ACCOUNTING POLICIES (Revised and Restated) (Tables)

6 Months Ended

Jun. 30, 2023

ACCOUNTING POLICIES (Revised and Restated) [Abstract]

Schedule of Hedged Assets and Cumulative Fair Value Hedging Adjustments

The following table represents the carrying value of the portfolio layer method hedged assets and the cumulative fair value hedging adjustments included in the carrying value of the hedged assets as of June 30, 2023 and December 31, 2022:

	June 30, 2023						December 31, 2022
(dollars in thousands)		Amortized Cost Basis		Hedged Asset		Basis Adjustment		Amortized Cost Basis		Hedged Asset		Basis Adjustment
Fixed rate assets	$	440,935	$	195,739	$	(4,261)	$	—	$	—	$	—

Schedule of revisions

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(dollars in thousands)	2023		2022		2023		2022
Income Statement:
Decrease in interest income	$	(26)	$	(29)	$	(71)		(54)
Increase in noninterest expenses		-		47		9		92
Decrease in income tax expense		(5)		(16)		(16)		(30)
Net decrease in net income from continuing operations	$	(21)	$	(60)	$	(64)	$	(116)

As of and for the three and six months ended June 30, 2023
(In thousands, expect per share data)			As Revised1,
	As Reported		As Restated
Condensed Consolidated Balance Sheet
Loans held for investment	$	3,173,638	$	3,172,254
Loans held for investment, collateralizing secured borrowings		—		20,714
Allowance for credit losses		(38,414)		(38,541)
Net Loans		3,135,224		3,154,427
Deferred tax assets, net		20,391		22,639
Consumer Program derivative		-		10,627
Other assets		72,438		58,079
Total assets		3,848,493		3,866,212
Secured borrowings		—		20,595
Other liabilities		27,361		27,279
Total liabilities		3,455,277		3,475,790
Retained earnings		106,075		103,281
Stockholders’ equity		393,216		390,422
Total liabilities and stockholders' equity	$	3,848,493	$	3,866,212
Condensed Consolidated Statement of Income and Comprehensive Income (Loss)
Three months ended June 30, 2023
Interest and fees on loans	$	43,970	$	41,491
Total interest and dividend income		52,679		50,200
Interest on other borrowings		1,739		2,083
Total interest expense		26,522		26,866
Net interest income		26,157		23,334
Provision for credit losses		4,301		4,352
Net interest income after provision for credit losses		21,856		18,982
Gain on sale of loans		182		—
Consumer Program derivative		-		1,758
Credit enhancement income		1,152		-
Total noninterest income		8,486		8,937
Miscellaneous lending expenses		-		568
Other operating expenses		5,303		3,140
Total noninterest expenses		30,552		30,439
Income (loss) before income taxes		(210)		(2,520)
Income tax expense (benefit)		(22)		(526)
Net income (loss)	$	(188)	$	(1,994)
Comprehensive income (loss)	$	(2,794)	$	(4,600)
EPS – Basic	$	(0.01)	$	(0.08)
EPS – Diluted	$	(0.01)	$	(0.08)
Six months ended June 30, 2023
Interest and fees on loans	$	85,276	$	79,941
Total interest and dividend income		99,793		94,458
Interest on other borrowings		5,444		5,975
Total interest expense		45,271		45,802
Net interest income		54,522		48,656
Provision for credit losses		9,488		9,615
Net interest income after provision for credit losses		45,034		39,041
Gain on sale of loans		660		51
Consumer Program derivative		-		13,201
Credit enhancement income		6,038		-
Total noninterest income		20,018		26,607
Miscellaneous lending expenses		-		1,453
Other operating expenses		8,559		5,479
Total noninterest expenses		57,956		57,393
Income (loss) before income taxes		7,096		8,255

