☒ | ANNUAL 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 |
Maryland |
61-1993378 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S Employer Identification No.) | |
7001 West Edgerton Avenue Greenfield, Wisconsin |
53220 | |
(Address of principal executive offices) |
(Zip Code) |
(Title of each class) |
(Trading Symbol) |
(Name of each exchange on which registered) | ||
Common stock, par value $0.01 per share |
BCOW |
The NASDAQ Stock Market, LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company |
☒ |
Item Number |
Page Number |
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1. |
3 |
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1A. |
27 |
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1B. |
37 |
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2. |
38 |
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3. |
38 |
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4. |
38 |
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5. |
38 |
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6. |
38 |
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7. |
38 |
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7A. |
49 |
|||||
8. |
49 |
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9. |
49 |
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9A. |
49 |
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9B. |
50 |
|||||
9C. |
50 |
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10. |
50 |
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11. |
50 |
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12. |
50 |
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13. |
51 |
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14. |
51 |
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15. |
51 |
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16. |
52 |
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F- 2 |
• | statements of our goals, intentions and expectations; |
• | statements regarding our business plans, prospects, growth and operating strategies; |
• | statements regarding the quality of our loan and investment portfolios; and |
• | estimates of our risks and future costs and benefits. |
• | the outbreak of COVID-19 and the emergence of new variants and government actions taken in response to the pandemic, which may, among other effects, adversely impact supply chains and the industries in which our customers operate and impair their ability to fulfill their financial obligations to us and affect demand for our products and services; |
• | general economic conditions, either nationally or in our market areas, that are worse than expected; |
• | changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; |
• | our ability to access cost-effective funding; |
• | fluctuations in real estate values and both residential and commercial real estate market conditions; |
• | demand for loans and deposits in our market area; |
• | our ability to implement and change our business strategies; |
• | competition among depository and other financial institutions; |
• | inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments, including our mortgage servicing rights asset, or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; |
• | adverse changes in the securities or secondary mortgage markets; |
• | changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; |
• | changes in the quality or composition of our loan or investment portfolios; |
• | technological changes that may be more difficult or expensive than expected; |
• | the inability of third-party providers to perform as expected; |
• | a failure or breach of our operational or security systems or infrastructure, including cyberattacks; |
• | our ability to manage market risk, credit risk and operational risk; |
• | our ability to enter new markets successfully and capitalize on growth opportunities; |
• | our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we have acquired or may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto; |
• | changes in consumer spending, borrowing and savings habits; |
• | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board, including the effects of our adoption of the Currented Expected Credit Loss (“CECL”) accounting standard, which we expect to implement on January 1, 2023; |
• | our ability to retain key employees; |
• | our compensation expense associated with equity allocated or awarded to our employees; and |
• | changes in the financial condition, results of operations or future prospects of issuers of securities that we own. |
2021 |
2020 |
|||||||||||||||
Amount |
Percent |
Amount |
Percent |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Residential Real Estate Loans: |
||||||||||||||||
First mortgage |
$ | 80,661 | 24.9 | % | $ | 68,968 | 20.8 | % | ||||||||
Construction |
3,388 | 1.0 | % | 2,954 | 0.9 | % | ||||||||||
Commercial Loans: |
||||||||||||||||
Real estate |
185,223 | 56.8 | % | 189,291 | 57.1 | % | ||||||||||
Land development |
1,400 | 0.4 | % | 1,492 | 0.5 | % | ||||||||||
Other |
38,160 | 11.7 | % | 46,184 | 13.9 | % | ||||||||||
Consumer Loans: |
||||||||||||||||
Home equity and lines of credit |
17,032 | 5.2 | % | 22,348 | 6.7 | % | ||||||||||
Other |
128 | 0.0 | % | 361 | 0.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans receivable |
$ | 325,992 | 100.0 | % | $ | 331,598 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net deferred loan fees |
$ | 655 | $ | 178 | ||||||||||||
Less: allowance for loan losses |
(2,858 | ) | (2,703 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Loans receivable, net |
$ | 323,789 | $ | 329,073 | ||||||||||||
|
|
|
|
At December 31, 2021 |
||||||||||||||||
Residential Real Estate Loans |
Commercial Loans |
Consumer Loans |
Total Loans |
|||||||||||||
(Dollars in thousands) |
||||||||||||||||
Amounts due in: |
||||||||||||||||
One year or less |
$ | 2,951 | $ | 29,007 | $ | 4,085 | $ | 36,043 | ||||||||
More than one year through five years |
12,469 | 123,933 | 10,836 | 147,238 | ||||||||||||
More than five through fifteen years |
32,669 | 68,803 | 1,463 | 102,935 | ||||||||||||
More than fifteen years |
35,960 | 3,040 | 776 | 39,776 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 84,049 | $ | 224,783 | $ | 17,160 | $ | 325,992 | ||||||||
|
|
|
|
|
|
|
|
Fixed Rates |
Floating or Adjustable Rates |
Total |
||||||||||
(Dollars in thousands) |
||||||||||||
Residential real estate loans |
$ | 70,263 | $ | 10,835 | $ | 81,098 | ||||||
Commercial loans |
161,418 | 34,358 | 195,776 | |||||||||
Consumer loans |
2,749 | 10,326 | 13,075 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 234,430 | $ | 55,519 | $ | 289,949 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(Dollars in thousands) |
||||||||
Allowance for loan losses at end of period |
$ | 2,858 | $ | 2,703 | ||||
Non-accrual loans at end of period |
$ | 1,017 | $ | 1,287 | ||||
Total loans at end of period |
$ | 325,992 | $ | 331,598 | ||||
Allowance for loan losses to total loans outstanding at end of period |
0.88 | % | 0.82 | % | ||||
Non-accrual loans to total loans outstanding at end of period |
0.31 | % | 0.39 | % | ||||
Non-accrual loans to total loans (excluding PPP loans) |
0.32 | % | 0.86 | % | ||||
Allowance for loan losses to non-accrual loans at end of period |
280.96 | % | 210.03 | % | ||||
Net charge-offs (recoveries) to average loans outstanding during period – Commercial loans |
(0.01 | )% | (0.01 | )% | ||||
Net charge-offs (recoveries) to average loans outstanding during period – Residential real estate loans |
0.00 | % | (0.12 | )% | ||||
Net charge-offs (recoveries) to average loans outstanding during period – Consumer loans |
(0.54 | )% | (0.43 | )% | ||||
Net charge-offs (recoveries) to average loans outstanding during period – Total |
(0.04 | )% | (0.06 | )% |
At December 31, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Allowance for Loan Losses |
Percent of Allowance in Category to Total Allocated Allowance |
Percent of Loans in Each Category to Total Loans |
Allowance for Loan Losses |
Percent of Allowance in Category to Total Allocated Allowance |
Percent of Loans in Each Category to Total Loans |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Residential real estate |
$ | 745 | 26.0 | % | 25.8 | % | $ | 745 | 27.6 | % | 21.7 | % | ||||||||||||
Commercial |
1,657 | 58.0 | % | 68.9 | % | 1,609 | 59.5 | % | 71.5 | % | ||||||||||||||
Consumer |
456 | 16.0 | % | 5.3 | % | 349 | 12.9 | % | 6.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total allocated allowance |
$ | 2,858 | 100.0 | % | 100.0 | % | $ | 2,703 | 100.0 | % | 100.0 | % | ||||||||||||
|
|
|
|
One Year or Less |
More than One Year to Five Years |
More than Five Years to Ten Years |
More than Ten Years |
Total |
||||||||||||||||||||||||||||||||||||||||
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Fair Value |
Weighted Average Yield |
||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: |
||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury notes |
$ | — | — | % | $ | 9,782 | 1.14 | % | $ | 9,719 | 1.36 | % | $ | — | — | % | $ | 19,501 | $ | 19,484 | 1.25 | % | ||||||||||||||||||||||
Obligations of states and political subdivisions |
1,505 | 2.11 | % | 3,157 | 2.45 | % | 4,596 | 1.70 | % | 11,500 | 1.90 | % | 20,758 | 20,760 | 1.96 | % | ||||||||||||||||||||||||||||
Government-sponsored mortgage-backed securities |
1,501 | 1.94 | % | 7,020 | 2.53 | % | 19,173 | 1.81 | % | 36,355 | 1.50 | % | 64,049 | 64,149 | 1.72 | % | ||||||||||||||||||||||||||||
Asset-backed securities |
— | — | % | 467 | 1.10 | % | — | — | % | 6,012 | 1.16 | % | 6,479 | 6,523 | 1.16 | % | ||||||||||||||||||||||||||||
Certificates of deposit |
— | — | % | 1,459 | 2.77 | % | — | — | % | — | — | % | 1,459 | 1,524 | 2.77 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Total |
$ | 3,006 | 2.03 | % | $ | 21,885 | 1.88 | % | $ | 33,488 | 1.66 | % | $ | 53,867 | 1.55 | % | $ | 112,246 | $ | 112,440 | 1.66 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
2020 |
|||||||||||||||||||||||
Amount |
Percent |
Rate |
Amount |
Percent |
Rate |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Noninterest-bearing checking accounts |
