10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q  

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission file number 001-33003

CITIZENS COMMUNITY BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	20-5120010
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

2174 EastRidge Center

Eau Claire, WI 54701

(Address and Zip Code of principal executive offices)

715-836-9994

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	CZWI	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐ No  ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

At May 4, 2022 there were 10,531,281 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

CITIZENS COMMUNITY BANCORP, INC.

FORM 10-Q

March 31, 2022

INDEX

			Page Number
Part I – FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	5
		Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2022 and 2021	6
		Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2022 and 2021	7
		Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the three months ended March 31, 2022 and the year ended December 31, 2021	8
		Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2022 and 2021	10
		Condensed Notes to Consolidated Financial Statements (Unaudited)	12
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	74
	Item 4.	Controls and Procedures	76
Part II – OTHER INFORMATION			76
	Item 1.	Legal Proceedings	76
	Item 1A.	Risk Factors	77
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
	Item 3.	Defaults Upon Senior Securities	77
	Item 4.	Mine Safety Disclosures	77
	Item 5.	Other Information	77
	Item 6.	Exhibits	78
SIGNATURES			79

3

PART 1 – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

4

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Balance Sheets

March 31, 2022 (unaudited) and December 31, 2021

(derived from audited financial statements)

(in thousands, except share and per share data)

	March 31, 2022		December 31, 2021
Assets
Cash and cash equivalents	$	84,364	$	47,691
Other interest bearing deposits	1,511		1,511
Securities available for sale "AFS"	187,905		203,068
Securities held to maturity "HTM"	104,894		71,141
Equity investments	1,291		1,328
Other investments	15,084		15,305
Loans receivable	1,290,176		1,310,963
Allowance for loan losses	(16,818)		(16,913)
Loans receivable, net	1,273,358		1,294,050
Loans held for sale	2,528		6,670
Mortgage servicing rights, net	4,614		4,161
Office properties and equipment, net	21,393		21,169
Accrued interest receivable	4,179		3,916
Intangible assets	3,499		3,898
Goodwill	31,498		31,498
Foreclosed and repossessed assets, net	1,368		1,408
Bank owned life insurance ("BOLI")	24,464		24,312
Other assets	13,519		8,502
TOTAL ASSETS	$	1,775,469	$	1,739,628
Liabilities and Stockholders’ Equity
Liabilities:
Deposits	$	1,428,223	$	1,387,535
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) advances	85,530		111,527
Other borrowings	87,062		58,426
Other liabilities	9,160		11,274
Total liabilities	1,609,975		1,568,762
Stockholders’ Equity:
Common stock—$0.01 par value, authorized 30,000,000; 10,526,781 and 10,502,442 shares issued and outstanding, respectively	105		105
Additional paid-in capital	119,789		119,925
Retained earnings	52,562		50,675
Accumulated other comprehensive (loss) income	(6,962)		161
Total stockholders’ equity	165,494		170,866
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,775,469	$	1,739,628

See accompanying condensed notes to unaudited consolidated financial statements.

5

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Operations (unaudited)

Three Months Ended March 31, 2022 and 2021

(in thousands, except per share data)

	Three Months Ended
	March 31, 2022		March 31, 2021
Interest and dividend income:
Interest and fees on loans	$	13,767	$	14,517
Interest on investments	1,609		1,103
Total interest and dividend income	15,376		15,620
Interest expense:
Interest on deposits	1,068		1,714
Interest on FHLB and FRB borrowed funds	311		411
Interest on other borrowed funds	830		731
Total interest expense	2,209		2,856
Net interest income before provision for loan losses	13,167		12,764
Provision for loan losses	—		—
Net interest income after provision for loan losses	13,167		12,764
Non-interest income:
Service charges on deposit accounts	488		398
Interchange income	549		530
Loan servicing income	701		893
Gain on sale of loans	722		1,595
Loan fees and service charges	92		278
Net gains (losses) on investment securities	(37)		235
Other	198		247
Total non-interest income	2,713		4,176
Non-interest expense:
Compensation and related benefits	5,398		5,569
Occupancy	1,365		1,316
Data processing	1,301		1,370
Amortization of intangible assets	399		399
Mortgage servicing rights expense, net	(327)		(450)
Advertising, marketing and public relations	212		163
FDIC premium assessment	115		165
Professional services	402		502
Gain on repossessed assets, net	(7)		(117)
New market tax credit depletion	163		—
Other	647		572
Total non-interest expense	9,668		9,489
Income before provision for income tax	6,212		7,451
Provision for income taxes	1,506		1,945
Net income attributable to common stockholders	$	4,706	$	5,506
Per share information:
Basic earnings	$	0.45	$	0.50
Diluted earnings	$	0.45	$	0.50
Cash dividends paid	$	0.26	$	0.23

See accompanying condensed notes to unaudited consolidated financial statements.

6

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Comprehensive (Loss) Income (unaudited)

Three months ended March 31, 2022 and 2021

(in thousands)

	Three Months Ended
	March 31, 2022		March 31, 2021
Net income attributable to common stockholders	$	4,706	$	5,506
Other comprehensive loss, net of tax:
Securities available for sale
Net unrealized losses arising during period, net of tax	(7,123)		(486)
Other comprehensive loss, net of tax	(7,123)		(486)
Comprehensive (loss) income	$	(2,417)	$	5,020

See accompanying condensed notes to unaudited consolidated financial statements.

7

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Three Months Ended March 31, 2022

(in thousands, except shares and per share data)

				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance, January 1, 2022	10,502,442	$	105	$	119,925	$	50,675	$	161	$	170,866
Net income	—	—		—		4,706		—		4,706
Other comprehensive loss, net of tax	—	—		—		—		(7,123)		(7,123)
Surrender of restricted shares of common stock	(10,119)	—		(141)		—		—		(141)
Restricted common stock awarded under the equity incentive plan	38,586	—		—		—		—		—
Restricted common stock issued upon achievement of the 2019 performance criteria	11,834	—		—		—		—		—
Common stock options exercised	2,500	—		20		—		—		20
Common stock repurchased	(18,462)	—		(211)		(77)		—		(288)
Stock option expense	—	—		1		—		—		1
Amortization of restricted stock	—	—		195		—		—		195
Cash dividends ($0.26 per share)	—	—		—		(2,742)		—		(2,742)
Balance at March 31, 2022	10,526,781	$	105	$	119,789	$	52,562	$	(6,962)	$	165,494

See accompanying condensed notes to unaudited consolidated financial statements.

8

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Twelve Months Ended December 31, 2021

(in thousands, except shares and per share data)

				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance, January 1, 2021	11,056,349	$	111	$	126,154	$	32,809	$	1,490	$	160,564
Net income	—	—		—		5,506		—		5,506
Other comprehensive loss, net of tax	—	—		—		—		(486)		(486)
Forfeiture of unvested shares	(1,500)	—		—		—		—		—
Surrender of restricted shares of common stock	(895)	—		(10)		—		—		(10)
Restricted common stock awarded under the equity incentive plan	64,399	—		—		—		—		—
Common stock repurchased	(224,481)	(2)		(2,552)		(21)		—		(2,575)
Stock option expense	—	—		3		—		—		3
Amortization of restricted stock	—	—		171		—		—		171
Cash dividends ($0.23 per share)	—	—		—		(2,511)		—		(2,511)
Balance at March 31, 2021	10,893,872	109		123,766		35,783		1,004		160,662
Net income	—	—		—		4,706		—		4,706
Other comprehensive income, net of tax	—	—		—		—		1,056		1,056
Surrender of restricted shares of common stock	(1,149)	—		(15)		—		—		(15)
Common stock options exercised	2,000	—		17		—		—		17
Common stock repurchased	(198,648)	(2)		(2,260)		(372)		—		(2,634)
Stock option expense	—	—		2		—		—		2
Amortization of restricted stock	—	—		222		—		—		222
Balance at June 30, 2021	10,696,075	107		121,732		40,117		2,060		164,016
Net income	—	—		—		4,997		—		4,997
Other comprehensive income, net of tax	—	—		—		—		(828)		(828)
Surrender of restricted shares of common stock	(222)	—		(3)		—		—		(3)
Common stock options exercised	3,800	—		35		—		—		35
Common stock repurchased	(180,768)	(2)		(2,058)		(454)		—		(2,514)
Stock option expense	—	—		2		—		—		2
Amortization of restricted stock	—	—		393		—		—		393
Balance, September 30, 2021	10,518,885	105		120,101		44,660		1,232		166,098
Net income	—	—		—		6,057		—		6,057
Other comprehensive income, net of tax	—	—		—		—		(1,071)		(1,071)
Surrender of restricted shares of common stock	(143)	—		(2)		—		—		(2)
Common stock repurchased	(16,300)	—		(186)		(42)		—		(228)
Stock option expense	—	—		1		—		—		1
Amortization of restricted stock	—	—		11		—		—		11
Balance, December 31, 2021	10,502,442	$	105	$	119,925	$	50,675	$	161	$	170,866

See accompanying condensed notes to unaudited consolidated financial statements.

9

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Cash Flows (unaudited)

Three Months Ended March 31, 2022 and 2021

(in thousands)

	Three Months Ended
	March 31, 2022		March 31, 2021
Cash flows from operating activities:
Net income attributable to common stockholders	$	4,706	$	5,506
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization, net of discount accretion on investment securities	33		23
Depreciation expense	573		530
Net realized loss (gain) on equity securities	37		(235)
Increase in mortgage servicing rights resulting from transfers of financial assets	(126)		(297)
Mortgage servicing rights amortization and impairment, net	(327)		(450)
Amortization of intangible assets	399		399
Amortization of restricted stock	195		171
Net stock based compensation expense	1		3
Loss on sale of office properties and equipment	—		6
Decrease in deferred income taxes	911		765
Increase in cash surrender value of life insurance	(152)		(153)
Net gain from disposals of foreclosed and repossessed assets	(7)		(117)
Gain on sale of loans held for sale, net	(722)		(1,595)
New market tax credit depletion	163		—
Net change in:
Loans held for sale	4,864		2,403
Accrued interest receivable and other assets	410		322
Other liabilities	(2,099)		6,248
Total adjustments	4,153		8,023
Net cash provided by operating activities	8,859		13,529
Cash flows from investing activities:
Net decrease in other interest bearing deposits	—		1,736
Purchase of available for sale securities	(1,750)		(50,956)
Proceeds from principal payments of available for sale securities	7,076		9,368
Purchase of held to maturity securities	(35,342)		(16,530)
Proceeds from principal payments and maturities of held to maturity securities	1,569		2,629
Net sales of other investments	221		17
Proceeds from sales of foreclosed and repossessed assets	28		312
Net decrease in loans	20,704		45,189
Net capital expenditures	(797)		(462)
Proceeds from disposal of office properties and equipment	—		10
New market tax credit investment	(4,056)		—
Net cash used in investing activities	(12,347)		(8,687)

Cash flows from financing activities:
Amortization of fair value adjustments for acquired Federal Home Loan Bank advances	3		—
Federal Home Loan Bank advance termination payments	(15,015)		(8,119)
Federal Home Loan Bank maturities	(11,000)		—
Amortization of debt issuance costs	41		26
Proceeds from other borrowings, net of origination costs	34,201		—
Other borrowings principal reductions	(5,606)		—
Net increase in deposits	40,688		84,946
Repurchase shares of common stock	(288)		(2,575)
Surrender of restricted shares of common stock	(141)		(10)
Common stock options exercised	20		—
Cash dividends paid	(2,742)		(2,511)
Net cash provided by financing activities	40,161		71,757
Net increase in cash and cash equivalents	36,673		76,599
Cash and cash equivalents at beginning of period	47,691		119,440
Cash and cash equivalents at end of period	$	84,364	$	196,039

10

Supplemental cash flow information:
Cash paid during the period for:
Interest on deposits	$	1,096	$	1,658
Interest on borrowings	$	1,323	$	1,391
Supplemental noncash disclosure:
Transfers from loans receivable to other real estate owned ("OREO")	$	—	$	45

See accompanying condensed notes to unaudited consolidated financial statements. 

11

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(UNAUDITED)

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Citizens Community Federal N.A. (the “Bank”) included herein have been included by its parent company, Citizens Community Bancorp, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. As used in this quarterly report, the terms “we”, “us”, “our”, and “Citizens Community Bancorp, Inc.” mean the Company and its wholly owned subsidiary, the Bank, unless the context indicates other meaning.

The Bank is a national banking association (a “National Bank”) and operates under the title of Citizens Community Federal National Association (“Citizens Community Federal N.A.” or “Bank” or “CCFBank”). The Company is a bank holding company, supervised by the Federal Reserve Bank of Minneapolis, and operates under the title of Citizens Community Bancorp, Inc. The U.S. Office of the Comptroller of the Currency (the “OCC”), is the primary federal regulator for the Bank.

The consolidated income of the Company is principally derived from the income of the Bank, the Company’s wholly owned subsidiary, serving customers in Wisconsin and Minnesota through 25 branch locations. Its primary markets include the Chippewa Valley Region in Wisconsin, the Mankato and Twin Cities markets in Minnesota, and various rural communities around these areas. The Bank offers traditional community banking services to businesses, agricultural operators and consumers, including one-to-four family residential mortgages.

The Bank is subject to competition from other financial institutions and non-financial institutions providing financial products. Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the March 31, 2022 balance sheet date and through the date the financial statements were available to be issued for items that should potentially be recognized or disclosed in these consolidated financial statements.

The accompanying consolidated interim financial statements are unaudited. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Unless otherwise stated herein, and except for shares and per share amounts, all amounts are in thousands.

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates –Preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, fair value of financial instruments, the allowance for loan losses, mortgage servicing rights, foreclosed and repossessed assets, valuation of intangible assets arising from acquisitions, useful lives for depreciation and amortization, valuation of goodwill and long-lived assets, stock based compensation, deferred tax assets, uncertain income tax positions and contingencies. Management does not anticipate any material changes to estimates made herein in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: those items described under the caption “Risk Factors” in Item 1A of the annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 2, 2022; the matters described in “Risk Factors” in Item 1A of this Form 10-Q; external market factors such as market interest rates and unemployment rates; changes to operating policies and procedures and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period.

Investment Securities; Held to Maturity and Available for Sale – Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of the date of each balance sheet. Securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held to maturity securities are stated at amortized cost. Investment securities not classified as held to maturity are classified as available for sale. Available for sale securities are stated at fair value, with unrealized holding gains and losses being reported in other comprehensive income (loss), net of tax. Unrealized losses deemed other-than-temporary due to credit issues are reported in the

12

Company’s net income in the period in which the losses arise. Realized gains or losses on sales of available for sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net gains on investment securities. Interest income includes amortization of purchase premium or accretion of purchase discount. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities.

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to: the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded in other comprehensive income or loss as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax.

Equity investments - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities. Farmer Mac equity securities are carried at their fair market value, which is readily determinable. Changes in fair value are recognized as net gains (losses) on investment securities in the consolidated Statement of Operations.

Also included in equity investments are the Company’s investments in a Volker Rule-compliant Small Business Investment Company ("SBIC") and an investment fund. The SBIC and investment fund meet the definition of investment companies, as defined in ASC 946, Financial Services - Investment Companies. These investments seek returns by investing in various small businesses and do not have redemption rights. Distributions from the investments will be received as the underlying investments, which generally have a life of 10 years, are liquidated. We elected the practical expedient available in Topic 820, Fair Value Measurements, which permits the use of net asset value ("NAV") per share or equivalent to value investments in entities that are or are similar to investment companies. SBICs and investment funds report their investments at estimated fair value. We record the unrealized gains and losses resulting from changes in the fair value of these investments as gains or losses on equity securities in our consolidated statements of operations. The carrying value of these investments is equal to the capital account balance per each entities' quarterly financial statements.

Other Investments - As a member of the Federal Reserve Bank (“FRB”) System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other exchange traded equity securities. As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as other income in the consolidated statement of operations.

Also included in other investments is stock of our correspondent bank, Bankers’ Bank, without readily determinable fair value. This stock is carried at cost plus or minus changes resulting from observable price changes in orderly transactions for this stock, less other-than-temporary impairment charges, if any.

Management’s evaluation for impairment of these other investments, includes consideration of the financial condition and other available relevant information of the issuer. Based on management’s quarterly evaluation, no impairment has been recorded on these securities. Other investments totaling $15,084 at March 31, 2022 consisted of $7,650 of FHLB stock, $5,205 of Federal Reserve Bank stock and $2,229 of Bankers’ Bank stock. Other investments totaling $15,305 at December 31, 2021 consisted of $7,877 of FHLB stock and $5,200 of Federal Reserve Bank stock and $2,228 of Bankers’ Bank stock.

Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of: deferred loan fees and costs, accretable yield on acquired loans and non-accretable discount on purchased credit impaired (PCI) loans. Interest income is accrued on the unpaid principal balance of these loans. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed. If the loan is prepaid, any unamortized net fee is recognized at this time. Late charge fees are recognized into income when collected.

Interest income on commercial, mortgage and consumer loans is discontinued according to the following schedules:

13

•Commercial/agricultural real estate loans past due 90 days or more;

•Commercial and industrial/agricultural operating loans past due 90 days or more;

•Closed end consumer installment loans past due 120 days or more; and

•Residential mortgage loans and open ended consumer installment loans past due 180 days or more.

Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for a loan placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual status. Loans are returned to accrual status when payments are made that bring the loan account current with the contractual term of the loan and a six month payment history has been established. Interest on accruing troubled debt restructured (“TDR”), less than 90 days delinquent, is recognized as income as it accrues, based on the revised terms of the loan over an established period of continued payment.

Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 180 days or more. Closed ended consumer installment loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 120 days or more. Commercial/agricultural real estate, commercial and industrial and agricultural operating loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 90 days or more.

Allowance for Loan Losses – The allowance for loan losses (“ALL”) is a valuation allowance for probable and inherent credit losses in our loan portfolio. Loan losses are charged against the ALL when management believes that the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the ALL. Management estimates the required ALL balance taking into account the following factors: past loan loss experience; the nature, volume and composition of our loan portfolio; known and inherent risks in our portfolio; information about specific borrowers’ ability to repay; estimated collateral values; current economic conditions; and other relevant factors determined by management. The ALL consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for certain qualitative factors. The entire ALL balance is available for any loan that, in management’s judgment, should be charged off.

A loan is impaired when full payment under the loan terms is not expected. Impaired loans consist of all TDRs, as well as individual loans not considered a TDR, that are either (1) rated substandard or worse, (2) on nonaccrual status or (3) PCI loans which are impaired at the time of acquisition. Substandard loans, as defined by the OCC, our primary banking regulator, are loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. All TDRs are individually evaluated for impairment. See Note 3, “Loans, Allowance for Loan Losses and Impaired Loans” for more information on what we consider to be a TDR. For TDR’s or substandard loans deemed to be impaired, a specific ALL allocation may be established so that the loan is reported, net, at the lower of (a) its outstanding principal balance; (b) the present value of the loan’s estimated future cash flows using the loan’s existing rate; or (c) at the fair value of any loan collateral, less estimated disposal costs, if repayment is expected solely from the underlying collateral of the loan. For TDRs less than 90+ days past due, and certain substandard loans that are less than 90+ days delinquent, the likelihood of the loan migrating to over 90 days past due is also taken into account when determining the specific ALL allocation for these particular loans. Large groups of smaller balance homogeneous loans, such as non-TDR commercial, consumer and residential real estate loans, are collectively evaluated for ALL purposes, and accordingly, are not separately identified for ALL disclosures.

Acquired Loans— Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value with no carryover of related allowance for loan losses. Any allowance for loan loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that no longer are expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including: the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may

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no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield.

Loans acquired with deteriorated credit quality are accounted for in accordance with Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30) if, at acquisition, the loans have evidence of credit quality deterioration since origination and it is probable that all contractually required payments will not be collected. At acquisition, the Company considers several factors as indicators that an acquired loan has evidence of deterioration in credit quality. These factors include, but are not limited to: loans 90 days or more past due, loans with an internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.

Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable discount is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan’s total scheduled principal and interest payments over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect.

Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable discount to be subsequently recognized in interest income on a prospective basis over the loan’s remaining life.

Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs (ASC 310-20), whereby the premium or discount derived from the fair market value adjustment, on a loan-by-loan or pooled basis, is recognized into interest income on a level yield basis over the remaining expected life of the loan or pool.

For all acquired loans, the outstanding loan balances less any related accretable discount and/or non-accretable difference is referred to as the loans’ carrying amount.

Loans Held for Sale — Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They are carried at the lower of aggregate cost or fair value. Gains and losses on sales of loans are recognized at settlement dates, and are determined by the difference between the sales proceeds and the carrying value of the loans after allocating costs to servicing rights retained. Such gains and losses are included as non-interest income in the consolidated statements of operations. All sales are made without recourse. Interest rate lock commitments on mortgage loans to be funded and sold are valued at fair value, and are included in other assets or liabilities, if material.

Transfers of financial assets—Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the entity, (2) the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and (3) the entity does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.

Mortgage Servicing Rights— Mortgage servicing rights (“MSR”) assets result as the Company sells loans to investors in the secondary market and retains the rights to service mortgage loans sold to others. MSR assets are initially measured at fair value; assessed for impairment at least annually; carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded in non-interest expense in the consolidated statement of operations.

The valuation of MSRs and related amortization, included in mortgage servicing rights expense in the consolidated statements of operations, thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs. Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

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Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing fee income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of outstanding principal; or a fixed amount per loan and are recorded as income when earned.

Goodwill and other intangible assets—The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management. The Company has one reporting unit as of March 31, 2022 which is related to its banking activities. The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of the Company’s reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the Company’s reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of the Company’s reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the Company’s reporting unit’s goodwill to the implied fair value of goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2021.

Foreclosed and Repossessed Assets, net – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis. If the fair value declines subsequent to foreclosure or repossession, a write-down is recorded through expense. Costs incurred after acquisition are expensed and are included in non-interest expense, other in the consolidated statements of operations.

New Markets Tax Credits - As a part of its commitment to the communities it serves, in the first quarter of 2022 the Company made an investment in an LLC that is sponsoring a community development project that has been awarded a New Markets Tax Credit (NMTC) through the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. This investment is Community Reinvestment Act eligible and is designed to generate a return primarily through the realization of the tax credit. This LLC is considered a Variable Interest Entity (VIE) as the Company represents the holder of the equity investment at risk, but does not have the ability to direct the activities that most significantly affect the performance of the LLC. As such, the Company is not the primary beneficiary of the VIE and the LLC has not been consolidated. The investment is accounted for using the equity method of accounting and is amortized through non-interest expense as the related tax credits are utilized. The utilization of the tax credit is recognized as a reduction in income tax expense.

As of March 31, 2022, the carrying amount of this investment, which is included in other assets in the consolidated balance sheets, was $3,833. The risk of loss with this investment is limited to its carrying value and is tied to its ability to operate in compliance with the rules and regulations necessary for the qualification of the tax credit generated by the investment. As of March 31, 2022 there were no known instances of noncompliance associated with the investment.

Leases - We determine if an arrangement is a lease at inception. All of our existing leases have been determined to be operating leases under ASC 842. Right-of-use (“ROU”) assets are included in other assets in our consolidated balance sheets. Operating lease liabilities are included in other liabilities in our consolidated balance sheets. Lease expense is included in non-interest expense, occupancy in the consolidated statements of operations.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date, based on the present value of lease payments over the lease term. As none of our existing leases provide an implicit rate, we use our incremental borrowing rate, based on information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, when it is reasonably certain that we will exercise that option. Lease expense is recognized based on the total contractually required lease payments, over the term of the lease, on a straight-line basis.

Debt and equity issuance costs—Debt issuance costs, which consist primarily of fees paid to note lenders, are deferred and included in other borrowings in the consolidated balance sheets. Debt issuance costs with a Company call option that

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originated prior to 2020 and senior note debt issuance costs, are amortized over the contractual term of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Debt issuance costs that originated in 2020 and thereafter, are amortized through the first Company call option date of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Specific costs associated with the issuance of shares of the Company’s common or preferred stock are netted against proceeds and recorded in stockholders’ equity, as additional paid in capital, on the consolidated balance sheets, in the period of the share issuance.

    Advertising, Marketing and Public Relations Expense—The Company expenses all advertising, marketing and public relations costs as they are incurred.

Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

The Company regularly reviews the carrying amount of its net deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s net deferred tax assets will not be realized in future periods, a deferred tax valuation allowance would be established. Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. Accordingly, the Company’s evaluation is based on current tax laws as well as management’s expectations of future performance.

Revenue Recognition - The Company’s primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts or other similar contracts.

The Company accounts for revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Topic 606 provides that revenue from contracts with customers be recognized when performance obligations under the terms of a contract are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing service. The company does not have any materially significant payment terms as payment is received shortly after the satisfaction of the performance obligation. The non-interest income line items recognized under the scope of Topic 606 are as follows:

Service charges on deposit accounts - Service charges on accounts consist of monthly service fees, transaction-based fees, overdraft services and other deposit account related fees. The Company’s performance obligation for monthly services fees is generally satisfied over the period in which the service is provided. Revenue for these monthly fees is recognized during the service period. Other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied at the time the service is provided. Payment for service charges on deposit accounts are primarily received immediately or in the following month through a direct charge to a customer’s account.

Interchange income - The Company earns interchange fees when cardholder debit card transaction are processed through card association networks. The interchange rates are generally set by the card association based upon purchase volumes and other factors. Interchange fees represent a percentage of the underlying transaction value. The Company has a continuous contract, based on customary business practices, with the card association networks to make funds available for settlement of card transactions. The Company’s performance obligation is satisfied over time as it makes funds available, and the related income is recognized when received.

Gain (loss) on repossessed assets - The Company records a gain or loss from the sale of repossessed assets, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement. When the company finances the sale of repossessed assets to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the repossessed asset is derecognized and the gain or loss on sale is recorded

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upon transfer of control of the property to the buyer. In determining the gain on sale or loss on the sale, the Company adjust the transaction price and related gain or loss on sale if a significant financing component is present.

Non-interest income outside of the scope of Revenue from Contracts with Customers, Topic 606 is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income outside of the scope of Topic 606 includes mortgage banking activities, loan fees and service charges, net gains (losses) on investment securities, settlement proceeds, and other, which is primarily made up of BOLI related income.

Earnings Per Share – Basic earnings per common share is net income or loss divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.

Loss Contingencies—Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable and an amount of loss can be reasonably estimated.

Other Comprehensive Income —Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale, net of tax, and is shown on the accompanying consolidated statements of comprehensive income.

Operating Segments—While our executive officers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.

Reclassifications – Certain items previously reported were reclassified for consistency with the current presentation.

Recent Accounting Pronouncements—The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have potentially significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.

