|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I. R. S. Employer Identification No.)
|
|
|
||
(Address of principal executive offices) |
(Zip code) |
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|
|
N/A
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
Emerging growth company
|
PART I
|
Page
|
||
4
|
|||
Item 1.
|
4
|
||
Item 1A.
|
8
|
||
Item 1B.
|
19
|
||
Item 1C.
|
19
|
||
Item 2.
|
20
|
||
Item 3.
|
20
|
||
Item 4.
|
20
|
||
PART II
|
|||
Item 5.
|
21
|
||
Item 6.
|
21
|
||
Item 7.
|
22
|
||
Item 7A.
|
51
|
||
Item 8.
|
53
|
||
Item 9.
|
99
|
||
Item 9A.
|
99
|
||
Item 9B.
|
100
|
||
Item 9C.
|
100
|
||
PART III
|
|||
Item 10.
|
101
|
||
Item 11.
|
114
|
||
Item 12.
|
122
|
||
Item 13.
|
124
|
||
Item 14.
|
124
|
||
PART IV
|
|||
Item 15.
|
125
|
||
Item 16.
|
125
|
||
128
|
|||
CERTIFICATIONS
|
|
ITEM 1. |
BUSINESS
|
Number
|
|||||
Full-time
|
132
|
||||
Part-time
|
4
|
||||
Temporary
|
4
|
||||
Women
|
91 or
|
65.0
|
%
|
||
Minorities
|
68 or
|
48.6
|
%
|
ITEM 1A. |
RISK FACTORS
|
• |
loan delinquencies, problem assets, and foreclosures may increase;
|
• |
the sale of foreclosed assets may slow;
|
• |
demand for our products and services may decline, possibly resulting in a decrease in our total loans or assets;
|
• |
collateral securing our outstanding loans could decline in value, exposing us to increased risk in our loans or reducing customers’ borrowing power;
|
• |
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and
|
• |
the amount of our low-cost or non-interest-bearing deposits may decrease and the composition of our deposits may be adversely affected.
|
ITEM 1B. |
UNRESOLVED STAFF COMMENTS
|
ITEM 1C. |
CYBERSECURITY
|
ITEM 2. |
PROPERTIES
|
ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
|
2023 Quarters
|
2022 Quarters
|
|||||||||||||||||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
First
|
|||||||||||||||||||||||||
Range of stock prices:
|
||||||||||||||||||||||||||||||||
High
|
$
|
17.55
|
$
|
14.18
|
$
|
12.98
|
$
|
15.17
|
$
|
14.98
|
$
|
14.95
|
$
|
14.31
|
$
|
15.90
|
||||||||||||||||
Low
|
11.85
|
12.21
|
10.46
|
12.16
|
13.91
|
13.52
|
13.36
|
13.40
|
||||||||||||||||||||||||
Cash Dividends Declared:
|
$
|
0.080
|
$
|
0.080
|
$
|
0.080
|
$
|
0.080
|
$
|
0.075
|
$
|
0.075
|
$
|
0.075
|
$
|
0.070
|
Plan Category
|
Number of securities to be
issued
upon exercise of outstanding
options, warrants and rights
|
Weighted-average exercise
price
of outstanding options,
warrants and rights
|
Number of securities
remaining available
for future issuance under
equity
compensation plans
(excluding securities
reflected in column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Plans approved by shareholders
|
530,850
|
$
|
10.08
|
302,919
|
||||||||
Plans not approved by shareholders
|
—
|
—
|
—
|
|||||||||
Total
|
530,850
|
$
|
10.08
|
302,919
|
ITEM 6. |
[Reserved]
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
• |
Net income of $7.3 million, or $0.81 per diluted share for the year ended December 31, 2023, compared to $13.4 million, or $1.51 per diluted share for the year ended December 31, 2022.
|
• |
Net interest income was $42.4 million for the year ended December 31, 2023, compared to $45.8 million for the year ended December 31, 2022.
|
• |
Net interest margin was 4.02% for 2023, compared to 4.21% for 2022.
|
• |
Total deposits were $852.9 million at December 31, 2023, compared to $875.1 million at December 31, 2022.
|
• |
Total demand deposits represented 64.0% of total deposits at December 31, 2023, compared to 73.7% at December 31, 2022.
|
• |
Total loans (including loans held for sale) were $967.5 million at December 31, 2023, compared to $955.3 million at December 31, 2022.
|
• |
Book value per common share increased to $13.10 at December 31, 2023, compared to $12.80 at December 31, 2022.
|
• |
Provision (credit) for credit losses was $(395) thousand for the year ended December 31, 2023, compared to $(195) thousand for the year ended December 31, 2022. Net loan loss recoveries during 2023 were $214 thousand compared to $556
thousand in 2022.
|
• |
The Bank’s Tier one leverage ratio was 10.88% at December 31, 2023 compared to 10.34% at December 31, 2022.
|
• |
Non-accrual loans were $4.0 million at December 31, 2023 compared to $211 thousand at December 31, 2022.
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(dollars in thousands, except per share amounts)
|
||||||||||||
Net income available to common stockholders
|
$
|
7,316
|
$
|
13,449
|
$
|
13,101
|
||||||
Basic earnings per share
|
0.83
|
1.54
|
1.53
|
|||||||||
Diluted earnings per share
|
0.81
|
1.51
|
1.50
|
|||||||||
Total assets
|
1,087,068
|
1,091,502
|
1,157,052
|
|||||||||
Gross loans (including loans held for sale)
|
967,472
|
955,342
|
892,083
|
|||||||||
Allowance for credit losses
|
12,451
|
10,765
|
10,404
|
|||||||||
Total deposits
|
852,938
|
875,084
|
950,131
|
|||||||||
Net interest margin
|
4.02
|
%
|
4.21
|
%
|
4.03
|
%
|
||||||
Return on average assets
|
0.68
|
%
|
1.20
|
%
|
1.21
|
%
|
||||||
Return on average common equity
|
6.37
|
%
|
12.48
|
%
|
13.68
|
%
|
||||||
Dividend payout ratio
|
38.55
|
%
|
19.13
|
%
|
17.66
|
%
|
||||||
Equity to assets ratio
|
10.68
|
%
|
10.32
|
%
|
8.76
|
%
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
( dollars in thousands)
|
||||||||||||
Non-accrual loans (net of guaranteed portion)
|
$
|
4,006
|
$
|
211
|
$
|
565
|
||||||
Non-accrual loans to total loans (including loans held for sale)
|
0.41
|
%
|
0.02
|
%
|
0.06
|
%
|
||||||
Allowance for credit losses to total loans held for investment
|
1.31
|
%
|
1.15
|
%
|
1.20
|
%
|
||||||
Allowance for credit losses to nonaccrual loans
|
311
|
%
|
5,102
|
%
|
1,841
|
%
|
||||||
Net (recoveries) charge-offs to average loans
|
(0.02
|
)%
|
(0.06
|
)%
|
(0.04
|
)%
|
Year Ended
December 31, |
Increase
|
Year Ended
December 31,
|
Increase
|
|||||||||||||||||||||
2023
|
2022
|
(Decrease)
|
2022
|
2021
|
(Decrease)
|
|||||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Consolidated Income Statement Data:
|
||||||||||||||||||||||||
Interest income
|
$
|
57,522
|
$
|
49,138
|
$
|
8,384
|
$
|
49,138
|
$
|
46,078
|
$
|
3,060
|
||||||||||||
Interest expense
|
15,115
|
3,328
|
11,787
|
3,328
|
3,704
|
(376
|
)
|
|||||||||||||||||
Net interest income
|
42,407
|
45,810
|
(3,403
|
)
|
45,810
|
42,374
|
3,436
|
|||||||||||||||||
Provision (credit) for credit losses
|
(395
|
)
|
(195
|
)
|
(200
|
)
|
(195
|
)
|
(181
|
)
|
(14
|
)
|
||||||||||||
Net interest income after provision (credit) for credit losses
|
42,802
|
46,005
|
(3,203
|
)
|
46,005
|
42,555
|
3,450
|
|||||||||||||||||
Non-interest income
|
3,753
|
3,978
|
(225
|
)
|
3,978
|
3,753
|
225
|
|||||||||||||||||
Non-interest expenses
|
35,745
|
31,272
|
4,473
|
31,272
|
27,995
|
3,277
|
||||||||||||||||||
Income before provision for income taxes
|
10,810
|
18,711
|
(7,901
|
)
|
18,711
|
18,313
|
398
|
|||||||||||||||||
Provision for income taxes
|
3,494
|
5,262
|
(1,768
|
)
|
5,262
|
5,212
|
50
|
|||||||||||||||||
Net income
|
$
|
7,316
|
$
|
13,449
|
$
|
(6,133
|
)
|
$
|
13,449
|
$
|
13,101
|
$
|
348
|
|||||||||||
Earnings per share - basic
|
$
|
0.83
|
$
|
1.54
|
$
|
(0.71
|
)
|
$
|
1.54
|
$
|
1.53
|
$
|
0.01
|
|||||||||||
Earnings per share - diluted
|
$
|
0.81
|
$
|
1.51
|
$
|
(0.70
|
)
|
$
|
1.51
|
$
|
1.50
|
$
|
0.01
|
December 31, 2023
|
December 31, 2022
|
December 31, 2021
|
|||||||||||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Cost
|
Average
Balance
|
Interest
|
Average
Yield/Cost
|
Average
Balance
|
Interest
|
Average
Yield/Cost
|
|||||||||||||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Interest-Earning Assets
|
|||||||||||||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
76,314
|
$
|
3,699
|
4.85
|
%
|
$
|
119,524
|
$
|
1,226
|
1.03
|
%
|
$
|
139,217
|
$
|
230
|
0.17
|
%
|
|||||||||||||||
Investment securities
|
24,265
|
1,267
|
5.22
|
%
|
47,949
|
1,255
|
2.62
|
%
|
27,011
|
725
|
2.68
|
%
|
|||||||||||||||||||||
Loans(1)
|
954,492
|
52,556
|
5.51
|
%
|
921,638
|
46,657
|
5.06
|
%
|
884,601
|
45,123
|
5.10
|
%
|
|||||||||||||||||||||
Total interest-earnings assets
|
1,055,071
|
57,522
|
5.45
|
%
|
1,089,111
|
49,138
|
4.51
|
%
|
1,050,829
|
46,078
|
4.38
|
%
|
|||||||||||||||||||||
Nonearning Assets
|
|||||||||||||||||||||||||||||||||
Cash and due from banks
|
1,959
|
2,169
|
2,149
|
||||||||||||||||||||||||||||||
Allowance for credit losses
|
(12,184
|
)
|
(10,906
|
)
|
(10,245
|
)
|
|||||||||||||||||||||||||||
Other assets
|
36,928
|
37,751
|
39,826
|
||||||||||||||||||||||||||||||
Total Assets
|
$
|
1,081,774
|
$
|
1,118,125
|
$
|
1,082,559
|
|||||||||||||||||||||||||||
Interest-Bearing Liabilities
|
|||||||||||||||||||||||||||||||||
Interest-bearing demand deposits
|
$
|
395,328
|
$
|
7,004
|
1.77
|
%
|
$
|
480,472
|
$
|
1,508
|
0.31
|
%
|
$
|
467,720
|
$
|
1,702
|
0.36
|
%
|
|||||||||||||||
Savings
|
19,133
|
53
|
0.28
|
%
|
24,317
|
60
|
0.25
|
%
|
20,749
|
76
|
0.37
|
%
|
|||||||||||||||||||||
Certificates of deposit
|
241,633
|
7,103
|
2.94
|
%
|
160,788
|
943
|
0.59
|
%
|
182,108
|
1,057
|
0.58
|
%
|
|||||||||||||||||||||
Total interest-bearing deposits
|
656,094
|
14,160
|
2.16
|
%
|
665,577
|
2,511
|
0.38
|
%
|
670,577
|
2,835
|
0.42
|
%
|
|||||||||||||||||||||
FHLB advances and other borrowings
|
92,838
|
955
|
1.03
|
%
|
90,795
|
817
|
0.90
|
%
|
94,343
|
869
|
0.92
|
%
|
|||||||||||||||||||||
Total interest-bearing liabilities
|
748,932
|
15,115
|
2.02
|
%
|
756,372
|
3,328
|
0.44
|
%
|
764,920
|
3,704
|
0.48
|
%
|
|||||||||||||||||||||
Noninterest-Bearing Liabilities
|
|||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits
|
199,968
|
237,849
|
205,820
|
||||||||||||||||||||||||||||||
Other liabilities
|
18,046
|
16,151
|
16,049
|
||||||||||||||||||||||||||||||
Stockholders’ equity
|
114,828
|
107,753
|
95,770
|
||||||||||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
1,081,774
|
$
|
1,118,125
|
$
|
1,082,559
|
|||||||||||||||||||||||||||
Net interest income and margin(2)
|
$
|
42,407
|
4.02
|
%
|
$
|
45,810
|
4.21
|
%
|
$
|
42,374
|
4.03
|
%
|
|||||||||||||||||||||
Net interest spread(3)
|
3.43
|
%
|
4.07
|
%
|
3.90
|
%
|
|||||||||||||||||||||||||||
Total cost of deposits(4)
|
1.65
|
%
|
0.28
|
%
|
0.32
|
%
|
|||||||||||||||||||||||||||
Total cost of funds(5)
|
1.59
|
%
|
0.33
|
%
|
0.37
|
%
|
(1) |
Includes nonaccrual loans and loans held for sale, and is net of deferred fees, related direct costs, premiums, and discounts, but excludes the allowance for credit losses. Interest income includes net
accretion/(amortization) of deferred fees, costs, premiums, and discounts of $0.4 million, $0.9 million, and $3.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.
|
(2) |
Net interest margin is computed by dividing net interest income by total average earning assets.
|
(3) |
Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
|
(4) |
Total cost of deposits (including the effect of noninterest-bearing demand deposits) is calculated by dividing total interest expense on interest-bearing deposits by the sum of total average interest-bearing
deposits and noninterest-bearing demand deposits.
|
(5) |
Total cost of funds (including the effect of noninterest-bearing demand deposits) is calculated by dividing total interest expense by the sum of total average interest-bearing liabilities and noninterest-bearing
demand deposits.
|
Year Ended December 31, 2023 versus
2022
|
Year Ended December 31, 2022 versus
2021
|
|||||||||||||||||||||||
Increase (Decrease)
Due to Changes in (1)
|
Increase (Decrease)
Due to Changes in (1)
|
|||||||||||||||||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest income:
|
||||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
(445
|
)
|
$
|
2,918
|
$
|
2,473
|
$
|
(33
|
)
|
$
|
1,029
|
$
|
996
|
||||||||||
Investment securities
|
(620
|
)
|
632
|
12
|
559
|
(29
|
)
|
530
|
||||||||||||||||
Loans
|
1,646
|
4,253
|
5,899
|
1,901
|
(367
|
)
|
1,534
|
|||||||||||||||||
Total interest income
|
581
|
7,803
|
8,384
|
2,427
|
633
|
3,060
|
||||||||||||||||||
Interest expense:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
(265
|
)
|
5,761
|
5,496
|
46
|
(240
|
)
|
(194
|
)
|
|||||||||||||||
Savings
|
(13
|
)
|
6
|
(7
|
)
|
13
|
(29
|
)
|
(16
|
)
|
||||||||||||||
Time deposits
|
477
|
5,683
|
6,160
|
(129
|
)
|
15
|
(114
|
)
|
||||||||||||||||
Total interest-bearing deposits
|
199
|
11,450
|
11,649
|
(70
|
)
|
(254
|
)
|
(324
|
)
|
|||||||||||||||
FHLB advances and other borrowings
|
18
|
120
|
138
|
(34
|
)
|
(18
|
)
|
(52
|
)
|
|||||||||||||||
Total interest expense
|
217
|
11,570
|
11,787
|
(104
|
)
|
(272
|
)
|
(376
|
)
|
|||||||||||||||
Net change
|
$
|
364
|
$
|
(3,767
|
)
|
$
|
(3,403
|
)
|
$
|
2,531
|
$
|
905
|
$
|
3,436
|
(1) |
Changes due to both volume and rate have been allocated proportionately between changes in volume and rate.
|
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Provision (credit) for credit losses for:
|
||||||||||||
Loans
|
$
|
(339
|
)
|
$
|
(195
|
)
|
$
|
(181
|
)
|
|||
Off-balance sheet commitments
|
(56
|
)
|
—
|
2
|
||||||||
Total provision (credit) for credit losses(1)
|
$
|
(395
|
)
|
$
|
(195
|
)
|
$
|
(179
|
)
|
(1)
|
In accordance with the applicable GAAP rules in place at the time, the only item reported on the Provision (credit) for credit losses line on the consolidated income
statements for the years ended December 31, 2022 and 2021, was the provision (credit) for credit losses for loans. The provision for credit losses for off-balance sheet commitments for those periods was recorded in other non-interest
expense.
|
Year Ended December 31,
|
Increase
|
Year Ended December 31,
|
Increase
|
|||||||||||||||||||||
2023
|
2022
|
(Decrease)
|
2022
|
2021
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Other loan fees
|
$
|
944
|
$
|
1,161
|
$
|
(217
|
)
|
$
|
1,161
|
$
|
1,349
|
$
|
(188
|
)
|
||||||||||
Gains from loan sales, net
|
171
|
257
|
(86
|
)
|
257
|
475
|
(218
|
)
|
||||||||||||||||
Document processing fees
|
352
|
422
|
(70
|
)
|
422
|
512
|
(90
|
)
|
||||||||||||||||
Service charges
|
626
|
438
|
188
|
438
|
302
|
136
|
||||||||||||||||||
Other income
|
1,660
|
1,700
|
(40
|
)
|
1,700
|
1,115
|
585
|
|||||||||||||||||
Total non-interest income
|
$
|
3,753
|
$
|
3,978
|
$
|
(225
|
)
|
$
|
3,978
|
$
|
3,753
|
$
|
225
|
Year Ended December 31,
|
Increase
|
Year Ended December 31,
|
Increase
|
|||||||||||||||||||||
2023
|
2022
|
(Decrease)
|
2022
|
2021
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Salaries and employee benefits
|
$
|
21,605
|
$
|
19,637
|
$
|
1,968
|
$
|
19,637
|
$
|
18,624
|
$
|
1,013
|
||||||||||||
Occupancy, net
|
4,380
|
4,180
|
200
|
4,180
|
3,254
|
926
|
||||||||||||||||||
Professional services
|
3,728
|
2,923
|
805
|
2,923
|
1,645
|
1,278
|
||||||||||||||||||
Advertising and marketing
|
926
|
921
|
5
|
921
|
734
|
187
|
||||||||||||||||||
Data processing
|
1,407
|
1,265
|
142
|
1,265
|
1,215
|
50
|
||||||||||||||||||
Depreciation
|
727
|
711
|
16
|
711
|
780
|
(69
|
)
|
|||||||||||||||||
FDIC assessment
|
1,013
|
577
|
436
|
577
|
485
|
92
|
||||||||||||||||||
Other expenses
|
1,959
|
1,058
|
901
|
1,058
|
1,258
|
(200
|
)
|
|||||||||||||||||
Total non-interest expenses
|
$
|
35,745
|
$
|
31,272
|
$
|
4,473
|
$
|
31,272
|
$
|
27,995
|
$
|
3,277
|
For the Years Ended December 31,
|
||||||||||||||||||||||||
2023
|
2022
|
2021
|
||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
ASSETS:
|
(in thousands)
|
|||||||||||||||||||||||
Cash and due from banks
|
$
|
1,959
|
0.2
|
%
|
$
|
2,169
|
0.2
|
%
|
$
|
2,149
|
0.2
|
%
|
||||||||||||
Interest-earning deposits in other institutions
|
76,314
|
7.1
|
%
|
119,524
|
10.7
|
%
|
139,217
|
12.9
|
%
|
|||||||||||||||
Investment securities available-for-sale
|
16,904
|
1.6
|
%
|
40,552
|
3.6
|
%
|
18,878
|
1.7
|
%
|
|||||||||||||||
Investment securities held-to-maturity
|
2,305
|
0.2
|
%
|
2,668
|
0.2
|
%
|
3,443
|
0.3
|
%
|
|||||||||||||||
Investment securities measured at fair value
|
289
|
0.0
|
%
|
224
|
0.0
|
%
|
199
|
0.0
|
%
|
|||||||||||||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
|
4,767
|
0.4
|
%
|
4,505
|
0.4
|
%
|
4,491
|
0.4
|
%
|
|||||||||||||||
Loans held for sale and loans held for investment, net
|
942,308
|
87.1
|
%
|
910,732
|
81.5
|
%
|
874,356
|
80.9
|
%
|
|||||||||||||||
Servicing assets
|
1,392
|
0.1
|
%
|
1,575
|
0.1
|
%
|
1,525
|
0.1
|
%
|
|||||||||||||||
Other assets acquired through foreclosure, net
|
1,409
|
0.1
|
%
|
2,304
|
0.2
|
%
|
2,580
|
0.2
|
%
|
|||||||||||||||
Premises and equipment, net
|
6,004
|
0.6
|
%
|
6,412
|
0.6
|
%
|
6,870
|
0.6
|
%
|
|||||||||||||||
Other assets
|
28,123
|
2.6
|
%
|
27,460
|
2.5
|
%
|
28,851
|
2.7
|
%
|
|||||||||||||||
TOTAL ASSETS
|
$
|
1,081,774
|
100.0
|
%
|
$
|
1,118,125
|
100.0
|
%
|
$
|
1,082,559
|
100.0
|
%
|
||||||||||||
LIABILITIES:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Non-interest-bearing demand
|
$
|
199,968
|
18.5
|
%
|
$
|
237,849
|
21.3
|
%
|
$
|
205,820
|
19.0
|
%
|
||||||||||||
Interest-bearing demand
|
395,328
|
36.5
|
%
|
480,472
|
43.0
|
%
|
467,720
|
43.3
|
%
|
|||||||||||||||
Savings
|
19,133
|
1.8
|
%
|
24,317
|
2.2
|
%
|
20,749
|
1.9
|
%
|
|||||||||||||||
Time certificates over $250,000
|
7,026
|
0.6
|
%
|
4,769
|
0.4
|
%
|
13,965
|
1.3
|
%
|
|||||||||||||||
Other time certificates
|
234,607
|
21.7
|
%
|
156,019
|
14.0
|
%
|
168,143
|
15.5
|
%
|
|||||||||||||||
Total deposits
|
856,062
|
79.1
|
%
|
903,426
|
80.9
|
%
|
876,397
|
81.0
|
%
|
|||||||||||||||
FHLB advances and other borrowings
|
92,838
|
8.6
|
%
|
90,795
|
8.1
|
%
|
94,343
|
8.7
|
%
|
|||||||||||||||
Other liabilities
|
18,046
|
1.6
|
%
|
16,151
|
1.4
|
%
|
16,049
|
1.5
|
%
|
|||||||||||||||
Total liabilities
|
966,946
|
89.3
|
%
|
1,010,372
|
90.4
|
%
|
986,789
|
91.2
|
%
|
|||||||||||||||
STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||
Common stock
|
46,219
|
4.3
|
%
|
45,186
|
4.0
|
%
|
43,627
|
4.0
|
%
|
|||||||||||||||
Retained earnings
|
69,777
|
6.5
|
%
|
62,940
|
5.6
|
%
|
52,059
|
4.8
|
%
|
|||||||||||||||
Accumulated other comprehensive (loss) income
|
(1,168
|
)
|
(0.1
|
)%
|
(373
|
)
|
0.0
|
%
|
84
|
0.0
|
%
|
|||||||||||||
Total stockholders’ equity
|
114,828
|
10.7
|
%
|
107,753
|
9.6
|
%
|
95,770
|
8.8
|
%
|
|||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,081,774
|
100.0
|
%
|
$
|
1,118,125
|
100.0
|
%
|
$
|
1,082,559
|
100.0
|
%
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
(dollars in thousands)
|
||||||||
Manufactured housing
|
$
|
330,358
|
$
|
315,825
|
||||
Commercial real estate
|
560,373
|
545,317
|
||||||
Commercial
|
46,255
|
59,070
|
||||||
SBA
|
1,753
|
3,482
|
||||||
HELOC
|
2,556
|
2,613
|
||||||
Single family real estate
|
10,350
|
8,709
|
||||||
Consumer
|
71
|
107
|
||||||
Loans held for sale
|
16,648
|
21,033
|
||||||
Total loans
|
968,364
|
956,156
|
||||||
Less:
|
||||||||
Allowance for credit losses
|
12,451
|
10,765
|
||||||
Deferred fees, net
|
867
|
787
|
||||||
Discount on SBA loans
|
25
|
27
|
||||||
Total loans, net
|
$
|
955,021
|
$
|
944,577
|
||||
Percentage to Total Loans:
|
||||||||
Manufactured housing
|
34.1
|
%
|
33.0
|
%
|
||||
Commercial real estate
|
57.9
|
%
|
57.0
|
%
|
||||
Commercial
|
4.8
|
%
|
6.2
|
%
|
||||
SBA
|
0.2
|
%
|
0.4
|
%
|
||||
HELOC
|
0.3
|
%
|
0.3
|
%
|
||||
Single family real estate
|
1.0
|
%
|
0.9
|
%
|
||||
Consumer
|
0.0
|
%
|
0.0
|
%
|
||||
Loans held for sale
|
1.7
|
%
|
2.2
|
%
|
||||
Total
|
100.0
|
%
|
100.0
|
%
|
Due in One
Year or
Less
|
Due After One
Year to Five
Years
|
Due After
Five to 15
Years
|
Due
After 15
Years
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
||||||||||||||||||||
Floating rate
|
$
|
6,512
|
$
|
30,879
|
$
|
102,125
|
$
|
52,136
|
$
|
191,652
|
||||||||||
Fixed rate
|
7,148
|
31,090
|
76,514
|
23,954
|
138,706
|
|||||||||||||||
Commercial real estate
|
||||||||||||||||||||
Floating rate
|
59,139
|
87,683
|
189,291
|
47
|
336,160
|
|||||||||||||||
Fixed rate
|
20,316
|
54,807
|
149,090
|
—
|
224,213
|
|||||||||||||||
Commercial
|
||||||||||||||||||||
Floating rate
|
14,956
|
16,221
|
4,637
|
11,040
|
46,854
|
|||||||||||||||
Fixed rate
|
2,649
|
7,497
|
1,438
|
—
|
11,584
|
|||||||||||||||
SBA
|
||||||||||||||||||||
Floating rate
|
613
|
2,075
|
2,949
|
581
|
6,218
|
|||||||||||||||
Fixed rate
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
HELOC
|
||||||||||||||||||||
Floating rate
|
—
|
2,556
|
—
|
—
|
2,556
|
|||||||||||||||
Fixed rate
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Single family real estate
|
||||||||||||||||||||
Floating rate
|
275
|
1,523
|
4,074
|
408
|
6,280
|
|||||||||||||||
Fixed rate
|
255
|
1,159
|
2,589
|
67
|
4,070
|
|||||||||||||||
Consumer
|
||||||||||||||||||||
Floating rate
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Fixed rate
|
44
|
—
|
—
|
27
|
71
|
|||||||||||||||
Total
|
$
|
111,907
|
$
|
235,490
|
$
|
532,707
|
$
|
88,260
|
$
|
968,364
|
Fixed Rate
|
Variable
Rate
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Manufactured housing
|
$
|
131,558
|
$
|
185,140
|
$
|
316,698
|
||||||
Commercial real estate
|
203,897
|
277,021
|
480,918
|
|||||||||
Commercial
|
8,935
|
31,898
|
40,833
|
|||||||||
SBA
|
—
|
5,605
|
5,605
|
|||||||||
HELOC
|
—
|
2,556
|
2,556
|
|||||||||
Single family real estate
|
3,815
|
6,005
|
9,820
|
|||||||||
Consumer
|
27
|
—
|
27
|
|||||||||
Total
|
$
|
348,232
|
$
|
508,225
|
$
|
856,457
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Total nonaccrual loans
|
$
|
4,006
|
$
|
211
|
$
|
565
|
||||||
Allowance for credit losses to total nonaccrual loans
|
311
|
%
|
5,102
|
%
|
1,841
|
%
|
||||||
Nonaccrual loans to total loans outstanding
|
0.41
|
%
|
0.02
|
%
|
0.06
|
%
|
||||||
Loans 30 through 89 days past due with interest accruing
|
$
|
12,643
|
$
|
2,880
|
$
|
704
|
||||||
Allowance for credit losses to gross loans held for investment
|
1.31
|
%
|
1.15
|
%
|
1.20
|
%
|
At December 31, 2023
|
At December 31, 2022
|
|||||||||||||||||||||||
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
990
|
24.71
|
%
|
0.10
|
%
|
$
|
61
|
28.91
|
%
|
0.01
|
%
|
||||||||||||
Commercial real estate
|
2,791
|
69.68
|
%
|
0.29
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
Commercial
|
87
|
2.17
|
%
|
0.01
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
HELOC
|
138
|
3.44
|
%
|
0.01
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
Single family real estate
|
—
|
0.00
|
%
|
0.00
|
%
|
150
|
71.09
|
%
|
0.01
|
%
|
||||||||||||||
Total nonaccrual loans
|
$
|
4,006
|
100.00
|
%
|
0.41
|
%
|
$
|
211
|
100.00
|
%
|
0.02
|
%
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(dollars in thousands)
|
||||||||||||
Net charge-offs (recoveries):
|
||||||||||||
Manufactured housing
|
$
|
(82
|
)
|
$
|
(139
|
)
|
$
|
(218
|
)
|
|||
Commercial real estate
|
(53
|
)
|
(80
|
)
|
(80
|
)
|
||||||
Commercial
|
(47
|
)
|
(190
|
)
|
(40
|
)
|
||||||
SBA
|
(32
|
)
|
(134
|
)
|
(47
|
)
|
||||||
HELOC
|
—
|
(12
|
)
|
(6
|
)
|
|||||||
Single family real estate
|
—
|
—
|
(1
|
)
|
||||||||
Consumer
|
—
|
(1
|
)
|
1
|
||||||||
Total net (recoveries) charge-offs
|
$
|
(214
|
)
|
$
|
(556
|
)
|
$
|
(391
|
)
|
|||
Average loan balance
|
||||||||||||
Manufactured housing
|
$
|
320,714
|
$
|
305,318
|
$
|
288,039
|
||||||
Commercial real estate
|
556,331
|
520,240
|
438,792
|
|||||||||
Commercial
|
57,982
|
69,994
|
71,866
|
|||||||||
SBA
|
6,882
|
13,331
|
73,672
|
|||||||||
HELOC
|
2,561
|
3,686
|
2,137
|
|||||||||
Single family real estate
|
9,260
|
8,935
|
9,996
|
|||||||||
Consumer
|
762
|
134
|
99
|
|||||||||
Total average loan balance
|
$
|
954,492
|
$
|
921,638
|
$
|
884,601
|
||||||
Net charge-offs annualized percentage
|
||||||||||||
Manufactured housing
|
(0.03
|
)%
|
(0.05
|
)%
|
(0.08
|
)%
|
||||||
Commercial real estate
|
(0.01
|
)%
|
(0.02
|
)%
|
(0.02
|
)%
|
||||||
Commercial
|
(0.08
|
)%
|
(0.27
|
)%
|
(0.06
|
)%
|
||||||
SBA
|
(0.46
|
)%
|
(1.01
|
)%
|
(0.06
|
)%
|
||||||
HELOC
|
0.00
|
%
|
(0.33
|
)%
|
(0.28
|
)%
|
||||||
Single family real estate
|
0.00
|
%
|
0.00
|
%
|
(0.01
|
)%
|
||||||
Consumer
|
0.00
|
%
|
(0.75
|
)%
|
1.01
|
%
|
||||||
Total net (recoveries) charge-offs to average loans
|
(0.02
|
)%
|
(0.06
|
)%
|
(0.04
|
)%
|
Manufactured
Homes
|
Single
Family
Residence
|
Machinery &
Equipment
|
Total
|
|||||||||||||
December 31, 2023:
|
(in thousands)
|
|||||||||||||||
Manufactured housing
|
$
|
1,196
|
$
|
—
|
$
|
—
|
$
|
1,196
|
||||||||
Commercial real estate
|
2,791
|
—
|
—
|
2,791
|
||||||||||||
Commercial
|
—
|
—
|
1,203
|
1,203
|
||||||||||||
Single family real estate
|
—
|
138
|
—
|
138
|
||||||||||||
Total
|
$
|
3,987
|
$
|
138
|
$
|
1,203
|
$
|
5,328
|
Manufactured
Housing
|
Commercial
Real
Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Impaired Loans as of December 31, 2022:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
2,918
|
$
|
209
|
$
|
67
|
$
|
41
|
$
|
—
|
$
|
208
|
$
|
—
|
$
|
3,443
|
||||||||||||||||
Impaired loans with no allowance recorded
|
1,166
|
—
|
1,297
|
—
|
—
|
151
|
—
|
2,614
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
4,084
|
209
|
1,364
|
41
|
—
|
359
|
—
|
6,057
|
||||||||||||||||||||||||
Related Allowance for Loan Losses:
|
||||||||||||||||||||||||||||||||
Allowance for impaired loans
|
157
|
18
|
—
|
1
|
—
|
8
|
—
|
184
|
||||||||||||||||||||||||
Total impaired loans, net of allowance
|
$
|
3,927
|
$
|
191
|
$
|
1,364
|
$
|
40
|
$
|
—
|
$
|
351
|
$
|
—
|
$
|
5,873
|
December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Amount
|
% of Loans in
Each
Category to
Gross Loans
|
Amount
|
% of Loans in
Each Category
to Gross
Loans
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Manufactured housing
|
$
|
5,378
|
34.7
|
%
|
$
|
3,879
|
33.8
|
%
|
||||||||
Commercial real estate
|
6,309
|
58.9
|
%
|
5,980
|
58.4
|
%
|
||||||||||
Commercial
|
554
|
4.8
|
%
|
747
|
6.2
|
%
|
||||||||||
SBA
|
4
|
0.2
|
%
|
21
|
0.4
|
%
|
||||||||||
HELOC
|
41
|
0.3
|
%
|
27
|
0.3
|
%
|
||||||||||
Single family real estate
|
164
|
1.1
|
%
|
107
|
0.9
|
%
|
||||||||||
Consumer
|
1
|
0.0
|
%
|
4
|
0.0
|
%
|
||||||||||
Total
|
$
|
12,451
|
100.0
|
%
|
$
|
10,765
|
100.0
|
%
|
December 31, 2023
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
469
|
5.85
|
%
|
$
|
2,861
|
6.89
|
%
|
$
|
3,330
|
6.74
|
%
|
||||||||||||||||||||||
U.S. government agency CMO
|
—
|
—
|
—
|
—
|
453
|
3.43
|
%
|
3,491
|
5.66
|
%
|
3,944
|
5.40
|
%
|
|||||||||||||||||||||||||||
Corporate debt securities
|
—
|
—
|
—
|
—
|
7,958
|
3.74
|
%
|
—
|
—
|
7,958
|
3.74
|
%
|
||||||||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
8,880
|
3.84
|
%
|
$
|
6,352
|
6.21
|
%
|
$
|
15,232
|
4.83
|
%
|
||||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
826
|
3.99
|
%
|
$
|
1,309
|
4.57
|
%
|
$
|
2,135
|
4.35
|
%
|
||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
826
|
3.99
|
%
|
$
|
1,309
|
4.57
|
%
|
$
|
2,135
|
4.35
|
%
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
2,250
|
$
|
2,518
|
$
|
2,614
|
||||||
Additions
|
1,576
|
—
|
136
|
|||||||||
Proceeds from dispositions
|
(2,967
|
)
|
(384
|
)
|
—
|
|||||||
Gains (losses) on sales, net
|
123
|
116
|
(232
|
)
|
||||||||
Balance, end of period
|
$
|
982
|
$
|
2,250
|
$
|
2,518
|
Year Ended December 31,
|
||||||||||||||||||||||||
2023
|
2022
|
2021
|
||||||||||||||||||||||
Average
Balance
|
Percent of
Total
|
Average
Balance
|
Percent of
Total
|
Average
Balance
|
Percent of
Total
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Non-interest-bearing demand
|
$
|
199,968
|
23.4
|
%
|
$
|
237,849
|
26.3
|
%
|
$
|
205,820
|
23.5
|
%
|
||||||||||||
Interest-bearing demand
|
395,328
|
46.2
|
%
|
480,472
|
53.2
|
%
|
467,720
|
53.3
|
%
|
|||||||||||||||
Savings
|
19,133
|
2.2
|
%
|
24,317
|
2.7
|
%
|
20,749
|
2.4
|
%
|
|||||||||||||||
Certificates of deposit ($250,000 or more)
|
7,026
|
0.8
|
%
|
4,769
|
0.5
|
%
|
13,965
|
1.6
|
%
|
|||||||||||||||
Other certificates of deposit
|
234,607
|
27.4
|
%
|
156,019
|
17.3
|
%
|
168,143
|
19.2
|
%
|
|||||||||||||||
Total deposits
|
$
|
856,062
|
100.0
|
%
|
$
|
903,426
|
100.0
|
%
|
$
|
876,397
|
100.0
|
%
|
Over
$ 250,000
|
||||
Less than three months
|
$
|
6,000
|
||
Three to six months
|
5,997
|
|||
Six to twelve months
|
1,395
|
|||
Over twelve months
|
—
|
|||
Total
|
$
|
13,392
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
FHLB and FRB PPPLF Advances
|
(dollars in thousands)
|
|||||||||||
Maximum month-end balance
|
$
|
110,000
|
$
|
110,000
|
$
|
105,000
|
||||||
Balance at year end
|
$
|
90,000
|
$
|
90,000
|
$
|
90,000
|
||||||
Average balance
|
$
|
92,564
|
$
|
90,795
|
$
|
94,343
|
||||||
Other Borrowings
|
||||||||||||
Maximum month-end balance
|
$
|
10,000
|
$
|
—
|
$
|
—
|
||||||
Balance at year end
|
$
|
10,000
|
$
|
—
|
$
|
—
|
||||||
Average balance
|
$
|
274
|
$
|
—
|
$
|
—
|
||||||
Total borrowed funds
|
$
|
100,000
|
$
|
90,000
|
$
|
90,000
|
||||||
Weighted average interest rate at end of year
|
1.65
|
%
|
0.86
|
%
|
0.86
|
%
|
||||||
Weighted average interest rate during the year
|
1.03
|
%
|
0.90
|
%
|
1.04
|
%
|
Total
Capital
(To Risk-
Weighted
Assets)
|
Tier 1 Capital
(To Risk-
Weighted
Assets)
|
Common Equity
Tier 1
(To Risk-
Weighted Assets) |
Leverage Ratio/Tier
1 Capital
(To Average Assets)
|
|||||||||||||
December 31, 2023
|
||||||||||||||||
CWB’s actual regulatory ratios
|
13.10
|
%
|
11.89
|
%
|
11.89
|
%
|
10.88
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully phased in capital conservation buffer
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
|||||||||
December 31, 2022
|
||||||||||||||||
CWB’s actual regulatory ratios
|
12.56
|
%
|
11.44
|
%
|
11.44
|
%
|
10.34
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully phased in capital conservation buffer
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
December 31, 2023
|
||||||||||||
Less than
1 year
|
More
than 1
year
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Time deposit maturities
|
$
|
222,807
|
$
|
67,741
|
$
|
290,548
|
||||||
FHLB advances
|
—
|
90,000
|
90,000
|
|||||||||
Operating lease obligations
|
1,041
|
3,924
|
4,965
|
|||||||||
Total
|
$
|
223,848
|
$
|
161,665
|
$
|
385,513
|
December 31, 2023
|
||||||||||||
Less than
1 year
|
More
than 1
year
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Loan commitments to extend credit
|
$
|
72,994
|
$
|
12,140
|
$
|
1,956
|
||||||
Standby letters of credit
|
—
|
—
|
—
|
|||||||||
Total
|
$
|
72,994
|
$
|
12,140
|
$
|
1,956
|
• |
the customer must obtain or provide some additional credit, property, or services from or to CWB other than a loan, discount, deposit, or trust services;
|
• |
the customer must obtain or provide some additional credit, property, or service from or to CWBC or any subsidiaries; or
|
• |
the customer must not obtain some other credit, property, or services from competitors, except reasonable requirements to assure soundness of credit extended.
