|
|
|
|
|
|
||||||||||||||||||
Multifamily
|
|
|
|
|
|
|
||||||||||||||||||
Construction and land development
|
|
|
|
|
|
|
||||||||||||||||||
Second mortgages
|
|
|
|
|
|
|
||||||||||||||||||
Equity lines of credit
|
|
|
|
|
|
|
||||||||||||||||||
Total mortgage loans on real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial and industrial loans
|
|
|
|
|
|
|
||||||||||||||||||
Consumer automobile loans
|
|
|
|
|
|
|
||||||||||||||||||
Other consumer loans
|
|
|
|
|
|
|
||||||||||||||||||
Other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
For purposes of this table, Total Current Loans includes loans that are 1 - 29 days past due.
|
(2)
|
For purposes of this table, if a loan is past due and on nonaccrual, it is included in the nonaccrual column and not also in its respective past due
column.
|
For the Year Ended
|
||||||||||||||||||||||||
As of December 31, 2022
|
December 31, 2022
|
|||||||||||||||||||||||
(dollars in thousands)
|
Unpaid Principal
Balance
|
Without
Valuation
Allowance
|
With Valuation
Allowance
|
Associated
Allowance
|
Average
Recorded
Investment
|
Interest Income
Recognized
|
||||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Total mortgage loans on real estate
|
|
|
|
|
|
|
||||||||||||||||||
Commercial and industrial loans
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
As of December 31, 2022 | ||||||||||||||||
(dollars in thousands)
|
Pass
|
OAEM
|
Substandard
|
Total
|
||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Residential 1-4 family
|
$
|
|
$
|
$
|
$
|
|||||||||||
Commercial - owner occupied
|
|
|||||||||||||||
Commercial - non-owner occupied
|
|
|||||||||||||||
Multifamily
|
|
|||||||||||||||
Construction
|
|
|||||||||||||||
Second mortgages
|
|
|||||||||||||||
Equity lines of credit
|
|
|||||||||||||||
Total mortgage loans on real estate
|
$
|
|
$
|
$
|
$
|
|||||||||||
Commercial and industrial loans
|
|
|||||||||||||||
Consumer automobile loans
|
|
|||||||||||||||
Other consumer loans
|
|
|||||||||||||||
Other
|
|
|||||||||||||||
Total
|
$
|
|
$
|
$
|
$
|
(dollars in thousands)
|
Commercial
and Industrial
|
Real Estate
Construction
|
Real Estate -
Mortgage (1)
|
Real Estate -
Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Charge-offs
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision for loan losses
|
|
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Loans Balances:
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
The real estate-mortgage segment includes residential 1 – 4 family, multi-family, second mortgages and equity lines of credit.
|
(2) |
The consumer segment includes consumer automobile loans.
|
(dollars in thousands)
|
September 30, 2023
|
|||
Lease liabilities
|
$
|
|
||
Right-of-use assets
|
$
|
|
||
Weighted average remaining lease term
|
|
|||
Weighted average discount rate
|
|
%
|
Three Months Ended September 30,
|
Nine Months September 30,
|
|||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
|
As of |
||||
(dollars in thousands)
|
September 30, 2023 | |||
Three months ending December 31, 2023
|
$
|
|
||
Twelve months ending December 31, 2024
|
|
|||
Twelve months ending December 31, 2025
|
|
|||
Twelve months ending December 31, 2026
|
|
|||
Thereafter
|
|
|||
Total undiscounted cash flows
|
$
|
|
||
Discount
|
(
|
)
|
||
Lease liabilities
|
$
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
September 30,
|
Affected Line Item on
|
|||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
Consolidated Income Statement
|
||||||||||||
Tax credits and other benefits
|
|||||||||||||||||
Amortization of operating losses
|
$
|
|
$
|
|
$
|
|
$
|
|
ATM and other losses
|
||||||||
Tax benefit of operating losses*
|
|
|
|
|
Income tax expense
|
||||||||||||
Tax credits
|
|
|
|
|
Income tax expense
|
||||||||||||
Total tax benefits
|
$
|
|
$
|
|
$
|
|
$
|
|
*
|
|
(dollars in thousands)
|
September 30, 2023
|
December 31, 2022
|
||||||
Federal funds purchased |
$ | $ | ||||||
Overnight repurchase agreements
|
|
|||||||
Federal Home Loan Bank advances |
||||||||
Total short-term borrowings
|
$
|
|
$
|
|
||||
Maximum month-end outstanding balance (year-to-date)
|
$
|
|
$
|
|
||||
Average outstanding balance during the period
|
$
|
|
$
|
|
||||
Average interest rate (year-to-date)
|
|
%
|
% | |||||
Average interest rate at end of period
|
|
%
|
|
%
|
September 30,
|
December 31,
|
|||||||
(dollars in thousands)
|
2023
|
2022
|
||||||
Commitments to extend credit:
|
||||||||
Home equity lines of credit
|
$
|
|
$
|
|
||||
Commercial real estate, construction and development loans committed but not funded
|
|
|
||||||
Other lines of credit (principally commercial)
|
|
|
||||||
Total
|
$
|
|
$
|
|
||||
Letters of credit
|
$
|
|
$
|
|
Weighted Average
|
||||||||
Grant Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Nonvested, January 1, 2023
|
|
$
|
|
|||||
Issued
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Nonvested, September 30, 2023
|
|
$
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
September 30,
|
Affected Line Item on
Consolidated Statement of Income
|
|||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Sale of securities
|
|||||||||||||||||
Realized gain (loss) on sale of securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Gain (loss) on sale of securities, net
|
|||||||
Tax effect
|
|
|
(
|
)
|
|
Income tax (benefit) expense
|
|||||||||||
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(dollars in thousands)
|
Unrealized Gains
(Losses) on
Available-for-Sale
Securities
|
Accumulated Other
Comprehensive (Loss)
Income
|
||||||
Three Months Ended September 30, 2023
|
||||||||
Balance at beginning of period
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Three Months Ended September 30, 2022
|
||||||||
Balance at beginning of period
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
(
|
)
|
$
|
(
|
)
|
(dollars in thousands)
|
Unrealized Gains
(Losses) on
Available-for-Sale
Securities
|
Accumulated Other
Comprehensive (Loss)
Income
|
||||||
Nine Months Ended September 30, 2023
|
||||||||
Balance at beginning of period
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Nine Months Ended September 30, 2022
|
||||||||
Balance at beginning of period
|
$
|
|
$
|
|
||||
Net other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
(
|
)
|
$
|
(
|
)
|
Three Months Ended September 30, 2023
|
||||||||||||
(dollars in thousands)
|
Pretax
|
Tax
|
Net-of-Tax
|
|||||||||
Unrealized losses on available-for-sale securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Reclassification adjustment for gains recognized in income
|
( |
) | ( |
) | ||||||||
( |
) | ( |
) | ( |
) | |||||||
|
||||||||||||
Total change in accumulated other comprehensive loss, net
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Three Months Ended September 30, 2022
|
||||||||||||
(dollars in thousands)
|
Pretax
|
Tax
|
Net-of-Tax
|
|||||||||
Unrealized losses on available-for-sale securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Total change in accumulated other comprehensive loss, net
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Nine Months Ended September 30, 2023
|
||||||||||||
(dollars in thousands)
|
Pretax
|
Tax
|
Net-of-Tax
|
|||||||||
Unrealized losses on available-for-sale securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Reclassification adjustment for losses recognized in income
|
( |
) | ||||||||||
( |
) | ( |
) | ( |
) | |||||||
Total change in accumulated other comprehensive income, net
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Nine Months Ended September 30, 2022
|
||||||||||||
(dollars in thousands)
|
Pretax
|
Tax
|
Net-of-Tax
|
|||||||||
Unrealized losses on available-for-sale securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Total change in accumulated other comprehensive loss, net
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
• |
Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access
at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions
involving identical assets or liabilities.