$ | 106,664 | 27.7 | % | 0.00 | % | $ | 98,970 | 26.1 | % | 0.00 | % | ||||||||||||
Negotiable order of withdrawal accounts |
37,467 | 9.7 | % | 0.10 | % | 30,630 | 8.1 | % | 0.17 | % | ||||||||||||||
Money market accounts |
94,823 | 24.7 | % | 0.27 | % | 103,724 | 27.2 | % | 0.58 | % | ||||||||||||||
Savings accounts |
64,954 | 16.9 | % | 0.05 | % | 58,895 | 15.5 | % | 0.11 | % | ||||||||||||||
Certificates of deposit (1) |
80,593 | 21.0 | % | 0.55 | % | 87,629 | 23.1 | % | 1.65 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 384,501 | 100.0 | % | 0.22 | % | $ | 379,848 | 100.0 | % | 0.67 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Included in these amounts are brokered deposits of $0 and $5.5 million as of December 31, 2021 and December 31, 2020, respectively. |
Dollar Amount |
||||
Maturity Period |
(Dollars in thousands) |
|||
At December 31, 2021: |
||||
Three months or less |
$ | 2,678 | ||
Over three through six months |
1,987 | |||
Over six through twelve months |
5,375 | |||
Over twelve months |
0 | |||
|
|
|||
Total |
$ | 10,040 | ||
|
|
• | the total capital distributions for the applicable calendar year exceed the sum of the savings bank’s net income for that year to date plus the savings bank’s retained net income for the preceding two years; |
• | the savings bank would not be at least adequately capitalized following the distribution; |
• | the distribution would violate any applicable statute, regulation, agreement or regulatory condition; or |
• | the savings bank is not eligible for expedited treatment of its filings, generally due to an unsatisfactory CAMELS rating or being subject to a cease-and-desist |
• | the federal savings bank would be undercapitalized following the distribution; |
• | the proposed capital distribution raises safety and soundness concerns; or |
• | the capital distribution would violate a prohibition contained in any statute, regulation or agreement. |
• | be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and |
• | not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of PyraMax Bank’s capital. |
• | Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; |
• | Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; |
• | Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and |
• | Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws. |
• | Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; |
• | Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and |
• | Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. |
• | Demand for our products and services may decline, making it difficult to grow assets and income. |
• | If the economy experiences significant dislocation, including supply chain interruptions, government restrictions on individual and business activities, and high levels of unemployment, we may experience increased loan delinquencies, problem assets, and foreclosures, resulting in increased charges and reduced income. |
• | Collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase. |
• | Our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income. |
• | A worsening of business and economic conditions or in the financial markets could result in an impairment of certain intangible assets. Among other things, a worsening of business and economic conditions could adversely affect our operating results, which, in turn, might require us to recognize an impairment to our deferred tax asset. See “—Risks Related to our Business Strategy – Our ability to recognize the benefits of deferred tax assets is dependent on taxable income.” |
• | We are subject to litigation, regulatory enforcement risk and reputation risk regarding our participation in the PPP and the risk that the SBA may not fund some or all PPP loan guarantees. |
• | We rely on third-party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us. |
• | Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs. |
• | We may experience unanticipated loss or unavailability of employees. |
• | difficulty in estimating the value of the target company; |
• | payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short and long term; |
• | potential exposure to unknown or contingent liabilities of the target company; |
• | exposure to potential asset quality problems of the target company; |
• | potential volatility in reported income associated with goodwill impairment losses; |
• | difficulty and expense of integrating the operations and personnel of the target company; |
• | inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits of the acquisition; |
• | potential disruption to our business; |
• | potential diversion of our management’s time and attention; |
• | the possible loss of key employees and customers of the target company; and |
• | potential changes in banking or tax laws or regulations that may affect the target company. |
• | operating our branches under a drive-through model with appointment-only lobby service for a period of time, leveraging our business continuity plans and capabilities that include critical operations teams being divided and dispersed to separate locations and, when possible, having employees work from home; and |
• | offering assistance to our customers affected by the COVID-19 pandemic, which includes payment deferrals, waiving certain fees, suspending property foreclosures, and participating in the CARES Act and lending programs for businesses, including the PPP. |
• | Grow our balance sheet and improve profitability. |
• | Grow our loan portfolio prudently and on a managed basis with a focus on diversifying the portfolio, particularly in commercial real estate and commercial lending. non-owner occupied commercial real estate, multi-family, owner occupied commercial real estate and one- to four-family non-owner-occupied loans). We intend to retain our presence as a mortgage lender in our market area and continue to increase our origination of commercial real estate and commercial loans (which includes commercial and industrial loans) including increasing our loan exposure in participations purchased. Over the last several years, we have incrementally increased the amount of some of our commercial real estate and commercial loan originations to preferred borrowers, and we intend to continue to originate similarly-sized loans within our present underwriting standards. |
• | Continue to increase core deposits, with an emphasis on low-cost demand deposits.loan-to-deposit |
• | Manage credit risk to maintain a low level of non-performing assets. non-performing assets to total assets ratio was 0.19% at December 31, 2021, compared to 0.25% at December 31, 2020. At December 31, 2021, the majority of our non-performing assets were related to residential real estate. |
• | Continue to grow organically while being aware of acquisition opportunities. de novo |
• | Continue to provide value to our community |
2021 |
2020 |
|||||||||||||||||||||||
Outstanding Average Balance |
Interest and Dividends |
Average Yield/ Cost |
Outstanding Average Balance |
Interest and Dividends |
Average Yield/ Cost |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans (1) |
$ |
332,031 |
$ |
12,594 |
3.79 |
% |
$ |
324,858 |
$ |
13,959 |
4.30 |
% | ||||||||||||
Securities available-for-sale |
83,044 |
1,399 |
1.68 |
% |
63,885 |
1,349 |
2.11 |
% | ||||||||||||||||
Other interest-earning assets |
85,815 |
245 |
0.28 |
% |
56,405 |
187 |
0.33 |
% | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-earning assets |
500,890 |
14,238 |
2.84 |
% |
445,148 |
15,495 |
3.48 |
% | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Non-interest-earning assets |
33,274 |
33,750 |
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ |
534,164 |
$ |
478,898 |
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest-earning liabilities: |
||||||||||||||||||||||||
Negotiable order of withdrawal accounts |
$ |
34,207 |
$ |
36 |
0.10 |
% |
$ |
27,702 |
$ |
46 |
0.17 |
% | ||||||||||||
Money market accounts |
97,079 |
261 |
0.27 |
% |
77,313 |
448 |
0.58 |
% | ||||||||||||||||
Savings accounts |
64,934 |
35 |
0.05 |
% |
53,658 |
58 |
0.11 |
% | ||||||||||||||||
Certificates of deposit |
81,532 |
452 |
0.55 |
% |
107,250 |
1,768 |
1.65 |
% | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing deposits |
277,752 |
784 |
0.28 |
% |
265,923 |
2,320 |
0.87 |
% | ||||||||||||||||
FHLB advances |
61,424 |
752 |
1.22 |
% |
58,920 |
721 |
1.22 |
% | ||||||||||||||||
Other interest-bearing liabilities |
8,573 |
— |
— |
% |
8,396 |
— |
— |
% | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing liabilities |
347,749 |
1,536 |
0.44 |
% |
333,239 |
3,041 |
0.91 |
% | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Non-interest-bearing deposits |
124,179 |
81,672 |
||||||||||||||||||||||
Other non-interest-bearing liabilities |
6,096 |
4,300 |
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities |
478,024 |
419,211 |
||||||||||||||||||||||
Total stockholders’ equity |
56,140 |
59,687 |
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ |
534,164 |
$ |
478,898 |
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest income |
$ |
12,702 |
$ |
12,454 |
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest-earning assets |
$ |
153,141 |
$ |
111,909 |
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest rate spread (2) |
2.40 |
% |
2.57 |
% | ||||||||||||||||||||
Net interest margin (3) |
2.54 |
% |
2.80 |
% | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities |
144.04 |
% |
133.58 |
% |
(1) |
Includes loan fees of $750,000 for 2021 and $894,000 for 2020. |
(2) |
Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. |
(3) |
Net interest margin represents net interest income divided by average total interest-earning assets. |
Years Ended December 31, 2021 vs. 2020 |
||||||||||||
Increase (Decrease) Due to |
Total Increase (Decrease) |
|||||||||||
Volume |
Rate |
|||||||||||
(Dollars in thousands) |
||||||||||||
Interest-earning assets: |
||||||||||||
Loans |
$ |
317 |
(1,682 |
) |
(1,365 |
) | ||||||
Securities available-for-sale |
153 |
(103 |
) |
50 |
||||||||
Other interest-earning assets |
79 |
(21 |
) |
58 |
||||||||
|
|
|
|
|
|
|||||||
Total interest-earning assets |