|
• |
assets (exclusive of goodwill and other intangible assets) would be 1.25 times its liabilities (exclusive of deferred taxes, deferred income and other deferred credits); and
|
• |
current assets would be at least equal to current liabilities.
|
Adequately
Capitalized
|
Well
Capitalized
|
Capital
Conservation
Buffer Fully
Phased-In
|
CWB
|
CWBC
(consolidated)
|
||||||||||||||||
Total risk-based capital
|
8.00
|
%
|
10.00
|
%
|
10.50
|
%
|
13.10
|
%
|
12.62
|
%
|
||||||||||
Tier 1 risk-based capital ratio
|
6.00
|
%
|
8.00
|
%
|
8.50
|
%
|
11.89
|
%
|
11.46
|
%
|
||||||||||
Common Equity Tier 1
|
4.50
|
%
|
6.50
|
%
|
7.00
|
%
|
11.89
|
%
|
11.46
|
%
|
||||||||||
Tier 1 leverage capital ratio
|
4.00
|
%
|
5.00
|
%
|
N/A
|
10.88
|
%
|
8.90
|
%
|
• |
“well capitalized” if it has a total risk-based capital ratio of 10% or more, has a Tier 1 risk-based capital ratio of 8% or more, has a common equity tier 1 capital ratio of 6.5% or more, has a leverage capital
ratio of 5% or more, and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure;
|
• |
“adequately capitalized” if it has a total risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 6% or more, a common equity tier 1 capital ratio of 4.5% or more, and a leverage capital ratio
of 4% or more (3% under certain circumstances) and does not meet the definition of “well capitalized;”
|
• |
“undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 6%, a common equity tier 1 capital that is less than 4.5%, or a leverage
capital ratio that is less than 4% (3% under certain circumstances);
|
• |
“significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 4%, a common equity tier 1 capital ratio that is less than 3%, or
a leverage capital ratio that is less than 3%; and
|
• |
“critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2%.
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Sensitivity of Net Interest Income
|
||||||||||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||||||||||
Down
300
|
Down
200
|
Down
100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Interest income
|
$
|
53,737
|
$
|
56,367
|
$
|
58,896
|
$
|
61,303
|
$
|
63,434
|
$
|
65,811
|
$
|
68,177
|
$
|
70,536
|
$
|
72,890
|
||||||||||||||||||
Interest expense
|
13,722
|
15,561
|
17,403
|
19,264
|
22,545
|
25,825
|
29,105
|
32,385
|
35,665
|
|||||||||||||||||||||||||||
Net interest income
|
$
|
40,015
|
$
|
40,806
|
$
|
41,493
|
$
|
42,039
|
$
|
40,889
|
$
|
39,986
|
$
|
39,072
|
$
|
38,151
|
$
|
37,225
|
||||||||||||||||||
% change
|
(4.8
|
)%
|
(2.9
|
)%
|
(1.3
|
)%
|
(2.7
|
)%
|
(4.9
|
)%
|
(7.1
|
)%
|
(9.2
|
)%
|
(11.5
|
)%
|
Sensitivity of Net Interest Income
|
||||||||||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||||||||||
Down
300
|
Down 200
|
Down
100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Interest income
|
$
|
46,911
|
$
|
50,112
|
$
|
53,046
|
$
|
55,852
|
$
|
58,342
|
$
|
61,024
|
$
|
63,687
|
$
|
66,343
|
$
|
64,147
|
||||||||||||||||||
Interest expense
|
4,002
|
5,525
|
7,055
|
8,600
|
11,588
|
14,577
|
17,565
|
20,553
|
21,602
|
|||||||||||||||||||||||||||
Net interest income
|
$
|
42,909
|
$
|
44,587
|
$
|
45,991
|
$
|
47,252
|
$
|
46,754
|
$
|
46,447
|
$
|
46,122
|
$
|
45,790
|
$
|
42,545
|
||||||||||||||||||
% change
|
(9.2
|
)%
|
(5.6
|
)%
|
(2.7
|
)%
|
(1.1
|
)%
|
(1.7
|
)%
|
(2.4
|
)%
|
(3.1
|
)%
|
(10.0
|
)%
|
Economic Value of Equity
|
||||||||||||||||||||||||||||||||||||
As of December 31, 2023
|
||||||||||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||||||||||
Down 300
|
Down 200
|
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Assets
|
$
|
1,110,470
|
$
|
1,091,749
|
$
|
1,068,228
|
$
|
1,044,757
|
$
|
1,016,777
|
$
|
989,993
|
$
|
964,502
|
$
|
940,619
|
$
|
918,338
|
||||||||||||||||||
Liabilities
|
980,995
|
952,172
|
924,766
|
898,790
|
879,698
|
861,518
|
844,201
|
827,698
|
813,880
|
|||||||||||||||||||||||||||
Net present value
|
$
|
129,475
|
$
|
139,577
|
$
|
143,462
|
$
|
145,967
|
$
|
137,079
|
$
|
128,475
|
$
|
120,301
|
$
|
112,921
|
$
|
104,458
|
||||||||||||||||||
% change
|
(11.3
|
)%
|
(4.4
|
)%
|
(1.7
|
)%
|
(6.1
|
)%
|
(12.0
|
)%
|
(17.6
|
)%
|
(22.6
|
)%
|
(28.4
|
)%
|
Economic Value of Equity
|
||||||||||||||||||||||||||||||||||||
As of December 31, 2022
|
||||||||||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||||||||||
Down 300
|
Down 200
|
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Assets
|
$
|
1,130,386
|
$
|
1,112,276
|
$
|
1,088,217
|
$
|
1,064,756
|
$
|
1,038,587
|
$
|
1,012,244
|
$
|
985,932
|
$
|
960,955
|
$
|
937,615
|
||||||||||||||||||
Liabilities
|
940,198
|
905,486
|
872,742
|
841,887
|
819,738
|
798,767
|
778,903
|
760,083
|
746,313
|
|||||||||||||||||||||||||||
Net present value
|
$
|
190,188
|
$
|
206,790
|
$
|
215,475
|
$
|
222,869
|
$
|
218,849
|
$
|
213,477
|
$
|
207,029
|
$
|
200,872
|
$
|
191,302
|
||||||||||||||||||
% change
|
(14.7
|
)%
|
(7.2
|
)%
|
(3.3
|
)%
|
(1.8
|
)%
|
(4.2
|
)%
|
(7.1
|
)%
|
(9.9
|
)%
|
(14.2
|
)%
|
•
|
We obtained an understanding of management’s controls that are related to the estimation of the qualitative factors and tested those
controls for both design effectiveness and operating effectiveness. These controls included management’s determination, review and approval of qualitative factors and the data that was utilized in establishing the qualitative factors.
|
•
|
We tested management’s process and evaluated their judgments and assumptions used to establish the qualitative factors, which included:
|
−
|
Testing the completeness and accuracy of data used by management in determining the qualitative factors by agreeing them to internal and
external source data.
|
−
|
Evaluating the reasonableness of management’s judgments and assumptions used in the development of the qualitative factors, including
the directional consistency and magnitude of the qualitative factors applied.
|
−
|
Evaluating the reasonableness of the period selected for the forecast and the
associated economic factors identified by management.
|
PAGE
|
|
54
|
|
Consolidated Financial Statements:
|
|
57
|
|
|
|
58
|
|
|
|
59
|
|
|
|
60
|
|
|
|
61
|
|
62
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands, except share amounts)
|
||||||||
Assets:
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest-earning demand deposits in other financial institutions
|
|
|
||||||
Cash and cash equivalents
|
|
|
||||||
Investment securities - available-for-sale, at fair value, amortized cost of $
|
|
|
||||||
Investment securities - held-to-maturity, at amortized cost; fair value of $
|
|
|
||||||
Investment securities - measured at fair value
|
|
|
||||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock, at cost
|
|
|
||||||
Loans held for sale, at lower of cost or fair value
|
|
|
||||||
Loans held for investment
|
|
|
||||||
Allowance for credit losses(1)
|
( |
) | ( |
) | ||||
Total loans held for investment, net
|
|
|
||||||
Other assets acquired through foreclosure, net
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing demand
|
$
|
|
$
|
|
||||
Interest-bearing demand
|
|
|
||||||
Savings
|
|
|
||||||
Certificates of deposit ($250,000 or more)
|
|
|
||||||
Other certificates of deposit
|
|
|
||||||
Total deposits
|
|
|
||||||
FHLB advances and other borrowings
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock —
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss, net
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Interest and dividend income:
|
(in thousands, except per share amounts)
|
|||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
||||||
Investment securities and other
|
|
|
|
|||||||||
Total interest and dividend income
|
|
|
|
|||||||||
Interest expense:
|
||||||||||||
Deposits
|
|
|
|
|||||||||
FHLB advances and other borrowings
|
|
|
|
|||||||||
Total interest expense
|
|
|
|
|||||||||
Net interest income
|
|
|
|
|||||||||
Provision (credit) for credit losses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net interest income after provision (credit) for credit losses
|
|
|
|
|||||||||
Non-interest income:
|
||||||||||||
Other loan fees
|
|
|
|
|||||||||
Gains from loan sales, net
|
|
|
|
|||||||||
Document processing fees
|
|
|
|
|||||||||
Service charges
|
|
|
|
|||||||||
Other income
|
|
|
|
|||||||||
Total non-interest income
|
|
|
|
|||||||||
Non-interest expenses:
|
||||||||||||
Salaries and employee benefits
|
|
|
|
|||||||||
Occupancy, net
|
|
|
|
|||||||||
Professional services
|
|
|
|
|||||||||
Advertising and marketing
|
|
|
|
|||||||||
Data processing
|
|
|
|
|||||||||
Depreciation
|
|
|
|
|||||||||
FDIC assessment
|
|
|
|
|||||||||
Other expenses
|
|
|
|
|||||||||
Total non-interest expenses
|
|
|
|
|||||||||
Income before provision for income taxes
|
|
|
|
|||||||||
Provision for income taxes
|
|
|
|
|||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Earnings per share:
|
||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
||||||
Diluted
|
$
|
|
$
|
|
$
|
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||
Basic
|
|
|
|
|||||||||
Diluted
|
|
|
|
|||||||||
Dividends declared per common share
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive (loss) income, net:
|
||||||||||||
Unrealized (loss) gain on securities available-for-sale (net of tax effect of $
|
(
|
)
|
(
|
)
|
|
|||||||
Other comprehensive (loss) income, net
|
(
|
)
|
(
|
)
|
|
|||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
Preferred Stock
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Balance, January 1, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Net income
|
—
|
|
—
|
|
|
|
|
|||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividends on common stock
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Other comprehensive income, net
|
—
|
|
—
|
|
|
|
|
|||||||||||||||||||||
Balance, December 31, 2021
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income
|
—
|
|
—
|
|
|
|
|
|||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Grant of restricted stock awards, net of forfeitures
|
||||||||||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividends on common stock
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Other comprehensive loss, net
|
—
|
|
—
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance, December 31, 2022
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||
(net of taxes of $
|
( |
) | ( |
) | ||||||||||||||||||||||||
Net income
|
— |
|
—
|
|
|
|
|
|||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Grant of restricted stock awards, net of forfeitures
|
||||||||||||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividends on common stock
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Other comprehensive loss, net
|
—
|
|
—
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance, December 31, 2023
|
|
$
|
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Depreciation
|
|
|
|
|||||||||
Stock-based compensation
|
|
|
|
|||||||||
Deferred taxes
|
|
|
(
|
)
|
||||||||
Net (accretion) amortization of discounts and premiums on investment securities
|
(
|
)
|
(
|
)
|
|
|||||||
(Gains) losses on:
|
||||||||||||
Sale of repossessed assets, net
|
(
|
)
|
(
|
)
|
|
|||||||
Sale of loans, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Loss on abandonment of premises and equipment
|
||||||||||||
Sale of assets, net
|
|
|
|
|||||||||
Loans originated for sale
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from sales of loans held for sale
|
||||||||||||
Proceeds from principal paydowns on loans held for sale
|
||||||||||||
Change in fair value of equity securities
|
( |
) | ( |
) | ||||||||
Changes in:
|
||||||||||||
Other assets
|
|
(
|
)
|
|
||||||||
Other liabilities
|
|
(
|
)
|
|
||||||||
Servicing assets, net
|
|
|
(
|
)
|
||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Principal pay downs and maturities of available-for-sale securities
|
|
|
|
|||||||||
Purchase of available-for-sale securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Principal pay downs and maturities of held-to-maturity securities
|
|
|
|
|||||||||
Loan originations and principal collections, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of restricted stock, net
|
(
|
)
|
(
|
)
|
|
|||||||
Purchase of premises and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from sale of other assets acquired through foreclosure
|
|
|
|
|||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Net (decrease) increase in deposits
|
(
|
)
|
(
|
)
|
|
|||||||
Proceeds from FHLB advances |
|
|||||||||||
Repayments of FHLB advances |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from other borrowings
|
||||||||||||
Repayments of other borrowings
|
( |
) | ||||||||||
Exercise of stock options
|
|
|
|
|||||||||
Cash dividends paid on common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(
|
)
|
(
|
)
|
|
|||||||
Net increase (decrease) in cash and cash equivalents |
|
(
|
)
|
|
||||||||
Cash and cash equivalents at beginning of year
|
|
|
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental disclosure:
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Interest
|
$
|
|
$
|
|
$
|
|
||||||
Income taxes
|
|
|
|
|||||||||
Non-cash investing and financing activity:
|
||||||||||||
Transfers from loans held for investment to loans held for sale
|
|
|
|
|||||||||
Transfers from loans held for sale to loans held for investment
|
|
|
|
|||||||||
Transfers from loans held for investment to other assets acquired through foreclosure, net
|
|
|
|
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Commercial real estate, commercial, commercial agriculture, SBA, HELOC, single family residential, and consumer: Migration analysis combined
with risk rating of the loans was used to determine the required allowance for loan losses for all non-impaired loans. In addition, the migration results were adjusted based upon qualitative factors that affect the specific portfolio
category. Reserves on impaired loans were determined based upon the individual characteristics of the loan.
|
•
|
Manufactured housing: The allowance for loan losses was calculated on the basis of loss history and risk rating, which was primarily a
function of delinquency. In addition, the loss results were adjusted based upon qualitative factors that affected this specific portfolio.
|
•
|
Concentrations of credit
|
•
|
Trends in volume, maturity, and composition of loans
|
•
|
Volume and trend in delinquency, nonaccrual, and classified assets
|
•
|
Economic conditions
|
•
|
Policy and procedures or underwriting standards
|
•
|
Staff experience and ability
|
•
|
Value of underlying collateral
|
•
|
Competition, legal, or regulatory environment
|
•
|
Results of outside exams and quality of loan review and Board oversight
|
Years
|
|
Building and improvements
|
|
Furniture and equipment
|
|
Electronic equipment and software
|
|
Year Ended December 31
|
||||||||||||
SBA servicing assets
measured at fair value
|
2023
|
2022
|
2021
|
|||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Valuation adjustment
|
(
|
)
|
(
|
)
|
|
|||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
Year Ended December 31
|
||||||||||||
SBA servicing assets measured using the amortization method
|
2023
|
2022
|
2021
|
|||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Amortization, net
|
|
|
(
|
)
|
||||||||
Valuation adjustment
|
|
|
(
|
)
|
||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
Year Ended December 31
|
||||||||||||
Farmer Mac servicing assets measured using the amortization method
|
2023
|
2022
|
2021
|
|||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Additions
|
|
|
|
|||||||||
Amortization, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
• |
Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
• |
Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing, or model-based valuation techniques
where all significant assumptions are observable, either directly or indirectly in the market.
|
• |
Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect management’s estimates of assumptions
that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques.
|
Year Ended December 31
|
||||||||||||
|
2023
|
2022
|
2021
|
|||||||||
(dollars in thousands, except per share amounts)
|
||||||||||||
Net income available to common stockholders
|
$
|
|
$
|
|
$
|
|
||||||
|
||||||||||||
Weighted average number of common shares outstanding - basic
|
|
|
|
|||||||||
Add: Dilutive effects of assumed exercises of stock options
|
|
|
|
|||||||||
Weighted average number of common shares outstanding - diluted
|
|
|
|
|||||||||
|
||||||||||||
Earnings per share:
|
||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
||||||
Diluted
|
$
|
|
$
|
|
$
|
|
Pre-CECL
Adoption
|
Impact
of CECL
Adoption
|
As Reported
Under CECL
|
||||||||||
(in thousands)
|
||||||||||||
Assets:
|
||||||||||||
Allowance for credit losses on securities:
|
||||||||||||
Available-for-sale
|
$
|
|
$
|
|
$
|
|
||||||
Held-to-maturity
|
|
|
|
|||||||||
Allowance for credit losses on loans
|
|
|
|
|||||||||
Deferred tax assets
|
|
|
|
|||||||||
Liabilities:
|
||||||||||||
Allowance for credit losses for off-balance sheet commitments
|
|
|
|
|||||||||
Shareholders’ equity:
|
||||||||||||
Retained earnings
|
|
(
|
)
|
|
2. |
INVESTMENT SECURITIES
|
December 31, 2023
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized (Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
U.S. government agency collateralized mortgage obligations (“CMOs”)
|
|
|
(
|
)
|
|
|||||||||||
Corporate debt securities
|
( |
) | ||||||||||||||
Total
|
|
|
|
|
|
(
|
)
|
|
|
|||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency MBS
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Securities measured at fair value
|
||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. government agency CMOs
|
|
|
(
|
)
|
|
|||||||||||
U.S. Treasury securities
|
( |
) | ||||||||||||||
Corporate debt securities
|
( |
) | ||||||||||||||
Total
|
|
|
(
|
)
|
|
|||||||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency MBS
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Securities measured at fair value
|
||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
U.S. government agency CMOs
|
|
|
|
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||||||||||||||
Corporate debt
securities
|
|
|
|
|
|
|
%
|
|
|
|
|
%
|
||||||||||||||||||||||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2022
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
U.S. government agency CMOs
|
|
|
|
|
|
|
|
|
%
|
|
|
%
|
||||||||||||||||||||||||||||
U.S. Treasury securities
|
% | % | ||||||||||||||||||||||||||||||||||||||
Corporate debt securities
|
% | % | ||||||||||||||||||||||||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
$
|
|
% |
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Amortized
Cost
|
Fair Value
|
Amortized
Cost
|
Fair Value
|
|||||||||||||
Securities available for sale
|
(in thousands)
|
|||||||||||||||
Due in one year or less
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
After one year through five years
|
|
|
|
|
||||||||||||
After five years through ten years
|
|
|
|
|
||||||||||||
After ten years
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities held to maturity
|
||||||||||||||||
Due in one year or less
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
After one year through five years
|
|
|
|
|
||||||||||||
After five years through ten years
|
|
|
|
|
||||||||||||
After ten years
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||
Less Than Twelve
Months
|
More Than Twelve
Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency notes
|
$ | ( |
) | $ | $ |
$ | $ | ( |
) | $ |
||||||||||||||
U.S. government agency CMOs
|
|
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||||||||
Corporate debt securities
|
|
|
(
|
)
|
|
(
|
)
|
|
||||||||||||||||
Total
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
December 31, 2022
|
||||||||||||||||||||||||
Less Than Twelve
Months
|
More Than Twelve
Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency CMOs
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
U.S. Treasury securities
|
( |
) | ( |
) | ||||||||||||||||||||
Corporate debt securities
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Total
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||
Securities held-to-maturity |
||||||||||||||||||||||||
U.S. government agency MBS
|
$ | ( |
) | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||
Total
|
$ | ( |
) | $ | $ | $ | $ | ( |
) | $ |
3. |
LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS
|
|
December 31,
2023
|
December 31,
2022
|
||||||
|
(in thousands)
|
|||||||
Farmer Mac
|
$
|
|
$
|
|
||||
SBA
|
|
|
||||||
USDA, FSA, and USDA Business and Industry
|
|
|
||||||
Total loans serviced for others
|
$
|
|
$
|
|
4. |
LOANS HELD FOR INVESTMENT
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
|
$
|
|
||||
Commercial real estate
|
|
|
||||||
Commercial
|
|
|
||||||
SBA
|
|
|
||||||
HELOC
|
|
|
||||||
Single family real estate
|
|
|
||||||
Consumer
|
|
|
||||||
Gross loans held for investment
|
|
|
||||||
Deferred fees, net
|
( |
) |
(
|
)
|
||||
Discount on SBA loans
|
(
|
)
|
( |
) | ||||
Loans held for investment
|
|
|||||||
Allowance for credit losses
|
( |
) | ( |
) | ||||
Loans held for investment, net
|
$
|
|
$ |
December 31, 2023
|
||||||||||||||||||||||||
Current
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Total
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
SBA 504 1st trust deed
|
|
|
|
|
|
|
||||||||||||||||||
Land
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
|
|
|
|
|
|
||||||||||||||||||
SBA
|
|
|
|
|
|
|
||||||||||||||||||
HELOC
|
|
|
|
|
|
|
||||||||||||||||||
Single family real estate
|
|
|
|
|
|
|
||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||||||||||
Current
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Total
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
SBA 504 1st trust deed
|
|
|
|
|
|
|
||||||||||||||||||
Land
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
|
|
|
|
|
|
||||||||||||||||||
SBA
|
|
|
|
|
|
|
||||||||||||||||||
HELOC
|
|
|
|
|
|
|
||||||||||||||||||
Single family real estate
|
|
|
|
|
|
|
||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
December 31, 2022
|
|||||||||||||||||||||||
With an ACL
|
Without an ACL
|
Total Nonaccrual
|
With an ACL | Without an ACL | Total Nonaccrual | |||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
|
$
|
|
$
|
|
$ | $ | $ | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||
Commercial real estate
|
|
|
|
|||||||||||||||||||||
SBA 504 1st trust deed |
||||||||||||||||||||||||
Construction
|
||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||
Single family real estate
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$ | $ | $ |
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2023
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance, prior to the adoption of ASC 326
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Impact of adoption of ASC 326
|
( |
) | ( |
) | ||||||||||||||||||||||||||||
Charge-offs
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
2022
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Charge-offs
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision (credit) for credit losses
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
2021
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Charge-offs
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Amortized Cost Basis:
|
||||||||||||||||||||||||||||||||
Individually evaluated loans with an ACL recorded
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Individually evaluated loans with no ACL recorded
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total individually evaluated loans
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Collectively evaluated loans
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Allowance for Credit Losses:
|
||||||||||||||||||||||||||||||||
Individually evaluated loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated loans
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total allowance for credit losses
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Impaired loans with no allowance recorded
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total impaired loans
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Loans collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Manufactured
Homes
|
Single Family
Residence
|
Machinery
&
Equipment
|
Total
|
|||||||||||||
December 31, 2023: |
(in thousands)
|
|||||||||||||||
Manufactured housing
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial real estate | ||||||||||||||||
Commercial
|
|
|
|
|
||||||||||||
HELOC
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2022:
|
||||||||||||||||
Manufactured housing
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial
|
|
|
|
|
||||||||||||
Single family real estate
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Term Loans - Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving
|
Total
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
December 31, 2023: | ||||||||||||||||||||||||||||||||
Manufactured housing:
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
SBA:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
HELOC:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Single family real estate:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Term Loans - Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
2022
|
2021
|
2020
|
2019
|
2018
|
Prior
|
Revolving
|
Total
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
December 31, 2022: | ||||||||||||||||||||||||||||||||
Manufactured housing:
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Commercial:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
SBA:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
HELOC:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Single family real estate:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||
Pass
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||
Term Extension |
Amortized
Cost
|
% of Total Class of
Loans
|
Weighted Average
Months
|
|||||||||
(Dollars in thousands) | ||||||||||||
Commercial real estate
|
$
|
|
|
%
|
|
|||||||
Commercial
|
|
|
%
|
|
||||||||
Total
|
$
|
|
|
%
|
|
December 31, 2023
|
||||||||||||
Payment Deferral
|
Amortized
Cost
|
% of Total Class of
Loans
|
Weighted Average
Months
|
|||||||||
(Dollars in thousands)
|
||||||||||||
SBA
|
$
|
|
|
%
|
|
|||||||
Total
|
$
|
|
|
%
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Balance, beginning
|
$
|
|
$
|
|
||||
New loans
|
|
|
||||||
Repayments and other
|
(
|
)
|
(
|
)
|
||||
Balance, ending
|
$
|
|
$
|
|
5. |
PREMISES AND EQUIPMENT
|
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Bank premises and land
|
$
|
|
$
|
|
||||
Furniture, fixtures, and equipment
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Construction in progress
|
|
|
||||||
|
|
|||||||
Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Premises and equipment, net
|
$
|
|
$
|
|
6. |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Additions
|
|
|
|
|||||||||
Proceeds from dispositions
|
(
|
)
|
(
|
)
|
|
|||||||
Gains (losses) on sales, net
|
|
|
(
|
)
|
||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
7. |
DEPOSITS
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Non-interest bearing demand deposits
|
$
|
|
$
|
|
||||
Interest-bearing deposits:
|
||||||||
NOW accounts
|
|
|
||||||
Money market deposit account
|
|
|
||||||
Savings accounts
|
|
|
||||||
Time deposits of $250,000 or more
|
|
|
||||||
Other time deposits
|
|
|
||||||
Total deposits
|
$
|
|
$
|
|
(in thousands)
|
||||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Total
|
$
|
|
8. |
BORROWINGS
|
December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
Contractual Maturity Date
|
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||
(dollars in thousands) |
||||||||||||||||
$ | % | $ | % | |||||||||||||
% | % | |||||||||||||||
% | % | |||||||||||||||
|
|
|
%
|
|
|
%
|
||||||||||
Total FHLB advances
|
$
|
|
$
|
|
||||||||||||
Weighted average rate
|
|
%
|
|
%
|
9. |
COMMITMENTS AND CONTINGENCIES
|
As of December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Commitments to extend credit
|
$
|
|
$
|
|
||||
Standby letters of credit
|
|
|
||||||
Total
|
$
|
|
$
|
|
10. |
STOCKHOLDERS’ EQUITY
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Expected life in years
|
|
|
|
|||||||||
Risk-free interest rate
|
|
%
|
|
%
|
|
%
|
||||||
Expected volatility
|
|
%
|
|
%
|
|
%
|
||||||
Annual dividend yield
|
|
%
|
|
%
|
|
%
|
Year ended December 31, 2023
|
||||||||||||||||
Option
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(dollars in thousands, except exercise price)
|
||||||||||||||||
Outstanding options, beginning of period
|
|
$
|
|
|||||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited or expired
|
(
|
)
|
|
|||||||||||||
Outstanding options, end of period
|
|
$
|
|
|
$
|
|
||||||||||
Options exercisable, end of period
|
|
$
|
|
|
$
|
|
||||||||||
Options expected to vest, end of period
|
|
$
|
|
|
$
|
|
Nonvested
Restricted Stock
Awards
|
Weighted Average
Grant-Date Fair
Value
|
|||||||
|
||||||||
Unvested options, beginning of period
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Unvested options, end of period
|
|
$
|
|
11. |
CAPITAL REQUIREMENTS
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1
Capital
(To Risk-
Weighted
Assets)
|
Common
Equity Tier
1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier1
Capital
(To
Average
Assets)
|
|||||||||||||
December 31, 2023
|
||||||||||||||||
CWB’s actual regulatory ratios
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Minimum capital requirements
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Well-capitalized requirements
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
December 31, 2022
|
||||||||||||||||
CWB’s actual regulatory ratios
|
% | % | % | % | ||||||||||||
Minimum capital requirements
|
% | % | % | % | ||||||||||||
Well-capitalized requirements
|
% | % | % | % |
12. |
REVENUE RECOGNITION
|
|
Years Ended December 31,
|
|||||||||||
Non-interest income
|
2023
|
2022
|
2021
|
|||||||||
In-scope of ASC 606: |
(in thousands)
|
|||||||||||
Service charges on deposit accounts
|
$
|
|
$
|
|
$
|
|
||||||
Exchange fees and other service charges
|
|
|
|
|||||||||
Non-interest income (in-scope of ASC 606)
|
|
|
|
|||||||||
Non-interest income (out-of-scope of ASC 606)
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
13. |
INCOME TAXES
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Current:
|
(in thousands)
|
|||||||||||
Federal
|
$
|
|
$
|
|
$
|
|
||||||
State
|
|
|
|
|||||||||
|
|
|
||||||||||
Deferred:
|
||||||||||||
Federal
|
|
(
|
)
|
(
|
)
|
|||||||
State
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
(
|
)
|
(
|
)
|
||||||||
Total provision for income taxes
|
$
|
|
$
|
|
$
|
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Federal income tax at statutory rate
|
|
%
|
|
%
|
|
%
|
||||||
State franchise tax, net of federal benefit
|
|
%
|
|
%
|
|
%
|
||||||
Merger costs |
% | % | % | |||||||||
Other
|
|
%
|
(
|
)%
|
(
|
)%
|
||||||
Total provision for income taxes
|
|
%
|
|
%
|
|
%
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Deferred Tax Assets:
|
(in thousands)
|
|||||||
Allowance for credit losses
|
$
|
|
$
|
|
||||
Bonus accrual
|
||||||||
Deferred compensation |
||||||||
Lease liability |
||||||||
Deferred state taxes |
||||||||
Unrealized loss on AFS securities
|
|
|
||||||
Other
|
|
|
||||||
Total deferred tax assets
|
|
|
||||||
Deferred Tax Liabilities:
|
||||||||
Depreciation
|
(
|
)
|
(
|
)
|
||||
Right of use asset |
( |
) | ( |
) | ||||
Total deferred tax liabilities
|
(
|
)
|
(
|
)
|
||||
Net deferred tax assets
|
$
|
|
$
|
|
14. |
LEASES
|
2023
|
2022
|
|||||||
(dollars in thousands) |
||||||||
Lease cost: | ||||||||
Operating lease cost
|
$
|
|
$
|
|
||||
Sublease income
|
|
|
||||||
Total lease cost
|
$
|
|
$
|
|
||||
Other information:
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities - operating leases
|
$
|
|
$
|
|
||||
Weighted average remaining lease term in years - operating leases
|
|
|
||||||
Weighted average discount rate - operating leases
|
|
%
|
|
%
|
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
||||
Thereafter
|
|
|||
Total future minimum lease payments
|
$
|
|
||
Less: remaining imputed interest
|
|
|||
Total lease liabilities
|
$
|
|
15. |
EMPLOYEE BENEFIT PLANS
|
16. |
FAIR VALUE MEASUREMENT
|
Fair Value Measurements at the End of the Reporting
Period Using:
|
||||||||||||||||
December 31, 2023
|
Quoted
Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Fair Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities measured at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. government agency notes
|
||||||||||||||||
U.S. government agency CMOs
|
||||||||||||||||
Corporate debt securities
|
||||||||||||||||
Interest only strips
|
|
|
|
|
||||||||||||
Servicing assets
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurements at the End of the Reporting
Period Using:
|
||||||||||||||||
December 31, 2022
|
Quoted
Prices
in Active
Markets
for Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities measured at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. government agency notes
|
||||||||||||||||
U.S. government agency CMOs
|
||||||||||||||||
U.S. Treasury securities
|
||||||||||||||||
Corporate debt securities
|
||||||||||||||||
Interest only strips
|
|
|
|
|
||||||||||||
Servicing assets
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurements at the End of the
Reporting Period Using
|
||||||||||||||||
Total
|
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
|
Active
Markets
for
Similar
Assets
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
As of December 31, 2023:
|
||||||||||||||||
Other assets acquired through foreclosure
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
As of December 31, 2022:
|
||||||||||||||||
Impaired loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other assets acquired through foreclosure
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||
Carrying |
Fair Value |
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
FHLB and FRB stock
|
|
|
|
|
|
|||||||||||||||
Investment securities - available-for-sale
|
|
|
|
|
|
|||||||||||||||
Investment securities - held-to-maturity
|
||||||||||||||||||||
Investment securities - measured at fair value
|
||||||||||||||||||||
Loans held for sale and loans held for investment, net
|
||||||||||||||||||||
Accrued interest receivable
|
||||||||||||||||||||
Servicing assets
|
||||||||||||||||||||
Interest only strips
|
||||||||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
|
|
|
|
|
|||||||||||||||
FHLB advances and other borrowings
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
December 31, 2022
|
||||||||||||||||||||
Carrying |
Fair Value |
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
FRB and FHLB stock
|
|
|
|
|
|
|||||||||||||||
Investment securities - available-for-sale
|
|
|
|
|
|
|||||||||||||||
Investment securities - held-to-maturity
|
||||||||||||||||||||
Investment securities - measured at fair value
|
||||||||||||||||||||
Loans held for sale and loans held for investment, net
|
||||||||||||||||||||
Accrued interest receivable
|
||||||||||||||||||||
Servicing assets
|
||||||||||||||||||||
Interest only strips
|
||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits
|
||||||||||||||||||||
FHLB advances and other borrowings
|
||||||||||||||||||||
Accrued interest payable
|
|
|
|
|
|
17. |
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Unrealized holding gains (losses) on AFS
|
(in thousands)
|
|||||||||||
Beginning balance
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Other comprehensive income (loss)
|
(
|
)
|
(
|
)
|
|
|||||||
Net current-period other comprehensive income
|
(
|
)
|
(
|
)
|
|
|||||||
Ending balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
18. |
PARENT COMPANY FINANCIAL INFORMATION
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Investment in subsidiary
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and Stockholders’ Equity:
|
||||||||
Other borrowings |
$ | $ | ||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Interest income
|
$
|
|
$
|
|
$
|
|
||||||
Interest expense
|
|
|
|
|||||||||
Net interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Provision for credit losses
|
|
|
|
|||||||||
Net interest expense after provision for credit losses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Equity in income from consolidated subsidiary
|
|
|
|
|||||||||
Total income
|
|
|
|
|||||||||
Total non-interest expenses
|
|
|
|
|||||||||
Income before income tax benefit
|
|
|
|
|||||||||
Income tax benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income
|
$
|
|
$
|
|
$
|
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(in thousands)
|
||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Equity in undistributed income from subsidiary
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Stock-based compensation
|
|
|
|
|||||||||
Changes in:
|
||||||||||||
Other assets
|
(
|
)
|
(
|
)
|
|
|||||||
Other liabilities
|
|
|
(
|
)
|
||||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash Flows from Investing Activities:
|
||||||||||||
Net dividends from and investment in subsidiary
|
|
|
|
|||||||||
Net cash provided by investing activities
|
|
|
|
|||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Proceeds from other borrowings
|
||||||||||||
Repayments of other borrowings
|
( |
) | ||||||||||
Common stock dividends paid
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from exercise of stock options
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
(
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|
||||||||
Cash and cash equivalents at beginning of year
|
|
|
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
|
$
|
|
$
|
|
19. |
SUBSEQUENT EVENTS
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
•
|
Reviewed and discussed with management the audited financial statements contained in the Company’s Annual Report on Form 10-K for fiscal
2023; and
|
•
|
Obtained from management their representation that the Company’s financial statements have been prepared in accordance with accounting
principles generally accepted in the United States.