|
• |
Level 2: Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the asset or liability.
|
• |
Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which
determination of fair value requires significant management judgment or estimation.
|
Fair Value Measurements at September 30, 2023 Using
|
||||||||||||||||
(dollars in thousands)
|
Balance
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets: | ||||||||||||||||
Available-for-sale securities
|
||||||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Obligations of U.S. Government agencies
|
|
|
|
|
||||||||||||
Obligations of state and political subdivisions
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
||||||||||||
Money market investments
|
|
|
|
|
||||||||||||
Corporate bonds and other securities
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
|
|
|
|
||||||||||||
Derivatives
|
||||||||||||||||
Interest rate lock
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Total assets
|
$ | $ | $ | $ | ||||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Total liabilities
|
$ | $ | $ | $ |
Fair Value Measurements at December 31, 2022 Using
|
||||||||||||||||
(dollars in thousands)
|
Balance
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Available-for-sale securities
|
||||||||||||||||
U.S. Treasury securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Obligations of U.S. Government agencies
|
|
|
|
|
||||||||||||
Obligations of state and political subdivisions
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
||||||||||||
Money market investments
|
|
|
|
|
||||||||||||
Corporate bonds and other securities
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivatives
|
||||||||||||||||
Interest rate lock
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Total assets
|
$ | $ | $ | $ | ||||||||||||
Liabilities:
|
||||||||||||||||
Derivatives
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Total liabilities
|
$ | $ | $ | $ |
Carrying Value at September 30, 2023
|
||||||||||||||||
(dollars in thousands)
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Loans
|
||||||||||||||||
Loans held for sale
|
$
|
|
$
|
|
$
|
|
$
|
|
Carrying Value at December 31, 2022
|
||||||||||||||||
(dollars in thousands)
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Impaired loans
|
||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
Construction
|
$ | $ | $ | $ | ||||||||||||
Total
|
$ | $ | $ | $ | ||||||||||||
Loans
|
||||||||||||||||
Loans held for sale
|
$
|
|
$
|
|
$
|
|
$
|
|
Quantitative Information About Level 3 Fair Value Measurements
|
||||||||||
(dollars in thousands)
|
Fair Value at
December 31,
2022
|
Valuation Techniques
|
Unobservable Input
|
Range (Weighted Average)
|
||||||
Impaired loans
|
|
|
||||||||
Construction
|
$
|
|
Market comparables
|
Selling costs
|
|
%)
|
Fair Value Measurements at September 30, 2023 Using
|
||||||||||||||||
(dollars in thousands)
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities available-for-sale
|
|
|
|
|
||||||||||||
Restricted securities
|
|
|
|
|
||||||||||||
Loans held for sale
|
|
|
|
|
||||||||||||
Loans, net
|
|
|
|
|
||||||||||||
Derivatives
|
||||||||||||||||
Interest rate lock
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Bank owned life insurance
|
|
|
|
|
||||||||||||
Accrued interest receivable
|
|
|
|
|
||||||||||||
Liabilities
|
||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Overnight repurchase agreements
|
|
|
|
|
||||||||||||
Federal Home Loan Bank advances
|
||||||||||||||||
Long term borrowings
|
||||||||||||||||
Derivatives
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Accrued interest payable
|
|
|
|
|
Fair Value Measurements at December 31, 2022 Using
|
||||||||||||||||
(dollars in thousands)
|
Carrying Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities available-for-sale
|
|
|
|
|
||||||||||||
Restricted securities
|
|
|
|
|
||||||||||||
Loans held for sale
|
|
|
|
|
||||||||||||
Loans, net
|
|
|
|
|
||||||||||||
Derivatives
|
||||||||||||||||
Interest rate lock
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Bank owned life insurance
|
|
|
|
|
||||||||||||
Accrued interest receivable
|
|
|
|
|
||||||||||||
Liabilities
|
||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Federal funds purchased
|
||||||||||||||||
Overnight repurchase agreements
|
|
|
|
|
||||||||||||
Federal Reserve Bank borrowings
|
|
|
|
|
||||||||||||
Long term borrowings
|
||||||||||||||||
Derivatives
|
||||||||||||||||
Interest rate swap on loans
|
||||||||||||||||
Accrued interest payable
|
|
|
|
|
Three Months Ended September 30, 2023
|
||||||||||||||||||||
(dollars in thousands)
|
Bank
|
Wealth
|
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Income from fiduciary activities
|
|
|
|
|
|
|||||||||||||||
Other income
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating income
|
|
|
|
(
|
)
|
|
||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
|
|
|
|
|
|||||||||||||||
Provision for credit losses
|
|
|
|
|
|
|||||||||||||||
Salaries and employee benefits
|
|
|
|
|
|
|||||||||||||||
Other expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Income (loss) before taxes
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||
Income tax expense (benefit)
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||
Capital expenditures
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended September 30, 2022
|
||||||||||||||||||||
(dollars in thousands)
|
Bank
|
Wealth
|
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Income from fiduciary activities
|
|
|
|
|
|
|||||||||||||||
Other income
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating income
|
|
|
|
(
|
)
|
|
||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
|
|
|
|
|
|||||||||||||||
Provision for credit losses
|
|
|
|
|
|
|||||||||||||||
Salaries and employee benefits
|
|
|
|
|
|
|||||||||||||||
Other expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Income before taxes
|
|
|
|
(
|
)
|
|
||||||||||||||
Income tax expense (benefit)
|
|
|
(
|
)
|
|
|
||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Capital expenditures
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Nine Months Ended September 30, 2023
|
||||||||||||||||||||
(dollars in thousands)
|
Bank
|
Wealth
|
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Income from fiduciary activities
|
|
|
|
|
|
|||||||||||||||
Other income
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating income
|
|
|
|
(
|
)
|
|
||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
|
|
|
|
|
|||||||||||||||
Provision for credit losses
|
|
|
|
|
|
|||||||||||||||
Salaries and employee benefits
|
|
|
|
|
|
|||||||||||||||
Other expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Income (loss) before taxes
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||
Income tax expense (benefit)
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||
Capital expenditures
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Nine Months Ended September 30, 2022
|
||||||||||||||||||||
(dollars in thousands)
|
Bank
|
Wealth
|
Parent
|
Eliminations
|
Consolidated
|
|||||||||||||||
Revenues
|
||||||||||||||||||||
Interest and dividend income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Income from fiduciary activities
|
|
|
|
|
|
|||||||||||||||
Other income
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating income
|
|
|
|
(
|
)
|
|
||||||||||||||
Expenses
|
||||||||||||||||||||
Interest expense
|
|
|
|
|
|
|||||||||||||||
Provision for credit losses
|
|
|
|
|
|
|||||||||||||||
Salaries and employee benefits
|
|
|
|
|
|
|||||||||||||||
Other expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Total operating expenses
|
|
|
|
(
|
)
|
|
||||||||||||||
Income before taxes
|
|
|
|
(
|
)
|
|
||||||||||||||
Income tax expense (benefit)
|
|
|
(
|
)
|
|
|
||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Capital expenditures
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
• |
Total assets were $1.4 billion at September 30, 2023, growing $91.7 million or 6.8% from December 31, 2022.