Income tax benefit		1,331		1,887
Net income (loss)	$	5,765	$	6,368
Comprehensive income (loss)	$	5,534	$	6,137
EPS – Basic	$	0.23	$	0.26
EPS – Diluted	$	0.23	$	0.26
Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended
Total shareholders' equity, March 31, 2023	$	398,406	$	397,418
Retained Earnings, March 31, 2023		108,732		107,744
Net loss, three months ended June 30, 2023		(188)		(1,994)
Retained Earnings, June 30, 2023		106,075		103,281
Total shareholders' equity, June 30, 2023	$	393,216	$	390,422
Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended
Total shareholders' equity, December 31, 2022	$	392,365	$	388,968
Retained Earnings, December 31, 2022		105,247		101,850
Net income, six months ended June 30, 2023		5,765		6,368
Retained Earnings, June 30, 2023		106,075		103,281
Total shareholders' equity, June 30, 2023	$	393,216	$	390,422
Condensed Consolidated Statement of Cash Flows
Operating activities
Net income	$	5,765	$	6,368
Credit enhancement income		(6,038)		-
Provision for credit losses		9,488		9,615
Net gains on sales of loans		(660)		(51)
Benefit for deferred income taxes		(2,040)		(2,704)
Net change in fair value of Consumer Program derivative		-		(11,100)
Net increase in other assets		(8,830)		(5,539)
Net increase (decrease) in other liabilities		4,345		4,266
Net cash and cash equivalents (used in) provided by operating activities		(34,513)		(35,688)
Investing activities
Net increase in loans		(231,405)		(250,736)
Net cash and cash equivalents used in investing activities		(204,708)		(224,039)
Financing activities
Net (decrease) increase in deposits		594,618		594,529
Change in secured borrowings		—		20,595
Net cash and cash equivalents provided by financing activities	$	262,230	$	282,736
Cash payments for interest	$	41,182	$	41,605

¹ These balances include revisions from the Company’s original Quarterly Report on Form 10-Q for the three and six month periods ended June 30, 2023 to reflect adjustments related to the fraud losses, as described in the Company’s restated Annual Report on Form 10-K/A as of and for the year ended December 31, 2022.

As of and for the three and six months ended June 30, 2022
(In thousands, expect per share data)
			As Revised1,
	As Reported		As Restated
Condensed Consolidated Statement of Income and Comprehensive Income (Loss)
Three months ended June 30, 2022
Interest and fees on loans	$	26,337	$	26,277
Total interest and dividend income		28,230		28,170
Total interest expense		3,652		3,664
Net interest income		24,578		24,506
Net interest income after provision for credit losses		24,156		24,084
Consumer program derivative		—		(238)
Total noninterest income		2,630		2,392
Miscellaneous lending expenses		—		104
Other operating expenses		2,366		2,251
Total noninterest expenses		20,477		20,523
Income before income taxes		6,309		5,953
Income tax expense		1,361		1,335
Net income	$	4,948	$	4,618
Comprehensive income (loss)	$	(3,462)	$	(3,853)
EPS – Basic	$	0.20	$	0.19
EPS – Diluted	$	0.20	$	0.19
Six months ended June 30, 2022
Interest and fees on loans	$	51,060	$	50,978
Total interest and dividend income		54,789		54,707
Total interest expense		7,383		7,408
Net interest income		47,406		47,299
Net interest income after provision for credit losses		46,885		46,778
Consumer Program derivative		-		(184)
Total noninterest income		4,720		4,536
Miscellaneous lending expenses		-		494
Other operating expenses		4,690		4,152
Total noninterest expenses		39,509		39,575
Income (loss) before income taxes		12,096		11,739
Income tax benefit		2,612		2,602
Net income (loss)	$	9,484	$	9,137
Comprehensive income (loss)	$	(9,436)	$	(9,901)
EPS – Basic	$	0.39	$	0.37
EPS – Diluted	$	0.38	$	0.37
Condensed Consolidated Statement of Changes in Stockholders’ Equity
Total stockholders' equity, March 31, 2022	$	402,372	$	402,279
Retained earnings, March 31, 2022		99,710		99,617
Net income, three months ended June 30, 2022		4,948		4,618
Retained earnings, June 30, 2022		102,193		101,770
Total stockholders' equity, June 30, 2022	$	396,753	$	396,330
Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended
Total stockholders' equity, December 31, 2021	$	410,115	$	410,039
Retained earnings, December 31, 2021		97,631		97,555
Net income, six months ended June 30, 2022		9,484		9,137
Retained Earnings, June 30, 2022		102,193		101,770
Total shareholders' equity, June 30, 2022	$	396,753	$	396,330
Condensed Consolidated Statement of Cash Flows
Operating activities

Net income	$	9,484	$	9,137
Net change in fair value of Consumer program derivative		—		273
Net increase in other assets		(3,008)		(2,510)
Net increase (decrease) in other liabilities		(2,631)		(3,147)
Net cash and cash equivalents (used in) provided by operating activities		12,526		12,434
Investing activities
Net increase in loans	$	(287,754)	$	(287,662)
Net cash and cash equivalents used in investing activities		(292,714)		(292,622)

¹ These balances include revisions from the Company’s original Quarterly Report on Form 10-Q for the three and six month periods ended June 30, 2022 to reflect adjustments related to the fraud losses, as described in the Company’s restated Annual Report on Form 10-K/A as of and for the year ended December 31, 2022.