549 |
(1,806 |
) |
(1,257 |
) | |||||||
|
|
|
|
|
|
|||||||
Interest-bearing liabilities: |
||||||||||||
Negotiable order of withdrawal accounts |
(18 |
) |
28 |
10 |
||||||||
Money market accounts |
(170 |
) |
357 |
187 |
||||||||
Savings accounts |
(17 |
) |
40 |
23 |
||||||||
Certificates of deposit |
350 |
966 |
1,316 |
|||||||||
|
|
|
|
|
|
|||||||
Total interest-bearing deposits |
145 |
1,391 |
1,536 |
|||||||||
Borrowings |
(31 |
) |
(31 |
) | ||||||||
Other |
— |
— |
— |
|||||||||
|
|
|
|
|
|
|||||||
Total interest-bearing liabilities |
114 |
1,391 |
1,505 |
|||||||||
|
|
|
|
|
|
|||||||
Change in net interest income |
$ |
663 |
(415 |
) |
248 |
|||||||
|
|
|
|
|
|
• |
originating commercial real estate and commercial loans, which tend to have shorter terms and higher interest rates than owner occupied one- to four-family residential real estate loans, and which generate customer relationships that can result in larger non-interest-bearing checking accounts; |
• |
selling substantially all of our conforming and eligible jumbo, longer-term, fixed-rate one- to four-family residential real estate loans and retaining the non-conforming and shorter-term, fixed-rate and adjustable-rate one- to four-family residential real estate loans that we originate, subject to market conditions and periodic review of our asset/liability management needs; and |
• |
reducing our dependence on jumbo and brokered certificates of deposit to support lending and investment activities and increasing our reliance on core deposits, including checking accounts and savings accounts, which are less interest rate sensitive than certificates of deposit. |
Change in Interest Rates (basis points) (1) |
Net Interest Income Year 1 Forecast |
Year 1 Change from Level |
||||||
(Dollars in thousands) |
||||||||
+400 |
$ |
13,619 |
12.8 |
% | ||||
+300 |
13,248 |
9.8 |
% | |||||
+200 |
12,874 |
6.7 |
% | |||||
+100 |
12,473 |
3.3 |
% | |||||
Level |
12,070 |
— |
||||||
-100 |
11,518 |
(4.6 |
)% |
(1) |
Assumes an immediate uniform change in interest rates at all maturities. |
Estimated Increase (Decrease) in EVE |
||||||||||||
Basis Point (“bp”) Change in Interest Rates (1) |
Estimated EVE (2) |
Amount |
Percent |
|||||||||
(Dollars in thousands) |
||||||||||||
400 |
$ |
73,314 |
$ |
(4,183 |
) |
(5.4 |
)% | |||||
300 |
74,541 |
(2,956 |
) |
(3.8 |
)% | |||||||
200 |
76,561 |
(936 |
) |
(1.2 |
)% | |||||||
100 |
77,779 |
282 |
0.4 |
% | ||||||||
— |
77,497 |
— |
— |
|||||||||
(100) |
72,219 |
(5,278 |
) |
(6.8 |
)% |
(1) |
Assumes an instantaneous uniform change in interest rates at all maturities. |
(2) |
EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. |
(a) |
Securities Authorized for Issuance under Stock-Based Compensation Plans |
Number of shares to be issued upon exercise of outstanding options and rights |
Weighted average option exercise price |
Number of securities remaining available for issuance under plan |
||||||||||
2020 Equity Incentive Plan |
386,008 |
$ |
6.13 |
26,326 |
(1) |
Consists of 309,148 shares reserved for grants of stock options and 103,186 shares reserved for grants of restricted stock. On December 31, 2021, 290,193 options were outstanding with a weighted average exercise price of $6.13 of which 52,677 were exercisable as of that date. On December 31, 2021, 95,815 restricted stock awards were nonvested with a weighted average grant date fair value of $6.23. |
(b) |
Security Ownership of Certain Beneficial Owners |
(c) |
Security Ownership of Management |
(d) |
Changes in Control |
(a)(1) |
Financial Statements | |||
The documents filed as a part of this Form 10-K are: | ||||
(A) |
Report of Independent Registered Public Accounting Firm | |||
(B) |
Consolidated Balance Sheets as of December 31, 2021 and 2020 | |||
(C) |
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020 | |||
(D) |
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2021 and 2020 | |||
(E) |
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2021 and 2020 | |||
(F) |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 | |||
(G) |
Notes to Consolidated Financial Statements. | |||
(a)(2) |
Financial Statement Schedules |
(a)(3) |
Exhibits | |||
3.1 |
||||
3.2 | Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (file no. 333-254135), initially filed March 11, 2021.) | |||
4.1 | Form of Common Stock Certificate of the Company (Incorporated by reference to Exhibit 4 to the Registration Statement on Form S-1 (file no. 333-254135), initially filed March 11, 2021.) | |||
4.2 |
||||
10.1 |
||||
10.2 |
||||
10.3 |
||||
10.4 |
||||
10.5 |
||||
10.6 |
||||
10.7 |
||||
10.8 |
||||
21 |
||||
23 |
||||
31.1 |
||||
31.2 |
||||
32 |
||||
101 |
The following materials for the year ended December 31, 2021, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive (Loss) Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements* | |||
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||
* Furnished, not filed |
1895 BANCORP OF WISCONSIN, INC. | ||||||
Date: March 28, 2022 |
By: |
/s/ Richard B. Hurd | ||||
Richard B. Hurd Chief Executive Officer (Duly Authorized Representative) |
Signatures |
Title |
Date | ||
/s/ Richard B. Hurd Richard B. Hurd |
Chief Executive Officer and Director (Principal Executive Officer) |
March 28, 2022 | ||
/s/ David R. Ball David R. Ball |
President, Chief Operating Officer and Director |
March 28, 2022 | ||
/s/ Steven T. Klitzing Steven T. Klitzing |
Principal Financial Officer (Principal Financial and Accounting Officer) |
March 28, 2022 | ||
/s/ Darrell Francis |
Chairman of the Board |
March 28, 2022 | ||
Darrell Francis |
||||
/s/ Monica Baker |
Senior Vice President and Director |
March 28, 2022 | ||
Monica Baker |
||||
/s/ Joseph Murphy |
Director |
March 28, 2022 | ||
Joseph Murphy |
||||
/s/ James Spiegelberg |
Director |
March 28, 2022 | ||
James Spiegelberg |
||||
/s/ John Talsky |
Director |
March 28, 2022 | ||
John Talsky |
||||
/s/ Gary Zenobi |
Director |
March 28, 2022 | ||
Gary Zenobi |
December 31, |
||||||||
2021 |
2020 |
|||||||
Assets |
||||||||
Cash and due from banks |
$ | 65,300 | $ | 87,977 | ||||
Fed funds sold |
1,503 | 4,549 | ||||||
|
|
|
|
|||||
Cash and cash equivalents |
66,803 | 92,526 | ||||||
Marketable equity securities, stated at fair value |
3,544 | 2,992 | ||||||
Available for sale securities, stated at fair value |
112,440 | 58,703 | ||||||
Loans held for sale |
1,183 | 2,484 | ||||||
Loans, net |
323,789 | 329,073 | ||||||
Premises and equipment, net |
5,864 | 6,275 | ||||||
Mortgage servicing rights, net |
2,036 | 1,806 | ||||||
Federal Home Loan Bank (FHLB) stock, at cost |
3,032 | 3,032 | ||||||
Accrued interest receivable |
948 | 912 | ||||||
Cash value of life insurance |
13,892 | 13,485 | ||||||
Other assets |
6,108 | 5,469 | ||||||
|
|
|
|
|||||
TOTAL ASSETS |
$ | 539,639 | $ | 516,757 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Deposits |
$ | 384,501 | $ | 379,848 | ||||
Advance payments by borrowers for taxes and insurance |
1,860 | 2,737 | ||||||
FHLB advances |
55,442 | 68,398 | ||||||
Accrued interest payable |
109 | 183 | ||||||
Other liabilities |
6,834 | 5,583 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES |
448,746 | 456,749 | ||||||
|
|
|
|
|||||
Common stock (par value $0.01 per share) |
64 | 49 | ||||||
Authorized - 90,000,000 shares at December 31, 2021 and December 31, 2020 |
||||||||
Issued - 6,402,571 at December 31, 2021 and 4,961,626 at December 31, 2020 (includes 97,128 and 84,949 unvested shares, respectively) (1) |
||||||||
Outstanding - 6,372,508 at December 31, 2021 and 4,834,401 at December 31, 2020 (includes 97,128 and 84,949 unvested shares, respectively) (1) |
||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized at December 31, 2021 and December 31, 2020 |
— | — | ||||||
Additional Paid in Capital |
52,805 | 20,134 | ||||||
Unallocated common stock of Employee Stock Ownership Plan (ESOP), 377,077 and 161,486 shares at December 31, 2021 and December 31, 2020, respectively (1) |
(3,432 | ) | (1,615 | ) | ||||
Less treasury stock at cost, 30,063 at December 31, 2021 and 127,225 at December 31, 2020 (1) |
(301 | ) | (1,228 | ) | ||||
Retained earnings |
41,615 | 41,530 | ||||||
Accumulated other comprehensive income, net of income taxes |
142 | 1,138 | ||||||
|
|
|
|
|||||
Total stockholders’ equity |
90,893 | 60,008 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 539,639 | $ | 516,757 | ||||
|
|
|
|
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Interest and dividend income: |
||||||||
Loans, including fees |
$ | 12,594 | $ | 13,959 | ||||
Securities, taxable |
1,399 | 1,349 | ||||||
Other |
245 | 187 | ||||||
|
|
|
|
|||||
Total interest and dividend income |
14,238 | 15,495 | ||||||
|
|
|
|
|||||
Interest expense: |
||||||||
Interest-bearing deposits |
784 | 2,320 | ||||||
Borrowed funds |
752 | 721 | ||||||
|
|
|
|
|||||
Total interest expense |
1,536 | 3,041 | ||||||
|
|
|
|
|||||
Net interest income |
12,702 | 12,454 | ||||||
Provision for loan losses |
30 | 500 | ||||||
|
|
|
|
|||||
Net interest income after provision for loan losses |
12,672 | 11,954 | ||||||
|
|
|
|
|||||
Noninterest income: |
||||||||
Service charges and other fees |
964 | 814 | ||||||
Loan servicing, net |
1,157 | 546 | ||||||
Net gain on sale of loans |
1,503 | 3,499 | ||||||
Net gain on sale of securities |
12 | 1,023 | ||||||
Increase in cash surrender value of insurance |
407 | 400 | ||||||
Unrealized gain on marketable equity securities |
222 | 568 | ||||||
Other |
5 | (72 | ) | |||||
|
|
|
|
|||||
Total noninterest income |
4,270 | 6,778 | ||||||
|
|
|
|
|||||
Noninterest expense: |
||||||||
Salaries and employee benefits |
10,425 | 9,674 | ||||||
Foreclosed assets, net |
— | (6 | ) | |||||
Advertising and promotions |
111 | 110 | ||||||
Data processing |
801 | 761 | ||||||
Occupancy and equipment |
1,410 | 1,361 | ||||||
FDIC assessment |
163 | 112 | ||||||
Other |
4,011 | 3,667 | ||||||
|
|
|
|
|||||
Total noninterest expense |
16,921 | 15,679 | ||||||
|
|
|
|
|||||
Income before income taxes |
21 | 3,053 | ||||||
|
|
|
|
|||||
Income (benefit) tax expense |
(64 | ) | 1,736 | |||||
|
|
|
|
|||||
Net income |
$ | 85 | $ | 1,317 | ||||
|
|