|
• |
Net loans held for investment grew $54.3 million, or 5.3%, from December 31, 2022 and $125.7 million, or 13.3% from September 30, 2022.
|
• |
Total deposits increased $81.6 million, or 7.1%, from December 31, 2022 and $55.3 million, or 4.7% from September 30, 2022.
|
• |
Nonperforming assets were $2.7 million at September 30, 2023 down from $4.7 million at September 30, 2022.
|
• |
Average earning assets of $1.4 and $1.3 billion for the quarter and nine months ended September 30, 2023 grew $135.7 million, or 11.1%, and $90.5 million, or 7.3%, compared to the prior year comparative periods, respectively.
|
• |
Average interest-bearing liabilities were $984.3 million for the quarter ended September 30, 2023, up $208.4 million or 26.9%, compared to the prior year comparative period. For the nine months ended September 30, 2023 and 2022,
average interest-bearing liabilities were $925.1 million and $786.6 million, respectively.
|
• |
NIM was 3.33% in the third quarter of 2023, compared to 3.67% in the second quarter of 2023 and 3.75% in the third quarter of 2022. NIM on a fully tax-equivalent basis (FTE) (non-GAAP) was 3.35% in the third quarter of 2023, 3.69% in
the linked quarter and 3.78% in the third quarter of 2022.
|
• |
Net interest income for the third quarter of 2023, decreased $145 thousand, or 1.3% compared to the third quarter of 2022, and decreased $673 thousand, or 5.6%, compared to the second quarter of 2023. For the nine months ended
September 30, 2023 and 2022, net interest income was $36.3 million and $31.5 million, respectively.
|
• |
Liquidity as of September 30, 2023, defined as cash and due from banks, unpledged securities, and available secured borrowing capacity, totaled $407.6 million, representing 28.2% of total assets.
|
For the quarters ended September 30,
|
||||||||||||||||||||||||
|
2023
|
2022
|
||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||
(dollars in thousands)
|
Balance
|
Expense
|
Rate**
|
Balance
|
Expense
|
Rate**
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Loans*
|
$
|
1,086,180
|
$
|
14,311
|
5.23
|
%
|
$
|
938,110
|
$
|
10,516
|
4.45
|
%
|
||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
176,445
|
1,788
|
4.02
|
%
|
190,728
|
1,297
|
2.70
|
%
|
||||||||||||||||
Tax-exempt*
|
30,128
|
201
|
2.64
|
%
|
46,046
|
345
|
2.97
|
%
|
||||||||||||||||
Total investment securities
|
206,573
|
1,989
|
3.82
|
%
|
236,774
|
1,642
|
2.75
|
%
|
||||||||||||||||
Interest-bearing due from banks
|
61,446
|
838
|
5.41
|
%
|
45,250
|
252
|
2.21
|
%
|
||||||||||||||||
Federal funds sold
|
714
|
9
|
5.16
|
%
|
2,201
|
11
|
2.05
|
%
|
||||||||||||||||
Other investments
|
4,808
|
84
|
6.84
|
%
|
1,650
|
30
|
6.92
|
%
|
||||||||||||||||
Total earning assets
|
1,359,721
|
$
|
17,231
|
5.03
|
%
|
1,223,985
|
$
|
12,451
|
4.04
|
%
|
||||||||||||||
Allowance for credit losses
|
(11,912
|
)
|
(10,015
|
)
|
||||||||||||||||||||
Other non-earning assets
|
105,130
|
99,676
|
||||||||||||||||||||||
Total assets
|
$
|
1,452,939
|
$
|
1,313,646
|
||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Time and savings deposits:
|
||||||||||||||||||||||||
Interest-bearing transaction accounts
|
$
|
91,139
|
$
|
4
|
0.01
|
%
|
$
|
79,620
|
$
|
3
|
0.01
|
%
|
||||||||||||
Money market deposit accounts
|
430,236
|
204
|
1.89
|
%
|
375,555
|
135
|
0.14
|
%
|
||||||||||||||||
Savings accounts
|
98,758
|
8
|
0.03
|
%
|
123,604
|
9
|
0.03
|
%
|
||||||||||||||||
Time deposits
|
263,167
|
2,456
|
3.70
|
%
|
155,989
|
312
|
0.79
|
%
|
||||||||||||||||
Total time and savings deposits
|
883,300
|
4,516
|
2.03
|
%
|
734,768
|
459
|
0.25
|
%
|
||||||||||||||||
Federal funds purchased, repurchase agreements and other borrowings
|
1,972
|
-
|
0.05
|
%
|
11,667
|
43
|
1.46
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
69,450
|
952
|
5.36
|
%
|
-
|
-
|
0.00
|
%
|
||||||||||||||||
Long term borrowings
|
29,619
|
295
|
3.90
|
%
|
29,485
|
295
|
3.92
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
984,341
|
5,763
|
2.32
|
%
|
775,920
|
797
|
0.41
|
%
|
||||||||||||||||
Demand deposits
|
356,752
|
429,928
|
||||||||||||||||||||||
Other liabilities
|
8,996
|
5,500
|
||||||||||||||||||||||
Stockholders' equity
|
102,850
|
102,298
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
1,452,939
|
$
|
1,313,646
|
||||||||||||||||||||
Net interest margin
|
$
|
11,468
|
3.35
|
%
|
$
|
11,654
|
3.78
|
%
|
For the nine months ended September 30,
|
||||||||||||||||||||||||
|
2023
|
2022
|
||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||
(dollars in thousands)
|
Balance
|
Expense
|
Rate**
|
Balance
|
Expense
|
Rate**
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Loans*
|
$
|
1,077,038
|
$
|
41,539
|
5.16
|
%
|
$
|
893,133
|
$
|
29,206
|
4.37
|
%
|
||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
181,969
|
5,324
|
3.91
|
%
|
196,475
|
3,409
|
2.32
|
%
|
||||||||||||||||
Tax-exempt*
|
35,365
|
734
|
2.77
|
%
|
42,208
|
927
|
2.94
|
%
|
||||||||||||||||
Total investment securities
|
217,334
|
6,058
|
3.73
|
%
|
238,683
|
4,336
|
2.43
|
%
|
||||||||||||||||
Interest-bearing due from banks
|
25,385
|
995
|
5.24
|
%
|
97,642
|
533
|
0.73
|
%
|
||||||||||||||||
Federal funds sold
|
670
|
24
|
4.79
|
%
|
3,514
|
18
|
0.70
|
%
|
||||||||||||||||
Other investments
|
4,420
|
229
|
6.91
|
%
|
1,396
|
58
|
5.47
|
%
|
||||||||||||||||