|
•
|
Discussed with RSM the matters required to be discussed by PCAOB Auditing Standards No. 1301, Communications with Audit Committees (AS
1301); and
|
•
|
Received and discussed with RSM the written disclosures and the letter from RSM required by applicable requirements of the PCAOB regarding
RSM’s communications with the Audit Committee concerning independence and reviewed and discussed with RSM whether the rendering of the non-audit services provided by them to the Company during fiscal 2023 was compatible with their
independence.
|
THE AUDIT COMMITTEE
Kirk B. Stovesand, Chairman
Dana L. Boutain
John D. Illgen
James W. Lokey
|
|
Dated: February 29, 2024 |
1.
|
Annually review and determine (i) the compensation, including salary, bonus, incentive and other compensation of the Chief Executive
Officer, (ii) approve corporate goals and objectives relevant to compensation of the Chief Executive Officer, and (iii) evaluate performance in light of these goals and objectives, approve compensation in accordance therewith and
provide a report thereon to the Board.
|
2.
|
Annually review the amounts and terms of base salary, incentive compensation and all other forms of compensation for the Company’s
Executive Officers, and report the CC’s findings to the Board.
|
3.
|
Assess bank compensation programs including bonus and incentive plans for risk that may materially affect the long‐term viability of the
Bank. Risk management practices should include an assessment of the internal control environment surrounding the compensation programs, ensure the review and approval process is evident and the documentation is adequate to support the
results and contains appropriate clawback provisions. This annual risk assessment will be conducted by the Chief Risk Officer who will then provide documentation supporting his/her recommendations to the CC.
|
4.
|
Review Executive Officer compensation in reference to Section 162(m) of the Internal Revenue Code, as it may be amended from time to time,
and any other applicable laws, rules and regulations. This review may be conducted by external compensation consultants as deemed appropriate by the CC.
|
5.
|
Annually review and make recommendations to the Board with respect to incentive-based compensation plans and equity-based plans. Establish
criteria for the terms of awards granted to participants under such plans. Grant awards in accordance with such criteria and exercise all authority granted to the CC under such plans, or by the Board in connection with such plans.
|
6.
|
Recommend to the Board the compensation for Directors (including retainer, CC and CC chair fees, stock options and other similar items, as
appropriate).
|
7.
|
Evaluate the need for or any modifications to employment agreements, severance arrangements and change in control agreements and
provisions, as well as any special supplemental benefits.
|
8.
|
Conduct an annual review of the CC’s performance and periodically assess the adequacy of its charter and recommend changes to the Board as
needed.
|
9.
|
Retain, at the expense of the Bank, compensation consultants, outside counsel and other advisors as the CC may deem appropriate in its sole
discretion. The CC shall have authority to approve related fees and retention terms.
|
10.
|
Perform any other activities consistent with this Charter, the Company’s By‐laws and governing law as the CC or the Board deem appropriate.
Delegate responsibility to subcommittees of the CC as necessary or appropriate. Regularly report to the Board on the CC’s activities.
|
•
|
Maintain a compensation program that is equitable in a competitive marketplace.
|
•
|
Provide opportunities that integrate pay with the Bank's annual and long‐term performance.
|
•
|
Encourage achievement of strategic objectives and creation of shareholder value.
|
•
|
Recognize and reward individual initiative and achievements.
|
•
|
Maintain an appropriate balance between base salary and incentive compensation.
|
•
|
Allow the Bank to attract, retain, and motivate talented executives.
|
•
|
Annual Incentives: Executive officers are eligible to participate in a cash‐based annual incentive plan as approved by the Board. The annual incentive plan will provide competitive cash incentives at the 50th
percentile of market when target performance goals are achieved. When target performance goals are exceeded, the plan will provide additional payout levels that move total cash compensation to the 75th percentile of market.
|
•
|
Long‐Term Incentives: Executive officers are eligible to participate in long‐term incentive plans as approved by the Board. The long‐term incentive plans will utilize incentive stock options or restricted stock to reward
executives for the long‐term performance of the Bank. The value of any long‐term incentive grants is designed to move total compensation for the Executive officers to the 50th percentile of market when performance expectations are met
and to the 75th percentile of market when performance expectations are exceeded.
|
•
|
Executive Benefits: Executive officers are eligible to participate in all welfare and benefit programs offered to employees. In addition, executives are eligible for non‐qualified deferred compensation and may be
eligible for a bank provided automobile or automobile reimbursement, club memberships and any other executive perquisite as approved by the Board.
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
Option
Awards (1)
|
Restricted
Stock Awards
(2)
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
(3)
|
Total
|
|||||||||||||||||||||
Martin E. Plourd, President and Chief Executive Officer, CWBC and Chief Executive Officer, CWB
|
2023
|
$
|
525,000
|
$
|
300,000
|
$
|
-
|
$
|
-
|
$
|
27,020
|
$
|
83,233
|
$
|
935,253
|
||||||||||||||
2022
|
$
|
525,000
|
$
|
250,000
|
$
|
41,200
|
$
|
88,320
|
$
|
900
|
$
|
77,627
|
$
|
983,047
|
|||||||||||||||
William F. Filippin, President CWB
|
2023
|
$
|
330,000
|
$
|
100,000
|
$
|
-
|
$
|
-
|
$
|
12,255
|
$
|
56,282
|
$
|
498,537
|
||||||||||||||
2022
|
$
|
330,000
|
$
|
130,000
|
$
|
-
|
$
|
78,610
|
$
|
356
|
$
|
53,125
|
$
|
592,091
|
|||||||||||||||
Timothy J. Stronks, Executive Vice President and Chief Operating Officer and Chief Risk Officer, CWB
|
2023
|
$
|
290,000
|
$
|
120,000
|
$
|
-
|
$
|
-
|
$
|
6,199
|
$
|
46,355
|
$
|
462,554
|
||||||||||||||
2022
|
$
|
290,000
|
$
|
120,000
|
$
|
20,500
|
$
|
44,160
|
$
|
176
|
$
|
43,800
|
$
|
518,636
|
1.
|
The dollar value of option awards represents the aggregate grant date fair value of option awards granted during the applicable fiscal year as computed
in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. The terms of the 2020, 2014 and 2006 Plans are described below in “Equity Compensation
Plans.” Furthermore, the amount recognized for these awards was calculated based on the Black-Scholes option-pricing model. See the Company’s Annual Report on Form 10-K, at Note 11 to the Company’s Financial Statements for the year
ended December 31, 2023.
|
2.
|
The dollar value of the restricted stock awards represents the aggregate grant date closing price fair market value on the date of grant less purchase
price. These awards are subject to service-based vesting conditions. The terms of the 2020 Plan are described below in “Equity Compensation Plan.”
|
3.
|
"All Other Compensation" includes the following:
|
ALL OTHER COMPENSATION
|
||||||||||||||||||||||||||||
Name
|
Year
|
401k Match
|
Deferred Compensation
|
Life Insurance Premium
|
Company Car/Car Allowance
|
Club Membership
|
Relocation
|
|||||||||||||||||||||
Martin E. Plourd
|
2023
2022
|
$
|
9,900$8,100
|
$
|
63,000$62,750
|
$
|
5,715$3,564
|
$
|
2,118$1,913
|
$
|
2,500$1,300
|
$-
$-
|
||||||||||||||||
William F. Filippin
|
2023
2022
|
$
|
9,900$8,100
|
$
|
39,600$39,600
|
$
|
2,937
$2,248
|
$
|
3,845$3,177
|
$-
$-
|
$-
$-
|
|||||||||||||||||
Timothy J. Stronks
|
2023
2022
|
$
|
9,900$8,100
|
$
|
34,800$34,650
|
$
|
1,655$1,050
|
|
$-
$-
|
$-
$-
|
$-
$-
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||
Name
|
Number of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number of Securities Underlying Unexercised Options
(#)
Unexercisable (1)
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares That Have Not Vested
(#)
|
Market Value of Shares That Have Not Vested ($)
|
||||||||||||||||||
William F. Filippin
|
15,800
|
-
|
-
|
$
|
6.590
|
6/25/25
|
|||||||||||||||||||
6,000
|
-
|
-
|
$
|
6.860
|
3/24/26
|
||||||||||||||||||||
5,000
|
-
|
-
|
$
|
11.200
|
2/22/28
|
||||||||||||||||||||
7,500
|
-
|
-
|
$
|
10.280
|
2/28/29
|
||||||||||||||||||||
1,200
|
800
|
-
|
$
|
6.710
|
4/29/30
|
||||||||||||||||||||
6,000
|
4,000
|
-
|
$
|
9.890
|
2/25/31
|
||||||||||||||||||||
8,000
|
12,000
|
-
|
$
|
12.940
|
11/18/31
|
||||||||||||||||||||
3,900
|
$
|
55,728
|
|||||||||||||||||||||||
Martin E. Plourd
|
1,650
|
-
|
-
|
$
|
6.699
|
3/26/25
|
|||||||||||||||||||
20,000
|
-
|
-
|
$
|
6.699
|
3/26/25
|
||||||||||||||||||||
25,000
|
-
|
-
|
$
|
6.860
|
3/24/26
|
||||||||||||||||||||
20,000
|
-
|
-
|
$
|
10.300
|
2/22/27
|
||||||||||||||||||||
10,000
|
-
|
-
|
$
|
10.990
|
12/20/27
|
||||||||||||||||||||
20,000
|
-
|
-
|
$
|
10.560
|
11/15/28
|
||||||||||||||||||||
16,000
|
4,000
|
-
|
$
|
10.700
|
2/27/30
|
||||||||||||||||||||
1,480
|
1,520
|
-
|
$
|
6.710
|
4/29/30
|
||||||||||||||||||||
15,000
|
10,000
|
-
|
$
|
9.890
|
2/25/31
|
||||||||||||||||||||
8,000
|
12,000
|
-
|
$
|
12.940
|
11/18/31
|
||||||||||||||||||||
2,000
|
8,000
|
-
|
$
|
14.72
|
11/17/32
|
||||||||||||||||||||
10,800
|
$
|
148,296
|
|||||||||||||||||||||||
Timothy J. Stronks
|
20,000
|
-
|
-
|
$
|
12.680
|
7/26/28
|
|||||||||||||||||||
5,000
|
-
|
-
|
$
|
10.280
|
2/28/29
|
||||||||||||||||||||
1,200
|
800
|
-
|
$
|
6.710
|
4/29/30
|
||||||||||||||||||||
6,000
|
4,000
|
-
|
$
|
9.890
|
2/25/31
|
||||||||||||||||||||
3,000
|
4,500
|
-
|
$
|
13.600
|
2/24/2032
|
||||||||||||||||||||
2,400
|
$
|
35,328
|
1.
|
Each option grant generally vests 20% on each anniversary of the grant date. Each stock option expires 10 years after the date the stock
option was granted.
|
Name (1)
|
Fees
Earned or
Paid in
Cash
($)
|
Stock
Awards
($)(2)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)(3)
|
Total
($)
|
|||||||||||||||||||||
Martin P. Alwin
|
21,400
|
14,800
|
-
|
-
|
-
|
-
|
36,200
|
|||||||||||||||||||||
Robert H. Bartlein
|
39,600
|
14,800
|
-
|
-
|
-
|
-
|
54,400
|
|||||||||||||||||||||
Dana L. Boutain
|
24,100
|
14,800
|
-
|
-
|
-
|
-
|
38,900
|
|||||||||||||||||||||
Suzanne M. Chadwick
|
22,200
|
14,800
|
-
|
-
|
-
|
-
|
37,000
|
|||||||||||||||||||||
Tom L. Dobyns
|
23,000
|
14,800
|
-
|
-
|
-
|
32,500
|
70,300
|
|||||||||||||||||||||
John D. Illgen
|
26,900
|
14,800
|
-
|
-
|
-
|
-
|
41,700
|
|||||||||||||||||||||
James W. Lokey
|
35,500
|
14,800
|
-
|
-
|
-
|
-
|
50,300
|
|||||||||||||||||||||
Shereef Moharram
|
20,900
|
14,800
|
-
|
-
|
-
|
-
|
35,700
|
|||||||||||||||||||||
William R. Peeples
|
22,400
|
14,800
|
-
|
-
|
-
|
-
|
37,200
|
|||||||||||||||||||||
Christopher R. Raffo
|
18,300
|
14,800
|
-
|
-
|
-
|
-
|
33,100
|
|||||||||||||||||||||
Kirk B. Stovesand
|
39,400
|
14,800
|
-
|
-
|
-
|
-
|
54,200
|
|||||||||||||||||||||
Celina L. Zacarias
|
13,700
|
14,800
|
-
|
-
|
-
|
-
|
28,500
|
1.
|
Outstanding stock options held by each non-employee Director at March 31, 2024 are as follows: Dana L. Boutain, 11,000, Tom L. Dobyns,
11,000, John D. Illgen, 6,000; Shereef Moharram, 16,000; Kirk B. Stovesand, 8,000, Chris Raffo, 20,000. Stock options held at December 31, 2023 by Mr. Plourd are included in the table for the Named Executive Officers under the
heading entitled “Outstanding Equity Awards at Fiscal Year-End.”
|
2.
|
Column represents the fair value of restricted stock awards granted and vested using the closing price on the date of the grant less cost
to the grantee.
|
3.
|
Other compensation consists of payments to Tom Dobyns for consulting services.
|
Year
|
Summary Compensation Table Total for PEO ($)1
|
Compensation Actually Paid to PEO ($)2
|
Average Summary Compensation Table Total for Non-PEO NEOs ($)1
|
Average Compensation Actually Paid for Non-PEO NEOs ($)2
|
Total Shareholder Return ($)3
|
Net Income ($)
|
||||||||||||||||||
2023
|
$
|
935,253
|
$
|
1,045,175
|
$
|
480,456
|
$
|
522,883
|
$
|
64.27
|
$
|
7,316,012
|
||||||||||||
2022
|
$
|
983,047
|
$
|
1,104,189
|
$
|
555,364
|
$
|
579,443
|
$
|
41.22
|
$
|
13,449,000
|
||||||||||||
2021
|
$
|
1,081,213
|
$
|
1,238,459
|
$
|
518,206
|
$
|
597,778
|
$
|
26.31
|
$
|
13,101,000
|
1.
|
For the disclosed time periods, the PEO (Principal Executive Officer) is Marty Plourd, President and CEO of the Company. The NEOs (Named
Executive Officers) are William F. Filippin, the Bank’s President and Timothy J. Stronks, the Bank’s Chief Operating Officer and Chief Risk Officer.
|
2.
|
The following table sets forth a reconciliation of summary compensation actually paid to the PEO and NEOs
|
3.
|
Total shareholder return represents the cumulative change in the value of a $100 investment based on the value of common stock as
measured at December 31, 2020, through and including the fiscal year-end for each reported period and dividend reinvestment during the period.
|
2023
|
2022
|
2021
|
||||||||||||||||||||||
Adjustments
|
PEO ($)
|
Average of
Other NEOs
($)
|
PEO ($)
|
Average of
Other NEOs
($)
|
PEO ($)
|
Average of
Other NEOs
($)
|
||||||||||||||||||
Total Compensation from Summary Compensation Table
|
$
|
935,253
|
$
|
480,546
|
$
|
983,047
|
$
|
555,364
|
$
|
1,081,213
|
$
|
518,206
|
||||||||||||
Subtraction: Current year equity awards
|
-
|
-
|
129,520
|
71,635
|
257,700
|
57,800
|
||||||||||||||||||
Year-end value of equity awards granted in the year and unvested at year end
|
-
|
-
|
150,315
|
81,216
|
329,101
|
105,772
|
||||||||||||||||||
Year over year change in fair value of outstanding and unvested equity awards
|
119,471
|
43,138
|
79,830
|
10,707
|
58,681
|
25,529
|
||||||||||||||||||
Year over year change in fair value of equity awards granted in prior years and vested in the year
|
(9,549
|
)
|
(801
|
)
|
20,517
|
3,792
|
27,164
|
6,072
|
||||||||||||||||
Compensation actually paid (as calculated)
|
$
|
1,045,175
|
$
|
522,883
|
$
|
1,104,189
|
$
|
579,443
|
$
|
1,238,459
|
$
|
597,778
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
|
Name and Title |
Number of
Shares of Common Stock Beneficially
Owned (1)
|
Number of
Shares Subject to Vested
Stock Options
(2)
|
Percent of Class
Beneficially Owned (1) (2)
|
|||||||||
Martin P. Alwin, Director
|
4,186
|
-
|
*
|
|||||||||
Robert H. Bartlein, Director, Chairman of the Board, CWB
|
540,450
|
-
|
6.07
|
%
|
||||||||
Dana L. Boutain, Director
|
3,501
|
11,000
|
*
|
|||||||||
Suzanne M. Chadwick, Director
|
1,763
|
-
|
*
|
|||||||||
Tom L. Dobyns, Director
|
4,500
|
11,000
|
*
|
|||||||||
William F. Filippin, Director, President and Chief Credit Officer, CWB
|
13,511
|
49,500
|
0.71
|
%
|
||||||||
John D. Illgen, Director
|
30,000
|
16,000
|
0.52
|
%
|
||||||||
Investors of America, Limited Partnership (3)
|
568,696
|
-
|
6.38
|
%
|
||||||||
James W. Lokey, Director
|
13,054
|
-
|
*
|
|||||||||
Shereef Moharram, Director
|
20,925
|
16,000
|
*
|
|||||||||
William R. Peeples, Director, Chairman of the Board, CWBC
|
807,987
|
-
|
9.07
|
%
|
||||||||
PL Capital Advisors, LLC, Richard J. Lashley, John W. Palmer and Martin
P. Alwin (6)
|
558,675
|
-
|
6.27
|
%
|
||||||||
Richard Pimentel, Executive Vice President and Chief Financial Officer, CWBC and CWB
|
600
|
8,000
|
*
|
|||||||||
Martin E. Plourd, Director, President and Chief Executive Officer, CWBC and Chief Executive Officer, CWB
|
104,412
|
139,130
|
2.73
|
%
|
||||||||
Christopher R. Raffo, Director (5)
|
1,739
|
20,000
|
*
|
|||||||||
Kirk B. Stovesand, Director
|
86,051
|
8,000
|
1.06
|
%
|
||||||||
Timothy J. Stronks, Executive Vice President and Chief Operating Officer and Chief Risk Officer, CWB
|
3,100
|
35,200
|
*
|
|||||||||
Philip J. Timyan (4)
|
506,311
|
-
|
5.68
|
%
|
||||||||
Celina L. Zacarias, Director
|
1,000
|
-
|
-
|
|||||||||
All Directors and Executive Officers as a Group (16 in number)
|
1,636,779
|
313,830
|
21.89
|
%
|
*
|
Less than 0.50%
|
1.
|
Includes shares beneficially owned, directly and indirectly, together with associates, except for shares subject to vested stock
options’. Also includes shares held as trustee and held by or as custodian for minor children. Unless otherwise noted, all shares are held as community property under California law or with sole investment and voting power.
|
2.
|
Shares subject to options held by Directors or executive officers that are exercisable within 60 days after the March 31, 2024 (vested)
are treated as issued and outstanding for the purpose of computing the percent of the class owned by such person and the percent of class owned by all Directors and executive officers as a group, but not for the purpose of computing
the percent of class owned by any other person.
|
3.
|
Address is: 135 North Meramec, Clayton, MO 63105. These securities are owned by Investors of America, Limited Partnership and may be
deemed to be indirectly owned by First Bank, Inc. Members of the Dierberg Family and the Dierberg Family Trusts are shareholders of First Securities America, Inc., the General Partner of Investors of America, Limited Partnership,
and First Bank, Inc. First Bank, Inc. disclaims beneficial ownership of these securities.
|
4.
|
Address is: 105 Front Street #122, Key West, Florida 33040. Excludes 4,000 shares held by Mr. Timyan’s spouse, Anna S. Belyaev, of
which Mr. Timyan disclaims beneficial ownership. Information is pursuant to the most recent Schedule 13D filed by Mr. Timyan with the SEC on or about July 31, 2020.
|
5.
|
Mr. Raffo holds the option to purchase 20,000 shares of Company Common Stock from Philip J Timyan under the terms of an option
agreement between Mr. Raffo and Mr. Timyan.
|
6.
|
Address is: 750 Eleventh Street South, Suite 202, Naples, FL 34102. Mr. Lashley, Mr. Palmer, and PL Capital Advisors, LLC disclaim
beneficial ownership of such Common Stock, except to the extent of their pecuniary interest therein. Information is pursuant to the most recent Schedule 13D/A filed by Mr. Lashley, Mr. Palmer, Mr. Alwin and PL Capital Advisors, LLC
with the SEC on or about March 22, 2022.
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Report of Independent Registered Public Accounting Firm
|
Page 54
|
|
Consolidated Balance Sheets as of December 31, 2023 and 2022
|
Page 57
|
|
Consolidated Income Statements for the three years ended December 31, 2023, 2022, and 2021
|
Page 58
|
|
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2023, 2022, and 2021
|
Page 59
|
|
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2023, 2022, and 2021
|
Page 60
|
|
Consolidated Statements of Cash Flows for the three years ended December 31, 2023, 2022, and 2021
|
Page 61
|
|
Notes to Consolidated Financial Statements
|
Page 62
|
ITEM 16. |
FORM 10-K SUMMARY
|
Second Amended and Restated Articles of Incorporation (1)
|
|
Bylaws (2)
|
|
Certificate of Amendment of Bylaws (3)
|
|
Common Stock Certificate (4)
|
|
Community West Bancshares 2006 Stock Option Plan (5)
|
|
Employment and Confidentiality Agreement, dated November 2, 2011, by and among Community West Bank, Community West Bancshares and Martin E. Plourd (6)
|
|
Salary Continuation Agreement, dated January 28, 2014, between Community West Bank and Martin E. Plourd. (1)
|
|
Community West Bancshares 2014 Stock Option Plan and Form of Stock Option Agreement (7)
|
|
Employment and Confidentiality Agreement, dated June 1, 2015, among Community West Bank, Community West Bancshares and William F. Filippin. (8)
|
|
Amendment to the Community West Bancshares 2014 Stock Option Plan (9)
|
|
Employment and Confidentiality Agreement, dated July 23, 2018 among Community
West Bank and T. Joseph Stronks, (10)
|
|
Salary Continuation Agreement, dated September 28, 2018, between Community West Bank and William Filippin (10)
|
|
Salary Continuation Agreement, dated May 1, 2020, between Community West Bank and Timothy Stronks, (11)
|
|
Employment and Confidentiality Agreement, dated, January 3, 2022, among Community West Bank and Richard Pimentel.(12)
|
|
Subsidiaries of the Registrant (6)
|
|
Consent of RSM US LLP**
|
|
Certification of the Chief Executive Officer **
|
|
Certification of the Chief Financial Officer **
|
|
Certification pursuant to 18 U.S. C. Section 1350 **
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded
within the inline XBRL document).
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document***
|
101.CAL
|
Inline XBRL Taxonomy Calculation Linkbase Document***
|
101.DEF
|
Inline XBRL Taxonomy Definition Linkbase Document***
|
101.LAB
|
Inline XBRL Taxonomy Label Linkbase Document***
|
101.PRE
|
Inline XBRL Taxonomy Presentation Linkbase Document***
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
(1) |
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on January 29, 2014.
|
(2) |
Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed with the Commission on March 26, 1998.
|
(3) |
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on July 2, 2007.
|
(4) |
Incorporated by reference from the Registrant’s Amendment to Registration Statement on Form 8-A filed with the Commission on March 12,
1998.
|
(5) |
Incorporated by reference from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Commission
on March 26, 2007.
|
(6) |
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on November 3, 2011.
|
(7) |
Incorporated by reference from Registrant’s Statement on Form S-8 (File No 333-201281) filed with the Commission on December 29, 2014.
|
(8) |
Incorporated by reference from the Registrant’s Form 10-Q for the quarter and nine months ended September 30, 2015 filed with the
Commission on November 6, 2015.
|
(9) |
Incorporated by reference from the Registrant’s Statement on Form S-8 (File No 323-218994) filed with the Commission on June 27, 2017.
|
(10) |
Incorporated by reference from the Registrant’s Form 10-Q for the quarter and nine months ended September 30, 2018 filed with the
Commission on November 2, 2018.
|
(11) |
Incorporated by reference from the Registrant’s Form 10-Q for the quarter and nine months ended September 30, 2015 filed with the
Commission on November 6, 2015.
|
(12) |
Incorporated by reference from the Registrant’s Form 10-Q for the quarter ended March 31, 2022 filed with the Commission on May 13,
2022.
|
* |
Indicates a management contract or compensatory plan or arrangement.
|
** |
Filed herewith.
|
*** |
Furnished herewith.
|
COMMUNITY WEST BANCSHARES
|
||
(Registrant)
|
||
Date: April 5, 2024
|
By:
|
/s/ William R. Peeples
|
William R. Peeples
|
||
Chairman of the Board
|
Signature
|
Title
|
Date
|
||
/s/ William R. Peeples
|
Director and Chairman of the Board
|
April 5, 2024
|
||
William R. Peeples
|
||||
/s/ Martin E. Plourd
|
President and Chief Executive Officer and Director
|
April 5, 2024
|
||
Martin E. Plourd
|
(Principal Executive Officer)
|
|||
/s/ Richard Pimentel
|
Executive Vice President and Chief Financial Officer
|
April 5, 2024
|
||
Richard Pimentel
|
(Principal Financial and Accounting Officer)
|
|||
/s/ Martin Alwin
|
Director
|
April 5, 2024
|
||
Martin Alwin
|
||||
/s/ Robert H. Bartlein
|
Director
|
April 5, 2024
|
||
Robert H. Bartlein
|
||||
/s/ Dana L. Boutain
|
Director
|
April 5, 2024
|
||
Dana L. Boutain
|
||||
/s/ Suzanne M. Chadwick
|
Director
|
April 5, 2024
|
||
Suzanne M. Chadwick
|
||||
/s/ Tom L. Dobyns
|
Director
|
April 5, 2024
|
||
Tom L. Dobyns
|
||||
/s/ John D. Illgen
|
Director and Secretary of the Board
|
April 5, 2024
|
||
John D. Illgen
|
||||
/s/ James W. Lokey
|
Director
|
April 5, 2024
|
||
James W. Lokey
|
||||
/s/ Shereef Moharram
|
Director
|
April 5, 2024
|
||
Shereef Moharram
|
/s/ Christopher Raffo
|
Director
|
April 5, 2024
|
||
Christopher Raffo
|
||||
/s/ Kirk B. Stovesand
|
Director
|
April 5, 2024
|
||
Kirk B. Stovesand
|
||||
/s/ Celina L. Zacarias
|
Director
|
April 5, 2024
|
||
Celina L. Zacarias
|
1. |
I have reviewed this annual report on Form 10-K of Community West Bancshares;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Martin E. Plourd
|
|
Martin E. Plourd
|
|
President and Chief Executive Officer
|
|
Community West Bancshares
|
|
April 5, 2024
|
1. |
I have reviewed this annual report on Form 10-K of Community West Bancshares;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Richard Pimentel
|
|
Richard Pimentel
|
|
Executive Vice President and Chief Financial Officer
|
|
Community West Bancshares
|
|
April 5, 2024
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of and for the periods presented in the Report.
|
/s/Martin E. Plourd
|
|
Martin E. Plourd
|
|
President and Chief Executive Officer
|
|
|
|
/s/Richard Pimentel
|
|
Richard Pimentel
|
|
Executive Vice President and Chief Financial Officer
|
|
April 5, 2024
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets: | ||
Investment securities available-for-sale, amortized cost | $ 16,682 | $ 27,790 |
Investment securities held-to-maturity, fair value | $ 2,056 | $ 2,423 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 8,875,012 | 8,798,412 |
Common stock, shares outstanding (in shares) | 8,875,012 | 8,798,412 |
CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Interest and dividend income: | |||
Loans, including fees | $ 52,556 | $ 46,657 | $ 45,123 |
Investment securities and other | 4,966 | 2,481 | 955 |
Total interest and dividend income | 57,522 | 49,138 | 46,078 |
Interest expense: | |||
Deposits | 14,160 | 2,511 | 2,835 |
FHLB advances and other borrowings | 955 | 817 | 869 |
Total interest expense | 15,115 | 3,328 | 3,704 |
Net interest income | 42,407 | 45,810 | 42,374 |
Provision (credit) for credit losses | (395) | (195) | (181) |
Net interest income after provision (credit) for credit losses | 42,802 | 46,005 | 42,555 |
Non-interest income: | |||
Other loan fees | 944 | 1,161 | 1,349 |
Gains from loan sales, net | 171 | 257 | 475 |
Document processing fees | 352 | 422 | 512 |
Service charges | 626 | 438 | 302 |
Other income | 1,660 | 1,700 | 1,115 |
Total non-interest income | 3,753 | 3,978 | 3,753 |
Non-interest expenses: | |||
Salaries and employee benefits | 21,605 | 19,637 | 18,624 |
Occupancy, net | 4,380 | 4,180 | 3,254 |
Professional services | 3,728 | 2,923 | 1,645 |
Advertising and marketing | 926 | 921 | 734 |
Data processing | 1,407 | 1,265 | 1,215 |
Depreciation | 727 | 711 | 780 |
FDIC assessment | 1,013 | 577 | 485 |
Other expenses | 1,959 | 1,058 | 1,258 |
Total non-interest expenses | 35,745 | 31,272 | 27,995 |
Income before provision for income taxes | 10,810 | 18,711 | 18,313 |
Provision for income taxes | 3,494 | 5,262 | 5,212 |
Net income | $ 7,316 | $ 13,449 | $ 13,101 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.83 | $ 1.54 | $ 1.53 |
Diluted (in dollars per share) | $ 0.81 | $ 1.51 | $ 1.5 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 8,840,524 | 8,722,481 | 8,567,839 |
Diluted (in shares) | 8,979,201 | 8,892,127 | 8,722,938 |
Dividends declared per common share (in dollars per share) | $ 0.32 | $ 0.295 | $ 0.27 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income | $ 7,316 | $ 13,449 | $ 13,101 |
Other comprehensive (loss) income, net: | |||
Unrealized (loss) gain on securities available-for-sale (net of tax effect of $103, $362, and ($24) for each respective period presented) | (245) | (863) | 57 |
Other comprehensive (loss) income, net | (245) | (863) | 57 |
Comprehensive income | $ 7,071 | $ 12,586 | $ 13,158 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Other comprehensive (loss) income, net: | |||
Unrealized (loss) gain on securities available-for-sale, tax effect | $ 103 | $ 362 | $ (24) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Preferred Stock [Member] |
Common Stock [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Retained Earnings [Member] |
Total |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Preferred Stock [Member]
|
[1] |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
|
[1] |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
|
[1] |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Retained Earnings [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member] |
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2020 | $ 0 | $ 42,909 | $ 35 | $ 46,063 | $ 89,007 | ||||||||||||
Balances (in shares) at Dec. 31, 2020 | 0 | 8,473,000 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income | $ 0 | $ 0 | 0 | 13,101 | 13,101 | ||||||||||||
Exercise of stock options | $ 0 | $ 1,204 | 0 | 0 | 1,204 | ||||||||||||
Exercise of stock options (in shares) | 0 | 177,000 | |||||||||||||||
Stock-based compensation | $ 0 | $ 318 | 0 | 0 | 318 | ||||||||||||
Stock-based compensation (in shares) | 0 | 0 | |||||||||||||||
Dividends on common stock | $ 0 | $ 0 | 0 | (2,312) | (2,312) | ||||||||||||
Dividends on common stock (in shares) | 0 | 0 | |||||||||||||||
Other comprehensive income (loss), net | $ 0 | $ 0 | 57 | 0 | 57 | ||||||||||||
Balance at Dec. 31, 2021 | $ 0 | $ 44,431 | 92 | 56,852 | 101,375 | ||||||||||||
Balances (in shares) at Dec. 31, 2021 | 0 | 8,650,000 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income | $ 0 | $ 0 | 0 | 13,449 | 13,449 | ||||||||||||
Exercise of stock options | $ 0 | $ 974 | 0 | 0 | 974 | ||||||||||||
Exercise of stock options (in shares) | 0 | 110,000 | |||||||||||||||
Grant of restricted stock awards, net of forfeitures | $ 0 | $ 0 | 0 | 0 | 0 | ||||||||||||
Grant of restricted stock awards, net of forfeitures (in shares) | 0 | 38,000 | |||||||||||||||
Stock-based compensation | $ 0 | $ 289 | 0 | 0 | 289 | ||||||||||||
Stock-based compensation (in shares) | 0 | 0 | |||||||||||||||
Dividends on common stock | $ 0 | $ 0 | 0 | (2,574) | (2,574) | ||||||||||||
Dividends on common stock (in shares) | 0 | 0 | |||||||||||||||
Other comprehensive income (loss), net | $ 0 | $ 0 | (863) | 0 | (863) | ||||||||||||
Balance at Dec. 31, 2022 | $ 0 | $ 45,694 | (771) | 67,727 | $ 112,650 | $ 0 | $ 0 | $ 0 | $ (1,573) | [1] | $ (1,573) | [1] | |||||
Balances (in shares) at Dec. 31, 2022 | 0 | 8,798,000 | 8,798,412 | 0 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Accounting Standards Update [Extensible Enumeration] | ASU 2016-13 [Member] | ASU 2016-13 [Member] | |||||||||||||||
Net income | $ 0 | $ 0 | 0 | 7,316 | $ 7,316 | ||||||||||||
Exercise of stock options | $ 0 | $ 456 | 0 | 0 | 456 | ||||||||||||
Exercise of stock options (in shares) | 0 | 54,000 | |||||||||||||||
Grant of restricted stock awards, net of forfeitures | $ 0 | $ 0 | 0 | 0 | 0 | ||||||||||||
Grant of restricted stock awards, net of forfeitures (in shares) | 0 | 23,000 | |||||||||||||||
Stock-based compensation | $ 0 | $ 464 | 0 | 0 | 464 | ||||||||||||
Stock-based compensation (in shares) | 0 | 0 | |||||||||||||||
Dividends on common stock | $ 0 | $ 0 | 0 | (2,824) | (2,824) | ||||||||||||
Dividends on common stock (in shares) | 0 | 0 | |||||||||||||||
Other comprehensive income (loss), net | $ 0 | $ 0 | (245) | 0 | (245) | ||||||||||||
Balance at Dec. 31, 2023 | $ 0 | $ 46,614 | $ (1,016) | $ 70,646 | $ 116,244 | ||||||||||||
Balances (in shares) at Dec. 31, 2023 | 0 | 8,875,000 | 8,875,012 | ||||||||||||||
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY [Abstract] | ||
Cumulative effect of change in accounting principle, taxes | $ 700 | $ 659 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Cash flows from operating activities: | |||
Net income | $ 7,316 | $ 13,449 | $ 13,101 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Provision (credit) for credit losses | (395) | (195) | (181) |
Depreciation | 727 | 711 | 780 |
Stock-based compensation | 464 | 289 | 318 |
Deferred taxes | 46 | 250 | (505) |
Net (accretion) amortization of discounts and premiums on investment securities | (28) | (76) | 63 |
(Gains) losses on: | |||
Sale of repossessed assets, net | (123) | (116) | 0 |
Sale of loans, net | (171) | (257) | (475) |
Loss on abandonment of premises and equipment | 42 | 0 | 0 |
Sale of assets, net | 0 | 0 | 4 |
Loans originated for sale | (22,434) | (22,069) | (41,077) |
Proceeds from sales of loans held for sale | 22,592 | 21,331 | 41,552 |
Proceeds from principal paydowns on loans held for sale | 3,796 | 3,370 | 7,346 |
Change in fair value of equity securities | (157) | 23 | (99) |
Changes in: | |||
Other assets | 9,983 | (9,196) | 439 |
Other liabilities | 3,753 | (1,778) | 1,093 |
Servicing assets, net | 175 | 120 | (139) |
Net cash provided by (used in) operating activities | 25,586 | 5,856 | 22,220 |
Cash flows from investing activities: | |||
Principal pay downs and maturities of available-for-sale securities | 21,105 | 32,236 | 3,894 |
Purchase of available-for-sale securities | (9,964) | (40,360) | (6,250) |
Principal pay downs and maturities of held-to-maturity securities | 417 | 255 | 1,743 |
Loan originations and principal collections, net | (17,275) | (65,078) | (41,596) |
Purchase of restricted stock, net | (332) | (92) | 192 |
Purchase of premises and equipment | (482) | (239) | (206) |
Proceeds from sale of other assets acquired through foreclosure | 2,967 | 384 | 0 |
Net cash provided by (used in) investing activities | (3,564) | (72,894) | (42,223) |
Cash flows from financing activities: | |||
Net (decrease) increase in deposits | (22,146) | (75,047) | 183,946 |
Proceeds from FHLB advances | 30,000 | 45,000 | 0 |
Repayments of FHLB advances | (30,000) | (45,000) | (15,000) |
Proceeds from other borrowings | 20,000 | 0 | 0 |
Repayments of other borrowings | (10,000) | 0 | 0 |
Exercise of stock options | 456 | 974 | 1,204 |
Cash dividends paid on common stock | (2,824) | (2,574) | (2,312) |
Net cash (used in) provided by financing activities | (14,514) | (76,647) | 167,838 |
Net increase (decrease) in cash and cash equivalents | 7,508 | (143,685) | 147,835 |
Cash and cash equivalents at beginning of year | 64,690 | 208,375 | 60,540 |
Cash and cash equivalents at end of year | 72,198 | 64,690 | 208,375 |
Cash paid during the period for: | |||
Interest | 12,886 | 3,260 | 3,880 |
Income taxes | 4,066 | 4,957 | 5,802 |
Non-cash investing and financing activity: | |||
Transfers from loans held for investment to loans held for sale | 735 | 0 | 0 |
Transfers from loans held for sale to loans held for investment | 1,337 | 0 | 0 |
Transfers from loans held for investment to other assets acquired through foreclosure, net | $ 1,576 | $ 0 | $ 136 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Operations
Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full-service
banking through its wholly owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”) which includes 445 Pine, LLC, the Bank’s wholly owned limited liability company. Unless indicated otherwise or unless the context suggests otherwise, these
entities are referred to herein collectively and on a consolidated basis as the “Company.”
