CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share data)
(UNAUDITED)
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of Citizens Community Federal N.A. (the “Bank”) included herein have been included by its parent company, Citizens Community Bancorp, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. As used in this quarterly report, the terms “we”, “us”, “our”, and “Citizens Community Bancorp, Inc.” mean the Company and its wholly owned subsidiary, the Bank, unless the context indicates other meaning.
The Bank is a national banking association (a “National Bank”) and operates under the title of Citizens Community Federal National Association (“Citizens Community Federal N.A.” or “Bank” or “CCFBank”). The Company is a bank holding company, supervised by the Federal Reserve Bank of Minneapolis (the “FRB”), and operates under the title of Citizens Community Bancorp, Inc. Wells Insurance Agency (“WIA”) was a wholly owned subsidiary of the Bank, providing insurance products to the Bank’s customers and was sold on June 30, 2020. F&M Investment Corp. of Tomah was a wholly owned subsidiary of the Bank that was formerly utilized by F. & M. Bancorp. of Tomah, Inc. (“F & M”) to manage its municipal bond portfolio, and was dissolved in February 2020. The U.S. Office of the Comptroller of the Currency (the “OCC”), is the primary federal regulator for the Bank.
The consolidated income of the Company is principally derived from the income of the Bank, the Company’s wholly owned subsidiary, serving customers in Wisconsin and Minnesota through 25 branch locations. Its primary markets include the Chippewa Valley Region in Wisconsin, the Mankato and Twin Cities markets in Minnesota, and various rural communities around these areas. The Bank offers traditional community banking services to businesses, agricultural operators and consumers, including one-to-four family residential mortgages.
The Bank is subject to competition from other financial institutions and non-financial institutions providing financial products. Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.
In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the September 30, 2021 balance sheet date and through the date the financial statements were available to be issued for items that should potentially be recognized or disclosed in these consolidated financial statements.
The accompanying consolidated interim financial statements are unaudited. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Unless otherwise stated herein, and except for shares and per share amounts, all amounts are in thousands.
Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates –Preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, fair value of financial instruments, the allowance for loan losses, mortgage servicing rights, foreclosed and repossessed assets, valuation of intangible assets arising from acquisitions, useful lives for depreciation and amortization, valuation of goodwill and long-lived assets, stock based compensation, deferred tax assets, uncertain income tax positions and contingencies. Management does not anticipate any material changes to estimates made herein in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: those items described under the caption “Risk Factors” in Item 1A of the annual report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 8, 2021; the matters described in “Risk Factors” in Item 1A of the quarterly reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, filed with the SEC on May 6, 2021 and August 5, 2021, respectively; the matters described in “Risk Factors” in Item 1A of this Form 10-Q; external market factors such as market interest rates and unemployment rates; changes to operating policies and procedures and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period.
Investment Securities; Held to Maturity and Available for Sale – Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of the date of each balance sheet. Securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held to maturity securities are stated at amortized cost. Investment securities not classified as held to maturity are classified as available for sale. Available for sale securities are stated at fair value, with unrealized holding gains and losses being reported in other comprehensive income (loss), net of tax. Unrealized losses deemed other-than-temporary due to credit issues are reported in the Company’s net income in the period in which the losses arise. Realized gains or losses on sales of available for sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net gains on investment securities. Interest income includes amortization of purchase premium or accretion of purchase discount. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities.
The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to: the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded in other comprehensive income or loss as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax.
Equity securities with readily determinable fair value - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities. Farmer Mac equity securities are carried at their fair market value, which is readily determinable. Changes in fair value are recognized as net gains (losses) on investment securities in the consolidated statement of operations.
Other Investments - As a member of the Federal Reserve Bank (“FRB”) System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other exchange traded equity securities. As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as other income in the consolidated statement of operations.
Also included in other investments is stock of our correspondent bank, Bankers’ Bank, without readily determinable fair value. This stock is carried at cost plus or minus changes resulting from observable price changes in orderly transactions for this stock, less other-than-temporary impairment charges, if any.
Management’s evaluation for impairment of these other investments, includes consideration of the financial condition and other available relevant information of the issuer. Based on management’s quarterly evaluation, no impairment has been recorded on these securities. Other investments totaling $14,965 at September 30, 2021 consisted of $7,925 of FHLB stock, $5,193 of Federal Reserve Bank stock and $1,847 of Bankers’ Bank stock. Other investments totaling $14,948 at December 31, 2020 consisted of $8,103 of FHLB stock and $5,170 of Federal Reserve Bank stock and $1,675 of Bankers’ Bank stock.
Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of: deferred loan fees and costs, accretable yield on acquired loans and non-accretable discount on purchased credit impaired (PCI) loans. Interest income is accrued on the unpaid principal balance of these loans. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed. If the loan is prepaid, any unamortized net fee is recognized at this time. Late charge fees are recognized into income when collected.
Interest income on commercial, mortgage and consumer loans is discontinued according to the following schedules:
•Commercial/agricultural real estate loans past due 90 days or more;
•Commercial and industrial/agricultural operating loans past due 90 days or more;
•Closed end consumer installment loans past due 120 days or more; and
•Residential mortgage loans and open ended consumer installment loans past due 180 days or more.
Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for a loan placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual status. Loans are returned to accrual status when payments are made that bring the loan account current with the contractual term of the loan and a six month payment history has been established. Interest on accruing troubled debt restructured (“TDR”), less than 90 days delinquent, is recognized as income as it accrues, based on the revised terms of the loan over an established period of continued payment.
Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 180 days or more. Closed ended consumer installment loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 120 days or more. Commercial/agricultural real estate, commercial and industrial and agricultural operating loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 90 days or more.
Allowance for Loan Losses – The allowance for loan losses (“ALL”) is a valuation allowance for probable and inherent credit losses in our loan portfolio. Loan losses are charged against the ALL when management believes that the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the ALL. Management estimates the required ALL balance taking into account the following factors: past loan loss experience; the nature, volume and composition of our loan portfolio; known and inherent risks in our portfolio; information about specific borrowers’ ability to repay; estimated collateral values; current economic conditions; and other relevant factors determined by management. The ALL consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for certain qualitative factors. The entire ALL balance is available for any loan that, in management’s judgment, should be charged off.
A loan is impaired when full payment under the loan terms is not expected. Impaired loans consist of all TDRs, as well as individual loans not considered a TDR, that are either (1) rated substandard or worse, (2) on nonaccrual status or (3) PCI loans which are impaired at the time of acquisition. Substandard loans, as defined by the OCC, our primary banking regulator, are loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. All TDRs are individually evaluated for impairment. See Note 3, “Loans, Allowance for Loan Losses and Impaired Loans” for more information on what we consider to be a TDR. For TDR’s or substandard loans deemed to be impaired, a specific ALL allocation may be established so that the loan is reported, net, at the lower of (a) its outstanding principal balance; (b) the present value of the loan’s estimated future cash flows using the loan’s existing rate; or (c) at the fair value of any loan collateral, less estimated disposal costs, if repayment is expected solely from the underlying collateral of the loan. For TDRs less than 90+ days past due, and certain substandard loans that are less than 90+ days delinquent, the likelihood of the loan migrating to over 90 days past due is also taken into account when determining the specific ALL allocation for these particular loans. Large groups of smaller balance homogeneous loans, such as non-TDR commercial, consumer and residential real estate loans, are collectively evaluated for ALL purposes, and accordingly, are not separately identified for ALL disclosures.
Acquired Loans— Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value with no carryover of related allowance for loan losses. Any allowance for loan loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that no longer are expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including: the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.
Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield.
Loans acquired with deteriorated credit quality are accounted for in accordance with Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30) if, at acquisition, the loans have evidence of credit quality deterioration since origination and it is probable that all contractually required payments will not be collected. At acquisition, the Company considers several factors as indicators that an acquired loan has evidence of deterioration in credit quality. These factors include, but are not limited to: loans 90 days or more past due, loans with an internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.
Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable discount is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan’s total scheduled principal and interest payments over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect.
Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable discount to be subsequently recognized in interest income on a prospective basis over the loan’s remaining life.
Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs (ASC 310-20), whereby the premium or discount derived from the fair market value adjustment, on a loan-by-loan or pooled basis, is recognized into interest income on a level yield basis over the remaining expected life of the loan or pool.
For all acquired loans, the outstanding loan balances less any related accretable discount and/or non-accretable difference is referred to as the loans’ carrying amount.
Loans Held for Sale — Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They are carried at the lower of aggregate cost or fair value. Gains and losses on sales of loans are recognized at settlement dates, and are determined by the difference between the sales proceeds and the carrying value of the loans after allocating costs to servicing rights retained. Such gains and losses are included in non-interest income in the consolidated statements of operations. All sales are made without recourse. Interest rate lock commitments on mortgage loans to be funded and sold are valued at fair value, and are included in other assets or liabilities, if material.
Transfers of financial assets—Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the entity, (2) the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and (3) the entity does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.
Mortgage Servicing Rights— Mortgage servicing rights (“MSR”) assets result as the Company sells loans to investors in the secondary market and retains the rights to service mortgage loans sold to others. MSR assets are initially measured at fair value; assessed for impairment at least annually; carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded in non-interest expense in the consolidated statement of operations.
The valuation of MSRs and related amortization, included in mortgage servicing rights expense in the consolidated statements of operations, thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs. Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.
Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing fee income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of outstanding principal; or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income.
Goodwill and other intangible assets—The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management. The Company has one reporting unit as of September 30, 2021 which is related to its banking activities. The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of the Company’s reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the Company’s reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of the company’s reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the Company’s reporting unit’s goodwill to the implied fair value of goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2020.
Foreclosed and Repossessed Assets, net – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis. If the fair value declines subsequent to foreclosure or repossession, a write-down is recorded through expense. Costs incurred after acquisition are expensed and are included in non-interest expense, other in the consolidated statements of operations.
Leases - We determine if an arrangement is a lease at inception. All of our existing leases have been determined to be operating leases under ASC 842. Right-of-use (“ROU”) assets are included in other assets in our consolidated balance sheets. Operating lease liabilities are included in other liabilities in our consolidated balance sheets. Lease expense is included in non-interest expense, occupancy in the consolidated statements of operations.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date, based on the present value of lease payments over the lease term. As none of our existing leases provide an implicit rate, we use our incremental borrowing rate, based on information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, when it is reasonably certain that we will exercise that option. Lease expense is recognized based on the total contractually required lease payments, over the term of the lease, on a straight-line basis.
Debt and equity issuance costs—Debt issuance costs, which consist primarily of fees paid to note lenders, are deferred and included in other borrowings in the consolidated balance sheet. Debt issuance costs are amortized over the contractual term of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statement of operations. Specific costs associated with the issuance of shares of the Company’s common or preferred stock are netted against proceeds and recorded in stockholders’ equity, as additional paid in capital, on the consolidated balance sheet, in the period of the share issuance.
Advertising, Marketing and Public Relations Expense—The Company expenses all advertising, marketing and public relations costs as they are incurred.
Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.
The Company regularly reviews the carrying amount of its net deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s net deferred tax assets will not be realized in future periods, a deferred tax valuation allowance would be
established. Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. Accordingly, the Company’s evaluation is based on current tax laws as well as management’s expectations of future performance.
Revenue Recognition - The Company recognizes revenue in the consolidated statements of operations as it is earned and when collectability is reasonably assured. The primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts or other similar contracts. Non-interest income is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income includes fees from deposit accounts, ATM and debit card fees, mortgage banking activities, and other miscellaneous services and transactions. Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later. The Company also receives contingent commissions from insurance companies which are based on the overall profitability of their relationship based primarily on the loss experience of the insurance placed by the Company. Contingent commissions from insurance companies are recognized when determinable. Commission revenue is included in other non-interest income in the consolidated statement of operations.
Earnings Per Share – Basic earnings per common share is net income or loss divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.
Loss Contingencies—Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable and an amount of loss can be reasonably estimated.
Other Comprehensive Income —Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale, net of tax, and is shown on the accompanying consolidated statements of comprehensive income.
Operating Segments—While our executive officers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.
Reclassifications – Certain items previously reported were reclassified for consistency with the current presentation.
Recent Accounting Pronouncements—The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have potentially significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.
Recent Accounting Pronouncements—Adopted
ASU 2018-13, Fair Value Measurement (Topic 820)—The ASU modifies disclosure requirements on fair value measurements. This ASU removes requirements to disclose, (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and (2) the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. ASU 2018-13 clarifies that, disclosure regarding measurement uncertainty, is intended to communicate information about the uncertainty in measurement, as of the reporting date. ASU 2018-13 adds certain disclosure requirements, including (1) disclosure of changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this ASU, in the first quarter of 2020. The amendments on (1) changes in unrealized gains and losses, (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and (3) the narrative description of measurement uncertainty, are being applied prospectively. All other amendments have been applied retrospectively for all periods presented. Adoption of this ASU had no material impact on its consolidated financial position or results of operations.
ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)—The ASU was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance for determining when the arrangement includes a software license. The amendments align the requirements
for capitalizing implementation costs incurred in a hosting arrangement that is a service contract, with similar costs to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. This guidance became effective for the Company beginning in the first quarter of 2020. Adoption of this ASU had no material impact on its consolidated financial statements.
ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting--These ASUs provide optional and temporary relief, in the form of optional expedients and exceptions, for applying GAAP to modifications of contacts, hedging relationships and other transactions affected by reference rate (e.g. LIBOR) reforms. ASU 2020-04 and ASU 2021-01 are effective for the Company immediately and through December 31, 2022. The Company utilizes LIBOR, among other indexes, as a reference rate for underwriting variable rate loans. Reference rate reform has not had, nor does the Company expect it to have, a material effect on the Company’s consolidated balance sheet, operations or cash flows.
Recently Issued, But Not Yet Effective Accounting Pronouncements
ASU 2016-13; Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments--The ASU changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. In November, 2019, the FASB issued ASU 2019-10, which delayed the effective date for ASU 2016-13 for smaller reporting companies, resulting in ASU 2016-13 becoming effective in the first quarter of 2023 for the Company. Earlier adoption is permitted; however, the Company does not currently plan to adopt the ASU early. Management is assessing alternative loss estimation methodologies and the Company’s data and system needs in order to evaluate the impact that adoption of this standard will have on the Company’s financial condition and results of operations. The Company anticipates recording the effect of implementing this ASU through a cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which the ASU is effective, which will be January 1, 2023.
NOTE 2 – INVESTMENT SECURITIES
The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of September 30, 2021 and December 31, 2020, respectively, were as follows:
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Available for sale securities
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Amortized
Cost
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Gross
Unrealized
Gains
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Gross
Unrealized
Losses
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Estimated
Fair Value
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September 30, 2021
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|
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U.S. government agency obligations
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$
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27,862
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$
|
553
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|
|
$
|
5
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|
|
$
|
28,410
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|
|
Obligations of states and political subdivisions
|
140
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|
|
—
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|
|
—
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|
|
140
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|
|
Mortgage-backed securities
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120,684
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|
|
738
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|
|
620
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|
|
120,802
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|
|
|
|
|
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|
|
|
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Corporate debt securities
|
40,676
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|
|
720
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|
|
178
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|
|
41,218
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|
|
Corporate asset-based securities
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34,522
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|
|
150
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|
|
57
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|
|
34,615
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|
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Trust preferred securities
|
8,841
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|
|
399
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|
|
—
|
|
|
9,240
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Total available for sale securities
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$
|
232,725
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|
|
$
|
2,560
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|
|
$
|
860
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|
|
$
|
234,425
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|
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|
|
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|
December 31, 2020
|
|
|
|
|
|
|
|
|
U.S. government agency obligations
|
$
|
33,048
|
|
|
$
|
387
|
|
|
$
|
70
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|
|
$
|
33,365
|
|
|
Obligations of states and political subdivisions
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
Mortgage-backed securities
|
39,454
|
|
|
1,537
|
|
|
—
|
|
|
40,991
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
17,199
|
|
|
372
|
|
|
109
|
|
|
17,462
|
|
|
Corporate asset-based securities
|
36,039
|
|
|
104
|
|
|
316
|
|
|
35,827
|
|
|
Trust preferred securities
|
16,297
|
|
|
189
|
|
|
38
|
|
|
16,448
|
|
|
Total available for sale securities
|
$
|
142,177
|
|
|
$
|
2,589
|
|
|
$
|
533
|
|
|
$
|
144,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held to maturity securities
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations of states and political subdivisions
|
$
|
4,600
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
4,599
|
|
|
Mortgage-backed securities
|
63,139
|
|
|
152
|
|
|
2,023
|
|
|
61,268
|
|
|
Total held to maturity securities
|
$
|
67,739
|
|
|
$
|
153
|
|
|
$
|
2,025
|
|
|
$
|
65,867
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
Obligations of states and political subdivisions
|
$
|
600
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
602
|
|
|
Mortgage-backed securities
|
42,951
|
|
|
265
|
|
|
34
|
|
|
43,182
|
|
|
Total held to maturity securities
|
$
|
43,551
|
|
|
$
|
267
|
|
|
$
|
34
|
|
|
$
|
43,784
|
|
As of September 30, 2021, the Bank has pledged U.S. Government Agency securities with a carrying value of $519 and mortgage-backed securities with a carrying value of $3,552 as collateral against specific municipal deposits. At September 30, 2021, the Bank has pledged mortgage-backed securities with a carrying value of $936 as collateral against a borrowing line of credit with the Federal Reserve Bank. However, as of September 30, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of September 30, 2021, the Bank also has mortgage-backed securities with a carrying value of $312 pledged as collateral to the Federal Home Loan Bank of Des Moines.
At December 31, 2020, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $1,209 as collateral to secure a line of credit with the Federal Reserve Bank. As of December 31, 2020, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2020, the Bank has pledged certain of its U.S. Government Agency securities with a carrying value of $576 and mortgage-backed securities with a carrying value of $3,028 as collateral against specific municipal deposits. As of December 31, 2020, the Bank also has mortgage-backed securities with a carrying value of $468 pledged as collateral to the Federal Home Loan Bank of Des Moines.
For the three and nine month periods ended September 30, 2021 gross sales of available for sale securities were $7,153 and $9,118, respectively. Gross gains on sale of available for sale securities for the three and nine months ended September 30, 2021 were $56 and $92, respectively. Gross losses on sale of available for sale securities for the three and nine months ended September 30, 2021 were $14 and $14, respectively. Gross sales of available for sale securities were $0 and $10,841 for the three and nine month periods ended September 30, 2020, respectively. Gross gains on sale of available for sale securities for the three and nine months ended September 30, 2020 were $0 and $157, respectively. Gross losses on sale of available for sale securities for the three and nine months ended September 30, 2020 were $0 and $1, respectively.
The estimated fair value of securities at September 30, 2021 and December 31, 2020, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Expected maturities may differ from contractual maturities on certain agency and municipal securities due to the call feature.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Available for sale securities
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Due in one year or less
|
$
|
140
|
|
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Due after one year through five years
|
6,413
|
|
|
6,705
|
|
|
3,833
|
|
|
4,095
|
|
|
Due after five years through ten years
|
50,890
|
|
|
51,832
|
|
|
44,405
|
|
|
44,880
|
|
|
Due after ten years
|
54,598
|
|
|
54,946
|
|
|
54,485
|
|
|
54,267
|
|
|
Total securities with contractual maturities
|
$
|
112,041
|
|
|
$
|
113,623
|
|
|
$
|
102,723
|
|
|
$
|
103,242
|
|
|
Mortgage-backed securities
|
120,684
|
|
|
120,802
|
|
|
39,454
|
|
|
40,991
|
|
|
|
|
|
|
|
|
|
|
|
Total available for sale securities
|
$
|
232,725
|
|
|
$
|
234,425
|
|
|
$
|
142,177
|
|
|
$
|
144,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Held to maturity securities
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
|
|
|
|
|
|
|
|
|
Due after one year through five years
|
$
|
4,300
|
|
|
$
|
4,301
|
|
|
$
|
200
|
|
|
$
|
200
|
|
|
Due after five years through ten years
|
300
|
|
|
298
|
|
|
400
|
|
|
402
|
|
|
|
|
|
|
|
|
|
|
|
Total securities with contractual maturities
|
4,600
|
|
|
4,599
|
|
|
600
|
|
|
602
|
|
|
Mortgage-backed securities
|
63,139
|
|
|
61,268
|
|
|
42,951
|
|
|
43,182
|
|
|
Total held to maturity securities
|
$
|
67,739
|
|
|
$
|
65,867
|
|
|
$
|
43,551
|
|
|
$
|
43,784
|
|
Securities with unrealized losses at September 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|
Available for sale securities
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agency obligations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,309
|
|
|
$
|
5
|
|
|
$
|
1,309
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities
|
|
82,600
|
|
|
620
|
|
|
—
|
|
|
—
|
|
|
82,600
|
|
|
620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
|
12,417
|
|
|
96
|
|
|
1,418
|
|
|
82
|
|
|
13,835
|
|
|
178
|
|
|
Corporate asset-based securities
|
|
15,038
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
15,038
|
|
|
57
|
|
|
Trust preferred securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
110,055
|
|
|
$
|
773
|
|
|
$
|
2,727
|
|
|
$
|
87
|
|
|
$
|
112,782
|
|
|
$
|
860
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government agency obligations
|
|
$
|
7,654
|
|
|
$
|
17
|
|
|
$
|
6,834
|
|
|
$
|
53
|
|
|
$
|
14,488
|
|
|
$
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
|
3,447
|
|
|
27
|
|
|
1,418
|
|
|
82
|
|
|
4,865
|
|
|
109
|
|
|
Corporate asset-based securities
|
|
—
|
|
|
—
|
|
|
24,310
|
|
|
316
|
|
|
24,310
|
|
|
316
|
|
|
Trust preferred securities
|
|
5,612
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
5,612
|
|
|
38
|
|
|
Total
|
|
$
|
16,713
|
|
|
$
|
82
|
|
|
$
|
32,562
|
|
|
$
|
451
|
|
|
$
|
49,275
|
|
|
$
|
533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|
Held to maturity securities
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
Fair
Value
|
|
Unrealized
Loss
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations of states and political subdivisions
|
|
$
|
398
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
398
|
|
|
$
|
2
|
|
|
Mortgage-backed securities
|
|
54,515
|
|
|
1,874
|
|
|
3,288
|
|
|
149
|
|
|
57,803
|
|
|
2,023
|
|
|
Total
|
|
$
|
54,913
|
|
|
$
|
1,876
|
|
|
$
|
3,288
|
|
|
$
|
149
|
|
|
$
|
58,201
|
|
|
$
|
2,025
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities
|
|
$
|
16,538
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,538
|
|
|
$
|
34
|
|
|
Total
|
|
$
|
16,538
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,538
|
|
|
$
|
34
|
|
The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to; the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax. Unrealized losses reflected in the preceding tables have not been included in results of operations because the unrealized loss was not deemed other-than-temporary. Management has determined that more likely than not, the Company neither intends to sell, nor will it be required to sell each debt security before its anticipated recovery, and therefore recovery of cost will occur.
NOTE 3 – LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS
Portfolio Segments:
Commercial and agricultural real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75%.
Commercial and industrial (“C&I”) loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Agricultural operating loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets or other business assets, as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields. SBA PPP loan balances are 100% guaranteed under the Small Business Association’s Paycheck Protection Program and may be forgiven in full, depending on use of funds and eligibility. These SBA-backed loans helped businesses keep their workforce employed during the COVID-19 crisis. Eligible borrowers, who qualify for full loan forgiveness during the eight to twenty four week period following loan disbursement, can apply for forgiveness, once all proceeds for which the borrower requested forgiveness has been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan.
Residential mortgage loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower’s documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home’s appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential mortgage portfolio due to relatively small loan account balances spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis.
Consumer installment loans are comprised of originated indirect paper loans secured primarily by boats and recreational vehicles and other consumer loans secured primarily by automobiles and other personal assets. The Bank ceased new originations of indirect paper loans in early fiscal 2017. Consumer loan underwriting terms often depend on the collateral type, debt to income ratio and the borrower’s creditworthiness as evidenced by their credit score. In the event of a consumer installment loan default, collateral value alone may not provide an adequate source of repayment of the outstanding loan balance. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral.
Credit Quality/Risk Ratings:
Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant.
Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio ratings are presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows:
1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better.
5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future.
6 - Special Mention. A “Special Mention” loan has one or more potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future.
7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.