Total earning assets
|
1,324,847
|
$
|
48,845
|
4.93
|
%
|
1,234,368
|
$
|
34,151
|
3.70
|
%
|
||||||||||||||
Allowance for credit losses
|
(11,663
|
)
|
(9,861
|
)
|
||||||||||||||||||||
Other nonearning assets
|
105,462
|
96,897
|
||||||||||||||||||||||
Total assets
|
$
|
1,418,646
|
$
|
1,321,404
|
||||||||||||||||||||
|
||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Time and savings deposits:
|
||||||||||||||||||||||||
Interest-bearing transaction accounts
|
$
|
80,672
|
$
|
9
|
0.02
|
%
|
$
|
75,641
|
$
|
8
|
0.01
|
%
|
||||||||||||
Money market deposit accounts
|
432,224
|
4,450
|
1.38
|
%
|
385,929
|
433
|
0.15
|
%
|
||||||||||||||||
Savings accounts
|
106,537
|
24
|
0.03
|
%
|
126,965
|
30
|
0.03
|
%
|
||||||||||||||||
Time deposits
|
204,647
|
4,412
|
2.88
|
%
|
161,885
|
993
|
0.82
|
%
|
||||||||||||||||
Total time and savings deposits
|
824,080
|
8,895
|
1.44
|
%
|
750,420
|
1,464
|
0.26
|
%
|
||||||||||||||||
Federal funds purchased, repurchase agreements and other borrowings
|
4,941
|
39
|
1.07
|
%
|
6,753
|
45
|
0.88
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
66,505
|
2,532
|
5.09
|
%
|
-
|
-
|
0.00
|
%
|
||||||||||||||||
Long term borrowings
|
29,585
|
885
|
4.00
|
%
|
29,453
|
885
|
4.02
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
925,111
|
12,351
|
1.79
|
%
|
786,626
|
2,394
|
0.41
|
%
|
||||||||||||||||
Demand deposits
|
382,908
|
420,527
|
||||||||||||||||||||||
Other liabilities
|
8,492
|
5,649
|
||||||||||||||||||||||
Stockholders' equity
|
102,135
|
108,602
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
1,418,646
|
$
|
1,321,404
|
||||||||||||||||||||
Net interest margin
|
$
|
36,494
|
3.68
|
%
|
$
|
31,757
|
3.44
|
%
|
Three months ended September 30, 2023 from 2022
|
||||||||||||
Increase (Decrease)
|
||||||||||||
Due to Changes in:
|
||||||||||||
(dollars in thousands)
|
Volume
|
Rate
|
Total
|
|||||||||
EARNING ASSETS
|
||||||||||||
Loans*
|
$
|
1,660
|
$
|
2,135
|
$
|
3,795
|
||||||
Investment securities:
|
||||||||||||
Taxable
|
(97
|
)
|
588
|
491
|
||||||||
Tax-exempt*
|
(119
|
)
|
(25
|
)
|
(144
|
)
|
||||||
Total investment securities
|
(216
|
)
|
563
|
347
|
||||||||
|
||||||||||||
Federal funds sold
|
(7
|
)
|
5
|
(2
|
)
|
|||||||
Other investments**
|
147
|
493
|
640
|
|||||||||
Total earning assets
|
1,584
|
3,196
|
4,780
|
|||||||||
INTEREST-BEARING LIABILITIES
|
||||||||||||
Interest-bearing transaction accounts
|
-
|
1
|
1
|
|||||||||
Money market deposit accounts
|
20
|
1,894
|
1,914
|
|||||||||
Savings accounts
|
(2
|
)
|
1
|
(1
|
)
|
|||||||
Time deposits
|
215
|
1,928
|
2,143
|
|||||||||
Total time and savings deposits
|
233
|
3,824
|
4,057
|
|||||||||
Federal funds purchased, repurchase agreements and other borrowings
|
(36
|
)
|
(7
|
)
|
(43
|
)
|
||||||
Federal Home Loan Bank advances
|
-
|
952
|
952
|
|||||||||
Long term borrowings
|
1
|
(1
|
)
|
-
|
||||||||
Total interest-bearing liabilities
|
198
|
4,768
|
4,966
|
|||||||||
Change in net interest income
|
$
|
1,386
|
$
|
(1,572
|
)
|
$
|
(186
|
)
|
Nine months ended September 30, 2023 from 2022
|
||||||||||||
Increase (Decrease)
|
||||||||||||
Due to Changes in:
|
||||||||||||
(dollars in thousands)
|
Volume
|
Rate
|
Total
|
|||||||||
EARNING ASSETS
|
||||||||||||
Loans*
|
$
|
6,014
|
$
|
6,319
|
$
|
12,333
|
||||||
Investment securities:
|
||||||||||||
Taxable
|
(252
|
)
|
2,167
|
1,915
|
||||||||
Tax-exempt*
|
(150
|
)
|
(43
|
)
|
(193
|
)
|
||||||
Total investment securities
|
(402
|
)
|
2,124
|
1,722
|
||||||||
|
||||||||||||
Federal funds sold
|
(15
|
)
|
21
|
6
|
||||||||
Other investments**
|
(268
|
)
|
901
|
633
|
||||||||
Total earning assets
|
5,329
|
9,365
|
14,694
|
|||||||||
INTEREST-BEARING LIABILITIES
|
||||||||||||
Interest-bearing transaction accounts
|
1
|
-
|
1
|
|||||||||
Money market deposit accounts
|
52
|
3,965
|
4,017
|
|||||||||
Savings accounts
|
(5
|
)
|
(1
|
)
|
(6
|
)
|
||||||
Time deposits
|
262
|
3,157
|
3,419
|
|||||||||
Total time and savings deposits
|
310
|
7,121
|
7,431
|
|||||||||
Federal funds purchased, repurchase
agreements and other borrowings
|
(12
|
)
|
6
|
(6
|
)
|
|||||||
Federal Home Loan Bank advances
|
-
|
2,532
|
2,532
|
|||||||||
Long term borrowings
|
4
|
(4
|
)
|
-
|
||||||||
Total interest-bearing liabilities
|
302
|
9,655
|
9,957
|
|||||||||
Change in net interest income
|
$
|
5,027
|
$
|
(290
|
)
|
$
|
4,737
|
September 30,
|
December 31,
|
|||||||||||||||
(dollars in thousands)
|
2023
|
2022
|
||||||||||||||
U.S. Treasury securities
|
$
|
3,777
|
2
|
%
|
$
|
7,671
|
3
|
%
|
||||||||
Obligations of U.S. Government agencies
|
44,555
|
22
|
%
|
42,399
|
19
|
%
|
||||||||||
Obligations of state and political subdivisions
|
46,655
|
23
|
%
|
59,384
|
26
|
%
|
||||||||||
Mortgage-backed securities
|
79,778
|
38
|
%
|
88,913
|
39
|
%
|
||||||||||
Money market investments
|
1,906
|
1
|
%
|
1,816
|
1
|
%
|
||||||||||
Corporate bonds and other securities
|
23,946
|
12
|
%
|
25,335
|
11
|
%
|
||||||||||
200,617
|
98
|
%
|
225,518
|
99
|
%
|
|||||||||||
Restricted securities:
|
||||||||||||||||
Federal Home Loan Bank stock
|
$
|
4,242
|
2
|
%
|
2,709
|
1
|
%
|
|||||||||
Federal Reserve Bank stock
|
892
|
-
|
683
|
-
|
||||||||||||
Community Bankers' Bank stock
|
42
|
-
|
42
|
-
|
||||||||||||
5,176
|
3,434
|
|||||||||||||||
Total Securities
|
$
|
205,793
|
100
|
%
|
$
|
228,952
|
100
|
%
|
1 year or less
