|
|
|
(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(s)
|
Name of each exchange on which registered
|
None
|
Not Applicable
|
Not Applicable
|
Large accelerated filer ☐
|
|
Non-accelerated filer ☐
|
Smaller reporting company |
Emerging growth company |
PART I. - FINANCIAL INFORMATION
|
Page
|
||
|
|
|
|
|
Item 1 - Financial Statements
|
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
|
|
|
|
|
30
|
||
|
|
|
|
|
50 | ||
|
|
|
|
|
Item 4 - Controls and Procedures
|
52
|
|
|
|
|
|
PART II. - OTHER INFORMATION
|
|
||
|
|
|
|
|
Item 1 – Legal Proceedings
|
53
|
|
|
Item 1A – Risk Factors
|
53
|
|
|
53
|
||
|
Item 3 – Defaults upon Senior Securities
|
53
|
|
|
Item 4 – Mine Safety Disclosures
|
53
|
|
|
Item 5 – Other Information
|
54
|
|
|
Item 6 – Exhibits
|
54
|
|
|
55
|
Item 1.
|
Financial Statements
|
(Dollars in thousands, except share and per share amounts)
|
March 31,
2024
|
December 31,
2023
|
||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest bearing deposits with banks
|
|
|
||||||
Total cash and cash equivalents
|
|
|
||||||
Securities available-for-sale, amortized cost $
|
|
|
||||||
Securities held-to-maturity, fair
value $
|
|
|
||||||
Allowance for credit losses - securities held-to-maturity
|
( |
) | ( |
) | ||||
Total investment securities
|
|
|
||||||
Non-marketable securities
|
|
|
||||||
Loans and leases held-for-investment, net of unearned income
|
|
|
||||||
Allowance for credit losses - loans and leases
|
(
|
)
|
(
|
)
|
||||
Loans and leases held for investment, net
|
|
|
||||||
Bank-owned life insurance
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Deferred income tax assets
|
|
|
||||||
Accrued interest receivable
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangibles
|
|
|
||||||
Other real estate owned
|
|
|
||||||
Other assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Non-interest bearing
|
$
|
|
$
|
|
||||
Interest bearing:
|
||||||||
Demand
|
|
|
||||||
Savings and money market
|
|
|
||||||
Certificates of deposit
|
|
|
||||||
Total interest bearing
|
|
|
||||||
Total deposits
|
|
|
||||||
Federal Home Loan Bank advances |
||||||||
Subordinated debentures
|
|
|
||||||
Interest payable and other liabilities
|
|
|
||||||
Total Liabilities
|
|
|
||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Preferred shares,
|
|
|
||||||
Common shares, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss, net of taxes
|
(
|
)
|
(
|
)
|
||||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
|
$
|
|
|
Three Months Ended
March 31,
|
|||||||
(Dollars in thousands, except share and per share amounts)
|
2024
|
2023
|
||||||
Interest income
|
||||||||
Interest and fees on loans and leases
|
$
|
|
$
|
|
||||
Interest and dividends on investment securities
|
|
|
||||||
Interest on deposits with others
|
|
|
||||||
Total interest income
|
|
|
||||||
|
||||||||
Interest expense
|
||||||||
Deposits
|
|
|
||||||
Borrowed funds
|
|
|
||||||
Subordinated debentures
|
|
|
||||||
Total interest expense
|
|
|
||||||
Net interest income
|
|
|
||||||
Provision for credit losses
|
|
|
||||||
Net interest income after provision for credit losses
|
|
|
||||||
Non-interest income
|
||||||||
Card processing
|
|
|
||||||
Gain on BOLI death benefit
|
|
|
||||||
Net gain on deferred compensation benefits
|
|
|
||||||
Service charges on deposit accounts
|
|
|
||||||
Increase in cash surrender value of BOLI
|
|
|
||||||
Net loss on sale of securities available-for-sale
|
|
(
|
)
|
|||||
Other
|
|
|
||||||
Total non-interest income
|
|
|
||||||
Non-interest expense
|
||||||||
Salaries and employee benefits
|
|
|
||||||
Data processing
|
|
|
||||||
Occupancy
|
|
|
||||||
Net gain on deferred compensation benefits
|
|
|
||||||
Deposit insurance
|
|
|
||||||
Professional services
|
|
|
||||||
Marketing
|
|
|
||||||
Other
|
|
|
||||||
Total non-interest expense
|
|
|
||||||
INCOME BEFORE INCOME TAXES
|
|
|
||||||
Income tax expense
|
|
|
||||||
NET INCOME
|
$
|
|
$
|
|
||||
|
||||||||
Earnings per common share:
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
||||
|
||||||||
Weighted average number of common shares
|
||||||||
Basic
|
|
|
||||||
Diluted
|
|
|
Three Months Ended
March 31,
|
||||||||
(Dollars in thousands)
|
2024
|
2023
|
||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income | ||||||||
Unrealized (losses)/gains on available-for-sale securities
|
(
|
)
|
|
|||||
Reclassification adjustment for losses on available-for-sale securities
|
|
|
||||||
Amortization of unrealized loss on securities transferred to held-to-maturity
|
(
|
)
|
(
|
)
|
||||
Net unrealized (losses)/gains on
available-for-sale securities
|
(
|
)
|
|
|||||
Income tax benefit/(expense)
|
|
(
|
)
|
|||||
Other comprehensive (loss)/income, net of
tax
|
(
|
)
|
|
|||||
Total comprehensive income
|
$
|
|
$
|
|
For the three months ended March 31, 2024 and 2023
|
||||||||||||||||||||||||
(Dollars in thousands, except share amounts)
|
Common
Shares
|
Amount
|
Additional
Paid-In
Capital
|
Retained Earnings
|
Accumulated
Other
Comprehensive
(Loss)/Income
|
Total
|
||||||||||||||||||
Balance as of December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
|
|
|
|
|
||||||||||||||||||
Repurchase of common stock
|
(
|
)
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||
Balance as of March 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
|
||||||||||||||||||||||||