Below is a summary of originated and acquired loans by type and risk rating as of September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 5
|
|
6
|
|
7
|
|
8
|
|
9
|
|
TOTAL
|
|
Originated Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
507,305
|
|
|
$
|
300
|
|
|
$
|
935
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508,540
|
|
|
Agricultural real estate
|
|
48,053
|
|
|
378
|
|
|
651
|
|
|
—
|
|
|
—
|
|
|
49,082
|
|
|
Multi-family real estate
|
|
149,802
|
|
|
292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,094
|
|
|
Construction and land development
|
|
76,366
|
|
|
—
|
|
|
8,033
|
|
|
—
|
|
|
—
|
|
|
84,399
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
87,481
|
|
|
16
|
|
|
3,084
|
|
|
—
|
|
|
—
|
|
|
90,581
|
|
|
Agricultural operating
|
|
23,744
|
|
|
22
|
|
|
1,624
|
|
|
—
|
|
|
—
|
|
|
25,390
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
65,733
|
|
|
—
|
|
|
3,253
|
|
|
—
|
|
|
—
|
|
|
68,986
|
|
|
Purchased HELOC loans
|
|
3,756
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
3,921
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
|
17,511
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
—
|
|
|
17,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other consumer
|
|
9,344
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
9,414
|
|
|
Originated loans before SBA PPP loans
|
|
989,095
|
|
|
1,008
|
|
|
17,993
|
|
|
—
|
|
|
—
|
|
|
1,008,096
|
|
|
SBA PPP loans
|
|
31,301
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,301
|
|
|
Total originated loans
|
|
$
|
1,020,396
|
|
|
$
|
1,008
|
|
|
$
|
17,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,039,397
|
|
|
Acquired Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
126,472
|
|
|
$
|
1,342
|
|
|
$
|
1,970
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,784
|
|
|
Agricultural real estate
|
|
22,517
|
|
|
—
|
|
|
5,035
|
|
|
—
|
|
|
—
|
|
|
27,552
|
|
|
Multi-family real estate
|
|
5,928
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,928
|
|
|
Construction and land development
|
|
949
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,139
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
16,243
|
|
|
8
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
16,554
|
|
|
Agricultural operating
|
|
4,251
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|
—
|
|
|
4,541
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
29,253
|
|
|
—
|
|
|
1,542
|
|
|
—
|
|
|
—
|
|
|
30,795
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other consumer
|
|
512
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
516
|
|
|
Total acquired loans
|
|
$
|
206,125
|
|
|
$
|
1,540
|
|
|
$
|
9,144
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216,809
|
|
|
Total Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
633,777
|
|
|
$
|
1,642
|
|
|
$
|
2,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
638,324
|
|
|
Agricultural real estate
|
|
70,570
|
|
|
378
|
|
|
5,686
|
|
|
—
|
|
|
—
|
|
|
76,634
|
|
|
Multi-family real estate
|
|
155,730
|
|
|
292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156,022
|
|
|
Construction and land development
|
|
77,315
|
|
|
190
|
|
|
8,033
|
|
|
—
|
|
|
—
|
|
|
85,538
|
|
|
Commercial/Agricultural non-real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
103,724
|
|
|
24
|
|
|
3,387
|
|
|
—
|
|
|
—
|
|
|
107,135
|
|
|
Agricultural operating
|
|
27,995
|
|
|
22
|
|
|
1,914
|
|
|
—
|
|
|
—
|
|
|
29,931
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
94,986
|
|
|
—
|
|
|
4,795
|
|
|
—
|
|
|
—
|
|
|
99,781
|
|
|
Purchased HELOC loans
|
|
3,756
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
3,921
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
|
17,511
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
—
|
|
|
17,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
|
9,856
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
9,930
|
|
|
Gross loans before SBA PPP Loans
|
|
1,195,220
|
|
|
2,548
|
|
|
27,137
|
|
|
—
|
|
|
—
|
|
|
1,224,905
|
|
|
SBA PPP loans
|
|
31,301
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
31,301
|
|
|
Gross loans
|
|
$
|
1,226,521
|
|
|
$
|
2,548
|
|
|
$
|
27,137
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,256,206
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned net deferred fees and costs and loans in process
|
|
|
|
|
|
|
|
|
|
|
|
(3,486)
|
|
|
Unamortized discount on acquired loans
|
|
|
|
|
|
|
|
|
|
|
|
(4,066)
|
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
(16,832)
|
|
|
Loans receivable, net
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,231,822
|
|
Below is a summary of originated and acquired loans by type and risk rating as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 5
|
|
6
|
|
7
|
|
8
|
|
9
|
|
TOTAL
|
|
Originated Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
349,482
|
|
|
$
|
543
|
|
|
$
|
1,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
351,113
|
|
|
Agricultural real estate
|
|
30,041
|
|
|
446
|
|
|
1,254
|
|
|
—
|
|
|
—
|
|
|
31,741
|
|
|
Multi-family real estate
|
|
112,423
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,731
|
|
|
Construction and land development
|
|
87,763
|
|
|
—
|
|
|
3,478
|
|
|
—
|
|
|
—
|
|
|
91,241
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
91,474
|
|
|
20
|
|
|
3,796
|
|
|
—
|
|
|
—
|
|
|
95,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural operating
|
|
22,462
|
|
|
934
|
|
|
1,061
|
|
|
—
|
|
|
—
|
|
|
24,457
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
82,097
|
|
|
7
|
|
|
4,179
|
|
|
—
|
|
|
—
|
|
|
86,283
|
|
|
Purchased HELOC loans
|
|
5,959
|
|
|
—
|
|
|
301
|
|
|
—
|
|
|
—
|
|
|
6,260
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
|
25,616
|
|
|
—
|
|
|
235
|
|
|
—
|
|
|
—
|
|
|
25,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
|
11,986
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
12,056
|
|
|
Originated loans before SBA PPP loans
|
|
819,303
|
|
|
2,258
|
|
|
15,462
|
|
|
—
|
|
|
—
|
|
|
837,023
|
|
|
SBA PPP loans
|
|
123,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,702
|
|
|
Total originated loans
|
|
$
|
943,005
|
|
|
$
|
2,258
|
|
|
$
|
15,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
960,725
|
|
|
Acquired Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
148,303
|
|
|
$
|
4,274
|
|
|
$
|
3,985
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156,562
|
|
|
Agricultural real estate
|
|
31,147
|
|
|
—
|
|
|
5,907
|
|
|
—
|
|
|
—
|
|
|
37,054
|
|
|
Multi-family real estate
|
|
9,273
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
—
|
|
|
9,421
|
|
|
Construction and land development
|
|
7,237
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
7,276
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
20,918
|
|
|
9
|
|
|
336
|
|
|
—
|
|
|
—
|
|
|
21,263
|
|
|
Agricultural operating
|
|
7,838
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
8,328
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
42,805
|
|
|
131
|
|
|
2,167
|
|
|
—
|
|
|
—
|
|
|
45,103
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
|
1,150
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
1,157
|
|
|
Total acquired loans
|
|
$
|
268,671
|
|
|
$
|
4,414
|
|
|
$
|
13,079
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
286,164
|
|
|
Total Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
497,785
|
|
|
$
|
4,817
|
|
|
$
|
5,073
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
507,675
|
|
|
Agricultural real estate
|
|
61,188
|
|
|
446
|
|
|
7,161
|
|
|
—
|
|
|
—
|
|
|
68,795
|
|
|
Multi-family real estate
|
|
121,696
|
|
|
308
|
|
|
148
|
|
|
—
|
|
|
—
|
|
|
122,152
|
|
|
Construction and land development
|
|
95,000
|
|
|
—
|
|
|
3,517
|
|
|
—
|
|
|
—
|
|
|
98,517
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
112,392
|
|
|
29
|
|
|
4,132
|
|
|
—
|
|
|
—
|
|
|
116,553
|
|
|
Agricultural operating
|
|
30,300
|
|
|
934
|
|
|
1,551
|
|
|
—
|
|
|
—
|
|
|
32,785
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
|
124,902
|
|
|
138
|
|
|
6,346
|
|
|
—
|
|
|
—
|
|
|
131,386
|
|
|
Purchased HELOC loans
|
|
5,959
|
|
|
—
|
|
|
301
|
|
|
—
|
|
|
—
|
|
|
6,260
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
|
25,616
|
|
|
—
|
|
|
235
|
|
|
—
|
|
|
—
|
|
|
25,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
|
13,136
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
13,213
|
|
|
Gross loans before SBA PPP loans
|
|
1,087,974
|
|
|
6,672
|
|
|
28,541
|
|
|
—
|
|
|
—
|
|
|
1,123,187
|
|
|
SBA PPP loans
|
|
123,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,702
|
|
|
Gross loans
|
|
$
|
1,211,676
|
|
|
$
|
6,672
|
|
|
$
|
28,541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,246,889
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned net deferred fees and costs and loans in process
|
|
|
|
|
|
|
|
|
|
|
|
(4,245)
|
|
|
Unamortized discount on acquired loans
|
|
|
|
|
|
|
|
|
|
|
|
(5,063)
|
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
(17,043)
|
|
|
Loans receivable, net
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,220,538
|
|
The following table summarizes SBA PPP loans at September 30, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 Originations
|
|
2021 Originations
|
|
Total
|
|
|
|
Balance
|
|
Net Deferred Fee Income
|
|
Balance
|
|
Net Deferred Fee Income
|
|
Balance
|
|
Net Deferred Fee Income
|
|
SBA PPP loans, December 31, 2020
|
|
$
|
123,702
|
|
|
$
|
2,991
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,702
|
|
|
$
|
2,991
|
|
|
2021 SBA PPP loan originations
|
|
—
|
|
|
—
|
|
|
47,467
|
|
|
1,770
|
|
|
47,467
|
|
|
1,770
|
|
|
Less: 2021 SBA PPP loan forgiveness and fee accretion
|
|
(52,238)
|
|
|
(1,706)
|
|
|
—
|
|
|
(44)
|
|
|
(52,238)
|
|
|
(1,750)
|
|
|
SBA PPP loans, March 31, 2021
|
|
71,464
|
|
|
1,285
|
|
|
47,467
|
|
|
1,726
|
|
|
118,931
|
|
|
3,011
|
|
|
2021 SBA PPP loan originations
|
|
—
|
|
|
—
|
|
|
8,323
|
|
|
1,715
|
|
|
8,323
|
|
|
1,715
|
|
|
Less: 2021 SBA PPP loan forgiveness and fee accretion
|
|
(50,057)
|
|
|
(977)
|
|
|
(2,272)
|
|
|
(332)
|
|
|
(52,329)
|
|
|
(1,309)
|
|
|
SBA PPP loans, June 30, 2021
|
|
21,407
|
|
|
308
|
|
|
53,518
|
|
|
$
|
3,109
|
|
|
74,925
|
|
|
3,417
|
|
|
2021 SBA PPP loan originations
|
|
—
|
|
|
—
|
|
|
64
|
|
|
9
|
|
|
64
|
|
|
9
|
|
|
Less: 2021 SBA PPP loan forgiveness and fee accretion
|
|
(18,286)
|
|
|
(279)
|
|
|
(25,402)
|
|
|
(1,599)
|
|
|
(43,688)
|
|
|
(1,878)
|
|
|
SBA PPP loans, September 30, 2021
|
|
$
|
3,121
|
|
|
$
|
29
|
|
|
$
|
28,180
|
|
|
$
|
1,519
|
|
|
$
|
31,301
|
|
|
$
|
1,548
|
|
Allowance for Loan Losses - The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL requires the exercise of significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of other qualitative factors such as current economic trends and conditions, all of which may be susceptible to significant change.
There are many factors affecting the ALL; some are quantitative, while others require qualitative judgment. The process for determining the ALL (which management believes adequately considers potential factors which result in probable credit losses), includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect the Company’s earnings or financial position in future periods. Allocations of the ALL may be made for specific loans but the entire ALL is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized.
As an integral part of their examination process, various regulatory agencies also review the Bank’s ALL. Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of our management based on information available to the regulators at the time of their examinations.