|
||||||||||||||||||||
(dollars in thousands)
|
2023
|
1-5 years
|
5-10 years
|
Over 10 years
|
Total
|
|||||||||||||||
U.S. Treasury securities
|
$
|
-
|
$
|
3,777
|
$
|
-
|
$
|
-
|
$
|
3,777
|
||||||||||
Weighted average yield
|
-
|
1.70
|
%
|
-
|
-
|
1.70
|
%
|
|||||||||||||
Obligations of U.S. Government agencies
|
$
|
1,169
|
$
|
3,572
|
$
|
2,177
|
$
|
37,637
|
$
|
44,555
|
||||||||||
Weighted average yield
|
0.77
|
%
|
2.35
|
%
|
4.51
|
%
|
6.47
|
%
|
5.90
|
%
|
||||||||||
Obligations of state and political subdivisions
|
$
|
167
|
$
|
1,417
|
$
|
18,692
|
$
|
26,379
|
$
|
46,655
|
||||||||||
Weighted average yield
|
0.75
|
%
|
2.74
|
%
|
2.21
|
%
|
2.47
|
%
|
2.37
|
%
|
||||||||||
Mortgage-backed securities
|
$
|
-
|
$
|
-
|
$
|
10,595
|
$
|
69,183
|
$
|
79,778
|
||||||||||
Weighted average yield
|
-
|
-
|
2.28
|
%
|
3.09
|
%
|
2.98
|
%
|
||||||||||||
Money market investments
|
$
|
1,906
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,906
|
||||||||||
Weighted average yield
|
4.59
|
%
|
-
|
-
|
-
|
4.59
|
%
|
|||||||||||||
Corporate bonds and other securities
|
$
|
488
|
$
|
-
|
$
|
23,458
|
$
|
-
|
$
|
23,946
|
||||||||||
Weighted average yield
|
3.44
|
%
|
-
|
4.43
|
%
|
-
|
4.43
|
%
|
||||||||||||
Federal Home Loan Bank stock
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
4,242
|
$
|
4,242
|
||||||||||
Weighted average yield
|
-
|
-
|
-
|
6.98
|
%
|
6.98
|
%
|
|||||||||||||
Federal Reserve Bank stock
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
892
|
$
|
892
|
||||||||||
Weighted average yield
|
-
|
-
|
-
|
4.78
|
%
|
4.78
|
%
|
|||||||||||||
Community Bankers' Bank stock
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
42
|
$
|
42
|
||||||||||
Weighted average yield
|
-
|
-
|
-
|
0.00
|
%
|
0.00
|
%
|
|||||||||||||
Total Securities
|
$
|
3,730
|
$
|
8,766
|
$
|
54,922
|
$
|
138,375
|
$
|
205,793
|
||||||||||
Weighted average yield
|
2.62
|
%
|
2.13
|
%
|
3.27
|
%
|
3.99
|
%
|
3.70
|
%
|
September 30,
|
December 31,
|
|||||||
(dollars in thousands)
|
2023
|
2022
|
||||||
Commercial and industrial
|
$
|
73,279
|
$
|
72,578
|
||||
Real estate-construction
|
94,143
|
77,944
|
||||||
Real estate-mortgage (1)
|
280,100
|
259,091
|
||||||
Real estate-commercial
|
441,794
|
429,863
|
||||||
Consumer (2)
|
190,946
|
185,269
|
||||||
Other
|
2,416
|
2,340
|
||||||
Ending Balance
|
$
|
1,082,678
|
$
|
1,027,085
|
As of September 30, 2023
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and industrial
|
Real estate-construction
|
Real estate-mortgage (1)
|
Real estate-commercial
|
Consumer (2)
|
Other
|
Total
|
|||||||||||||||||||||
Variable Rate:
|
||||||||||||||||||||||||||||
Within 1 year
|
$
|
14,668
|
$
|
55,433
|
$
|
62,666
|
$
|
43,650
|
$
|
7,764
|
$
|
1,898
|
$
|
186,079
|
||||||||||||||
1 to 5 years
|
408
|
38
|
26,698
|
25,096
|
2
|
128
|
52,370
|
|||||||||||||||||||||
5 to 15 years
|
-
|
4,788
|
36,579
|
970
|
26
|
-
|
42,363
|
|||||||||||||||||||||
After 15 years
|
-
|
-
|
-
|
-
|
77
|
-
|
77
|
|||||||||||||||||||||
Fixed Rate:
|
||||||||||||||||||||||||||||
Within 1 year
|
$
|
1,519
|
$
|
7,930
|
$
|
7,427
|
$
|
24,741
|
$
|
1,512
|
$
|
98
|
$
|
43,227
|
||||||||||||||
1 to 5 years
|
27,375
|
16,365
|
43,419
|
198,650
|
87,395
|
-
|
373,204
|
|||||||||||||||||||||
5 to 15 years
|
29,309
|
9,545
|
40,037
|
143,305
|
84,965
|
292
|
307,453
|
|||||||||||||||||||||
After 15 years
|
-
|
44
|
63,274
|
5,383
|
9,204
|
-
|
77,905
|
|||||||||||||||||||||
|
$
|
73,279
|
$
|
94,143
|
$
|
280,100
|
$
|
441,795
|
$
|
190,945
|
$
|
2,416
|
$
|
1,082,678
|
September 30,
|
December 31,
|
|||||||
(dollars in thousands)
|
2023
|
2022
|
||||||
Total loans
|
$
|
1,082,678
|
$
|
1,027,085
|
||||
Nonaccrual loans
|
1,918
|
1,243
|
||||||
Loans past due 90 days or more and accruing interest
|
797
|
840
|
||||||
Total Nonperforming Assets
|
$
|
2,715
|
$
|
2,083
|
||||
ACLL
|
$
|
11,844
|
$
|
10,526
|
||||
Nonaccrual loans to total loans
|
0.18
|
%
|
0.12
|
%
|
||||
ACLL to total loans
|
1.09
|
%
|
1.02
|
%
|
||||
ACLL to nonaccrual loans
|
617.52
|
%
|
846.82
|
%
|
||||
Annualized year-to-date net charge-offs to average loans
|
0.08
|
%
|
0.02
|
%
|
(dollars in thousands)
|
September 30, 2023
|
|||
Total ACLL
|
$
|
11,844
|
||
Total reserve for unfunded commitments
|
293
|
|||
Total ACL
|
$
|
12,137
|
||
ACLL to total loans
|
1.09
|
%
|
For the nine months ended September 30, 2023
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and Industrial
|
Real Estate Construction
|
Real Estate - Mortgage (1)
|
Real Estate - Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for credit losses on loans:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
673
|
$
|
552
|
$
|
2,575
|
$
|
4,499
|
$
|
2,065
|
$
|
156
|
$
|
6
|
$
|
10,526
|
||||||||||||||||
Day 1 impact of adoption of CECL
|
(11
|
)
|
19
|
87
|
1,048
|
(365
|
)
|
(137
|
)
|
-
|
641
|
|||||||||||||||||||||
Charge-offs
|
(159
|
)
|
-
|
-
|
-
|
(813
|
)
|
(228
|
)
|
-
|
(1,200
|
)
|
||||||||||||||||||||
Recoveries
|
64
|
-
|
28
|
-
|
393
|
41
|
-
|
526
|
||||||||||||||||||||||||
Provision for credit losses
|
78
|
258
|
192
|
244
|
270
|
315
|
(6
|
)
|
1,351
|
|||||||||||||||||||||||
Ending Balance
|
$
|
645
|
$
|
829
|
$
|
2,882
|
$
|
5,791
|
$
|
1,550
|
$
|
147
|
$
|
-
|
$
|
11,844
|
||||||||||||||||
Average loans
|
75,770
|
88,728
|
274,034
|
436,135
|
200,071
|
2,300
|
1,077,038
|