Recent Accounting Pronouncements—Adopted

ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting--These ASUs provide optional and temporary relief, in the form of optional expedients and exceptions, for applying GAAP to modifications of contacts, hedging relationships and other transactions affected by reference rate (e.g. LIBOR) reforms. ASU 2020-04 and ASU 2021-01 are effective for the Company immediately and through December 31, 2022. The Company utilizes LIBOR, among other indexes, as a reference rate for underwriting variable rate loans. Reference rate reform has not had, nor does the Company expect it to have, a material effect on the Company’s consolidated balance sheet, operations or cash flows.

Recently Issued, But Not Yet Effective Accounting Pronouncements

ASU 2016-13; Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments--The ASU changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. In November, 2019, the FASB issued ASU 2019-10, which delayed the effective date for ASU 2016-13 for smaller reporting companies, resulting in ASU 2016-13 becoming effective in the first quarter of 2023 for the Company. Earlier adoption is permitted; however, the Company does not currently plan to adopt the ASU early. Management is assessing alternative loss estimation methodologies and the Company’s data and system needs in order to evaluate the impact that adoption of this standard will have on the Company’s financial condition and results of operations. The Company anticipates recording the effect of implementing this ASU through a cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which the ASU is effective, which will be January 1, 2023.

ASU 2022-02; Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures - The ASU addresses and amends areas identified by the FASB as part of its post-implementation review of the accounting standard that introduced the current expected credit losses model. The amendments eliminate the accounting

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guidance for troubled debt restructurings by creditors that have adopted the current expected credit losses model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has not yet adopted the amendments in ASU 2016-13, ASU 2022-02 becomes effective in the first quarter of 2023. Management is assessing the impact that adoption of this standard will have on the Company’s financial condition and results of operations in conjunction with its assessment of the impact of ASU 2016-13. The Company expects to adopt the guidance for our fiscal year beginning January 1, 2023.

NOTE 2 – INVESTMENT SECURITIES

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of March 31, 2022 and December 31, 2021, respectively, were as follows:

Available for sale securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
U.S. government agency obligations	$	23,686	$	298	$	103	$	23,881
Mortgage-backed securities	103,723		9		8,181		95,551
Corporate debt securities	37,087		54		1,195		35,946
Corporate asset-based securities	33,011		—		484		32,527
Total available for sale securities	$	197,507	$	361	$	9,963	$	187,905
December 31, 2021
U.S. government agency obligations	$	25,826	$	440	$	1	$	26,265
Obligations of states and political subdivisions	140		—		—		140
Mortgage-backed securities	107,636		409		878		107,167
Corporate debt securities	35,342		403		157		35,588
Corporate asset-based securities	33,902		133		127		33,908
Total available for sale securities	$	202,846	$	1,385	$	1,163	$	203,068

Held to maturity securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
Obligations of states and political subdivisions	$	4,600	$	—	$	32	$	4,568
Mortgage-backed securities	100,294		29		8,916		91,407
Total held to maturity securities	$	104,894	$	29	$	8,948	$	95,975
December 31, 2021
Obligations of states and political subdivisions	$	4,600	$	—	$	7	$	4,593
Mortgage-backed securities	66,541		104		2,061		64,584
Total held to maturity securities	$	71,141	$	104	$	2,068	$	69,177

At March 31, 2022, the Bank has pledged mortgage-backed securities with a carrying value of $5,813 as collateral against a borrowing line of credit with the Federal Reserve Bank. However, as of March 31, 2022, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of March 31, 2022, the Bank has pledged U.S. Government Agency securities with a carrying value of $3,570 and mortgage-backed securities with a carrying value of $2,645 as collateral against specific municipal deposits. As of March 31, 2022, the Bank also has mortgage-backed securities with a carrying value of $220 pledged as collateral to the Federal Home Loan Bank of Des Moines.

At December 31, 2021, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $863 as collateral to secure a line of credit with the Federal Reserve Bank. As of December 31, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2021, the Bank has pledged certain of its U.S. Government Agency securities with a carrying value of $3,934 and mortgage-backed securities with a carrying value of $2,879

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as collateral against specific municipal deposits. As of December 31, 2021, the Bank also has mortgage-backed securities with a carrying value of $267 pledged as collateral to the Federal Home Loan Bank of Des Moines.

For the three month periods ended March 31, 2022 and March 31, 2021, there were no sales of available for sale securities.

The estimated fair value of securities at March 31, 2022 and December 31, 2021, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Expected maturities may differ from contractual maturities on certain agency and municipal securities due to the call feature.

	March 31, 2022				December 31, 2021
Available for sale securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	—	$	—	$	140	$	140
Due after one year through five years	4,670		4,524		4,903		4,971
Due after five years through ten years	42,629		41,673		40,410		40,818
Due after ten years	46,485		46,157		49,757		49,972
Total securities with contractual maturities	$	93,784	$	92,354	$	95,210	$	95,901
Mortgage-backed securities	103,723		95,551		107,636		107,167
Total available for sale securities	$	197,507	$	187,905	$	202,846	$	203,068

	March 31, 2022				December 31, 2021
Held to maturity securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due after one year through five years	$	4,450	$	4,425	$	4,300	$	4,298
Due after five years through ten years	150		143		300		295
Total securities with contractual maturities	4,600		4,568		4,600		4,593
Mortgage-backed securities	100,294		91,407		66,541		64,584
Total held to maturity securities	$	104,894	$	95,975	$	71,141	$	69,177

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Securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	Less than 12 Months				12 Months or More				Total
Available for sale securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
U.S. government agency obligations	$	3,716	$	103	$	—	$	—	$	3,716	$	103
Mortgage-backed securities	84,939		7,358		7,469		823		92,408		8,181
Corporate debt securities	29,871		1,157		712		38		30,583		1,195
Corporate asset-based securities	32,527		484		—		—		32,527		484
Total	$	151,053	$	9,102	$	8,181	$	861	$	159,234	$	9,963
December 31, 2021
U.S. government agency obligations	$	1,169	$	1	$	—	$	—	$	1,169	$	1
Mortgage backed securities	89,010		878		—		—		89,010		878
Corporate debt securities	17,240		142		735		15		17,975		157
Corporate asset-based securities	19,296		127		—		—		19,296		127
Total	$	126,715	$	1,148	$	735	$	15	$	127,450	$	1,163

	Less than 12 Months				12 Months or More				Total
Held to maturity securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
Obligations of states and political subdivisions	$	4,568	$	32	$	—	$	—	$	4,568	$	32
Mortgage-backed securities	56,503		4,105		33,773		4,811		90,276		8,916
Total	$	61,071	$	4,137	$	33,773	$	4,811	$	94,844	$	8,948
December 31, 2021
Obligations of states and political subdivisions	$	593	$	7	$	—	$	—	$	593	$	7
Mortgage-backed securities	46,969		1,346		14,716		715		61,685		2,061
Total	$	47,562	$	1,353	$	14,716	$	715	$	62,278	$	2,068

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to; the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax. Unrealized losses reflected in the preceding tables have not been included in results of operations because the unrealized loss was not deemed other-than-temporary. Management has determined that more likely than not, the Company neither intends to sell, nor will it be required to sell each debt security before its anticipated recovery, and therefore recovery of cost will occur.

21

NOTE 3 – LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

Portfolio Segments:

    Commercial and agricultural real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75%.

Commercial and industrial (“C&I”) loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Agricultural operating loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets or other business assets, as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields. SBA PPP loan balances are 100% guaranteed under the Small Business Association’s Paycheck Protection Program and may be forgiven in full, depending on use of funds and eligibility. These SBA-backed loans helped businesses keep their workforce employed during the COVID-19 crisis. Eligible borrowers, who qualify for full loan forgiveness during the eight to twenty four week period following loan disbursement, can apply for forgiveness, once all proceeds for which the borrower requested forgiveness has been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan.

Residential mortgage loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower’s documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home’s appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential mortgage portfolio due to relatively small loan account balances spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis.

Consumer installment loans are comprised of originated indirect paper loans secured primarily by boats and recreational vehicles and other consumer loans secured primarily by automobiles and other personal assets. Consumer loan underwriting terms often depend on the collateral type, debt to income ratio and the borrower’s creditworthiness as evidenced by their credit score. In the event of a consumer installment loan default, collateral value alone may not provide an adequate source of repayment of the outstanding loan balance. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral.

22

Credit Quality/Risk Ratings:

    Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant.

Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio ratings are presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows:

1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better.

5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future.

6 - Special Mention. A “Special Mention” loan has one or more potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future.

7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.

23

Below is a summary of originated and acquired loans by type and risk rating as of March 31, 2022:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	569,560	$	659	$	5,070	$	—	$	—	$	575,289
Agricultural real estate	50,111		784		1,788		—		—		52,683
Multi-family real estate	175,186		285		—		—		—		175,471
Construction and land development	86,869		—		128		—		—		86,997
C&I/Agricultural operating:
Commercial and industrial	108,370		48		4		—		—		108,422
Agricultural operating	18,792		68		5,160		—		—		24,020
Residential mortgage:
Residential mortgage	57,145		—		2,730		—		—		59,875
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	7,772		—		70		—		—		7,842
Total originated loans before SBA PPP loans	1,091,688		1,844		15,062		—		—		1,108,594
SBA PPP loans	2,071		—		—		—		—		2,071
Total originated loans	$	1,093,759	$	1,844	$	15,062	$	—	$	—	$	1,110,665
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	111,371	$	—	$	3,114	$	—	$	—	$	114,485
Agricultural real estate	18,424		—		4,609		—		—		23,033
Multi-family real estate	4,016		—		—		—		—		4,016
Construction and land development	729		—		154		—		—		883
C&I/Agricultural operating:
Commercial and industrial	12,342		5		253		—		—		12,600
Agricultural operating	4,501		—		236		—		—		4,737
Residential mortgage:
Residential mortgage	23,507		—		1,391		—		—		24,898
Consumer installment:
Other consumer	346		—		3		—		—		349
Total acquired loans	$	175,236	$	5	$	9,760	$	—	$	—	$	185,001
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	680,931	$	659	$	8,184	$	—	$	—	$	689,774
Agricultural real estate	68,535		784		6,397		—		—		75,716
Multi-family real estate	179,202		285		—		—		—		179,487
Construction and land development	87,598		—		282		—		—		87,880
Commercial/Agricultural non-real estate:
Commercial and industrial	120,712		53		257		—		—		121,022
Agricultural operating	23,293		68		5,396		—		—		28,757
Residential mortgage:
Residential mortgage	80,652		—		4,121		—		—		84,773
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	8,118		—		73		—		—		8,191
Gross loans before SBA PPP Loans	1,266,924		1,849		24,822		—		—		1,293,595
SBA PPP loans	2,071		—		—		—		—		$	2,071
Gross loans	$	1,268,995	$	1,849	$	24,822	$	—	$	—	$	1,295,666
Less:
Unearned net deferred fees and costs and loans in process											(2,223)
Unamortized discount on acquired loans											(3,267)
Allowance for loan losses											(16,818)
Loans receivable, net											$	1,273,358

24

Below is a summary of originated and acquired loans by type and risk rating as of December 31, 2021:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	572,724	$	667	$	5,004	$	—	$	—	$	578,395
Agricultural real estate	50,834		1,267		271		—		—		52,372
Multi-family real estate	173,760		290		—		—		—		174,050
Construction and land development	75,146		—		3,467		—		—		78,613
C&I/Agricultural operating:
Commercial and industrial	107,798		57		82		—		—		107,937
Agricultural operating	23,935		764		1,503		—		—		26,202
Residential mortgage:
Residential mortgage	60,754		—		3,101		—		—		63,855
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,404		—		69		—		—		8,473
Total Originated loans before SBA PPP loans	1,092,879		3,045		13,815		—		—		1,109,739
SBA PPP loans	8,755		—		—		—		—		8,755
Total originated loans	$	1,101,634	$	3,045	$	13,815	$	—	$	—	$	1,118,494
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	116,839	$	1,314	$	1,917	$	—	$	—	$	120,070
Agricultural real estate	21,051		—		5,072		—		—		26,123
Multi-family real estate	4,299		—		—		—		—		4,299
Construction and land development	735		172		—		—		—		907
C&I/Agricultural operating:
Commercial and industrial	13,931		5		294		—		—		14,230
Agricultural operating	4,936		—		450		—		—		5,386
Residential mortgage:
Residential mortgage	25,869		—		1,266		—		—		27,135
Consumer installment:
Other consumer	398		—		3		—		—		401
Total acquired loans	$	188,058	$	1,491	$	9,002	$	—	$	—	$	198,551
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	689,563	$	1,981	$	6,921	$	—	$	—	698,465
Agricultural real estate	71,885		1,267		5,343		—		—		78,495
Multi-family real estate	178,059		290		—		—		—		178,349
Construction and land development	75,881		172		3,467		—		—		79,520
C&I/Agricultural operating:
Commercial and industrial	121,729		62		376		—		—		122,167
Agricultural operating	28,871		764		1,953		—		—		31,588
Residential mortgage:
Residential mortgage	86,623		—		4,367		—		—		90,990
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,802		—		72		—		—		8,874
Gross loans before SBA PPP loans	1,280,937		4,536		22,817		—		—		1,308,290
SBA PPP loans	8,755		—		—		—		—		8,755
Gross loans	$	1,289,692	$	4,536	$	22,817	$	—	$	—	$	1,317,045
Less:
Unearned net deferred fees and costs and loans in process											(2,482)
Unamortized discount on acquired loans											(3,600)
Allowance for loan losses											(16,913)
Loans receivable, net											$	1,294,050

25

Allowance for Loan Losses - The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL requires the exercise of significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of other qualitative factors such as current economic trends and conditions, all of which may be susceptible to significant change.

There are many factors affecting the ALL; some are quantitative, while others require qualitative judgment. The process for determining the ALL (which management believes adequately considers potential factors which result in probable credit losses), includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect the Company’s earnings or financial position in future periods. Allocations of the ALL may be made for specific loans but the entire ALL is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized.

As an integral part of their examination process, various regulatory agencies also review the Bank’s ALL. Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of our management based on information available to the regulators at the time of their examinations.

26

Changes in the ALL by loan type for the periods presented below were as follows:

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2022
Allowance for Loan Losses:
Beginning balance, January 1, 2022	$	12,354	$	1,959	$	518	$	225	$	774	$	15,830
Charge-offs	(35)		(63)		—		(9)		—		(107)
Recoveries	3		10		1		10		—		24
Provision	72		198		(59)		(66)		8		153
Total allowance on originated loans	12,394		2,104		460		160		782		15,900
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans:
Beginning balance, January 1, 2022	856		69		130		28		—		1,083
Charge-offs	—		—		(12)		—		—		(12)
Recoveries	—		—		—		—		—		—
Provision	(67)		(11)		(56)		(19)		—		(153)
Total allowance on other acquired loans	789		58		62		9		—		918
Total allowance on acquired loans	789		58		62		9		—		918
Ending balance, March 31, 2022	$	13,183	$	2,162	$	522	$	169	$	782	$	16,818
Allowance for Loan Losses at March 31, 2022:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,280	$	373	$	69	$	—	$	—	$	1,722
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,903	$	1,789	$	453	$	169	$	782	$	15,096
Loans Receivable as of March 31, 2022:											—
Ending balance of originated loans	$	890,440	$	134,513	$	63,362	$	22,350	$	—	$	1,110,665
Ending balance of purchased credit-impaired loans	8,672		1,023		1,024		—		—		10,719
Ending balance of other acquired loans	133,745		16,314		23,874		349		—		174,282
Ending balance of loans	$	1,032,857	$	151,850	$	88,260	$	22,699	$	—	$	1,295,666
Ending balance: individually evaluated for impairment	$	20,597	$	6,605	$	6,838	$	210	$	—	$	34,250
Ending balance: collectively evaluated for impairment	$	1,012,260	$	145,245	$	81,422	$	22,489	$	—	$	1,261,416

27

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2021
Allowance for Loan Losses:
Beginning balance, January 1, 2021	$	10,271	$	2,112	$	1,041	$	489	$	906	$	14,819
Charge-offs	—		—		—		(25)		—		(25)
Recoveries	5		8		7		10		—		30
Provision	833		(487)		(107)		(24)		(11)		204
Total allowance on originated loans	$	11,109	$	1,633	$	941	$	450	$	895	$	15,028
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans
Beginning balance, January 1, 2021	1,684		141		335		64		—		2,224
Charge-offs	(200)		—		—		—		—		(200)
Recoveries	—		7		1		4		—		12
Provision	(183)		(54)		52		(19)		—		(204)
Total allowance on other acquired loans	1,301		94		388		49		—		1,832
Total allowance on acquired loans	1,301		94		388		49		—		1,832
Ending balance, March 31, 2021	$	12,410	$	1,727	$	1,329	$	499	$	895	$	16,860
Allowance for Loan Losses at March 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,094	$	10	$	157	$	—	$	—	$	1,261
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,316	$	1,717	$	1,172	$	499	$	895	$	15,599
Loans Receivable as of March 31, 2021
Ending balance of originated loans	$	599,182	$	216,773	$	87,576	$	34,137	$	—	$	937,668
Ending balance of purchased credit-impaired loans	14,856		1,367		1,218		—		—		17,441
Ending balance of other acquired loans	181,438		24,974		38,828		913		—		246,153
Ending balance of loans	$	795,476	$	243,114	$	127,622	$	35,050	$	—	$	1,201,262
Ending balance: individually evaluated for impairment	$	24,948	$	6,197	$	8,843	$	255	$	—	$	40,243
Ending balance: collectively evaluated for impairment	$	770,528	$	236,917	$	118,779	$	34,795	$	—	$	1,161,019

28

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Allowance for Loan Losses at December 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	797	$	99	$	113	$	—	$	—	$	1,009
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	12,413	$	1,929	$	535	$	253	$	774	$	15,904
Loans Receivable as of December 31, 2021:
Ending balance of originated loans	$	883,430	$	142,894	$	67,726	$	24,444	$	—	$	1,118,494
Ending balance of purchased credit-impaired loans	9,060		1,101		1,044		—		—		11,205
Ending balance of other acquired loans	142,339		18,515		26,091		401		—		187,346
Ending balance of loans	$	1,034,829	$	162,510	$	94,861	$	24,845	$	—	$	1,317,045
Ending balance: individually evaluated for impairment	$	21,792	$	3,337	$	7,007	$	257	$	—	$	32,393
Ending balance: collectively evaluated for impairment	$	1,013,037	$	159,173	$	87,854	$	24,588	$	—	$	1,284,652

Loans receivable by loan type as of the end of the periods shown below were as follows:

	Commercial/Agricultural Real Estate Loans				C&I/Agricultural Operating				Residential Mortgage				Consumer Installment				Totals
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Performing loans
Performing TDR loans	$	2,085	$	4,618	$	608	$	649	$	2,924	$	2,681	$	28	$	36	$	5,645	$	7,984
Performing loans other	1,021,686		1,021,346		149,894		160,570		83,604		90,591		22,581		24,729		1,277,765		1,297,236
Total performing loans	1,023,771		1,025,964		150,502		161,219		86,528		93,272		22,609		24,765		1,283,410		1,305,220
Nonperforming loans (1)
Nonperforming TDR loans	3,502		3,389		639		554		443		593		2		3		4,586		4,539
Nonperforming loans other	5,584		5,476		709		737		1,289		996		88		77		7,670		7,286
Total nonperforming loans	9,086		8,865		1,348		1,291		1,732		1,589		90		80		12,256		11,825
Total loans	$	1,032,857	$	1,034,829	$	151,850	$	162,510	$	88,260	$	94,861	$	22,699	$	24,845	$	1,295,666	$	1,317,045

(1)Nonperforming loans are either 90+ days past due or nonaccrual.

As of March 31, 2022 the Company had $288,001 in unused commitments, compared to $270,985 in unused commitments as of December 31, 2021.

29

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of March 31, 2022 and December 31, 2021, respectively, was as follows:

	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Greater Than 89 Days Past Due and Accruing		Total Past Due and Accruing		Nonaccrual Loans		Total Past Due Accruing and Nonaccrual Loans		Current		Total Loans
March 31, 2022
Commercial/Agricultural real estate:
Commercial real estate	$	1,996	$	—	$	—	$	1,996	$	5,503	$	7,499	$	682,275	$	689,774
Agricultural real estate	895		—		—		895		3,454		4,349		71,367		75,716
Multi-family real estate	—		—		—		—		—		—		179,487		179,487
Construction and land development	—		—		—		—		129		129		87,751		87,880
C&I/Agricultural operating:
Commercial and industrial	—		—		—		—		284		284		120,738		121,022
C&I SBA PPP loans	—		—		—		—		—		—		2,071		2,071
Agricultural operating	1,645		—		—		1,645		1,064		2,709		26,048		28,757
Residential mortgage:
Residential mortgage	1,444		392		398		2,234		1,334		3,568		81,205		84,773
Purchased HELOC loans	—		—		—		—		—		—		3,487		3,487
Consumer installment:
Originated indirect paper	39		—		—		39		60		99		14,409		14,508
Other consumer	38		3		—		41		30		71		8,120		8,191
Total	$	6,057	$	395	$	398	$	6,850	$	11,858	$	18,708	$	1,276,958	$	1,295,666
December 31, 2021
Commercial/Agricultural real estate:
Commercial real estate	$	36	$	—	$	—	$	36	$	5,374	$	5,410	$	693,055	$	698,465
Agricultural real estate	498		4		—		502		3,490		3,992		74,503		78,495
Multi-family real estate	—		—		—		—		—		—		178,349		178,349
Construction and land development	—		—		—		—		—		—		79,520		79,520
C&I/Agricultural operating:
Commercial and industrial	—		32		—		32		298		330		121,837		122,167
SBA PPP loans	—		—		—		—		—		—		8,755		8,755
Agricultural operating	1,123		—		—		1,123		993		2,116		29,472		31,588
Residential mortgage:
Residential mortgage	1,471		487		156		2,114		1,268		3,382		87,608		90,990
Purchased HELOC loans	117		—		—		117		165		282		3,589		3,871
Consumer installment:
Originated indirect paper	38		27		—		65		55		120		15,851		15,971
Other consumer	58		10		4		72		22		94		8,780		8,874
Total	$	3,341	$	560	$	160	$	4,061	$	11,665	$	15,726	$	1,301,319	$	1,317,045

30

At March 31, 2022, the Company individually evaluated loans for impairment with a recorded investment of $33,741, consisting of (1) $10,719 purchased credit impaired (“PCI”) loans, with a carrying amount of $10,210; (2) $6,716 TDR loans, net of TDR PCI loans; and (3) $16,815 of substandard non-TDR, non-PCI loans. The $33,741 total of loans individually evaluated for impairment includes $5,645 of performing TDR loans. At December 31, 2021, the Company individually evaluated loans for impairment with a recorded investment of $31,740, consisting of (1) $11,205 PCI loans, with a carrying amount of $10,552; (2) $9,860 TDR loans, net of TDR PCI loans; and (3) $11,328 of substandard non-TDR, non-PCI loans. The $31,740 total of loans individually evaluated for impairment includes $7,984 of performing TDR loans. A loan is identified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis.

A summary of the Company’s loans individually evaluated for impairment as of March 31, 2022, December 31, 2021 and March 31, 2021 was as follows:

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2022
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	13,840	$	14,116	$	—	$	16,626	$	136
C&I/Agricultural operating	6,015		6,167		—		5,319		50
Residential mortgage	6,447		6,528		—		6,882		71
Consumer installment	210		210		—		258		2
Total	$	26,512	$	27,021	$	—	$	29,085	$	259
With An Allowance Recorded:
Commercial/Agricultural real estate	$	6,481	$	6,481	$	1,280	$	5,285	$	11
C&I/Agricultural operating	438		438		373		415		10
Residential mortgage	310		310		69		600		1
Consumer installment	—		—		—		1		—
Total	$	7,229	$	7,229	$	1,722	$	6,301	$	22
March 31, 2022 Totals:
Commercial/Agricultural real estate	$	20,321	$	20,597	$	1,280	$	21,911	$	147
C&I/Agricultural operating	6,453		6,605		373		5,734		60
Residential mortgage	6,757		6,838		69		7,482		72
Consumer installment	210		210		—		259		2
Total	$	33,741	$	34,250	$	1,722	$	35,386	$	281

31

							Twelve Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	15,521	$	15,905	$	—	$	19,412	$	964
C&I/Agricultural operating	3,153		3,337		—		4,622		146
Residential mortgage	6,221		6,306		—		7,316		316
Consumer installment	256		256		—		306		85
Total	$	25,151	$	25,804	$	—	$	31,656	$	1,511
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,887	$	5,887	$	797	$	4,089	$	62
C&I/Agricultural operating	—		—		99		391		84
Residential mortgage	701		701		113		890		17
Consumer installment	1		1		—		2		—
Total	$	6,589	$	6,589	$	1,009	$	5,372	$	163
December 31, 2021 Totals
Commercial/Agricultural real estate	$	21,408	$	21,792	$	797	$	23,501	$	1,026
C&I/Agricultural operating	3,153		3,337		99		5,013		230
Residential mortgage	6,922		7,007		113		8,206		333
Consumer installment	257		257		—		308		85
Total	$	31,740	$	32,393	$	1,009	$	37,028	$	1,674

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	19,064	$	19,714	$	—	$	21,183	$	239
C&I/Agricultural operating	5,924		6,118		—		6,007		70
Residential mortgage	8,069		8,191		—		8,240		80
Consumer installment	255		255		—		306		3
Total	$	33,312	$	34,278	$	—	$	35,736	$	392
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,234	$	5,234	$	1,094	$	3,762	$	62
C&I/Agricultural operating	79		79		10		430		—
Residential mortgage	652		652		157		866		8
Consumer installment	—		—		—		1		—
Total	$	5,965	$	5,965	$	1,261	$	5,059	$	70
March 31, 2021 Totals:
Commercial/Agricultural real estate	$	24,298	$	24,948	$	1,094	$	24,945	$	301
C&I/Agricultural operating	6,003		6,197		10		6,437		70
Residential mortgage	8,721		8,843		157		9,106		88
Consumer installment	255		255		—		307		3
Total	$	39,277	$	40,243	$	1,261	$	40,795	$	462

32

Troubled Debt Restructuring – A TDR includes a loan modification where a borrower is experiencing financial difficulty, and the Bank grants a concession to that borrower that the Bank would not otherwise consider, except for the borrower’s financial difficulties. Concessions may include: extension of the loan’s term, renewals of existing balloon loans, reductions in interest rates and consolidating existing Bank loans at modified terms. A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status. There were no delinquent accruing TDR loan greater than 60 days past due at March 31, 2022, compared to one such loan with a recorded investment of $4 at December 31, 2021.