Basis of Presentation
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”)
and conform to practices within the banking industry. The accounts of the Company and its consolidated subsidiary are included in these consolidated financial statements. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for credit losses and fair value of investment securities available for sale. Although management
believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of management, all adjustments considered necessary have been reflected in the financial statements during their preparation.
Proposed Merger
On October 10, 2023, the Company announced the signing of an Agreement of Reorganization and Merger with Central Valley Community Bancorp (NASDAQ:
CVCY), headquartered in Fresno, California, together with its banking subsidiary, Central Valley Community Bank, pursuant to which the companies will combine in an all-stock merger transaction. Under the terms of the agreement, Community West
Bancshares will merge with and into Central Valley Community Bancorp and Community West Bank will merge with and into Central Valley Community Bank. The Central Valley Community Bancorp and Community West Bancshares Boards of Directors have
unanimously approved the transaction. The merger closed on April 1, 2024. On the effective date of the merger, Central Valley Community Bancorp and Central Valley Community Bank were rebranded and changed their names to “Community West
Bancshares” and “Community West Bank,” respectively.
Concentrations of Lending Activities
The Company’s lending activities are primarily driven by the customers served in the market areas where the Company has branch offices in the
Central Coast of California. The Company monitors concentrations within selected categories, such as geography and product. The Company makes manufactured housing, commercial, SBA, construction, commercial real estate, single family real estate,
and consumer loans to customers through branch offices located in the Company’s primary markets. The Company’s business is concentrated in these areas and the loan
portfolio includes significant credit exposure to the commercial real estate and manufactured housing markets of these areas. As of December 31, 2023 and 2022, commercial real estate loans accounted for approximately 57.9% and 57.1% of total loans (including loans held for sale), respectively. Approximately 27.5% and 24.5% of these commercial real estate loans were owner occupied at December 31, 2023 and 2022, respectively. Substantially all of these loans are
secured by first liens with an average loan to value ratios of 50.3% and 50.4% at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, manufactured housing loans comprised 34.1% and 33.1%, respectively, of total loans. The Company was within established lending policy limits at December 31, 2023 and 2022.
Reclassifications
Certain amounts in the consolidated financial statements as of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022, and
2021, have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported.
Business Segments
Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how
the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2023 and 2022, the Company had only one reportable business segment.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts due from banks (including cash items in process
of clearing). Cash flows from loans originated by the Company and deposits are reported net.
The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in
such accounts.
Cash Reserve Requirement
Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the
Federal Reserve Bank. The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The Federal Reserve reduced the reserve requirement
ratio to zero percent across all deposit tiers as of March 26, 2020, to aid institutions impacted by COVID-19.
Investment Securities
Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”), or trading. The appropriate classification is
initially decided at the time of purchase.
Securities classified as HTM are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in
market conditions, liquidity needs, or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been
collected is considered a maturity for purposes of classification and disclosure.
Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity.
Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality,
and regulatory capital considerations. AFS securities are reported as an asset on the consolidated balance sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element
of other comprehensive income (loss) (“OCI”). When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income.
Trading securities are carried at fair value on the consolidated balance sheets. The changes in the fair values of trading securities are reported in other income on
the consolidated income statements.
Interest income on securities is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the
amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations.
Effective January 1, 2023, the allowance for credit losses on investment securities is determined for both HTM and AFS investments in accordance
with Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) - “Financial Instruments-Credit Losses.”
The allowance for credit losses for HTM investment securities is determined on a collective basis, based on shared risk characteristics, and is
determined at the individual security level when the Company deems a security to no longer possess shared risk characteristics. For investment securities where the Company has reason to believe the credit loss exposure is remote, a zero-credit loss
assumption is applied. Such investment securities typically consist of those guaranteed by the U.S. government or government agencies, where there is an explicit or implicit guarantee by the U.S. government, that are highly rated by rating
agencies, and historically have had no credit loss experience.
For AFS securities, the Company performs a quarterly evaluation for securities in an unrealized loss position to determine if the decline in fair value
below the security’s amortized cost is credit related or non-credit related. In determining whether a security’s decline in fair value is credit related, the Company considers a number of factors including, but not limited to: (i) the extent to
which the fair value of the investment is less than its amortized cost; (ii) the financial condition and near-term prospects of the issuer; (iii) downgrades in credit ratings; (iv) payment structure of the security; (v) the ability of the issuer of
the security to make scheduled principal and interest payments; and (vi) general market conditions which reflect prospects for the economy as a whole, including interest rates and sector credit spreads. If it is determined that the unrealized loss,
or a portion thereof, is credit related, the Company records the amount of credit loss through a charge to provision for credit losses in current period earnings. However, the amount of credit loss recorded in the current period’s earnings is
limited to the amount of the total unrealized loss on the security, which is measured as the amount by which the security’s fair value is below its amortized cost. If the Company intends to sell, or if it is more likely than not that the Company
will be required to sell, a security in an unrealized loss position before the recovery of its amortized cost basis, the total amount of the unrealized loss is recognized in the current period’s earnings. Unrealized losses deemed non-credit related
are recorded, net of tax, through accumulated other comprehensive income (loss).
A debt security is placed on nonaccrual status at the time any principal or interest payments become greater than 90 days delinquent. Interest accrued but not received when a security is placed on nonaccrual status is reversed against interest income. Accrued
interest receivable on available-for-sale securities is excluded from the estimate of the required allowance for credit losses.
Prior to the adoption of ASC 326 on January 1, 2023, the Company estimated whether there were any other than temporary impairment losses related to HTM
or AFS securities. When making this determination, management considered: 1) the length of time and the extent to which the fair value was less than the security’s amortized cost; 2) the financial condition and near term prospects of the issuer; 3)
the impact of changes in market interest rates; and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in a security’s fair value whether it was more likely than
not that the Company would be required to sell the security. Declines in the fair value of individual debt securities classified as AFS that were deemed to be other than temporary were reflected in earnings when identified. The fair value of the
debt security then became the new cost basis. For individual debt securities where the Company did not intend to sell the security and it was not more likely than not that the Company would have been required to sell the security before the
recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss was recognized in earnings, and 2) market or other factors was recognized in other comprehensive income or loss.
FHLB and FRB Stock
The Company’s subsidiary bank is a member of the FHLB system and maintains an investment in capital stock of the FHLB. The bank also maintains an
investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the
stock is reported in interest and dividend income. Management conducts a periodic review and evaluation of the Company’s holdings of FHLB and FRB stock to determine if any impairment exists. No impairment was deemed to have existed during the years ended December 31, 2023 or 2022.
Loans Held For Sale
Loans which are originated and intended for sale in the secondary
market are carried at the lower of their amortized cost or estimated fair value, determined on an aggregate basis. Valuation adjustments, if any, are recognized through a valuation allowance by charges to lower of cost or fair value provision.
Loans held for sale are comprised of SBA and commercial agriculture loans. Gains or losses realized on the sales of loans are recognized at the time of sale and are determined by the difference between the net sales proceeds and the
carrying value of the loans sold, adjusted for any servicing asset or liability. Gains and losses on sales of loans held for sale are included in gains from loan sales, net in the accompanying consolidated income statements. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2023, 2022, and 2021.
Loans Held for Investment
Loans are recognized at the principal amount outstanding, net of unearned income, loan participations, and amounts charged off. Unearned income
includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method.
Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for
the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is
calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the
contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period.
When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs, and premiums and discounts paid on purchased
loans are relieved though interest income.
When a borrower discontinues making payments as contractually required by the note, management must determine whether it is appropriate to continue to
accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to
continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process
of collection.
When a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status
is changed. Subsequent payments received from the borrower are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again
consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt.
Allowance for Credit Losses - Loans (Subsequent to the Adoption of ASC 326 on January 1, 2023)
Effective January 1, 2023, the Company accounts for credit losses on loans in accordance with ASC 326. The allowance for credit losses (“ACL”) for
loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. The Company has elected to exclude accrued interest receivable from the amortized cost basis in
the estimate of the ACL. The provision for credit losses on loans (which is a component of the provision for credit losses on the consolidated income statements) reflects the amount required to maintain the ACL at an appropriate level based upon
management’s evaluation of the adequacy of collective and individual loss reserves. The Company’s methodologies for determining the adequacy of ACL are set forth in a formal policy and take into consideration the need for an ACL for loans
evaluated on a collective pool basis which have similar risk characteristics, as well as allowances that are tied to individual loans that do not share risk characteristics and are individually evaluated. The Company increases its ACL by charging
the provision for credit losses on its consolidated income statements. Losses related to specific assets are applied as a reduction of the carrying value of the assets and charged against the ACL when management believes the non-collectability of
a loan balance is confirmed. Recoveries on previously charged off loans are credited to the ACL.
Management conducts an assessment of the ACL on a monthly basis and undertakes a more comprehensive evaluation quarterly. The ACL is estimated using
relevant information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts and is maintained at a level sufficient to provide for expected credit losses over the life of the loan,
including expected prepayments, based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio and economic
conditions.
The ACL is measured on a collective pool basis when similar risk characteristics exist. In estimating the component of the ACL for loans that share
common risk characteristics, loans are pooled based on the loan types and areas of risk concentration. For loans evaluated collectively as a pool, the ACL is calculated using the weighted average remaining maturity (“WARM”) method. The WARM
method utilizes a historical average annual charge-off rate containing loan loss information over a historical lookback period that is used as a foundation for estimating the ACL for the remaining outstanding balances of loans in a segment at a
particular consolidated balance sheet date. The WARM methodology was chosen because each of the loan segments have had loan loss histories dating back as far as 2006 and therefore capture the Company’s historical losses and recoveries and thus
established reliable loan loss rates for each loan segment. In the events where there was insufficient historical loan data to establish a reliable loan loss rate, California peer bank data has been utilized to establish loan loss rates.
The Company established a general forecast loan policy to calculate the loan loss rates for each loan segment. The general forecast policy projects
that the next four quarters will be similar to the Company’s loan loss rates from 2009 to 2016, and then revert to the long-term average over one quarter.
Loans that do not share risk characteristics with other loans in the portfolio are individually evaluated for a required ACL and are not included in
the collective evaluation. Factors involved in determining whether a loan should be individually evaluated include, but are not limited to, the financial condition of the borrower and the value of the underlying collateral. Expected credit losses
for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, when the Company determines that foreclosure is probable, the expected credit loss is
measured based on the fair value of the collateral as of the reporting date, less estimated selling costs. Collateral may consist of various types of real estate including residential properties, commercial properties, agriculture land, vacant
land, and manufactured housing. In certain cases, the Company may hold business assets as collateral. The Company assesses these loans on each reporting date to determine whether repayment is expected to be provided substantially through the
operation or sale of the collateral when the borrower is experiencing financial difficulty.
If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will recognize an ACL or partial charge off as the
difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost
basis will be limited to the amount previously charged off. Subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss
initially was recognized or as a reduction in the provision that would otherwise be reported.
The calculation of the ACL is adjusted using qualitative factors for current conditions and for reasonable and supportable forecast periods. These
qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not directly reflected in the Company’s historical loan losses and may include adjustments for changes in environmental and economic
conditions, such as changes in unemployment rates, changes in Gross Domestic Product, the impact of droughts in the Company’s lending areas, and other relevant factors.
The process of assessing the adequacy of the ACL is necessarily subjective. Further, and particularly in times of economic downturns, it is reasonably
possible that future credit losses may exceed historical loss levels and may also exceed management’s current estimates of expected credit losses within the loan portfolio. As such, there can be no assurance that future charge offs will not
exceed management’s current estimate of what constitutes a reasonable ACL.
Portfolio segmentation is defined as the level at which an entity develops and documents a systematic methodology to determine its ACL. The method for
determining the ACL described above is used to determine the ACL in each portfolio segment in the Company’s loan portfolio. The Company has designated the following portfolio segments of loans:
Manufactured Housing: The Company has a
financing program for manufactured housing to provide affordable home ownership. These loans are offered in approved mobile home parks throughout California primarily on or near the coast. The parks must meet specific criteria. The manufactured
housing loans are secured by the manufactured home and are retained in the Company’s loan portfolio. The primary risks of manufactured housing loans include the borrower’s inability to pay, material decreases in the value of the collateral, and
significant increases in interest rates, which may reduce the borrower’s ability to make the required principal or interest payments.
Commercial Real Estate (“CRE”): CRE loans are
those for which the Company holds commercial real estate property as collateral. This category of loans also includes loans secured by agriculture/farmland and construction loans. These loans are primarily underwritten based on the cash flows of
the business and secondarily on the real estate. The primary risks associated with CRE loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases
in interest rates, which may make the real estate loan unprofitable to the borrower. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.
Commercial: Commercial loans are loans that are
secured by business assets including inventory, receivables, machinery, and equipment. Risk associated with commercial loans arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the
recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans, and occasionally upon other borrower assets and guarantor assets. The fair value of
the collateral securing these loans may fluctuate as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its
customers.
Small Business Administration (“SBA”): These
are the unguaranteed portion of loans that are partially guaranteed by the SBA. SBA loans are similar to commercial business loans. The Company originates SBA loans with the intent to sell the guaranteed portion into the secondary market on a
quarterly basis. Certain loans classified as SBA loans are secured by commercial real estate property which are included in the commercial real estate category above. SBA loans secured by all other forms of real estate are included in the
business loans secured by real estate segment. All other SBA loans are secured by business assets and have similar risks to those discussed in the commercial category above.
Single Family Real Estate and Home Equity Lines of
Credit (“HELOC”): These loans are made to consumers and are secured by residential real estate. The primary risks of single family real estate and HELOC loans include the borrower’s inability to pay, material decreases in the value of
the real estate that is being held as collateral, and significant increases in interest rates, which may reduce the borrower’s ability to make the required principal or interest payments.
Consumer: The Company has a limited number of
consumer loans. Risk arises with these loans in the borrower’s inability to pay and decreases in the fair value of the underlying collateral, if any.
Allowance for Loan Losses (Prior to the Adoption of ASC 326 on January 1, 2023)
Prior to the adoption of ASC 326 on January 1, 2023, the allowance for loan losses was intended to provide for losses that were considered inherent in
the loan portfolio. This process involved deriving probable loss estimates that were based on migration analyses and historical loss rates, in addition to qualitative factors that were based on management’s judgment. The migration analysis and
historical loss rate calculations were based on annualized loss rates. Migration analysis was utilized for the commercial real estate, commercial, commercial agriculture, SBA, HELOC, single family residential, and consumer portfolios. The
historical loss rate method was utilized primarily for the manufactured housing portfolio. The migration analysis considered the risk rating of loans that were charged off in each loan category.
The Company’s allowance for loan losses was maintained at a level believed appropriate by management to absorb known and inherent probable losses on
existing loans. The allowance was charged for losses when management believed that full recovery on the loan was unlikely.
The allowance for loan losses calculation for the different loan portfolios consisted of the following:
A loan was considered impaired when, based on current information, it was probable that the Company would be unable to collect the scheduled payments
of principal or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment included payment status, collateral value, and the probability of collecting scheduled principal or interest
payments. Loans that experienced insignificant payment delays or payment shortfalls generally were not classified as impaired. Management determined the significance of payment delays or payment shortfalls on a case-by-case basis. When
determining the possibility of impairment, management considered the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the
shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company used the fair value of collateral method to measure impairment. The collateral-dependent loans that recognized impairment were charged down to
the fair value of the collateral less costs to sell. All other loans were measured for impairment either based on the present value of future cash flows or the loan’s observable market price.
The Company evaluated and individually assessed for impairment loans either on nonaccrual, those that were classified as a troubled debt restructuring,
or when other conditions existed which led management to review for possible impairment. Measurement of impairment on impaired loans was determined on a loan-by-loan basis and in total established a specific reserve for impaired loans. Interest
income was not recognized on impaired loans except for limited circumstances in which a loan, although considered impaired, continued to perform in accordance with the loan contract and the borrower provided financial information to support
maintaining the loan on accrual.
The Company determined the appropriate allowance for loan losses on a monthly basis. Any differences between estimated and actual observed losses from
the prior month were reflected in the current period in determining the appropriate allowance for loan losses determination and adjusted as deemed necessary. The review of the appropriateness of the allowance took into consideration such factors
as concentrations of credit, changes in the growth, size, and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may
have affected borrowers’ ability to pay or the value of the underlying collateral. Additional factors considered included geographic location of borrowers, changes in the Company’s product-specific credit policy, and lending staff experience.
These estimates depended on the outcome of future events and, therefore, contained inherent uncertainties.
Another component of the allowance for loan losses considered qualitative factors related to non-impaired loans. The qualitative portion of the
allowance on each of the loan pools was based on changes in any of the following factors:
Modified Loans to Troubled Borrowers
From time to time, the Company will modify certain loans in order to alleviate temporary difficulties in a borrower’s financial condition or
constraints on a borrower’s ability to repay the loan, and to minimize potential losses to the Company. Such modifications may include changes in the amortization terms of the loan, reductions in interest rates, acceptance of interest only
payments, and in limited cases, reductions to the outstanding loan balance. Such loans are typically placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been in default for a
period of 90 days or more. These loans may be returned to accrual status when all contractual amounts past due have been brought
current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt. The Company typically measures the ACL on these
loans on an individual basis when the loans are deemed to no longer share risk characteristics that are similar with other loans in the portfolio. The determination of the ACL for these loans is based on a discounted cash flow approach, unless
the loan is deemed collateral dependent, which requires measurement of the ACL based on the estimated fair value of the underlying collateral, less estimated selling costs. See Note 4 - Loans Held for Investment for additional information
concerning modified loans to troubled borrowers.
Off-Balance Sheet Credit Exposure
In the ordinary course of business, the Company has entered into off-balance sheet
financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees,
elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the
borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances
in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company
evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are
collateralized by the same types of assets used as loan collateral.
After the adoption of ASC 326 on January 1, 2023, the estimate of the ACL for off-balance sheet commitments provides for current estimated credit losses for the
unused portion of collective pools of off-balance sheet credit exposures expected to be funded, except for unconditionally cancellable commitments for which no allowance for credit losses is required under ASC 326. The ACL for off-balance sheet
commitments includes factors that are consistent with the ACL methodology for loans using the expected loss factors and an estimated utilization or probability of draw factor, which are based on historical experience. Changes in the ACL for
off-balance sheet commitments are reported as a component of provision for credit losses in the consolidated income statements and the allowance for credit losses for off-balance sheet commitments is included in other liabilities in the
consolidated balance sheets.
Prior to the adoption of ASC 326 on January 1, 2023, the Company applied qualitative factors to its off-balance sheet obligations in determining an estimate of
losses inherent in these contractual obligations. The estimate for losses on off-balance sheet instruments is included within other liabilities and the charge to income that established this liability is included in other expense on the
consolidated income statement.
Premises and Equipment
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. The estimated useful lives of premises and equipment are as follows:
Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter.
Leases
At inception, contracts are evaluated to determine whether the contract constitutes a lease agreement. For contracts that are determined to be an
operating lease, a corresponding Right of Use (“ROU”) asset and operating lease liability are recorded in separate line items on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset during the lease
term and a lease liability represents the Company’s commitment to make contractually obligated lease payments. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease and are based on the present value of
lease payments over the lease term. The measurement of the operating lease ROU asset includes any lease payments made and is reduced by lease incentives that are paid or are payable to the Company. Variable lease payments that depend on an index
are included in lease payments based on the rate in effect at the commencement date of the lease. Lease payments are recognized on a straight-line basis as part of occupancy expense over the lease term.
As the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate is used to determine the present value of
lease payments. This rate gives consideration to the applicable FHLB collateralized borrowing rates and is based on the information available at the commencement date. The Company has elected to apply the short-term lease measurement and
recognition exemption to leases with an initial term of 12 months or less, therefore, these leases are not recorded on the Company’s consolidated balance sheets. Lease expense of these leases is recognized over the lease term on a straight-line
basis. The Company’s lease agreements may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the option will be exercised.
The Company has also elected the practical expedient that allows lessees to make an accounting policy election to not separate non-lease components
from the associated lease component, and instead account for them all together as part of the applicable lease component. The majority of the Company’s non-lease components, such as common area maintenance and taxes, are variable and expensed as
incurred. Variable payment amounts are determined in arrears by the landlord depending on actual costs incurred.
Other Assets Acquired Through Foreclosure, Net
Other assets acquired through foreclosure are recorded at fair
value at the time of foreclosure, less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the assets is charged-off against the allowance for credit losses. Any excess of the fair value less
estimated costs to sell over the loan balance is recorded as a credit loss recovery to the extent of the credit loss previously charged-off against the allowance for credit losses; and, if greater, recorded as a gain. Subsequent to the legal
ownership date, the Company periodically performs a new valuation and the other assets acquired through foreclosure are carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or
losses on disposition of such properties, are recorded in current operations.
Servicing Assets
The guaranteed portion of certain SBA loans can be sold into the secondary market. Servicing assets are recognized as separate assets when
loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in
estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is
determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale for SBA loan sales are calculated based on the
difference between the best actual par and premium bids on an individual loan basis.
SBA servicing assets measured at fair value were $12 thousand and $26 thousand for the years ended December 31, 2023 and 2022, respectively.
Changes in the fair values are recorded in other income in the consolidated income statements.
In prior periods, the Company carried SBA servicing assets measured under the amortization method. There were no
remaining SBA servicing assets measured at amortized cost at December 31, 2023 or 2022.
CWB is an approved Federal Agricultural Mortgage Corporation (“Farmer Mac”) seller/servicer. Servicing assets are recognized as separate assets
as certain servicing requirements are retained. Servicing assets are amortized over the period of estimated net servicing income. CWB uses Farmer Mac prepayment statistics in estimating the expected life of the loans. Management evaluates
its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based on the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a
loan-by-loan basis. The initial servicing asset and resulting gain is calculated based on the contractual net servicing fees. Farmer Mac servicing assets are valued based on the net servicing fee, estimated life of seven years, and discounted using the Company’s borrowing rate (the discount rate used was 5.63% and 5.91% at December 31, 2023 and 2022,
respectively). Farmer Mac servicing assets measured under the amortization method were $1.3 million and $1.5 million at December 31, 2023 and 2022, respectively. Servicing assets are recorded in other assets on the consolidated balance sheets.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over
transferred assets is deemed to have been surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge and exchange
the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
Bank Owned Life Insurance
Bank owned life insurance is stated at its cash surrender value with changes recorded in other income in the consolidated income statements. The cash
surrender value of the underlying policies was $8.9 million and $8.7 million as of December 31, 2023 and 2022, respectively, and was recorded in other assets on the consolidated balance sheets. There are no loans offset against cash surrender values,
and there are no restrictions as to the use of proceeds.
Fair Value of Financial Instruments
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820 - “Fair Value Measurements
and Disclosures” (“ASC 820”) established a framework for measuring fair value using a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of
an asset as of the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when
available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the
Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the
reliability of inputs, as follows:
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on
models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments
categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value
measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an
entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the
measurement date.
FASB ASC 825 - “Financial Instruments” (“ASC
825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value.
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any
estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2023 or
2022. The estimated fair value amounts for December 31, 2023 and 2022, have been measured as of period-end and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the
estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end.
The information presented in Note 16 - Fair Value Measurement should not be interpreted as an estimate of the fair value of the entire Company since
a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s
disclosures and those of other companies or banks may not be meaningful.
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:
Cash and cash equivalents - The carrying
amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value.
Investment securities - The fair value of
equity securities was based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. The fair value of AFS and HTM debt securities was determined based on matrix pricing. Matrix pricing is a mathematical technique that
utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy.
FRB and FHLB stock - CWB is a member of the
FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintains an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company
conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy.
Loans - Fair value for loans is estimated
based on their discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining
fair value. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. Fair values of collateral dependent loans with an ACL have been categorized as Level 3.
Accrued interest receivable and payable - the fair value of the accrued interest associated with interest-bearing assets and liabilities is considered to be approximately
equal to its cost given its short-term nature and the fact that collectability is regularly assessed. Accrued interest is categorized within the same level of the fair value hierarchy as the associated interest-bearing asset or liability.
Deposit liabilities - The amount payable on
demand at the reporting date is used to estimate the fair value of demand and savings deposits. The estimated fair values of fixed-rate time deposits are determined by discounting the cash flows of segments of deposits that have similar
maturities and rates, utilizing a discount rate that approximates the prevailing rates offered to depositors as of the measurement date. The fair value measurement of deposit liabilities is categorized as Level 2 in the fair value hierarchy.
Federal Home Loan Bank advances and other borrowings -
The fair values of the Company’s borrowings are estimated using discounted cash flow analyses based on the market rates for similar types of borrowing arrangements. The FHLB advances and other borrowings have been categorized as Level 2 in
the fair value hierarchy.
Off-balance sheet instruments - Fair values
for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the
counterparties’ credit standing.
Stock-Based Compensation
Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of the
awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards.
Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded
vesting, compensation is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur.
Income Taxes
The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or
taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting.
These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is
more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified as income tax expense in the consolidated income statements. Deferred tax
assets net of deferred tax liabilities are included in other assets on the consolidated balance sheets.
Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of
negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if
management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized.
The Company is subject to the provisions of ASC 740 - “Income Taxes” (“ASC 740”). ASC 740 prescribes a more likely than not threshold for the
financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions.
Earnings Per Share
Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income
available to common shareholders. Diluted earnings per share is computed using the treasury stock method and includes the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options.
Restricted stock awards are considered to be outstanding common shares for the purpose of computing basic and diluted earnings per share.
The factors used in the earnings per share computation are as follows:
Stock options for 114,002;
95,304; and 101,010
shares of common stock were not considered in computing diluted earnings per share for the years ended December 31, 2023, 2022, and 2021, respectively, because they were antidilutive.
Recently Adopted Accounting Pronouncements
In June of 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 - “Financial Instruments -
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This ASU replaces the incurred loss impairment model in current GAAP with a model that reflects current expected credit losses (“CECL”). The CECL model is
applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. CECL also requires credit losses on available-for-sale debt securities to be
measured through an allowance for credit losses when the fair value is less than the amortized cost basis. It also applies to off-balance sheet credit exposures. The ASU requires that all expected credit losses for financial assets held at
the reporting date be measured based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU also requires enhanced disclosure, including qualitative and quantitative disclosures that provide additional
information about significant estimates and judgments used in estimating credit losses. The provisions of this Update became effective for the Company for all annual and interim periods beginning January 1, 2023.
In April 2019, the FASB issued ASU 2019-04 - “Codification Improvements to Topic 326 - Financial Instruments - Credit Losses, Topic 815 -
Derivatives and Hedging, and Topic 825 - Financial Instruments.” This ASU was issued as part of an ongoing project on the FASB’s agenda for improving the Codification or correcting for its unintended application. The FASB issued this ASU,
which is specific to ASUs: 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” 2016-01 - “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities,” and 2017-12 - “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this Update became effective for all interim and annual reporting
periods for the Company on January 1, 2023. The Company adopted the provisions within this ASU in conjunction with the implementation of ASC 326 - “Financial Instruments - Credit Losses,” including: (i) the election to not measure credit
losses on accrued interest receivable when such balances are written-off in a timely manner when deemed uncollectable and (ii) the election to not include the balance of accrued interest receivable as part of the amortized cost of a loan, but
rather to present it separately in the consolidated balance sheets.
In May 2019, the FASB issued ASU 2019-05 - “Financial Instruments - Credit Losses (Topic 326) - Targeted Transition Relief.” This ASU was issued to
allow entities that have certain financial instruments within the scope of ASC 326-20 - “Financial Instruments - Credit Losses - Measured at Amortized Cost” to make an irrevocable election to elect the fair value option for those instruments
in ASC 825-10 - “Financial Instruments - Overall” upon the adoption of ASC 326, which for the Company was January 1, 2023. The fair value option is not applicable to held-to-maturity debt securities. Entities are required to make this
election on an instrument-by-instrument basis. The Company did not elect the fair value option for any of its financial assets upon the adoption of ASC 326 on January 1, 2023.
Effective January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach,
and recorded a net decrease of $1.6 million to the beginning balance of retained earnings for the cumulative effect adjustment.The following table illustrates the impact of adoption of the CECL methodology on the Company’s consolidated balance
sheet as of January 1, 2023:
The Company’s assessment of HTM and AFS investment securities as of January 1, 2023, indicated that an allowance for credit losses was not required.
The Company determined the likelihood of default on HTM investment securities was remote, and the amount of expected non-repayment on those investments was zero. The Company also analyzed AFS investment securities that were in an unrealized
loss position as of January 1, 2023, and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no allowance for credit losses
was recorded for HTM and AFS securities as of January 1, 2023.
In February 2019, the U.S. federal bank regulatory agencies approved a final rule modifying their regulatory capital rules and providing an option to
phase in over a three-year period the Day 1 adverse regulatory capital effects of ASU 2016-13. As a result, entities have the option to gradually phase in the full effect of CECL on regulatory capital over a three-year transition period. The
Company elected to phase in the full effect of CECL on regulatory capital over the three-year transition period.
In March 2022, the FASB issued ASU No. 2022-02 - “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage
Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing
financial difficulty. Under the provisions of this ASU, an entity must determine whether a modification results in a new loan or the continuation of an existing loan. Further, the amendments in this ASU require that an entity disclose current
period gross charge-offs on loans by year of origination and class of financing receivable. This guidance became effective for the Company on January 1, 2023. The new guidance did not have a material impact on the Company’s consolidated
financial statements; however, the required disclosures were added to the consolidated financial statements.
Recent Accounting Pronouncements - Not Yet Adopted
In November 2023, the FASB issued ASU no 2023-07 - “Segment Reporting (Topic 820): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).
This ASU expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker
uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial
position, results of operations, or financial statement disclosures.
In December 2023, the FASB issued ASU No 2023-09 - “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands
disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied
prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations, or financial statement disclosures.
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES |
The amortized cost and estimated fair value of
investment securities are as follows:
At December 31, 2023 and 2022, $9.3
million and $21.1 million of securities at carrying value, respectively, were pledged to the FHLB as collateral for current and future
advances.
At December 31, 2023 and 2022, there were no
holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.
The Company had no sales of
investment securities during 2023, 2022, or 2021.
The maturity periods and weighted average yields of investment securities at December 31, 2023 and 2022 were as follows:
The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below:
Actual maturities may differ from contractual maturities as borrowers or issuers have the right to prepay or call the investment securities. Changes in
interest rates may also impact prepayments.
As of December 31, 2023 and 2022, securities that were in an unrealized loss position and length of time that individual securities have been in a continuous loss position are summarized as follows:
As of December 31, 2023 and 2022, there were 36
and 37 securities, respectively, in an unrealized loss position.