|||||||||||||||||||||||||
Ratio of net charge-offs to average loans
|
0.13
|
%
|
0.00
|
%
|
-0.01
|
%
|
0.00
|
%
|
0.21
|
%
|
8.13
|
%
|
0.06
|
%
|
For the nine months ended September 30, 2022
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and Industrial
|
Real Estate Construction
|
Real Estate - Mortgage (1)
|
Real Estate - Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
683
|
$
|
459
|
$
|
2,390
|
$
|
4,787
|
$
|
1,362
|
$
|
184
|
$
|
-
|
$
|
9,865
|
||||||||||||||||
Charge-offs
|
(297
|
)
|
-
|
(25
|
)
|
-
|
(1,095
|
)
|
(281
|
)
|
-
|
(1,698
|
)
|
|||||||||||||||||||
Recoveries
|
131
|
-
|
52
|
22
|
389
|
99
|
-
|
693
|
||||||||||||||||||||||||
Provision for loan losses
|
107
|
70
|
190
|
(464
|
)
|
982
|
188
|
-
|
1,073
|
|||||||||||||||||||||||
Ending Balance
|
$
|
624
|
$
|
529
|
$
|
2,607
|
$
|
4,345
|
$
|
1,638
|
$
|
190
|
$
|
-
|
$
|
9,933
|
||||||||||||||||
Average loans
|
67,481
|
65,368
|
227,401
|
400,889
|
123,895
|
6,810
|
891,844
|
|||||||||||||||||||||||||
Ratio of net charge-offs to average loans
|
0.25
|
%
|
0.00
|
%
|
-0.01
|
%
|
-0.01
|
%
|
0.57
|
%
|
2.67
|
%
|
0.11
|
%
|
For the Three Months ended September 30, 2023
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and Industrial
|
Real Estate Construction
|
Real Estate - Mortgage (1)
|
Real Estate - Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
666
|
$
|
707
|
$
|
2,880
|
$
|
5,709
|
$
|
1,590
|
$
|
99
|
$
|
-
|
$
|
11,651
|
||||||||||||||||
Charge-offs
|
(108
|
)
|
-
|
-
|
-
|
(279
|
)
|
(59
|
)
|
-
|
(446
|
)
|
||||||||||||||||||||
Recoveries
|
52
|
-
|
8
|
-
|
81
|
20
|
-
|
161
|
||||||||||||||||||||||||
Provision for credit losses
|
35
|
122
|
(6
|
)
|
82
|
158
|
87
|
-
|
478
|
|||||||||||||||||||||||
Ending Balance
|
$
|
645
|
$
|
829
|
$
|
2,882
|
$
|
5,791
|
$
|
1,550
|
$
|
147
|
$
|
-
|
$
|
11,844
|
||||||||||||||||
Average loans
|
75,848
|
88,266
|
280,221
|
441,878
|
197,421
|
2,546
|
1,086,180
|
|||||||||||||||||||||||||
Ratio of net charge-offs to average loans
|
0.07
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.10
|
%
|
1.53
|
%
|
0.03
|
%
|
For the Three Months ended September 30, 2022
|
||||||||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and Industrial
|
Real Estate Construction
|
Real Estate - Mortgage (1)
|
Real Estate - Commercial
|
Consumer (2)
|
Other
|
Unallocated
|
Total
|
||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||
Balance, beginning
|
$
|
596
|
$
|
479
|
$
|
2,676
|
$
|
4,436
|
$
|
1,482
|
$
|
227
|
$
|
-
|
$
|
9,896
|
||||||||||||||||
Charge-offs
|
(1
|
)
|
-
|
(22
|
)
|
-
|
(473
|
)
|
(91
|
)
|
-
|
(587
|
)
|
|||||||||||||||||||
Recoveries
|
4
|
-
|
12
|
22
|
170
|
14
|
-
|
222
|
||||||||||||||||||||||||
Provision for loan losses
|
25
|
50
|
(59
|
)
|
(113
|
)
|
459
|
40
|
-
|
402
|
||||||||||||||||||||||
Ending Balance
|
$
|
624
|
$
|
529
|
$
|
2,607
|
$
|
4,345
|
$
|
1,638
|
$
|
190
|
$
|
-
|
$
|
9,933
|
||||||||||||||||
Average loans
|
63,999
|
64,907
|
254,594
|
408,791
|
139,147
|
6,098
|
937,536
|
|||||||||||||||||||||||||
Ratio of net charge-offs to average loans
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
-0.01
|
%
|
0.22
|
%
|
1.26
|
%
|
0.04
|
%
|
September 30,
|
December 31,
|
|||||||||||||||
2023
|
2022
|
|||||||||||||||
(dollars in thousands)
|
Amount
|
Percent of Loans to Total Loans
|
Amount
|
Percent of Loans to Total Loans
|
||||||||||||
Commercial and industrial
|
$
|
645
|
6.77
|
%
|
$
|
673
|
7.07
|
%
|
||||||||
Real estate-construction
|
829
|
8.70
|
%
|
552
|
7.59
|
%
|
||||||||||
Real estate-mortgage (1)
|
2,882
|
25.87
|
%
|
2,575
|
25.23
|
%
|
||||||||||
Real estate-commercial
|
5,791
|
40.81
|
%
|
4,499
|
41.85
|
%
|
||||||||||
Consumer (2)
|
1,550
|
17.64
|
%
|
2,065
|
18.04
|
%
|
||||||||||
Other
|
147
|
0.22
|
%
|
156
|
0.23
|
%
|
||||||||||
Unallocated
|
-
|
-
|
6
|
-
|
||||||||||||
Ending Balance
|
$
|
11,844
|
100.00
|
%
|
$
|
10,526
|
100.00
|
%
|
Nine months ended September 30,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||
(Dollars in thousands)
|
Balance
|
Rate
|
Balance
|
Rate
|
||||||||||||
Interest-bearing transaction
|
$
|
80,672
|
0.02
|
%
|
$
|
75,641
|
0.01
|
%
|
||||||||
Money market
|
432,224
|
1.38
|
%
|
385,929
|
0.15
|
%
|
||||||||||
Savings
|
106,537
|
0.03
|
%
|
126,965
|
0.03
|
%
|
||||||||||
Time deposits
|
204,647
|
2.88
|
%
|
161,885
|
0.82
|
%
|
||||||||||
Total interest bearing
|
824,080
|
1.44
|
%
|
750,420
|
0.26
|
%
|
||||||||||
Demand
|
382,908
|
420,527
|
||||||||||||||
Total deposits
|
$
|
1,206,988
|
$
|
1,170,947
|
As of September 30,
|
||||
(dollars in thousands)
|
2023
|
|||
Maturing in:
|
||||
Within 3 months
|
$
|
31,109
|
||
4 through 6 months
|
24,796
|
|||
7 through 12 months
|
18,158
|
|||
Greater than 12 months
|
10,169
|
|||
|
$
|
84,232
|
2023
|
2022
|
|||||||||||||||
Regulatory
|
Regulatory
|
|||||||||||||||
(dollars in thousands)
|
Minimums
|
September 30, 2023
|
Minimums
|
December 31, 2022
|
||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets
|
4.500
|
%
|
11.28
|
%
|
4.500
|
%
|
10.80
|
%
|
||||||||
Tier 1 Capital to Risk-Weighted Assets
|
6.000
|
%
|
11.28
|
%
|
6.000
|
%
|
10.80
|
%
|
||||||||
Total Capital to Risk-Weighted Assets
|
8.000
|
%
|
12.26
|
%
|
8.000
|
%
|
11.70
|
%
|
||||||||
Tier 1 Leverage to Average Assets
|
4.000
|
%
|
9.46
|
%
|
4.000
|
%
|
9.43
|
%
|
||||||||
Risk-Weighted Assets
|
$
|