Following is a summary of TDR loans by accrual status as of March 31, 2022 and December 31, 2021.

	March 31, 2022		December 31, 2021
Troubled debt restructure loans:
Accrual status	$	5,645	$	7,984
Non-accrual status	4,586		4,539
Total	$	10,231	$	12,523

There was one loan commitment for $27 meeting our TDR criteria as of March 31, 2022 and no loan commitments meeting our TDR criteria as of December 31, 2021. There were unused lines of credit totaling $49 and $10 meeting our TDR criteria as of March 31, 2022 and December 31, 2021, respectively.

The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three months ended March 31, 2022 and March 31, 2021:     

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2022
TDRs:
Commercial/Agricultural real estate	4	$	1,241	$	—	$	—	$	—	$	1,241	$	1,241	$	—
C&I/Agricultural operating	1	—		—		150		—		150		150		—
Residential mortgage	4	31		—		507		—		538		538		—
Consumer installment	—	—		—		—		—		—		—		—
Totals	9	$	1,272	$	—	$	657	$	—	$	1,929	$	1,929	$	—

33

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2021
TDRs:
Commercial/Agricultural real estate	2	$	38	$	81	$	—	$	—	$	119	$	119	$	—
C&I/Agricultural operating	1	—		—		240		—		240		240		—
Residential mortgage	2	66		—		14		—		80		80		—
Consumer installment	1	6		—		—		—		6		6		—
Totals	6	$	110	$	81	$	254	$	—	$	445	$	445	$	—

A summary of loans by loan segment modified in a troubled debt restructuring as of March 31, 2022 and March 31, 2021, was as follows:

	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	20	$	5,587	30	$	8,656
C&I/Agricultural operating	7	1,247		14	4,800
Residential mortgage	42	3,367		52	3,937
Consumer installment	6	30		9	49
Total troubled debt restructurings	75	$	10,231	105	$	17,442

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2022 and March 31, 2021, as well as the recorded investment in these restructured loans as of March 31, 2022 and March 31, 2021:

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	—	$	—	—	$	—
C&I/Agricultural operating	—	—		—	—
Residential mortgage	—	—		1	19
Consumer installment	—	—		—	—
Total troubled debt restructurings	—	$	—	1	$	19

34

All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
Accountable for under ASC 310-30 (Purchased Credit Impaired “PCI” loans)
Outstanding balance	$	10,719	$	11,205
Carrying amount	$	10,210	$	10,552
Accountable for under ASC 310-20 (non-PCI loans)
Outstanding balance	$	174,282	$	187,346
Carrying amount	$	171,524	$	184,399
Total acquired loans
Outstanding balance	$	185,001	$	198,551
Carrying amount	$	181,734	$	194,951

The table below shows scheduled accretion by year for the accretable difference recognized due to fair value purchase accounting on recent whole bank acquisitions. In addition, the Company has $1.66 million of accretable discount from purchased impaired loans with the original non-accretable discount transferred to accretable discount. The scheduled accretion on this balance is estimated to be $100 per year; however, large balance payoffs, as seen in 2021 and 2020, would accelerate this accretion.

Fiscal years ending December 31,	Purchase Accounting Accretable Discount
2022	$	594
2023	279
2024	131
2025	96
Total	$	1,100

The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:

	March 31, 2022		December 31, 2021
Balance at beginning of period	$	653	$	1,087
Additions to non-accretable difference for acquired purchased credit impaired loans	—		—
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans	(26)		(105)
Transfers from non-accretable difference to accretable discount	(86)		(329)
Non-accretable difference used to reduce loan principal balance	(32)		—
Balance at end of period	$	509	$	653

35

NOTE 4 – MORTGAGE SERVICING RIGHTS

Mortgage servicing rights--Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid balances of these loans as of March 31, 2022 and December 31, 2021 were $552,236 and $556,086, respectively, and consisted of one to four family residential real estate loans. These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the Federal National Mortgage Association. Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $4,748 and $2,781 at March 31, 2022 and December 31, 2021, respectively.

Mortgage servicing rights activity for the three month periods ended March 31, 2022 and March 31, 2021 were as follows:

	As of and for the Three Months Ended		As of and for the Three Months Ended
	March 31, 2022		March 31, 2021
Mortgage servicing rights:
Mortgage servicing rights, beginning of period	$	4,727	$	5,266
Increase in mortgage servicing rights resulting from transfers of financial assets	126		297
Amortization during the period	(239)		(439)
Mortgage servicing rights, end of period	4,614		5,124
Valuation allowance:
Valuation allowance, beginning of period	(566)		(2,014)
Additions	—		—
Recoveries	566		889
Valuation allowance, end of period	—		(1,125)
Mortgage servicing rights, net	$	4,614	$	3,999
Fair value of mortgage servicing rights; end of period	$	5,267	$	4,005

The current period change in valuation allowance is included in non-interest expense as mortgage servicing rights expense, net on the consolidated statement of operations. Servicing fees totaled $351 and $352 for the three months ended March 31, 2022 and March 31, 2021, respectively, and are included in loan servicing income on the consolidated statement of operations. Late fees and ancillary fees related to loan servicing are not material.

To estimate the fair value of the MSR asset, a valuation model is applied at the loan level to calculate the present value of the expected future cash flows. The valuation model incorporates various assumptions that would impact market participants’ estimations of future servicing income. Central to the valuation model is the discount rate. Fair value at both March 31, 2022 and March 31, 2021, was determined using discount rates ranging from 9% to 12%. Other assumptions utilized in the valuation model include, but are not limited to, prepayment speed, servicing costs, delinquencies, costs of advances, foreclosure costs, ancillary income, and income earned on float and escrow.

36

NOTE 5 – LEASES

We have operating leases for our corporate offices (1), bank branch offices (5), and an ATM location (1). Our leases have remaining lease terms ranging from approximately 1.00 to 6.25 years, some of which include options to extend the leases for up to 5 additional years. As of March 31, 2022, we have no additional lease commitments that have not yet commenced. The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.

	Three Months Ended
	March 31, 2022			March 31, 2021
The components of total lease cost were as follows:
Operating lease cost	$	139		$	139
Variable lease cost	10			7
Total lease cost	$	149		$	146
The components of total lease income were as follows:
Operating lease income	$	9		$	7
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	139		$	138
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	—
	March 31, 2022			December 31, 2021
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	$	2,034		$	2,159
Operating lease liabilities	$	2,104		$	2,228
Weighted average remaining lease term in years; operating leases	5.36			5.55
Weighted average discount rate; operating leases	2.75		%	2.73		%

37

Cash obligations and receipts under lease contracts are as follows:

Fiscal years ending December 31,	Payments		Receipts
2022	$	420	$	26
2023	506		27
2024	419		10
2025	403		—
2026	346
Thereafter	480
Total	2,574		$	63
Less: effects of discounting	(470)
Lease liability recognized	$	2,104

38

NOTE 6 – DEPOSITS

The following is a summary of deposits by type at March 31, 2022 and December 31, 2021, respectively: 

	March 31, 2022		December 31, 2021
Non-interest bearing demand deposits	$	269,481	$	276,631
Interest bearing demand deposits	423,251		396,231
Savings accounts	241,072		222,674
Money market accounts	321,409		288,985
Certificate accounts	173,010		203,014
Total deposits	$	1,428,223	$	1,387,535

At March 31, 2022, the scheduled maturities of time deposits were as follows for the year ended, except December 31, 2022 which is the nine months ended:

December 31, 2022	$	128,883
December 31, 2023	27,613
December 31, 2024	7,508
December 31, 2025	7,264
December 31, 2026	1,398
After December 31, 2027	344
Total	$	173,010

Time deposits of $250 or more were $19,762 and $22,381 at March 31, 2022 and December 31, 2021, respectively. Brokered deposits were $11 at both March 31, 2022 and December 31, 2021, respectively.

39

NOTE 7 – FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS

A summary of Federal Home Loan Bank advances and other borrowings at March 31, 2022 and December 31, 2021 is as follows:

		March 31, 2022						December 31, 2021
	Stated Maturity	Amount		Range of Stated Rates				Amount		Range of Stated Rates
Federal Home Loan Bank advances (1), (2), (3), (4)	2022	$	—	—	%	—	%	$	11,000	2.45	%	2.45	%
	2023	5,000		1.43	%	1.44	%	20,000		1.43	%	1.44	%
	2024	20,530		0.00	%	1.45	%	20,530		0.00	%	1.45	%
	2025	5,000		1.45	%	1.45	%	5,000		1.45	%	1.45	%
	2029	42,500		1.00	%	1.13	%	42,500		1.00	%	1.13	%
	2030	12,500		0.52	%	0.86	%	12,500		0.52	%	0.86	%
Subtotal		85,530						111,530
Unamortized discount on acquired notes		—						(3)
Federal Home Loan Bank advances, net		$	85,530					$	111,527
Senior Notes (5)	2034	$	23,250	3.00	%	3.00	%	$	28,856	3.00	%	3.50	%
Subordinated Notes (6)	2027	$	15,000	6.75	%	6.75	%	$	15,000	6.75	%	6.75	%
	2030	15,000		6.00	%	6.00	%	15,000		6.00	%	6.00	%
	2032	35,000		4.75	%	4.75	%	—		—	%	—	%
		$	65,000					$	30,000
Unamortized debt issuance costs		(1,188)						(430)
Total other borrowings		$	87,062					$	58,426
Totals		$	172,592					$	169,953

(1)    The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $931,498 and $861,900 at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $240,412 compared to $204,271 as of December 31, 2021.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $111,530 and $123,530, during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively.

(3) There are no FHLB borrowings maturing within twelve months of March 31, 2022. The weighted-average interest rate on FHLB borrowings maturing within twelve months as of December 31, 2021 was 2.45%.

(4)    FHLB term notes totaling $55,000 can be called or replaced by the FHLB on a quarterly basis, and if not called, will mature at various dates in 2029 and 2030.

(5)    Senior notes, entered into by the Company in June 2019 consist of the following:

(a) A term note, which was subsequently refinanced in March 2022, requiring quarterly interest-only payments through March 2025, and quarterly principal and interest payments thereafter. Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 3.00%.

(b) A $5,000 line of credit, maturing in August 2022, that remains undrawn upon.

40

(6)    Subordinated notes resulted from the following:

(a) The Company’s private sale in August 2017, which bears a fixed interest rate of 6.75% for five years. In August 2022, they convert to a three-month LIBOR plus 4.90% rate, and the interest rate will reset quarterly thereafter. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due quarterly.

(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00% for five years. In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

(c) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in March 2022, which bears a fixed interest rate of 4.75% for five years. In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 329 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

Federal Home Loan Bank Letters of Credit

The Bank has an irrevocable Standby Letter of Credit Master Reimbursement Agreement with the Federal Home Loan Bank. This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest bearing deposit balances. These balances were $209,400 and $176,150 at March 31, 2022 and December 31, 2021, respectively.

Federal Reserve Bank Paycheck Protection Program Liquidity Facility (“FRB PPPLF”) Program

The Bank has originated Small Business Administration’s Paycheck Protection Program (“SBA PPP”) loans and has complied with the requirements to pledge these loans to the FRB PPPLF program which provides 100% funding for SBA PPP loans upon request. This FRB PPPLF program expired on July 30, 2021. The Bank had no outstanding loan balances under this facility at March 31, 2022 and December 31, 2021. There were no month-end borrowed amounts outstanding under this agreement during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively. In July 2021, the Bank pledged these SBA PPP loans to the FHLB.

41

NOTE 8 - CAPITAL MATTERS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Although these terms are not used to represent overall financial condition, if adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At March 31, 2022, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio			Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	207,760	14.9	%	$	111,180	> =	8.0	%		$	138,975	> =	10.0	%
Tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	83,385	> =	6.0	%	10	111,180		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	62,539	> =	4.5	%		90,334		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	190,942		11.1	%	68,584		> =	4.0	%		85,729		> =	5.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	187,783	13.4	%	$	111,694	> =	8.0	%		$	139,618	> =	10.0	%
Tier 1 capital (to risk weighted assets)	170,870		12.2	%	83,771		> =	6.0	%		111,694		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	170,870		12.2	%	62,828		> =	4.5	%		90,752		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	170,870		10.0	%	68,323		> =	4.0	%		85,403		> =	5.0	%

42

The Company’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	219,277	15.8	%	111,180		> =	8.0	%
Tier 1 capital (to risk weighted assets)	137,459		9.9	%	83,385		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	137,459		9.9	%	62,539		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	137,459		8.0	%	68,584		> =	4.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	182,242	13.1	%	$	111,694	> =	8.0	%
Tier 1 capital (to risk weighted assets)	135,329		9.7	%	83,771		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	135,329		9.7	%	62,828		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	135,329		7.9	%	68,323		> =	4.0	%

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NOTE 9 – STOCK-BASED COMPENSATION

On March 27, 2018, the stockholders of Citizens Community Bancorp, Inc. approved the 2018 Equity Incentive Plan. The aggregate number of shares of common stock reserved and available for issuance under the 2018 Equity Incentive Plan is 350,000 shares. As of March 31, 2022, 214,394 restricted shares had been granted under this plan. This amount includes 11,834 shares of performance based restricted stock granted in 2019 and issued in January 2022 upon achievement of the performance criteria and completion of the three year performance period beginning in January 2019 and ending December 31, 2021. As of March 31, 2022, no stock options had been granted under this plan.

In February 2008, the Company’s stockholders approved the Company’s 2008 Equity Incentive Plan for a term of 10 years. Due to the plan’s expiration, no new awards can be granted under this plan. As of March 31, 2022, there are 400 awarded unvested restricted shares and 63,400 awarded unexercised options remaining from the plan. Restricted shares granted under the 2008 Equity Incentive Plan were awarded at no cost to the employee and vest pro rata over a two to five-year period from the grant date. Options granted to date under this plan vest pro rata over a five-year period from the grant date. Unexercised incentive stock options expire within 10 years of the grant date.

Net compensation expense related to restricted stock awards from these plans was $195 for the three months ended March 31, 2022, compared to $171 for the three months ended March 31, 2021.

Restricted Common Stock Award

	March 31, 2022			December 31, 2021
	Number of Shares	Weighted Average Grant Price		Number of Shares	Weighted Average Grant Price
Restricted Shares
Unvested and outstanding at beginning of year	75,630	$	11.20	57,242	$	12.23
Granted	38,586	14.00		64,399	10.78
Vested	(23,649)	11.12		(44,511)	13.26
Forfeited	—	—		(1,500)	10.78
Unvested and outstanding at end of period	90,567	$	12.41	75,630	$	11.20

The Company accounts for stock option-based employee compensation related to the Company’s 2008 Equity Incentive Plan and 2018 Equity Incentive Plan using the fair-value-based method. Accordingly, management records compensation expense based on the value of the award as measured on the grant date and then the Company recognizes that cost over the vesting period for the award. The compensation cost recognized for stock option-based employee compensation related to these plans for the three month period ended March 31, 2022 was $1. The compensation cost recognized for stock option-based employee compensation related to these plans for the three month period ended March 31, 2021 was $3.

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Common Stock Option Awards

	Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
March 31, 2022
Outstanding at beginning of year	65,900	$	11.20
Exercised	(2,500)	8.00
Forfeited or expired	—	—
Outstanding at end of period	63,400	$	11.33	4.52	$	240
Exercisable at end of period	59,200	$	11.16	4.45	$	234
December 31, 2021
Outstanding at beginning of year	72,300	$	11.05
Exercised	(5,800)	8.99
Forfeited or expired	(600)	13.76
Outstanding at end of year	65,900	$	11.20	4.61	$	169
Exercisable at end of year	61,700	$	11.03	4.54	$	169

Information related to the 2008 Equity Incentive Plan for the respective periods follows:

	Three months ended March 31, 2022		Twelve months ended December 31, 2021
Intrinsic value of options exercised	$	19	$	28
Cash received from options exercised	$	20	$	52
Tax benefit realized from options exercised	$	—	$	—

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NOTE 10 – FAIR VALUE ACCOUNTING

ASC Topic 820-10, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:

Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3- Significant unobservable inputs that reflect the Company’s assumptions about the factors that market participants would use in pricing an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.

The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).

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Assets Measured on a Recurring Basis

The following tables present the financial instruments measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Investment securities:
U.S. government agency obligations	$	23,881	$	—	$	23,881	$	—
Mortgage-backed securities	95,551		—		95,551		—
Corporate debt securities	35,946		—		35,946		—
Corporate asset-backed securities	32,527		—		32,527		—
Total investment securities	187,905		—		187,905		—
Equity Investments:
Equity Investments	331		331		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,291		331		—		—
Total	$	189,196	$	331	$	187,905	$	—
December 31, 2021
Investment securities:
U.S. government agency obligations	$	26,265	$	—	$	26,265	$	—
Obligations of states and political subdivisions	140		—		140		—
Mortgage-backed securities	107,167		—		107,167		—
Corporate debt securities	35,588		—		35,588		—
Corporate asset backed securities	33,908		—		33,908		—
Total investment securities	203,068		—		203,068		—
Equity Investments:
Equity Investments	368		368		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,328		368		—		—
Total	$	204,396	$	368	$	203,068	$	—

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

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Assets Measured on Nonrecurring Basis

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021:

	Carrying Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	$	—	$	—	$	1,368
Impaired loans with allocated allowances	5,507		—		—		5,507
Mortgage servicing rights	4,614		—		—		5,267
Total	$	11,489	$	—	$	—	$	12,142
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	$	—	$	—	$	1,408
Impaired loans with allocated allowances	5,580		—		—		5,580
Mortgage servicing rights	4,161		—		—		4,312
Total	$	11,149	$	—	$	—	$	11,300

The fair value of impaired loans referenced above was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans.

The fair value of foreclosed and repossessed assets was determined by obtaining market price valuations from independent third parties wherever such quotes were available for other collateral owned. The Company utilized independent third party appraisals to support the Company’s estimates and judgments in determining fair value for other real estate owned.

The fair value of mortgage servicing rights was estimated using discounted cash flows based on current market rates and other factors.

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The following table represents additional quantitative information about assets measured at fair value on a

recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at

March 31, 2022.

	Fair Value		Valuation Techniques (1)	Significant Unobservable Inputs (2)	Range
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,507	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	5,267	Discounted cash flows	Discounted rates	9% - 12%
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,580	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	4,312	Discounted cash flows	Discounted rates	9% - 12%

(1)     Fair value is generally determined through independent third-party appraisals of the underlying

    collateral, which generally includes various level 3 inputs which are not observable.

(2)     The fair value basis of impaired loans and real estate owned may be adjusted to reflect management

    estimates of disposal costs including, but not limited to, real estate brokerage commissions, legal fees,

    and delinquent property taxes.

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The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:

		March 31, 2022				December 31, 2021
	Valuation Method Used	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	(Level I)	$	84,364	$	84,364	$	47,691	$	47,691
Other interest-bearing deposits	(Level II)	1,511		1,527		1,511		1,535
Securities available for sale “AFS”	(Level II)	187,905		187,905		203,068		203,068
Securities held to maturity “HTM”	(Level II)	104,894		95,975		71,141		69,177
Equity investments	(Level I)	331		331		368		368
Equity investments valued at NAV(1)	N/A	960		960		960		960
Other investments	(Level II)	15,084		15,084		15,305		15,305
Loans receivable, net	(Level III)	1,273,358		1,343,482		1,294,050		1,319,293
Loans held for sale	(Level II)	2,528		2,528		6,670		6,670
Mortgage servicing rights	(Level III)	4,614		5,267		4,161		4,312
Accrued interest receivable	(Level I)	4,179		4,179		3,916		3,916
Financial liabilities:
Deposits	(Level III)	$	1,428,223	$	1,428,630	$	1,387,535	$	1,388,390
FHLB advances	(Level II)	85,530		85,039		111,527		113,285
Other borrowings	(Level I)	87,062		87,062		58,426		58,426
Accrued interest payable	(Level I)	375		375		586		586

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

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NOTE 11—EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares outstanding for the period. A reconciliation of the basic and diluted earnings per share is as follows:

	Three Months Ended
(Share count in thousands)	March 31, 2022		March 31, 2021
Basic
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Basic earnings per share	$	0.45	$	0.50
Diluted
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Add: Dilutive stock options outstanding	14		6
Average shares and dilutive potential common shares	10,541		10,986
Diluted earnings per share	$	0.45	$	0.50
Additional common stock option shares that have not been included due to their antidilutive effect	—		22,400

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NOTE 12 – OTHER COMPREHENSIVE INCOME (LOSS)

The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three months ended
	March 31, 2022						March 31, 2021
	Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount		Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount
Unrealized losses on securities:
Net unrealized losses arising during the period	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)
Other comprehensive loss	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2021 and the three months ended March 31, 2022 were as follows:

	Unrealized Gains (Losses) on AFS Securities		Other Accumulated Comprehensive Income (Loss), net of tax
Beginning Balance, January 1, 2021	$	2,056	$	1,490
Current year-to-date other comprehensive loss	(1,834)		(1,329)
Ending balance, December 31, 2021	$	222	$	161
Current year-to-date other comprehensive loss	(9,824)		(7,123)
Ending balance, March 31, 2022	$	(9,602)	$	(6,962)

There were no reclassifications out of accumulated other comprehensive income (loss) for either of the three month periods ended March 31, 2022 or March 31, 2021, respectively.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the Company intends that these forward-looking statements be covered by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “estimates”, “intend,” “may,” “preliminary,” “planned,” “potential,” “should,” “will,” “would,” or the negative of those terms or other words of similar meaning. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are inherently subject to many uncertainties in the Company’s operations and business environment.

Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 2, 2022 (“2021 10-K”), the matters described in “Risk Factors” in Item 1A of this Form 10-Q, and the following:

•conditions in the financial markets and economic conditions generally;

•adverse impacts to the Company or Bank arising from the COVID-19 pandemic;

•acts of terrorism and political or military actions by the United States or other governments;

•the possibility of a deterioration in the residential real estate markets;

•interest rate risk;

•lending risk;

•higher lending risks associated with our commercial and agricultural banking activities;

•the sufficiency of loan allowances;

•changes in the fair value or ratings downgrades of our securities;

•competitive pressures among depository and other financial institutions;

•disintermediation risk;

•our ability to maintain our reputation;

•our ability to maintain or increase our market share;

•our ability to realize the benefits of net deferred tax assets;

•our inability to obtain needed liquidity;

•our ability to raise capital needed to fund growth or meet regulatory requirements;

•our ability to attract and retain key personnel;

•our ability to keep pace with technological change;

•prevalence of fraud and other financial crimes;

•cybersecurity risks;

•the possibility that our internal controls and procedures could fail or be circumvented;

•our ability to successfully execute our acquisition growth strategy;

•risks posed by acquisitions and other expansion opportunities, including difficulties and delays in integrating the acquired business operations or fully realizing the cost savings and other benefits;

•restrictions on our ability to pay dividends;

•the potential volatility of our stock price;

•accounting standards for loan losses;

•legislative or regulatory changes or actions, or significant litigation, adversely affecting the Company or Bank;

•public company reporting obligations;

•changes in federal or state tax laws; and

•changes in accounting principles, policies or guidelines and their impact on financial performance.

Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this filing and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances occurring after the date of this report.

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GENERAL

The following discussion sets forth management’s discussion and analysis of our consolidated financial condition as of March 31, 2022, and our consolidated results of operations for the three months ended March 31, 2022, compared to the same period in the prior fiscal year for the three months ended March 31, 2021. This discussion should be read in conjunction with the interim consolidated financial statements and the condensed notes thereto included with this report and with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes related thereto included in our 2021 10-K. Unless otherwise stated, all monetary amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, other than share, per share and capital ratio amounts, are stated in thousands.

CRITICAL ACCOUNTING ESTIMATES

Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amount of assets, liabilities, revenue, expenses, and their related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that our management believes to be relevant at the time our consolidated financial statements are prepared. Some of these estimates are more critical than others. In addition to the policies included in Note 1, “Nature of Business and Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included as an exhibit in our annual report on our 2021 10-K, our critical accounting estimates are as follows:

Allowance for Loan Losses.

We maintain an allowance for loan losses to absorb probable and inherent losses in our loan portfolio. The allowance is based on ongoing, quarterly assessments of the estimated probable incurred losses in our loan portfolio. In evaluating the level of the allowance for loan loss, we consider the types of loans and the amount of loans in our loan portfolio, historical loss experience, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, prevailing economic conditions and other relevant factors determined by management. We follow all applicable regulatory guidance, including the “Interagency Policy Statement on the Allowance for Loan and Lease Losses,” issued by the Federal Financial Institutions Examination Council (FFIEC). We believe that the Bank’s Allowance for Loan Losses Policy conforms to all applicable regulatory requirements. However, based on periodic examinations by regulators, the amount of the allowance for loan losses recorded during a particular period may be adjusted.

Our determination of the allowance for loan losses is based on (1) specific allowances for specifically identified and evaluated impaired loans and their corresponding estimated loss based on likelihood of default, payment history, and net realizable value of underlying collateral. Specific allocations for collateral dependent loans are based on fair value of the underlying collateral relative to the unpaid principal balance of individually impaired loans. For loans that are not collateral dependent, the specific allocation is based on the present value of expected future cash flows discounted at the loan’s original effective interest rate through the repayment period; and (2) a general allowance on loans not specifically identified in (1) above, based on historical loss ratios, which are adjusted for qualitative and general economic factors. We continue to refine our allowance for loan losses methodology, with an increased emphasis on historical performance adjusted for applicable economic and qualitative factors.

Assessing the allowance for loan losses is inherently subjective as it requires making material estimates, including the amount and timing of future cash flows expected to be received on impaired loans, any of which estimates may be susceptible to significant change. In our opinion, the allowance, when taken as a whole, reflects estimated probable loan losses in our loan portfolio.

Goodwill.

We account for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. The Company amortizes acquired intangible assets with definite useful economic lives over their useful economic lives utilizing the straight-line method. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. The Company does not amortize goodwill, but reviews goodwill for impairment at a reporting unit level on an annual basis, or when events or changes in circumstances indicate that the carrying amounts may be impaired. A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete,

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discrete financial information is available and reviewed regularly by the segment’s management. The Company has one reporting unit as of March 31, 2022, which is related to its banking activities. The Company performed the required goodwill impairment test and determined that goodwill was not impaired as of December 31, 2021.

Fair Value Measurements and Valuation Methodologies.