At December 31, 2023 and 2022, there were no
available-for-sale or held-to-maturity securities that were on nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. Accrued interest receivable related to available-for-sale and
held-to-maturity securities was $130 thousand and $77 thousand December 31, 2023 and 2022, respectively. Accrued interest receivable is included in
on the consolidated balance sheets.There were no collateral dependent
available-for-sale or held-to-maturity securities at December 31, 2023 or 2022.
The Company did not record an
allowance for credit losses for available-for-sale or held-to-maturity investment securities as of December 31, 2023. For available-for-sale securities where the security’s estimated fair value was below its amortized cost, such declines were
deemed non-credit related and recorded as an adjustment to accumulated other comprehensive income, net of tax. Non-credit related declines in the fair value of available-for-sale investment securities can be attributed to changes in interest
rates and other market-related factors. The Company did not record an allowance for credit losses for held-to maturity securities as
of December 31, 2023, because the likelihood of non-repayment is remote. There was no provision for credit losses recognized for
investment securities during the year ended December 31, 2023.
Prior to the adoption of ASC 326, declines in the fair value of held-to-maturity and available-for-sale securities below their cost that were deemed to
be other-than-temporary were reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considered, among other things: (i) the length of time and the extent to which the fair value had been less
than cost; (ii) the financial condition and near-term prospects of the issuer; and (iii) the Company’s intent to sell an impaired security and if it was more likely than not that it would have been required to sell the security before the
recovery of its amortized basis. Management concluded that none of the Company’s securities were impaired due to reasons of credit quality as of December 31, 2022, and therefore management believes the impairments detailed in the table above were
temporary and no other-than-temporary impairment loss was recorded in the Company’s consolidated income statements.
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LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS |
As of December 31, 2023 and 2022, the Company had approximately $4.5 million and $5.2 million, respectively, of SBA loans included in loans held
for sale. The Company’s agricultural lending program includes loans for agricultural land, agricultural operational lines, and agricultural term loans for crops, equipment, and livestock. The primary products are supported by guarantees issued from
the USDA, FSA, and the USDA Business and Industry loan program. As of December 31, 2023 and 2022, the Company had $12.1 million and $15.8 million of USDA loans included in loans held for sale, respectively.
The unpaid balance of loans serviced for others as of the periods presented are shown below:
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LOANS HELD FOR INVESTMENT |
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LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT |
The composition of the Company’s loans held for investment loan portfolio follows:
The following tables present the contractual aging of the recorded investment in
past due held for investment loans by class of loans:
The following table presents the
composition of nonaccrual loans as of December 31, 2023 and 2022:
There were no loans past due by 90 days or more that were not on nonaccrual status at December 31, 2023 or 2022.
The accrual of
interest is discontinued when substantial doubt exists as to collectability of the loan; generally, at the time the loan is 90 days
delinquent. Any unpaid but accrued interest is reversed at that time. Thereafter, interest income is no longer recognized on the loan. Interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for
return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Foregone interest on nonaccrual loans for the years ended
December 31, 2023, 2022, and 2021, was $436 thousand, $38 thousand, and $154 thousand, respectively.
Accrued interest
receivable related to loans was $5.4 million and $5.1 million at December 31, 2023 and 2022, respectively. Accrued interest receivable is included in
on the consolidated balance sheets.Allowance for Credit Losses for Loans
The Company adopted
the CECL requirements of ASC 326 on January 1, 2023. As discussed further in Note 1 - Summary of Significant Accounting Policies, the Company uses the WARM method as the basis for the estimation of expected credit losses under CECL. The
calculation of the ACL is adjusted using qualitative factors for current conditions and for reasonable and supportable forecast periods. Loans that do not share risk characteristics with other loans in the portfolio are individually evaluated for
a required ACL and are not included in the collective evaluation. Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or,
when the Company determines that foreclosure is probable, the fair value of the collateral securing the loan, less estimated selling costs.
During
the year ended December 31, 2023, the allowance for credit losses on loans increased by $1.7 million to $12.5 million from $10.8 million at
December 31, 2022. When the Company adopted the provisions of ASC 326 on January 1, 2023, it recorded the required $1.8 million increase
directly to retained earnings (net of tax). The Company recorded a provision (credit) for credit losses for loans of $(339) thousand
during the year ended December 31, 2023, primarily due to a reduction in the qualitative factor related to the percentage of the state of California that was experiencing a drought. This reduction was partially offset by growth in the loan
portfolio and an increase in historical loss factors for certain loan segments.
The following tables summarize the changes in the allowance for credit losses by portfolio type. Prior to the adoption of ASC 326 on January 1,
2023, the allowance for loan losses was determined in accordance with ASC 450 - “Contingencies” (“ASC 450”) and ASC 310 - “Receivables” (“ASC 310”).
During the year
ended December 31, 2023, the Company charged off one commercial estate loan in the amount of $27 thousand that was originated in 2021.
As of December 31,
2023 and 2022, the Company had an ACL for off-balance sheet commitments of $458 thousand and $94 thousand, respectively, which was included in other liabilities on the consolidated balance sheets. The provision (credit) for credit losses
associated with the allowance for off-balance sheet commitments was $(56) thousand, $0 thousand, and $2 for the years ended December 31, 2023,
2022, and 2021, respectively.
Beginning on
January 1, 2023, the Company evaluates loans collectively for purposes of determining the allowance for credit losses in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk
characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio. These loans are typically identified as those that have exhibited
deterioration in credit quality, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, have undergone a significant modification, have been
downgraded to substandard or worse, or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to no longer
possess risk characteristics similar to other loans in the portfolio, or that have been identified as collateral dependent, are evaluated individually for purposes of determining an appropriate lifetime allowance for credit losses. The Company
uses a discounted cash flow approach, using the loan’s effective interest rate, for determining the allowance for credit losses on individually evaluated loans unless the loan is deemed collateral dependent, which requires evaluation based on
the estimated fair value of the underlying collateral (less estimated selling costs). The Company may increase or decrease the allowance for credit losses for collateral dependent loans based on changes in the estimated fair value of the
collateral.
The following table presents the amortized cost basis and the associated allowance for credit losses by portfolio segment
for loans that were individually evaluated as of December 31, 2023:
Prior to the adoption of ASC 326
on January 1, 2023, the Company classified loans as impaired when, based on current information and events, it was probable that the Company would be unable to collect all amounts due according to the contractual terms of the loan agreement or it
was determined that the likelihood of the Company receiving all scheduled payments, including interest, when due was remote. Credit losses on impaired loans were determined separately based on the guidance in ASC 310. Beginning January 1, 2023,
the Company accounts for credit losses on all loans in accordance with ASC 326, which eliminates the concept of an impaired loan within the context of determining credit losses.
The following table presents impairment method information related to loans and allowance for loan losses by loan portfolio segment as of December 31, 2022:
The recorded investment in impaired loans approximated the
unpaid balance of the loans as of December 31, 2022.
Prior to the adoption of ASC 326, a valuation allowance was established for an impaired loan when the fair value of the loan was less than the recorded investment. In
certain cases, portions of impaired loans were charged-off to realizable value instead of establishing a valuation allowance and were included, when applicable, in the table above as “Impaired loans without specific valuation allowance.”
The following table presents the amortized cost basis of collateral dependent loans by class of loans and by collateral type as of the dates indicated :
There was no associated allowance for credit losses (or allowance for loan losses prior to the adoption of ASC 326 on January 1, 2023) for collateral dependent loans as of December 31, 2023 or 2022, as the fair value of the
collateral exceeded the loan balances.
The Company utilizes an internal asset classification system as a means of
reporting problem and potential problem loans. Under the Company’s risk rating system, the Company classifies problem and potential problem loans as “Special Mention,” “Substandard,” “Doubtful,” or “Loss.” Risk ratings are updated as part of the
normal loan monitoring process (at a minimum, annually). The following is a description of the characteristics of loan ratings.
Special Mention - A Special Mention loan has potential weaknesses that require management’s close attention. If left uncorrected, these potential
weaknesses may result in deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to
warrant adverse classification.
Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral
pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the full collection of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s
deficiencies are not corrected.
Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified as Substandard with the added characteristic that the
weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably
specific pending factors, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on
additional collateral, and refinancing plans.
Loss - Loans classified Loss are considered uncollectible and of such little value that recording them as bankable loans is not warranted. This
classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off the loan even though partial recovery may be realized in the future. Losses are taken in
the period in which they are considered uncollectible.
Loans not meeting the criteria above are considered to be pass-rated loans.
The
following tables present the risk categories for gross loans by class of loans and by year of origination as of the dates indicated:
There were no loans classified as “Loss” at December 31, 2023 or 2022.
Loan Modifications
In certain instances, the Company may make modifications to
the terms of loans to borrowers that are experiencing financial distress by providing a term extension, a payment deferral, a reduction of the contractual interest rate on the loan, or a partial forgiveness of principal (or a combination of these
modifications). When principal forgiveness is provided to a borrower, the amount of forgiveness is charged off against the ACL.
The following tables presents the amortized cost basis of loans at December 31, 2023, that were modified during the year
ended December 31, 2023, in response to financial difficulties experienced by the borrowers, by loan class and by type of modification.
The Company does not have any commitments to lend any additional amounts to the borrowers included in the previous table. All of the loans listed in the previous table were considered to be current as of
December 31, 2023, except for one commercial real estate loan whose term was extended and had an amortized cost of $473 thousand that was delinquent and in foreclosure.
The ACL for a loan to a borrower
that was experiencing financial difficulty and was granted a modification (and included in the table above) is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer
possess risk characteristics similar to others in the loan portfolio. In those instances, the ACL for such a loan is determined through individual evaluation.
Troubled Debt Restructured Loan (“TDR”)
Prior to the adoption of ASU 2022-02 on January 1, 2023, the Company, in infrequent situations, would modify or restructure loans as a TDR. A TDR was a loan
on which the Company, for reasons related to a borrower’s financial difficulties, granted a concession to the borrower that the Company would not have otherwise considered. The loan terms that were modified or restructured due to a borrower’s
financial situation included, but were not limited to, a reduction in the stated interest rate, an extension of the maturity or renewal of the loan at an interest rate below current market, or a reduction in the face amount of the loan or
accrued interest balance. The majority of the Company’s modifications were extensions in terms or deferral of payments (which resulted in no lost principal or interest), followed by reductions in interest rates or accrued interest.
The total carrying amount of loans that were classified as TDRs at December 31, 2022, was $6.0
million; of these, $5.8 million were performing according to their modified terms.
Related Parties
Principal stockholders, directors, and executive officers of the Company, together
with companies they control and family members, are considered to be related parties. In the ordinary course of business, the Company has extended credit to these related parties. Federal banking regulations require that any such extensions of credit
not be offered on terms more favorable than would be offered to non-related party borrowers of similar creditworthiness.
The following table summarizes the aggregate activity in such loans:
None of these loans are past due, are on nonaccrual status, or have been restructured
to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. There were no loans to a related party that were considered classified loans at December 31, 2023 or 2022.
Unfunded loan commitments outstanding with related parties totaled $0.4 million and $0.3 million at December
31, 2023 and 2022, respectively.
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PREMISES AND EQUIPMENT |
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREMISES AND EQUIPMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREMISES AND EQUIPMENT |
The Company’s premises and equipment consisted of the following at December 31:
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OTHER ASSETS ACQUIRED THROUGH FORECLOSURE |
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OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE |
The following table summarizes the changes in other assets acquired through foreclosure for the periods indicated:
Gains or losses on sale are included in other non-interest income on the consolidated income statements.
|
DEPOSITS |
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DEPOSITS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS |
The table below summarizes deposits by type:
Of the total deposits at December 31, 2023, $562.4
million may be immediately withdrawn. Time certificates of deposit are the only deposits which have a specified maturity.
The summary of the contractual maturities for all time deposits is as follows:
The Company through the bank is a member of the Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep (“ICS”) services,
which provides Federal Deposit Insurance Corporation (“FDIC”) insurance for large deposits. Federal banking law and regulation place restrictions on depository institutions regarding brokered deposits as they pose increased liquidity risk for
institutions that gather significant amounts of brokered deposits. At December 31, 2023 and 2022, the Company had $17.7 million and $51.1 million, respectively, of CDARS deposits. At December 31, 2023 and 2022, the Company had $117.4 million and $69.2 million, respectively of ICS deposits.
The Company also accepts deposits from related parties which totaled $41.3 million at December 31, 2023, and $29.3 million at December 31, 2022.
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BORROWINGS |
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BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS |
FHLB Advances
The following table summarizes the Company’s FHLB advances by maturity date:
All of the Company’s outstanding advances as of December 31, 2023 and 2022, were at fixed rates of interest.
The Company also had $27.0 million of letters of credit with FHLB at December 31, 2023, to secure public funds. The Company, through the Bank, has a blanket lien credit line with
the FHLB. FHLB advances are collateralized in the aggregate by the Company’s eligible loans and securities. At December 31, 2023, the Company had $9.3
million of securities and $371.9 million of loans pledged to the FHLB. At December 31, 2023, the Company had $112.8 million available for additional borrowing based on the value of the collateral pledged. At December 31, 2022, the Company had pledged to the
FHLB $21.1 million of securities and $232.6
million of loans. Total FHLB interest expense for the years ended December 31, 2023, 2022, and 2021, was $0.9 million, $0.8
million, and $0.9 million, respectively.
Line of Credit
The Company has an unsecured line of credit agreement to borrow up
to $10.0 million at Prime +0.25%.
The Company must maintain a compensating deposit with the lender of $1.0 million. In addition, the Company must maintain a minimum debt
service coverage ratio of 1.65 to 1, a minimum Tier 1 leverage ratio of 7.0%, a minimum total risked based capital ratio of 10.0%, and
a maximum net non-accrual ratio of not more than 3%. The Company is in compliance with all of the covenants at December 31, 2023. The
line of credit matured in September 2023 and the Company renewed the line of credit for an additional two-year term with no other
changes to the financial terms or covenants. As of December 31, 2023, there was $10.0
million outstanding on the revolving line of credit and the interest rate in effect was 8.75%; there were no outstanding balances on the revolving line of credit as of December 31, 2022.
Federal Reserve Bank
The Company has established a credit line with the FRB. Advances are collateralized in the aggregate by eligible loans. As of December 31, 2023 and 2022, there were $293.7 million and $248.6 million, respectively, of loans
pledged as collateral to the FRB. There were no outstanding FRB advances as of December 31, 2023 and 2022. Available borrowing
capacity based on the balance of loans pledged was $110.7 million at December 31, 2023.
Federal Funds Purchased Lines
The Company has federal funds borrowing lines at correspondent banks totaling $20.0 million. There were no amounts outstanding on these
lines as of December 31, 2023 and 2022.
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COMMITMENTS AND CONTINGENCIES |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
Unfunded Commitments and Letters of Credit
The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets.
Lines of credit are obligations to lend money to a borrower. Credit risk arises when the borrowers’ current financial condition may indicate less
ability to pay than when the commitment was originally made. In the case of standby letters of credit, the risk arises from the possibility of the failure of the customer to perform according to the terms of a contract. In such a situation, the
third party might draw on the standby letter of credit to pay for completion of the contract and the Company would look to its customer to repay these funds with interest. To minimize the risk, the Company uses the same credit policies in making
commitments and conditional obligations as it would for a loan to that customer.
A summary of the contractual amounts for unfunded commitments and letters of credit are as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation
or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on
a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as
loan collateral.
The Company has exposure to credit losses from unfunded commitments and letters of credit. As funds have not been disbursed on these commitments, they
are not reported as loans outstanding. Credit losses related to these commitments are not included in the allowance for credit losses reported in Note 4 - Loans Held for Investment of these consolidated financial statements and are accounted for as
a separate loss contingency as a liability. This loss contingency for unfunded loan commitments and letters of credit was $458 thousand
and $94 thousand as of December 31, 2023 and 2022, respectively. Changes to this liability are adjusted through provision for credit losses on the consolidated income statements.
Loan Sales and Servicing
The Company retains a certain level of risk relating to the servicing activities and retained interest in sold loans. In
addition, during the period of time that the loans are held for sale, the Company is subject to various business risks associated with the lending business, including borrower default, foreclosure, and the risk that a rapid increase in interest
rates would result in a decline of the value of loans held for sale to potential purchasers.
In connection with certain loan sales, the Company enters agreements which generally require the company to repurchase or
substitute loans in the event of a breach of a representation or warranty made by the Company to the loan purchaser, any misrepresentation during the loan origination process or, in some cases, upon any fraud or early default on such loans.
The Company has sold loans that are guaranteed or insured by government agencies for which the Company retained all
servicing rights and responsibilities. The Company is required to perform certain monitoring functions in connection with these loans to preserve the guarantee by the government agency and prevent loss to the Company in the event of
nonperformance by the borrower. Management believes that the Company is in compliance with these requirements.
Interest rate risk
The Company assumes interest rate risk (the risk to the Company’s earnings and capital from changes in interest rate
levels) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments as well as its future net interest income will change when interest rate levels change and that change may be either favorable or
unfavorable to the Company.
Interest rate risk exposure is measured using interest rate sensitivity analysis to determine the change in the net
portfolio value and net interest income resulting from hypothetical changes in interest rates. If potential changes to net portfolio value and net interest income resulting from hypothetical interest rate changes are not within the limits
established by the Board of Directors, the Board of Directors may direct management to adjust the asset and liability mix to bring interest rate risk within board-approved limits. As of December 31, 2023, the Company’s interest rate risk profile
was within Board-approved limits.
The Company’s subsidiary bank has an Asset and Liability Management Committee charged with managing interest rate risk within Board approved limits. Such limits are structured to prohibit an interest rate risk
profile that is significantly asset or liability sensitive.
Other
The Company is involved in various other litigation matters of a routine nature that are being handled and defended in the ordinary course of the
Company’s business. In the opinion of Management, based in part on consultation with legal counsel, the resolution of these litigation matters will not have a material impact on the Company’s financial position or results of operations.
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STOCKHOLDERS' EQUITY |
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STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY |
Common Stock
During the years ended December 31, 2023, 2022, and 2021, the Company paid $2.8 million, $2.6 million, and $2.3 million, respectively, of dividends on common stock.
On February 18, 2019, the Board of Directors increased the common stock repurchase program to $4.5 million extended the repurchase program until August 31, 2023. On August 30, 2023, the Board of Directors approved an extension of the expiration date of the repurchase
program to August 31, 2025. Under this program the Company has repurchased 350,189 common stock shares for $3.1 million at an average price
of $8.75 per share. There were no
shares repurchased during the years ended December 31, 2023, 2022, or 2021.
Equity Compensation Plans
The Company has two
stock-based compensation plans that are currently available. Both stock options and restricted stock awards can be granted under the terms of the plans. Stock options granted under the terms of the plan generally have a vesting period of 5 years and a contractual life of 10 years,
while restricted stock awards generally vest over 5 years. The Company recognizes compensation cost ratably over the requisite service
period for all awards. As of December 31, 2023, 302,919 shares were available for future grants of stock awards.
Stock Options - The fair value of each stock option award is estimated on the
date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate.
The expected volatility is based on the historical volatility of the stock of the Company over the expected life of the stock options. The risk-free rate for the periods within the contractual life of the stock option is based on the U.S.
Treasury yield curve in effect at the time of the grant. The dividend rate assumption was the Company’s annual dividend yield at grant date.
A summary of the assumptions used in calculating the fair value of stock option awards during the years ended December 31, 2023, 2022, and 2021, are as follows:
A summary of stock option activity under the plan is presented below:
As of December 31, 2023, there was $0.2 million of total unrecognized compensation cost related to unvested stock options granted under the Company’s plan. That cost is expected to be recognized over a weighted average
period of 1.8 years. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021, was $0.3 million, $0.5 million, and $0.9 million, respectively.
Restricted Stock Awards - Compensation expense for restricted stock awards is based on the trading price of the Company’s stock at the grant date and is recognized over the
vesting period of the awards. Restricted stock awards generally vest evenly over a five-year period from the date of grant.
The following table summarizes the change in nonvested restricted stock awards for the year ended December 31, 2023:
As of December 31, 2023, there was $0.3
million of total unrecognized compensation cost related to unvested restricted stock awards granted under the Company’s plan. That cost is expected to be recognized over a weighted average period of 3.7 years.
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CAPITAL REQUIREMENTS |
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CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS |
At December 31, 2023 and 2022, the Company qualified for treatment under the Small Bank Holding Company Policy Statement (Regulation Y, Appendix C) and, therefore, is
not subject to consolidated capital rules at the holding company level.
The following tables illustrates the Bank’s regulatory ratios and the Federal Reserve’s current adequacy guidelines as of December 31, 2023 and 2022.
As of the most recent formal notification from the Bank’s primary regulatory agency, the Bank was categorized as “well capitalized.” There are no conditions or events
since that notification that management believes have changed the Bank’s categorization.
The adoption of CECL on January 1, 2023 resulted in a $1.6
million reduction to stockholders’ equity, net of $0.7 million in taxes. Banking organizations that experienced a reduction in retained
earnings from the adoption of CECL had the option to elect a phase-in approach for up to 3 years of the “day 1” adverse impact to regulatory capital. The Company made this election and is phasing in the impact of the transition to CECL over a
three-year period, starting with the first quarter of 2023.
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REVENUE RECOGNITION |
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REVENUE RECOGNITION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION |
ASC Topic 606 - “Revenue from Contracts with Customers” (“ASC 606”) requires recognition of revenue at an amount that reflects the consideration to which the Company
expects to be entitled to in exchange for transferring goods or services to a customer. The majority of the Company’s revenue is from sources outside of the scope of ASC 606. Revenue from service charges and fees and interchange fees on credit and
debit cards are within the scope of ASC 606.
Service Charges on Deposit Accounts
Service charges on deposit accounts consist of monthly service fees, check orders, account analysis fees, and other deposit account related fees. The Company’s
performance obligation for monthly service fees and account analysis fees is generally satisfied, and the related income recognized, over the period in which the service is provided. Check orders and other deposit-related fees are largely
transactional based and, therefore, the Company’s performance obligation is satisfied and related income recognized at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month
through a direct charge to customers’ accounts.
Exchange Fees and Other Service Charges
Exchange fees and other service charges are primarily comprised of debit and credit card income, merchant services income, ATM fees, and other service charges. Debit
and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa or MasterCard. Merchant services income is primarily fees charged to
merchants to process their debit and credit card transactions. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Other service charges include fees from processing
wire transfers, cashier’s checks, and other services. The Company’s performance obligations for exchange and other service charges is largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is
typically received immediately or in the following month.
The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of ASC 606 for the periods indicated:
Contract Balances
A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before
payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s
non-interest income streams are largely based on transactional activity. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and income is recognized. The Company does not typically enter
into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2023 and 2022, the Company did not have any contract balances.
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INCOME TAXES |
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INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
The provision for income taxes consisted of the following:
A reconciliation between the statutory income tax rate and the Company’s effective tax rate is as follows:
The cumulative tax effects of the primary temporary differences are as shown in the following table:
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts and their respective tax basis including operating losses and tax credit carryforwards. Net deferred tax assets of $5.8 million
and $5.1 million at December 31, 2023 and December 31, 2022, respectively, are reported in other assets on the consolidated balance
sheets.
Accounting standards Codification Topic 740, Income Taxes, requires that companies assess whether a valuation
allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. A valuation allowance is established for deferred tax assets if, based on weight of
available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Management evaluates the Company’s deferred tax assets for recoverability using a consistent approach which considers the
relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to
income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized.
There was no valuation allowance on
deferred tax assets at December 31, 2023 or December 31, 2022.
The Company is subject to the provisions of ASC 740, which prescribes
a more likely than not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on
uncertain tax positions. There were no uncertain tax positions at December 31, 2023 or 2022.
The Company is subject to income taxation in the United States and certain state jurisdictions. The Company’s federal and state income tax returns are
filed on a consolidated basis. The Company is generally open to examination by tax authorities for the years 2020 and later and state tax authorities for the years 2019 and later.
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
The Company has operating leases for office space, which typically have terms of between 2 and 10 years. Rents usually increase annually in accordance with defined
rent steps or based on current year consumer price index adjustments. When renewal options exist, the Company generally does not deem them to be reasonably certain to be exercised, and therefore the amounts are not recognized as part of the lease
liability nor the ROU asset. As of December 31, 2023, the balance of the ROU assets was $4.3 million and the balance of the lease
liabilities were $4.4 million. The ROU assets are included in
and the lease liabilities are included in in
the accompanying consolidated balance sheets.
Future minimum operating lease payments as of December 31, 2023 are as follows (in thousands):
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EMPLOYEE BENEFIT PLANS |
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EMPLOYEE BENEFIT PLANS [Abstract] | |||
EMPLOYEE BENEFIT PLANS |
401(k) Plan
The Company has a
401(k)
employee for all eligible employees. Participants are able to defer up to a maximum of $22,500 (for those under 50 years of age in 2023) of their annual compensation. The Company may elect to match a discretionary amount each year, which
was 3% of the participant’s eligible compensation. The Company’s total contribution to the plan was $0.4 million, $0.3 million, and $0.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.Deferred Compensation Plans
A deferred compensation plan covers the executive officers. Under the plan, the Company pays each participant a percentage of their base salary plus
interest. Vesting occurs at age 65. A liability is accrued for the obligation under these plans. The expense incurred for the deferred
compensation for the years ended December 31, 2023, 2022, and 2021, was $0.2 million, $0.3 million, and $0.2 million, respectively. The Company
recognized a deferred compensation liability of $2.5 million and $2.1 million as of December 31, 2023 and 2022, respectively.
The Company also provides an unfunded nonqualified deferred compensation arrangement to provide supplemental retirement benefits for the Participants
which are a select group of management or highly compensated employees of the Company. The Participants may defer up to 30% of their
base salary and bonus each plan year. The 36-month certificate of deposit rate is paid on the vested balance.
Salary Continuation
The Company has agreements with certain key officers, which provide for a monthly cash payment to the officers or beneficiaries in the event of death,
disability, or retirement, beginning in the month after the retirement date or death and extending for a period of fifteen years,
subject to vesting. The income from the policy investments will help fund this liability.
At December 31, 2023 and 2022, the Company had an accrued salary continuation liability for these agreements of $1.6 million and $1.5 million,
respectively, which was included in other liabilities on the consolidated balance sheets. The cash surrender value of the life insurance policies was $8.9
million and $8.7 at December 31, 2023 and 2022, respectively, and is included in other assets on the consolidated balance sheets.
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FAIR VALUE MEASUREMENT |
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FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT |
The fair value of an asset or liability is the price that would be received to sell the asset or paid to transfer the liability in an orderly
transaction occurring in the principal market for such asset or liability. ASC 820 establishes a fair value hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1”) and the lowest priority to unobservable inputs (“Level 3”). The three levels of the fair value hierarchy under ASC 820 and the methods and assumptions used
by the Company in estimating the fair value of its financial instruments are described in Note 1 - Summary of Significant Accounting Policies – Fair Value of Financial Instruments of these Notes to the Consolidated Financial Statements.
The following tables summarize the fair value of assets measured on a recurring basis:
Market valuations of the Company’s investment securities, which are classified as level 2, are provided by an independent third party. The fair values
are determined by using several sources for valuing fixed income securities. The techniques used include pricing models that vary based on the type of asset being valued and incorporate available trade, bid, and other market information. In
accordance with the fair value hierarchy, the market valuation sources include observable market inputs and are therefore considered Level 2 inputs for purposes of determining the fair values.
On certain SBA loan sales, the Company retained interest only strips (“I/O strips”), which represent the present value of excess net cash flows
generated by the difference between (a) interest at the stated rate paid by borrowers and (b) the sum of (i) pass-through interest paid to third-party investors and (ii) contractual servicing fees. I/O strips are classified as level 3 in the fair
value hierarchy. The fair value is determined on a quarterly basis through a discounted cash flow analysis prepared by an independent third-party using industry prepayment speeds. I/O strip valuation adjustments are recorded as additions or offsets
to loan servicing income.
Historically, the Company has elected to use the amortizing method for the treatment of servicing assets and has measured for impairment on a quarterly
basis. In connection with the sale of certain SBA and USDA loans, the Company recorded servicing assets and elected to measure those assets at fair value in accordance with ASC 825. Significant assumptions in the valuation of servicing assets
include estimated loan repayment rates, the discount rate, and servicing costs, among others. Servicing assets are classified as Level 3 measurements due to the use of significant unobservable inputs, as well as significant management judgment and
estimation.
The Company also has assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis, as follows:
The Company records certain loans at fair value on a non-recurring basis. When a loan is considered collateral dependent, the need for an ACL is
evaluated. Such loans are measured at the fair value of the loan’s collateral. The fair value of the loan’s collateral is determined by appraisals or independent valuations which may contain a wide range of values and therefore the Company
classifies the fair value of the collateral dependent loans as a non-recurring valuation within Level 2 of the valuation hierarchy.
Other assets acquired through foreclosure are carried at the lower of book value or fair value less estimated costs to sell. Fair value is based upon independent market prices obtained from certified appraisers or the current listing price, if lower. When the fair value of the collateral is based on a current appraised value, the Company reports the fair value of the foreclosed collateral as non-recurring valuation within Level 2 of the valuation hierarchy. When a current appraised value is not available or if management determines the fair value of the collateral is further impaired, the Company reports the foreclosed collateral as non-recurring Level 3. Fair Values of Financial Instruments
The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation
methodologies. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current
market exchange. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.
The estimated fair value of the Company’s financial instruments are as follows:
Fair value of commitments
Loan commitments on which the committed interest rates were less than the current market rate are insignificant at December 31, 2023 and 2022. The
estimated fair value of standby letters of credit outstanding at December 31, 2023 and 2022 were also insignificant.
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ACCUMULATED OTHER COMPREHENSIVE INCOME |
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ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME |
The following table summarizes the changes in accumulated other comprehensive income by component, net of tax for the period indicated:
There were no reclassifications out of accumulated other comprehensive income for the years ended December 31, 2023, 2022, or 2021.
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PARENT COMPANY FINANCIAL INFORMATION |
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PARENT COMPANY FINANCIAL INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT COMPANY FINANCIAL INFORMATION |
The condensed financial statements of the holding company are presented in the following tables:
COMMUNITY WEST BANCSHARES
Condensed Balance Sheets
COMMUNITY WEST BANCSHARES
Condensed Income Statements
COMMUNITY WEST BANCSHARES
Condensed Statements of Cash Flows
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SUBSEQUENT EVENTS |
12 Months Ended | ||
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Dec. 31, 2023 | |||
SUBSEQUENT EVENTS [Abstract] | |||
SUBSEQUENT EVENTS |
On January 26, 2024, the
Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share, payable on February 29, 2024, to common shareholders of record on February 9, 2024.
On April 1, 2024, the merger between Central Valley Community Bancorp and the Company was completed, as described more fully in Note 1 - Summary of Significant
Accounting Policies.
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Insider Trading Arrangements |
3 Months Ended |
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Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations |
Nature of Operations
Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full-service
banking through its wholly owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”) which includes 445 Pine, LLC, the Bank’s wholly owned limited liability company. Unless indicated otherwise or unless the context suggests otherwise, these
entities are referred to herein collectively and on a consolidated basis as the “Company.”
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Basis of Presentation |
Basis of Presentation
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”)
and conform to practices within the banking industry. The accounts of the Company and its consolidated subsidiary are included in these consolidated financial statements. All significant intercompany balances and transactions have been eliminated.
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Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for credit losses and fair value of investment securities available for sale. Although management
believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of management, all adjustments considered necessary have been reflected in the financial statements during their preparation.
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Proposed Merger |
Proposed Merger
On October 10, 2023, the Company announced the signing of an Agreement of Reorganization and Merger with Central Valley Community Bancorp (NASDAQ:
CVCY), headquartered in Fresno, California, together with its banking subsidiary, Central Valley Community Bank, pursuant to which the companies will combine in an all-stock merger transaction. Under the terms of the agreement, Community West
Bancshares will merge with and into Central Valley Community Bancorp and Community West Bank will merge with and into Central Valley Community Bank. The Central Valley Community Bancorp and Community West Bancshares Boards of Directors have
unanimously approved the transaction. The merger closed on April 1, 2024. On the effective date of the merger, Central Valley Community Bancorp and Central Valley Community Bank were rebranded and changed their names to “Community West
Bancshares” and “Community West Bank,” respectively.
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Concentrations of Lending Activities |
Concentrations of Lending Activities
The Company’s lending activities are primarily driven by the customers served in the market areas where the Company has branch offices in the
Central Coast of California. The Company monitors concentrations within selected categories, such as geography and product. The Company makes manufactured housing, commercial, SBA, construction, commercial real estate, single family real estate,
and consumer loans to customers through branch offices located in the Company’s primary markets. The Company’s business is concentrated in these areas and the loan
portfolio includes significant credit exposure to the commercial real estate and manufactured housing markets of these areas. As of December 31, 2023 and 2022, commercial real estate loans accounted for approximately 57.9% and 57.1% of total loans (including loans held for sale), respectively. Approximately 27.5% and 24.5% of these commercial real estate loans were owner occupied at December 31, 2023 and 2022, respectively. Substantially all of these loans are
secured by first liens with an average loan to value ratios of 50.3% and 50.4% at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, manufactured housing loans comprised 34.1% and 33.1%, respectively, of total loans. The Company was within established lending policy limits at December 31, 2023 and 2022.
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Reclassifications |
Reclassifications
Certain amounts in the consolidated financial statements as of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022, and
2021, have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported.
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Business Segments |
Business Segments
Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how
the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2023 and 2022, the Company had only one reportable business segment.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts due from banks (including cash items in process
of clearing). Cash flows from loans originated by the Company and deposits are reported net.
The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in
such accounts.
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Cash Reserve Requirement |
Cash Reserve Requirement
Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the
Federal Reserve Bank. The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The Federal Reserve reduced the reserve requirement
ratio to zero percent across all deposit tiers as of March 26, 2020, to aid institutions impacted by COVID-19.
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Investment Securities |
Investment Securities
Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”), or trading. The appropriate classification is
initially decided at the time of purchase.
Securities classified as HTM are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in
market conditions, liquidity needs, or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been
collected is considered a maturity for purposes of classification and disclosure.
Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity.
Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality,
and regulatory capital considerations. AFS securities are reported as an asset on the consolidated balance sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element
of other comprehensive income (loss) (“OCI”). When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income.
Trading securities are carried at fair value on the consolidated balance sheets. The changes in the fair values of trading securities are reported in other income on
the consolidated income statements.
Interest income on securities is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the
amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations.
Effective January 1, 2023, the allowance for credit losses on investment securities is determined for both HTM and AFS investments in accordance
with Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) - “Financial Instruments-Credit Losses.”
The allowance for credit losses for HTM investment securities is determined on a collective basis, based on shared risk characteristics, and is
determined at the individual security level when the Company deems a security to no longer possess shared risk characteristics. For investment securities where the Company has reason to believe the credit loss exposure is remote, a zero-credit loss
assumption is applied. Such investment securities typically consist of those guaranteed by the U.S. government or government agencies, where there is an explicit or implicit guarantee by the U.S. government, that are highly rated by rating
agencies, and historically have had no credit loss experience.
For AFS securities, the Company performs a quarterly evaluation for securities in an unrealized loss position to determine if the decline in fair value
below the security’s amortized cost is credit related or non-credit related. In determining whether a security’s decline in fair value is credit related, the Company considers a number of factors including, but not limited to: (i) the extent to
which the fair value of the investment is less than its amortized cost; (ii) the financial condition and near-term prospects of the issuer; (iii) downgrades in credit ratings; (iv) payment structure of the security; (v) the ability of the issuer of
the security to make scheduled principal and interest payments; and (vi) general market conditions which reflect prospects for the economy as a whole, including interest rates and sector credit spreads. If it is determined that the unrealized loss,
or a portion thereof, is credit related, the Company records the amount of credit loss through a charge to provision for credit losses in current period earnings. However, the amount of credit loss recorded in the current period’s earnings is
limited to the amount of the total unrealized loss on the security, which is measured as the amount by which the security’s fair value is below its amortized cost. If the Company intends to sell, or if it is more likely than not that the Company
will be required to sell, a security in an unrealized loss position before the recovery of its amortized cost basis, the total amount of the unrealized loss is recognized in the current period’s earnings. Unrealized losses deemed non-credit related
are recorded, net of tax, through accumulated other comprehensive income (loss).