|
|
|||||
Earnings per share: |
||||||||
Basic (1) |
$ | 0.01 | $ | 0.28 | ||||
Diluted (1) |
$ | 0.01 | $ | 0.28 | ||||
Average common shares outstanding: |
||||||||
Basic (1) |
5,987,164 | 4,642,171 | ||||||
Diluted (1) |
6,190,409 | 4,685,208 |
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). Refer to Note 18 Earnings Per Share for retroactive recognition given to the exchange ratio applied in the Conversion for the year ended December 31, 2020. |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net income |
$ | 85 | $ | 1,317 | ||||
Other comprehensive (loss) income: |
||||||||
Unrealized holding (losses) gains arising during the period |
(1,352 | ) | 2,435 | |||||
Reclassification adjustment for gains realized in net income |
(12 | ) | (1,023 | ) | ||||
|
|
|
|
|||||
Other comprehensive (loss) income before tax effect |
(1,364 | ) | 1,412 | |||||
Tax effect of other comprehensive (loss) income items |
(368 | ) | 381 | |||||
|
|
|
|
|||||
Other comprehensive (loss) income, net of tax |
(996 | ) | 1,031 | |||||
|
|
|
|
|||||
Comprehensive (loss) income |
$ | (911 | ) | $ | 2,348 | |||
|
|
|
|
Common Stock |
Additional Paid In Capital |
Treasury Stock |
Unallocated Common Stock ESOP |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders’ Equity |
||||||||||||||||||||||
Balance, December 31, 2019 |
$ | 49 | $ | 19,981 | $ | — | $ | (1,685) | $ | 40,213 | $ | 107 | $ | 58,665 | ||||||||||||||
Net income |
— | — | — | — | 1,317 | — | 1,317 | |||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | 1,031 | 1,031 | |||||||||||||||||||||
Common stock reclassified to treasury stock |
— | — | (175 | ) | — | — | — | (175 | ) | |||||||||||||||||||
Repurchase of common stock |
— | — | (1,053 | ) | — | — | — | (1,053 | ) | |||||||||||||||||||
ESOP shares committed to be released (7,021 shares) (1) |
— | (3 | ) | — | 70 | — | — | 67 | ||||||||||||||||||||
Stock compensation expense |
— | 156 | — | — | — | — | 156 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2020 |
$ | 49 | $ | 20,134 | $ | (1,228) | $ | (1,615) | $ | 41,530 | $ | 1,138 | $ | 60,008 | ||||||||||||||
Net income |
— | — | — | — | 85 | — | 85 | |||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (996 | ) | (996 | ) | |||||||||||||||||||
Purchase of treasury stock by Rabbi Trust |
— | — | (136 | ) | — | — | — | (136 | ) | |||||||||||||||||||
Sales of treasury stock by Rabbi Trust |
— | — | 10 | — | — | — | 10 | |||||||||||||||||||||
Repurchase of common stock |
— | (15 | ) | — | — | — | — | (15 | ) | |||||||||||||||||||
Gross proceeds from stock offering |
15 | 35,403 | — | — | — | — | 35,418 | |||||||||||||||||||||
Contribution from 1895 Bancorp of Wisconsin, MHC |
— | 100 | — | — | — | — | 100 | |||||||||||||||||||||
Stock offering costs |
— | (1,988 | ) | — | — | — | — | (1,988 | ) | |||||||||||||||||||
Retirement of treasury shares from stock offering |
— | (1,053 | ) | 1,053 | — | — | — | — | ||||||||||||||||||||
Purchase of ESOP shares |
— | — | — | (2,041 | ) | — | — | (2,041 | ) | |||||||||||||||||||
ESOP shares committed to be released (22,401 shares) |
— | 22 | — | 224 | — | — | 246 | |||||||||||||||||||||
Retirement of common stock |
— | (69 | ) | — | — | — | — | (69 | ) | |||||||||||||||||||
Stock options exercised |
— | 30 | — | — | — | — | 30 | |||||||||||||||||||||
Stock compensation expense |
— | 241 | — | — | — | — | 241 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2021 |
$ | 64 | $ | 52,805 | $ | (301) | $ | (3,432) | $ | 41,615 | $ | 142 | $ | 90,893 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net income |
$ | 85 | $ | 1,317 | ||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||
Net amortization of investment securities |
221 | 232 | ||||||
Depreciation |
654 | 661 | ||||||
Provision for loan losses |
30 | 500 | ||||||
Net loss on disposal of premises and equipment |
— | 33 | ||||||
Net change in fair value of marketable equity securities |
(222 | ) | (568 | ) | ||||
Net gain on sale of available for sale securities |
(12 | ) | (1,023 | ) | ||||
Stock compensation expense |
241 | 156 | ||||||
Adjustment to mortgage servicing rights valuation |
(369 | ) | 369 | |||||
(Benefit from) provision for deferred income tax |
(64 | ) | 1,650 | |||||
Originations of mortgage loans held for sale |
(121,562 | ) | (195,425 | ) | ||||
Proceeds from sales of mortgage loans held for sale |
124,366 | 197,125 | ||||||
Net gain on sale of mortgage loans held for sale |
(1,503 | ) | (3,499 | ) | ||||
ESOP compensation |
246 | 67 | ||||||
Net change in cash value of life insurance |
(407 | ) | (400 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Net change in mortgage servicing rights |
139 | (3 | ) | |||||
Change in accrued interest receivable and other assets |
(243 | ) | (248 | ) | ||||
Change in accrued interest payable and other liabilities |
1,108 | 322 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
2,708 | 1,266 | ||||||
|
|
|
|
|||||
Cash flows from investing activities |
||||||||
Proceeds from sales of available for sale securities |
1,018 | 19,515 | ||||||
Maturities, prepayments and calls of available for sale securities |
12,442 | 55,217 | ||||||
Purchase of available for sale securities |
(68,770 | ) | (59,857 | ) | ||||
Net change in marketable equity securities |
(330 | ) | (46 | ) | ||||
Net decrease (increase) in loans |
5,254 | (18,899 | ) | |||||
Net capital expenditures for premises and equipment |
(243 | ) | (288 | ) | ||||
Net increase in Federal Home Loan Bank stock |
— | (2,119 | ) | |||||
Cash received in MHC merger |
100 | — | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(50,529 | ) | (6,477 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Net increase in deposits |
4,653 | 35,252 | ||||||
Net (decrease) increase in advance payments by borrowers for taxes and insurance |
(877 | ) | 1,056 | |||||
Proceeds from the issuance of Federal Home Loan Bank advances |
— | 52,000 | ||||||
Gross proceeds from stock offering |
35,418 | — | ||||||
Stock offering costs |
(1,988 | ) | — | |||||
Purchase of ESOP shares |
(2,041 | ) | — | |||||
Purchases of common stock |
(151 | ) | (1,053 | ) | ||||
Sale of treasury stock by Rabbi Trust |
10 | — | ||||||
Principal payments on Federal Home Loan Bank advances |
(12,956 | ) | (1,225 | ) | ||||
Stock options exercised |
30 | — | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
22,098 | 86,030 | ||||||
|
|
|
|
|||||
Net (decrease) increase in cash and cash equivalents |
(25,723 | ) | 80,819 | |||||
Cash and cash equivalents at beginning of year |
92,526 | 11,707 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of year |
$ | 66,803 | $ | 92,526 | ||||
|
|
|
|
|||||
Supplemental cash flow information: |
||||||||
Cash paid during the year for interest |
$ | 1,610 | $ | 3,242 | ||||
Cash received during the year for income taxes |
$ | (196) | $ | (5) | ||||
Noncash activities: |
||||||||
Retirement of common stock |
$ | 69 | $ | — | ||||
Loans transferred to loans held for sale |
— | 124 | ||||||
Issuance of treasury stock – stock compensation plans |
15 | — | ||||||
1895 Bancorp of Wisconsin, Inc. common stock held by PyraMax Bank reclassified to treasury stock |
— | 175 | ||||||
Retirement of treasury stock |
1,053 | — |
Gross |
Gross |
|||||||||||||||
Amortized |
Unrealized |
Unrealized |
||||||||||||||
December 31, 2021 |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
U.S. Treasury notes |
$ | 19,501 | $ | 8 | $ | (25 | ) | $ | 19,484 | |||||||
Obligations of states and political subdivisions |
20,758 | 207 | (205 | ) | 20,760 | |||||||||||
Government-sponsored mortgage-backed securities |
64,049 | 563 | (463 | ) | 64,149 | |||||||||||
Asset-backed securities |
6,479 | 45 | (1 | ) | 6,523 | |||||||||||
Certificates of deposit |
1,459 | 65 | — | 1,524 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 112,246 | $ | 888 | $ | (694 | ) | $ | 112,440 | |||||||
|
|
|
|
|
|
|
|
Gross |
Gross |
|||||||||||||||
Amortized |
Unrealized |
Unrealized |
||||||||||||||
December 31, 2020 |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
Obligations of states and political subdivisions |
$ | 11,570 | $ | 244 | $ | (11 | ) | $ | 11,803 | |||||||
Government-sponsored mortgage-backed securities |
36,886 | 1,165 | (12 | ) | 38,039 | |||||||||||
Asset-backed securities |
7,231 | 57 | (7 | ) | 7,281 | |||||||||||
Certificates of deposit |
1,458 | 122 | — | 1,580 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 57,145 | $ | 1,588 | $ | (30 | ) | $ | 58,703 | |||||||
|
|
|
|
|
|
|
|
Less than 12 months |
12 months or longer |
Total |
||||||||||||||||||||||
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
December 31, 2021 |
Value |
Loss |
Value |
Loss |
Value |
Loss |
||||||||||||||||||
U.S. Treasury notes |
$ | 12,971 | $ | (25 | ) | $ | — | $ | — | $ | 12,971 | $ | (25 | ) | ||||||||||
Obligations of states and political subdivisions |
5,414 | (82 | ) | 4,105 | (123 | ) | 9,519 | (205 | ) | |||||||||||||||
Government-sponsored mortgage-backed securities |
39,392 | (463 | ) | — | — | 39,392 | (463 | ) | ||||||||||||||||
Asset-backed securities |
808 | (1 | ) | — | — | 808 | (1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 58,585 | $ | (571 | ) | $ | 4,105 | $ | (123 | ) | $ | 62,690 | $ | (694 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months |
12 months or longer |
Total |
||||||||||||||||||||||
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
December 31, 2020 |
Value |
Loss |
Value |
Loss |
Value |
Loss |
||||||||||||||||||
Obligations of states and political subdivisions |
$ | 4,235 | $ | (11 | ) | $ | — | $ | — | $ | 4,235 | $ | (11 | ) | ||||||||||
Government-sponsored mortgage-backed securities |
4,984 | (12 | ) | — | — | 4,984 | (12 | ) | ||||||||||||||||
Asset-backed securities |
— | — | 638 | (7 | ) | 638 | (7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ |
9,219 |
$ |
(23 |
) |
$ |
638 |
$ |
(7 |
) |
$ |
9,857 |
$ |
(30 |
) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
||||||||
Amortized |
Fair |
|||||||
Cost |
Value |
|||||||
Debt and other securities: |
||||||||
Due in one year or less |
$ | 1,505 | $ | 1,512 | ||||
Due after one through 5 years |
13,901 | 13,982 | ||||||
Due after 5 through 10 years |