1,232,099
|
$
|
1,177,600
|
September 30,
|
||||||||||||
2023
|
||||||||||||
(dollars in thousands)
|
Total
|
In Use
|
Available
|
|||||||||
Sources:
|
||||||||||||
Federal funds lines of credit
|
$
|
100,000
|
$
|
-
|
$
|
100,000
|
||||||
Federal Home Loan Bank advances
|
430,380
|
69,450
|
360,930
|
|||||||||
Federal funds sold & balances at the Federal Reserve
|
-
|
-
|
62,722
|
|||||||||
Securities, available for sale and unpledged at fair value
|
-
|
-
|
119,905
|
|||||||||
Total funding sources
|
$
|
643,557
|
||||||||||
Uses: (1)
|
||||||||||||
Unfunded loan commitments and lending lines of credit
|
89,807
|
|||||||||||
Letters of credit
|
226
|
|||||||||||
Total potential short-term funding uses
|
90,033
|
|||||||||||
Liquidity coverage ratio
|
714.8
|
%
|
|
Three Months Ended
|
Nine Months Ended September 30,
|
||||||||||||||||||
(dollar in thousands, except share and per share data)
|
September 30, 2023
|
June 30, 2023
|
September 30, 2022
|
2023
|
2022
|
|||||||||||||||
Fully Taxable Equivalent Net Interest Income
|
||||||||||||||||||||
Net interest income (GAAP)
|
$
|
11,426
|
$
|
12,099
|
$
|
11,571
|
$
|
36,338
|
$
|
31,526
|
||||||||||
FTE adjustment
|
42
|
56
|
83
|
156
|
228
|
|||||||||||||||
Net interest income (FTE) (non-GAAP)
|
$
|
11,468
|
$
|
12,155
|
$
|
11,654
|
$
|
36,494
|
$
|
31,754
|
||||||||||
Noninterest income (GAAP)
|
3,482
|
3,477
|
3,365
|
10,380
|
10,380
|
|||||||||||||||
Total revenue (FTE) (non-GAAP)
|
$
|
14,950
|
$
|
15,632
|
$
|
15,019
|
$
|
46,874
|
$
|
42,134
|
||||||||||
Noninterest expense (GAAP)
|
12,881
|
13,147
|
11,565
|
38,196
|
33,368
|
|||||||||||||||
|
||||||||||||||||||||
Average earning assets
|
$
|
1,359,721
|
$
|
1,322,886
|
$
|
1,223,985
|
$
|
1,324,847
|
$
|
1,234,368
|
||||||||||
Net interest margin
|
3.33
|
%
|
3.67
|
%
|
3.75
|
%
|
3.67
|
%
|
3.42
|
%
|
||||||||||
Net interest margin (FTE) (non-GAAP)
|
3.35
|
%
|
3.69
|
%
|
3.78
|
%
|
3.68
|
%
|
3.44
|
%
|
||||||||||
|
||||||||||||||||||||
Efficiency ratio
|
86.40
|
%
|
84.41
|
%
|
77.43
|
%
|
81.76
|
%
|
79.62
|
%
|
||||||||||
Efficiency ratio (FTE) (non-GAAP)
|
86.16
|
%
|
84.10
|
%
|
77.01
|
%
|
81.49
|
%
|
79.19
|
%
|
Tangible Book Value Per Share
|
September 30, 2023
|
September 30, 2022
|
December 31, 2022
|
|||||||||
Total Stockholders Equity (GAAP)
|
$
|
99,526
|
$
|
93,512
|
$
|
98,734
|
||||||
Less goodwill
|
1,650
|
1,650
|
1,650
|
|||||||||
Less core deposit intangible
|
198
|
242
|
231
|
|||||||||
Tangible Stockholders Equity (non-GAAP)
|
$
|
97,678
|
$
|
91,620
|
$
|
96,853
|
||||||
|
||||||||||||
Shares issued and outstanding, including nonvested restricted stock
|
5,038,066
|
4,996,728
|
4,999,083
|
|||||||||
|
||||||||||||
Book value per share
|
$
|
19.75
|
$
|
18.71
|
$
|
19.75
|
||||||
Tangible book value per share
|
$
|
19.39
|
$
|
18.34
|
$
|
19.37
|
• |
interest rates and yields, such as increases or volatility in short-term interest rates or yields on U.S. Treasury bonds and increases or volatility in mortgage interest rates, and the impacts on macroeconomic conditions, customer and
client behavior, the Company’s funding costs, and the Company’s loan and securities portfolios
|
• |
inflation and its impacts on economic growth and customer and client behavior
|
• |
adverse developments in the financial services industry, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on
customer and client behavior
|
• |
the sufficiency of liquidity
|
• |
general economic and business conditions in the United States generally and particularly in the Company’s service area, including unemployment levels, supply chain disruptions, higher inflation, slowdowns in economic growth, continuing
economic impacts of the COVID-19 pandemic, and the ongoing conflict between Russia and Ukraine, and the impacts on customer and client behavior
|
• |
conditions within the financial markets and in the banking industry, as well as the financial condition and capital adequacy of other participants in the banking industry, and the market reactions thereto
|
• |
monetary and fiscal policies of the U.S. Government, including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, the effect of these policies on interest rates and business in our
markets and any changes associated with the current administration
|
• |
conditions in the banking industry and the financial condition and capital adequacy of other participants in the banking industry, and market, supervisory and regulatory reactions thereto
|
• |
the quality or composition of the loan or securities portfolios and changes therein
|
• |
effectiveness of expense control initiatives
|
• |
an insufficient ACL or volatility in the ACL resulting from the CECL methodology, either alone or as may be affected by inflation, changing interest rates, or other factors
|
• |
the Company’s liquidity and capital positions
|
• |
the value of securities held in the Company’s investment portfolios
|
• |
deposit flows
|
• |
the Company’s technology, efficiency, and other strategic initiatives
|
• |
the legislative/regulatory climate, regulatory initiatives with respect to financial institutions, products and services, the Consumer Financial Protection Bureau (the CFPB) and the regulatory and enforcement activities of the CFPB
|
• |
future levels of government defense spending particularly in the Company’s service areas
|
• |