We apply various valuation methodologies to assets and liabilities which often involve a significant degree of judgment, particularly when liquid markets do not exist for the particular items being valued. Quoted market prices are referred to when estimating fair values for certain assets, such as most investment securities. However, for those items for which an observable liquid market does not exist, management utilizes significant estimates and assumptions to value such items. Examples of these items include loans, deposits, borrowings, goodwill, core deposit intangible assets, other assets and liabilities obtained or assumed in business combinations, and certain other financial instruments. These valuations require the use of various assumptions, including, among others, discount rates, rates of return on assets, repayment rates, cash flows, default rates, and liquidation values. The use of different assumptions could produce significantly different results, which could have material positive or negative effects on the Company’s results of operations, financial condition or disclosures of fair value information.

In addition to valuation, the Company must assess whether there are any declines in value below the carrying value of assets that should be considered other than temporary or otherwise require an adjustment in carrying value and recognition of a loss in the consolidated statement of operations. Examples include but are not limited to; loans, investment securities, goodwill, core deposit intangible assets and deferred tax assets, among others. Specific assumptions, estimates and judgments utilized by management are discussed in detail herein in management’s discussion and analysis of financial condition and results of operations and in notes 1, 2, 3, 4 and 10 of Condensed Notes to Consolidated Financial Statements.

Income Taxes.

Amounts provided for income tax expenses are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities, which arise principally from temporary differences between the amounts reported in the financial statements and the tax basis of certain assets and liabilities, are included in the amounts provided for income taxes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and tax planning strategies which will create taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and if necessary, tax planning strategies in making this assessment.

The assessment of tax assets and liabilities involves the use of estimates, assumptions, interpretations, and judgments concerning certain accounting pronouncements and application of specific provisions of federal and state tax codes. There can be no assurance that future events, such as court decisions or positions of federal and state taxing authorities, will not differ from management’s current assessment, the impact of which could be material to our consolidated results of operations and reported earnings. We believe that the deferred tax assets and liabilities are adequate and properly recorded in the accompanying consolidated financial statements. As of March 31, 2022, management does not believe a valuation allowance related to the realizability of its deferred tax assets is necessary.

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STATEMENT OF OPERATIONS ANALYSIS

Net Interest Income. Net interest income represents the difference between the dollar amount of interest earned on interest-bearing assets and the dollar amount of interest paid on interest-bearing liabilities. The interest income and expense of financial institutions (including those of the Bank) are significantly affected by general economic conditions, competition, policies of regulatory authorities and other factors.

Interest rate spread and net interest margin are used to measure and explain changes in net interest income. Interest rate spread is the difference between the yield on interest earning assets and the rate paid for interest-bearing liabilities that fund those assets. Net interest margin is expressed as the percentage of net interest income to average interest earning assets. Net interest margin currently exceeds interest rate spread because non-interest-bearing sources of funds (“net free funds”), principally demand deposits and stockholders’ equity, also support interest earning assets. The narrative below discusses net interest income, interest rate spread, and net interest margin for the three-month periods ended March 31, 2022, and March 31, 2021, respectively.

Net interest income was $13.2 million for the three months ended March 31, 2022, compared to $12.8 million for the three months ended March 31, 2021. Net interest income for the three months ended March 31, 2022, increased from the same period one year ago due to: 1) both the organic loan and investment growth from March 31, 2021; 2) the increase in loans as a percentage of total interest-earning assets, partially due to lower levels of low-yielding cash and cash equivalent; and 3) lower liability costs. This was partially offset by a $1.5 million dollar decrease in the accretion of deferred fees related to SBA Paycheck Protection Program (“SBA PPP”) loans for the quarter ended March 31, 2022, compared to the prior year quarter.

The net interest margin for the three-month period ended March 31, 2022, was 3.25%, compared to 3.31% for the three-month period ended March 31, 2021. The net interest margin decrease was due to a 36-basis point decrease in SBA PPP deferred loan fee accretion in loan yields, partially offset by 1) the positive impact of investing lower yield cash into investment securities, 2) lower liability costs, and 3) the favorable impact of lower yielding deposits increasing as a percentage of interest-bearing liabilities.

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Average Balances, Net Interest Income, Yields Earned and Rates Paid. The following net interest income analysis table presents interest income from average interest earning assets, expressed in dollars and yields, and interest expense on average interest-bearing liabilities, expressed in dollars and rates on a tax equivalent basis. Shown below is the weighted average tax equivalent yield on interest earning assets, rates paid on interest-bearing liabilities and the resultant spread at or during the three-month periods ended March 31, 2022, and March 31, 2021. Non-accruing loans have been included in the table as loans carrying a zero yield.

NET INTEREST INCOME ANALYSIS ON A TAX EQUIVALENT BASIS

(Dollar amounts in thousands)

Three months ended March 31, 2022 compared to the three months ended March 31, 2021:

	Three months ended March 31, 2022						Three months ended March 31, 2021
	Average Balance		Interest Income/ Expense		Average Yield/ Rate (1)		Average Balance		Interest Income/ Expense		Average Yield/ Rate (1)
Average interest earning assets:
Cash and cash equivalents	$	35,208	$	13	0.15	%	$	129,642	$	29	0.09	%
Loans	1,304,141		13,767		4.28	%	1,213,562		14,517		4.85	%
Interest-bearing deposits	1,511		8		2.15	%	3,437		20		2.36	%
Investment securities (1)	288,261		1,416		1.99	%	202,981		885		1.77	%
Other investments	15,258		172		4.57	%	15,038		169		4.56	%
Total interest earning assets (1)	$	1,644,379	$	15,376	3.79	%	$	1,564,660	$	15,620	4.05	%
Average interest-bearing liabilities:
Savings accounts	$	224,557	$	94	0.17	%	$	197,647	$	83	0.17	%
Demand deposits	410,890		217		0.21	%	330,674		251		0.31	%
Money market	299,004		216		0.29	%	254,120		202		0.32	%
CD’s	161,203		464		1.17	%	266,044		1,043		1.59	%
IRA’s	37,067		77		0.84	%	40,877		135		1.34	%
Total deposits	$	1,132,721	$	1,068	0.38	%	$	1,089,362	$	1,714	0.64	%
FHLB Advances and other borrowings	166,118		1,141		2.79	%	180,635		1,142		2.56	%
Total interest-bearing liabilities	$	1,298,839	$	2,209	0.69	%	$	1,269,997	$	2,856	0.91	%
Net interest income			$	13,167					$	12,764
Interest rate spread					3.10	%					3.14	%
Net interest margin (1)					3.25	%					3.31	%
Average interest earning assets to average interest-bearing liabilities					1.27						1.23

(1) Fully taxable equivalent (FTE). The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21.0% for the quarters ended March 31, 2022 and March 31, 2021. The FTE adjustment to net interest income included in the rate calculations totaled $1 thousand for both the three months ended March 31, 2022 and March 31, 2021, respectively.

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Rate/Volume Analysis. The following table presents the dollar amount of changes in interest income and interest expense for the components of interest earning assets and interest-bearing liabilities that are presented in the preceding table. For each category of interest earning assets and interest-bearing liabilities, information is provided on changes attributable to: (1) changes in volume, which are changes in the average outstanding balances multiplied by the prior period rate (i.e., holding the initial rate constant); and (2) changes in rate, which are changes in average interest rates multiplied by the prior period volume (i.e., holding the initial balance constant). Rate changes have been discussed previously in the net interest income section above. For the three months ended March 31, 2022, compared to the same periods in 2021, the loan volume increased due to strong organic growth. Investment securities volume increases are due to an increase in portfolio balances, largely due to purchases of mortgage-backed securities. The decrease in certificate volumes is due to CD shrinkage.

RATE / VOLUME ANALYSIS

(Dollar amounts in thousands)

Three months ended March 31, 2022 compared to the three months ended March 31, 2021.

	Increase (decrease) due to
	Volume			Rate		Net
Interest income:
Cash and cash equivalents	$	(32)		$	16	$	(16)
Loans	1,036			(1,786)		(750)
Interest-bearing deposits	(10)			(2)		(12)
Investment securities	405			126		531
Other investments	2			1		3
Total interest earning assets	1,401			(1,645)		(244)
Interest expense:
Savings accounts	11			—		11
Demand deposits	54			(88)		(34)
Money market accounts	34			(20)		14
CD’s	(333)			(246)		(579)
IRA’s	(12)			(46)		(58)
Total deposits	(246)			(400)		(646)
FHLB Advances and other borrowings	(96)		0	95		(1)
Total interest bearing liabilities	(342)			(305)		(647)
Net interest income	$	1,743		$	(1,340)	$	403

Provision for Loan Losses. We determine our provision for loan losses (“provision”) based on our desire to provide an adequate allowance for loan losses (“ALL”) to reflect probable and inherent credit losses in our loan portfolio. We continue to monitor adverse general economic conditions that could affect our commercial and agricultural portfolios in the future.

Total provision for loan losses for both the three months ended March 31, 2022, and March 31, 2021, was $0. The ALL and related need for provision for loan losses for the three months ended March 31, 2022, was positively impacted by reductions in the allocation of the allowance for loan losses for general economic conditions utilizing a Q-factor and the impact of lower loan deferral balances associated with Section 4013 of the Cares Act. These positive impacts offset increases in specific reserve and modest net loan charge offs. Note that in discussing ALL allocations, the entire ALL balance is available for any loan that, in management’s judgment, should be charged off. The ALL and related need for no provision was due to loan shrinkage and low net charge-offs.

Management believes that the provision recorded for the current year three-month period is adequate in view of the present condition of our loan portfolio and the sufficiency of collateral supporting our non-performing loans. We continually monitor non-performing loan relationships and will adjust our provision, as necessary, if changing facts and circumstances require a change in the ALL. In addition, a decline in the quality of our loan portfolio as a result of general economic conditions, factors affecting particular borrowers or our market areas, or otherwise, could all affect the adequacy of our ALL. If there are significant charge-offs against the ALL, or we otherwise determine that the ALL is inadequate, we will need to record an additional provision in the future.

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Non-interest Income. The following table reflects the various components of non-interest income for the three month periods ended March 31, 2022 and 2021, respectively.

	Three months ended March 31,
	2022		2021		% Change
Non-interest Income:
Service charges on deposit accounts	$	488	$	398	22.61	%
Interchange income	549		530		3.58	%
Loan servicing income	701		893		(21.50)	%
Gain on sale of loans	722		1,595		(54.73)	%
Loan fees and service charges	92		278		(66.91)	%
Net gains (losses) on investment securities	(37)		235		N/M
Other	198		247		(19.84)	%
Total non-interest income	$	2,713	$	4,176	(35.03)	%

Service charges on deposit accounts increased modestly to $488 for the three months ended March 31, 2022, from $398 for the prior year quarter due to higher customer spending activity during the quarter.

Loan servicing income decreased with reduced capitalization of mortgage servicing rights due to lower mortgage loan origination fees in the three-month period ended March 31, 2022.

Gain on sale of loans decreased in the current three-month period ended March 31, 2022, compared to March 31, 2021, due to lower mortgage loan origination volumes, partially offset by a modest increase on the gain on sale of SBA loans.

The change in loan fees and service charges for the three ended March 31, 2022, is largely due to decreases in commercial loan-related customer activity

The change in net gains (losses) on investment securities between the three-month period ended March 31, 2022 and the three-month period ended March 31, 2021, is primarily due to the corresponding change in unrealized gains/losses on equity securities with readily determinable fair value.

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Non-interest Expense. The following table reflects the various components of non-interest expense for the three-month periods ended March 31, 2022 and 2021, respectively.

	Three months ended March 31,
	2022			2021			% Change
Non-interest Expense:
Compensation and related benefits	$	5,398		$	5,569		(3.07)	%
Occupancy	1,365			1,316			3.72	%
Data processing	1,301			1,370			(5.04)	%
Amortization of intangible assets	399			399			—	%
Mortgage servicing rights expense, net	(327)			(450)			27.33	%
Advertising, marketing and public relations	212			163			30.06	%
FDIC premium assessment	115			165			(30.30)	%
Professional services	402			502			(19.92)	%
Gains on repossessed assets, net	(7)			(117)			94.02	%
New market tax credit depletion	163			—			NM
Other	647			572			13.11	%
Total non-interest expense	$	9,668		$	9,489		1.89	%
Non-interest expense (annualized) / Average assets	2.24		%	2.29		%	(2.17)	%

Compensation expense for the three-month period ended March 31, 2022, was lower than the comparable prior year period due to 1) lower variable mortgage production compensation related to lower mortgage loan origination activity; and 2) lower incentive compensation based on performance metrics, including items such as net income and loan growth.

Net mortgage servicing rights expense increased during the three months ended March 31, 2022, compared to the comparable prior year period. This increase is primarily due to the reversal of previously recognized impairment charges of $1.3 million in 2021, resulting largely from the impact of lower future forecasted prepayment rates. Approximately 30% of this impairment reversal occurred in the third quarter of 2021 and 70% in the first quarter of 2021.

The FDIC insurance premium decreased during the three months ended March 31, 2022, from the comparable prior year period due to the favorable impact of increased bank capital ratios.

Professional services costs decreased due to the need for fewer outside professionals.

Net gains on repossessed assets decreased due to fewer and lower value repossessed property sales resulting in lower corresponding gains on sale.

In the first quarter of 2022, the bank invested $4.1 million in a New Market Tax Credit. The related non-tax-deductible asset depletion will occur over a 5-year period in lockstep with the recognition of the tax credit.

Income Taxes. Income tax expense was $1.5 million for the three months ended March 31, 2022, compared to $1.9 million for the three months March 31, 2021. The effective tax rate was 24.2% for the three-month period ended March 31, 2022, compared to 26.1% for the comparable prior year period. The lower effective tax rate is due to the impact of the New Markets Tax Credit. The lower tax expense is due to both the lower effective tax rate and lower pre-tax income.

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BALANCE SHEET ANALYSIS

Cash and Cash Equivalents. This balance increased $36.7 million in the first quarter of 2022 as the net cash increase resulting from deposit growth and loan shrinkage was not yet fully invested in our securities portfolios.

Investment Securities. We manage our securities portfolio to provide liquidity and enhance income. Our investment portfolio is comprised of securities available for sale and securities held to maturity.

Securities available for sale, which represent the majority of our investment portfolio, were $187.9 million at March 31, 2022, compared with $203.1 million at December 31, 2021. The decrease in the available for sale portfolio is due to unrealized losses of $9.8 million and principal repayments.

Securities held to maturity increased to $104.9 million at March 31, 2022, compared to $71.1 million at December 31, 2021. This increase was largely due to the purchase of agency mortgage-backed securities, net of repayments. The unrealized loss on this portfolio increased by $7.0 million in the quarter.

The amortized cost and market values of our available for sale securities by asset categories as of the dates indicated below were as follows:

Available for sale securities	Amortized Cost		Fair Value
March 31, 2022
U.S. government agency obligations	$	23,686	$	23,881
Obligations of states and political subdivisions	—		—
Mortgage-backed securities	103,723		95,551
Corporate debt securities	37,087		35,946
Corporate asset-backed securities	33,011		32,527
Totals	$	197,507	$	187,905
December 31, 2021
U.S. government agency obligations	$	25,826	$	26,265
Obligations of states and political subdivisions	140		140
Mortgage-backed securities	107,636		107,167
Corporate debt securities	35,342		35,588
Corporate asset-backed securities	33,902		33,908
Totals	$	202,846	$	203,068

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The amortized cost and fair value of our held to maturity securities by asset categories as of the dates noted below were as follows:

Held to maturity securities	Amortized Cost		Fair Value
March 31, 2022
Obligations of states and political subdivisions	$	4,600	$	4,568
Mortgage-backed securities	100,294		91,407
Totals	$	104,894	$	95,975
December 31, 2021
Obligations of states and political subdivisions	$	4,600	$	4,593
Mortgage-backed securities	66,541		64,584
Totals	$	71,141	$	69,177

The composition of our available for sale portfolios by credit rating as of the dates indicated below was as follows:

	March 31, 2022				December 31, 2021
Available for sale securities	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. government agency	$	125,149	$	117,194	$	131,115	$	131,008
AAA	9,617		9,426		9,662		9,710
AA	25,654		25,339		26,727		26,762
A	5,700		5,559		5,700		5,720
BBB	31,387		30,387		29,642		29,868
Non-rated	—		—		—		—
Total available for sale securities	$	197,507	$	187,905	$	202,846	$	203,068

The composition of our held to maturity portfolio by credit rating as of the dates indicated was as follows:

	March 31, 2022				December 31, 2021
Held to maturity securities	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. government agency	$	100,294	$	91,407	$	66,541	$	64,584
AAA	—		—		—		—
AA	4,000		3,999		4,000		4,000
A	600		569		600		593
Total	$	104,894	$	95,975	$	71,141	$	69,177

As of March 31, 2022, the Bank has pledged U.S. Government Agency securities with a carrying value of $3.6 million and mortgage-backed securities with a carrying value of $2.6 million as collateral against specific municipal deposits. At March 31, 2022, the Bank has pledged mortgage-backed securities with a carrying value of $5.8 million as collateral against a borrowing line of credit with the Federal Reserve Bank. However, as of March 31, 2022, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of March 31, 2022, the Bank also has mortgage-backed securities with a carrying value of $0.2 million pledged as collateral to the Federal Home Loan Bank of Des Moines.

As of December 31, 2021, the Bank has pledged certain of its U.S. Government Agency securities with a carrying value of $3.9 million and mortgage-backed securities with a carrying value of $2.9 million as collateral against specific municipal deposits. At December 31, 2021, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $0.8 million as collateral to secure a line of credit with the Federal Reserve Bank. However, as of December 31, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2021, the Bank also has mortgage-backed securities with a carrying value of $0.3 million pledged as collateral to the Federal Home Loan Bank of Des Moines.

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Loans. Total loans outstanding, net of deferred loan fees and costs and unamortized discount on acquired loans, decreased by $20.8 million, to $1.29 billion as of March 31, 2022, from $1.31 billion at December 31, 2021. The originated loan portfolio, before SBA PPP loans, decreased $1.1 million in the three-month period. We experienced approximately $27 million of loan payoffs in the originated loan portfolio during the quarter ended March 31, 2022, that we expected to be received in the fourth quarter of 2021. Total SBA PPP loans decreased $6.7 million, entirely due to debt forgiveness. Acquired loans decreased by $13.6 million. The following table reflects the composition, or mix, of our loan portfolio at March 31, 2022, and December 31, 2021:

	March 31, 2022				December 31, 2021
	Amount		Percent		Amount		Percent
Real estate loans:
Commercial/Agricultural real estate
Commercial real estate	$	689,774	53.5	%	$	698,465	53.3	%
Agricultural real estate	75,716		5.9	%	78,495		6.0	%
Multi-family real estate	179,487		13.9	%	178,349		13.6	%
Construction and land development	87,880		6.8	%	79,520		6.1	%
Residential mortgage
Residential mortgage	84,773		6.6	%	90,990		6.9	%
Purchased HELOC loans	3,487		0.3	%	3,871		0.3	%
Total real estate loans	1,121,117		87.0	%	1,129,690		86.2	%
C&I/Agricultural operating and Consumer Installment Loans:
C&I/Agricultural operating
Commercial and industrial (“C&I”)	121,022		9.4	%	122,167		9.3	%
Agricultural operating	28,757		2.2	%	31,588		2.4	%
Consumer installment							—	%
Originated indirect paper	14,508		1.1	%	15,971		1.2	%
Other consumer	8,191		0.6	%	8,874		0.7	%
Total C&I/Agricultural operating and Consumer installment Loans	172,478		13.3	%	178,600		13.6	%
Gross loans before C&I SBA PPP loans	1,293,595		100.3	%	1,308,290		99.8	%
SBA PPP loans	2,071		0.2	%	8,755		0.7	%
Gross loans	$	1,295,666	100.5	%	$	1,317,045	100.5	%
Unearned net deferred fees and costs and loans in process	(2,223)		(0.2)	%	(2,482)		(0.2)	%
Unamortized discount on acquired loans	(3,267)		(0.3)	%	(3,600)		(0.3)	%
Total loans (net of unearned income and deferred expense)	1,290,176		100.0	%	1,310,963		100.0	%
Allowance for loan losses	(16,818)				(16,913)
Total loans receivable, net	$	1,273,358			$	1,294,050

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The following table summarizes SBA PPP loans by origination year at March 31, 2022:

	2020 Originations				2021 Originations				Total
	Balance		Net Deferred Fee Income		Balance		Net Deferred Fee Income		Balance		Net Deferred Fee Income
SBA PPP loans, January 1, 2021	$	123,702	$	2,991	$	—	$	—	$	123,702	$	2,991
2021 SBA PPP loan originations	—		—		55,854		3,494		55,854		3,494
Less: 2021 SBA PPP loan forgiveness and fee accretion	(121,574)		(2,987)		(49,227)		(3,201)		(170,801)		(6,188)
SBA PPP loans, December 31, 2021	2,128		4		6,627		293		8,755		297
Less: 2022 SBA PPP loan forgiveness and fee accretion	(886)		(3)		(5,798)		(255)		(6,684)		(258)
SBA PPP loans, March 31, 2022	$	1,242	$	1	$	829	$	38	$	2,071	$	39

Allowance for Loan Losses. The loan portfolio is our primary asset subject to credit risk. To address this credit risk, we maintain an ALL for probable and inherent credit losses through periodic charges to our earnings. These charges are shown in our consolidated statements of operations as PLL. See “Provision for Loan Losses” earlier in this quarterly report. We attempt to control, monitor, and minimize credit risk through the use of prudent lending standards, a thorough review of potential borrowers prior to lending and ongoing and timely review of payment performance. Asset quality administration, including early identification of loans performing in a substandard manner, as well as timely and active resolution of problems, further enhances management of credit risk and minimization of loan losses. Any losses that occur and that are charged off against the ALL are periodically reviewed with specific efforts focused on achieving maximum recovery of both principal and interest.

At least quarterly, we review the adequacy of the ALL. Based on an estimate computed pursuant to the requirements of ASC 450-10, “Accounting for Contingencies” and ASC 310-10, “Accounting by Creditors for Impairment of a Loan”, the analysis of the ALL consists of three components: (i) specific credit allocation established for expected losses relating to specific impaired loans for which the recorded investment in the loan exceeds its fair value; (ii) general portfolio allocation based on historical loan loss experience for significant loan categories; and (iii) general portfolio allocation based on qualitative factors such as economic conditions and other relevant factors specific to the markets in which we operate. We continue to refine our ALL methodology by introducing a greater level of granularity to our loan portfolio. We currently segregate loans into pools based on common risk characteristics for purposes of determining the ALL. The additional segmentation of the portfolio is intended to provide a more effective basis for the determination of qualitative factors affecting our ALL. In addition, management continually evaluates our ALL methodology to assess whether modifications in our methodology are appropriate in light of underwriting practices, market conditions, identifiable trends, regulatory pronouncements or other factors. We believe that any modifications or changes to the ALL methodology would be to enhance the ALL. However, any such modifications could result in materially different ALL levels in future periods.

The specific credit allocation for the ALL is based on a regular analysis of all loans that are considered impaired. In compliance with ASC 310-10, the fair value of the loan is determined based on either the present value of expected cash flows discounted at the loan’s effective interest rate, the market price of the loan, or, if the loan is collateral dependent, the fair value of the underlying collateral less the expected cost of sale for such collateral. At March 31, 2022, the Company individually evaluated loans for impairment with a recorded investment of $33.7 million, consisting of (1) $10.7 million purchased credit impaired (“PCI”) loans, with a carrying amount of $10.2 million; (2) $6.7 million TDR loans, net of TDR PCI loans; and (3) $16.8 million of substandard non-TDR, non-PCI loans. The $33.7 million total of loans individually evaluated for impairment includes $5.6 million of performing TDR loans. At December 31, 2021, the Company individually evaluated loans for impairment with a recorded investment of $31.7 million, consisting of (1) $11.2 million PCI loans, with a carrying amount of $10.6 million; (2) $9.9 million TDR loans, net of TDR PCI loans; and (3) $11.3 million of substandard non-TDR, non-PCI loans. The $31.7 million total of loans individually evaluated for impairment includes $8.0 million of performing TDR loans. At March 31, 2022, and December 31, 2021, we had 237 and 235 loans individually evaluated for impairment, respectively, all secured by real estate or personal property. Of the originated loans individually evaluated for impairment, there were 13 loans where the estimated fair value was less than their book value (i.e., we deemed impairment to exist) totaling $7.2 million for which $1.7 million in specific ALL was recorded as of March 31, 2022.

The allowance for loan losses modestly decreased $0.1 million to $16.8 million at March 31, 2022, representing 1.31% of loans receivable, less the 100% SBA guaranteed PPP loans. A portion of the current loan portfolio includes loans purchased through whole bank acquisitions in recent years resulting in purchased credit impairments which are not included in the allowance for loan losses. As the originated portfolio grows and the acquired portfolio shrinks, the percentage of originated loans to total loans grows, as does the overall percentage of the allowance to total loans. The allowance for loan losses was

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$16.9 million at December 31, 2021, representing 1.30% of loans receivable, less the 100% SBA guaranteed PPP loans. The decrease in the allowance at March 31, 2022, was due to modest loan charge-offs.

Allowance for Loan Losses to Loans, net of SBA PPP Loans

(in thousands, except ratios)

	March 31, 2022			December 31, 2021
Loans, end of period	$	1,290,176		$	1,310,963
SBA PPP loans, net of deferred fees	(2,032)			(8,457)
Loans, net of SBA PPP loans and deferred fees	$	1,288,144		$	1,302,506
Allowance for loan losses	$	16,818		$	16,913
ALL to loans net of SBA PPP loans and deferred fees	1.31		%	1.30		%
ALL to loans, end of period	1.30		%	1.29		%

All of the nine factors identified in the FFIEC’s Interagency Policy Statement on the Allowance for Loan and Lease Losses are taken into account in determining the ALL. The impact of the factors in general categories are subject to change; thus, the allocations are management’s estimate of the loan loss categories in which the probable and inherent loss has occurred as of the date of our assessment. Of the nine factors, we believe the following have the greatest impact on our customers’ ability to repay loans and our ability to recover potential losses through collateral sales: (1) lending policies and procedures; (2) economic and business conditions; and (3) the value of the underlying collateral. As loan balances and estimated losses in a particular loan type decrease or increase and as the factors and resulting allocations are monitored by management, changes in the risk profile of the various parts of the loan portfolio may be reflected in the allocated allowance. The general component covers non-impaired loans and is based on historical loss experience adjusted for these and other qualitative factors. In addition, management continues to refine the ALL estimation process as new information becomes available. These refinements could also cause increases or decreases in the ALL. See Provision for loan losses in the Consolidated Statements of Operations (unaudited) for further details. The unallocated portion of the ALL is intended to account for imprecision in the estimation process or relevant current information that may not have been considered in the process.