14,812 | 14,822 | ||||||
Due after 10 years |
11,500 | 11,452 | ||||||
|
|
|
|
|||||
Total debt and other securities |
41,718 | 41,768 | ||||||
Mortgage-related securities |
64,049 | 64,149 | ||||||
Asset-backed securities |
6,479 | 6,523 | ||||||
|
|
|
|
|||||
Total |
$ | 112,246 | $ | 112,440 | ||||
|
|
|
|
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Proceeds from sales of securities available-for-sale |
$ | 1,018 | $ | 19,515 | ||||
Gross realized gains |
12 | 1,023 | ||||||
Gross realized losses |
— | — |
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Commercial: |
||||||||
Real estate |
$ | 185,223 | $ | 189,291 | ||||
Land development |
1,400 | 1,492 | ||||||
Other |
38,160 | 46,184 | ||||||
Residential real estate: |
||||||||
First mortgage |
80,661 | 68,968 | ||||||
Construction |
3,388 | 2,954 | ||||||
Consumer: |
||||||||
Home equity and lines of credit |
17,032 | 22,348 | ||||||
Other |
128 | 361 | ||||||
|
|
|
|
|||||
Subtotal |
325,992 | 331,598 | ||||||
Net deferred loan costs |
655 | 178 | ||||||
Allowance for loan losses |
(2,858 | ) | (2,703 | ) | ||||
|
|
|
|
|||||
Loans, net |
$ | 323,789 | $ | 329,073 | ||||
|
|
|
|
December 31, 2021 |
Commercial |
Residential |
Consumer |
Total |
||||||||||||
Allowance for loan losses |
||||||||||||||||
Beginning balance |
$ | 1,609 | $ | 745 | $ | 349 | $ | 2,703 | ||||||||
Provision (credit) for loan losses |
30 | — | — | 30 | ||||||||||||
Loans charged-off |
— | — | (19 | ) | (19 | ) | ||||||||||
Recoveries |
18 | — | 126 | 144 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
$ | 1,657 | $ | 745 | $ | 456 | $ | 2,858 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2020 |
Commercial |
Residential |
Consumer |
Total |
||||||||||||
Allowance for loan losses |
||||||||||||||||
Beginning balance |
$ | 1,235 | $ | 573 | $ | 192 | $ | 2,000 | ||||||||
Provision (credit) for loan losses |
360 | 100 | 40 | 500 | ||||||||||||
Loans charged-off |
— | (60 | ) | (8 | ) | (68 | ) | |||||||||
Recoveries |
14 | 132 | 125 | 271 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
$ | 1,609 | $ | 745 | $ | 349 | $ | 2,703 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 |
Commercial |
Residential |
Consumer |
Total |
||||||||||||
Loans: |
||||||||||||||||
Individually evaluated for impairment |
$ | 4,833 | $ | 1,357 | $ | 37 | $ | 6,227 | ||||||||
Collectively evaluated for impairment |
219,950 | 82,692 | 17,123 | 319,765 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans |
$ | 224,783 | $ | 84,049 | $ | 17,160 | $ | 325,992 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses: |
||||||||||||||||
Individually evaluated for impairment |
$ | — | $ | — | $ | — | $ | — | ||||||||
Collectively evaluated for impairment |
1,657 | 745 | 456 | 2,858 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total allowance for loan losses |
$ | 1,657 | $ | 745 | $ | 456 | $ | 2,858 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2020 |
Commercial |
Residential |
Consumer |
Total |
||||||||||||
Loans: |
||||||||||||||||
Individually evaluated for impairment |
$ | 10,573 | $ | 411 | $ | 21 | $ | 11,005 | ||||||||
Collectively evaluated for impairment |
226,394 | 71,511 | 22,688 | 320,593 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans |
$ | 236,967 | $ | 71,922 | $ | 22,709 | $ | 331,598 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Allowance for loan losses: |
||||||||||||||||
Individually evaluated for impairment |
$ | — | $ | — | $ | — | $ | — | ||||||||
Collectively evaluated for impairment |
1,609 | 745 | 349 | 2,703 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total allowance for loan losses |
$ | 1,609 | $ | 745 | $ | 349 | $ | 2,703 | ||||||||
|
|
|
|
|
|
|
|
Recorded Investment |
Unpaid Principal |
Reserve |
Average Investment |
Interest Recognized |
||||||||||||||||
December 31, 2021 |
||||||||||||||||||||
Impaired loans with reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||
Land development |
— |
— |
— |
— |
— |
|||||||||||||||
Other |
— |
— |
— |
— |
— |
|||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgages |
— |
— |
— |
— |
— |
|||||||||||||||
Construction |
— |
— |
— |
— |
— |
|||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— |
— |
— |
— |
— |
|||||||||||||||
Other |
— |
— |
— |
— |
— |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans with reserve |
— |
— |
— |
— |
— |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Impaired loans with no reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | 4,088 | $ | 4,089 | NA | $ | 5,615 | $ | 213 | |||||||||||
Land development |
— | — | NA | 734 | 33 | |||||||||||||||
Other |
745 | 796 | NA | 1,478 | 35 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgages |
1,357 | 1,572 | NA | 914 | 34 | |||||||||||||||
Construction |
— | — | NA | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
37 | 41 | NA | 17 | 22 | |||||||||||||||
Other |
— | — | NA | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans with no reserve |
6,227 | 6,498 | NA | 8,758 | 337 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans |
$ | 6,227 | $ | 6,498 | $ | — | $ | 8,758 | $ | 337 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Recorded Investment |
Unpaid Principal |
Reserve |
Average Investment |
Interest Recognized |
||||||||||||||||
December 31, 2020 |
||||||||||||||||||||
Impaired loans with reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||
Land development |
— |
— |
— |
— |
— |
|||||||||||||||
Other |
— |
— |
— |
— |
— |
|||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgages |
— | — | — | 36 | — | |||||||||||||||
Construction |
— | — | — | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— | — | — | 4 | — | |||||||||||||||
Other |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans with reserve |
— | — | — | 40 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Impaired loans with no reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | 6,277 | $ | 6,277 | NA | $ | 6,268 | $ | 332 | |||||||||||
Land development |
1,492 | 1,492 | NA | 503 | 40 | |||||||||||||||
Other |
2,804 | 2,804 | NA | 2,301 | 138 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgages |
411 | 495 | NA | 568 | 261 | |||||||||||||||
Construction |
— | — | NA | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
21 | 51 | NA | 24 | 3 | |||||||||||||||
Other |
— | — | NA | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans with no reserve |
11,005 | 11,119 | NA | 9,664 | 774 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total impaired loans |
$ | 11,005 | $ | 11,119 | $ | — | $ | 9,704 | $ | 774 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
Pass |
Watch and Special Mention |
Substandard |
Total |
||||||||||||
Commercial: |
||||||||||||||||
Real estate |
$ | 172,172 | $ | 8,963 | $ | 4,088 | $ | 185,223 | ||||||||
Land development |
1,400 | — | — | 1,400 | ||||||||||||
Other |
37,414 | 1 | 745 | 38,160 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 210,986 | $ | 8,964 | $ | 4,833 | $ | 224,783 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2020 |
Pass |
Watch and Special Mention |
Substandard |
Total |
||||||||||||
Commercial: |
||||||||||||||||
Real estate |
$ | 163,961 | $ | 19,272 | $ | 6,058 | $ | 189,291 | ||||||||
Land development |
— | — | 1,492 | 1,492 | ||||||||||||
Other |
37,675 | 5,705 | 2,804 | 46,184 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 201,636 | $ | 24,977 | $ | 10,354 | $ | 236,967 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 |
Performing |
Non-Performing |
Total |
|||||||||
Residential real estate: |
||||||||||||
First mortgage |
$ | 79,722 | $ | 939 | $ | 80,661 | ||||||
Construction |
3,388 | — | 3,388 | |||||||||
Consumer: |
||||||||||||
Home equity and lines of credit |
16,954 | 78 | 17,032 | |||||||||
Other |
128 | — | 128 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 100,192 | $ | 1,017 | $ | 101,209 | ||||||
|
|
|
|
|
|
December 31, 2020 |
Performing |
Non-Performing |
Total |
|||||||||
Residential real estate: |
||||||||||||
First mortgage |
$ | 67,817 | $ | 1,151 | $ | 68,968 | ||||||
Construction |
2,954 | — | 2,954 | |||||||||
Consumer: |
||||||||||||
Home equity and lines of credit |
22,212 | 136 | 22,348 | |||||||||
Other |
361 | — | 361 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 93,344 | $ | 1,287 | $ | 94,631 | ||||||
|
|
|
|
|
|
December 31, 2021 |
Current Loans |
Loans Past Due 30-89 Days |
Loans Past Due 90+ Days |
Total Loans |
Non-accrual Loans |
|||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | 185,223 | $ | — | $ | — | $ | 185,223 | $ | — | ||||||||||
Land development |
1,400 | — | — | 1,400 | — | |||||||||||||||
Other |
38,127 | 33 | — | 38,160 | — | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
80,319 | 342 | — | 80,661 | 939 | |||||||||||||||
Construction |
3,388 | — | — | 3,388 | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
17,032 | — | — | 17,032 | 78 | |||||||||||||||
Other |
128 | — | — | 128 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 325,617 | $ | 375 | $ | — | $ | 325,992 | $ | 1,017 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-accrual loans to total loans |
|
0.31 | % | |||||||||||||||||
Total non-accrual loans to total assets |
|
0.19 | % |
December 31, 2020 |
Current Loans |
Loans Past Due 30-89 Days |
Loans Past Due 90+ Days |
Total Loans |
Non-accrual Loans |
|||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | 189,050 | $ | 241 | $ | — | $ | 189,291 | $ | — | ||||||||||
Land development |
1,492 | — | — | 1,492 | — | |||||||||||||||
Other |
46,151 | 33 | — | 46,184 | — | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
68,147 | 684 | 137 | 68,968 | 1,151 | |||||||||||||||
Construction |
2,954 | — | — | 2,954 | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
22,204 | 121 | 23 | 22,348 | 136 | |||||||||||||||
Other |
361 | — | — | 361 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 330,359 | $ |
1,079 | $ | 160 | $ | 331,598 | $ | 1,287 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-accrual loans to total loans |
|
0.39 | % | |||||||||||||||||
Total non-accrual loans to total assets |
|
0.25 | % |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Nonaccrual loans, other than troubled debt restructurings |