Changes in the ALL by loan type for the periods presented below were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate
|
|
C&I/Agricultural operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Unallocated
|
|
Total
|
|
Three months ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, July 1, 2021
|
$
|
10,890
|
|
|
$
|
2,182
|
|
|
$
|
771
|
|
|
$
|
362
|
|
|
$
|
855
|
|
|
$
|
15,060
|
|
|
Charge-offs
|
—
|
|
|
—
|
|
|
—
|
|
|
(12)
|
|
|
—
|
|
|
(12)
|
|
|
Recoveries
|
4
|
|
|
10
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
19
|
|
|
Provision
|
1,004
|
|
|
(218)
|
|
|
(185)
|
|
|
(80)
|
|
|
(83)
|
|
|
438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on originated loans
|
11,898
|
|
|
1,974
|
|
|
586
|
|
|
275
|
|
|
772
|
|
|
15,505
|
|
|
Purchased credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other acquired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, July 1, 2021
|
1,468
|
|
|
81
|
|
|
231
|
|
|
5
|
|
|
—
|
|
|
1,785
|
|
|
Charge-offs
|
—
|
|
|
—
|
|
|
—
|
|
|
(24)
|
|
|
—
|
|
|
(24)
|
|
|
Recoveries
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
Provision
|
(371)
|
|
|
(10)
|
|
|
(106)
|
|
|
49
|
|
|
—
|
|
|
(438)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on other acquired loans
|
1,097
|
|
|
74
|
|
|
126
|
|
|
30
|
|
|
—
|
|
|
1,327
|
|
|
Total allowance on acquired loans
|
1,097
|
|
|
74
|
|
|
126
|
|
|
30
|
|
|
—
|
|
|
1,327
|
|
|
Ending balance, September 30, 2021
|
$
|
12,995
|
|
|
$
|
2,048
|
|
|
$
|
712
|
|
|
$
|
305
|
|
|
$
|
772
|
|
|
$
|
16,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate
|
|
C&I/Agricultural operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Unallocated
|
|
Total
|
|
Nine months ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, January 1, 2021
|
$
|
10,271
|
|
|
$
|
2,112
|
|
|
$
|
1,041
|
|
|
$
|
489
|
|
|
$
|
906
|
|
|
$
|
14,819
|
|
|
Charge-offs
|
(51)
|
|
|
—
|
|
|
—
|
|
|
(49)
|
|
|
—
|
|
|
(100)
|
|
|
Recoveries
|
10
|
|
|
48
|
|
|
9
|
|
|
36
|
|
|
—
|
|
|
103
|
|
|
Provision
|
1,668
|
|
|
(186)
|
|
|
(464)
|
|
|
(201)
|
|
|
(134)
|
|
|
683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on originated loans
|
11,898
|
|
|
1,974
|
|
|
586
|
|
|
275
|
|
|
772
|
|
|
15,505
|
|
|
Purchased credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other acquired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, January 1, 2021
|
1,684
|
|
|
141
|
|
|
335
|
|
|
64
|
|
|
—
|
|
|
2,224
|
|
|
Charge-offs
|
(200)
|
|
|
(7)
|
|
|
—
|
|
|
(27)
|
|
|
—
|
|
|
(234)
|
|
|
Recoveries
|
—
|
|
|
13
|
|
|
3
|
|
|
4
|
|
|
—
|
|
|
20
|
|
|
Provision
|
(387)
|
|
|
(73)
|
|
|
(212)
|
|
|
(11)
|
|
|
—
|
|
|
(683)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on other acquired loans
|
1,097
|
|
|
74
|
|
|
126
|
|
|
30
|
|
|
—
|
|
|
1,327
|
|
|
Total allowance on acquired loans
|
1,097
|
|
|
74
|
|
|
126
|
|
|
30
|
|
|
—
|
|
|
1,327
|
|
|
Ending balance, September 30, 2021
|
$
|
12,995
|
|
|
$
|
2,048
|
|
|
$
|
712
|
|
|
$
|
305
|
|
|
$
|
772
|
|
|
$
|
16,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses at September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of allowance for loan losses arising from loans individually evaluated for impairment
|
$
|
1,033
|
|
|
$
|
271
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,363
|
|
|
Amount of allowance for loan losses arising from loans collectively evaluated for impairment
|
$
|
11,962
|
|
|
$
|
1,777
|
|
|
$
|
653
|
|
|
$
|
305
|
|
|
$
|
772
|
|
|
$
|
15,469
|
|
|
Loans Receivable as of September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Ending balance of originated loans
|
$
|
792,115
|
|
|
$
|
147,272
|
|
|
$
|
72,907
|
|
|
$
|
27,103
|
|
|
$
|
—
|
|
|
$
|
1,039,397
|
|
|
Ending balance of purchased credit-impaired loans
|
9,183
|
|
|
1,219
|
|
|
1,097
|
|
|
—
|
|
|
—
|
|
|
11,499
|
|
|
Ending balance of other acquired loans
|
155,220
|
|
|
19,876
|
|
|
29,698
|
|
|
516
|
|
|
—
|
|
|
205,310
|
|
|
Ending balance of loans
|
$
|
956,518
|
|
|
$
|
168,367
|
|
|
$
|
103,702
|
|
|
$
|
27,619
|
|
|
$
|
—
|
|
|
$
|
1,256,206
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
22,744
|
|
|
$
|
6,451
|
|
|
$
|
7,705
|
|
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
37,191
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
933,774
|
|
|
$
|
161,916
|
|
|
$
|
95,997
|
|
|
$
|
27,328
|
|
|
$
|
—
|
|
|
$
|
1,219,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate
|
|
C&I/Agricultural operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Unallocated
|
|
Total
|
|
Three months ended September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, July 1, 2020
|
$
|
8,297
|
|
|
$
|
1,778
|
|
|
$
|
980
|
|
|
$
|
480
|
|
|
$
|
574
|
|
|
$
|
12,109
|
|
|
Charge-offs
|
—
|
|
|
(103)
|
|
|
(4)
|
|
|
(10)
|
|
|
—
|
|
|
(117)
|
|
|
Recoveries
|
74
|
|
|
—
|
|
|
2
|
|
|
18
|
|
|
—
|
|
|
94
|
|
|
Provision
|
430
|
|
|
188
|
|
|
(15)
|
|
|
64
|
|
|
56
|
|
|
723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on originated loans
|
8,801
|
|
|
1,863
|
|
|
963
|
|
|
552
|
|
|
630
|
|
|
12,809
|
|
|
Purchased credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other acquired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, July 1, 2020
|
746
|
|
|
334
|
|
|
112
|
|
|
72
|
|
|
—
|
|
|
1,264
|
|
|
Charge-offs
|
—
|
|
|
—
|
|
|
(47)
|
|
|
—
|
|
|
—
|
|
|
(47)
|
|
|
Recoveries
|
1
|
|
|
30
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
33
|
|
|
Provision
|
623
|
|
|
(58)
|
|
|
199
|
|
|
13
|
|
|
—
|
|
|
777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on other acquired loans
|
1,370
|
|
|
306
|
|
|
264
|
|
|
87
|
|
|
—
|
|
|
2,027
|
|
|
Total allowance on acquired loans
|
1,370
|
|
|
306
|
|
|
264
|
|
|
87
|
|
|
—
|
|
|
2,027
|
|
|
Ending balance, September 30, 2020
|
$
|
10,171
|
|
|
$
|
2,169
|
|
|
$
|
1,227
|
|
|
$
|
639
|
|
|
$
|
630
|
|
|
$
|
14,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate
|
|
C&I/Agricultural operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Unallocated
|
|
Total
|
|
Nine months ended September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, January 1, 2020
|
$
|
6,205
|
|
|
$
|
1,643
|
|
|
$
|
879
|
|
|
$
|
467
|
|
|
$
|
357
|
|
|
$
|
9,551
|
|
|
Charge-offs
|
—
|
|
|
(632)
|
|
|
(4)
|
|
|
(124)
|
|
|
—
|
|
|
(760)
|
|
|
Recoveries
|
74
|
|
|
—
|
|
|
7
|
|
|
55
|
|
|
—
|
|
|
136
|
|
|
Provision
|
2,522
|
|
|
852
|
|
|
81
|
|
|
154
|
|
|
273
|
|
|
3,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on originated loans
|
$
|
8,801
|
|
|
$
|
1,863
|
|
|
$
|
963
|
|
|
$
|
552
|
|
|
$
|
630
|
|
|
$
|
12,809
|
|
|
Purchased credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other acquired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance, January 1, 2020
|
526
|
|
|
27
|
|
|
163
|
|
|
53
|
|
|
—
|
|
|
769
|
|
|
Charge-offs
|
—
|
|
|
(159)
|
|
|
(74)
|
|
|
(2)
|
|
|
—
|
|
|
(235)
|
|
|
Recoveries
|
77
|
|
|
30
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
125
|
|
|
Provision
|
767
|
|
|
408
|
|
|
161
|
|
|
32
|
|
|
—
|
|
|
1,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance on other acquired loans
|
1,370
|
|
|
306
|
|
|
264
|
|
|
87
|
|
|
—
|
|
|
2,027
|
|
|
Total allowance on acquired loans
|
1,370
|
|
|
306
|
|
|
264
|
|
|
87
|
|
|
—
|
|
|
2,027
|
|
|
Ending balance, September 30, 2020
|
$
|
10,171
|
|
|
$
|
2,169
|
|
|
$
|
1,227
|
|
|
$
|
639
|
|
|
$
|
630
|
|
|
$
|
14,836
|
|
|
Allowance for Loan Losses at September 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of allowance for loan losses arising from loans individually evaluated for impairment
|
$
|
772
|
|
|
$
|
159
|
|
|
$
|
249
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,181
|
|
|
Amount of allowance for loan losses arising from loans collectively evaluated for impairment
|
$
|
9,399
|
|
|
$
|
2,010
|
|
|
$
|
978
|
|
|
$
|
638
|
|
|
$
|
630
|
|
|
$
|
13,655
|
|
|
Loans Receivable as of September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance of originated loans
|
$
|
535,698
|
|
|
$
|
243,449
|
|
|
$
|
96,647
|
|
|
$
|
41,756
|
|
|
$
|
—
|
|
|
$
|
917,550
|
|
|
Ending balance of purchased credit-impaired loans
|
21,453
|
|
|
2,077
|
|
|
1,553
|
|
|
—
|
|
|
—
|
|
|
25,083
|
|
|
Ending balance of other acquired loans
|
215,671
|
|
|
31,970
|
|
|
50,201
|
|
|
1,409
|
|
|
—
|
|
|
299,251
|
|
|
Ending balance of loans
|
$
|
772,822
|
|
|
$
|
277,496
|
|
|
$
|
148,401
|
|
|
$
|
43,165
|
|
|
$
|
—
|
|
|
$
|
1,241,884
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
33,596
|
|
|
$
|
7,894
|
|
|
$
|
9,833
|
|
|
$
|
366
|
|
|
$
|
—
|
|
|
$
|
51,689
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
739,226
|
|
|
$
|
269,602
|
|
|
$
|
138,568
|
|
|
$
|
42,799
|
|
|
$
|
—
|
|
|
$
|
1,190,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate
|
|
C&I/Agricultural operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Unallocated
|
|
Total
|
|
Allowance for Loan Losses at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of allowance for loan losses arising from loans individually evaluated for impairment
|
$
|
698
|
|
|
$
|
190
|
|
|
$
|
226
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,115
|
|
|
Amount of allowance for loan losses arising from loans collectively evaluated for impairment
|
$
|
11,257
|
|
|
$
|
2,063
|
|
|
$
|
1,150
|
|
|
$
|
552
|
|
|
$
|
906
|
|
|
$
|
15,928
|
|
|
Loans Receivable as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance of originated loans
|
$
|
586,826
|
|
|
$
|
243,449
|
|
|
$
|
92,543
|
|
|
$
|
37,907
|
|
|
$
|
—
|
|
|
$
|
960,725
|
|
|
Ending balance of purchased credit-impaired loans
|
15,100
|
|
|
1,534
|
|
|
1,312
|
|
|
—
|
|
|
—
|
|
|
17,946
|
|
|
Ending balance of other acquired loans
|
195,213
|
|
|
28,057
|
|
|
43,791
|
|
|
1,157
|
|
|
—
|
|
|
268,218
|
|
|
Ending balance of loans
|
$
|
797,139
|
|
|
$
|
273,040
|
|
|
$
|
137,646
|
|
|
$
|
39,064
|
|
|
$
|
—
|
|
|
$
|
1,246,889
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
26,303
|
|
|
$
|
7,115
|
|
|
$
|
9,621
|
|
|
$
|
358
|
|
|
$
|
—
|
|
|
$
|
43,397
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
770,836
|
|
|
$
|
265,925
|
|
|
$
|
128,025
|
|
|
$
|
38,706
|
|
|
$
|
—
|
|
|
$
|
1,203,492
|
|
Loans receivable by loan type as of the end of the periods shown below were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural Real Estate Loans
|
|
C&I/Agricultural Operating
|
|
Residential Mortgage
|
|
Consumer Installment
|
|
Totals
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
September 30, 2021
|
|
December 31, 2020
|
|
September 30, 2021
|
|
December 31, 2020
|
|
September 30, 2021
|
|
December 31, 2020
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Performing loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDR loans
|
$
|
4,711
|
|
|
$
|
4,695
|
|
|
$
|
3,685
|
|
|
$
|
3,836
|
|
|
$
|
2,883
|
|
|
$
|
3,142
|
|
|
$
|
44
|
|
|
$
|
49
|
|
|
$
|
11,323
|
|
|
$
|
11,722
|
|
|
Performing loans other
|
942,813
|
|
|
786,533
|
|
|
163,308
|
|
|
266,975
|
|
|
99,147
|
|
|
131,470
|
|
|
27,484
|
|
|
38,856
|
|
|
1,232,752
|
|
|
1,223,834
|
|
|
Total performing loans
|
947,524
|
|
|
791,228
|
|
|
166,993
|
|
|
270,811
|
|
|
102,030
|
|
|
134,612
|
|
|
27,528
|
|
|
38,905
|
|
|
1,244,075
|
|
|
1,235,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming TDR loans
|
3,337
|
|
|
4,691
|
|
|
600
|
|
|
1,287
|
|
|
426
|
|
|
777
|
|
|
3
|
|
|
—
|
|
|
4,366
|
|
|
6,755
|
|
|
Nonperforming loans other
|
5,657
|
|
|
1,220
|
|
|
774
|
|
|
942
|
|
|
1,246
|
|
|
2,257
|
|
|
88
|
|
|
159
|
|
|
7,765
|
|
|
4,578
|
|
|
Total nonperforming loans
|
8,994
|
|
|
5,911
|
|
|
1,374
|
|
|
2,229
|
|
|
1,672
|
|
|
3,034
|
|
|
91
|
|
|
159
|
|
|
12,131
|
|
|
11,333
|
|
|
Total loans
|
$
|
956,518
|
|
|
$
|
797,139
|
|
|
$
|
168,367
|
|
|
$
|
273,040
|
|
|
$
|
103,702
|
|
|
$
|
137,646
|
|
|
$
|
27,619
|
|
|
$
|
39,064
|
|
|
$
|
1,256,206
|
|
|
$
|
1,246,889
|
|
(1)Nonperforming loans are either 90+ days past due or nonaccrual.
As of September 30, 2021 the Company had $320,105 in unused commitments, compared to $247,324 in unused commitments as of December 31, 2020.