A debt security is placed on nonaccrual status at the time any principal or interest payments become greater than 90 days delinquent. Interest accrued but not received when a security is placed on nonaccrual status is reversed against interest income. Accrued
interest receivable on available-for-sale securities is excluded from the estimate of the required allowance for credit losses.
Prior to the adoption of ASC 326 on January 1, 2023, the Company estimated whether there were any other than temporary impairment losses related to HTM
or AFS securities. When making this determination, management considered: 1) the length of time and the extent to which the fair value was less than the security’s amortized cost; 2) the financial condition and near term prospects of the issuer; 3)
the impact of changes in market interest rates; and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in a security’s fair value whether it was more likely than
not that the Company would be required to sell the security. Declines in the fair value of individual debt securities classified as AFS that were deemed to be other than temporary were reflected in earnings when identified. The fair value of the
debt security then became the new cost basis. For individual debt securities where the Company did not intend to sell the security and it was not more likely than not that the Company would have been required to sell the security before the
recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss was recognized in earnings, and 2) market or other factors was recognized in other comprehensive income or loss.
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FHLB and FRB Stock |
FHLB and FRB Stock
The Company’s subsidiary bank is a member of the FHLB system and maintains an investment in capital stock of the FHLB. The bank also maintains an
investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the
stock is reported in interest and dividend income. Management conducts a periodic review and evaluation of the Company’s holdings of FHLB and FRB stock to determine if any impairment exists. No impairment was deemed to have existed during the years ended December 31, 2023 or 2022.
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Loans Held for Sale |
Loans Held For Sale
Loans which are originated and intended for sale in the secondary
market are carried at the lower of their amortized cost or estimated fair value, determined on an aggregate basis. Valuation adjustments, if any, are recognized through a valuation allowance by charges to lower of cost or fair value provision.
Loans held for sale are comprised of SBA and commercial agriculture loans. Gains or losses realized on the sales of loans are recognized at the time of sale and are determined by the difference between the net sales proceeds and the
carrying value of the loans sold, adjusted for any servicing asset or liability. Gains and losses on sales of loans held for sale are included in gains from loan sales, net in the accompanying consolidated income statements. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2023, 2022, and 2021.
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Loans Held for Investment |
Loans Held for Investment
Loans are recognized at the principal amount outstanding, net of unearned income, loan participations, and amounts charged off. Unearned income
includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method.
Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for
the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is
calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the
contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period.
When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs, and premiums and discounts paid on purchased
loans are relieved though interest income.
When a borrower discontinues making payments as contractually required by the note, management must determine whether it is appropriate to continue to
accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to
continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process
of collection.
When a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status
is changed. Subsequent payments received from the borrower are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again
consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt.
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Allowance for Credit Losses - Loans (Subsequent to the Adoption of ASC 326 on January 1, 2023) |
Allowance for Credit Losses - Loans (Subsequent to the Adoption of ASC 326 on January 1, 2023)
Effective January 1, 2023, the Company accounts for credit losses on loans in accordance with ASC 326. The allowance for credit losses (“ACL”) for
loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. The Company has elected to exclude accrued interest receivable from the amortized cost basis in
the estimate of the ACL. The provision for credit losses on loans (which is a component of the provision for credit losses on the consolidated income statements) reflects the amount required to maintain the ACL at an appropriate level based upon
management’s evaluation of the adequacy of collective and individual loss reserves. The Company’s methodologies for determining the adequacy of ACL are set forth in a formal policy and take into consideration the need for an ACL for loans
evaluated on a collective pool basis which have similar risk characteristics, as well as allowances that are tied to individual loans that do not share risk characteristics and are individually evaluated. The Company increases its ACL by charging
the provision for credit losses on its consolidated income statements. Losses related to specific assets are applied as a reduction of the carrying value of the assets and charged against the ACL when management believes the non-collectability of
a loan balance is confirmed. Recoveries on previously charged off loans are credited to the ACL.
Management conducts an assessment of the ACL on a monthly basis and undertakes a more comprehensive evaluation quarterly. The ACL is estimated using
relevant information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts and is maintained at a level sufficient to provide for expected credit losses over the life of the loan,
including expected prepayments, based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio and economic
conditions.
The ACL is measured on a collective pool basis when similar risk characteristics exist. In estimating the component of the ACL for loans that share
common risk characteristics, loans are pooled based on the loan types and areas of risk concentration. For loans evaluated collectively as a pool, the ACL is calculated using the weighted average remaining maturity (“WARM”) method. The WARM
method utilizes a historical average annual charge-off rate containing loan loss information over a historical lookback period that is used as a foundation for estimating the ACL for the remaining outstanding balances of loans in a segment at a
particular consolidated balance sheet date. The WARM methodology was chosen because each of the loan segments have had loan loss histories dating back as far as 2006 and therefore capture the Company’s historical losses and recoveries and thus
established reliable loan loss rates for each loan segment. In the events where there was insufficient historical loan data to establish a reliable loan loss rate, California peer bank data has been utilized to establish loan loss rates.
The Company established a general forecast loan policy to calculate the loan loss rates for each loan segment. The general forecast policy projects
that the next four quarters will be similar to the Company’s loan loss rates from 2009 to 2016, and then revert to the long-term average over one quarter.
Loans that do not share risk characteristics with other loans in the portfolio are individually evaluated for a required ACL and are not included in
the collective evaluation. Factors involved in determining whether a loan should be individually evaluated include, but are not limited to, the financial condition of the borrower and the value of the underlying collateral. Expected credit losses
for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, when the Company determines that foreclosure is probable, the expected credit loss is
measured based on the fair value of the collateral as of the reporting date, less estimated selling costs. Collateral may consist of various types of real estate including residential properties, commercial properties, agriculture land, vacant
land, and manufactured housing. In certain cases, the Company may hold business assets as collateral. The Company assesses these loans on each reporting date to determine whether repayment is expected to be provided substantially through the
operation or sale of the collateral when the borrower is experiencing financial difficulty.
If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will recognize an ACL or partial charge off as the
difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost
basis will be limited to the amount previously charged off. Subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss
initially was recognized or as a reduction in the provision that would otherwise be reported.
The calculation of the ACL is adjusted using qualitative factors for current conditions and for reasonable and supportable forecast periods. These
qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not directly reflected in the Company’s historical loan losses and may include adjustments for changes in environmental and economic
conditions, such as changes in unemployment rates, changes in Gross Domestic Product, the impact of droughts in the Company’s lending areas, and other relevant factors.
The process of assessing the adequacy of the ACL is necessarily subjective. Further, and particularly in times of economic downturns, it is reasonably
possible that future credit losses may exceed historical loss levels and may also exceed management’s current estimates of expected credit losses within the loan portfolio. As such, there can be no assurance that future charge offs will not
exceed management’s current estimate of what constitutes a reasonable ACL.
Portfolio segmentation is defined as the level at which an entity develops and documents a systematic methodology to determine its ACL. The method for
determining the ACL described above is used to determine the ACL in each portfolio segment in the Company’s loan portfolio. The Company has designated the following portfolio segments of loans:
Manufactured Housing: The Company has a
financing program for manufactured housing to provide affordable home ownership. These loans are offered in approved mobile home parks throughout California primarily on or near the coast. The parks must meet specific criteria. The manufactured
housing loans are secured by the manufactured home and are retained in the Company’s loan portfolio. The primary risks of manufactured housing loans include the borrower’s inability to pay, material decreases in the value of the collateral, and
significant increases in interest rates, which may reduce the borrower’s ability to make the required principal or interest payments.
Commercial Real Estate (“CRE”): CRE loans are
those for which the Company holds commercial real estate property as collateral. This category of loans also includes loans secured by agriculture/farmland and construction loans. These loans are primarily underwritten based on the cash flows of
the business and secondarily on the real estate. The primary risks associated with CRE loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases
in interest rates, which may make the real estate loan unprofitable to the borrower. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.
Commercial: Commercial loans are loans that are
secured by business assets including inventory, receivables, machinery, and equipment. Risk associated with commercial loans arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the
recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans, and occasionally upon other borrower assets and guarantor assets. The fair value of
the collateral securing these loans may fluctuate as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its
customers.
Small Business Administration (“SBA”): These
are the unguaranteed portion of loans that are partially guaranteed by the SBA. SBA loans are similar to commercial business loans. The Company originates SBA loans with the intent to sell the guaranteed portion into the secondary market on a
quarterly basis. Certain loans classified as SBA loans are secured by commercial real estate property which are included in the commercial real estate category above. SBA loans secured by all other forms of real estate are included in the
business loans secured by real estate segment. All other SBA loans are secured by business assets and have similar risks to those discussed in the commercial category above.
Single Family Real Estate and Home Equity Lines of
Credit (“HELOC”): These loans are made to consumers and are secured by residential real estate. The primary risks of single family real estate and HELOC loans include the borrower’s inability to pay, material decreases in the value of
the real estate that is being held as collateral, and significant increases in interest rates, which may reduce the borrower’s ability to make the required principal or interest payments.
Consumer: The Company has a limited number of
consumer loans. Risk arises with these loans in the borrower’s inability to pay and decreases in the fair value of the underlying collateral, if any.
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Allowance for Loan Losses (Prior to the Adoption of ASC 326 on January 1, 2023) |
Allowance for Loan Losses (Prior to the Adoption of ASC 326 on January 1, 2023)
Prior to the adoption of ASC 326 on January 1, 2023, the allowance for loan losses was intended to provide for losses that were considered inherent in
the loan portfolio. This process involved deriving probable loss estimates that were based on migration analyses and historical loss rates, in addition to qualitative factors that were based on management’s judgment. The migration analysis and
historical loss rate calculations were based on annualized loss rates. Migration analysis was utilized for the commercial real estate, commercial, commercial agriculture, SBA, HELOC, single family residential, and consumer portfolios. The
historical loss rate method was utilized primarily for the manufactured housing portfolio. The migration analysis considered the risk rating of loans that were charged off in each loan category.
The Company’s allowance for loan losses was maintained at a level believed appropriate by management to absorb known and inherent probable losses on
existing loans. The allowance was charged for losses when management believed that full recovery on the loan was unlikely.
The allowance for loan losses calculation for the different loan portfolios consisted of the following:
A loan was considered impaired when, based on current information, it was probable that the Company would be unable to collect the scheduled payments
of principal or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment included payment status, collateral value, and the probability of collecting scheduled principal or interest
payments. Loans that experienced insignificant payment delays or payment shortfalls generally were not classified as impaired. Management determined the significance of payment delays or payment shortfalls on a case-by-case basis. When
determining the possibility of impairment, management considered the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the
shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company used the fair value of collateral method to measure impairment. The collateral-dependent loans that recognized impairment were charged down to
the fair value of the collateral less costs to sell. All other loans were measured for impairment either based on the present value of future cash flows or the loan’s observable market price.
The Company evaluated and individually assessed for impairment loans either on nonaccrual, those that were classified as a troubled debt restructuring,
or when other conditions existed which led management to review for possible impairment. Measurement of impairment on impaired loans was determined on a loan-by-loan basis and in total established a specific reserve for impaired loans. Interest
income was not recognized on impaired loans except for limited circumstances in which a loan, although considered impaired, continued to perform in accordance with the loan contract and the borrower provided financial information to support
maintaining the loan on accrual.
The Company determined the appropriate allowance for loan losses on a monthly basis. Any differences between estimated and actual observed losses from
the prior month were reflected in the current period in determining the appropriate allowance for loan losses determination and adjusted as deemed necessary. The review of the appropriateness of the allowance took into consideration such factors
as concentrations of credit, changes in the growth, size, and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may
have affected borrowers’ ability to pay or the value of the underlying collateral. Additional factors considered included geographic location of borrowers, changes in the Company’s product-specific credit policy, and lending staff experience.
These estimates depended on the outcome of future events and, therefore, contained inherent uncertainties.
Another component of the allowance for loan losses considered qualitative factors related to non-impaired loans. The qualitative portion of the
allowance on each of the loan pools was based on changes in any of the following factors:
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Modified Loans to Troubled Borrowers |
Modified Loans to Troubled Borrowers
From time to time, the Company will modify certain loans in order to alleviate temporary difficulties in a borrower’s financial condition or
constraints on a borrower’s ability to repay the loan, and to minimize potential losses to the Company. Such modifications may include changes in the amortization terms of the loan, reductions in interest rates, acceptance of interest only
payments, and in limited cases, reductions to the outstanding loan balance. Such loans are typically placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been in default for a
period of 90 days or more. These loans may be returned to accrual status when all contractual amounts past due have been brought
current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt. The Company typically measures the ACL on these
loans on an individual basis when the loans are deemed to no longer share risk characteristics that are similar with other loans in the portfolio. The determination of the ACL for these loans is based on a discounted cash flow approach, unless
the loan is deemed collateral dependent, which requires measurement of the ACL based on the estimated fair value of the underlying collateral, less estimated selling costs. See Note 4 - Loans Held for Investment for additional information
concerning modified loans to troubled borrowers.
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Off-Balance Sheet Credit Exposure |
Off-Balance Sheet Credit Exposure
In the ordinary course of business, the Company has entered into off-balance sheet
financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees,
elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the
borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances
in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company
evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are
collateralized by the same types of assets used as loan collateral.
After the adoption of ASC 326 on January 1, 2023, the estimate of the ACL for off-balance sheet commitments provides for current estimated credit losses for the
unused portion of collective pools of off-balance sheet credit exposures expected to be funded, except for unconditionally cancellable commitments for which no allowance for credit losses is required under ASC 326. The ACL for off-balance sheet
commitments includes factors that are consistent with the ACL methodology for loans using the expected loss factors and an estimated utilization or probability of draw factor, which are based on historical experience. Changes in the ACL for
off-balance sheet commitments are reported as a component of provision for credit losses in the consolidated income statements and the allowance for credit losses for off-balance sheet commitments is included in other liabilities in the
consolidated balance sheets.
Prior to the adoption of ASC 326 on January 1, 2023, the Company applied qualitative factors to its off-balance sheet obligations in determining an estimate of
losses inherent in these contractual obligations. The estimate for losses on off-balance sheet instruments is included within other liabilities and the charge to income that established this liability is included in other expense on the
consolidated income statement.
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Premises and Equipment |
Premises and Equipment
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. The estimated useful lives of premises and equipment are as follows:
Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter.
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Leases |
Leases
At inception, contracts are evaluated to determine whether the contract constitutes a lease agreement. For contracts that are determined to be an
operating lease, a corresponding Right of Use (“ROU”) asset and operating lease liability are recorded in separate line items on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset during the lease
term and a lease liability represents the Company’s commitment to make contractually obligated lease payments. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease and are based on the present value of
lease payments over the lease term. The measurement of the operating lease ROU asset includes any lease payments made and is reduced by lease incentives that are paid or are payable to the Company. Variable lease payments that depend on an index
are included in lease payments based on the rate in effect at the commencement date of the lease. Lease payments are recognized on a straight-line basis as part of occupancy expense over the lease term.
As the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate is used to determine the present value of
lease payments. This rate gives consideration to the applicable FHLB collateralized borrowing rates and is based on the information available at the commencement date. The Company has elected to apply the short-term lease measurement and
recognition exemption to leases with an initial term of 12 months or less, therefore, these leases are not recorded on the Company’s consolidated balance sheets. Lease expense of these leases is recognized over the lease term on a straight-line
basis. The Company’s lease agreements may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the option will be exercised.
The Company has also elected the practical expedient that allows lessees to make an accounting policy election to not separate non-lease components
from the associated lease component, and instead account for them all together as part of the applicable lease component. The majority of the Company’s non-lease components, such as common area maintenance and taxes, are variable and expensed as
incurred. Variable payment amounts are determined in arrears by the landlord depending on actual costs incurred.
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Other Assets Acquired Through Foreclosure, Net |
Other Assets Acquired Through Foreclosure, Net
Other assets acquired through foreclosure are recorded at fair
value at the time of foreclosure, less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the assets is charged-off against the allowance for credit losses. Any excess of the fair value less
estimated costs to sell over the loan balance is recorded as a credit loss recovery to the extent of the credit loss previously charged-off against the allowance for credit losses; and, if greater, recorded as a gain. Subsequent to the legal
ownership date, the Company periodically performs a new valuation and the other assets acquired through foreclosure are carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or
losses on disposition of such properties, are recorded in current operations.
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Servicing Assets |
Servicing Assets
The guaranteed portion of certain SBA loans can be sold into the secondary market. Servicing assets are recognized as separate assets when
loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in
estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is
determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale for SBA loan sales are calculated based on the
difference between the best actual par and premium bids on an individual loan basis.
SBA servicing assets measured at fair value were $12 thousand and $26 thousand for the years ended December 31, 2023 and 2022, respectively.
Changes in the fair values are recorded in other income in the consolidated income statements.
In prior periods, the Company carried SBA servicing assets measured under the amortization method. There were no
remaining SBA servicing assets measured at amortized cost at December 31, 2023 or 2022.
CWB is an approved Federal Agricultural Mortgage Corporation (“Farmer Mac”) seller/servicer. Servicing assets are recognized as separate assets
as certain servicing requirements are retained. Servicing assets are amortized over the period of estimated net servicing income. CWB uses Farmer Mac prepayment statistics in estimating the expected life of the loans. Management evaluates
its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based on the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a
loan-by-loan basis. The initial servicing asset and resulting gain is calculated based on the contractual net servicing fees. Farmer Mac servicing assets are valued based on the net servicing fee, estimated life of seven years, and discounted using the Company’s borrowing rate (the discount rate used was 5.63% and 5.91% at December 31, 2023 and 2022,
respectively). Farmer Mac servicing assets measured under the amortization method were $1.3 million and $1.5 million at December 31, 2023 and 2022, respectively. Servicing assets are recorded in other assets on the consolidated balance sheets.
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Transfers of Financial Assets |
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over
transferred assets is deemed to have been surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge and exchange
the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
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Bank Owned Life Insurance |
Bank Owned Life Insurance
Bank owned life insurance is stated at its cash surrender value with changes recorded in other income in the consolidated income statements. The cash
surrender value of the underlying policies was $8.9 million and $8.7 million as of December 31, 2023 and 2022, respectively, and was recorded in other assets on the consolidated balance sheets. There are no loans offset against cash surrender values,
and there are no restrictions as to the use of proceeds.
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Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820 - “Fair Value Measurements
and Disclosures” (“ASC 820”) established a framework for measuring fair value using a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of
an asset as of the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when
available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the
Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the
reliability of inputs, as follows:
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on
models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments
categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value
measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an
entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the
measurement date.
FASB ASC 825 - “Financial Instruments” (“ASC
825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value.
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any
estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2023 or
2022. The estimated fair value amounts for December 31, 2023 and 2022, have been measured as of period-end and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the
estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end.
The information presented in Note 16 - Fair Value Measurement should not be interpreted as an estimate of the fair value of the entire Company since
a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s
disclosures and those of other companies or banks may not be meaningful.
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:
Cash and cash equivalents - The carrying
amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value.
Investment securities - The fair value of
equity securities was based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. The fair value of AFS and HTM debt securities was determined based on matrix pricing. Matrix pricing is a mathematical technique that
utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy.
FRB and FHLB stock - CWB is a member of the
FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintains an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company
conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy.
Loans - Fair value for loans is estimated
based on their discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining
fair value. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. Fair values of collateral dependent loans with an ACL have been categorized as Level 3.
Accrued interest receivable and payable - the fair value of the accrued interest associated with interest-bearing assets and liabilities is considered to be approximately
equal to its cost given its short-term nature and the fact that collectability is regularly assessed. Accrued interest is categorized within the same level of the fair value hierarchy as the associated interest-bearing asset or liability.
Deposit liabilities - The amount payable on
demand at the reporting date is used to estimate the fair value of demand and savings deposits. The estimated fair values of fixed-rate time deposits are determined by discounting the cash flows of segments of deposits that have similar
maturities and rates, utilizing a discount rate that approximates the prevailing rates offered to depositors as of the measurement date. The fair value measurement of deposit liabilities is categorized as Level 2 in the fair value hierarchy.
Federal Home Loan Bank advances and other borrowings -
The fair values of the Company’s borrowings are estimated using discounted cash flow analyses based on the market rates for similar types of borrowing arrangements. The FHLB advances and other borrowings have been categorized as Level 2 in
the fair value hierarchy.
Off-balance sheet instruments - Fair values
for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the
counterparties’ credit standing.
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Stock-Based Compensation |
Stock-Based Compensation
Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of the
awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards.
Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded
vesting, compensation is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur.
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Income Taxes |
Income Taxes
The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or
taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting.
These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is
more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified as income tax expense in the consolidated income statements. Deferred tax
assets net of deferred tax liabilities are included in other assets on the consolidated balance sheets.
Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of
negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if
management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized.
The Company is subject to the provisions of ASC 740 - “Income Taxes” (“ASC 740”). ASC 740 prescribes a more likely than not threshold for the
financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions.
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Earnings Per Share |
Earnings Per Share
Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income
available to common shareholders. Diluted earnings per share is computed using the treasury stock method and includes the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options.
Restricted stock awards are considered to be outstanding common shares for the purpose of computing basic and diluted earnings per share.
The factors used in the earnings per share computation are as follows:
Stock options for 114,002;
95,304; and 101,010
shares of common stock were not considered in computing diluted earnings per share for the years ended December 31, 2023, 2022, and 2021, respectively, because they were antidilutive.
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Recently Adopted Accounting Pronouncements |
Recently Adopted Accounting Pronouncements
In June of 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13 - “Financial Instruments -
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This ASU replaces the incurred loss impairment model in current GAAP with a model that reflects current expected credit losses (“CECL”). The CECL model is
applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. CECL also requires credit losses on available-for-sale debt securities to be
measured through an allowance for credit losses when the fair value is less than the amortized cost basis. It also applies to off-balance sheet credit exposures. The ASU requires that all expected credit losses for financial assets held at
the reporting date be measured based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU also requires enhanced disclosure, including qualitative and quantitative disclosures that provide additional
information about significant estimates and judgments used in estimating credit losses. The provisions of this Update became effective for the Company for all annual and interim periods beginning January 1, 2023.
In April 2019, the FASB issued ASU 2019-04 - “Codification Improvements to Topic 326 - Financial Instruments - Credit Losses, Topic 815 -
Derivatives and Hedging, and Topic 825 - Financial Instruments.” This ASU was issued as part of an ongoing project on the FASB’s agenda for improving the Codification or correcting for its unintended application. The FASB issued this ASU,
which is specific to ASUs: 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” 2016-01 - “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities,” and 2017-12 - “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this Update became effective for all interim and annual reporting
periods for the Company on January 1, 2023. The Company adopted the provisions within this ASU in conjunction with the implementation of ASC 326 - “Financial Instruments - Credit Losses,” including: (i) the election to not measure credit
losses on accrued interest receivable when such balances are written-off in a timely manner when deemed uncollectable and (ii) the election to not include the balance of accrued interest receivable as part of the amortized cost of a loan, but
rather to present it separately in the consolidated balance sheets.
In May 2019, the FASB issued ASU 2019-05 - “Financial Instruments - Credit Losses (Topic 326) - Targeted Transition Relief.” This ASU was issued to
allow entities that have certain financial instruments within the scope of ASC 326-20 - “Financial Instruments - Credit Losses - Measured at Amortized Cost” to make an irrevocable election to elect the fair value option for those instruments
in ASC 825-10 - “Financial Instruments - Overall” upon the adoption of ASC 326, which for the Company was January 1, 2023. The fair value option is not applicable to held-to-maturity debt securities. Entities are required to make this
election on an instrument-by-instrument basis. The Company did not elect the fair value option for any of its financial assets upon the adoption of ASC 326 on January 1, 2023.
Effective January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach,
and recorded a net decrease of $1.6 million to the beginning balance of retained earnings for the cumulative effect adjustment.The following table illustrates the impact of adoption of the CECL methodology on the Company’s consolidated balance
sheet as of January 1, 2023:
The Company’s assessment of HTM and AFS investment securities as of January 1, 2023, indicated that an allowance for credit losses was not required.
The Company determined the likelihood of default on HTM investment securities was remote, and the amount of expected non-repayment on those investments was zero. The Company also analyzed AFS investment securities that were in an unrealized
loss position as of January 1, 2023, and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no allowance for credit losses
was recorded for HTM and AFS securities as of January 1, 2023.
In February 2019, the U.S. federal bank regulatory agencies approved a final rule modifying their regulatory capital rules and providing an option to
phase in over a three-year period the Day 1 adverse regulatory capital effects of ASU 2016-13. As a result, entities have the option to gradually phase in the full effect of CECL on regulatory capital over a three-year transition period. The
Company elected to phase in the full effect of CECL on regulatory capital over the three-year transition period.
In March 2022, the FASB issued ASU No. 2022-02 - “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage
Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing
financial difficulty. Under the provisions of this ASU, an entity must determine whether a modification results in a new loan or the continuation of an existing loan. Further, the amendments in this ASU require that an entity disclose current
period gross charge-offs on loans by year of origination and class of financing receivable. This guidance became effective for the Company on January 1, 2023. The new guidance did not have a material impact on the Company’s consolidated
financial statements; however, the required disclosures were added to the consolidated financial statements.
Recent Accounting Pronouncements - Not Yet Adopted
In November 2023, the FASB issued ASU no 2023-07 - “Segment Reporting (Topic 820): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).
This ASU expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker
uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial
position, results of operations, or financial statement disclosures.
In December 2023, the FASB issued ASU No 2023-09 - “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands
disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied
prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations, or financial statement disclosures.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Useful Lives of Other Items of Premises and Equipment |
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. The estimated useful lives of premises and equipment are as follows:
Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter.
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Servicing Assets Measured at Fair Value |
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Servicing Assets Measured Under the Amortization Method |
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Components of Basic and Diluted Earnings Per Share |
The factors used in the earnings per share computation are as follows:
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Impact of Adoption of CECL Methodology on Consolidated Balance Sheet | The following table illustrates the impact of adoption of the CECL methodology on the Company’s consolidated balance
sheet as of January 1, 2023:
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INVESTMENT SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Investment Securities |
The amortized cost and estimated fair value of
investment securities are as follows:
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Maturity Periods and Weighted Average Yields of Investment Securities |
The maturity periods and weighted average yields of investment securities at December 31, 2023 and 2022 were as follows:
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Amortized Cost and Fair Value of Investment Securities by Contractual Maturities |
The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below:
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Fair Value and Unrealized Losses of Securities in Unrealized Loss Position |
As of December 31, 2023 and 2022, securities that were in an unrealized loss position and length of time that individual securities have been in a continuous loss position are summarized as follows:
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LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unpaid Balance of Loan Serviced for Others |
The unpaid balance of loans serviced for others as of the periods presented are shown below:
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LOANS HELD FOR INVESTMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Loans Held for Investment Loan Portfolio |
The composition of the Company’s loans held for investment loan portfolio follows:
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Contractual Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans |
The following tables present the contractual aging of the recorded investment in
past due held for investment loans by class of loans:
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Composition of Nonaccrual Loans |
The following table presents the
composition of nonaccrual loans as of December 31, 2023 and 2022:
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Analysis of Allowance for Loan Losses for Loans Held for Investment |
The following tables summarize the changes in the allowance for credit losses by portfolio type. Prior to the adoption of ASC 326 on January 1,
2023, the allowance for loan losses was determined in accordance with ASC 450 - “Contingencies” (“ASC 450”) and ASC 310 - “Receivables” (“ASC 310”).
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Amortized Cost Basis and Associated Allowance for Credit Losses by Portfolio Segment for Loans That Were Individually Evaluated |
The following table presents the amortized cost basis and the associated allowance for credit losses by portfolio segment
for loans that were individually evaluated as of December 31, 2023:
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Impairment Method Information Related to Loans and Allowance for Loan Losses by Loan Portfolio Segment |
The following table presents impairment method information related to loans and allowance for loan losses by loan portfolio segment as of December 31, 2022:
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Amortized Cost Basis of Collateral Dependent Loans by Class of Loans and by Collateral Type |
The following table presents the amortized cost basis of collateral dependent loans by class of loans and by collateral type as of the dates indicated :
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Gross Loans by Risk Rating |
The
following tables present the risk categories for gross loans by class of loans and by year of origination as of the dates indicated:
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Modifications to Borrowers Experiencing Financial Difficulty |
The following tables presents the amortized cost basis of loans at December 31, 2023, that were modified during the year
ended December 31, 2023, in response to financial difficulties experienced by the borrowers, by loan class and by type of modification.
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Aggregate Activity with Related Parties |
The following table summarizes the aggregate activity in such loans:
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PREMISES AND EQUIPMENT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREMISES AND EQUIPMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment |
The Company’s premises and equipment consisted of the following at December 31:
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OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets Acquired through Foreclosure |
The following table summarizes the changes in other assets acquired through foreclosure for the periods indicated:
|
DEPOSITS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Deposits |
The table below summarizes deposits by type:
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Summary of Contractual Maturities for All Time Deposits |
The summary of the contractual maturities for all time deposits is as follows:
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BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of FHLB Advances by Maturity Date |
FHLB Advances
The following table summarizes the Company’s FHLB advances by maturity date:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contractual Amounts for Unfunded Commitments and Letters of Credit |
A summary of the contractual amounts for unfunded commitments and letters of credit are as follows:
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STOCKHOLDERS' EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assumptions Used in Calculating Fair Value of Option Awards |
A summary of the assumptions used in calculating the fair value of stock option awards during the years ended December 31, 2023, 2022, and 2021, are as follows:
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Summary of Stock Option Activity |
A summary of stock option activity under the plan is presented below:
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Summary of Change in Nonvested Restricted Stock Awards |
The following table summarizes the change in nonvested restricted stock awards for the year ended December 31, 2023:
|
CAPITAL REQUIREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank's Regulatory Ratios and Federal Reserve's Current Adequacy Guidelines |
The following tables illustrates the Bank’s regulatory ratios and the Federal Reserve’s current adequacy guidelines as of December 31, 2023 and 2022.