$ | 826 | $ | 1,068 | ||||
Nonaccrual loans, troubled debt restructurings |
191 | 219 | ||||||
|
|
|
|
|||||
Total nonperforming loans (NPLs) |
$ | 1,017 | $ | 1,287 | ||||
|
|
|
|
|||||
Troubled debt restructurings, accruing |
$ | 418 | $ | 432 | ||||
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Land |
$ | 863 | $ | 863 | ||||
Buildings |
8,060 | 7,845 | ||||||
Leasehold improvements |
1 | 209 | ||||||
Furniture and equipment |
6,111 | 5,929 | ||||||
|
|
|
|
|||||
Totals |
15,035 | 14,846 | ||||||
Less: Accumulated depreciation |
9,171 | 8,571 | ||||||
|
|
|
|
|||||
Premises and equipment, net |
$ |
5,864 | $ |
6,275 | ||||
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Mortgage servicing rights beginning balance |
$ | 1,806 | $ | 2,172 | ||||
Additions |
553 | 770 | ||||||
Amortization |
(692 | ) | (767 | ) | ||||
De crease (in |
369 | (369 | ) | |||||
|
|
|
|
|||||
Mortgage servicing rights ending balance |
$ | 2,036 | $ | 1,806 | ||||
|
|
|
|
|||||
Fair value at beginning of period |
$ | 1,806 | $ | 2,404 | ||||
|
|
|
|
|||||
Fair value at end of period |
$ | 2,477 | $ | 1,806 | ||||
|
|
|
|
Estimated future amortization as of December 31, 2021: |
||||
2022 |
$ |
419 | ||
2023 |
282 | |||
2024 |
217 | |||
2025 |
181 | |||
2026 |
152 | |||
Thereafter |
785 | |||
|
|
|||
Total |
$ | 2,036 | ||
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Non-interest bearing checking |
$ | 106,664 | $ | 98,970 | ||||
Interest bearing checking |
37,467 | 30,630 | ||||||
Money market |
94,823 | 103,724 | ||||||
Statement savings |
64,954 | 58,895 | ||||||
Certificates of deposit (1) |
80,593 | 87,629 | ||||||
|
|
|
|
|||||
Total |
$ | 384,501 | $ | 379,848 | ||||
|
|
|
|
(1) |
Included in these amounts are brokered deposits of $5.5 million at December 31, 2020. There were no brokered deposits at December 31, 2021. |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Interest bearing checking |
$ | 36 | $ | 46 | ||||
Money market |
261 | 448 | ||||||
Statement savings |
35 | 58 | ||||||
Certificates of deposit |
452 | 1,768 | ||||||
|
|
|
|
|||||
Total |
$ | 784 | $ | 2,320 | ||||
|
|
|
|
2022 |
$ |
77,339 | ||
2023 |
1,351 | |||
2024 |
972 | |||
2025 |
581 | |||
2026 |
350 | |||
|
|
|||
Total |
$ | 80,593 | ||
|
|
As of December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Rate |
Amount |
Rate |
Amount |
|||||||||||||
Fixed rate, COVID-19 Relief Advance, maturing May 2021 |
N/A | $ | — | 0.00 | % | $ | 4,000 | |||||||||
Fixed rate, fixed term advance, maturing July 2021 |
N/A | — | 1.41 | % | 7,000 | |||||||||||
Fixed rate, fixed term advance, maturing February 2022 |
1.62 | % | 6,500 | 1.62 | % | 6,500 | ||||||||||
Fixed rate, fixed term advance, maturing February 2023 |
1.62 | % | 6,500 | 1.62 | % | 6,500 | ||||||||||
Putable advance, maturing October 2029 first option date Nov 2020 |
1.03 | % | 10,000 | 1.03 | % | 10,000 | ||||||||||
Putable advance, maturing February 2030 first option date Feb 2023 |
0.98 | % | 5,000 | 0.98 | % | 5,000 | ||||||||||
Putable advance, maturing March 2030 first option date March 2025 |
0.89 | % | 10,000 | 0.89 | % | 10,000 | ||||||||||
Advance structured note, payments due monthly, maturing February 2030 |
7.47 | % | 542 | 7.47 | % | 584 | ||||||||||
Advance structured note, payments due monthly, maturing April 2030 |
1.05 | % | 8,405 | 1.05 | % | 9,365 | ||||||||||
Advance structured note, payments due monthly, maturing May 2030 |
1.19 | % | 8,495 | 1.19 | % | 9,449 | ||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 55,442 | $ | 68,398 | ||||||||||||
|
|
|
|
December 31, 2021 |
||||||||
Weighted Average Rate |
Amount |
|||||||
2022 |
1.54 | % | 8,481 | |||||
2023 |
1.54 | % | 8,506 | |||||
2024 |
1.28 | % | 2,032 | |||||
2025 |
1.30 | % | 2,059 | |||||
2026 |
1.31 | % | 2,086 | |||||
Thereafter |
1.05 | % | 32,278 | |||||
|
|
|||||||
Total |
$ | 55,442 | ||||||
|
|
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Current tax expense (benefit): |
||||||||
Federal |
$ | — | $ | 86 | ||||
State |
— | — | ||||||
|
|
|
|
|||||
Total current tax expense (benefit) |
— | 86 | ||||||
|
|
|
|
|||||
Deferred tax expense: |
||||||||
Federal |
(49 | ) | 589 | |||||
State |
(15 | ) | 127 | |||||
Valuation allowance |
— | 934 | ||||||
|
|
|
|
|||||
Total deferred tax expense |
(64 | ) | 1,650 | |||||
|
|
|
|
|||||
Provision (credit) for income taxes |
$ | (64 | ) | $ | 1,736 | |||
|
|
|
|
Years ended December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Amount |
% of Pretax Income |
Amount |
% of Pretax Income |
|||||||||||||
Reconciliation of statutory to effective rates: |
||||||||||||||||
Federal income taxes at statutory rate |
$ | 5 | 21.00 | % | $ | 641 | 21.00 | % | ||||||||
Adjustments for: |
||||||||||||||||
Increase in cash value of life insurance |
(85 | ) | (357.00 | %) | (84 | ) | (2.75 | %) | ||||||||
Change in valuation allowance |
— | 0.00 | % | 934 | 30.60 | % | ||||||||||
Other, net |
16 | 67.20 | % | 245 | 8.03 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total income tax expense (benefit) |
$ | (64 | ) | (268.80 | %) | $ | 1,736 | 56.88 | % | |||||||
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Allowance for loan losses |
$ | 780 | $ | 735 | ||||
Deferred compensation |
1,070 | 859 | ||||||
Accrued employee benefits |
102 | 122 | ||||||
NOL and charitable contribution carryforwards |
3,442 | 3,492 | ||||||
Premises and equipment |
40 | 6 | ||||||
ESOP release of shares |
32 | 17 | ||||||
Other |
82 | 57 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
$ | 5,548 | $ | 5,288 | ||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Loan fees |
$ | 179 | $ | 48 | ||||
Unrealized gain on available for sale securities |
52 | 420 | ||||||
Mortgage servicing rights |
556 | 491 | ||||||
FHLB stock dividends |
26 | 26 | ||||||
|
|
|
|
|||||
Total deferred tax liabilities |
$ | 813 | $ | 985 | ||||
|
|
|
|
|||||
Net deferred tax asset/liability |
4,735 | 4,303 | ||||||
Valuation allowance |
(934 | ) | (934 | ) | ||||
|
|
|
|
|||||
Net deferred tax asset |
$ | 3,801 | $ | 3,369 | ||||
|
|
|
|
December 31, 2021 |
||||||||||||
Fixed Rate |
Variable Rate |
Total |
||||||||||
Commitments to extend credit |
$ | 21,586 | $ | 56,921 | $ | 78,507 | ||||||
Standby letters of credit |
— | 175 | 175 | |||||||||
Credit enhancement under the FHLB of Chicago Mortgage Partnership Finance Program |
1,214 | — | 1,214 | |||||||||
Commitments to sell loans |
5,410 | — | 5,410 | |||||||||
Overdraft protection program commitments |
3,993 | — | 3,993 |
December 31, 2020 |
||||||||||||
Fixed Rate |
Variable Rate |
Total |
||||||||||
Commitments to extend credit |
$ | 12,084 | $ | 41,778 | $ | 53,862 | ||||||
Standby letters of credit |
23 | 2,150 | 2,173 | |||||||||
Credit enhancement under the FHLB of Chicago Mortgage Partnership Finance Program |
1,087 | — | 1,087 | |||||||||
Commitments to sell loans |
53,847 | — | 53,847 | |||||||||
Overdraft protection program commitments |
4,104 | — | 4,104 |
2022 |
$ |
85 | ||
2023 |
87 | |||
2024 |
15 | |||
Thereafter |
— | |||
|
|
|||
Total |
$ | 187 | ||
|
|
2021 (1) |
2020 |
|||||||
Shares committed to be released |
22,401 | 7,021 | ||||||
Total allocated shares |
15,239 | 7,021 | ||||||
Total unallocated shares |
377,077 | 161,486 | ||||||
|
|
|
|
|||||
Total ESOP shares |
414,717 | 175,528 | ||||||
|
|
|
|
|||||
Fair value of unallocated shares (based on $10.99 and $9.96 share price as of December 31, 2021 and December 31, 2020, respectively) | $ | 4,144 | $ | 1,608 | ||||
|
|
|
|
(1) |
Share amounts reflected in the table are adjusted for the 1.3163 to 1 common share conversion ratio as part of the conversion and offering. |
Years ended December 31, |
||||||||
2021 |
2020 |
|||||||
Beginning balance |
$ | 1,034 | $ | 1,172 | ||||
Adjustments due to changes in directors, executive officers, and/or principal stockholders |
202 | — | ||||||
New loans |
53 | 512 | ||||||
Repayments |
(357 | ) | (650 | ) | ||||
|
|
|
|
|||||
Ending balance |
$ | 932 | $ | 1,034 | ||||
|
|
|
|
Recurring Fair Value Measurements Using |
||||||||||||||||
December 31, 2021 |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Marketable equity securities |
$ | 3,544 | $ | 3,544 | $ | — | $ | — | ||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. Treasury notes |
19,484 | — | 19,484 | — | ||||||||||||
Obligations of states and political subdivisions |
20,760 | — | 20,760 | — | ||||||||||||
Government-sponsored mortgage-backed securities |
64,149 | — | 64,149 | — | ||||||||||||
Asset-backed securities |
6,523 | — | 6,523 | — | ||||||||||||
Certificates of deposit |
1,524 | — | 1,524 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 115,984 | $ | 3,544 | $ | 112,440 | $ | — | ||||||||
|
|
|
|
|
|
|
|
Recurring Fair Value Measurements Using |
||||||||||||||||
December 31, 2020 |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Marketable equity securities |
$ | 2,992 | $ | 2,992 | $ | — | $ | — | ||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. Treasury notes |
— | — | — | — | ||||||||||||
Obligations of states and political subdivisions |
11,803 | — | 11,803 | — | ||||||||||||
Government-sponsored mortgage-backed securities |
38,039 | — | 38,039 | — | ||||||||||||
Asset-backed securities |
7,281 | — | 7,281 | — | ||||||||||||
Certificates of deposit |
1,580 | — | 1,580 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 61,695 | $ | 2,992 | $ | 58,703 | $ | — | ||||||||
|
|
|
|
|
|
|
|
Fair Value at |
Significant Unobservable Input Value |
|||||||||||||||||||
December 31, 2021 |
Valuation Technique |
Significant Unobservable Input(s) |
Minimum Value |
Maximum Value |
||||||||||||||||
Rate lock commitments |
30 | Pricing model | Pull through rate | 75.0 | % |
100.0 | % | |||||||||||||
Mortgage servicing rights |
2,477 | Pricing models | Prepayment rate | 11.3 | % |
37.0 | % | |||||||||||||
Discount rate | 10.0 | % |
13.5 | % | ||||||||||||||||
Cost to service | $ | 83.00 | $ | 85.00 |
December 31, 2021 |
||||||||||||||||
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Financial assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 66,803 | $ | 66,803 | $ | — | $ | — | ||||||||