An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of September 30, 2021 and December 31, 2020, respectively, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59 Days Past Due and Accruing
|
|
60-89 Days Past Due and Accruing
|
|
Greater Than 89 Days Past Due and Accruing
|
|
Total
Past Due and Accruing
|
|
Nonaccrual Loans
|
|
Total Past Due Accruing and Nonaccrual Loans
|
|
Current
|
|
Total
Loans
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
5,613
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,613
|
|
|
$
|
872
|
|
|
$
|
6,485
|
|
|
$
|
631,839
|
|
|
$
|
638,324
|
|
|
Agricultural real estate
|
345
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
3,567
|
|
|
3,912
|
|
|
72,722
|
|
|
76,634
|
|
|
Multi-family real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156,022
|
|
|
156,022
|
|
|
Construction and land development
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
4,555
|
|
|
4,603
|
|
|
80,935
|
|
|
85,538
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
311
|
|
|
332
|
|
|
106,803
|
|
|
107,135
|
|
|
C&I SBA PPP loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,301
|
|
|
31,301
|
|
|
Agricultural operating
|
199
|
|
|
—
|
|
|
—
|
|
|
199
|
|
|
1,063
|
|
|
1,262
|
|
|
28,669
|
|
|
29,931
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
2,085
|
|
|
782
|
|
|
409
|
|
|
3,276
|
|
|
1,098
|
|
|
4,374
|
|
|
95,407
|
|
|
99,781
|
|
|
Purchased HELOC loans
|
232
|
|
|
—
|
|
|
—
|
|
|
232
|
|
|
165
|
|
|
397
|
|
|
3,524
|
|
|
3,921
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
105
|
|
|
1
|
|
|
14
|
|
|
120
|
|
|
51
|
|
|
171
|
|
|
17,518
|
|
|
17,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
37
|
|
|
4
|
|
|
2
|
|
|
43
|
|
|
24
|
|
|
67
|
|
|
9,863
|
|
|
9,930
|
|
|
Total
|
$
|
8,685
|
|
|
$
|
787
|
|
|
$
|
425
|
|
|
$
|
9,897
|
|
|
$
|
11,706
|
|
|
$
|
21,603
|
|
|
$
|
1,234,603
|
|
|
$
|
1,256,206
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
9,568
|
|
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
10,035
|
|
|
$
|
679
|
|
|
$
|
10,714
|
|
|
$
|
496,961
|
|
|
$
|
507,675
|
|
|
Agricultural real estate
|
411
|
|
|
48
|
|
|
—
|
|
|
459
|
|
|
5,084
|
|
|
5,543
|
|
|
63,252
|
|
|
68,795
|
|
|
Multi-family real estate
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
148
|
|
|
456
|
|
|
121,696
|
|
|
122,152
|
|
|
Construction and land development
|
3,898
|
|
|
—
|
|
|
—
|
|
|
3,898
|
|
|
—
|
|
|
3,898
|
|
|
94,619
|
|
|
98,517
|
|
|
C&I/Agricultural operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
436
|
|
|
491
|
|
|
—
|
|
|
927
|
|
|
357
|
|
|
1,284
|
|
|
115,269
|
|
|
116,553
|
|
|
SBA PPP loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,702
|
|
|
123,702
|
|
|
Agricultural operating
|
1,499
|
|
|
200
|
|
|
—
|
|
|
1,699
|
|
|
1,872
|
|
|
3,571
|
|
|
29,214
|
|
|
32,785
|
|
|
Residential mortgage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
2,238
|
|
|
372
|
|
|
516
|
|
|
3,126
|
|
|
2,217
|
|
|
5,343
|
|
|
126,043
|
|
|
131,386
|
|
|
Purchased HELOC loans
|
338
|
|
|
94
|
|
|
67
|
|
|
499
|
|
|
234
|
|
|
733
|
|
|
5,527
|
|
|
6,260
|
|
|
Consumer installment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated indirect paper
|
90
|
|
|
37
|
|
|
—
|
|
|
127
|
|
|
133
|
|
|
260
|
|
|
25,591
|
|
|
25,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Consumer
|
100
|
|
|
14
|
|
|
3
|
|
|
117
|
|
|
23
|
|
|
140
|
|
|
13,073
|
|
|
13,213
|
|
|
Total
|
$
|
18,886
|
|
|
$
|
1,723
|
|
|
$
|
586
|
|
|
$
|
21,195
|
|
|
$
|
10,747
|
|
|
$
|
31,942
|
|
|
$
|
1,214,947
|
|
|
$
|
1,246,889
|
|
At September 30, 2021, the Company individually evaluated loans for impairment with a recorded investment of $37,191, consisting of (1) $11,499 purchased credit impaired (“PCI”) loans, with a carrying amount of $10,813; (2) $13,198 TDR loans, net of TDR PCI loans; and (3) $12,494 of substandard non-TDR, non-PCI loans. The $37,191 total of loans individually evaluated for impairment includes $11,323 of performing TDR loans. At December 31, 2020, the Company individually evaluated loans for impairment with a recorded investment of $43,397, consisting of (1) $17,946 PCI loans, with a carrying amount of $16,859; (2) $15,634 TDR loans, net of TDR PCI loans; and (3) $9,817 of substandard non-TDR, non-PCI loans. The $43,397 total of loans individually evaluated for impairment includes $11,722 of performing TDR loans. A loan is identified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis.
A summary of the Company’s loans individually evaluated for impairment as of September 30, 2021, December 31, 2020 and September 30, 2020 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With No Related Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
16,820
|
|
|
$
|
16,820
|
|
|
$
|
—
|
|
|
$
|
19,618
|
|
|
$
|
172
|
|
|
$
|
20,417
|
|
|
$
|
663
|
|
|
C&I/Agricultural operating
|
3,451
|
|
|
3,451
|
|
|
—
|
|
|
3,484
|
|
|
29
|
|
|
4,893
|
|
|
119
|
|
|
Residential mortgage
|
7,291
|
|
|
7,291
|
|
|
—
|
|
|
7,498
|
|
|
79
|
|
|
7,917
|
|
|
240
|
|
|
Consumer installment
|
291
|
|
|
291
|
|
|
—
|
|
|
284
|
|
|
3
|
|
|
324
|
|
|
9
|
|
|
Total
|
$
|
27,853
|
|
|
$
|
27,853
|
|
|
$
|
—
|
|
|
$
|
30,884
|
|
|
$
|
283
|
|
|
$
|
33,551
|
|
|
$
|
1,031
|
|
|
With An Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
5,924
|
|
|
$
|
5,924
|
|
|
$
|
1,033
|
|
|
$
|
3,558
|
|
|
$
|
—
|
|
|
$
|
4,107
|
|
|
$
|
62
|
|
|
C&I/Agricultural operating
|
3,000
|
|
|
3,000
|
|
|
271
|
|
|
3,041
|
|
|
41
|
|
|
1,891
|
|
|
82
|
|
|
Residential mortgage
|
414
|
|
|
414
|
|
|
59
|
|
|
547
|
|
|
2
|
|
|
747
|
|
|
17
|
|
|
Consumer installment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Total
|
$
|
9,338
|
|
|
$
|
9,338
|
|
|
$
|
1,363
|
|
|
$
|
7,146
|
|
|
$
|
43
|
|
|
$
|
6,746
|
|
|
$
|
161
|
|
|
September 30, 2021 Totals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
22,744
|
|
|
$
|
22,744
|
|
|
$
|
1,033
|
|
|
$
|
23,176
|
|
|
$
|
172
|
|
|
$
|
24,524
|
|
|
$
|
725
|
|
|
C&I/Agricultural operating
|
6,451
|
|
|
6,451
|
|
|
271
|
|
|
6,525
|
|
|
70
|
|
|
6,784
|
|
|
201
|
|
|
Residential mortgage
|
7,705
|
|
|
7,705
|
|
|
59
|
|
|
8,045
|
|
|
81
|
|
|
8,664
|
|
|
257
|
|
|
Consumer installment
|
291
|
|
|
291
|
|
|
—
|
|
|
284
|
|
|
3
|
|
|
325
|
|
|
9
|
|
|
Total
|
$
|
37,191
|
|
|
$
|
37,191
|
|
|
$
|
1,363
|
|
|
$
|
38,030
|
|
|
$
|
326
|
|
|
$
|
40,297
|
|
|
$
|
1,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
With No Related Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
24,013
|
|
|
$
|
24,013
|
|
|
$
|
—
|
|
|
$
|
32,264
|
|
|
$
|
1,894
|
|
|
C&I/Agricultural operating
|
6,334
|
|
|
6,334
|
|
|
—
|
|
|
7,906
|
|
|
284
|
|
|
Residential mortgage
|
8,542
|
|
|
8,542
|
|
|
—
|
|
|
8,619
|
|
|
450
|
|
|
Consumer installment
|
356
|
|
|
356
|
|
|
—
|
|
|
368
|
|
|
30
|
|
|
Total
|
$
|
39,245
|
|
|
$
|
39,245
|
|
|
$
|
—
|
|
|
$
|
49,157
|
|
|
$
|
2,658
|
|
|
With An Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
2,290
|
|
|
$
|
2,290
|
|
|
$
|
698
|
|
|
$
|
2,217
|
|
|
$
|
100
|
|
|
C&I/Agricultural operating
|
781
|
|
|
781
|
|
|
190
|
|
|
636
|
|
|
22
|
|
|
Residential mortgage
|
1,079
|
|
|
1,079
|
|
|
226
|
|
|
1,255
|
|
|
54
|
|
|
Consumer installment
|
2
|
|
|
2
|
|
|
1
|
|
|
35
|
|
|
1
|
|
|
Total
|
$
|
4,152
|
|
|
$
|
4,152
|
|
|
$
|
1,115
|
|
|
$
|
4,143
|
|
|
$
|
177
|
|
|
December 31, 2020 Totals
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
26,303
|
|
|
$
|
26,303
|
|
|
$
|
698
|
|
|
$
|
34,481
|
|
|
$
|
1,994
|
|
|
C&I/Agricultural operating
|
7,115
|
|
|
7,115
|
|
|
190
|
|
|
8,542
|
|
|
306
|
|
|
Residential mortgage
|
9,621
|
|
|
9,621
|
|
|
226
|
|
|
9,874
|
|
|
504
|
|
|
Consumer installment
|
358
|
|
|
358
|
|
|
1
|
|
|
403
|
|
|
31
|
|
|
Total
|
$
|
43,397
|
|
|
$
|
43,397
|
|
|
$
|
1,115
|
|
|
$
|
53,300
|
|
|
$
|
2,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With No Related Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
30,419
|
|
|
$
|
30,419
|
|
|
$
|
—
|
|
|
$
|
30,344
|
|
|
$
|
454
|
|
|
$
|
35,467
|
|
|
$
|
1,374
|
|
|
C&I/Agricultural operating
|
6,860
|
|
|
6,860
|
|
|
—
|
|
|
7,070
|
|
|
35
|
|
|
8,169
|
|
|
188
|
|
|
Residential mortgage
|
8,715
|
|
|
8,715
|
|
|
—
|
|
|
8,668
|
|
|
107
|
|
|
8,705
|
|
|
356
|
|
|
Consumer installment
|
363
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|
6
|
|
|
371
|
|
|
23
|
|
|
Total
|
$
|
46,357
|
|
|
$
|
46,357
|
|
|
$
|
—
|
|
|
$
|
46,445
|
|
|
$
|
602
|
|
|
$
|
52,712
|
|
|
$
|
1,941
|
|
|
With An Allowance Recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
3,177
|
|
|
$
|
3,177
|
|
|
$
|
772
|
|
|
$
|
3,597
|
|
|
$
|
48
|
|
|
$
|
2,660
|
|
|
$
|
73
|
|
|
C&I/Agricultural operating
|
1,034
|
|
|
1,034
|
|
|
159
|
|
|
669
|
|
|
—
|
|
|
762
|
|
|
12
|
|
|
Residential mortgage
|
1,118
|
|
|
1,118
|
|
|
249
|
|
|
970
|
|
|
7
|
|
|
1,275
|
|
|
36
|
|
|
Consumer installment
|
3
|
|
|
3
|
|
|
1
|
|
|
9
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
Total
|
$
|
5,332
|
|
|
$
|
5,332
|
|
|
$
|
1,181
|
|
|
$
|
5,245
|
|
|
$
|
55
|
|
|
$
|
4,732
|
|
|
$
|
121
|
|
|
September 30, 2020 Totals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
$
|
33,596
|
|
|
$
|
33,596
|
|
|
$
|
772
|
|
|
$
|
33,941
|
|
|
$
|
502
|
|
|
$
|
38,127
|
|
|
$
|
1,447
|
|
|
C&I/Agricultural operating
|
7,894
|
|
|
7,894
|
|
|
159
|
|
|
7,739
|
|
|
35
|
|
|
8,931
|
|
|
200
|
|
|
Residential mortgage
|
9,833
|
|
|
9,833
|
|
|
249
|
|
|
9,638
|
|
|
114
|
|
|
9,980
|
|
|
392
|
|
|
Consumer installment
|
366
|
|
|
366
|
|
|
1
|
|
|
372
|
|
|
6
|
|
|
406
|
|
|
23
|
|
|
Total
|
$
|
51,689
|
|
|
$
|
51,689
|
|
|
$
|
1,181
|
|
|
$
|
51,690
|
|
|
$
|
657
|
|
|
$
|
57,444
|
|
|
$
|
2,062
|
|
Troubled Debt Restructuring – A TDR includes a loan modification where a borrower is experiencing financial difficulty, and the Bank grants a concession to that borrower that the Bank would not otherwise consider, except for the borrower’s financial difficulties. Concessions may include: extension of the loan’s term, renewals of existing balloon loans, reductions in interest rates and consolidating existing Bank loans at modified terms. A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status. There was one delinquent accruing TDR loan greater than 60 days past due with a recorded investment of $42 at September 30, 2021, compared to one such loan with a recorded investment of $20 at December 31, 2020.
Following is a summary of TDR loans by accrual status as of September 30, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Troubled debt restructure loans:
|
|
|
|
|
|
Accrual status
|
|
$
|
11,365
|
|
|
$
|
11,742
|
|
|
Non-accrual status
|
|
4,324
|
|
|
6,735
|
|
|
Total
|
|
$
|
15,689
|
|
|
$
|
18,477
|
|
There were two loan commitments totaling $160 meeting our TDR criteria as of September 30, 2021 and no loan commitments meeting our TDR criteria as of December 31, 2020. There were unused lines of credit totaling $51 and $15 meeting our TDR criteria as of September 30, 2021 and December 31, 2020, respectively.