Nonperforming Loans, Potential Problem Loans and Foreclosed Properties. We practice early identification of nonaccrual and problem loans in order to minimize the Bank’s risk of loss. Nonperforming loans are defined as nonaccrual loans and restructured loans that were 90 days or more past due at the time of their restructure, or when management determines that such classification is warranted. The accrual of interest income is discontinued on our loans according to the following schedule:

•Commercial/agricultural real estate loans, past due 90 days or more;

•C&I/Agricultural operating loans, past due 90 days or more;

•Closed ended consumer installment loans past due 120 days or more; and

•Residential mortgage loans and open-ended consumer installment loans past due 180 days or more.

When interest accruals are discontinued, interest credited to income is reversed. If collection is in doubt, cash receipts on non-accrual loans are used to reduce principal rather than being recorded as interest income. A TDR typically involves the granting of some concession to the borrower involving a loan modification, such as modifying the payment schedule or making interest rate changes. TDR loans may involve loans that have had a charge-off taken against the loan to reduce the carrying amount of the loan to fair market value as determined pursuant to ASC 310-10.

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The following table identifies the various components of nonperforming assets and other balance sheet information as of the dates indicated below and changes in the ALL for the periods then ended:

	March 31, 2022 and Three Months Then Ended			December 31, 2021 and Twelve Months Then Ended
Nonperforming assets:
Nonaccrual loans
Commercial real estate	$	5,503		$	5,374
Agricultural real estate	3,454			3,490
Construction and land development	129			—
Commercial and industrial	284			298
Agricultural operating	1,064			993
Residential mortgage	1,334			1,433
Consumer installment	90			77
Total nonaccrual loans	$	11,858		$	11,665
Accruing loans past due 90 days or more	398			160
Total nonperforming loans (“NPLs”)	12,256			11,825
Other real estate owned	1,360			1,406
Other collateral owned	8			2
Total nonperforming assets (“NPAs”)	$	13,624		$	13,233
Troubled Debt Restructurings (“TDRs”)	$	10,231		$	12,523
Accruing TDR's	$	5,645		$	7,984
Nonaccrual TDRs	$	4,586		$	4,539
Average outstanding loan balance	$	1,304,141		$	1,216,244
Loans, end of period	$	1,290,176		$	1,310,963
Total assets, end of period	$	1,775,469		$	1,739,628
ALL, at beginning of period	$	16,913		$	17,043
Loans charged off:
Commercial/Agricultural real estate	(35)			(251)
C&I/Agricultural operating	(63)			(7)
Residential mortgage	(12)			—
Consumer installment	(9)			(81)
Total loans charged off	(119)			(339)
Recoveries of loans previously charged off:
Commercial/Agricultural real estate	3			28
C&I/Agricultural operating	10			123
Residential mortgage	1			13
Consumer installment	10			45
Total recoveries of loans previously charged off:	24			209
Net loans charged off (“NCOs”)	(95)			(130)
Additions to ALL via provision for loan losses charged to operations	—			—
ALL, at end of period	$	16,818		$	16,913
Ratios:
ALL to NCOs (annualized)	4,365.16		%	13,010.00		%
NCOs (annualized) to average loans	0.03		%	0.08		%
ALL to total loans	1.30		%	1.29		%
NPLs to total loans	0.95		%	0.90		%
NPAs to total assets	0.77		%	0.76		%

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The following table shows the detail of non-performing assets by originated and acquired portfolios:

Nonperforming Originated / Acquired Assets

(in thousands, except ratios)

	March 31, 2022			December 31, 2021
Nonperforming assets:
Originated nonperforming assets:
Nonaccrual loans	$	6,602		$	6,448
Accruing loans past due 90 days or more	398			63
Total originated nonperforming loans (“NPL”)	7,000			6,511
Other real estate owned (“OREO”)	—			—
Other collateral owned	8			2
Total originated nonperforming assets (“NPAs”)	$	7,008		$	6,513
Acquired nonperforming assets:
Nonaccrual loans	$	5,256		$	5,217
Accruing loans past due 90 days or more	—			97
Total acquired nonperforming loans (“NPL”)	5,256			5,314
Other real estate owned (“OREO”)	1,360			1,406
Other collateral owned	—			—
Total acquired nonperforming assets (“NPAs”)	$	6,616		$	6,720
Total nonperforming assets (“NPAs”)	$	13,624		$	13,233
Loans, end of period	$	1,290,176		$	1,310,963
Total assets, end of period	$	1,775,469		$	1,739,628
Ratios:
Originated NPLs to total loans	0.54		%	0.50		%
Acquired NPLs to total loans	0.41		%	0.41		%
Originated NPAs to total assets	0.39		%	0.37		%
Acquired NPAs to total assets	0.37		%	0.39		%

Nonperforming assets increased by $0.4 million to $13.6 million at March 31, 2022 from December 31, 2021. This increase is largely due to an increase in accruing loans past due 90 days or more. Refer to the “Allowance for Loan Losses” and “Nonperforming Loans, Potential Problem Loans and Foreclosed Properties” sections above for more information related to nonperforming loans.

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Nonaccrual Loans Roll forward:

	Quarter Ended
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Balance, beginning of period	$	11,665	$	11,706	$	8,075	$	8,678	$	10,747
Additions	720		428		4,859		863		430
Acquired nonaccrual loans	—		—		—		—		—
Charge offs	(15)		(1)		(24)		(58)		(205)
Transfers to OREO	—		(19)		—		—		(45)
Return to accrual status	(51)		(30)		—		(696)		(291)
Payments received	(461)		(422)		(1,202)		(712)		(1,935)
Other, net	—		3		(2)		—		(23)
Balance, end of period	$	11,858	$	11,665	$	11,706	$	8,075	$	8,678

Nonaccrual TDR loans increased to $4.6 million at March 31, 2022 from $4.5 million at December 31, 2021.

Accruing troubled debt restructurings decreased $2.4 million to $5.6 million largely due to the payoff of a $3.5 million loan, partially offset by modest additions.

	March 31, 2022			December 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings: Accrual Status
Commercial/Agricultural real estate	10	$	2,085	11	$	4,618
C&I/Agricultural operating	2	608		3	649
Residential mortgage	35	2,924		36	2,681
Consumer installment	5	28		6	36
Total loans	52	$	5,645	56	$	7,984

Classified assets increased to $24.8 million at March 31, 2022, from $22.8 million at December 31, 2021, largely due to the new classification of $3.8 million in five agricultural relationships, with residential non-performing loans (nonaccrual and ninety days delinquent) and other smaller relationships offsetting the payoff of a substandard accruing troubled debt restructuring of $3.5 million. Nonperforming assets increased to $13.6 million or 0.77% of total assets at March 31, 2022 compared to $13.2 million, or 0.76% of total assets at December 31, 2021. Included in nonperforming assets at March 31, 2022, are $6.6 million of nonperforming assets acquired during recent whole-bank acquisitions.

The table below shows a summary of criticized loans for the past five quarters, with the decrease largely due to decreases in special mention loans. See Note 3, “Loans, Allowance for Loan Losses and Impaired Loans” for additional information.

	(in thousands)
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Special mention loan balances	$	1,849	$	4,536	$	2,548	$	12,308	$	13,659
Substandard loan balances	24,822		22,817		27,137		25,890		26,064
Criticized loans, end of period	$	26,671	$	27,353	$	29,685	$	38,198	$	39,723

Hotels and restaurants represent our portfolio’s two industry sectors most directly and adversely affected by the recent pandemic and related government actions. These sector loans totaled approximately $96 million and $47 million, respectively, at March 31, 2022. The weighted-average loan-to-value percentage and debt service coverage ratio on these hotel industry

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sector loans were 58% and 2.5 times, respectively. Approximately $33.8 million of restaurant sector loans are to franchise quick-service restaurants.

As of March 31, 2022, the Bank had $0.4 million of remaining residential mortgage loan modifications, due to pandemic-related borrower requests. As of March 31, 2022, all previously deferred commercial loans have exited deferral status. While the Company has no indication that any of the modified credits are specifically impaired, additional risk and uncertainty inherent in the current pandemic-affected environment have been considered. See “Allowance for Loan Losses” section above for discussion of pandemic-related qualitative factor, and related provision for loan losses.

Accretable difference:

The table below shows scheduled accretion by year for the accretable difference recognized due to fair value purchase accounting on recent whole bank acquisitions. In addition, the Company has $1.65 million of accretable discount from purchased impaired loans with the original non-accretable discount transferred to accretable discount. The scheduled accretion on this balance is estimated to be $100 thousand per year; however, large balance payoffs, as seen in 2021 and 2020, would accelerate this accretion.

Fiscal years ending December 31,	Purchase Accounting Accretable Difference
2022	$	594
2023	279
2024	131
2025	96
Total	1,100

Mortgage Servicing Rights. Mortgage servicing rights (“MSR”) assets are initially measured at fair value; assessed at least quarterly for impairment; carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded in non-interest expense in the consolidated statement of operations. The valuation of MSRs and related amortization thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs. Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

The fair market value of the Company’s MSR asset increased from $4.3 million at December 31, 2021, to $5.3 million at March 31, 2022, primarily due to higher future forecasted interest rates and resulting lower forecasted prepayments. As a result, $0.6 million of previously recorded impairments on the MSR asset was reversed during the three-month period ended March 31, 2022. At March 31, 2022, the Company had no MSR impairment, or related valuation allowance.

The unpaid balances of one- to four-family residential real estate loans serviced for others as of March 31, 2022, and December 31, 2021, were $552.2 million and $556.1 million, respectively. The fair market value of the Company’s MSR asset as a percentage of its servicing portfolio at March 31, 2022, and December 31, 2021, was 0.95% and 0.78%, respectively.

Deposits. Deposits increased $40.7 million to $1.43 billion at March 31, 2022, from $1.39 billion at December 31, 2021. The increase was due in part to seasonal factors related to taxes and two large retail and one large commercial deposit. These large deposits totaling $19 million are approximately evenly split between retail and commercial deposits and are expected to decrease substantially over the next three quarters. This growth was partially offset by retail certificates of deposit decreasing by $30.0 million, as the Company chose not to match higher rate local retail certificate competition. Some of the decrease in retail certificates has moved to money markets.

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The following is a summary of deposits by type at March 31, 2022 and December 31, 2021, respectively:

	March 31, 2022		December 31, 2021
Non-interest bearing demand deposits	$	269,481	$	276,631
Interest bearing demand deposits	423,251		396,231
Savings accounts	241,072		222,674
Money market accounts	321,409		288,985
Certificate accounts	173,010		203,014
Total deposits	$	1,428,223	$	1,387,535

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Federal Home Loan Bank (FHLB) advances (borrowings) and Other Borrowings. A summary of Federal Home Loan Bank (FHLB) advances and other borrowings at March 31, 2022 and December 31, 2021 is as follows:

		March 31, 2022						December 31, 2021
	Stated Maturity	Amount		Range of Stated Rates				Amount		Range of Stated Rates
Federal Home Loan Bank advances (1), (2), (3), (4)	2022	$	—	—	%	—	%	$	11,000	2.45	%	2.45	%
	2023	5,000		1.43	%	1.44	%	20,000		1.43	%	1.44	%
	2024	20,530		—	%	1.45	%	20,530		—	%	1.45	%
	2025	5,000		1.45	%	1.45	%	5,000		1.45	%	1.45	%
	2029	42,500		1.00	%	1.13	%	42,500		1.00	%	1.13	%
	2030	12,500		0.52	%	0.86	%	12,500		0.52	%	0.86	%
Subtotal		85,530						111,530
Unamortized discount on acquired notes		—						(3)
Federal Home Loan Bank advances, net		$	85,530					$	111,527
Senior Notes (5)	2034	$	23,250	3.00	%	3.00	%	$	28,856	3.00	%	3.50	%
Subordinated Notes (6)	2027	$	15,000	6.75	%	6.75	%	$	15,000	6.75	%	6.75	%
	2030	15,000		6.00	%	6.00	%	15,000		6.00	%	6.00	%
	2032	35,000		4.75	%	4.75	%	—		—	%	—	%
		$	65,000					$	30,000
Unamortized debt issuance costs		(1,188)						(430)
Total other borrowings		$	87,062					$	58,426
Totals		$	172,592					$	169,953

(1)    The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $931,498 and $861,900 at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $240,412 compared to $204,271 as of December 31, 2021.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $111,530 and $123,530, during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively.

(3) There are no FHLB borrowings maturing within twelve months of March 31, 2022. The weighted-average interest rate on FHLB borrowings maturing within twelve months as of and December 31, 2021 was 2.45%.

(4)    FHLB term notes totaling $55,000 can be called or replaced by the FHLB on a quarterly basis, and if not called, will mature at various dates in 2029 and 2030.

(5)    Senior notes, entered into by the Company in June 2019 consist of the following:

(a) A term note, which was subsequently refinanced in March 2022, requiring quarterly interest-only payments through March 2025, and quarterly principal and interest payments thereafter. Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 3.00%.

(b) A $5,000 line of credit, maturing in August 2022, that remains undrawn upon.

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(6)    Subordinated notes resulted from the following:

(a) The Company’s private sale in August 2017, which bears a fixed interest rate of 6.75% for five years. In August 2022, they convert to a three-month LIBOR plus 4.90% rate, and the interest rate will reset quarterly thereafter. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due quarterly.

(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00% for five years. In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

(c) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in March 2022, which bears a fixed interest rate of 4.75% for five years. In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 329 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

FHLB advances decreased $26.0 million to $85.5 million as of March 31, 2022, compared to $111.5 million as of December 31, 2021. The Bank terminated $15.0 million of advances in the quarter ended March 31, 2022, incurring a $0.002 million prepayment penalty, as we modestly reduced excess liquidity. In addition, $11 million of FHLB advances matured in the quarter and were not replaced. The Bank has an irrevocable Standby Letter of Credit Master Reimbursement Agreement with the Federal Home Loan Bank. This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest-bearing deposit balances. The Bank’s current unused borrowing capacity, supported by loan collateral as of March 31, 2022, is approximately $240.4 million.

At both March 31, 2022 and December 31, 2021, the Bank had $55 million of 10-year, three-month callable advances.

See Note 7, “Federal Home Loan Bank and Federal Reserve Bank Advances and Other Borrowings” for more information.

At March 31, 2022, the Bank has pledged $931.5 million of loans to secure the current FHLB outstanding advances and letters of credit and to provide the unused borrowing capacity, compared to $861.9 million of loans pledged at December 31, 2021.

Stockholders’ Equity. Total stockholders’ equity was $165.5 million at March 31, 2022, compared to $170.9 million at December 31, 2021. The decrease in stockholder’s equity was attributable to 1) the $7.1 million decrease in accumulated other comprehensive income, as the previously unrealized gain on available for sale securities of $0.16 million transitioned to a $6.96 million unrealized loss; 2) the payment of the annual cash dividend paid in February to common stockholders of $0.26 per share or $2.7 million, and 3) the repurchase of approximately 18 thousand shares of the Company’s common stock, which reduced equity by $0.3 million. This was partially offset by net income of $4.7 million.

The Company repurchased all remaining authorized shares of the Company’s stock under the November 2020 share repurchase program during the three months ended September 30, 2021. On July 23, 2021, the Board of Directors adopted a new share repurchase program. Under this new share repurchase program, approximately eighteen thousand shares, were repurchased during the quarter ended March 31, 2022. The Company is authorized to repurchase an additional 354 thousand shares under this July 2021 share repurchase program.

Liquidity and Asset / Liability Management. Our primary sources of funds are deposits; contractual amortization, prepayments, and maturities of outstanding loans and investment securities; and borrowings. We use our sources of funds primarily to meet ongoing commitments, to pay non-renewing, maturing certificates of deposit and savings withdrawals, and to fund loan commitments. We have enhanced our liquidity monitoring and updated what we consider to be sources of on-balance sheet cash. We consider our interest-bearing cash and unpledged investment securities to be our sources of on-balance sheet liquidity. At March 31, 2022, our on-balance sheet liquidity ratio was 18.7%. While scheduled payments from the amortization of loans and investment securities and maturing short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are influenced by factors partially outside of the Bank’s control, including general interest rates, economic conditions and competition. Although $149.6 million of our $173.0 million (86.49%) March 31, 2022, CD portfolio matures within the next 12 months, we have historically retained a majority of our maturing CDs. Due to strategic pricing decisions regarding rate matching based on currently liquidity levels, our retention rate may decrease in the future, although some deposits may be retained and moved to money market accounts. At March 31, 2022, the Bank had approximately $72.5

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million of certificate of deposit accounts maturing in the second quarter of 2022, with a weighted average cost of approximately 1.50%, and approximately $56.3 million of certificate of deposit accounts maturing in the second half of 2022. Through new deposit product offerings to our branch and commercial customers, we are currently attempting to strengthen customer relationships to attract additional non-rate sensitive deposits. In our present interest rate environment, and based on maturing yields, this is intended to also reduce our cost of funds.

We maintain access to additional sources of funds including FHLB borrowings and lines of credit with the Federal Reserve Bank and correspondent banks. We utilize FHLB borrowings to leverage our capital base, to provide funds for our lending and investment activities, and to manage our interest rate risk. Our borrowing arrangement with the FHLB calls for pledging certain qualified real estate loans and borrowing up to 75% of the value of those loans, not to exceed 35% of the Bank’s total assets. As of March 31, 2022, we had approximately $240.4 million available under this arrangement, supported by loan collateral, as compared to $204.2 million at December 31, 2021. In July 2021, the Bank pledged the remaining SBA PPP loans to the FHLB. As the SBA PPP loans are forgiven, the collateral will reduce and our borrowing capacity under this facility will be reduced.

We maintain a line of credit with the Federal Reserve Bank which has a $1.0 million capacity, based on our current pledged collateral position. Additionally, we have $25.0 million of uncommitted federal funds purchased lines of credit, as well as a $5.0 million revolving line of credit which is available as needed for general liquidity purposes.

In reviewing our adequacy of liquidity, we review and evaluate historical financial information, including information regarding general economic conditions, current ratios, management goals and the resources available to meet our anticipated liquidity needs. Management believes that our liquidity is adequate. To management’s knowledge, there are no known events or uncertainties that will result, or are likely to reasonably result, in a material increase or decrease in our liquidity.

Off-Balance Sheet Liabilities. Some of our financial instruments have off-balance sheet risk. These instruments include unused commitments for lines of credit, overdraft protection lines of credit and home equity lines of credit, as well as commitments to extend credit. As of March 31, 2022, the Company had $288.0 million in unused commitments, compared to $271.0 million in unused commitments as of December 31, 2021.

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Capital Resources. As of March 31, 2022 and December 31, 2021, as shown in the table below, the Bank’s Tier 1 and Risk-based capital levels exceeded levels necessary to be considered “Well Capitalized” under Prompt Corrective Action provisions.

Below are the amounts and ratios for our capital levels as of the dates noted below for the Bank:

	Actual				For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
As of March 31, 2022 (Unaudited)
Total capital (to risk weighted assets)	$	207,760	14.9	%	$	111,180	> =	8.0	%	$	138,975	> =	10.0	%
Tier 1 capital (to risk weighted assets)	190,942		13.7	%	83,385		> =	6.0	%	111,180		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	190,942		13.7	%	62,539		> =	4.5	%	90,334		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	190,942		11.1	%	68,584		> =	4.0	%	85,729		> =	5.0	%
As of December 31, 2021 (Audited)
Total capital (to risk weighted assets)	$	187,783	13.4	%	$	111,694	> =	8.0	%	$	139,618	> =	10.0	%
Tier 1 capital (to risk weighted assets)	170,870		12.2	%	83,771		> =	6.0	%	111,694		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	170,870		12.2	%	62,828		> =	4.5	%	90,752		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	170,870		10.0	%	68,323		> =	4.0	%	85,403		> =	5.0	%

At March 31, 2022 and December 31, 2021, the Bank was categorized as “Well Capitalized” under Prompt Corrective Action Provisions, as determined by the OCC, our primary regulator.

Below are the amounts and ratios for our capital levels as of the dates noted below for the Company:

	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount			Ratio
As of March 31, 2022 (Unaudited)
Total capital (to risk weighted assets)	$	219,277	15.8	%	$	111,180	> =	8.0	%
Tier 1 capital (to risk weighted assets)	137,459		9.9	%	83,385		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	137,459		9.9	%	62,539		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	137,459		8.0	%	68,584		> =	4.0	%
As of December 31, 2021 (Audited)
Total capital (to risk weighted assets)	$	182,242	13.1	%	$	111,694	> =	8.0	%
Tier 1 capital (to risk weighted assets)	135,329		9.7	%	83,771		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	135,329		9.7	%	62,828		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	135,329		7.9	%	68,323		> =	4.0	%

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our Risk When Interest Rates Change. The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time and are not predictable or controllable.

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Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. Like other financial institutions, our interest income and interest expense are affected by general economic conditions and policies of regulatory authorities, including the monetary policies of the Federal Reserve. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

How We Measure Our Risk of Interest Rate Changes. As part of our attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor our interest rate risk through several means including through the use of third party reporting software. In monitoring interest rate risk we continually analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities, and their sensitivity to actual or potential changes in market interest rates.

In order to manage the potential for adverse effects of material and prolonged increases in interest rates on our results of operations, we adopted asset and liability management policies to better align the maturities and re-pricing terms of our interest earning assets and interest bearing liabilities. These policies are implemented by our Asset and Liability Management Committee (ALCO). The ALCO is comprised of members of the Bank’s senior management and Board of Directors. The ALCO establishes guidelines for and monitors the volume and mix of our assets and funding sources, taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The Committee’s objectives are to manage assets and funding sources to produce results that are consistent with liquidity, cash flow, capital adequacy, growth, risk and profitability goals for the Bank. The ALCO meets on a regularly scheduled basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital position, anticipated changes in the volume and mix of assets and liabilities and interest rate risk exposure limits versus current projections pursuant to net present value of portfolio equity analysis. At each meeting, the Committee recommends strategy changes, as appropriate, based on this review. The Committee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the Bank’s Board of Directors on a regularly scheduled basis.

In managing our assets and liabilities to achieve desired levels of interest rate risk, we have focused our strategies on:

•originating shorter-term secured commercial, agricultural and consumer loan maturities;

•originating variable rate commercial and agricultural loans;

•the sale of a vast majority of longer-term fixed-rate residential loans in the secondary market with retained servicing;

•managing our funding needs growing core deposits;

•utilize brokered certificate of deposits and borrowings as appropriate, which may have fixed rates with varying maturities;

•purchasing investment securities to modify our interest rate risk profile.

At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the ALCO may determine to increase the Bank’s interest rate risk position somewhat in order to maintain or improve its net interest margin.

The following table sets forth, at March 31, 2022 and December 31, 2021 an analysis of our interest rate risk as measured by the estimated changes in Economic Value of Equity (“EVE”) resulting from an immediate and permanent shift in the yield curve (up 300 basis points and down 100 basis points). As of March 31, 2022 and December 31, 2021, due to the current level of interest rates, EVE estimates for decreases in interest rates greater than 100 basis points are not meaningful.

	Percent Change in Economic Value of Equity (EVE)
Change in Interest Rates in Basis Points (“bp”) Rate Shock in Rates (1)	At March 31, 2022		At December 31, 2021
+300 bp	(9)	%	(5)	%
+200 bp	(6)	%	(3)	%
+100 bp	(3)	%	(1)	%
-100 bp	1	%	(1)	%

(1)Assumes an immediate and parallel shift in the yield curve at all maturities.

Our overall interest rate sensitivity is demonstrated by net interest income shock analysis which measures the change in net interest income in the event of hypothetical changes in interest rates. This analysis assesses the risk of change in our net interest income over the next 12 months in the event of an immediate and parallel shift in the yield curve (up 300 basis points

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and down 100 basis points). The table below presents our projected change in net interest income for the various rate shock levels at March 31, 2022, and December 31, 2021.

	Percent Change in Net Interest Income Over One Year Horizon
Change in Interest Rates in Basis Points (“bp”) Rate Shock in Rates (1)	At March 31, 2022		At December 31, 2021
+300 bp	(7)	%	(11)	%
+200 bp	(5)	%	(7)	%
+100 bp	(3)	%	(4)	%
-100 bp	(3)	%	—	%

(1)Assumes an immediate and parallel shift in the yield curve at all maturities.

Note: The table above may not be indicative of future results.

The assumptions used to measure and assess interest rate risk include interest rates, loan prepayment rates, deposit decay (runoff) rates, and the market values of certain assets under differing interest rate scenarios. Actual values may differ from those projections set forth above should market conditions vary from the assumptions used in preparing the analysis. Further, the computations do not contemplate any actions we may undertake in response to changes in interest rates.

ITEM 4.CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have designed our disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives. We carried out an evaluation as of March 31, 2022, under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2022 at reaching a level of reasonable assurance.

There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

In the normal course of business, the Company and/or the Bank occasionally become involved in other various legal proceedings. In our opinion, any liability from such proceedings would not have a material adverse effect on the business or financial condition of the Company.

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Item 1A.RISK FACTORS

The information in this Form 10-Q should be read in conjunction with the risk factors described in “Risk Factors” in Item 1A of our 2021 10-K and the information under “Forward-Looking Statements” in this Form 10-Q and in our 2021 10-K.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)Not applicable.

(b)Not applicable.

(c)Issuer Purchases of Equity Securities.

On November 30, 2020, the Board of Directors adopted a stock repurchase program. Under this program the Company was authorized to repurchase up to approximately 5% of the outstanding shares of its common stock as of November 30, 2020, or 557,728 shares, from time to time. The 36 thousand shares remaining under this authorization as of the beginning of the quarter ended September 30, 2021 were repurchased during the quarter.

On July 23, 2021, the Board of Directors adopted a new share repurchase program. Under this new share repurchase program, the Company may repurchase up to approximately 5% of the outstanding shares of its common stock as of July 23, 2021, or 532,962 shares, from time to time. During the quarter ended March, 2022, approximately 18 thousand shares were repurchased under this authorization. The table below shows information about our repurchases of our common stock during the three months ended March 31, 2022.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2022 - January 31, 2022	—	$	—	—	372,728
February 1, 2022 - February 28, 2022	2,467	$	15.58	2,467	370,261
March 1, 2022 - March 31, 2022	15,995	$	15.55	15,995	354,266
Total	18,462	$	15.56	18,462

Item 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4.MINE SAFETY DISCLOSURES

Not applicable.

Item 5.OTHER INFORMATION

Not applicable.