uncertainty over future federal spending or budget priorities, particularly in connection with the Department of Defense, on the Company’s service areas
|
• |
the impact of potential changes in the political landscape and related policy changes, including monetary, regulatory and trade policies
|
• |
the U.S. Government’s guarantee of repayment of student or small business loans purchased by the Company
|
• |
potential claims, damages and fines related to litigation or government actions
|
• |
demand for loan products and the impact of changes in demand on loan growth
|
• |
changes in the volume and mix of interest-earning assets and interest-bearing liabilities
|
• |
the effects of management’s investment strategy and strategy to manage the NIM
|
• |
the level of net charge-offs on loans
|
• |
performance of the Company’s dealer lending program
|
• |
the Company’s branch realignment initiatives
|
• |
the strength of the Company’s counterparties
|
• |
the Company’s ability to compete in the market for financial services and increased competition from both banks and non-banks, including fintech companies
|
• |
demand for financial services in the Company’s market area
|
• |
implementation of new technologies
|
• |
the Company’s ability to develop and maintain secure and reliable electronic systems
|
• |
any interruption or breach of security in the Company’s information systems or those of the Company’s third-party vendors or their service providers
|
• |
reliance on third parties for key services
|
• |
cyber threats, attacks or events
|
• |
the impact of changes in the political landscape and related policy changes, including monetary, regulatory, and trade policies
|
• |
the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, financial crises, political crises, war and other geopolitical conflicts, such as the war between Russia and
Ukraine [or the conflict between Israel and Hamas], or public health events, such as the COVID-19 pandemic, and of governmental and societal responses thereto, on, among other things, the Company’s operations, liquidity and credit quality
|
• |
the use of inaccurate assumptions in management’s modeling systems
|
• |
technological risks and developments
|
• |
the commercial and residential real estate markets
|
• |
the demand in the secondary residential mortgage loan markets
|
• |
expansion of the Company’s product offerings
|
• |
effectiveness of expense control initiatives
|
• |
changes in management
|
• |
changes in accounting principles, standards, rules and interpretations and elections made by the Company thereunder, and the related impact on the Company’s financial statements.
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk.
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Item 4. |
Controls and Procedures.
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Item 1. |
Legal Proceedings.
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Item 1A. |
Risk Factors.
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Item 2. |
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
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Item 3. |
Defaults Upon Senior Securities.
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Item 4. |
Mine Safety Disclosures.
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Item 5. |
Other Information.
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Item 6. |
Exhibits.
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Exhibit No.
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Description
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3.1
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3.1.1
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3.2
|
|
31.1
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31.2
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32.1
|
|
101
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The following materials from Old Point Financial Corporation’s quarterly report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL, filed herewith: (i) Consolidated Balance
Sheets (unaudited for September 30, 2023), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited), (iv) Consolidated Statements of Changes in Stockholders’ Equity
(unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to Consolidated Financial Statements (unaudited)
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104
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The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, formatted in Inline XBRL (included with Exhibit 101)
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OLD POINT FINANCIAL CORPORATION
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||
Date: November 13, 2023
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/s/Robert F. Shuford, Jr.
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|
Robert F. Shuford, Jr.
|
||
Chairman, President & Chief Executive Officer
|
||
(Principal Executive Officer)
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||
Date: November 13, 2023
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/s/Paul M. Pickett
|
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Paul M. Pickett
|
||
Chief Financial Officer & Senior Vice President/Finance
|
||
(Principal Financial & Accounting Officer)
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