The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three and nine months ended September 30, 2021 and September 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Contracts
|
|
Maturity Extension
|
|
Modified Payment
|
|
Modified Under- writing
|
|
Other
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Specific Reserve
|
|
Three months ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
C&I/Agricultural operating
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential mortgage
|
|
4
|
|
|
186
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
374
|
|
|
374
|
|
|
—
|
|
|
Consumer installment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Totals
|
|
4
|
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
188
|
|
|
$
|
—
|
|
|
$
|
374
|
|
|
$
|
374
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Contracts
|
|
Maturity Extension
|
|
Modified Payment
|
|
Modified Under- writing
|
|
Other
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Specific Reserve
|
|
Nine months ended September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
3
|
|
|
$
|
39
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
120
|
|
|
$
|
—
|
|
|
C&I/Agricultural operating
|
|
1
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
240
|
|
|
240
|
|
|
—
|
|
|
Residential mortgage
|
|
6
|
|
|
252
|
|
|
—
|
|
|
202
|
|
|
—
|
|
|
454
|
|
|
454
|
|
|
—
|
|
|
Consumer installment
|
|
2
|
|
|
6
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
Totals
|
|
12
|
|
|
$
|
297
|
|
|
$
|
81
|
|
|
$
|
460
|
|
|
$
|
—
|
|
|
$
|
838
|
|
|
$
|
838
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Contracts
|
|
Maturity Extension
|
|
Modified Payment
|
|
Modified Under- writing
|
|
Other
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Specific Reserve
|
|
Three months ended September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
3
|
|
|
$
|
3,550
|
|
|
$
|
—
|
|
|
$
|
276
|
|
|
$
|
—
|
|
|
$
|
3,826
|
|
|
$
|
3,826
|
|
|
$
|
—
|
|
|
C&I/Agricultural operating
|
|
2
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|
3,000
|
|
|
—
|
|
|
Residential mortgage
|
|
8
|
|
|
59
|
|
|
500
|
|
|
32
|
|
|
—
|
|
|
591
|
|
|
591
|
|
|
—
|
|
|
Consumer installment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Totals
|
|
13
|
|
|
$
|
6,609
|
|
|
$
|
500
|
|
|
$
|
308
|
|
|
$
|
—
|
|
|
$
|
7,417
|
|
|
$
|
7,417
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Contracts
|
|
Maturity Extension
|
|
Modified Payment
|
|
Modified Under- writing
|
|
Other
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Specific Reserve
|
|
Nine months ended September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
12
|
|
|
$
|
4,442
|
|
|
$
|
198
|
|
|
$
|
293
|
|
|
$
|
—
|
|
|
$
|
4,933
|
|
|
$
|
4,933
|
|
|
$
|
—
|
|
|
C&I/Agricultural operating
|
|
5
|
|
|
3,295
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
3,373
|
|
|
3,373
|
|
|
—
|
|
|
Residential mortgage
|
|
13
|
|
|
148
|
|
|
858
|
|
|
117
|
|
|
—
|
|
|
1,123
|
|
|
1,123
|
|
|
—
|
|
|
Consumer installment
|
|
2
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
Totals
|
|
32
|
|
|
$
|
7,888
|
|
|
$
|
1,134
|
|
|
$
|
414
|
|
|
$
|
—
|
|
|
$
|
9,436
|
|
|
$
|
9,436
|
|
|
$
|
—
|
|
A summary of loans by loan segment modified in a troubled debt restructuring as of September 30, 2021 and September 30, 2020, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Troubled debt restructurings:
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
23
|
|
|
$
|
8,048
|
|
|
34
|
|
|
$
|
10,517
|
|
|
C&I/Agricultural operating
|
|
8
|
|
|
4,285
|
|
|
17
|
|
|
5,358
|
|
|
Residential mortgage
|
|
45
|
|
|
3,308
|
|
|
50
|
|
|
3,850
|
|
|
Consumer installment
|
|
7
|
|
|
48
|
|
|
7
|
|
|
53
|
|
|
Total troubled debt restructurings
|
|
83
|
|
|
$
|
15,689
|
|
|
108
|
|
|
$
|
19,778
|
|
The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three and nine months ended September 30, 2021 and September 30, 2020, as well as the recorded investment in these restructured loans as of September 30, 2021 and September 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Troubled debt restructurings:
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
C&I/Agricultural operating
|
|
—
|
|
|
—
|
|
|
1
|
|
|
250
|
|
|
Residential mortgage
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Consumer installment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total troubled debt restructurings
|
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Number of
Modifications
|
|
Recorded
Investment
|
|
Troubled debt restructurings:
|
|
|
|
|
|
|
|
|
|
Commercial/Agricultural real estate
|
|
—
|
|
|
$
|
—
|
|
|
5
|
|
|
$
|
1,892
|
|
|
C&I/Agricultural operating
|
|
—
|
|
|
—
|
|
|
1
|
|
|
250
|
|
|
Residential mortgage
|
|
1
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
Consumer installment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total troubled debt restructurings
|
|
1
|
|
|
$
|
19
|
|
|
6
|
|
|
$
|
2,142
|
|
All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Accountable for under ASC 310-30 (Purchased Credit Impaired “PCI” loans)
|
|
|
|
|
|
Outstanding balance
|
|
$
|
11,499
|
|
|
$
|
17,946
|
|
|
Carrying amount
|
|
$
|
10,813
|
|
|
$
|
16,859
|
|
|
Accountable for under ASC 310-20 (non-PCI loans)
|
|
|
|
|
|
Outstanding balance
|
|
$
|
205,310
|
|
|
$
|
268,218
|
|
|
Carrying amount
|
|
$
|
201,930
|
|
|
$
|
264,242
|
|
|
Total acquired loans
|
|
|
|
|
|
Outstanding balance
|
|
$
|
216,809
|
|
|
$
|
286,164
|
|
|
Carrying amount
|
|
$
|
212,743
|
|
|
$
|
281,101
|
|
The following table provides changes in accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
Balance at beginning of period, January 1
|
|
$
|
3,976
|
|
|
$
|
3,201
|
|
|
Acquisitions
|
|
—
|
|
|
—
|
|
|
Reduction due to unexpected early payoffs
|
|
(102)
|
|
|
(99)
|
|
|
Reclass from non-accretable difference
|
|
298
|
|
|
2,704
|
|
|
Accretion
|
|
(792)
|
|
|
(756)
|
|
|
Balance at end of period, September 30
|
|
$
|
3,380
|
|
|
$
|
5,050
|
|
The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Balance at beginning of period
|
$
|
1,087
|
|
|
$
|
6,290
|
|
|
Additions to non-accretable difference for acquired purchased credit impaired loans
|
—
|
|
|
—
|
|
|
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans
|
(103)
|
|
|
(1,693)
|
|
|
Transfers from non-accretable difference to accretable discount
|
(298)
|
|
|
(2,754)
|
|
|
Non-accretable difference used to reduce loan principal balance
|
—
|
|
|
(505)
|
|
|
Non-accretable difference transferred to OREO due to loan foreclosure
|
—
|
|
|
(251)
|
|
|
Balance at end of period
|
$
|
686
|
|
|
$
|
1,087
|
|
NOTE 4 – MORTGAGE SERVICING RIGHTS
Mortgage servicing rights--Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid balances of these loans as of September 30, 2021 and December 31, 2020 were $557,148 and $553,655, respectively, and consisted of one to four family residential real estate loans. These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the Federal National Mortgage Association. Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $6,669 and $2,868 at September 30, 2021 and December 31, 2020, respectively.
Mortgage servicing rights activity for the three and nine month periods ended September 30, 2021 and September 30, 2020 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Three Months Ended
|
|
As of and for the Three Months Ended
|
|
As of and for the Nine Months Ended
|
|
As of and for the Nine Months Ended
|
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
September 30, 2021
|
|
September 30, 2020
|
|
Mortgage servicing rights:
|
|
|
|
|
|
|
|
|
|
Mortgage servicing rights, beginning of period
|
|
$
|
4,964
|
|
|
$
|
4,940
|
|
|
$
|
5,266
|
|
|
$
|
4,541
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in mortgage servicing rights resulting from transfers of financial assets
|
|
256
|
|
|
592
|
|
|
858
|
|
|
1,546
|
|
|
Amortization during the period
|
|
(418)
|
|
|
(353)
|
|
|
(1,322)
|
|
|
(908)
|
|
|
Mortgage servicing rights, end of period
|
|
4,802
|
|
|
5,179
|
|
|
4,802
|
|
|
5,179
|
|
|
Valuation allowance:
|
|
|
|
|
|
|
|
|
|
Valuation allowance, beginning of period
|
|
(1,102)
|
|
|
(1,431)
|
|
|
(2,014)
|
|
|
(259)
|
|
|
Additions
|
|
—
|
|
|
(250)
|
|
|
—
|
|
|
(1,422)
|
|
|
Recoveries
|
|
382
|
|
|
—
|
|
|
1,294
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance, end of period
|
|
(720)
|
|
|
(1,681)
|
|
|
(720)
|
|
|
(1,681)
|
|
|
Mortgage servicing rights, net
|
|
$
|
4,082
|
|
|
$
|
3,498
|
|
|
$
|
4,082
|
|
|
$
|
3,498
|
|
|
Fair value of mortgage servicing rights; end of period
|
|
$
|
4,161
|
|
|
$
|
3,509
|
|
|
$
|
4,161
|
|
|
$
|
3,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The current period change in valuation allowance is included in non-interest expense as mortgage servicing rights expense, net on the consolidated statement of operations. Servicing fees totaled $354 and $353 for the three months ended September 30, 2021 and September 30, 2020, respectively. Servicing fees totaled $1,058 and $1,033 for the nine months ended September 30, 2021 and September 30, 2020, respectively. Late fees and ancillary fees related to loan servicing are not material.
To estimate the fair value of the MSR asset, a valuation model is applied at the loan level to calculate the present value of the expected future cash flows. The valuation model incorporates various assumptions that would impact market participants’ estimations of future servicing income. Central to the valuation model is the discount rate. Fair value at September 30, 2021 was determined using discount rates ranging from 9% to 12%. Other assumptions utilized in the valuation model include, but are not limited to, prepayment speed, servicing costs, delinquencies, costs of advances, foreclosure costs, ancillary income, and income earned on float and escrow.
NOTE 5 – LEASES
We have operating leases for our corporate offices (1), bank branch offices (5), and an ATM location (1). Our leases have remaining lease terms ranging from approximately 1.50 to 6.75 years, some of which include options to extend the leases for up to 5 additional years. As of September 30, 2021, we have no additional lease commitments that have not yet commenced. The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
The components of total lease cost were as follows:
|
|
|
|
|
|
Operating lease cost
|
|
$
|
418
|
|
|
$
|
460
|
|
|
Variable lease cost
|
|
36
|
|
|
32
|
|
|
Total lease cost
|
|
$
|
454
|
|
|
$
|
492
|
|
|
|
|
|
|
|
|
The components of total lease income were as follows:
|
|
|
|
|
|
Operating lease income
|
|
$
|
27
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
Supplemental cash flow information related to leases was as follows:
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
Operating cash flows from operating leases
|
|
$
|
415
|
|
|
$
|
477
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
|
|
Operating leases
|
|
$
|
2
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
Supplemental balance sheet information related to leases was as follows:
|
|
|
|
|
|
Operating lease right-of-use assets
|
|
$
|
2,286
|
|
|
$
|
2,657
|
|
|
Operating lease liabilities
|
|
$
|
2,354
|
|
|
$
|
2,762
|
|
|
|
|
|
|
|
|
Weighted average remaining lease term in years; operating leases
|
|
5.76
|
|
6.32
|
|
Weighted average discount rate; operating leases
|
|
2.72
|
%
|
|
2.70
|
%
|
Cash obligations and receipts under lease contracts are as follows:
|
|
|
|
|
|
|
|
|
|
|
Fiscal years ending December 31,
|
Payments
|
Receipts
|
|
2021
|
$
|
139
|
|
$
|
9
|
|
|
2022
|
558
|
|
34
|
|
|
2023
|
506
|
|
27
|
|
|
2024
|
419
|
|
10
|
|
|
2025
|
403
|
|
|
|
Thereafter
|
826
|
|
|
|
Total
|
2,851
|
|
$
|
80
|
|
|
Less: effects of discounting
|
(497)
|
|
|
|
Lease liability recognized
|
$
|
2,354
|
|
|
NOTE 6 – DEPOSITS
The following is a summary of deposits by type at September 30, 2021 and December 31, 2020, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
|
Non-interest bearing demand deposits
|
|
$
|
280,611
|
|
|
$
|
238,348
|
|
|
|
|
Interest bearing demand deposits
|
|
381,315
|
|
|
301,764
|
|
|
|
|
Savings accounts
|
|
229,623
|
|
|
196,348
|
|
|
|
|
Money market accounts
|
|
291,242
|
|
|
245,549
|
|
|
|
|
Certificate accounts
|
|
225,524
|
|
|
313,247
|
|
|
|
|
Total deposits
|
|
$
|
1,408,315
|
|
|
$
|
1,295,256
|
|
|
|
|
Brokered deposits included above:
|
|
$
|
2,520
|
|
|
$
|
2,516
|
|
|
|
At September 30, 2021, the scheduled maturities of time deposits were as follows for the year ended, except December 31, 2021 which is the three months ended:
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021
|
|
$
|
47,190
|
|
|
December 31, 2022
|
|
155,717
|
|
|
December 31, 2023
|
|
13,333
|
|
|
December 31, 2024
|
|
6,205
|
|
|
December 31, 2025
|
|
1,894
|
|
|
After December 31, 2025
|
|
1,185
|
|
|
Total
|
|
$
|
225,524
|
|
Time deposits of $250 or more were $24,741 and $46,660 at September 30, 2021 and December 31, 2020, respectively.