77

Item 6.EXHIBITS

(a) Exhibits

4.1	Form of Subordinated Note Purchase Agreement (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed on March 14, 2022 (File No. 001-33003))
4.2	Form of Subordinated Note (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K filed on March 14, 2022 (File No. 001-33003))
4.3	Form of Global Subordinated Note (incorporated by reference to Exhibit 4.3 to the Company’s current report on Form 8-K filed on March 14, 2022 (File No. 001-33003))
31.1	Rule 13a-14(a) Certification of the Company’s Chief Executive Officer
31.2	Rule 13a-14(a) Certification of the Company’s Chief Financial Officer
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

78

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CITIZENS COMMUNITY BANCORP, INC.
Date: May 4, 2022	By:	/s/ Stephen M. Bianchi
		Stephen M. Bianchi
		Chief Executive Officer
Date: May 4, 2022	By:	/s/ James S. Broucek
		James S. Broucek
		Chief Financial Officer

79

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen M. Bianchi, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Citizens Community Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 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 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(s) 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 the 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.

Date: May 4, 2022	By:	/s/ Stephen M. Bianchi
		Stephen M. Bianchi
		President and Chief Executive Officer, Chairman of the Board (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James S. Broucek, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Citizens Community Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 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 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(s) 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 the 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.

Date: May 4, 2022	By:	/s/ James S. Broucek
		James S. Broucek
		Executive Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORT

PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Citizens Community Bancorp, Inc. (the “Company”) certifies that the Quarterly Report of the Company on Form 10-Q for the quarter ended March 31, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such report.

Date:  May 4, 2022	By:	/s/ Stephen M. Bianchi
		Stephen M. Bianchi
		President and Chief Executive Officer, Chairman of the Board (Principal Executive Officer)

Date: May 4, 2022	By:	/s/ James S. Broucek
		James S. Broucek
		Executive Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

The above certifications are made solely for the purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

XML

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 04, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-33003
Entity Registrant Name	CITIZENS COMMUNITY BANCORP, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-5120010
Entity Address, Address Line One	2174 EastRidge Center
Entity Address, City or Town	Eau Claire
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	54701
City Area Code	715
Local Phone Number	836-9994
Title of 12(b) Security	Common Stock, $.01 par value per share
Trading Symbol	CZWI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,531,281
Entity Central Index Key	0001367859
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets
Cash and cash equivalents	$ 84,364	$ 47,691
Other interest bearing deposits	1,511	1,511
Securities available for sale "AFS"	187,905	203,068
Securities held to maturity "HTM"	104,894	71,141
Equity investments	1,291	1,328
Other investments	15,084	15,305
Loans receivable	1,290,176	1,310,963
Allowance for loan losses	(16,818)	(16,913)
Loans receivable, net	1,273,358	1,294,050
Loans held for sale	2,528	6,670
Mortgage servicing rights, net	4,614	4,161
Office properties and equipment, net	21,393	21,169
Accrued interest receivable	4,179	3,916
Intangible assets	3,499	3,898
Goodwill	31,498	31,498
Foreclosed and repossessed assets, net	1,368	1,408
Bank owned life insurance ("BOLI")	24,464	24,312
Other assets	13,519	8,502
TOTAL ASSETS	1,775,469	1,739,628
Liabilities:
Deposits	1,428,223	1,387,535
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) advances	85,530	111,527
Other borrowings	87,062	58,426
Other liabilities	9,160	11,274
Total liabilities	1,609,975	1,568,762
Stockholders’ Equity:
Common stock—$0.01 par value, authorized 30,000,000; 10,526,781 and 10,502,442 shares issued and outstanding, respectively	105	105
Additional paid-in capital	119,789	119,925
Retained earnings	52,562	50,675
Accumulated other comprehensive (loss) income	(6,962)	161
Total stockholders’ equity	165,494	170,866
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,775,469	$ 1,739,628

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock authorized (shares)	30,000,000	30,000,000
Common stock issued (shares)	10,526,781	10,502,442
Common stock outstanding (shares)	10,526,781	10,502,442

XML

Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest and dividend income:
Interest and fees on loans	$ 13,767	$ 14,517
Interest on investments	1,609	1,103
Total interest and dividend income	15,376	15,620
Interest expense:
Interest on deposits	1,068	1,714
Interest on FHLB and FRB borrowed funds	311	411
Interest on other borrowed funds	830	731
Total interest expense	2,209	2,856
Net interest income before provision for loan losses	13,167	12,764
Provision for loan losses	0	0
Net interest income after provision for loan losses	13,167	12,764
Non-interest income:
Service charges on deposit accounts	488	398
Interchange income	549	530
Loan servicing income	701	893
Gain on sale of loans	722	1,595
Loan fees and service charges	92	278
Net gains (losses) on investment securities	(37)	235
Other	198	247
Total non-interest income	2,713	4,176
Non-interest expense:
Compensation and related benefits	5,398	5,569
Occupancy	1,365	1,316
Data processing	1,301	1,370
Amortization of intangible assets	399	399
Mortgage servicing rights expense, net	(327)	(450)
Advertising, marketing and public relations	212	163
FDIC premium assessment	115	165
Professional services	402	502
Gain on repossessed assets, net	(7)	(117)
New market tax credit depletion	163	0
Other	647	572
Total non-interest expense	9,668	9,489
Income before provision for income tax	6,212	7,451
Provision for income taxes	1,506	1,945
Net income attributable to common stockholders	$ 4,706	$ 5,506
Per share information:
Basic earnings (USD per share)	$ 0.45	$ 0.50
Diluted earnings (USD per share)	0.45	0.50
Cash dividends paid (USD per share)	$ 0.26	$ 0.23

XML

Consolidated Statements of Comprehensive (Loss) Income (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income attributable to common stockholders	$ 4,706	$ 5,506
Securities available for sale
Net unrealized losses arising during period, net of tax	(7,123)	(486)
Other comprehensive loss, net of tax	(7,123)	(486)
Comprehensive (loss) income	$ (2,417)	$ 5,020

XML

Consolidated Statement of Changes in Stockholders' Equity (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Common Stock Equity Incentive Plan	Common Stock 2019 Performance Plan	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (loss)
Balance at beginning of period (shares) at Dec. 31, 2020		11,056,349
Balance at beginning of period at Dec. 31, 2020	$ 160,564	$ 111			$ 126,154	$ 32,809	$ 1,490
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	5,506					5,506
Other comprehensive income (loss), net of tax	(486)						(486)
Forfeiture of unvested shares (shares)		(1,500)
Surrender of restricted shares of common stock (shares)		(895)
Surrender of restricted shares of common stock	(10)				(10)
Restricted common stock awarded under the equity incentive plan (shares)			64,399
Common stock repurchased (shares)		(224,481)
Common stock repurchased	(2,575)	$ (2)			(2,552)	(21)
Stock option expense	3				3
Amortization of restricted stock	171				171
Cash dividends	(2,511)					(2,511)
Balance at end of period (shares) at Mar. 31, 2021		10,893,872
Balance at end of period at Mar. 31, 2021	160,662	$ 109			123,766	35,783	1,004
Balance at beginning of period (shares) at Dec. 31, 2020		11,056,349
Balance at beginning of period at Dec. 31, 2020	$ 160,564	$ 111			126,154	32,809	1,490
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock options exercised (shares)	5,800
Balance at end of period (shares) at Dec. 31, 2021		10,502,442
Balance at end of period at Dec. 31, 2021	$ 170,866	$ 105			119,925	50,675	161
Balance at beginning of period (shares) at Mar. 31, 2021		10,893,872
Balance at beginning of period at Mar. 31, 2021	160,662	$ 109			123,766	35,783	1,004
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,706					4,706
Other comprehensive income (loss), net of tax	1,056						1,056
Surrender of restricted shares of common stock (shares)		(1,149)
Surrender of restricted shares of common stock	(15)				(15)
Common stock options exercised (shares)		2,000
Common stock options exercised	17				17
Common stock repurchased (shares)		(198,648)
Common stock repurchased	(2,634)	$ (2)			(2,260)	(372)
Stock option expense	2				2
Amortization of restricted stock	222				222
Balance at end of period (shares) at Jun. 30, 2021		10,696,075
Balance at end of period at Jun. 30, 2021	164,016	$ 107			121,732	40,117	2,060
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,997					4,997
Other comprehensive income (loss), net of tax	(828)						(828)
Surrender of restricted shares of common stock (shares)		(222)
Surrender of restricted shares of common stock	(3)				(3)
Common stock options exercised (shares)		3,800
Common stock options exercised	35				35
Common stock repurchased (shares)		(180,768)
Common stock repurchased	(2,514)	$ (2)			(2,058)	(454)
Stock option expense	2				2
Amortization of restricted stock	393				393
Balance at end of period (shares) at Sep. 30, 2021		10,518,885
Balance at end of period at Sep. 30, 2021	166,098	$ 105			120,101	44,660	1,232
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	6,057					6,057
Other comprehensive income (loss), net of tax	(1,071)						(1,071)
Surrender of restricted shares of common stock (shares)		(143)
Surrender of restricted shares of common stock	(2)				(2)
Common stock repurchased (shares)		(16,300)
Common stock repurchased	(228)				(186)	(42)
Stock option expense	1				1
Amortization of restricted stock	11				11
Balance at end of period (shares) at Dec. 31, 2021		10,502,442
Balance at end of period at Dec. 31, 2021	170,866	$ 105			119,925	50,675	161
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,706					4,706
Other comprehensive income (loss), net of tax	(7,123)						(7,123)
Surrender of restricted shares of common stock (shares)		(10,119)
Surrender of restricted shares of common stock	$ (141)				(141)
Restricted common stock awarded under the equity incentive plan (shares)			38,586	11,834
Common stock options exercised (shares)	2,500	2,500
Common stock options exercised	$ 20				20
Common stock repurchased (shares)		(18,462)
Common stock repurchased	(288)				(211)	(77)
Stock option expense	1				1
Amortization of restricted stock	195				195
Cash dividends	(2,742)					(2,742)
Balance at end of period (shares) at Mar. 31, 2022		10,526,781
Balance at end of period at Mar. 31, 2022	$ 165,494	$ 105			$ 119,789	$ 52,562	$ (6,962)

XML

Consolidated Statement of Changes in Stockholders' Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Sep. 30, 2020
Statement of Stockholders' Equity [Abstract]
Cash dividends paid (USD per share)	$ 0.26	$ 0.23

XML

Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2021
Cash flows from operating activities:
Net income attributable to common stockholders	$ 4,706	$ 6,057	$ 4,706	$ 5,506
Adjustments to reconcile net income to net cash provided by operating activities:
Premium amortization, net of discount accretion on investment securities	33			23
Depreciation expense	573			530
Net realized loss (gain) on equity securities	37			(235)
Increase in mortgage servicing rights resulting from transfers of financial assets	(126)			(297)
Mortgage servicing rights amortization and impairment, net	(327)			(450)
Amortization of intangible assets	399			399
Amortization of restricted stock	195			171
Net stock based compensation expense	1			3
Loss on sale of office properties and equipment	0			6
Decrease in deferred income taxes	911			765
Increase in cash surrender value of life insurance	(152)			(153)
Net gain from disposals of foreclosed and repossessed assets	(7)			(117)
Gain on sale of loans held for sale, net	(722)			(1,595)
New market tax credit depletion	163			0
Net change in:
Loans held for sale	4,864			2,403
Accrued interest receivable and other assets	410			322
Other liabilities	(2,099)			6,248
Total adjustments	4,153			8,023
Net cash provided by operating activities	8,859			13,529
Cash flows from investing activities:
Net decrease in other interest bearing deposits	0			1,736
Purchase of available for sale securities	(1,750)			(50,956)
Proceeds from principal payments of available for sale securities	7,076			9,368
Purchase of held to maturity securities	(35,342)			(16,530)
Proceeds from principal payments and maturities of held to maturity securities	1,569			2,629
Net sales of other investments	221			17
Proceeds from sales of foreclosed and repossessed assets	28			312
Net decrease in loans	20,704			45,189
Net capital expenditures	(797)			(462)
Proceeds from disposal of office properties and equipment	0			10
New market tax credit investment	(4,056)			0
Net cash used in investing activities	(12,347)			(8,687)
Cash flows from financing activities:
Amortization of fair value adjustments for acquired Federal Home Loan Bank advances	3			0
Federal Home Loan Bank advance termination payments	(15,015)			(8,119)
Federal Home Loan Bank maturities	(11,000)			0
Amortization of debt issuance costs	41			26
Proceeds from other borrowings, net of origination costs	34,201			0
Other borrowings principal reductions	(5,606)			0
Net increase in deposits	40,688			84,946
Repurchase shares of common stock	(288)			(2,575)
Surrender of restricted shares of common stock	(141)			(10)
Common stock options exercised	20			0	$ 52
Cash dividends paid	(2,742)			(2,511)
Net cash provided by financing activities	40,161			71,757
Net increase in cash and cash equivalents	36,673			76,599
Cash and cash equivalents at beginning of period	47,691		$ 196,039	119,440	119,440
Cash and cash equivalents at end of period	84,364	$ 47,691		196,039	$ 47,691
Cash paid during the period for:
Interest on deposits	1,096			1,658
Interest on borrowings	1,323			1,391
Supplemental noncash disclosure:
Transfers from loans receivable to other real estate owned ("OREO")	$ 0			$ 45

XML

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Citizens Community Federal N.A. (the “Bank”) included herein have been included by its parent company, Citizens Community Bancorp, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. As used in this quarterly report, the terms “we”, “us”, “our”, and “Citizens Community Bancorp, Inc.” mean the Company and its wholly owned subsidiary, the Bank, unless the context indicates other meaning.

The Bank is a national banking association (a “National Bank”) and operates under the title of Citizens Community Federal National Association (“Citizens Community Federal N.A.” or “Bank” or “CCFBank”). The Company is a bank holding company, supervised by the Federal Reserve Bank of Minneapolis, and operates under the title of Citizens Community Bancorp, Inc. The U.S. Office of the Comptroller of the Currency (the “OCC”), is the primary federal regulator for the Bank.

The consolidated income of the Company is principally derived from the income of the Bank, the Company’s wholly owned subsidiary, serving customers in Wisconsin and Minnesota through 25 branch locations. Its primary markets include the Chippewa Valley Region in Wisconsin, the Mankato and Twin Cities markets in Minnesota, and various rural communities around these areas. The Bank offers traditional community banking services to businesses, agricultural operators and consumers, including one-to-four family residential mortgages.

The Bank is subject to competition from other financial institutions and non-financial institutions providing financial products. Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the March 31, 2022 balance sheet date and through the date the financial statements were available to be issued for items that should potentially be recognized or disclosed in these consolidated financial statements.

The accompanying consolidated interim financial statements are unaudited. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Unless otherwise stated herein, and except for shares and per share amounts, all amounts are in thousands.

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates –Preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, fair value of financial instruments, the allowance for loan losses, mortgage servicing rights, foreclosed and repossessed assets, valuation of intangible assets arising from acquisitions, useful lives for depreciation and amortization, valuation of goodwill and long-lived assets, stock based compensation, deferred tax assets, uncertain income tax positions and contingencies. Management does not anticipate any material changes to estimates made herein in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: those items described under the caption “Risk Factors” in Item 1A of the annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 2, 2022; the matters described in “Risk Factors” in Item 1A of this Form 10-Q; external market factors such as market interest rates and unemployment rates; changes to operating policies and procedures and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period.

Investment Securities; Held to Maturity and Available for Sale – Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of the date of each balance sheet. Securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held to maturity securities are stated at amortized cost. Investment securities not classified as held to maturity are classified as available for sale. Available for sale securities are stated at fair value, with unrealized holding gains and losses being reported in other comprehensive income (loss), net of tax. Unrealized losses deemed other-than-temporary due to credit issues are reported in the

Company’s net income in the period in which the losses arise. Realized gains or losses on sales of available for sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net gains on investment securities. Interest income includes amortization of purchase premium or accretion of purchase discount. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities.

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to: the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded in other comprehensive income or loss as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax.

Equity investments - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities. Farmer Mac equity securities are carried at their fair market value, which is readily determinable. Changes in fair value are recognized as net gains (losses) on investment securities in the consolidated Statement of Operations.

Also included in equity investments are the Company’s investments in a Volker Rule-compliant Small Business Investment Company ("SBIC") and an investment fund. The SBIC and investment fund meet the definition of investment companies, as defined in ASC 946, Financial Services - Investment Companies. These investments seek returns by investing in various small businesses and do not have redemption rights. Distributions from the investments will be received as the underlying investments, which generally have a life of 10 years, are liquidated. We elected the practical expedient available in Topic 820, Fair Value Measurements, which permits the use of net asset value ("NAV") per share or equivalent to value investments in entities that are or are similar to investment companies. SBICs and investment funds report their investments at estimated fair value. We record the unrealized gains and losses resulting from changes in the fair value of these investments as gains or losses on equity securities in our consolidated statements of operations. The carrying value of these investments is equal to the capital account balance per each entities' quarterly financial statements.

Other Investments - As a member of the Federal Reserve Bank (“FRB”) System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other exchange traded equity securities. As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as other income in the consolidated statement of operations.

Also included in other investments is stock of our correspondent bank, Bankers’ Bank, without readily determinable fair value. This stock is carried at cost plus or minus changes resulting from observable price changes in orderly transactions for this stock, less other-than-temporary impairment charges, if any.

Management’s evaluation for impairment of these other investments, includes consideration of the financial condition and other available relevant information of the issuer. Based on management’s quarterly evaluation, no impairment has been recorded on these securities. Other investments totaling $15,084 at March 31, 2022 consisted of $7,650 of FHLB stock, $5,205 of Federal Reserve Bank stock and $2,229 of Bankers’ Bank stock. Other investments totaling $15,305 at December 31, 2021 consisted of $7,877 of FHLB stock and $5,200 of Federal Reserve Bank stock and $2,228 of Bankers’ Bank stock.

Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of: deferred loan fees and costs, accretable yield on acquired loans and non-accretable discount on purchased credit impaired (PCI) loans. Interest income is accrued on the unpaid principal balance of these loans. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed. If the loan is prepaid, any unamortized net fee is recognized at this time. Late charge fees are recognized into income when collected.

Interest income on commercial, mortgage and consumer loans is discontinued according to the following schedules:

•Commercial/agricultural real estate loans past due 90 days or more;

•Commercial and industrial/agricultural operating loans past due 90 days or more;

•Closed end consumer installment loans past due 120 days or more; and

•Residential mortgage loans and open ended consumer installment loans past due 180 days or more.

Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for a loan placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual status. Loans are returned to accrual status when payments are made that bring the loan account current with the contractual term of the loan and a six month payment history has been established. Interest on accruing troubled debt restructured (“TDR”), less than 90 days delinquent, is recognized as income as it accrues, based on the revised terms of the loan over an established period of continued payment.

Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 180 days or more. Closed ended consumer installment loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 120 days or more. Commercial/agricultural real estate, commercial and industrial and agricultural operating loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 90 days or more.

Allowance for Loan Losses – The allowance for loan losses (“ALL”) is a valuation allowance for probable and inherent credit losses in our loan portfolio. Loan losses are charged against the ALL when management believes that the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the ALL. Management estimates the required ALL balance taking into account the following factors: past loan loss experience; the nature, volume and composition of our loan portfolio; known and inherent risks in our portfolio; information about specific borrowers’ ability to repay; estimated collateral values; current economic conditions; and other relevant factors determined by management. The ALL consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for certain qualitative factors. The entire ALL balance is available for any loan that, in management’s judgment, should be charged off.

A loan is impaired when full payment under the loan terms is not expected. Impaired loans consist of all TDRs, as well as individual loans not considered a TDR, that are either (1) rated substandard or worse, (2) on nonaccrual status or (3) PCI loans which are impaired at the time of acquisition. Substandard loans, as defined by the OCC, our primary banking regulator, are loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. All TDRs are individually evaluated for impairment. See Note 3, “Loans, Allowance for Loan Losses and Impaired Loans” for more information on what we consider to be a TDR. For TDR’s or substandard loans deemed to be impaired, a specific ALL allocation may be established so that the loan is reported, net, at the lower of (a) its outstanding principal balance; (b) the present value of the loan’s estimated future cash flows using the loan’s existing rate; or (c) at the fair value of any loan collateral, less estimated disposal costs, if repayment is expected solely from the underlying collateral of the loan. For TDRs less than 90+ days past due, and certain substandard loans that are less than 90+ days delinquent, the likelihood of the loan migrating to over 90 days past due is also taken into account when determining the specific ALL allocation for these particular loans. Large groups of smaller balance homogeneous loans, such as non-TDR commercial, consumer and residential real estate loans, are collectively evaluated for ALL purposes, and accordingly, are not separately identified for ALL disclosures.

Acquired Loans— Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value with no carryover of related allowance for loan losses. Any allowance for loan loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that no longer are expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including: the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may

no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield.

Loans acquired with deteriorated credit quality are accounted for in accordance with Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30) if, at acquisition, the loans have evidence of credit quality deterioration since origination and it is probable that all contractually required payments will not be collected. At acquisition, the Company considers several factors as indicators that an acquired loan has evidence of deterioration in credit quality. These factors include, but are not limited to: loans 90 days or more past due, loans with an internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.

Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable discount is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan’s total scheduled principal and interest payments over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect.

Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable discount to be subsequently recognized in interest income on a prospective basis over the loan’s remaining life.

Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs (ASC 310-20), whereby the premium or discount derived from the fair market value adjustment, on a loan-by-loan or pooled basis, is recognized into interest income on a level yield basis over the remaining expected life of the loan or pool.

For all acquired loans, the outstanding loan balances less any related accretable discount and/or non-accretable difference is referred to as the loans’ carrying amount.

Loans Held for Sale — Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They are carried at the lower of aggregate cost or fair value. Gains and losses on sales of loans are recognized at settlement dates, and are determined by the difference between the sales proceeds and the carrying value of the loans after allocating costs to servicing rights retained. Such gains and losses are included as non-interest income in the consolidated statements of operations. All sales are made without recourse. Interest rate lock commitments on mortgage loans to be funded and sold are valued at fair value, and are included in other assets or liabilities, if material.

Transfers of financial assets—Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the entity, (2) the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and (3) the entity does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.

Mortgage Servicing Rights— Mortgage servicing rights (“MSR”) assets result as the Company sells loans to investors in the secondary market and retains the rights to service mortgage loans sold to others. MSR assets are initially measured at fair value; assessed for impairment at least annually; carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded in non-interest expense in the consolidated statement of operations.

The valuation of MSRs and related amortization, included in mortgage servicing rights expense in the consolidated statements of operations, thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs. Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing fee income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of outstanding principal; or a fixed amount per loan and are recorded as income when earned.

Goodwill and other intangible assets—The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management. The Company has one reporting unit as of March 31, 2022 which is related to its banking activities. The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of the Company’s reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the Company’s reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of the Company’s reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the Company’s reporting unit’s goodwill to the implied fair value of goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2021.

Foreclosed and Repossessed Assets, net – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis. If the fair value declines subsequent to foreclosure or repossession, a write-down is recorded through expense. Costs incurred after acquisition are expensed and are included in non-interest expense, other in the consolidated statements of operations.

New Markets Tax Credits - As a part of its commitment to the communities it serves, in the first quarter of 2022 the Company made an investment in an LLC that is sponsoring a community development project that has been awarded a New Markets Tax Credit (NMTC) through the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. This investment is Community Reinvestment Act eligible and is designed to generate a return primarily through the realization of the tax credit. This LLC is considered a Variable Interest Entity (VIE) as the Company represents the holder of the equity investment at risk, but does not have the ability to direct the activities that most significantly affect the performance of the LLC. As such, the Company is not the primary beneficiary of the VIE and the LLC has not been consolidated. The investment is accounted for using the equity method of accounting and is amortized through non-interest expense as the related tax credits are utilized. The utilization of the tax credit is recognized as a reduction in income tax expense.

As of March 31, 2022, the carrying amount of this investment, which is included in other assets in the consolidated balance sheets, was $3,833. The risk of loss with this investment is limited to its carrying value and is tied to its ability to operate in compliance with the rules and regulations necessary for the qualification of the tax credit generated by the investment. As of March 31, 2022 there were no known instances of noncompliance associated with the investment.

Leases - We determine if an arrangement is a lease at inception. All of our existing leases have been determined to be operating leases under ASC 842. Right-of-use (“ROU”) assets are included in other assets in our consolidated balance sheets. Operating lease liabilities are included in other liabilities in our consolidated balance sheets. Lease expense is included in non-interest expense, occupancy in the consolidated statements of operations.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date, based on the present value of lease payments over the lease term. As none of our existing leases provide an implicit rate, we use our incremental borrowing rate, based on information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, when it is reasonably certain that we will exercise that option. Lease expense is recognized based on the total contractually required lease payments, over the term of the lease, on a straight-line basis.

Debt and equity issuance costs—Debt issuance costs, which consist primarily of fees paid to note lenders, are deferred and included in other borrowings in the consolidated balance sheets. Debt issuance costs with a Company call option that

originated prior to 2020 and senior note debt issuance costs, are amortized over the contractual term of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Debt issuance costs that originated in 2020 and thereafter, are amortized through the first Company call option date of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Specific costs associated with the issuance of shares of the Company’s common or preferred stock are netted against proceeds and recorded in stockholders’ equity, as additional paid in capital, on the consolidated balance sheets, in the period of the share issuance.

    Advertising, Marketing and Public Relations Expense—The Company expenses all advertising, marketing and public relations costs as they are incurred.

Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

The Company regularly reviews the carrying amount of its net deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s net deferred tax assets will not be realized in future periods, a deferred tax valuation allowance would be established. Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. Accordingly, the Company’s evaluation is based on current tax laws as well as management’s expectations of future performance.

Revenue Recognition - The Company’s primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts or other similar contracts.

The Company accounts for revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Topic 606 provides that revenue from contracts with customers be recognized when performance obligations under the terms of a contract are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing service. The company does not have any materially significant payment terms as payment is received shortly after the satisfaction of the performance obligation. The non-interest income line items recognized under the scope of Topic 606 are as follows:

Service charges on deposit accounts - Service charges on accounts consist of monthly service fees, transaction-based fees, overdraft services and other deposit account related fees. The Company’s performance obligation for monthly services fees is generally satisfied over the period in which the service is provided. Revenue for these monthly fees is recognized during the service period. Other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied at the time the service is provided. Payment for service charges on deposit accounts are primarily received immediately or in the following month through a direct charge to a customer’s account.

Interchange income - The Company earns interchange fees when cardholder debit card transaction are processed through card association networks. The interchange rates are generally set by the card association based upon purchase volumes and other factors. Interchange fees represent a percentage of the underlying transaction value. The Company has a continuous contract, based on customary business practices, with the card association networks to make funds available for settlement of card transactions. The Company’s performance obligation is satisfied over time as it makes funds available, and the related income is recognized when received.