Balance as of December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
|
|
|
||||||||||||||||||||||
Net income
|
-
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Repurchase of common stock
|
(
|
)
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||
Balance as of March 31, 2024
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended
March 31,
|
||||||||
(Dollars in thousands)
|
2024
|
2023
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for credit losses
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Net amortization of securities premiums and discounts
|
(
|
)
|
|
|||||
Increase in cash surrender value of BOLI
|
(
|
)
|
(
|
)
|
||||
Gain on BOLI death benefit
|
( |
) | ||||||
Decrease in deferred income taxes, net
|
|
|
||||||
Loss on sale of securities available-for-sale
|
|
|
||||||
Net changes in:
|
||||||||
Other assets
|
|
|
||||||
Other liabilities
|
|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Net change in loans and leases held-for-investment
|
(
|
)
|
|
|||||
Purchase of available-for-sale securities
|
(
|
)
|
(
|
)
|
||||
Purchase of held-to-maturity securities
|
(
|
)
|
(
|
)
|
||||
Proceeds from sales, maturities, calls and pay downs of available-for-sale securities
|
|
|
||||||
Proceeds from maturities, calls and pay downs of held-to-maturity securities
|
|
|
||||||
Purchase of premises and equipment
|
(
|
)
|
(
|
)
|
||||
Purchase of other investments
|
(
|
)
|
(
|
)
|
||||
Proceeds from bank-owned life insurance | ||||||||
Net cash (used in)/ provided by investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Net increase/(decrease) in deposits
|
|
(
|
)
|
|||||
Federal Home Loan Bank advances |
||||||||
Net cash used in share repurchases of common stock
|
(
|
)
|
(
|
)
|
||||
Net
cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
Net change in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Income taxes paid |
$ | $ | ||||||
Supplemental disclosures of non-cash transactions:
|
||||||||
Net change in unrealized gain/(losses) on securities
available-for-sale
|
$ | $ | ( |
) |
|
Amortized | Gross Unrealized | |
|||||||||||||
(Dollars in thousands)
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
As of March 31, 2024 | ||||||||||||||||
U.S. Government-sponsored securities
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Mortgage-backed securities (1)
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations (1)
|
||||||||||||||||
Corporate securities
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
Amortized
|
Gross Unrealized
|
|
||||||||||||||
(Dollars in thousands)
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
As of December 31, 2023
|
||||||||||||||||
U.S. Government-sponsored securities
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Mortgage-backed securities (1)
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations (1)
|
||||||||||||||||
Corporate securities | ||||||||||||||||
Other
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
Allowance |
||||||||||||||||||||
Amortized
|
Gross Unrealized
|
|
for Credit | |||||||||||||||||
(Dollars in thousands)
|
Cost
|
Gains
|
Losses
|
Fair Value
|
Losses
|
|||||||||||||||
As of March 31, 2024 | ||||||||||||||||||||
Mortgage-backed securities (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | |||||||||||
Collateralized mortgage obligations (1)
|
||||||||||||||||||||
Municipal securities
|
||||||||||||||||||||
Total held-to-maturity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
Allowance |
||||||||||||||||||||
|
Amortized |
Gross Unrealized
|
for Credit
|
|||||||||||||||||
(Dollars in thousands)
|
Cost
|
Gains
|
Losses
|
Fair Value
|
Losses
|
|||||||||||||||
As of December 31, 2023
|
||||||||||||||||||||
Mortgage-backed securities(1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Collateralized mortgage obligations(1)
|
|
|
|
|
|
|||||||||||||||
Municipal securities
|
||||||||||||||||||||
Total held-to-maturity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
March 31, 2024
|
|||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||||||||||
U.S. Government-sponsored securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Mortgage-backed securities(1)
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized mortgage obligations(1)
|
|
|
|
|
|
|
||||||||||||||||||
Corporate securities
|
|
|
|
|
|
|
||||||||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31, 2023
|
|||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||||||||||
U.S. Government-sponsored securities
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||
Mortgage-backed securities(1)
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized Mortgage Obligations(1) | ||||||||||||||||||||||||
Corporate securities | ||||||||||||||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
March 31, 2024
|
|||||||||||||||
(Dollars in thousands)
|
Municipal
securities
|
Mortgage-backed
securities
|
Collateralized
mortgage
obligations
|
Total
|
||||||||||||
Allowance for credit losses - securities
|
||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Provision for credit losses
|
|
|
|
|
||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||
(Dollars in thousands)
|
Municipal
securities
|
Mortgage-backed
securities
|
Collateralized
mortgage
obligations
|
Total
|
||||||||||||
Allowance for credit losses - securities
|
||||||||||||||||
Beginning Balance
|