Available for sale securities |
112,440 | — | 112,440 | — | ||||||||||||
Marketable equity securities |
3,544 | 3,544 | — | — | ||||||||||||
Loans held for sale |
1,183 | — | 1,183 | — | ||||||||||||
Loans |
323,789 | — | — | 323,182 | ||||||||||||
Rate lock commitments |
30 | — | — | 30 | ||||||||||||
Accrued interest receivable |
948 | 948 | — | — | ||||||||||||
Federal Home Loan Bank Stock |
3,032 | — | — | 3,032 | ||||||||||||
Cash value of life insurance |
13,892 | — | — | 13,892 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Deposits |
384,501 | 303,908 | — | 80,473 | ||||||||||||
Advance payments by borrowers for taxes and insurance |
1,860 | 1,860 | — | — | ||||||||||||
Federal Home Loan Bank advances |
55,442 | — | — | 55,981 | ||||||||||||
Accrued interest payable |
109 | 109 | — | — |
December 31, 2020 |
||||||||||||||||
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Financial assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 92,526 | $ | 92,526 | $ | — | $ | — | ||||||||
Available for sale securities |
58,703 | — | 58,703 | — | ||||||||||||
Marketable equity securities |
2,992 | 2,992 | — | — | ||||||||||||
Loans held for sale |
2,484 | — | 2,484 | — | ||||||||||||
Loans |
329,073 | — | — | 332,882 | ||||||||||||
Rate lock commitments |
354 | — | — | 354 | ||||||||||||
Accrued interest receivable |
912 | 912 | — | — | ||||||||||||
Federal Home Loan Bank Stock |
3,032 | — | — | 3,032 | ||||||||||||
Cash value of life insurance |
13,485 | — | — | 13,485 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Deposits |
379,848 | 292,219 | — | 87,884 | ||||||||||||
Advance payments by borrowers for taxes and insurance |
2,737 | 2,737 | — | — | ||||||||||||
Federal Home Loan Bank advances |
68,398 | — | — | 70,561 | ||||||||||||
Accrued interest payable |
183 | 183 | — | — |
Actual |
For Capital Adequacy Purposes |
To Be Well Capitalized Under Prompt Corrective Action Provisions |
||||||||||||||||||||||
(Dollars in thousands) |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||
December 31, 2021 |
||||||||||||||||||||||||
PyraMax Bank |
||||||||||||||||||||||||
Leverage (Tier 1) |
$ | 65,179 | 11.9 | % | $ | 21,838 | 4.0 | % | $ | 27,298 | 5.0 | % | ||||||||||||
Risk-based: |
||||||||||||||||||||||||
Common Equity Tier 1 |
65,179 | 19.4 | % | 15,124 | 4.5 | % | 21,846 | 6.5 | % | |||||||||||||||
Tier 1 |
65,179 | 19.4 | % | 20,166 | 6.0 | % | 26,888 | 8.0 | % | |||||||||||||||
Total |
68,037 | 20.2 | % | 26,888 | 8.0 | % | 33,610 | 10.0 | % | |||||||||||||||
December 31, 2020 |
||||||||||||||||||||||||
PyraMax Bank |
||||||||||||||||||||||||
Leverage (Tier 1) |
$ | 49,534 | 9.8 | % | $ | 20,195 | 4.0 | % | $ | 25,243 | 5.0 | % | ||||||||||||
Risk-based: |
||||||||||||||||||||||||
Common Equity Tier 1 |
49,534 | 15.1 | % | 14,725 | 4.5 | % | 21,269 | 6.5 | % | |||||||||||||||
Tier 1 |
49,534 | 15.1 | % | 19,633 | 6.0 | % | 26,177 | 8.0 | % | |||||||||||||||
Total |
52,237 | 16.0 | % | 26,177 | 8.0 | % | 32,722 | 10.0 | % |
Years ended December 31, |
||||||||||||
2021 (1) |
2020 (2) |
2020 (1) (Unaudited) |
||||||||||
(dollars in thousands, except per share amounts) |
||||||||||||
Net income |
$ | 85 | $ | 1,317 | |
$ |
1,317 |
| ||||
Weighted shares outstanding for basic EPS |
|
| ||||||||||
Weighted average shares outstanding |
6,248,678 | 4,807,158 | |
6,327,662 |
| |||||||
Less: Weighted average unallocated ESOP shares |
261,514 | 164,987 | |
217,172 |
| |||||||
|
|
|
|
|
|
|
| |||||
Weighted average shares outstanding for basic EPS |
5,987,164 | 4,642,171 | |
6,110,490 |
| |||||||
Additional dilutive shares |
203,245 | 43,037 | |
56,649 |
| |||||||
|
|
|
|
|
|
|
| |||||
Weighted average shares outstanding for dilutive EPS |
6,190,409 | 4,685,208 | |
6,167,139 |
| |||||||
|
|
|
|
|
|
|
| |||||
Basic income per share |
$ | 0.01 | $ | 0.28 | |
$ |
0.22 |
| ||||
|
|
|
|
|
|
|
| |||||
Diluted income per share |
$ | 0.01 | $ | 0.28 | |
$ |
0.21 |
|
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
(2) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
2021 |
2020 |
|||||||
Dividend yield |
0.00 |
% |
0.00 |
% | ||||
Risk-free interest rate |
0.96 |
% |
0.45 |
% | ||||
Expected volatility |
24.64 |
% |
24.00 |
% | ||||
Weighted average expected life |
6.5 |
6.5 |
||||||
Weighted average per share value of options |
$ |
2.10 |
$ |
1.98 |
Stock Options |
Shares (1) |
Weighted Average Exercise Price |
Weighted Average Remaining in Contractual Term (Years) |
Aggregate Intrinsic Value |
||||||||||||
Outstanding and exercisable December 31, 2019 |
— | $ | — | — | — | |||||||||||
Granted |
287,097 | 5.99 | — | 1,138,663 | ||||||||||||
Exercised |
— | — | — | — | ||||||||||||
Forfeited |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding December 31, 2020 |
287,097 | 5.99 | 9.30 | 1,138,663 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Options exercisable at December 31, 2020 |
— | $ | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Granted (2) |
37,316 | 7.76 | — | 120,526 | ||||||||||||
Exercised |
(4,738 | ) | 6.27 | — | 23,274 | |||||||||||
Forfeited |
(18,955 | ) | 6.27 | — | 91,574 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding December 31, 2021 |
300,720 | 6.19 | 8.40 | 1,443,067 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Options exercisable at December 31, 2021 |
52,677 | $ | 5.97 | 8.30 | 264,489 | |||||||||||
|
|
|
|
|
|
|
|
(1) |
Share amounts reflected in the tables are adjusted for the 1.3163 to 1 common share conversion ratio as part of the conversion and offering. |
(2) |
Includes 10,527 shares granted as a nonqualified stock option inducement award to the Company’s President and Chief Operating Officer. |
Stock Options |
Shares (1) |
Weighted Average Grant Date Fair Value |
||||||
Nonvested at December 31, 2019 |
— | $ | — | |||||
Granted |
287,097 | 1.98 | ||||||
Vested |
— | — | ||||||
Forfeited |
— | — | ||||||
|
|
|
|
|||||
Nonvested at December 31, 2020 |
287,097 | $ | 1.98 | |||||
|
|
|
|
|||||
Nonvested at December 31, 2020 |
287,097 | $ | 1.98 | |||||
Granted (2) |
37,316 | 2.10 | ||||||
Vested |
(57,415 | ) | 1.50 | |||||
Forfeited |
(18,955 | ) | 1.61 | |||||
|
|
|
|
|||||
Nonvested at December 31, 2021 |
248,043 | $ | 1.58 | |||||
|
|
|
|
(1) |
Share amounts reflected in the tables are adjusted for the 1.3163 to 1 common share conversion ratio as part of the conversion and offering. |
(2) |
Includes 10,527 shares granted as a nonqualified stock option inducement award to the Company’s President and Chief Operating Officer. |
Restricted Stock |
Shares (1) |
Weighted Average Grant Date Fair Value |
||||||
Nonvested at December 31, 2019 |
— | $ | — | |||||
Granted |
111,802 | 5.98 | ||||||
Vested |
— | — | ||||||
Forfeited |
— | — | ||||||
Nonvested at December 31, 2020 |
111,802 | $ | 5.98 | |||||
|
|
|
|
|||||
Nonvested at December 31, 2020 |
111,802 | $ | 5.98 | |||||
Granted (2) |
15,052 | 7.76 | ||||||
Vested (3) |
(22,355 | ) | 5.98 | |||||
Forfeited |
(7,371 | ) | 6.06 | |||||
Nonvested at December 31, 2021 |
97,128 | $ | 6.25 | |||||
|
|
|
|
(1) |
Share amounts reflected in the tables are adjusted for the 1.3163 to 1 common share conversion ratio as part of the conversion and offering. |
(2) |
Includes 1,313 shares granted as a nonqualified stock option inducement award to the Company’s President and Chief Operating Officer. |
(3) |
Includes 6,305 shares surrendered by employees to cover payroll tax costs related to the vested shares. |
Exhibit 4.2
Description of Registrants Securities
Unless otherwise indicated or the context otherwise requires, references in this Exhibit 4.2 to the Company, we, us and our refer collectively to 1895 Bancorp of Wisconsin, Inc. and PyraMax Bank, FSB.
General
The Company is authorized to issue 90,000,000 shares of common stock, par value of $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share. Each share of common stock has the same relative rights as, and is identical in all respects to, each other share of common stock. All of our shares of common stock are duly authorized, fully paid and non-assessable.
Common Stock
Dividends. The holders of common stock of the Company will be entitled to receive and share equally in dividends as may be declared by our board of directors out of funds legally available therefor. The Company may pay dividends on its common stock if, after giving effect to such dividends, it would be able to pay its debts in the usual course of business and its total assets would exceed the sum of its total liabilities plus the amount needed to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the dividends. However, even if the Companys assets are less than the amount necessary to satisfy the requirement set forth above, the Company may pay dividends from: its net earnings for the fiscal year in which the distribution is made; its net earnings for the preceding fiscal year; or the sum of its net earnings for the preceding eight fiscal quarters. The payment of dividends by the Company is also subject to limitations that are imposed by applicable regulation, including restrictions on payments of dividends that would reduce the Companys assets below the then-adjusted balance of its liquidation accounts. If the Company issues shares of preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.
Voting Rights. The holders of common stock of the Company have exclusive voting rights in the Company. They elect the Companys board of directors and act on other matters required to be presented to them under Maryland law or as are otherwise presented to them by the board of directors. Generally, each holder of common stock is entitled to one vote per share and does not have any right to cumulate votes in the election of directors. Directors are elected by a plurality of the votes cast. Certain matters require the approval of 80% of our outstanding common stock. Any person who beneficially owns more than 10% of the then-outstanding shares of the Companys common stock, however, is not entitled or permitted to vote any shares of common stock held in excess of the 10% limit. If the Company issues shares of preferred stock, holders of the preferred stock may also possess voting rights.