Gain (loss) on repossessed assets - The Company records a gain or loss from the sale of repossessed assets, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement. When the company finances the sale of repossessed assets to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the repossessed asset is derecognized and the gain or loss on sale is recorded

upon transfer of control of the property to the buyer. In determining the gain on sale or loss on the sale, the Company adjust the transaction price and related gain or loss on sale if a significant financing component is present.

Non-interest income outside of the scope of Revenue from Contracts with Customers, Topic 606 is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income outside of the scope of Topic 606 includes mortgage banking activities, loan fees and service charges, net gains (losses) on investment securities, settlement proceeds, and other, which is primarily made up of BOLI related income.

Earnings Per Share – Basic earnings per common share is net income or loss divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.

Loss Contingencies—Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable and an amount of loss can be reasonably estimated.

Other Comprehensive Income —Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale, net of tax, and is shown on the accompanying consolidated statements of comprehensive income.

Operating Segments—While our executive officers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.

Reclassifications – Certain items previously reported were reclassified for consistency with the current presentation.

Recent Accounting Pronouncements—The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have potentially significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.

Recent Accounting Pronouncements—Adopted

ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting--These ASUs provide optional and temporary relief, in the form of optional expedients and exceptions, for applying GAAP to modifications of contacts, hedging relationships and other transactions affected by reference rate (e.g. LIBOR) reforms. ASU 2020-04 and ASU 2021-01 are effective for the Company immediately and through December 31, 2022. The Company utilizes LIBOR, among other indexes, as a reference rate for underwriting variable rate loans. Reference rate reform has not had, nor does the Company expect it to have, a material effect on the Company’s consolidated balance sheet, operations or cash flows.

Recently Issued, But Not Yet Effective Accounting Pronouncements

ASU 2016-13; Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments--The ASU changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. In November, 2019, the FASB issued ASU 2019-10, which delayed the effective date for ASU 2016-13 for smaller reporting companies, resulting in ASU 2016-13 becoming effective in the first quarter of 2023 for the Company. Earlier adoption is permitted; however, the Company does not currently plan to adopt the ASU early. Management is assessing alternative loss estimation methodologies and the Company’s data and system needs in order to evaluate the impact that adoption of this standard will have on the Company’s financial condition and results of operations. The Company anticipates recording the effect of implementing this ASU through a cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which the ASU is effective, which will be January 1, 2023.

ASU 2022-02; Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures - The ASU addresses and amends areas identified by the FASB as part of its post-implementation review of the accounting standard that introduced the current expected credit losses model. The amendments eliminate the accounting

guidance for troubled debt restructurings by creditors that have adopted the current expected credit losses model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has not yet adopted the amendments in ASU 2016-13, ASU 2022-02 becomes effective in the first quarter of 2023. Management is assessing the impact that adoption of this standard will have on the Company’s financial condition and results of operations in conjunction with its assessment of the impact of ASU 2016-13. The Company expects to adopt the guidance for our fiscal year beginning January 1, 2023.

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INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

INVESTMENT SECURITIES

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of March 31, 2022 and December 31, 2021, respectively, were as follows:

Available for sale securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
U.S. government agency obligations	$	23,686	$	298	$	103	$	23,881
Mortgage-backed securities	103,723		9		8,181		95,551
Corporate debt securities	37,087		54		1,195		35,946
Corporate asset-based securities	33,011		—		484		32,527
Total available for sale securities	$	197,507	$	361	$	9,963	$	187,905
December 31, 2021
U.S. government agency obligations	$	25,826	$	440	$	1	$	26,265
Obligations of states and political subdivisions	140		—		—		140
Mortgage-backed securities	107,636		409		878		107,167
Corporate debt securities	35,342		403		157		35,588
Corporate asset-based securities	33,902		133		127		33,908
Total available for sale securities	$	202,846	$	1,385	$	1,163	$	203,068

Held to maturity securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
Obligations of states and political subdivisions	$	4,600	$	—	$	32	$	4,568
Mortgage-backed securities	100,294		29		8,916		91,407
Total held to maturity securities	$	104,894	$	29	$	8,948	$	95,975
December 31, 2021
Obligations of states and political subdivisions	$	4,600	$	—	$	7	$	4,593
Mortgage-backed securities	66,541		104		2,061		64,584
Total held to maturity securities	$	71,141	$	104	$	2,068	$	69,177

At March 31, 2022, the Bank has pledged mortgage-backed securities with a carrying value of $5,813 as collateral against a borrowing line of credit with the Federal Reserve Bank. However, as of March 31, 2022, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of March 31, 2022, the Bank has pledged U.S. Government Agency securities with a carrying value of $3,570 and mortgage-backed securities with a carrying value of $2,645 as collateral against specific municipal deposits. As of March 31, 2022, the Bank also has mortgage-backed securities with a carrying value of $220 pledged as collateral to the Federal Home Loan Bank of Des Moines.

At December 31, 2021, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $863 as collateral to secure a line of credit with the Federal Reserve Bank. As of December 31, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2021, the Bank has pledged certain of its U.S. Government Agency securities with a carrying value of $3,934 and mortgage-backed securities with a carrying value of $2,879

as collateral against specific municipal deposits. As of December 31, 2021, the Bank also has mortgage-backed securities with a carrying value of $267 pledged as collateral to the Federal Home Loan Bank of Des Moines.

For the three month periods ended March 31, 2022 and March 31, 2021, there were no sales of available for sale securities.

The estimated fair value of securities at March 31, 2022 and December 31, 2021, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Expected maturities may differ from contractual maturities on certain agency and municipal securities due to the call feature.

	March 31, 2022				December 31, 2021
Available for sale securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	—	$	—	$	140	$	140
Due after one year through five years	4,670		4,524		4,903		4,971
Due after five years through ten years	42,629		41,673		40,410		40,818
Due after ten years	46,485		46,157		49,757		49,972
Total securities with contractual maturities	$	93,784	$	92,354	$	95,210	$	95,901
Mortgage-backed securities	103,723		95,551		107,636		107,167
Total available for sale securities	$	197,507	$	187,905	$	202,846	$	203,068

	March 31, 2022				December 31, 2021
Held to maturity securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due after one year through five years	$	4,450	$	4,425	$	4,300	$	4,298
Due after five years through ten years	150		143		300		295
Total securities with contractual maturities	4,600		4,568		4,600		4,593
Mortgage-backed securities	100,294		91,407		66,541		64,584
Total held to maturity securities	$	104,894	$	95,975	$	71,141	$	69,177

Securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	Less than 12 Months				12 Months or More				Total
Available for sale securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
U.S. government agency obligations	$	3,716	$	103	$	—	$	—	$	3,716	$	103
Mortgage-backed securities	84,939		7,358		7,469		823		92,408		8,181
Corporate debt securities	29,871		1,157		712		38		30,583		1,195
Corporate asset-based securities	32,527		484		—		—		32,527		484
Total	$	151,053	$	9,102	$	8,181	$	861	$	159,234	$	9,963
December 31, 2021
U.S. government agency obligations	$	1,169	$	1	$	—	$	—	$	1,169	$	1
Mortgage backed securities	89,010		878		—		—		89,010		878
Corporate debt securities	17,240		142		735		15		17,975		157
Corporate asset-based securities	19,296		127		—		—		19,296		127
Total	$	126,715	$	1,148	$	735	$	15	$	127,450	$	1,163

	Less than 12 Months				12 Months or More				Total
Held to maturity securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
Obligations of states and political subdivisions	$	4,568	$	32	$	—	$	—	$	4,568	$	32
Mortgage-backed securities	56,503		4,105		33,773		4,811		90,276		8,916
Total	$	61,071	$	4,137	$	33,773	$	4,811	$	94,844	$	8,948
December 31, 2021
Obligations of states and political subdivisions	$	593	$	7	$	—	$	—	$	593	$	7
Mortgage-backed securities	46,969		1,346		14,716		715		61,685		2,061
Total	$	47,562	$	1,353	$	14,716	$	715	$	62,278	$	2,068

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to; the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax. Unrealized losses reflected in the preceding tables have not been included in results of operations because the unrealized loss was not deemed other-than-temporary. Management has determined that more likely than not, the Company neither intends to sell, nor will it be required to sell each debt security before its anticipated recovery, and therefore recovery of cost will occur.

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS

Portfolio Segments:

    Commercial and agricultural real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75%.

Commercial and industrial (“C&I”) loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Agricultural operating loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets or other business assets, as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields. SBA PPP loan balances are 100% guaranteed under the Small Business Association’s Paycheck Protection Program and may be forgiven in full, depending on use of funds and eligibility. These SBA-backed loans helped businesses keep their workforce employed during the COVID-19 crisis. Eligible borrowers, who qualify for full loan forgiveness during the eight to twenty four week period following loan disbursement, can apply for forgiveness, once all proceeds for which the borrower requested forgiveness has been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan.

Residential mortgage loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower’s documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home’s appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential mortgage portfolio due to relatively small loan account balances spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis.

Consumer installment loans are comprised of originated indirect paper loans secured primarily by boats and recreational vehicles and other consumer loans secured primarily by automobiles and other personal assets. Consumer loan underwriting terms often depend on the collateral type, debt to income ratio and the borrower’s creditworthiness as evidenced by their credit score. In the event of a consumer installment loan default, collateral value alone may not provide an adequate source of repayment of the outstanding loan balance. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral.

Credit Quality/Risk Ratings:

    Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant.

Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio ratings are presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows:

1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better.

5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future.

6 - Special Mention. A “Special Mention” loan has one or more potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future.

7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.

Below is a summary of originated and acquired loans by type and risk rating as of March 31, 2022:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	569,560	$	659	$	5,070	$	—	$	—	$	575,289
Agricultural real estate	50,111		784		1,788		—		—		52,683
Multi-family real estate	175,186		285		—		—		—		175,471
Construction and land development	86,869		—		128		—		—		86,997
C&I/Agricultural operating:
Commercial and industrial	108,370		48		4		—		—		108,422
Agricultural operating	18,792		68		5,160		—		—		24,020
Residential mortgage:
Residential mortgage	57,145		—		2,730		—		—		59,875
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	7,772		—		70		—		—		7,842
Total originated loans before SBA PPP loans	1,091,688		1,844		15,062		—		—		1,108,594
SBA PPP loans	2,071		—		—		—		—		2,071
Total originated loans	$	1,093,759	$	1,844	$	15,062	$	—	$	—	$	1,110,665
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	111,371	$	—	$	3,114	$	—	$	—	$	114,485
Agricultural real estate	18,424		—		4,609		—		—		23,033
Multi-family real estate	4,016		—		—		—		—		4,016
Construction and land development	729		—		154		—		—		883
C&I/Agricultural operating:
Commercial and industrial	12,342		5		253		—		—		12,600
Agricultural operating	4,501		—		236		—		—		4,737
Residential mortgage:
Residential mortgage	23,507		—		1,391		—		—		24,898
Consumer installment:
Other consumer	346		—		3		—		—		349
Total acquired loans	$	175,236	$	5	$	9,760	$	—	$	—	$	185,001
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	680,931	$	659	$	8,184	$	—	$	—	$	689,774
Agricultural real estate	68,535		784		6,397		—		—		75,716
Multi-family real estate	179,202		285		—		—		—		179,487
Construction and land development	87,598		—		282		—		—		87,880
Commercial/Agricultural non-real estate:
Commercial and industrial	120,712		53		257		—		—		121,022
Agricultural operating	23,293		68		5,396		—		—		28,757
Residential mortgage:
Residential mortgage	80,652		—		4,121		—		—		84,773
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	8,118		—		73		—		—		8,191
Gross loans before SBA PPP Loans	1,266,924		1,849		24,822		—		—		1,293,595
SBA PPP loans	2,071		—		—		—		—		$	2,071
Gross loans	$	1,268,995	$	1,849	$	24,822	$	—	$	—	$	1,295,666
Less:
Unearned net deferred fees and costs and loans in process											(2,223)
Unamortized discount on acquired loans											(3,267)
Allowance for loan losses											(16,818)
Loans receivable, net											$	1,273,358

Below is a summary of originated and acquired loans by type and risk rating as of December 31, 2021:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	572,724	$	667	$	5,004	$	—	$	—	$	578,395
Agricultural real estate	50,834		1,267		271		—		—		52,372
Multi-family real estate	173,760		290		—		—		—		174,050
Construction and land development	75,146		—		3,467		—		—		78,613
C&I/Agricultural operating:
Commercial and industrial	107,798		57		82		—		—		107,937
Agricultural operating	23,935		764		1,503		—		—		26,202
Residential mortgage:
Residential mortgage	60,754		—		3,101		—		—		63,855
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,404		—		69		—		—		8,473
Total Originated loans before SBA PPP loans	1,092,879		3,045		13,815		—		—		1,109,739
SBA PPP loans	8,755		—		—		—		—		8,755
Total originated loans	$	1,101,634	$	3,045	$	13,815	$	—	$	—	$	1,118,494
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	116,839	$	1,314	$	1,917	$	—	$	—	$	120,070
Agricultural real estate	21,051		—		5,072		—		—		26,123
Multi-family real estate	4,299		—		—		—		—		4,299
Construction and land development	735		172		—		—		—		907
C&I/Agricultural operating:
Commercial and industrial	13,931		5		294		—		—		14,230
Agricultural operating	4,936		—		450		—		—		5,386
Residential mortgage:
Residential mortgage	25,869		—		1,266		—		—		27,135
Consumer installment:
Other consumer	398		—		3		—		—		401
Total acquired loans	$	188,058	$	1,491	$	9,002	$	—	$	—	$	198,551
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	689,563	$	1,981	$	6,921	$	—	$	—	698,465
Agricultural real estate	71,885		1,267		5,343		—		—		78,495
Multi-family real estate	178,059		290		—		—		—		178,349
Construction and land development	75,881		172		3,467		—		—		79,520
C&I/Agricultural operating:
Commercial and industrial	121,729		62		376		—		—		122,167
Agricultural operating	28,871		764		1,953		—		—		31,588
Residential mortgage:
Residential mortgage	86,623		—		4,367		—		—		90,990
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,802		—		72		—		—		8,874
Gross loans before SBA PPP loans	1,280,937		4,536		22,817		—		—		1,308,290
SBA PPP loans	8,755		—		—		—		—		8,755
Gross loans	$	1,289,692	$	4,536	$	22,817	$	—	$	—	$	1,317,045
Less:
Unearned net deferred fees and costs and loans in process											(2,482)
Unamortized discount on acquired loans											(3,600)
Allowance for loan losses											(16,913)
Loans receivable, net											$	1,294,050

Allowance for Loan Losses - The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL requires the exercise of significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of other qualitative factors such as current economic trends and conditions, all of which may be susceptible to significant change.

There are many factors affecting the ALL; some are quantitative, while others require qualitative judgment. The process for determining the ALL (which management believes adequately considers potential factors which result in probable credit losses), includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect the Company’s earnings or financial position in future periods. Allocations of the ALL may be made for specific loans but the entire ALL is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized.

As an integral part of their examination process, various regulatory agencies also review the Bank’s ALL. Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of our management based on information available to the regulators at the time of their examinations.

Changes in the ALL by loan type for the periods presented below were as follows:

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2022
Allowance for Loan Losses:
Beginning balance, January 1, 2022	$	12,354	$	1,959	$	518	$	225	$	774	$	15,830
Charge-offs	(35)		(63)		—		(9)		—		(107)
Recoveries	3		10		1		10		—		24
Provision	72		198		(59)		(66)		8		153
Total allowance on originated loans	12,394		2,104		460		160		782		15,900
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans:
Beginning balance, January 1, 2022	856		69		130		28		—		1,083
Charge-offs	—		—		(12)		—		—		(12)
Recoveries	—		—		—		—		—		—
Provision	(67)		(11)		(56)		(19)		—		(153)
Total allowance on other acquired loans	789		58		62		9		—		918
Total allowance on acquired loans	789		58		62		9		—		918
Ending balance, March 31, 2022	$	13,183	$	2,162	$	522	$	169	$	782	$	16,818
Allowance for Loan Losses at March 31, 2022:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,280	$	373	$	69	$	—	$	—	$	1,722
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,903	$	1,789	$	453	$	169	$	782	$	15,096
Loans Receivable as of March 31, 2022:											—
Ending balance of originated loans	$	890,440	$	134,513	$	63,362	$	22,350	$	—	$	1,110,665
Ending balance of purchased credit-impaired loans	8,672		1,023		1,024		—		—		10,719
Ending balance of other acquired loans	133,745		16,314		23,874		349		—		174,282
Ending balance of loans	$	1,032,857	$	151,850	$	88,260	$	22,699	$	—	$	1,295,666
Ending balance: individually evaluated for impairment	$	20,597	$	6,605	$	6,838	$	210	$	—	$	34,250
Ending balance: collectively evaluated for impairment	$	1,012,260	$	145,245	$	81,422	$	22,489	$	—	$	1,261,416

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2021
Allowance for Loan Losses:
Beginning balance, January 1, 2021	$	10,271	$	2,112	$	1,041	$	489	$	906	$	14,819
Charge-offs	—		—		—		(25)		—		(25)
Recoveries	5		8		7		10		—		30
Provision	833		(487)		(107)		(24)		(11)		204
Total allowance on originated loans	$	11,109	$	1,633	$	941	$	450	$	895	$	15,028
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans
Beginning balance, January 1, 2021	1,684		141		335		64		—		2,224
Charge-offs	(200)		—		—		—		—		(200)
Recoveries	—		7		1		4		—		12
Provision	(183)		(54)		52		(19)		—		(204)
Total allowance on other acquired loans	1,301		94		388		49		—		1,832
Total allowance on acquired loans	1,301		94		388		49		—		1,832
Ending balance, March 31, 2021	$	12,410	$	1,727	$	1,329	$	499	$	895	$	16,860
Allowance for Loan Losses at March 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,094	$	10	$	157	$	—	$	—	$	1,261
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,316	$	1,717	$	1,172	$	499	$	895	$	15,599
Loans Receivable as of March 31, 2021
Ending balance of originated loans	$	599,182	$	216,773	$	87,576	$	34,137	$	—	$	937,668
Ending balance of purchased credit-impaired loans	14,856		1,367		1,218		—		—		17,441
Ending balance of other acquired loans	181,438		24,974		38,828		913		—		246,153
Ending balance of loans	$	795,476	$	243,114	$	127,622	$	35,050	$	—	$	1,201,262
Ending balance: individually evaluated for impairment	$	24,948	$	6,197	$	8,843	$	255	$	—	$	40,243
Ending balance: collectively evaluated for impairment	$	770,528	$	236,917	$	118,779	$	34,795	$	—	$	1,161,019

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Allowance for Loan Losses at December 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	797	$	99	$	113	$	—	$	—	$	1,009
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	12,413	$	1,929	$	535	$	253	$	774	$	15,904
Loans Receivable as of December 31, 2021:
Ending balance of originated loans	$	883,430	$	142,894	$	67,726	$	24,444	$	—	$	1,118,494
Ending balance of purchased credit-impaired loans	9,060		1,101		1,044		—		—		11,205
Ending balance of other acquired loans	142,339		18,515		26,091		401		—		187,346
Ending balance of loans	$	1,034,829	$	162,510	$	94,861	$	24,845	$	—	$	1,317,045
Ending balance: individually evaluated for impairment	$	21,792	$	3,337	$	7,007	$	257	$	—	$	32,393
Ending balance: collectively evaluated for impairment	$	1,013,037	$	159,173	$	87,854	$	24,588	$	—	$	1,284,652

Loans receivable by loan type as of the end of the periods shown below were as follows:

	Commercial/Agricultural Real Estate Loans				C&I/Agricultural Operating				Residential Mortgage				Consumer Installment				Totals
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Performing loans
Performing TDR loans	$	2,085	$	4,618	$	608	$	649	$	2,924	$	2,681	$	28	$	36	$	5,645	$	7,984
Performing loans other	1,021,686		1,021,346		149,894		160,570		83,604		90,591		22,581		24,729		1,277,765		1,297,236
Total performing loans	1,023,771		1,025,964		150,502		161,219		86,528		93,272		22,609		24,765		1,283,410		1,305,220
Nonperforming loans (1)
Nonperforming TDR loans	3,502		3,389		639		554		443		593		2		3		4,586		4,539
Nonperforming loans other	5,584		5,476		709		737		1,289		996		88		77		7,670		7,286
Total nonperforming loans	9,086		8,865		1,348		1,291		1,732		1,589		90		80		12,256		11,825
Total loans	$	1,032,857	$	1,034,829	$	151,850	$	162,510	$	88,260	$	94,861	$	22,699	$	24,845	$	1,295,666	$	1,317,045

(1)Nonperforming loans are either 90+ days past due or nonaccrual.

As of March 31, 2022 the Company had $288,001 in unused commitments, compared to $270,985 in unused commitments as of December 31, 2021.

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of March 31, 2022 and December 31, 2021, respectively, was as follows:

	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Greater Than 89 Days Past Due and Accruing		Total Past Due and Accruing		Nonaccrual Loans		Total Past Due Accruing and Nonaccrual Loans		Current		Total Loans
March 31, 2022
Commercial/Agricultural real estate:
Commercial real estate	$	1,996	$	—	$	—	$	1,996	$	5,503	$	7,499	$	682,275	$	689,774
Agricultural real estate	895		—		—		895		3,454		4,349		71,367		75,716
Multi-family real estate	—		—		—		—		—		—		179,487		179,487
Construction and land development	—		—		—		—		129		129		87,751		87,880
C&I/Agricultural operating:
Commercial and industrial	—		—		—		—		284		284		120,738		121,022
C&I SBA PPP loans	—		—		—		—		—		—		2,071		2,071
Agricultural operating	1,645		—		—		1,645		1,064		2,709		26,048		28,757
Residential mortgage:
Residential mortgage	1,444		392		398		2,234		1,334		3,568		81,205		84,773
Purchased HELOC loans	—		—		—		—		—		—		3,487		3,487
Consumer installment:
Originated indirect paper	39		—		—		39		60		99		14,409		14,508
Other consumer	38		3		—		41		30		71		8,120		8,191
Total	$	6,057	$	395	$	398	$	6,850	$	11,858	$	18,708	$	1,276,958	$	1,295,666
December 31, 2021
Commercial/Agricultural real estate:
Commercial real estate	$	36	$	—	$	—	$	36	$	5,374	$	5,410	$	693,055	$	698,465
Agricultural real estate	498		4		—		502		3,490		3,992		74,503		78,495
Multi-family real estate	—		—		—		—		—		—		178,349		178,349
Construction and land development	—		—		—		—		—		—		79,520		79,520
C&I/Agricultural operating:
Commercial and industrial	—		32		—		32		298		330		121,837		122,167
SBA PPP loans	—		—		—		—		—		—		8,755		8,755
Agricultural operating	1,123		—		—		1,123		993		2,116		29,472		31,588
Residential mortgage:
Residential mortgage	1,471		487		156		2,114		1,268		3,382		87,608		90,990
Purchased HELOC loans	117		—		—		117		165		282		3,589		3,871
Consumer installment:
Originated indirect paper	38		27		—		65		55		120		15,851		15,971
Other consumer	58		10		4		72		22		94		8,780		8,874
Total	$	3,341	$	560	$	160	$	4,061	$	11,665	$	15,726	$	1,301,319	$	1,317,045

At March 31, 2022, the Company individually evaluated loans for impairment with a recorded investment of $33,741, consisting of (1) $10,719 purchased credit impaired (“PCI”) loans, with a carrying amount of $10,210; (2) $6,716 TDR loans, net of TDR PCI loans; and (3) $16,815 of substandard non-TDR, non-PCI loans. The $33,741 total of loans individually evaluated for impairment includes $5,645 of performing TDR loans. At December 31, 2021, the Company individually evaluated loans for impairment with a recorded investment of $31,740, consisting of (1) $11,205 PCI loans, with a carrying amount of $10,552; (2) $9,860 TDR loans, net of TDR PCI loans; and (3) $11,328 of substandard non-TDR, non-PCI loans. The $31,740 total of loans individually evaluated for impairment includes $7,984 of performing TDR loans. A loan is identified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis.

A summary of the Company’s loans individually evaluated for impairment as of March 31, 2022, December 31, 2021 and March 31, 2021 was as follows:

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2022
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	13,840	$	14,116	$	—	$	16,626	$	136
C&I/Agricultural operating	6,015		6,167		—		5,319		50
Residential mortgage	6,447		6,528		—		6,882		71
Consumer installment	210		210		—		258		2
Total	$	26,512	$	27,021	$	—	$	29,085	$	259
With An Allowance Recorded:
Commercial/Agricultural real estate	$	6,481	$	6,481	$	1,280	$	5,285	$	11
C&I/Agricultural operating	438		438		373		415		10
Residential mortgage	310		310		69		600		1
Consumer installment	—		—		—		1		—
Total	$	7,229	$	7,229	$	1,722	$	6,301	$	22
March 31, 2022 Totals:
Commercial/Agricultural real estate	$	20,321	$	20,597	$	1,280	$	21,911	$	147
C&I/Agricultural operating	6,453		6,605		373		5,734		60
Residential mortgage	6,757		6,838		69		7,482		72
Consumer installment	210		210		—		259		2
Total	$	33,741	$	34,250	$	1,722	$	35,386	$	281

							Twelve Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	15,521	$	15,905	$	—	$	19,412	$	964
C&I/Agricultural operating	3,153		3,337		—		4,622		146
Residential mortgage	6,221		6,306		—		7,316		316
Consumer installment	256		256		—		306		85
Total	$	25,151	$	25,804	$	—	$	31,656	$	1,511
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,887	$	5,887	$	797	$	4,089	$	62
C&I/Agricultural operating	—		—		99		391		84
Residential mortgage	701		701		113		890		17
Consumer installment	1		1		—		2		—
Total	$	6,589	$	6,589	$	1,009	$	5,372	$	163
December 31, 2021 Totals
Commercial/Agricultural real estate	$	21,408	$	21,792	$	797	$	23,501	$	1,026
C&I/Agricultural operating	3,153		3,337		99		5,013		230
Residential mortgage	6,922		7,007		113		8,206		333
Consumer installment	257		257		—		308		85
Total	$	31,740	$	32,393	$	1,009	$	37,028	$	1,674

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	19,064	$	19,714	$	—	$	21,183	$	239
C&I/Agricultural operating	5,924		6,118		—		6,007		70
Residential mortgage	8,069		8,191		—		8,240		80
Consumer installment	255		255		—		306		3
Total	$	33,312	$	34,278	$	—	$	35,736	$	392
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,234	$	5,234	$	1,094	$	3,762	$	62
C&I/Agricultural operating	79		79		10		430		—
Residential mortgage	652		652		157		866		8
Consumer installment	—		—		—		1		—
Total	$	5,965	$	5,965	$	1,261	$	5,059	$	70
March 31, 2021 Totals:
Commercial/Agricultural real estate	$	24,298	$	24,948	$	1,094	$	24,945	$	301
C&I/Agricultural operating	6,003		6,197		10		6,437		70
Residential mortgage	8,721		8,843		157		9,106		88
Consumer installment	255		255		—		307		3
Total	$	39,277	$	40,243	$	1,261	$	40,795	$	462

Troubled Debt Restructuring – A TDR includes a loan modification where a borrower is experiencing financial difficulty, and the Bank grants a concession to that borrower that the Bank would not otherwise consider, except for the borrower’s financial difficulties. Concessions may include: extension of the loan’s term, renewals of existing balloon loans, reductions in interest rates and consolidating existing Bank loans at modified terms. A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status. There were no delinquent accruing TDR loan greater than 60 days past due at March 31, 2022, compared to one such loan with a recorded investment of $4 at December 31, 2021.