NOTE 7 – FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS
A summary of Federal Home Loan Bank advances and other borrowings at September 30, 2021 and December 31, 2020 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
|
Stated Maturity
|
|
Amount
|
|
Range of Stated Rates
|
|
Amount
|
|
Range of Stated Rates
|
|
Federal Home Loan Bank advances (1), (2), (3), (4)
|
|
2021
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
$
|
8,000
|
|
|
0.00
|
%
|
|
2.16
|
%
|
|
|
|
2022
|
|
11,000
|
|
|
2.45
|
%
|
|
2.45
|
%
|
|
15,000
|
|
|
2.34
|
%
|
|
2.45
|
%
|
|
|
|
2023
|
|
20,000
|
|
|
1.43
|
%
|
|
1.44
|
%
|
|
20,000
|
|
|
1.43
|
%
|
|
1.44
|
%
|
|
|
|
2024
|
|
20,530
|
|
|
0.00
|
%
|
|
1.45
|
%
|
|
20,530
|
|
|
0.00
|
%
|
|
1.45
|
%
|
|
|
|
2025
|
|
5,000
|
|
|
1.45
|
%
|
|
1.45
|
%
|
|
5,000
|
|
|
1.45
|
%
|
|
1.45
|
%
|
|
|
|
2029
|
|
42,500
|
|
|
1.00
|
%
|
|
1.13
|
%
|
|
42,500
|
|
|
1.00
|
%
|
|
1.13
|
%
|
|
|
|
2030
|
|
12,500
|
|
|
0.52
|
%
|
|
0.86
|
%
|
|
12,500
|
|
|
0.52
|
%
|
|
0.86
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
111,530
|
|
|
|
|
|
|
123,530
|
|
|
|
|
|
|
Unamortized discount on acquired notes
|
|
|
|
(18)
|
|
|
|
|
|
|
(32)
|
|
|
|
|
|
|
Federal Home Loan Bank advances, net
|
|
|
|
$
|
111,512
|
|
|
|
|
|
|
$
|
123,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Notes (5)
|
|
2031
|
|
$
|
28,856
|
|
|
3.50
|
%
|
|
3.50
|
%
|
|
$
|
28,856
|
|
|
3.25
|
%
|
|
3.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Notes (6)
|
|
2027
|
|
$
|
15,000
|
|
|
6.75
|
%
|
|
6.75
|
%
|
|
$
|
15,000
|
|
|
6.75
|
%
|
|
6.75
|
%
|
|
|
|
2030
|
|
15,000
|
|
|
6.00
|
%
|
|
6.00
|
%
|
|
15,000
|
|
|
6.00
|
%
|
|
6.00
|
%
|
|
|
|
|
|
$
|
30,000
|
|
|
|
|
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized debt issuance costs
|
|
|
|
$
|
(456)
|
|
|
|
|
|
|
$
|
(528)
|
|
|
|
|
|
|
Total other borrowings
|
|
|
|
$
|
58,400
|
|
|
|
|
|
|
$
|
58,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
|
$
|
169,912
|
|
|
|
|
|
|
$
|
181,826
|
|
|
|
|
|
(1) The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $782,715 and $723,862 at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $162,875 compared to $118,391 as of December 31, 2020.
(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $123,530 and $162,530, during the nine months ended September 30, 2021 and the twelve months ended December 31, 2020, respectively.
(3) The weighted-average interest rates on FHLB borrowings maturing within twelve months as of September 30, 2021 and December 31, 2020 were 2.45% and 1.02%, respectively.
(4) FHLB term notes totaling $55,000, with various maturity dates in 2029 and 2030, can be called or replaced by the FHLB on a quarterly basis.
(5) Senior notes, entered into by the Company in June 2019 consist of the following:
(a) A term note, which was subsequently refinanced in October 2020, requiring quarterly interest-only payments through June 2022, and quarterly principal and interest payments thereafter. Interest is variable, based on US Prime rate with a floor rate of 3.25%.
(b) A $5,000 line of credit, maturing in August 2022, that remains undrawn upon.
(6) Subordinated notes resulted from the following:
(a) The Company’s private sale in August 2017, which bears a fixed interest rate of 6.75% for five years. In August 2022, they convert to a three-month LIBOR plus 4.90% rate, and the interest rate will reset quarterly thereafter. Interest-only payments are due quarterly.
(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00% for five years. In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.
Federal Home Loan Bank Letters of Credit
The Bank has an irrevocable Standby Letter of Credit Master Reimbursement Agreement with the Federal Home Loan Bank. This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest bearing deposit balances. These balances were $180,250 and $179,400 at September 30, 2021 and December 31, 2020, respectively.
Federal Reserve Bank Paycheck Protection Program Liquidity Facility (“FRB PPPLF”) Program
The Bank has originated Small Business Association’s Paycheck Protection Program (“SBA PPP”) loans and has complied with the requirements to pledge these loans to the FRB PPPLF program which provides 100% funding for SBA PPP loans upon request This FRB PPPLF program expired on July 30, 2021. The Bank has no outstanding loan balances under this facility at September 30, 2021 and December 31, 2020. Maximum month-end borrowed amounts outstanding under this agreement were $0 and $25,136, during the nine months ended September 30, 2021 and the twelve months ended December 31, 2020, respectively. In July 2021, the Bank pledged these SBA PPP loans to the FHLB.
NOTE 8 - CAPITAL MATTERS
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Although these terms are not used to represent overall financial condition, if adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2021, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.
The Bank’s Tier 1 (leverage) and risk-based capital ratios at September 30, 2021 and December 31, 2020, respectively, are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
For Capital Adequacy
Purposes
|
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
|
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
|
|
Ratio
|
|
Amount
|
|
|
|
Ratio
|
|
As of September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital (to risk weighted assets)
|
|
$
|
181,257
|
|
|
13.6
|
%
|
|
$
|
106,602
|
|
|
> =
|
|
8.0
|
%
|
|
$
|
133,252
|
|
|
> =
|
|
10.0
|
%
|
|
Tier 1 capital (to risk weighted assets)
|
|
164,598
|
|
|
12.4
|
%
|
|
$
|
79,951
|
|
|
> =
|
|
6.0
|
%
|
10
|
106,602
|
|
|
> =
|
|
8.0
|
%
|
|
Common equity tier 1 capital (to risk weighted assets)
|
|
164,598
|
|
|
12.4
|
%
|
|
$
|
59,963
|
|
|
> =
|
|
4.5
|
%
|
|
86,614
|
|
|
> =
|
|
6.5
|
%
|
|
Tier 1 leverage ratio (to adjusted total assets)
|
|
164,598
|
|
|
9.6
|
%
|
|
68,273
|
|
|
> =
|
|
4.0
|
%
|
|
85,342
|
|
|
> =
|
|
5.0
|
%
|
|
As of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital (to risk weighted assets)
|
|
$
|
171,702
|
|
|
14.7
|
%
|
|
$
|
93,381
|
|
|
> =
|
|
8.0
|
%
|
|
$
|
116,726
|
|
|
> =
|
|
10.0
|
%
|
|
Tier 1 capital (to risk weighted assets)
|
|
157,081
|
|
|
13.5
|
%
|
|
70,035
|
|
|
> =
|
|
6.0
|
%
|
|
93,381
|
|
|
> =
|
|
8.0
|
%
|
|
Common equity tier 1 capital (to risk weighted assets)
|
|
157,081
|
|
|
13.5
|
%
|
|
52,527
|
|
|
> =
|
|
4.5
|
%
|
|
75,872
|
|
|
> =
|
|
6.5
|
%
|
|
Tier 1 leverage ratio (to adjusted total assets)
|
|
157,081
|
|
|
9.9
|
%
|
|
63,718
|
|
|
> =
|
|
4.0
|
%
|
|
79,647
|
|
|
> =
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s Tier 1 (leverage) and risk-based capital ratios at September 30, 2021 and December 31, 2020, respectively, are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
For Capital Adequacy
Purposes
|
|
|
|
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
|
|
Ratio
|
|
|
|
|
|
|
|
As of September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital (to risk weighted assets)
|
|
$
|
175,558
|
|
|
13.2
|
%
|
|
106,602
|
|
|
> =
|
|
8.0
|
%
|
|
|
|
|
|
|
|
Tier 1 capital (to risk weighted assets)
|
|
128,899
|
|
|
9.7
|
%
|
|
79,951
|
|
|
> =
|
|
6.0
|
%
|
|
|
|
|
|
|
|
Common equity tier 1 capital (to risk weighted assets)
|
|
128,899
|
|
|
9.7
|
%
|
|
59,963
|
|
|
> =
|
|
4.5
|
%
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (to adjusted total assets)
|
|
128,899
|
|
|
7.6
|
%
|
|
68,273
|
|
|
> =
|
|
4.0
|
%
|
|
|
|
|
|
|
|
As of December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital (to risk weighted assets)
|
|
$
|
166,703
|
|
|
14.3
|
%
|
|
$
|
93,381
|
|
|
> =
|
|
8.0
|
%
|
|
|
|
|
|
|
|
Tier 1 capital (to risk weighted assets)
|
|
122,082
|
|
|
10.5
|
%
|
|
70,035
|
|
|
> =
|
|
6.0
|
%
|
|
|
|
|
|
|
|
Common equity tier 1 capital (to risk weighted assets)
|
|
122,082
|
|
|
10.5
|
%
|
|
52,527
|
|
|
> =
|
|
4.5
|
%
|
|
|
|
|
|
|
|
Tier 1 leverage ratio (to adjusted total assets)
|
|
122,082
|
|
|
7.7
|
%
|
|
63,718
|
|
|
> =
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
NOTE 9 – STOCK-BASED COMPENSATION
On March 27, 2018, the stockholders of Citizens Community Bancorp, Inc. approved the 2018 Equity Incentive Plan. The aggregate number of shares of common stock reserved and available for issuance under the 2018 Equity Incentive Plan is 350,000 shares. As of September 30, 2021, 163,974 restricted shares had been granted under this plan. As of September 30, 2021, no stock options had been granted under this plan.
In February 2008, the Company’s stockholders approved the Company’s 2008 Equity Incentive Plan for a term of 10 years. Due to the plan’s expiration, no new awards can be granted under this plan. As of September 30, 2021, there are 900 awarded unvested restricted shares and 65,900 awarded unexercised options remaining from the plan. Restricted shares granted under the 2008 Equity Incentive Plan were awarded at no cost to the employee and vest pro rata over a two to five-year period from the grant date. Options granted to date under this plan vest pro rata over a five-year period from the grant date. Unexercised incentive stock options expire within 10 years of the grant date.
Net compensation expense related to restricted stock awards from these plans was $221 and $614 for the three and nine months ended September 30, 2021, compared to $165 and $462 for the three and nine months ended September 30, 2020.
Restricted Common Stock Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
|
Number of Shares
|
|
Weighted
Average
Grant Price
|
|
Number of Shares
|
|
Weighted
Average
Grant Price
|
|
Restricted Shares
|
|
|
|
|
|
|
|
|
|
Unvested and outstanding at beginning of year
|
|
57,242
|
|
|
$
|
12.23
|
|
|
43,457
|
|
|
$
|
12.76
|
|
|
Granted
|
|
64,399
|
|
|
10.78
|
|
|
45,507
|
|
|
11.79
|
|
|
Vested
|
|
(18,382)
|
|
|
12.51
|
|
|
(31,722)
|
|
|
12.32
|
|
|
Forfeited
|
|
(1,500)
|
|
|
10.78
|
|
|
—
|
|
|
—
|
|
|
Unvested and outstanding at end of year
|
|
101,759
|
|
|
$
|
11.29
|
|
|
57,242
|
|
|
$
|
12.23
|
|
The Company accounts for stock option-based employee compensation related to the Company’s 2008 Equity Incentive Plan and 2018 Equity Incentive Plan using the fair-value-based method. Accordingly, management records compensation expense based on the value of the award as measured on the grant date and then the Company recognizes that cost over the vesting period for the award. The compensation cost recognized for stock option-based employee compensation related to these plans for the three and nine month periods ended September 30, 2021 was $2 and $7, respectively. The compensation cost recognized for stock option-based employee compensation related to these plans for the three and nine month period ended September 30, 2020 was $3 and $11, respectively.