|
REVENUE RECOGNITION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Interest Income |
The following table presents non-interest income, segregated by revenue streams in-scope and out-of-scope of ASC 606 for the periods indicated:
|
INCOME TAXES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes |
The provision for income taxes consisted of the following:
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Reconciliation between Statutory Income Tax Rate and Effective Tax Rate |
A reconciliation between the statutory income tax rate and the Company’s effective tax rate is as follows:
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Cumulative Tax Effects of Primary Temporary Differences |
The cumulative tax effects of the primary temporary differences are as shown in the following table:
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LEASES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Cost and Other Information |
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Future Minimum Operating Lease Payments |
Future minimum operating lease payments as of December 31, 2023 are as follows (in thousands):
|
FAIR VALUE MEASUREMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements of Assets Measured on a Recurring Basis |
The following tables summarize the fair value of assets measured on a recurring basis:
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Fair Value Measurements of Assets Measured on a Non-recurring Basis |
The Company also has assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis, as follows:
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Estimated Fair Values and Carrying Values of Financial Instruments |
The estimated fair value of the Company’s financial instruments are as follows:
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Other Comprehensive Income (Loss) by Component, Net of Tax |
The following table summarizes the changes in accumulated other comprehensive income by component, net of tax for the period indicated:
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PARENT COMPANY FINANCIAL INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets |
COMMUNITY WEST BANCSHARES
Condensed Balance Sheets
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Condensed Income Statements |
COMMUNITY WEST BANCSHARES
Condensed Income Statements
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Condensed Statements of Cash Flows |
COMMUNITY WEST BANCSHARES
Condensed Statements of Cash Flows
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Concentrations of Lending Activities (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Commercial Real Estate [Member] | ||
Concentrations of Lending Activities [Abstract] | ||
Loans secured by first liens, average loan to value ratio | 50.30% | 50.40% |
Commercial Real Estate [Member] | Owner Occupied [Member] | ||
Concentrations of Lending Activities [Abstract] | ||
Percentage of Commercial Real Estate loans | 27.50% | 24.50% |
Loans Receivable, Total [Member] | Credit Concentration Risk [Member] | Manufactured Housing [Member] | ||
Concentrations of Lending Activities [Abstract] | ||
Concentration risk, percentage | 34.10% | 33.10% |
Loans Receivable, Total [Member] | Credit Concentration Risk [Member] | Commercial Real Estate [Member] | ||
Concentrations of Lending Activities [Abstract] | ||
Concentration risk, percentage | 57.90% | 57.10% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investment Securities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Investment Securities [Abstract] | |
Period of delinquency after which a debt security is placed in a nonaccrual status | 90 days |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Business Segments (Details) - Segment |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Business Segments [Abstract] | ||
Number of reportable segments | 1 | 1 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash Reserve Requirement (Details) |
Mar. 26, 2020 |
---|---|
Cash Reserve Requirement [Abstract] | |
Ratio of cash reserve required | 0.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, FHLB and FRB Stock (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") Stock [Abstract] | ||
Impairment charge on equity securities with no actively traded market | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Loans Held for Investment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Loans Held for Investment and Interest and Fees from Loans [Abstract] | |
Period of delinquency after which a loan is placed in a nonaccrual status | 90 days |
Minimum [Member] | |
Loans Held for Investment and Interest and Fees from Loans [Abstract] | |
Period of delinquency after which a loan is placed in a nonaccrual status | 90 days |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Premises and Equipment (Details) |
Dec. 31, 2023 |
---|---|
Building and Improvements [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 20 years |
Building and Improvements [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 30 years |
Furniture and Equipment [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 5 years |
Furniture and Equipment [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 10 years |
Electronic Equipment and Software [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 3 years |
Electronic Equipment and Software [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful life of assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Servicing Assets (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Change in Level 3 Assets Measured at Fair Value on a Recurring Basis [Roll Forward] | |||
Balance, beginning of period | $ 26,000 | $ 44,000 | $ 43,000 |
Valuation adjustment | (14,000) | (18,000) | 1,000 |
Balance, end of period | 12,000 | 26,000 | 44,000 |
Servicing Assets Measured Under the Amortization Method [Roll Forward] | |||
Valuation adjustment | 175,000 | 120,000 | (139,000) |
SBA Servicing Assets [Member] | |||
Servicing Assets Measured Under the Amortization Method [Roll Forward] | |||
Balance, beginning of period | 0 | 0 | 27,000 |
Amortization, net | 0 | 0 | (6,000) |
Valuation adjustment | 0 | 0 | (21,000) |
Balance, end of period | 0 | 0 | 0 |
Farmer Mac Servicing Assets [Member] | |||
Servicing Assets Measured Under the Amortization Method [Roll Forward] | |||
Balance, beginning of period | 1,454,000 | 1,556,000 | 1,391,000 |
Additions | 171,000 | 257,000 | 475,000 |
Amortization, net | (332,000) | (359,000) | (310,000) |
Balance, end of period | $ 1,293,000 | $ 1,454,000 | $ 1,556,000 |
Discount rate | 5.63% | 5.91% | |
Estimated life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Bank Owned Life Insurance (Details) - USD ($) $ in Millions |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Bank Owned Life Insurance [Abstract] | ||
Cash surrender value of life insurance | $ 8.9 | $ 8.7 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Earnings Per Share [Abstract] | |||
Net income available to common stockholders | $ 7,316 | $ 13,449 | $ 13,101 |
Weighted average number of common shares outstanding - basic (in shares) | 8,840,524 | 8,722,481 | 8,567,839 |
Add: Dilutive effects of assumed exercises of stock options (in shares) | 138,677 | 169,646 | 155,099 |
Weighted average number of common shares outstanding - diluted (in shares) | 8,979,201 | 8,892,127 | 8,722,938 |
Earnings per share [Abstract] | |||
Basic (in dollars per share) | $ 0.83 | $ 1.54 | $ 1.53 |
Diluted (in dollars per share) | $ 0.81 | $ 1.51 | $ 1.5 |
Stock Options [Member] | |||
Antidilutive Securities [Abstract] | |||
Antidilutive stock not considered in computing diluted earnings per common share (in shares) | 114,002 | 95,304 | 101,010 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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---|---|---|---|---|---|---|---|---|
Allowance for credit losses on securities [Abstract] | ||||||||
Available-for-sale | $ 0 | $ 0 | ||||||
Held-to-maturity | 0 | 0 | ||||||
Allowance for credit losses on loans | 12,451 | [1] | 10,765 | [1] | $ 10,404 | $ 10,194 | ||
Deferred tax assets | 5,770 | 5,053 | ||||||
Liabilities [Abstract] | ||||||||
Allowance for credit losses for off-balance sheet commitments | 458 | 94 | ||||||
Stockholders' Equity [Abstract] | ||||||||
Retained earnings | 70,646 | 67,727 | ||||||
ASU 2016-13 [Member] | Impact of CECL Adoption [Member] | ||||||||
Allowance for credit losses on securities [Abstract] | ||||||||
Available-for-sale | 0 | |||||||
Held-to-maturity | 0 | |||||||
Allowance for credit losses on loans | 1,811 | $ 1,811 | ||||||
Deferred tax assets | 659 | |||||||
Liabilities [Abstract] | ||||||||
Allowance for credit losses for off-balance sheet commitments | 421 | |||||||
Stockholders' Equity [Abstract] | ||||||||
Retained earnings | (1,573) | |||||||
ASU 2016-13 [Member] | As Reported Under CECL [Member] | ||||||||
Allowance for credit losses on securities [Abstract] | ||||||||
Available-for-sale | 0 | |||||||
Held-to-maturity | 0 | |||||||
Allowance for credit losses on loans | 12,576 | |||||||
Deferred tax assets | 5,712 | |||||||
Liabilities [Abstract] | ||||||||
Allowance for credit losses for off-balance sheet commitments | 515 | |||||||
Stockholders' Equity [Abstract] | ||||||||
Retained earnings | $ 66,154 | |||||||
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INVESTMENT SECURITIES, Securities Available-for-Sale (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities available-for-sale [Abstract] | ||
Amortized cost | $ 16,682 | $ 27,790 |
Gross unrealized gains | 13 | 26 |
Gross unrealized (losses) | (1,463) | (1,128) |
Fair value | 15,232 | 26,688 |
U.S. Government Agency Notes [Member] | ||
Securities available-for-sale [Abstract] | ||
Amortized cost | 3,318 | 4,081 |
Gross unrealized gains | 13 | 26 |
Gross unrealized (losses) | (1) | 0 |
Fair value | 3,330 | 4,107 |
U.S. Government Agency Collateralized Mortgage Obligations ("CMO") [Member] | ||
Securities available-for-sale [Abstract] | ||
Amortized cost | 4,114 | 4,475 |
Gross unrealized gains | 0 | 0 |
Gross unrealized (losses) | (170) | (179) |
Fair value | 3,944 | 4,296 |
U.S. Treasury Securities [Member] | ||
Securities available-for-sale [Abstract] | ||
Amortized cost | 9,984 | |
Gross unrealized gains | 0 | |
Gross unrealized (losses) | (14) | |
Fair value | 9,970 | |
Corporate Debt Securities [Member] | ||
Securities available-for-sale [Abstract] | ||
Amortized cost | 9,250 | 9,250 |
Gross unrealized gains | 0 | 0 |
Gross unrealized (losses) | (1,292) | (935) |
Fair value | $ 7,958 | $ 8,315 |
INVESTMENT SECURITIES, Securities Held-to-Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities held-to-maturity [Abstract] | ||
Amortized cost | $ 2,135 | $ 2,557 |
Gross unrealized gains | 8 | 3 |
Gross unrealized (losses) | (87) | (137) |
Fair value | 2,056 | 2,423 |
U.S. Government Agency Mortgage-Backed Securities ("MBS") [Member] | ||
Securities held-to-maturity [Abstract] | ||
Amortized cost | 2,135 | 2,557 |
Gross unrealized gains | 8 | 3 |
Gross unrealized (losses) | (87) | (137) |
Fair value | $ 2,056 | $ 2,423 |
INVESTMENT SECURITIES, Securities Measured at Fair Value (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities measured at fair value [Abstract] | ||
Amortized cost | $ 66 | $ 66 |
Gross unrealized gains | 316 | 159 |
Gross unrealized (losses) | 0 | 0 |
Fair value | 382 | 225 |
Equity Securities: Farmer Mac Class A Stock [Member] | ||
Securities measured at fair value [Abstract] | ||
Amortized cost | 66 | 66 |
Gross unrealized gains | 316 | 159 |
Gross unrealized (losses) | 0 | 0 |
Fair value | $ 382 | $ 225 |
INVESTMENT SECURITIES, Securities Pledged as Collateral (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023
USD ($)
Security
|
Dec. 31, 2022
USD ($)
Security
|
Dec. 31, 2021
USD ($)
|
|
INVESTMENT SECURITIES [Abstract] | |||
Securities pledged as collateral to the Federal Home Loan Bank ("FHLB") | $ 9,300 | $ 21,100 | |
Number of securities held by issuer greater than 10% of stockholders' equity | Security | 0 | 0 | |
Sales of investment securities | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES, Maturity Periods and Weighted Average Yields (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than one year, amount | $ 0 | $ 9,970 |
Less than one year, yield | 0.00% | 2.06% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 8,880 | $ 8,834 |
Five to ten years, yield | 3.84% | 3.73% |
Over ten years, amount | $ 6,352 | $ 7,884 |
Over ten years, yield | 6.21% | 4.53% |
Total amount | $ 15,232 | $ 26,688 |
Total yield | 4.83% | 3.34% |
Maturity periods and weighted average yields of investment securities held-to-maturity [Abstract] | ||
Less than one year, amount | $ 0 | $ 0 |
Less than one year, yield | 0.00% | 0.00% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 826 | $ 746 |
Five to ten years, yield | 3.99% | 3.60% |
Over ten years, amount | $ 1,309 | $ 1,811 |
Over ten years, yield | 4.57% | 3.68% |
Total amount | $ 2,135 | $ 2,557 |
Total yield | 4.35% | 3.66% |
U.S. Government Agency Notes [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than one year, amount | $ 0 | $ 0 |
Less than one year, yield | 0.00% | 0.00% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 469 | $ 519 |
Five to ten years, yield | 5.85% | 3.59% |
Over ten years, amount | $ 2,861 | $ 3,588 |
Over ten years, yield | 6.89% | 4.40% |
Total amount | $ 3,330 | $ 4,107 |
Total yield | 6.74% | 4.30% |
U.S. Government Agency CMOs [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than one year, amount | $ 0 | $ 0 |
Less than one year, yield | 0.00% | 0.00% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 453 | $ 0 |
Five to ten years, yield | 3.43% | 0.00% |
Over ten years, amount | $ 3,491 | $ 4,296 |
Over ten years, yield | 5.66% | 4.63% |
Total amount | $ 3,944 | $ 4,296 |
Total yield | 5.40% | 4.63% |
U.S. Treasury Securities [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than one year, amount | $ 9,970 | |
Less than one year, yield | 2.06% | |
One to five years, amount | $ 0 | |
One to five years, yield | 0.00% | |
Five to ten years, amount | $ 0 | |
Five to ten years, yield | 0.00% | |
Over ten years, amount | $ 0 | |
Over ten years, yield | 0.00% | |
Total amount | $ 9,970 | |
Total yield | 2.06% | |
Corporate Debt Securities [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than one year, amount | $ 0 | $ 0 |
Less than one year, yield | 0.00% | 0.00% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 7,958 | $ 8,315 |
Five to ten years, yield | 3.74% | 3.74% |
Over ten years, amount | $ 0 | $ 0 |
Over ten years, yield | 0.00% | 0.00% |
Total amount | $ 7,958 | $ 8,315 |
Total yield | 3.74% | 3.74% |
U.S. Government Agency MBS [Member] | ||
Maturity periods and weighted average yields of investment securities held-to-maturity [Abstract] | ||
Less than one year, amount | $ 0 | $ 0 |
Less than one year, yield | 0.00% | 0.00% |
One to five years, amount | $ 0 | $ 0 |
One to five years, yield | 0.00% | 0.00% |
Five to ten years, amount | $ 826 | $ 746 |
Five to ten years, yield | 3.99% | 3.60% |
Over ten years, amount | $ 1,309 | $ 1,811 |
Over ten years, yield | 4.57% | 3.68% |
Total amount | $ 2,135 | $ 2,557 |
Total yield | 4.35% | 3.66% |
INVESTMENT SECURITIES, Investment Securities by Contractual Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities available-for-sale, Amortized Cost [Abstract] | ||
Due in less than one year | $ 0 | $ 9,984 |
After one year through five years | 0 | 0 |
After five years through ten years | 10,206 | 9,768 |
After ten years | 6,476 | 8,038 |
Amortized cost | 16,682 | 27,790 |
Securities available for sale, Estimated Fair Value [Abstract] | ||
Due in one year or less | 0 | 9,970 |
After one year through five years | 0 | 0 |
After five years through ten years | 8,880 | 8,834 |
After ten years | 6,352 | 7,884 |
Estimated fair value | 15,232 | 26,688 |
Securities held to maturity, Amortized Cost [Abstract] | ||
Due in less than one year | 0 | 0 |
After one year through five years | 0 | 0 |
After five years through ten years | 826 | 746 |
After ten years | 1,309 | 1,811 |
Amortized cost | 2,135 | 2,557 |
Securities held to maturity, Estimated Fair Value [Abstract] | ||
Due in less than one year | 0 | 0 |
After one year through five years | 0 | 0 |
After five years through ten years | 792 | 705 |
After ten years | 1,264 | 1,718 |
Estimated fair value | $ 2,056 | $ 2,423 |
INVESTMENT SECURITIES, Unrealized Loss Positions (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
Security
|
Dec. 31, 2022
USD ($)
Security
|
|
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | $ (1) | $ (908) |
More than twelve months, gross unrealized losses | (1,462) | (220) |
Total, gross unrealized losses | (1,463) | (1,128) |
Less than twelve months, fair value | 988 | 20,646 |
More than twelve months, fair value | 11,902 | 1,935 |
Total, fair value | 12,890 | 22,581 |
Securities held-to-maturity, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | 0 | (137) |
More than twelve months, gross unrealized losses | (87) | 0 |
Total, gross unrealized losses | (87) | (137) |
Less than twelve months, fair value | 0 | 2,115 |
More than twelve months, fair value | (1,718) | 0 |
Total, fair value | $ (1,718) | $ 2,115 |
Securities in unrealized loss positions | Security | 36 | 37 |
Available-for-sale securities on nonaccrual status | $ 0 | $ 0 |
Held-to-maturity securities on nonaccrual status | 0 | 0 |
Accrued interest receivable on available-for-sale securities | $ 130 | $ 77 |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Accrued interest receivable related to held-to-maturity securities | $ 130 | $ 77 |
Collateral dependent available-for-sale securities | 0 | 0 |
Collateral dependent held-to-maturity securities | 0 | 0 |
Allowance for credit losses on securities available-for-sale | 0 | 0 |
Allowance for credit losses on securities held-to-maturity | 0 | 0 |
Provision for credit losses related to held-to-maturity securities | 0 | |
U.S. Government Agency Notes [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | (1) | |
More than twelve months, gross unrealized losses | 0 | |
Total, gross unrealized losses | (1) | |
Less than twelve months, fair value | 988 | |
More than twelve months, fair value | 0 | |
Total, fair value | 988 | |
U.S. Government Agency CMOs [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | 0 | (130) |
More than twelve months, gross unrealized losses | (170) | (49) |
Total, gross unrealized losses | (170) | (179) |
Less than twelve months, fair value | 0 | 3,690 |
More than twelve months, fair value | 3,944 | 606 |
Total, fair value | 3,944 | 4,296 |
U.S. Treasury Securities [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | (14) | |
More than twelve months, gross unrealized losses | 0 | |
Total, gross unrealized losses | (14) | |
Less than twelve months, fair value | 9,970 | |
More than twelve months, fair value | 0 | |
Total, fair value | 9,970 | |
Corporate Debt Securities [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | 0 | (764) |
More than twelve months, gross unrealized losses | (1,292) | (171) |
Total, gross unrealized losses | (1,292) | (935) |
Less than twelve months, fair value | 0 | 6,986 |
More than twelve months, fair value | 7,958 | 1,329 |
Total, fair value | 7,958 | 8,315 |
U.S. Government Agency MBS [Member] | ||
Securities held-to-maturity, continuous unrealized loss position [Abstract] | ||
Less than twelve months, gross unrealized losses | 0 | (137) |
More than twelve months, gross unrealized losses | (87) | 0 |
Total, gross unrealized losses | (87) | (137) |
Less than twelve months, fair value | 0 | 2,115 |
More than twelve months, fair value | (1,718) | 0 |
Total, fair value | $ (1,718) | $ 2,115 |
LOANS HELD FOR SALE AND LOANS SERVICED FOR OTHERS (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | $ 16,648 | $ 21,033 |
Loans serviced for others | 163,630 | 158,183 |
Farmer Mac [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans serviced for others | 162,242 | 155,522 |
SBA [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | 4,500 | 5,200 |
Loans serviced for others | 1,388 | 1,926 |
USDA, FSA, and USDA Business and Industry [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans serviced for others | 0 | 735 |
USDA [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | $ 12,100 | $ 15,800 |
LOANS HELD FOR INVESTMENT, Composition of Loans Held for Investment Portfolio (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
||||
---|---|---|---|---|---|---|---|---|
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | $ 951,716 | $ 935,123 | ||||||
Deferred fees, net | (867) | (787) | ||||||
Discount on SBA loans | (25) | (27) | ||||||
Loans held for investment | 950,824 | 934,309 | ||||||
Allowance for credit losses | (12,451) | [1] | (10,765) | [1] | $ (10,404) | $ (10,194) | ||
Total loans held for investment, net | 938,373 | 923,544 | ||||||
Manufactured Housing [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 330,358 | 315,825 | ||||||
Allowance for credit losses | (5,378) | (3,879) | (2,606) | (2,612) | ||||
Commercial Real Estate [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 560,373 | 545,317 | ||||||
Allowance for credit losses | (6,309) | (5,980) | (6,729) | (5,950) | ||||
Commercial [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 46,255 | 59,070 | ||||||
Allowance for credit losses | (554) | (747) | (923) | (1,379) | ||||
SBA [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 1,753 | 3,482 | ||||||
Allowance for credit losses | (4) | (21) | (22) | (118) | ||||
HELOC [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 2,556 | 2,613 | ||||||
Allowance for credit losses | (41) | (27) | (18) | (25) | ||||
Single Family Real Estate [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 10,350 | 8,709 | ||||||
Allowance for credit losses | (164) | (107) | (105) | (108) | ||||
Consumer [Member] | ||||||||
Loans held for investment [Abstract] | ||||||||
Gross loans held for investment | 71 | 107 | ||||||
Allowance for credit losses | $ (1) | $ (4) | $ (1) | $ (2) | ||||
|
LOANS HELD FOR INVESTMENT, Financing Receivables Past Due (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | $ 951,716 | $ 935,123 |
Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 934,783 | 932,243 |
Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 16,933 | 2,880 |
30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 12,501 | 2,778 |
60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 142 | 102 |
Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 4,290 | 0 |
Manufactured Housing [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 330,358 | 315,825 |
Manufactured Housing [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 329,636 | 315,058 |
Manufactured Housing [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 722 | 767 |
Manufactured Housing [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 537 | 665 |
Manufactured Housing [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 142 | 102 |
Manufactured Housing [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 43 | 0 |
Commercial Real Estate [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 560,373 | 545,317 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 496,436 | 482,759 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 486,180 | 481,599 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 10,256 | 1,160 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 8,207 | 1,160 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 2,049 | 0 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 12,199 | 12,947 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 12,199 | 12,947 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Land [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 6,021 | 11,237 |
Commercial Real Estate [Member] | Land [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 6,021 | 11,237 |
Commercial Real Estate [Member] | Land [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Land [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Land [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Land [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Construction [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 45,717 | 38,374 |
Commercial Real Estate [Member] | Construction [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 43,767 | 38,374 |
Commercial Real Estate [Member] | Construction [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 1,950 | 0 |
Commercial Real Estate [Member] | Construction [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Construction [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial Real Estate [Member] | Construction [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 1,950 | 0 |
Commercial [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 46,255 | 59,070 |
Commercial [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 42,313 | 59,070 |
Commercial [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 3,942 | 0 |
Commercial [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 3,695 | 0 |
Commercial [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Commercial [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 247 | 0 |
SBA [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 1,753 | 3,482 |
SBA [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 1,690 | 2,529 |
SBA [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 63 | 953 |
SBA [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 62 | 953 |
SBA [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
SBA [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 1 | 0 |
HELOC [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 2,556 | 2,613 |
HELOC [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 2,556 | 2,613 |
HELOC [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
HELOC [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
HELOC [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
HELOC [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Single Family Real Estate [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 10,350 | 8,709 |
Single Family Real Estate [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 10,350 | 8,709 |
Single Family Real Estate [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Single Family Real Estate [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Single Family Real Estate [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Single Family Real Estate [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Consumer [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 71 | 107 |
Consumer [Member] | Current [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 71 | 107 |
Consumer [Member] | Total Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Consumer [Member] | 30 to 59 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Consumer [Member] | 60 to 89 Days Past Due [Member] | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | 0 | 0 |
Consumer [Member] | Over 90 Days Past Due | ||
Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans [Abstract] | ||
Total loans held for investment | $ 0 | $ 0 |
LOANS HELD FOR INVESTMENT, Nonaccrual Loans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | $ 77 | $ 0 | |
Without an ACL | 3,929 | 211 | |
Total Nonaccrual | 4,006 | 211 | |
Loans past due by 90 days or more that were not on nonaccrual status | $ 0 | 0 | |
Period past due after which accrual of interest is discontinued | 90 days | ||
Foregone interest on nonaccrual loans | $ 436 | 38 | $ 154 |
Accrued interest receivable related to loans | $ 5,400 | $ 5,100 | |
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets | |
Manufactured Housing [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | $ 77 | $ 0 | |
Without an ACL | 913 | 61 | |
Total Nonaccrual | 990 | 61 | |
Commercial Real Estate [Member] | Commercial Real Estate [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | 0 | 0 | |
Without an ACL | 800 | 0 | |
Total Nonaccrual | 800 | 0 | |
Commercial Real Estate [Member] | SBA 504 1st Trust Deed [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | 0 | 0 | |
Without an ACL | 41 | 0 | |
Total Nonaccrual | 41 | 0 | |
Commercial Real Estate [Member] | Construction [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | 0 | 0 | |
Without an ACL | 1,950 | 0 | |
Total Nonaccrual | 1,950 | 0 | |
Commercial [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | 0 | 0 | |
Without an ACL | 87 | 0 | |
Total Nonaccrual | 87 | 0 | |
Single Family Real Estate [Member] | |||
Composition of Nonaccrual Loans [Abstract] | |||
With an ACL | 0 | 0 | |
Without an ACL | 138 | 150 | |
Total Nonaccrual | $ 138 | $ 150 |
LOANS HELD FOR INVESTMENT, Allowance for Credit Losses by Portfolio Type (Details) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2023
USD ($)
Loan
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | $ 10,765 | [1] | $ 10,404 | $ 10,194 | |||
Charge-offs | (27) | (182) | (1) | ||||
Recoveries | 241 | 738 | 392 | ||||
Net (charge-offs) recoveries | 214 | 556 | 391 | ||||
Provision (credit) for credit losses | (339) | (195) | (181) | ||||
Ending balance | 12,451 | [1] | 10,765 | [1] | 10,404 | ||
Increase in allowance for credit losses on loans | 1,700 | ||||||
Allowance for credit losses for off-balance sheet commitments | 458 | 94 | |||||
Provision (credit) for credit losses associated with the allowance for off-balance sheet commitments | (56) | 0 | 2 | ||||
Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 1,811 | ||||||
Ending balance | 1,811 | 1,811 | |||||
Allowance for credit losses for off-balance sheet commitments | 421 | ||||||
Manufactured Housing [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 3,879 | 2,606 | 2,612 | ||||
Charge-offs | 0 | 0 | 0 | ||||
Recoveries | 82 | 139 | 218 | ||||
Net (charge-offs) recoveries | 82 | 139 | 218 | ||||
Provision (credit) for credit losses | (254) | 1,134 | (224) | ||||
Ending balance | 5,378 | 3,879 | 2,606 | ||||
Manufactured Housing [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 1,671 | ||||||
Ending balance | 1,671 | ||||||
Commercial Real Estate [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 5,980 | 6,729 | 5,950 | ||||
Charge-offs | (27) | 0 | 0 | ||||
Recoveries | 80 | 80 | 80 | ||||
Net (charge-offs) recoveries | 53 | 80 | 80 | ||||
Provision (credit) for credit losses | 245 | (829) | 699 | ||||
Ending balance | $ 6,309 | 5,980 | 6,729 | ||||
Number of loans charged off | Loan | 1 | ||||||
Commercial Real Estate [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | $ 31 | ||||||
Ending balance | 31 | ||||||
Commercial [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 747 | 923 | 1,379 | ||||
Charge-offs | 0 | 0 | 0 | ||||
Recoveries | 47 | 190 | 40 | ||||
Net (charge-offs) recoveries | 47 | 190 | 40 | ||||
Provision (credit) for credit losses | (310) | (366) | (496) | ||||
Ending balance | 554 | 747 | 923 | ||||
Commercial [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 70 | ||||||
Ending balance | 70 | ||||||
SBA [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 21 | 22 | 118 | ||||
Charge-offs | 0 | (182) | 0 | ||||
Recoveries | 32 | 316 | 47 | ||||
Net (charge-offs) recoveries | 32 | 134 | 47 | ||||
Provision (credit) for credit losses | (34) | (135) | (143) | ||||
Ending balance | 4 | 21 | 22 | ||||
SBA [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | (15) | ||||||
Ending balance | (15) | ||||||
HELOC [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 27 | 18 | 25 | ||||
Charge-offs | 0 | 0 | 0 | ||||
Recoveries | 0 | 12 | 6 | ||||
Net (charge-offs) recoveries | 0 | 12 | 6 | ||||
Provision (credit) for credit losses | (3) | (3) | (13) | ||||
Ending balance | 41 | 27 | 18 | ||||
HELOC [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 17 | ||||||
Ending balance | 17 | ||||||
Single Family Real Estate [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 107 | 105 | 108 | ||||
Charge-offs | 0 | 0 | 0 | ||||
Recoveries | 0 | 0 | 1 | ||||
Net (charge-offs) recoveries | 0 | 0 | 1 | ||||
Provision (credit) for credit losses | 18 | 2 | (4) | ||||
Ending balance | 164 | 107 | 105 | ||||
Single Family Real Estate [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 39 | ||||||
Ending balance | 39 | ||||||
Consumer [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | 4 | 1 | 2 | ||||
Charge-offs | 0 | 0 | (1) | ||||
Recoveries | 0 | 1 | 0 | ||||
Net (charge-offs) recoveries | 0 | 1 | (1) | ||||
Provision (credit) for credit losses | (1) | 2 | 0 | ||||
Ending balance | 1 | 4 | $ 1 | ||||
Consumer [Member] | Period of Adoption [Member] | ASU 2016-13 [Member] | |||||||
Summary of changes in allowance for credit losses [Roll Forward] | |||||||
Beginning balance | $ (2) | ||||||
Ending balance | $ (2) | ||||||
|
LOANS HELD FOR INVESTMENT, Amortized Cost Basis and Associated Allowance for Credit Losses by Portfolio Segment for Loans That Were Individually Evaluated (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
||||
---|---|---|---|---|---|---|---|---|
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | $ 432 | |||||||
Individually evaluated loans with no ACL recorded | 5,774 | |||||||
Total impaired loans | 6,206 | $ 6,057 | ||||||
Collectively evaluated loans | 945,510 | 929,066 | ||||||
Total loans held for investment | 951,716 | 935,123 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 11 | |||||||
Collectively evaluated loans | 12,440 | |||||||
Total allowance for loan losses | 12,451 | [1] | 10,765 | [1] | $ 10,404 | $ 10,194 | ||
Manufactured Housing [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 432 | |||||||
Individually evaluated loans with no ACL recorded | 1,642 | |||||||
Total impaired loans | 2,074 | 4,084 | ||||||
Collectively evaluated loans | 328,284 | 311,741 | ||||||
Total loans held for investment | 330,358 | 315,825 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 11 | |||||||
Collectively evaluated loans | 5,367 | |||||||
Total allowance for loan losses | 5,378 | 3,879 | 2,606 | 2,612 | ||||
Commercial Real Estate [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 2,791 | |||||||
Total impaired loans | 2,791 | 209 | ||||||
Collectively evaluated loans | 557,582 | 545,108 | ||||||
Total loans held for investment | 560,373 | 545,317 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 6,309 | |||||||
Total allowance for loan losses | 6,309 | 5,980 | 6,729 | 5,950 | ||||
Commercial [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 1,203 | |||||||
Total impaired loans | 1,203 | 1,364 | ||||||
Collectively evaluated loans | 45,052 | 57,706 | ||||||
Total loans held for investment | 46,255 | 59,070 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 554 | |||||||
Total allowance for loan losses | 554 | 747 | 923 | 1,379 | ||||
SBA [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 0 | |||||||
Total impaired loans | 0 | 41 | ||||||
Collectively evaluated loans | 1,753 | 3,441 | ||||||
Total loans held for investment | 1,753 | 3,482 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 4 | |||||||
Total allowance for loan losses | 4 | 21 | 22 | 118 | ||||
HELOC [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 0 | |||||||
Total impaired loans | 0 | 0 | ||||||
Collectively evaluated loans | 2,556 | 2,613 | ||||||
Total loans held for investment | 2,556 | 2,613 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 41 | |||||||
Total allowance for loan losses | 41 | 27 | 18 | 25 | ||||
Single Family Real Estate [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 138 | |||||||
Total impaired loans | 138 | 359 | ||||||
Collectively evaluated loans | 10,212 | 8,350 | ||||||
Total loans held for investment | 10,350 | 8,709 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 164 | |||||||
Total allowance for loan losses | 164 | 107 | 105 | 108 | ||||
Consumer [Member] | ||||||||
Amortized Cost Basis [Abstract] | ||||||||
Individually evaluated loans with an ACL recorded | 0 | |||||||
Individually evaluated loans with no ACL recorded | 0 | |||||||
Total impaired loans | 0 | 0 | ||||||
Collectively evaluated loans | 71 | 107 | ||||||
Total loans held for investment | 71 | 107 | ||||||
Allowance for Credit Losses [Abstract] | ||||||||
Individually evaluated loans | 0 | |||||||
Collectively evaluated loans | 1 | |||||||
Total allowance for loan losses | $ 1 | $ 4 | $ 1 | $ 2 | ||||
|
LOANS HELD FOR INVESTMENT, Impaired Financing Receivables (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
||||
---|---|---|---|---|---|---|---|---|
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | $ 3,443 | |||||||
Impaired loans with no allowance recorded | 2,614 | |||||||
Total impaired loans | $ 6,206 | 6,057 | ||||||
Loans collectively evaluated for impairment | 945,510 | 929,066 | ||||||
Total loans held for investment | 951,716 | 935,123 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 184 | |||||||
Loans collectively evaluated for impairment | 10,581 | |||||||
Total allowance for loan losses | 12,451 | [1] | 10,765 | [1] | $ 10,404 | $ 10,194 | ||
Manufactured Housing [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 2,918 | |||||||
Impaired loans with no allowance recorded | 1,166 | |||||||
Total impaired loans | 2,074 | 4,084 | ||||||
Loans collectively evaluated for impairment | 328,284 | 311,741 | ||||||
Total loans held for investment | 330,358 | 315,825 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 157 | |||||||
Loans collectively evaluated for impairment | 3,722 | |||||||
Total allowance for loan losses | 5,378 | 3,879 | 2,606 | 2,612 | ||||
Commercial Real Estate [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 209 | |||||||
Impaired loans with no allowance recorded | 0 | |||||||
Total impaired loans | 2,791 | 209 | ||||||
Loans collectively evaluated for impairment | 557,582 | 545,108 | ||||||
Total loans held for investment | 560,373 | 545,317 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 18 | |||||||
Loans collectively evaluated for impairment | 5,962 | |||||||
Total allowance for loan losses | 6,309 | 5,980 | 6,729 | 5,950 | ||||
Commercial [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 67 | |||||||
Impaired loans with no allowance recorded | 1,297 | |||||||
Total impaired loans | 1,203 | 1,364 | ||||||
Loans collectively evaluated for impairment | 45,052 | 57,706 | ||||||
Total loans held for investment | 46,255 | 59,070 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 0 | |||||||
Loans collectively evaluated for impairment | 747 | |||||||
Total allowance for loan losses | 554 | 747 | 923 | 1,379 | ||||
SBA [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 41 | |||||||
Impaired loans with no allowance recorded | 0 | |||||||
Total impaired loans | 0 | 41 | ||||||
Loans collectively evaluated for impairment | 1,753 | 3,441 | ||||||
Total loans held for investment | 1,753 | 3,482 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 1 | |||||||
Loans collectively evaluated for impairment | 20 | |||||||
Total allowance for loan losses | 4 | 21 | 22 | 118 | ||||
HELOC [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 0 | |||||||
Impaired loans with no allowance recorded | 0 | |||||||
Total impaired loans | 0 | 0 | ||||||
Loans collectively evaluated for impairment | 2,556 | 2,613 | ||||||
Total loans held for investment | 2,556 | 2,613 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 0 | |||||||
Loans collectively evaluated for impairment | 27 | |||||||
Total allowance for loan losses | 41 | 27 | 18 | 25 | ||||
Single Family Real Estate [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 208 | |||||||
Impaired loans with no allowance recorded | 151 | |||||||
Total impaired loans | 138 | 359 | ||||||
Loans collectively evaluated for impairment | 10,212 | 8,350 | ||||||
Total loans held for investment | 10,350 | 8,709 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 8 | |||||||
Loans collectively evaluated for impairment | 99 | |||||||
Total allowance for loan losses | 164 | 107 | 105 | 108 | ||||
Consumer [Member] | ||||||||
Recorded Investment [Abstract] | ||||||||
Impaired loans with an allowance recorded | 0 | |||||||
Impaired loans with no allowance recorded | 0 | |||||||
Total impaired loans | 0 | 0 | ||||||
Loans collectively evaluated for impairment | 71 | 107 | ||||||
Total loans held for investment | 71 | 107 | ||||||
Allowance for Loan Losses [Abstract] | ||||||||
Loans individually evaluated for impairment | 0 | |||||||
Loans collectively evaluated for impairment | 4 | |||||||
Total allowance for loan losses | $ 1 | $ 4 | $ 1 | $ 2 | ||||
|