Liquidation. In the unlikely event of any liquidation, dissolution or winding up of PyraMax Bank, FSB, the Company, as the holder of 100% of PyraMax Bank, FSBs capital stock, would be entitled to receive all assets of PyraMax Bank, FSB available for distribution, after payment or provision for payment of all debts and liabilities of PyraMax Bank, FSB, including all deposit accounts and accrued interest thereon, and after distribution of the balance in the liquidation accounts as required by federal regulation. In the unlikely event of liquidation, dissolution or winding up of the Company, the holders of our common stock would be entitled to receive, after payment or provision for payment of all our debts and liabilities (including payments with respect to the liquidation accounts), all of the assets of the Company available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the event of liquidation or dissolution.
Preemptive Rights. Holders of the common stock of the Company are not entitled to preemptive rights with respect to any shares that may be issued. The common stock is not subject to redemption.
Preferred Stock
None of the Companys authorized shares of preferred stock have been issued. Preferred stock may be issued with preferences and designations as our board of directors may from time to time determine. Our board of directors may, without stockholder approval, issue shares of preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.
Forum Selection for Certain Stockholder Lawsuits
The articles of incorporation of the Company provide that, unless the Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Companys stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Maryland General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine will be conducted in a state or federal court located within the State of Maryland, in all cases subject to the courts having personal jurisdiction over the indispensable parties named as defendants. This exclusive forum provision does not apply to claims arising under the federal securities laws. Under the articles of incorporation, any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the exclusive forum provision of the articles of incorporation. This exclusive forum provision may limit a stockholders ability to bring a claim in a judicial forum it finds favorable for disputes with the Company and its directors, officers, and other employees or may cause a stockholder to incur additional expense by having to bring a claim in a judicial forum that is distant from where the stockholder resides, or both.
Maryland Law and Articles of Incorporation and Bylaws of 1895 Bancorp of Wisconsin, Inc.
Maryland law, as well as the Companys articles of incorporation and bylaws, contain a number of provisions relating to corporate governance and rights of stockholders that may discourage future takeover attempts. As a result, stockholders who might desire to participate in such transactions may not have an opportunity to do so. In addition, these provisions also render the removal of the board of directors or management of the Company more difficult.
Directors. The board of directors is divided into three classes, as nearly equal in number as possible, with one class of directors elected each year to serve for a three-year term. Thus, it would take at least two annual elections to replace a majority of the board of directors. The bylaws establish qualifications for board members, including restrictions on affiliations with competitors of PyraMax Bank, FSB, restrictions based upon prior legal or regulatory violations and a Wisconsin residency requirement. Further, the bylaws impose notice and information requirements in connection with the nomination by stockholders of candidates for election to the board of directors or the proposal by stockholders of business to be acted upon at an annual meeting of stockholders. Such notice and information requirements are applicable to all stockholder business proposals and nominations, and are in addition to any requirements under the federal securities laws.
Restrictions on Calling Special Meetings. The articles of incorporation and bylaws provide that special meetings of stockholders can be called by the president, chief executive officer, the chairperson of the board of directors, a majority of the whole board of directors, or upon the written request of stockholders entitled to cast at least a majority of all votes entitled to vote at the meeting.
Prohibition of Cumulative Voting. The articles of incorporation prohibit cumulative voting for the election of directors.
Limitation of Voting Rights. The articles of incorporation provide that no record owner of any of the Companys outstanding common stock that is beneficially owned, directly or indirectly, by a person who beneficially owns more than 10% of the outstanding shares of common stock will be permitted to vote any shares in excess of such 10% limit. This provision has been included in the articles of incorporation in reliance on Section 2-507(a) of the Maryland General Corporation Law, which entitles stockholders to one vote for each share of stock unless the articles of incorporation provide for a greater or lesser number of votes per share or limit or deny voting rights.
Restrictions on Removing Directors from Office. The articles of incorporation provide that directors may be removed only for cause, and only by the affirmative vote of the holders of at least two-thirds of the voting power of all of the Companys then-outstanding common stock entitled to vote (after giving effect to the limitation on voting rights discussed above in Limitation of Voting Rights).
Authorized but Unissued Shares. The Company has authorized but unissued shares of common and preferred stock. The articles of incorporation authorize 10,000,000 shares of serial preferred stock. The Company is authorized to issue preferred stock from time to time in one or more series subject to applicable provisions of law, and the board of directors is authorized to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of the shares of each such series. In the event of a proposed merger, tender offer or other attempt to gain control of the Company that the board of directors does not approve, it may be possible for the board of directors to authorize the issuance of a series of preferred stock with rights and preferences that would impede the completion of the transaction. An effect of the possible issuance of preferred stock therefore may be to deter a future attempt to gain control of the Company.
Amendments to Articles of Incorporation and Bylaws. Amendments to the articles of incorporation must be approved by the board of directors and by the affirmative vote of at least two-thirds of the outstanding shares of common stock, or by the affirmative vote of a majority of the outstanding shares of common stock if at least two-thirds of the members of the whole board of directors approves such amendment; provided, however, that approval by at least 80% of the outstanding voting stock is generally required to amend certain provisions.
The articles of incorporation also provide that the bylaws may be amended by the affirmative vote of a majority of the Companys directors or by the affirmative vote of at least 80% of the total votes eligible to be cast by stockholders at a duly constituted meeting of stockholders. Any amendment of this super-majority requirement for amendment of the bylaws would also require the approval of 80% of the total votes eligible to be cast.
The provisions requiring the affirmative vote of 80% of the total votes eligible to be cast for certain stockholder actions have been included in the articles of incorporation of the Company in reliance on Section 2-104(b)(4) of the Maryland General Corporation Law, which permits the articles of incorporation to require a greater proportion of votes than the proportion that would otherwise be required for stockholder action under the Maryland General Corporation Law.
Business Combinations with Interested Stockholders. Maryland law restricts mergers, consolidations, sales of assets and other business combinations between the Company and an interested stockholder, as defined under Maryland law.
Evaluation of Offers. The articles of incorporation of the Company provide that its board of directors, when evaluating a transaction that would or may involve a change in control of the Company (whether by purchases of its securities, merger, consolidation, share exchange, dissolution, liquidation, sale of all or substantially all of its assets, proxy solicitation or otherwise), may, in connection with the exercise of its business judgment in determining what is in the best interests of the Company and its stockholders and in making any recommendation to the stockholders, give due consideration to all relevant factors, including, but not limited to, financial aspects of the proposed transaction, the effect of the transaction on employees, customers and the local community, the reputation and business practices of the other party involved in the proposed transaction, and antitrust or other legal issues raised by the transaction.
Federal Conversion Regulations
The conversion of 1895 Bancorp of Wisconsin, MHC and 1895 Bancorp of Wisconsin, Inc., a federal corporation, from the mutual holding company form of organization to a fully public stock holding company structure was completed on July 14, 2021. Without the prior written approval of the Federal Reserve Board, no person may make an offer or announcement of an offer to purchase shares or actually acquire shares of a converted institution or its holding company for a period of three years from the date of the completion of the conversion if, upon the completion of such offer, announcement or acquisition, the person would become the beneficial owner of more than 10% of the outstanding stock of the institution or its holding company. The Federal Reserve Board has defined person to include any individual, group acting in concert, corporation, partnership, association, joint stock
company, trust, unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities of an insured institution. However, offers made exclusively to a bank or its holding company, or to an underwriter or member of a selling group acting on the converting institutions or its holding companys behalf for resale to the general public, are excepted. The regulation also provides civil penalties for willful violation or assistance in any such violation of the regulation by any person connected with the management of the converting institution or its holding company or who controls more than 10% of the outstanding shares or voting rights of a converted institution or its holding company.
Change in Control Law and Regulations
Under the Change in Bank Control Act, no person may acquire control of a savings and loan holding company, such as the Company, unless the Federal Reserve Board has been given 60 days prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition. Control, as defined under the Change in Bank Control Act, means ownership, control of or the power to vote 25% or more of any class of voting stock. There is a rebuttable presumption of control upon the acquisition of 10% or more of a class of voting stock under certain circumstances, such as where the holding company involved has its shares registered under the Securities Exchange Act of 1934.
The Federal Reserve Board has adopted a final rule, effective September 30, 2020, that revises its framework for determining whether a company has a controlling influence over a bank or savings and loan holding company for purposes of the Bank and Savings and Loan Holding Company Acts.
Exhibit 21
Subsidiaries of the Registrant
The following is a list of the subsidiaries of 1895 Bancorp of Wisconsin, Inc.:
Name |
State of Incorporation | |
PyraMax Bank, FSB | Federal | |
PyraMax Insurance Services LLC (a wholly owned subsidiary of PyraMax Bank, FSB) |
Wisconsin |
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-260586 and No. 333-261002 on Form S-8s of 1895 Bancorp of Wisconsin, Inc. of our report dated March 28, 2022, relating to the consolidated financial statements of 1895 Bancorp of Wisconsin, Inc., which appear in this Annual Report on Form 10-K of 1895 Bancorp of Wisconsin, Inc., for the years ended December 31, 2021 and 2020.
/s/ Wipfli LLP
Wipfli LLP
Eau Claire, Wisconsin
March 28, 2022
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Richard Hurd, certify that:
1. | I have reviewed this annual report on Form 10-K of 1895 Bancorp of Wisconsin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 28, 2022 | /s/ Richard Hurd | |||||
Richard Hurd | ||||||
Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Steven T. Klitzing, certify that:
1. | I have reviewed this annual report on Form 10-K of 1895 Bancorp of Wisconsin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
(c) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(d) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 28, 2022 | /s/ Steven T. Klitzing | |||||
Steven T. Klitzing | ||||||
Chief Financial Officer |
EXHIBIT 32
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Richard Hurd, Chief Executive Officer and Steven T. Klitzing, Chief Financial Officer of 1895 Bancorp of Wisconsin, Inc. (the Company) each certify in their capacity as officers of the Company that they have reviewed the Annual Report of the Company on Form 10-K for the year ended December 31, 2021 and that to the best of their knowledge:
(1) | the Report fully complies with the requirements of Sections 13(a) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 28, 2022 | /s/ Richard Hurd | |||||
Richard Hurd | ||||||
Chief Executive Officer | ||||||
March 28, 2022 | /s/ Steven T. Klitzing | |||||
Steven T. Klitzing | ||||||
Chief Financial Officer |