Common Stock Option Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term in Years
|
|
Aggregate
Intrinsic
Value
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
72,300
|
|
|
$
|
11.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
(5,800)
|
|
|
8.99
|
|
|
|
|
|
|
Forfeited or expired
|
|
(600)
|
|
|
13.76
|
|
|
|
|
|
|
Outstanding at end of period
|
|
65,900
|
|
|
$
|
11.20
|
|
|
4.86
|
|
|
|
Exercisable at end of period
|
|
59,900
|
|
|
$
|
10.95
|
|
|
4.75
|
|
$
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
78,100
|
|
|
$
|
11.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Forfeited or expired
|
|
(5,800)
|
|
|
11.95
|
|
|
|
|
|
|
Outstanding at end of year
|
|
72,300
|
|
|
$
|
11.05
|
|
|
5.49
|
|
|
|
Exercisable at end of year
|
|
54,100
|
|
|
$
|
10.82
|
|
|
5.37
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
Information related to the 2008 Equity Incentive Plan for the respective periods follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2021
|
|
Twelve months ended December 31, 2020
|
|
|
|
Intrinsic value of options exercised
|
|
$
|
28
|
|
|
$
|
—
|
|
|
|
|
Cash received from options exercised
|
|
$
|
52
|
|
|
$
|
—
|
|
|
|
|
Tax benefit realized from options exercised
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
NOTE 10 – FAIR VALUE ACCOUNTING
ASC Topic 820-10, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:
Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.
Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3- Significant unobservable inputs that reflect the Company’s assumptions about the factors that market participants would use in pricing an asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.
The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).
Assets Measured on a Recurring Basis
The following tables present the financial instruments measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
Quoted Prices in
Active Markets
for Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
U.S. government agency obligations
|
$
|
28,410
|
|
|
$
|
—
|
|
|
$
|
28,410
|
|
|
$
|
—
|
|
|
Obligations of states and political subdivisions
|
140
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
Mortgage-backed securities
|
120,802
|
|
|
—
|
|
|
120,802
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
41,218
|
|
|
—
|
|
|
41,218
|
|
|
—
|
|
|
Corporate asset-backed securities
|
34,615
|
|
|
—
|
|
|
34,615
|
|
|
—
|
|
|
Trust preferred securities
|
9,240
|
|
|
—
|
|
|
9,240
|
|
|
—
|
|
|
Total
|
$
|
234,425
|
|
|
$
|
—
|
|
|
$
|
234,425
|
|
|
$
|
—
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
U.S. government agency obligations
|
$
|
33,365
|
|
|
$
|
—
|
|
|
$
|
33,365
|
|
|
$
|
—
|
|
|
Obligations of states and political subdivisions
|
140
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
Mortgage-backed securities
|
40,991
|
|
|
—
|
|
|
40,991
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
17,462
|
|
|
—
|
|
|
17,462
|
|
|
—
|
|
|
Corporate asset backed securities
|
35,827
|
|
|
—
|
|
|
35,827
|
|
|
—
|
|
|
Trust preferred securities
|
16,448
|
|
|
—
|
|
|
16,448
|
|
|
—
|
|
|
Total
|
$
|
144,233
|
|
|
$
|
—
|
|
|
$
|
144,233
|
|
|
$
|
—
|
|
Assets Measured on Nonrecurring Basis
The following tables present the financial instruments measured at fair value on a nonrecurring basis as of September 30, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Value
|
|
Quoted Prices in
Active Markets
for Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
Foreclosed and repossessed assets, net
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Impaired loans with allocated allowances
|
7,976
|
|
|
—
|
|
|
—
|
|
|
7,976
|
|
|
Mortgage servicing rights
|
4,082
|
|
|
—
|
|
|
—
|
|
|
4,161
|
|
|
Total
|
$
|
12,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,141
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
Foreclosed and repossessed assets, net
|
$
|
197
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197
|
|
|
Impaired loans with allocated allowances
|
3,037
|
|
|
—
|
|
|
—
|
|
|
3,037
|
|
|
Mortgage servicing rights
|
3,252
|
|
|
—
|
|
|
—
|
|
|
3,285
|
|
|
Total
|
$
|
6,486
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,519
|
|
|
|
|
|
|
|
|
|
|
The fair value of impaired loans referenced above was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans.
The fair value of foreclosed and repossessed assets was determined by obtaining market price valuations from independent third parties wherever such quotes were available for other collateral owned. The Company utilized independent third party appraisals to support the Company’s estimates and judgments in determining fair value for other real estate owned.
The fair value of mortgage servicing rights was estimated using discounted cash flows based on current market rates and other factors.
The following table represents additional quantitative information about assets measured at fair value on a
recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at
September 30, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
Valuation Techniques (1)
|
|
Significant Unobservable Inputs (2)
|
|
Range
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
Foreclosed and repossessed assets, net
|
$
|
4
|
|
|
Appraisal value
|
|
Estimated costs to sell
|
|
10% - 15%
|
|
Impaired loans with allocated allowances
|
$
|
7,976
|
|
|
Appraisal value
|
|
Estimated costs to sell
|
|
10% - 15%
|
|
Mortgage servicing rights
|
$
|
4,161
|
|
|
Discounted cash flows
|
|
Discounted rates
|
|
9% - 12%
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
Foreclosed and repossessed assets, net
|
$
|
197
|
|
|
Appraisal value
|
|
Estimated costs to sell
|
|
10% - 15%
|
|
Impaired loans with allocated allowances
|
$
|
3,037
|
|
|
Appraisal value
|
|
Estimated costs to sell
|
|
10% - 15%
|
|
Mortgage servicing rights
|
$
|
3,285
|
|
|
Discounted cash flows
|
|
Discounted rates
|
|
9% - 12%
|
(1) Fair value is generally determined through independent third-party appraisals of the underlying
collateral, which generally includes various level 3 inputs which are not observable.
(2) The fair value basis of impaired loans and real estate owned may be adjusted to reflect management
estimates of disposal costs including, but not limited to, real estate brokerage commissions, legal fees,
and delinquent property taxes.
The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
Valuation Method Used
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Carrying
Amount
|
|
Estimated
Fair
Value
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
(Level I)
|
|
$
|
102,341
|
|
|
$
|
102,341
|
|
|
$
|
119,440
|
|
|
$
|
119,440
|
|
|
Other interest-bearing deposits
|
(Level II)
|
|
1,512
|
|
|
1,543
|
|
|
3,752
|
|
|
3,818
|
|
|
Securities available for sale “AFS”
|
(Level II)
|
|
234,425
|
|
|
234,425
|
|
|
144,233
|
|
|
144,233
|
|
|
Securities held to maturity “HTM”
|
(Level II)
|
|
67,739
|
|
|
65,867
|
|
|
43,551
|
|
|
43,784
|
|
|
Equity securities with readily determinable fair value
|
(Level I)
|
|
327
|
|
|
327
|
|
|
200
|
|
|
200
|
|
|
Other investments
|
(Level II)
|
|
14,965
|
|
|
14,965
|
|
|
14,948
|
|
|
14,948
|
|
|
Loans receivable, net
|
(Level III)
|
|
1,231,822
|
|
|
1,255,806
|
|
|
1,220,538
|
|
|
1,239,692
|
|
|
Loans held for sale
|
(Level II)
|
|
1,675
|
|
|
1,675
|
|
|
3,075
|
|
|
3,075
|
|
|
Mortgage servicing rights
|
(Level III)
|
|
4,082
|
|
|
4,161
|
|
|
3,252
|
|
|
3,285
|
|
|
Accrued interest receivable
|
(Level I)
|
|
4,882
|
|
|
4,882
|
|
|
5,652
|
|
|
5,652
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
(Level III)
|
|
$
|
1,408,315
|
|
|
$
|
1,409,779
|
|
|
$
|
1,295,256
|
|
|
$
|
1,292,104
|
|
|
FHLB advances
|
(Level II)
|
|
111,512
|
|
|
114,259
|
|
|
123,498
|
|
|
128,282
|
|
|
Other borrowings
|
(Level I)
|
|
58,400
|
|
|
58,400
|
|
|
58,328
|
|
|
58,328
|
|
|
Accrued interest payable
|
(Level I)
|
|
396
|
|
|
396
|
|
|
796
|
|
|
796
|
|
NOTE 11—EARNINGS PER SHARE
Earnings per share is based on the weighted average number of shares outstanding for the period. A reconciliation of the basic and diluted earnings per share is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(Share count in thousands)
|
|
September 30, 2021
|
|
September 30, 2020
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
4,997
|
|
|
$
|
3,480
|
|
|
$
|
15,209
|
|
|
$
|
9,155
|
|
|
Weighted average common shares outstanding
|
|
10,610
|
|
|
11,153
|
|
|
10,788
|
|
|
11,173
|
|
|
Basic earnings per share
|
|
$
|
0.47
|
|
|
$
|
0.31
|
|
|
$
|
1.41
|
|
|
$
|
0.82
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
4,997
|
|
|
$
|
3,480
|
|
|
$
|
15,209
|
|
|
$
|
9,155
|
|
|
Weighted average common shares outstanding
|
|
10,610
|
|
|
11,153
|
|
|
10,788
|
|
|
11,173
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Dilutive stock options outstanding
|
|
13
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
Average shares and dilutive potential common shares
|
|
10,623
|
|
|
11,153
|
|
|
10,798
|
|
|
11,173
|
|
|
Diluted earnings per share
|
|
$
|
0.47
|
|
|
$
|
0.31
|
|
|
$
|
1.41
|
|
|
$
|
0.82
|
|
|
Additional common stock option shares that have not been included due to their antidilutive effect
|
|
—
|
|
|
73,100
|
|
|
21,000
|
|
|
69,600
|
|
NOTE 12 – OTHER COMPREHENSIVE INCOME (LOSS)
The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
Before-Tax
Amount
|
|
Tax
Expense
|
|
Net-of-Tax
Amount
|
|
Before-Tax
Amount
|
|
Tax
Expense
|
|
Net-of-Tax
Amount
|
|
Unrealized (losses) gains on securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized (losses) gains arising during the period
|
$
|
(1,099)
|
|
|
$
|
302
|
|
|
$
|
(797)
|
|
|
$
|
1,220
|
|
|
$
|
(335)
|
|
|
$
|
885
|
|
|
Reclassification adjustment for gains included in net income
|
(42)
|
|
|
11
|
|
|
(31)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income
|
$
|
(1,141)
|
|
|
$
|
313
|
|
|
$
|
(828)
|
|
|
$
|
1,220
|
|
|
$
|
(335)
|
|
|
$
|
885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
September 30, 2021
|
|
September 30, 2020
|
|
|
Before-Tax
Amount
|
|
Tax
Expense
|
|
Net-of-Tax
Amount
|
|
Before-Tax
Amount
|
|
Tax
Expense
|
|
Net-of-Tax
Amount
|
|
Unrealized (losses) gains on securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized (losses) gains arising during the period
|
$
|
(278)
|
|
|
$
|
77
|
|
|
$
|
(201)
|
|
|
$
|
2,052
|
|
|
$
|
(564)
|
|
|
$
|
1,488
|
|
|
Reclassification adjustment for gains included in net income
|
(78)
|
|
|
21
|
|
|
(57)
|
|
|
(156)
|
|
|
43
|
|
|
(113)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income
|
$
|
(356)
|
|
|
$
|
98
|
|
|
$
|
(258)
|
|
|
$
|
1,896
|
|
|
$
|
(521)
|
|
|
$
|
1,375
|
|
The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2020 and the nine months ended September 30, 2021 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
Gains (Losses)
on
Securities
|
|
|
|
Other Accumulated
Comprehensive
Income (Loss), net of tax
|
|
Beginning Balance, January 1, 2020
|
$
|
(649)
|
|
|
|
|
$
|
(471)
|
|
|
Current year-to-date other comprehensive income
|
2,705
|
|
|
|
|
1,961
|
|
|
|
|
|
|
|
|
|
Ending balance, December 31, 2020
|
$
|
2,056
|
|
|
|
|
$
|
1,490
|
|
|
Current year-to-date other comprehensive loss
|
(356)
|
|
|
|
|
(258)
|
|
|
Ending balance, September 30, 2021
|
$
|
1,700
|
|
|
|
|
$
|
1,232
|
|
Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2021 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
|
|
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Three months ended September 30, 2021
|
|
Nine months ended September 30, 2021
|
(1)
|
Affected Line Item on the Statement of Operations
|
|
Unrealized gains and losses
|
|
|
|
|
|
|
|
Sale of securities
|
|
$
|
42
|
|
|
$
|
78
|
|
|
Net gains (losses) on investment securities
|
|
Tax Effect
|
|
(11)
|
|
|
(21)
|
|
|
Provision for income taxes
|
|
Total reclassifications for the period
|
|
$
|
31
|
|
|
$
|
57
|
|
|
Net income attributable to common stockholders
|
(1) Amounts in parentheses indicate decreases to income/loss.
Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2020 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
|
|
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Three months ended September 30, 2020
|
|
Nine months ended September 30, 2020
|
(1)
|
Affected Line Item on the Statement of Operations
|
|
Unrealized gains and losses
|
|
|
|
|
|
|
|
Sale of securities
|
|
$
|
—
|
|
|
$
|
156
|
|
|
Net gains (losses) on investment securities
|
|
Tax Effect
|
|
—
|
|
|
(43)
|
|
|
Provision for income taxes
|
|
Total reclassifications for the period
|
|
$
|
—
|
|
|
$
|
113
|
|
|
Net income attributable to common stockholders
|
(1) Amounts in parentheses indicate decreases to profit/loss.