LOANS HELD FOR INVESTMENT, Amortized Cost Basis of Collateral Dependent Loans by Class of Loans and by Collateral Type (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | $ 951,716 | $ 935,123 |
Manufactured Housing [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 330,358 | 315,825 |
Commercial Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 560,373 | 545,317 |
Commercial [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 46,255 | 59,070 |
HELOC [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 2,556 | 2,613 |
Single Family Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 10,350 | 8,709 |
Collateral [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 5,328 | 2,021 |
Collateral [Member] | Manufactured Housing [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 1,196 | 574 |
Collateral [Member] | Commercial Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 2,791 | |
Collateral [Member] | Commercial [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 1,203 | 1,297 |
Collateral [Member] | HELOC [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 138 | |
Collateral [Member] | Single Family Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 150 | |
Manufactured Homes [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 3,987 | 574 |
Manufactured Homes [Member] | Manufactured Housing [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 1,196 | 574 |
Manufactured Homes [Member] | Commercial Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 2,791 | |
Manufactured Homes [Member] | Commercial [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | 0 |
Manufactured Homes [Member] | HELOC [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | |
Manufactured Homes [Member] | Single Family Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | |
Single Family Residence [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 138 | 150 |
Single Family Residence [Member] | Manufactured Housing [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | 0 |
Single Family Residence [Member] | Commercial Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | |
Single Family Residence [Member] | Commercial [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | 0 |
Single Family Residence [Member] | HELOC [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 138 | |
Single Family Residence [Member] | Single Family Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 150 | |
Machinery & Equipment [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 1,203 | 1,297 |
Machinery & Equipment [Member] | Manufactured Housing [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | 0 |
Machinery & Equipment [Member] | Commercial Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 0 | |
Machinery & Equipment [Member] | Commercial [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | 1,203 | 1,297 |
Machinery & Equipment [Member] | HELOC [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | $ 0 | |
Machinery & Equipment [Member] | Single Family Real Estate [Member] | ||
Collateral Dependent Loans by Class of Loans and by Collateral Type [Abstract] | ||
Loans | $ 0 |
LOANS HELD FOR INVESTMENT, Risk Categories for Gross Loans by Class of Loans and by Year of Origination (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | $ 106,205 | $ 233,248 |
2022/2021 | 204,765 | 188,001 |
2021/2020 | 181,209 | 124,363 |
2020/2019 | 109,773 | 82,953 |
2019/2018 | 79,981 | 67,054 |
Prior | 256,231 | 216,192 |
Revolving | 13,552 | 23,312 |
Total loans held for investment | 951,716 | 935,123 |
Manufactured Housing [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 49,826 | 62,591 |
2022/2021 | 56,337 | 54,403 |
2021/2020 | 48,511 | 51,158 |
2020/2019 | 45,416 | 26,745 |
2019/2018 | 24,488 | 25,889 |
Prior | 105,780 | 95,039 |
Revolving | 0 | 0 |
Total loans held for investment | 330,358 | 315,825 |
Manufactured Housing [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 49,826 | 62,591 |
2022/2021 | 56,337 | 54,403 |
2021/2020 | 48,412 | 51,158 |
2020/2019 | 45,199 | 26,745 |
2019/2018 | 24,488 | 25,768 |
Prior | 103,999 | 94,106 |
Revolving | 0 | 0 |
Total loans held for investment | 328,261 | 314,771 |
Manufactured Housing [Member] | Substandard [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 99 | 0 |
2020/2019 | 217 | 0 |
2019/2018 | 0 | 121 |
Prior | 1,781 | 933 |
Revolving | 0 | 0 |
Total loans held for investment | 2,097 | 1,054 |
Commercial Real Estate [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 50,612 | 161,023 |
2022/2021 | 142,382 | 125,074 |
2021/2020 | 126,402 | 68,589 |
2020/2019 | 61,031 | 54,340 |
2019/2018 | 54,091 | 33,695 |
Prior | 125,855 | 102,596 |
Revolving | 0 | 0 |
Total loans held for investment | 560,373 | 545,317 |
Commercial Real Estate [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 50,612 | 161,023 |
2022/2021 | 142,382 | 125,074 |
2021/2020 | 117,260 | 57,441 |
2020/2019 | 58,874 | 50,134 |
2019/2018 | 49,967 | 32,662 |
Prior | 116,518 | 95,174 |
Revolving | 0 | 0 |
Total loans held for investment | 535,613 | 521,508 |
Commercial Real Estate [Member] | Special Mention [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 8,669 | 10,092 |
2020/2019 | 207 | 4,206 |
2019/2018 | 4,124 | 1,033 |
Prior | 3,572 | 0 |
Revolving | 0 | 0 |
Total loans held for investment | 16,572 | 15,331 |
Commercial Real Estate [Member] | Substandard [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 473 | 1,056 |
2020/2019 | 1,950 | 0 |
2019/2018 | 0 | 0 |
Prior | 5,765 | 7,422 |
Revolving | 0 | 0 |
Total loans held for investment | 8,188 | 8,478 |
Commercial [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 3,587 | 8,804 |
2022/2021 | 5,225 | 5,647 |
2021/2020 | 4,327 | 1,505 |
2020/2019 | 1,192 | 1,107 |
2019/2018 | 658 | 6,956 |
Prior | 17,714 | 14,352 |
Revolving | 13,552 | 20,699 |
Total loans held for investment | 46,255 | 59,070 |
Commercial [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 3,587 | 8,804 |
2022/2021 | 3,400 | 2,924 |
2021/2020 | 2,434 | 1,505 |
2020/2019 | 791 | 1,107 |
2019/2018 | 620 | 6,956 |
Prior | 13,758 | 10,889 |
Revolving | 13,552 | 20,699 |
Total loans held for investment | 38,142 | 52,884 |
Commercial [Member] | Special Mention [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 1,825 | 2,723 |
2021/2020 | 1,893 | 0 |
2020/2019 | 401 | 0 |
2019/2018 | 0 | 0 |
Prior | 0 | 0 |
Revolving | 0 | 0 |
Total loans held for investment | 4,119 | 2,723 |
Commercial [Member] | Substandard [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 38 | 0 |
Prior | 3,956 | 3,463 |
Revolving | 0 | 0 |
Total loans held for investment | 3,994 | 3,463 |
SBA [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 690 |
2021/2020 | 0 | 1,083 |
2020/2019 | 160 | 0 |
2019/2018 | 0 | 0 |
Prior | 1,593 | 1,709 |
Revolving | 0 | 0 |
Total loans held for investment | 1,753 | 3,482 |
SBA [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 690 |
2021/2020 | 0 | 1,083 |
2020/2019 | 160 | 0 |
2019/2018 | 0 | 0 |
Prior | 1,429 | 1,709 |
Revolving | 0 | 0 |
Total loans held for investment | 1,589 | 3,482 |
SBA [Member] | Special Mention [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | |
2022/2021 | 0 | |
2021/2020 | 0 | |
2020/2019 | 0 | |
2019/2018 | 0 | |
Prior | 163 | |
Revolving | 0 | |
Total loans held for investment | 163 | |
SBA [Member] | Doubtful [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | |
2022/2021 | 0 | |
2021/2020 | 0 | |
2020/2019 | 0 | |
2019/2018 | 0 | |
Prior | 1 | |
Revolving | 0 | |
Total loans held for investment | 1 | |
HELOC [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 0 | 0 |
Prior | 2,556 | 0 |
Revolving | 0 | 2,613 |
Total loans held for investment | 2,556 | 2,613 |
HELOC [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 0 | 0 |
Prior | 2,556 | 0 |
Revolving | 0 | 2,613 |
Total loans held for investment | 2,556 | 2,613 |
Single Family Real Estate [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 2,109 | 817 |
2022/2021 | 821 | 2,187 |
2021/2020 | 1,969 | 2,028 |
2020/2019 | 1,974 | 761 |
2019/2018 | 744 | 514 |
Prior | 2,733 | 2,402 |
Revolving | 0 | 0 |
Total loans held for investment | 10,350 | 8,709 |
Single Family Real Estate [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 2,109 | 817 |
2022/2021 | 821 | 2,187 |
2021/2020 | 1,969 | 2,028 |
2020/2019 | 1,974 | 761 |
2019/2018 | 744 | 364 |
Prior | 2,595 | 2,398 |
Revolving | 0 | 0 |
Total loans held for investment | 10,212 | 8,555 |
Single Family Real Estate [Member] | Substandard [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 0 | 0 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 0 | 150 |
Prior | 138 | 4 |
Revolving | 0 | 0 |
Total loans held for investment | 138 | 154 |
Consumer [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 71 | 13 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 0 | 0 |
Prior | 0 | 94 |
Revolving | 0 | 0 |
Total loans held for investment | 71 | 107 |
Consumer [Member] | Pass [Member] | ||
Financing Receivable Risk Category of Loans by Class and by Year of Origination [Abstract] | ||
2023/2022 | 71 | 13 |
2022/2021 | 0 | 0 |
2021/2020 | 0 | 0 |
2020/2019 | 0 | 0 |
2019/2018 | 0 | 0 |
Prior | 0 | 94 |
Revolving | 0 | 0 |
Total loans held for investment | $ 71 | $ 107 |
LOANS HELD FOR INVESTMENT, Gross Loans by Risk Rating (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Gross loans by risk rating [Abstract] | ||
Total loans held for investment | $ 951,716 | $ 935,123 |
Loss [Member] | ||
Gross loans by risk rating [Abstract] | ||
Total loans held for investment | $ 0 | $ 0 |
LOANS HELD FOR INVESTMENT, Loan Modifications (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2023
USD ($)
Loan
| |
Loan Modifications [Abstract] | |
Commitments to lend any additional amounts to the borrowers experiencing financial difficulties | $ 0 |
Term Extension [Member] | |
Loan Modifications [Abstract] | |
Amortized cost | $ 1,846 |
% of total class of loans | 0.19% |
Weighted average months | 45 months 27 days |
Payment Deferral [Member] | |
Loan Modifications [Abstract] | |
Amortized cost | $ 160 |
% of total class of loans | 0.02% |
Weighted average months | 3 months |
Commercial Real Estate [Member] | Term Extension [Member] | |
Loan Modifications [Abstract] | |
Amortized cost | $ 473 |
% of total class of loans | 0.08% |
Weighted average months | 5 months |
Modified loans that was delinquent and in foreclosure, number | Loan | 1 |
Modified loans that was delinquent and in foreclosure, amortized cost | $ 473 |
Commercial [Member] | Term Extension [Member] | |
Loan Modifications [Abstract] | |
Amortized cost | $ 1,373 |
% of total class of loans | 2.97% |
Weighted average months | 60 months |
SBA [Member] | Payment Deferral [Member] | |
Loan Modifications [Abstract] | |
Amortized cost | $ 160 |
% of total class of loans | 9.13% |
Weighted average months | 3 months |
LOANS HELD FOR INVESTMENT, Troubled Debt Restructured Loan (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
---|---|
Troubled Debt Restructurings [Abstract] | |
Loans classified as TDRs | $ 6.0 |
Performing [Member] | |
Troubled Debt Restructurings [Abstract] | |
Loans classified as TDRs | $ 5.8 |
LOANS HELD FOR INVESTMENT, Related Parties (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Summary of Aggregate Activity in Loans to Related Parties [Roll Forward] | ||
Balance, beginning | $ 2,622 | $ 2,919 |
New loans | 0 | 0 |
Repayments and other | (190) | (297) |
Balance, ending | 2,432 | 2,622 |
Loan commitments outstanding with related parties | $ 400 | $ 300 |
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Premises and equipment [Abstract] | ||
Premises and equipment, gross | $ 19,891 | $ 19,962 |
Accumulated depreciation | (14,074) | (13,858) |
Premises and equipment, net | 5,817 | 6,104 |
Bank Premises and Land [Member] | ||
Premises and equipment [Abstract] | ||
Premises and equipment, gross | 3,975 | 3,983 |
Furniture, Fixtures, and Equipment [Member] | ||
Premises and equipment [Abstract] | ||
Premises and equipment, gross | 11,017 | 10,865 |
Leasehold Improvements [Member] | ||
Premises and equipment [Abstract] | ||
Premises and equipment, gross | 4,644 | 4,992 |
Construction in Progress [Member] | ||
Premises and equipment [Abstract] | ||
Premises and equipment, gross | $ 255 | $ 122 |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||
Balance, beginning of period | $ 2,250 | $ 2,518 | $ 2,614 |
Additions | 1,576 | 0 | 136 |
Proceeds from dispositions | (2,967) | (384) | 0 |
Gains (losses) on sales, net | 123 | 116 | (232) |
Balance, end of period | $ 982 | $ 2,250 | $ 2,518 |
DEPOSITS (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Summary of deposits by type [Abstract] | ||
Non-interest-bearing demand deposits | $ 168,603 | $ 216,494 |
Interest-bearing deposits [Abstract] | ||
NOW accounts | 32,267 | 38,068 |
Money market deposit account | 345,263 | 390,105 |
Savings accounts | 16,257 | 23,490 |
Time deposits of $250,000 or more | 13,892 | 6,693 |
Other time deposits | 276,656 | 200,234 |
Total deposits | 852,938 | 875,084 |
Deposit liabilities that may be immediately withdrawn | 562,400 | |
Maturities of time certificates [Abstract] | ||
2024 | 222,807 | |
2025 | 19,527 | |
2026 | 42,914 | |
2027 | 5,143 | |
2028 | 157 | |
Total | 290,548 | |
Deposits with CDARS | 17,700 | 51,100 |
Deposit Liabilities, ICS | 117,400 | 69,200 |
Related Party [Member] | ||
Interest-bearing deposits [Abstract] | ||
Total deposits | $ 41,300 | $ 29,300 |
BORROWINGS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
FHLB advances by maturity date [Abstract] | |||
Amount | $ 90,000 | $ 90,000 | |
Financial Home Loan Bank Advances [Abstract] | |||
Securities pledged to FHLB | 9,300 | 21,100 | |
Loans | 951,716 | 935,123 | |
Total FHLB interest expense | 955 | 817 | $ 869 |
Federal Funds Purchased Lines [Abstract] | |||
Federal funds borrowing lines at correspondent banks | 20,000 | ||
Federal funds amount outstanding | $ 0 | $ 0 | |
Weighted Average [Member] | |||
FHLB advances by maturity date [Abstract] | |||
Rate | 0.86% | 0.86% | |
FHLB Advance April 15, 2025 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
Amount | $ 6,000 | $ 6,000 | |
Rate | 0.76% | 0.76% | |
Maturity date | Apr. 15, 2025 | ||
FHLB Advance April 15, 2025 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
Amount | $ 39,000 | $ 39,000 | |
Rate | 0.78% | 0.78% | |
Maturity date | Apr. 15, 2025 | ||
FHLB Advance June 23, 2025 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
Amount | $ 30,000 | $ 30,000 | |
Rate | 0.95% | 0.95% | |
Maturity date | Jun. 23, 2025 | ||
FHLB Advance June 23, 2025 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
Amount | $ 15,000 | $ 15,000 | |
Rate | 0.92% | 0.92% | |
Maturity date | Jun. 23, 2025 | ||
Line of Credit [Member] | |||
Line of Credit [Abstract] | |||
Maximum borrowing capacity | $ 10,000 | ||
Required compensating deposit | $ 1,000 | ||
Minimum debt service coverage ratio | 1.65 | ||
Minimum Tier 1 leverage ratio | 7.00% | ||
Minimum total risk-based capital ratio | 10.00% | ||
Maximum net non-accrual ratio | 3.00% | ||
Renewal term | 2 years | ||
Outstanding balance | $ 10,000 | $ 0 | |
Line of credit interest rate | 8.75% | ||
Line of Credit [Member] | Prime Rate [Member] | |||
Line of Credit [Abstract] | |||
Basis spread on variable rate | 0.25% | ||
Federal Home Loan Bank Advances [Member] | |||
Financial Home Loan Bank Advances [Abstract] | |||
Letter of credit with FHLB | $ 27,000 | ||
Available for additional borrowing | 112,800 | ||
Total FHLB interest expense | 900 | 800 | $ 900 |
Federal Home Loan Bank Advances [Member] | Asset Pledged as Collateral [Member] | |||
Financial Home Loan Bank Advances [Abstract] | |||
Securities pledged to FHLB | 9,300 | 21,100 | |
Loans | 371,900 | 232,600 | |
Federal Reserve Bank Advances [Member] | |||
Line of Credit [Abstract] | |||
Outstanding balance | 0 | 0 | |
Available borrowing capacity | 110,700 | ||
Federal Reserve Bank Advances [Member] | Asset Pledged as Collateral [Member] | |||
Financial Home Loan Bank Advances [Abstract] | |||
Loans | $ 293,700 | $ 248,600 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Abstract] | ||
Contractual amounts for unfunded commitments and letters of credit | $ 84,656 | $ 100,011 |
Unfunded Commitments and Letters of Credit [Abstract] | ||
Loss contingency for unfunded loan commitments and letters of credit | 458 | 94 |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Abstract] | ||
Contractual amounts for unfunded commitments and letters of credit | 84,656 | 100,011 |
Standby Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Abstract] | ||
Contractual amounts for unfunded commitments and letters of credit | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY, Common Stock Warrants and Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Feb. 18, 2019 |
|
Common Stock [Abstract] | ||||
Common stock dividend paid | $ 2,824 | $ 2,574 | $ 2,312 | |
Common Stock [Member] | ||||
Common Stock [Abstract] | ||||
Common stock dividend paid | $ 2,800 | $ 2,600 | $ 2,300 | |
Common Stock [Member] | Stock Repurchase Program [Member] | ||||
Common Stock [Abstract] | ||||
Amount of common stock repurchase program authorized | $ 4,500 | |||
Expiration date | Aug. 31, 2025 | |||
Common stock shares repurchased to date (in shares) | 350,189 | |||
Common stock shares repurchased to date, value | $ 3,100 | |||
Common stock shares repurchased to date, average price (in dollars per share) | $ 8.75 | |||
Common stock shares repurchased during the period (in shares) | 0 | 0 | 0 |
STOCKHOLDERS' EQUITY, Equity Compensation Plans (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023
USD ($)
Plan
$ / shares
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Number of stock option plans | Plan | 2 | ||
Option-pricing model assumptions [Abstract] | |||
Expected life in years | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 4 months 24 days |
Risk-free interest rate | 3.52% | 2.53% | 1.80% |
Expected volatility | 27.44% | 28.81% | 36.40% |
Annual dividend yield | 2.03% | 2.05% | 1.94% |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting period | 5 years | ||
Contractual life | 10 years | ||
Number of shares available for grant (in shares) | 302,919 | ||
Unrecognized compensation cost | $ | $ 200 | ||
Period for recognition of unrecognized compensation cost | 1 year 9 months 18 days | ||
Intrinsic value of options exercised | $ | $ 300 | $ 500 | $ 900 |
Option Shares [Roll Forward] | |||
Outstanding options, beginning of period (in shares) | 605,950 | ||
Granted (in shares) | 2,500 | ||
Exercised (in shares) | (54,168) | ||
Forfeited or expired (in shares) | (23,432) | ||
Outstanding options, end of period (in shares) | 530,850 | 605,950 | |
Options exercisable, end of period (in shares) | 385,930 | ||
Options expected to vest, end of period (in shares) | 502,653 | ||
Weighted Average Exercise Price [Abstract] | |||
Outstanding options, beginning of period (in dollars per share) | $ / shares | $ 9.95 | ||
Granted (in dollars per share) | $ / shares | 14.75 | ||
Exercised (in dollars per share) | $ / shares | 8.41 | ||
Forfeited or expired (in dollars per share) | $ / shares | 11.11 | ||
Outstanding options, end of period (in dollars per share) | $ / shares | 10.08 | $ 9.95 | |
Options exercisable, end of period (in dollars per share) | $ / shares | 9.46 | ||
Options expected to vest, end of period (in dollars per share) | $ / shares | $ 9.96 | ||
Weighted Average Remaining Term [Abstract] | |||
Outstanding options | 5 years 3 days | ||
Options exercisable | 4 years 1 month 9 days | ||
Options expected to vest | 4 years 10 months 9 days | ||
Aggregate Intrinsic Value [Abstract] | |||
Outstanding options, end of period | $ | $ 3,881 | ||
Options exercisable, end of period | $ | 3,060 | ||
Options expected to vest, end of period | $ | $ 3,736 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |||
Vesting period | 5 years | ||
Unrecognized compensation cost | $ | $ 300 | ||
Period for recognition of unrecognized compensation cost | 3 years 8 months 12 days | ||
Nonvested Restricted Stock Awards [Roll Forward] | |||
Unvested options, beginning of period (in shares) | 34,934 | ||
Granted (in shares) | 23,900 | ||
Vested (in shares) | (19,212) | ||
Forfeited (in shares) | (1,718) | ||
Unvested options, end of period (in shares) | 37,904 | 34,934 | |
Weighted Average Grant-Date Fair Value [Roll Forward] | |||
Unvested options, beginning of period (in dollars per share) | $ / shares | $ 13.78 | ||
Granted (in dollars per share) | $ / shares | 14.59 | ||
Vested (in dollars per share) | $ / shares | 14.39 | ||
Forfeited (in dollars per share) | $ / shares | 13.38 | ||
Unvested options, end of period (in dollars per share) | $ / shares | $ 14 | $ 13.78 |
CAPITAL REQUIREMENTS, Bank's Regulatory Ratios and Federal Reserve's Current Adequacy Guidelines (Details) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Regulatory Ratios [Abstract] | ||
Total capital ratio, minimum capital ratios | 0.08 | 0.08 |
Total capital ratio, well-capitalized ratios | 0.10 | 0.10 |
Tier 1 risk-based capital ratio, minimum capital ratios | 0.06 | 0.06 |
Tier 1 risk-based capital ratio, well-capitalized ratios | 0.08 | 0.08 |
Common Equity Tier 1 ratio, minimum capital ratios | 0.045 | 0.045 |
Common Equity Tier 1 ratio, well-capitalized ratios | 0.065 | 0.065 |
Tier 1 leverage ratio, minimum capital ratios | 0.04 | 0.04 |
Tier 1 leverage ratio, well-capitalized ratios | 0.05 | 0.05 |
CWB [Member] | ||
Regulatory Ratios [Abstract] | ||
Total capital ratio | 0.131 | 0.1256 |
Tier 1 risk-based capital ratio | 0.1189 | 0.1144 |
Common Equity Tier 1 ratio | 0.1189 | 0.1144 |
Tier 1 leverage ratio | 0.1088 | 0.1034 |
CAPITAL REQUIREMENTS, Adoption of CECL (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction in stockholders' equity | $ 116,244 | $ 112,650 | $ 101,375 | $ 89,007 |
Income tax allocated to stockholders' equity | 700 | 659 | ||
Retained Earnings [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction in stockholders' equity | 70,646 | $ 67,727 | $ 56,852 | $ 46,063 |
Retained Earnings [Member] | Accounting Standards Update 2016-13 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction in stockholders' equity | $ (1,600) |
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Noninterest Income [Abstract] | |||
Non-interest income (in-scope of ASC 606) | $ 987 | $ 853 | $ 711 |
Non-interest income (out-of-scope of ASC 606) | 2,766 | 3,125 | 3,042 |
Total non-interest income | 3,753 | 3,978 | 3,753 |
Service Charges on Deposit Accounts [Member] | |||
Noninterest Income [Abstract] | |||
Non-interest income (in-scope of ASC 606) | 538 | 335 | 243 |
Exchange Fees and Other Service Charges [Member] | |||
Noninterest Income [Abstract] | |||
Non-interest income (in-scope of ASC 606) | $ 449 | $ 518 | $ 468 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Current [Abstract] | |||
Federal | $ 2,133 | $ 3,518 | $ 3,671 |
State | 1,315 | 1,994 | 2,046 |
Current income tax expense (benefit) | 3,448 | 5,512 | 5,717 |
Deferred [Abstract] | |||
Federal | 80 | (178) | (371) |
State | (34) | (72) | (134) |
Deferred income tax expense (benefit) | 46 | (250) | (505) |
Total provision for income taxes | $ 3,494 | $ 5,262 | $ 5,212 |
Reconciliation between statutory income tax rate and effective tax rate [Abstract] | |||
Federal income tax at statutory rate | 21.00% | 21.00% | 21.00% |
State franchise tax, net of federal benefit | 9.00% | 8.20% | 8.60% |
Merger costs | 1.40% | 0.00% | 0.00% |
Other | 0.90% | (1.10%) | (1.10%) |
Total provision for income taxes | 32.30% | 28.10% | 28.50% |
Deferred Tax Assets [Abstract] | |||
Allowance for credit losses | $ 3,678 | $ 3,127 | |
Bonus accrual | 2 | 8 | |
Deferred compensation | 1,236 | 1,057 | |
Lease liability | 1,301 | 1,555 | |
Deferred state taxes | 273 | 419 | |
Unrealized loss of AFS securities | 408 | 305 | |
Other | 608 | 586 | |
Total deferred tax assets | 7,506 | 7,057 | |
Deferred Tax Liabilities [Abstract] | |||
Depreciation | (455) | (469) | |
Right of use asset | (1,281) | (1,535) | |
Total deferred tax liabilities | (1,736) | (2,004) | |
Net deferred tax assets | 5,770 | 5,053 | |
Deferred tax asset valuation allowance | 0 | 0 | |
Uncertain tax positions | $ 0 | $ 0 |
LEASES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Operating leases [Abstract] | ||
Operating lease, right-of-use assets | $ 4,300 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets | |
Lease cost [Abstract] | ||
Operating lease cost | $ 1,022 | $ 1,012 |
Sublease income | 0 | 0 |
Total lease cost | 1,022 | 1,012 |
Other information [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities - operating leases | $ 1,022 | $ 1,003 |
Weighted average remaining lease term in years - operating leases | 6 years 3 months 18 days | 7 years |
Weighted average discount rate - operating leases | 3.68% | 3.26% |
Future minimum operating lease payments [Abstract] | ||
2024 | $ 1,041 | |
2025 | 991 | |
2026 | 891 | |
2027 | 488 | |
2028 | 314 | |
Thereafter | 1,240 | |
Total future minimum lease payments | 4,965 | |
Less remaining imputed interest | 565 | |
Total lease liabilities | $ 4,400 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | |
Minimum [Member] | ||
Operating leases [Abstract] | ||
Term of operating leases | 2 years | |
Maximum [Member] | ||
Operating leases [Abstract] | ||
Term of operating leases | 10 years |
EMPLOYEE BENEFIT PLANS (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
EMPLOYEE BENEFIT PLANS [Abstract] | |||
Defined Contribution Plan, Tax Status [Extensible List] | us-gaap:QualifiedPlanMember | ||
Defined Contribution Plan, Type [Extensible List] | us-gaap:PensionPlansDefinedBenefitMember | ||
Maximum amount of annual contribution per participant under age 50 | $ 22,500 | ||
Percentage of maximum matching contribution by employer | 3.00% | ||
Employer contribution | $ 400,000 | $ 300,000 | $ 300,000 |
Salary Continuation [Abstract] | |||
Maximum period of monthly cash payment to the officer or beneficiaries in the event of death, disability or retirement | 15 years | ||
Salary continuation liability accrual | $ 1,600,000 | 1,500,000 | |
Cash surrender value of life insurance | $ 8,900,000 | 8,700,000 | |
Executive Officers [Member] | Deferred Compensation Plans [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Abstract] | |||
Age of vesting | 65 years | ||
Expenses incurred | $ 200,000 | 300,000 | $ 200,000 |
Deferred compensation liability | $ 2,500,000 | $ 2,100,000 | |
Select Group of Management or Highly Compensated Employees [Member] | Unfunded Nonqualified Deferred Compensation Arrangement [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Abstract] | |||
Maximum percentage of deferred base salary and bonus | 30.00% | ||
Period of certificate of deposit rate paid on vested balance | 36 months |
FAIR VALUE MEASUREMENT, Fair Value of Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Assets [Abstract] | ||||
Investment securities measured at fair value | $ 382 | $ 225 | ||
Investment securities - available-for-sale | 15,232 | 26,688 | ||
Servicing assets | 12 | 26 | $ 44 | $ 43 |
U.S. Government Agency Notes [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,330 | 4,107 | ||
U.S. Government Agency CMOs [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,944 | 4,296 | ||
U.S. Treasury Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 9,970 | |||
Corporate Debt Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 7,958 | 8,315 | ||
Recurring [Member] | ||||
Assets [Abstract] | ||||
Investment securities measured at fair value | 382 | 225 | ||
Interest only strips | 5 | 7 | ||
Servicing assets | 12 | 26 | ||
Total | 15,631 | 26,946 | ||
Recurring [Member] | U.S. Government Agency Notes [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,330 | 4,107 | ||
Recurring [Member] | U.S. Government Agency CMOs [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,944 | 4,296 | ||
Recurring [Member] | U.S. Treasury Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 9,970 | |||
Recurring [Member] | Corporate Debt Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 7,958 | 8,315 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Assets [Abstract] | ||||
Investment securities measured at fair value | 382 | 225 | ||
Interest only strips | 0 | 0 | ||
Servicing assets | 0 | 0 | ||
Total | 382 | 225 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government Agency Notes [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | 0 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government Agency CMOs [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | 0 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Treasury Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | |||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate Debt Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | 0 | ||
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Assets [Abstract] | ||||
Investment securities measured at fair value | 0 | 0 | ||
Interest only strips | 0 | 0 | ||
Servicing assets | 0 | 0 | ||
Total | 15,232 | 26,688 | ||
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Agency Notes [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,330 | 4,107 | ||
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Agency CMOs [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 3,944 | 4,296 | ||
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Treasury Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 9,970 | |||
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 7,958 | 8,315 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Assets [Abstract] | ||||
Investment securities measured at fair value | 0 | 0 | ||
Interest only strips | 5 | 7 | ||
Servicing assets | 12 | 26 | ||
Total | 17 | 33 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Agency Notes [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Agency CMOs [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Treasury Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | 0 | |||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Debt Securities [Member] | ||||
Assets [Abstract] | ||||
Investment securities - available-for-sale | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT, Assets Measured on Non-recurring Basis (Details) - Non-recurring [Member] - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||
Impaired loans | $ 3,805 | |
Other assets acquired through foreclosure | $ 982 | 2,250 |
Total | 982 | 6,055 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||
Impaired loans | 0 | |
Other assets acquired through foreclosure | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||
Impaired loans | 3,805 | |
Other assets acquired through foreclosure | 982 | 2,250 |
Total | 982 | 6,055 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||
Impaired loans | 0 | |
Other assets acquired through foreclosure | 0 | 0 |
Total | $ 0 | $ 0 |
FAIR VALUE MEASUREMENT, Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Financial assets [Abstract] | ||||
Investment securities - available-for-sale | $ 15,232 | $ 26,688 | ||
Investment securities - held-to-maturity | 2,135 | 2,557 | ||
Investment securities - measured at fair value | 382 | 225 | ||
Servicing assets | 12 | 26 | $ 44 | $ 43 |
Carrying Amount [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 72,198 | 64,690 | ||
FHLB and FRB stock | 4,865 | 4,533 | ||
Investment securities - available-for-sale | 15,232 | 26,688 | ||
Investment securities - held-to-maturity | 2,135 | 2,557 | ||
Investment securities - measured at fair value | 382 | 225 | ||
Loans held for sale and loans held for investment, net | 955,021 | 944,577 | ||
Accrued interest receivable | 5,655 | 5,295 | ||
Servicing assets | 1,305 | 1,480 | ||
Interest only strips | 5 | 7 | ||
Financial liabilities [Abstract] | ||||
Deposits | 852,938 | 875,084 | ||
FHLB advances and other borrowings | 100,000 | 90,000 | ||
Accrued interest payable | 2,355 | 126 | ||
Fair Value [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 72,198 | 64,690 | ||
FHLB and FRB stock | 4,865 | 4,533 | ||
Investment securities - available-for-sale | 15,232 | 26,688 | ||
Investment securities - held-to-maturity | 2,056 | 2,423 | ||
Investment securities - measured at fair value | 382 | 225 | ||
Loans held for sale and loans held for investment, net | 905,073 | 895,939 | ||
Accrued interest receivable | 5,655 | 5,295 | ||
Servicing assets | 2,583 | 2,646 | ||
Interest only strips | 5 | 7 | ||
Financial liabilities [Abstract] | ||||
Deposits | 850,236 | 867,697 | ||
FHLB advances and other borrowings | 95,426 | 83,322 | ||
Accrued interest payable | 2,355 | 126 | ||
Fair Value [Member] | Level 1 [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 72,198 | 64,690 | ||
FHLB and FRB stock | 0 | 0 | ||
Investment securities - available-for-sale | 0 | 0 | ||
Investment securities - held-to-maturity | 0 | 0 | ||
Investment securities - measured at fair value | 382 | 225 | ||
Loans held for sale and loans held for investment, net | 0 | 0 | ||
Accrued interest receivable | 0 | 0 | ||
Servicing assets | 0 | 0 | ||
Interest only strips | 0 | 0 | ||
Financial liabilities [Abstract] | ||||
Deposits | 0 | 0 | ||
FHLB advances and other borrowings | 0 | 0 | ||
Accrued interest payable | 0 | 0 | ||
Fair Value [Member] | Level 2 [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 0 | 0 | ||
FHLB and FRB stock | 4,865 | 4,533 | ||
Investment securities - available-for-sale | 15,232 | 26,688 | ||
Investment securities - held-to-maturity | 2,056 | 2,423 | ||
Investment securities - measured at fair value | 0 | 0 | ||
Loans held for sale and loans held for investment, net | 905,073 | 892,134 | ||
Accrued interest receivable | 5,655 | 5,295 | ||
Servicing assets | 0 | 0 | ||
Interest only strips | 0 | 0 | ||
Financial liabilities [Abstract] | ||||
Deposits | 850,236 | 867,697 | ||
FHLB advances and other borrowings | 95,426 | 83,322 | ||
Accrued interest payable | 2,355 | 126 | ||
Fair Value [Member] | Level 3 [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 0 | 0 | ||
FHLB and FRB stock | 0 | 0 | ||
Investment securities - available-for-sale | 0 | 0 | ||
Investment securities - held-to-maturity | 0 | 0 | ||
Investment securities - measured at fair value | 0 | 0 | ||
Loans held for sale and loans held for investment, net | 0 | 3,805 | ||
Accrued interest receivable | 0 | 0 | ||
Servicing assets | 2,583 | 2,646 | ||
Interest only strips | 5 | 7 | ||
Financial liabilities [Abstract] | ||||
Deposits | 0 | 0 | ||
FHLB advances and other borrowings | 0 | 0 | ||
Accrued interest payable | $ 0 | $ 0 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Changes in other comprehensive income (loss) by component, net of tax [Roll Forward] | |||
Balance | $ 112,650 | $ 101,375 | $ 89,007 |
Net current-period other comprehensive income | (245) | (863) | 57 |
Balance | 116,244 | 112,650 | 101,375 |
Unrealized Holding Gains (Losses) on AFS [Member] | |||
Changes in other comprehensive income (loss) by component, net of tax [Roll Forward] | |||
Balance | (771) | 92 | 35 |
Other comprehensive income (loss) | (245) | (863) | 57 |
Net current-period other comprehensive income | (245) | (863) | 57 |
Balance | $ (1,016) | $ (771) | $ 92 |
PARENT COMPANY FINANCIAL INFORMATION, Condensed Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Assets [Abstract] | ||||
Cash and cash equivalents | $ 72,198 | $ 64,690 | ||
Other assets | 30,436 | 39,878 | ||
Total assets | 1,087,068 | 1,091,502 | ||
Liabilities and Stockholders' Equity [Abstract] | ||||
Other liabilities | 17,886 | 13,768 | ||
Total liabilities | 970,824 | 978,852 | ||
Total stockholders' equity | 116,244 | 112,650 | $ 101,375 | $ 89,007 |
Total liabilities and stockholders' equity | 1,087,068 | 1,091,502 | ||
Parent Company [Member] | ||||
Assets [Abstract] | ||||
Cash and cash equivalents | 10,498 | 67 | ||
Investment in subsidiary | 115,407 | 112,183 | ||
Other assets | 521 | 419 | ||
Total assets | 126,426 | 112,669 | ||
Liabilities and Stockholders' Equity [Abstract] | ||||
Other borrowings | 10,000 | 0 | ||
Other liabilities | 182 | 19 | ||
Total liabilities | 10,182 | 19 | ||
Total stockholders' equity | 116,244 | 112,650 | ||
Total liabilities and stockholders' equity | $ 126,426 | $ 112,669 |
PARENT COMPANY FINANCIAL INFORMATION, Condensed Income Statements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Condensed Income Statements [Abstract] | |||
Interest income | $ 57,522 | $ 49,138 | $ 46,078 |
Interest expense | 15,115 | 3,328 | 3,704 |
Net interest income | 42,407 | 45,810 | 42,374 |
Provision for credit losses | (395) | (195) | (181) |
Net interest income after provision (credit) for credit losses | 42,802 | 46,005 | 42,555 |
Total non-interest expenses | 35,745 | 31,272 | 27,995 |
Income before provision for income taxes | 10,810 | 18,711 | 18,313 |
Income tax benefit | 3,494 | 5,262 | 5,212 |
Net income | 7,316 | 13,449 | 13,101 |
Parent Company [Member] | |||
Condensed Income Statements [Abstract] | |||
Interest income | 0 | 0 | 0 |
Interest expense | 51 | 16 | 17 |
Net interest income | (51) | (16) | (17) |
Provision for credit losses | 0 | 0 | 0 |
Net interest income after provision (credit) for credit losses | (51) | (16) | (17) |
Equity in income from consolidated subsidiary | 8,668 | 13,779 | 13,271 |
Total income | 8,617 | 13,763 | 13,254 |
Total non-interest expenses | 1,624 | 525 | 420 |
Income before provision for income taxes | 6,993 | 13,238 | 12,834 |
Income tax benefit | (323) | (211) | (267) |
Net income | $ 7,316 | $ 13,449 | $ 13,101 |
PARENT COMPANY FINANCIAL INFORMATION, Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Cash Flows from Operating Activities [Abstract] | |||
Net income | $ 7,316 | $ 13,449 | $ 13,101 |
Adjustments to reconcile net income to cash provided by operating activities [Abstract] | |||
Stock-based compensation | 464 | 289 | 318 |
Changes in [Abstract] | |||
Other assets | 9,983 | (9,196) | 439 |
Other liabilities | 3,753 | (1,778) | 1,093 |
Net cash provided by (used in) operating activities | 25,586 | 5,856 | 22,220 |
Cash Flows from Investing Activities [Abstract] | |||
Net cash provided by (used in) investing activities | (3,564) | (72,894) | (42,223) |
Cash Flows from Financing Activities [Abstract] | |||
Proceeds from other borrowings | 20,000 | 0 | 0 |
Repayments of other borrowings | (10,000) | 0 | 0 |
Common stock dividends paid | (2,824) | (2,574) | (2,312) |
Proceeds from exercise of stock options | 456 | 974 | 1,204 |
Net cash (used in) provided by financing activities | (14,514) | (76,647) | 167,838 |
Net increase (decrease) in cash and cash equivalents | 7,508 | (143,685) | 147,835 |
Cash and cash equivalents at beginning of year | 64,690 | 208,375 | 60,540 |
Cash and cash equivalents at end of year | 72,198 | 64,690 | 208,375 |
Parent Company [Member] | |||
Cash Flows from Operating Activities [Abstract] | |||
Net income | 7,316 | 13,449 | 13,101 |
Adjustments to reconcile net income to cash provided by operating activities [Abstract] | |||
Equity in undistributed income from subsidiary | (8,668) | (13,779) | (13,271) |
Stock-based compensation | 464 | 289 | 318 |
Changes in [Abstract] | |||
Other assets | (102) | (221) | 41 |
Other liabilities | 163 | 15 | (215) |
Net cash provided by (used in) operating activities | (827) | (247) | (26) |
Cash Flows from Investing Activities [Abstract] | |||
Net dividends from and investment in subsidiary | 3,626 | 1,375 | 1,600 |
Net cash provided by (used in) investing activities | 3,626 | 1,375 | 1,600 |
Cash Flows from Financing Activities [Abstract] | |||
Proceeds from other borrowings | 20,000 | 0 | 0 |
Repayments of other borrowings | (10,000) | 0 | 0 |
Common stock dividends paid | (2,824) | (2,574) | (2,312) |
Proceeds from exercise of stock options | 456 | 974 | 1,204 |
Net cash (used in) provided by financing activities | 7,632 | (1,600) | (1,108) |
Net increase (decrease) in cash and cash equivalents | 10,431 | (472) | 466 |
Cash and cash equivalents at beginning of year | 67 | 539 | 73 |
Cash and cash equivalents at end of year | $ 10,498 | $ 67 | $ 539 |
SUBSEQUENT EVENTS (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Jan. 26, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Dividends [Abstract] | ||||
Dividends declared per common share (in dollars per share) | $ 0.32 | $ 0.295 | $ 0.27 | |
Subsequent Event [Member] | ||||
Dividends [Abstract] | ||||
Dividend payable, date declared | Jan. 26, 2024 | |||
Dividends declared per common share (in dollars per share) | $ 0.08 | |||
Dividend payable, date to be paid | Feb. 29, 2024 | |||
Dividend payable, date of record | Feb. 09, 2024 |
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