Following is a summary of TDR loans by accrual status as of March 31, 2022 and December 31, 2021.

	March 31, 2022		December 31, 2021
Troubled debt restructure loans:
Accrual status	$	5,645	$	7,984
Non-accrual status	4,586		4,539
Total	$	10,231	$	12,523

There was one loan commitment for $27 meeting our TDR criteria as of March 31, 2022 and no loan commitments meeting our TDR criteria as of December 31, 2021. There were unused lines of credit totaling $49 and $10 meeting our TDR criteria as of March 31, 2022 and December 31, 2021, respectively.

The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three months ended March 31, 2022 and March 31, 2021:     

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2022
TDRs:
Commercial/Agricultural real estate	4	$	1,241	$	—	$	—	$	—	$	1,241	$	1,241	$	—
C&I/Agricultural operating	1	—		—		150		—		150		150		—
Residential mortgage	4	31		—		507		—		538		538		—
Consumer installment	—	—		—		—		—		—		—		—
Totals	9	$	1,272	$	—	$	657	$	—	$	1,929	$	1,929	$	—

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2021
TDRs:
Commercial/Agricultural real estate	2	$	38	$	81	$	—	$	—	$	119	$	119	$	—
C&I/Agricultural operating	1	—		—		240		—		240		240		—
Residential mortgage	2	66		—		14		—		80		80		—
Consumer installment	1	6		—		—		—		6		6		—
Totals	6	$	110	$	81	$	254	$	—	$	445	$	445	$	—

A summary of loans by loan segment modified in a troubled debt restructuring as of March 31, 2022 and March 31, 2021, was as follows:

	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	20	$	5,587	30	$	8,656
C&I/Agricultural operating	7	1,247		14	4,800
Residential mortgage	42	3,367		52	3,937
Consumer installment	6	30		9	49
Total troubled debt restructurings	75	$	10,231	105	$	17,442

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2022 and March 31, 2021, as well as the recorded investment in these restructured loans as of March 31, 2022 and March 31, 2021:

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	—	$	—	—	$	—
C&I/Agricultural operating	—	—		—	—
Residential mortgage	—	—		1	19
Consumer installment	—	—		—	—
Total troubled debt restructurings	—	$	—	1	$	19

All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
Accountable for under ASC 310-30 (Purchased Credit Impaired “PCI” loans)
Outstanding balance	$	10,719	$	11,205
Carrying amount	$	10,210	$	10,552
Accountable for under ASC 310-20 (non-PCI loans)
Outstanding balance	$	174,282	$	187,346
Carrying amount	$	171,524	$	184,399
Total acquired loans
Outstanding balance	$	185,001	$	198,551
Carrying amount	$	181,734	$	194,951

The table below shows scheduled accretion by year for the accretable difference recognized due to fair value purchase accounting on recent whole bank acquisitions. In addition, the Company has $1.66 million of accretable discount from purchased impaired loans with the original non-accretable discount transferred to accretable discount. The scheduled accretion on this balance is estimated to be $100 per year; however, large balance payoffs, as seen in 2021 and 2020, would accelerate this accretion.

Fiscal years ending December 31,	Purchase Accounting Accretable Discount
2022	$	594
2023	279
2024	131
2025	96
Total	$	1,100

The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:

	March 31, 2022		December 31, 2021
Balance at beginning of period	$	653	$	1,087
Additions to non-accretable difference for acquired purchased credit impaired loans	—		—
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans	(26)		(105)
Transfers from non-accretable difference to accretable discount	(86)		(329)
Non-accretable difference used to reduce loan principal balance	(32)		—
Balance at end of period	$	509	$	653

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MORTGAGE SERVICING RIGHTS

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

MORTGAGE SERVICING RIGHTS

MORTGAGE SERVICING RIGHTS

Mortgage servicing rights--Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid balances of these loans as of March 31, 2022 and December 31, 2021 were $552,236 and $556,086, respectively, and consisted of one to four family residential real estate loans. These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the Federal National Mortgage Association. Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $4,748 and $2,781 at March 31, 2022 and December 31, 2021, respectively.

Mortgage servicing rights activity for the three month periods ended March 31, 2022 and March 31, 2021 were as follows:

	As of and for the Three Months Ended		As of and for the Three Months Ended
	March 31, 2022		March 31, 2021
Mortgage servicing rights:
Mortgage servicing rights, beginning of period	$	4,727	$	5,266
Increase in mortgage servicing rights resulting from transfers of financial assets	126		297
Amortization during the period	(239)		(439)
Mortgage servicing rights, end of period	4,614		5,124
Valuation allowance:
Valuation allowance, beginning of period	(566)		(2,014)
Additions	—		—
Recoveries	566		889
Valuation allowance, end of period	—		(1,125)
Mortgage servicing rights, net	$	4,614	$	3,999
Fair value of mortgage servicing rights; end of period	$	5,267	$	4,005

The current period change in valuation allowance is included in non-interest expense as mortgage servicing rights expense, net on the consolidated statement of operations. Servicing fees totaled $351 and $352 for the three months ended March 31, 2022 and March 31, 2021, respectively, and are included in loan servicing income on the consolidated statement of operations. Late fees and ancillary fees related to loan servicing are not material.

To estimate the fair value of the MSR asset, a valuation model is applied at the loan level to calculate the present value of the expected future cash flows. The valuation model incorporates various assumptions that would impact market participants’ estimations of future servicing income. Central to the valuation model is the discount rate. Fair value at both March 31, 2022 and March 31, 2021, was determined using discount rates ranging from 9% to 12%. Other assumptions utilized in the valuation model include, but are not limited to, prepayment speed, servicing costs, delinquencies, costs of advances, foreclosure costs, ancillary income, and income earned on float and escrow.

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LEASES

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

LEASES

We have operating leases for our corporate offices (1), bank branch offices (5), and an ATM location (1). Our leases have remaining lease terms ranging from approximately 1.00 to 6.25 years, some of which include options to extend the leases for up to 5 additional years. As of March 31, 2022, we have no additional lease commitments that have not yet commenced. The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.

	Three Months Ended
	March 31, 2022			March 31, 2021
The components of total lease cost were as follows:
Operating lease cost	$	139		$	139
Variable lease cost	10			7
Total lease cost	$	149		$	146
The components of total lease income were as follows:
Operating lease income	$	9		$	7
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	139		$	138
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	—
	March 31, 2022			December 31, 2021
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	$	2,034		$	2,159
Operating lease liabilities	$	2,104		$	2,228
Weighted average remaining lease term in years; operating leases	5.36			5.55
Weighted average discount rate; operating leases	2.75		%	2.73		%

Cash obligations and receipts under lease contracts are as follows:

Fiscal years ending December 31,	Payments		Receipts
2022	$	420	$	26
2023	506		27
2024	419		10
2025	403		—
2026	346
Thereafter	480
Total	2,574		$	63
Less: effects of discounting	(470)
Lease liability recognized	$	2,104

LEASES

LEASES

We have operating leases for our corporate offices (1), bank branch offices (5), and an ATM location (1). Our leases have remaining lease terms ranging from approximately 1.00 to 6.25 years, some of which include options to extend the leases for up to 5 additional years. As of March 31, 2022, we have no additional lease commitments that have not yet commenced. The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.

	Three Months Ended
	March 31, 2022			March 31, 2021
The components of total lease cost were as follows:
Operating lease cost	$	139		$	139
Variable lease cost	10			7
Total lease cost	$	149		$	146
The components of total lease income were as follows:
Operating lease income	$	9		$	7
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	139		$	138
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	—
	March 31, 2022			December 31, 2021
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	$	2,034		$	2,159
Operating lease liabilities	$	2,104		$	2,228
Weighted average remaining lease term in years; operating leases	5.36			5.55
Weighted average discount rate; operating leases	2.75		%	2.73		%

Cash obligations and receipts under lease contracts are as follows:

Fiscal years ending December 31,	Payments		Receipts
2022	$	420	$	26
2023	506		27
2024	419		10
2025	403		—
2026	346
Thereafter	480
Total	2,574		$	63
Less: effects of discounting	(470)
Lease liability recognized	$	2,104

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DEPOSITS

3 Months Ended

Mar. 31, 2022

Deposits [Abstract]

DEPOSITS

DEPOSITS

The following is a summary of deposits by type at March 31, 2022 and December 31, 2021, respectively: 

	March 31, 2022		December 31, 2021
Non-interest bearing demand deposits	$	269,481	$	276,631
Interest bearing demand deposits	423,251		396,231
Savings accounts	241,072		222,674
Money market accounts	321,409		288,985
Certificate accounts	173,010		203,014
Total deposits	$	1,428,223	$	1,387,535

At March 31, 2022, the scheduled maturities of time deposits were as follows for the year ended, except December 31, 2022 which is the nine months ended:

December 31, 2022	$	128,883
December 31, 2023	27,613
December 31, 2024	7,508
December 31, 2025	7,264
December 31, 2026	1,398
After December 31, 2027	344
Total	$	173,010

Time deposits of $250 or more were $19,762 and $22,381 at March 31, 2022 and December 31, 2021, respectively. Brokered deposits were $11 at both March 31, 2022 and December 31, 2021, respectively.

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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS

3 Months Ended

Mar. 31, 2022

Federal Home Loan Banks [Abstract]

FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS

FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS

A summary of Federal Home Loan Bank advances and other borrowings at March 31, 2022 and December 31, 2021 is as follows:

		March 31, 2022						December 31, 2021
	Stated Maturity	Amount		Range of Stated Rates				Amount		Range of Stated Rates
Federal Home Loan Bank advances (1), (2), (3), (4)	2022	$	—	—	%	—	%	$	11,000	2.45	%	2.45	%
	2023	5,000		1.43	%	1.44	%	20,000		1.43	%	1.44	%
	2024	20,530		0.00	%	1.45	%	20,530		0.00	%	1.45	%
	2025	5,000		1.45	%	1.45	%	5,000		1.45	%	1.45	%
	2029	42,500		1.00	%	1.13	%	42,500		1.00	%	1.13	%
	2030	12,500		0.52	%	0.86	%	12,500		0.52	%	0.86	%
Subtotal		85,530						111,530
Unamortized discount on acquired notes		—						(3)
Federal Home Loan Bank advances, net		$	85,530					$	111,527
Senior Notes (5)	2034	$	23,250	3.00	%	3.00	%	$	28,856	3.00	%	3.50	%
Subordinated Notes (6)	2027	$	15,000	6.75	%	6.75	%	$	15,000	6.75	%	6.75	%
	2030	15,000		6.00	%	6.00	%	15,000		6.00	%	6.00	%
	2032	35,000		4.75	%	4.75	%	—		—	%	—	%
		$	65,000					$	30,000
Unamortized debt issuance costs		(1,188)						(430)
Total other borrowings		$	87,062					$	58,426
Totals		$	172,592					$	169,953

(1)    The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $931,498 and $861,900 at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $240,412 compared to $204,271 as of December 31, 2021.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $111,530 and $123,530, during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively.

(3) There are no FHLB borrowings maturing within twelve months of March 31, 2022. The weighted-average interest rate on FHLB borrowings maturing within twelve months as of December 31, 2021 was 2.45%.

(4)    FHLB term notes totaling $55,000 can be called or replaced by the FHLB on a quarterly basis, and if not called, will mature at various dates in 2029 and 2030.

(5)    Senior notes, entered into by the Company in June 2019 consist of the following:

(a) A term note, which was subsequently refinanced in March 2022, requiring quarterly interest-only payments through March 2025, and quarterly principal and interest payments thereafter. Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 3.00%.

(b) A $5,000 line of credit, maturing in August 2022, that remains undrawn upon.

(6)    Subordinated notes resulted from the following:

(a) The Company’s private sale in August 2017, which bears a fixed interest rate of 6.75% for five years. In August 2022, they convert to a three-month LIBOR plus 4.90% rate, and the interest rate will reset quarterly thereafter. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due quarterly.

(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00% for five years. In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

(c) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in March 2022, which bears a fixed interest rate of 4.75% for five years. In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 329 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

Federal Home Loan Bank Letters of Credit

The Bank has an irrevocable Standby Letter of Credit Master Reimbursement Agreement with the Federal Home Loan Bank. This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest bearing deposit balances. These balances were $209,400 and $176,150 at March 31, 2022 and December 31, 2021, respectively.

Federal Reserve Bank Paycheck Protection Program Liquidity Facility (“FRB PPPLF”) Program

The Bank has originated Small Business Administration’s Paycheck Protection Program (“SBA PPP”) loans and has complied with the requirements to pledge these loans to the FRB PPPLF program which provides 100% funding for SBA PPP loans upon request. This FRB PPPLF program expired on July 30, 2021. The Bank had no outstanding loan balances under this facility at March 31, 2022 and December 31, 2021. There were no month-end borrowed amounts outstanding under this agreement during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively. In July 2021, the Bank pledged these SBA PPP loans to the FHLB.

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CAPITAL MATTERS

3 Months Ended

Mar. 31, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

CAPITAL MATTERS

CAPITAL MATTERS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Although these terms are not used to represent overall financial condition, if adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At March 31, 2022, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio			Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	207,760	14.9	%	$	111,180	> =	8.0	%		$	138,975	> =	10.0	%
Tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	83,385	> =	6.0	%	10	111,180		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	62,539	> =	4.5	%		90,334		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	190,942		11.1	%	68,584		> =	4.0	%		85,729		> =	5.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	187,783	13.4	%	$	111,694	> =	8.0	%		$	139,618	> =	10.0	%
Tier 1 capital (to risk weighted assets)	170,870		12.2	%	83,771		> =	6.0	%		111,694		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	170,870		12.2	%	62,828		> =	4.5	%		90,752		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	170,870		10.0	%	68,323		> =	4.0	%		85,403		> =	5.0	%

The Company’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	219,277	15.8	%	111,180		> =	8.0	%
Tier 1 capital (to risk weighted assets)	137,459		9.9	%	83,385		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	137,459		9.9	%	62,539		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	137,459		8.0	%	68,584		> =	4.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	182,242	13.1	%	$	111,694	> =	8.0	%
Tier 1 capital (to risk weighted assets)	135,329		9.7	%	83,771		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	135,329		9.7	%	62,828		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	135,329		7.9	%	68,323		> =	4.0	%

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

On March 27, 2018, the stockholders of Citizens Community Bancorp, Inc. approved the 2018 Equity Incentive Plan. The aggregate number of shares of common stock reserved and available for issuance under the 2018 Equity Incentive Plan is 350,000 shares. As of March 31, 2022, 214,394 restricted shares had been granted under this plan. This amount includes 11,834 shares of performance based restricted stock granted in 2019 and issued in January 2022 upon achievement of the performance criteria and completion of the three year performance period beginning in January 2019 and ending December 31, 2021. As of March 31, 2022, no stock options had been granted under this plan.

In February 2008, the Company’s stockholders approved the Company’s 2008 Equity Incentive Plan for a term of 10 years. Due to the plan’s expiration, no new awards can be granted under this plan. As of March 31, 2022, there are 400 awarded unvested restricted shares and 63,400 awarded unexercised options remaining from the plan. Restricted shares granted under the 2008 Equity Incentive Plan were awarded at no cost to the employee and vest pro rata over a two to five-year period from the grant date. Options granted to date under this plan vest pro rata over a five-year period from the grant date. Unexercised incentive stock options expire within 10 years of the grant date.

Net compensation expense related to restricted stock awards from these plans was $195 for the three months ended March 31, 2022, compared to $171 for the three months ended March 31, 2021.

Restricted Common Stock Award

	March 31, 2022			December 31, 2021
	Number of Shares	Weighted Average Grant Price		Number of Shares	Weighted Average Grant Price
Restricted Shares
Unvested and outstanding at beginning of year	75,630	$	11.20	57,242	$	12.23
Granted	38,586	14.00		64,399	10.78
Vested	(23,649)	11.12		(44,511)	13.26
Forfeited	—	—		(1,500)	10.78
Unvested and outstanding at end of period	90,567	$	12.41	75,630	$	11.20

The Company accounts for stock option-based employee compensation related to the Company’s 2008 Equity Incentive Plan and 2018 Equity Incentive Plan using the fair-value-based method. Accordingly, management records compensation expense based on the value of the award as measured on the grant date and then the Company recognizes that cost over the vesting period for the award. The compensation cost recognized for stock option-based employee compensation related to these plans for the three month period ended March 31, 2022 was $1. The compensation cost recognized for stock option-based employee compensation related to these plans for the three month period ended March 31, 2021 was $3.

Common Stock Option Awards

	Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
March 31, 2022
Outstanding at beginning of year	65,900	$	11.20
Exercised	(2,500)	8.00
Forfeited or expired	—	—
Outstanding at end of period	63,400	$	11.33	4.52	$	240
Exercisable at end of period	59,200	$	11.16	4.45	$	234
December 31, 2021
Outstanding at beginning of year	72,300	$	11.05
Exercised	(5,800)	8.99
Forfeited or expired	(600)	13.76
Outstanding at end of year	65,900	$	11.20	4.61	$	169
Exercisable at end of year	61,700	$	11.03	4.54	$	169

Information related to the 2008 Equity Incentive Plan for the respective periods follows:

	Three months ended March 31, 2022		Twelve months ended December 31, 2021
Intrinsic value of options exercised	$	19	$	28
Cash received from options exercised	$	20	$	52
Tax benefit realized from options exercised	$	—	$	—

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FAIR VALUE ACCOUNTING

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE ACCOUNTING

FAIR VALUE ACCOUNTING

ASC Topic 820-10, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:

Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3- Significant unobservable inputs that reflect the Company’s assumptions about the factors that market participants would use in pricing an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.

The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).

Assets Measured on a Recurring Basis

The following tables present the financial instruments measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Investment securities:
U.S. government agency obligations	$	23,881	$	—	$	23,881	$	—
Mortgage-backed securities	95,551		—		95,551		—
Corporate debt securities	35,946		—		35,946		—
Corporate asset-backed securities	32,527		—		32,527		—
Total investment securities	187,905		—		187,905		—
Equity Investments:
Equity Investments	331		331		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,291		331		—		—
Total	$	189,196	$	331	$	187,905	$	—
December 31, 2021
Investment securities:
U.S. government agency obligations	$	26,265	$	—	$	26,265	$	—
Obligations of states and political subdivisions	140		—		140		—
Mortgage-backed securities	107,167		—		107,167		—
Corporate debt securities	35,588		—		35,588		—
Corporate asset backed securities	33,908		—		33,908		—
Total investment securities	203,068		—		203,068		—
Equity Investments:
Equity Investments	368		368		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,328		368		—		—
Total	$	204,396	$	368	$	203,068	$	—

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

Assets Measured on Nonrecurring Basis

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021:

	Carrying Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	$	—	$	—	$	1,368
Impaired loans with allocated allowances	5,507		—		—		5,507
Mortgage servicing rights	4,614		—		—		5,267
Total	$	11,489	$	—	$	—	$	12,142
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	$	—	$	—	$	1,408
Impaired loans with allocated allowances	5,580		—		—		5,580
Mortgage servicing rights	4,161		—		—		4,312
Total	$	11,149	$	—	$	—	$	11,300

The fair value of impaired loans referenced above was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans.

The fair value of foreclosed and repossessed assets was determined by obtaining market price valuations from independent third parties wherever such quotes were available for other collateral owned. The Company utilized independent third party appraisals to support the Company’s estimates and judgments in determining fair value for other real estate owned.

The fair value of mortgage servicing rights was estimated using discounted cash flows based on current market rates and other factors.

The following table represents additional quantitative information about assets measured at fair value on a

recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at

March 31, 2022.

	Fair Value		Valuation Techniques (1)	Significant Unobservable Inputs (2)	Range
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,507	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	5,267	Discounted cash flows	Discounted rates	9% - 12%
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,580	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	4,312	Discounted cash flows	Discounted rates	9% - 12%

(1)     Fair value is generally determined through independent third-party appraisals of the underlying

    collateral, which generally includes various level 3 inputs which are not observable.

(2)     The fair value basis of impaired loans and real estate owned may be adjusted to reflect management

    estimates of disposal costs including, but not limited to, real estate brokerage commissions, legal fees,

    and delinquent property taxes.

The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:

		March 31, 2022				December 31, 2021
	Valuation Method Used	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	(Level I)	$	84,364	$	84,364	$	47,691	$	47,691
Other interest-bearing deposits	(Level II)	1,511		1,527		1,511		1,535
Securities available for sale “AFS”	(Level II)	187,905		187,905		203,068		203,068
Securities held to maturity “HTM”	(Level II)	104,894		95,975		71,141		69,177
Equity investments	(Level I)	331		331		368		368
Equity investments valued at NAV(1)	N/A	960		960		960		960
Other investments	(Level II)	15,084		15,084		15,305		15,305
Loans receivable, net	(Level III)	1,273,358		1,343,482		1,294,050		1,319,293
Loans held for sale	(Level II)	2,528		2,528		6,670		6,670
Mortgage servicing rights	(Level III)	4,614		5,267		4,161		4,312
Accrued interest receivable	(Level I)	4,179		4,179		3,916		3,916
Financial liabilities:
Deposits	(Level III)	$	1,428,223	$	1,428,630	$	1,387,535	$	1,388,390
FHLB advances	(Level II)	85,530		85,039		111,527		113,285
Other borrowings	(Level I)	87,062		87,062		58,426		58,426
Accrued interest payable	(Level I)	375		375		586		586

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares outstanding for the period. A reconciliation of the basic and diluted earnings per share is as follows:

	Three Months Ended
(Share count in thousands)	March 31, 2022		March 31, 2021
Basic
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Basic earnings per share	$	0.45	$	0.50
Diluted
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Add: Dilutive stock options outstanding	14		6
Average shares and dilutive potential common shares	10,541		10,986
Diluted earnings per share	$	0.45	$	0.50
Additional common stock option shares that have not been included due to their antidilutive effect	—		22,400

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OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE INCOME (LOSS)

The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three months ended
	March 31, 2022						March 31, 2021
	Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount		Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount
Unrealized losses on securities:
Net unrealized losses arising during the period	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)
Other comprehensive loss	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2021 and the three months ended March 31, 2022 were as follows:

	Unrealized Gains (Losses) on AFS Securities		Other Accumulated Comprehensive Income (Loss), net of tax
Beginning Balance, January 1, 2021	$	2,056	$	1,490
Current year-to-date other comprehensive loss	(1,834)		(1,329)
Ending balance, December 31, 2021	$	222	$	161
Current year-to-date other comprehensive loss	(9,824)		(7,123)
Ending balance, March 31, 2022	$	(9,602)	$	(6,962)

There were no reclassifications out of accumulated other comprehensive income (loss) for either of the three month periods ended March 31, 2022 or March 31, 2021, respectively.

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

Use of Estimates –Preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, fair value of financial instruments, the allowance for loan losses, mortgage servicing rights, foreclosed and repossessed assets, valuation of intangible assets arising from acquisitions, useful lives for depreciation and amortization, valuation of goodwill and long-lived assets, stock based compensation, deferred tax assets, uncertain income tax positions and contingencies. Management does not anticipate any material changes to estimates made herein in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: those items described under the caption “Risk Factors” in Item 1A of the annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 2, 2022; the matters described in “Risk Factors” in Item 1A of this Form 10-Q; external market factors such as market interest rates and unemployment rates; changes to operating policies and procedures and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period.

Investment Securities; Held to Maturity and Available for Sale

Investment Securities; Held to Maturity and Available for Sale – Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of the date of each balance sheet. Securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held to maturity securities are stated at amortized cost. Investment securities not classified as held to maturity are classified as available for sale. Available for sale securities are stated at fair value, with unrealized holding gains and losses being reported in other comprehensive income (loss), net of tax. Unrealized losses deemed other-than-temporary due to credit issues are reported in the

Company’s net income in the period in which the losses arise. Realized gains or losses on sales of available for sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net gains on investment securities. Interest income includes amortization of purchase premium or accretion of purchase discount. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities.

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. As part of such monitoring, the credit quality of individual securities and their issuer is assessed. Significant inputs used to measure the amount of other-than-temporary impairment related to credit loss include, but are not limited to: the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities. Adjustments to market value of available for sale securities that are considered temporary are recorded in other comprehensive income or loss as separate components of stockholders’ equity, net of tax. If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists. If there is a credit loss, it will be recorded in the Company’s consolidated statement of operations. Non-credit components of the unrealized losses on available for sale securities will continue to be recognized in other comprehensive income (loss), net of tax.

Equity investments

Equity investments - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities. Farmer Mac equity securities are carried at their fair market value, which is readily determinable. Changes in fair value are recognized as net gains (losses) on investment securities in the consolidated Statement of Operations.

Also included in equity investments are the Company’s investments in a Volker Rule-compliant Small Business Investment Company ("SBIC") and an investment fund. The SBIC and investment fund meet the definition of investment companies, as defined in ASC 946, Financial Services - Investment Companies. These investments seek returns by investing in various small businesses and do not have redemption rights. Distributions from the investments will be received as the underlying investments, which generally have a life of 10 years, are liquidated. We elected the practical expedient available in Topic 820, Fair Value Measurements, which permits the use of net asset value ("NAV") per share or equivalent to value investments in entities that are or are similar to investment companies. SBICs and investment funds report their investments at estimated fair value. We record the unrealized gains and losses resulting from changes in the fair value of these investments as gains or losses on equity securities in our consolidated statements of operations. The carrying value of these investments is equal to the capital account balance per each entities' quarterly financial statements.

Other Investments

Other Investments - As a member of the Federal Reserve Bank (“FRB”) System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other exchange traded equity securities. As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as other income in the consolidated statement of operations.

Also included in other investments is stock of our correspondent bank, Bankers’ Bank, without readily determinable fair value. This stock is carried at cost plus or minus changes resulting from observable price changes in orderly transactions for this stock, less other-than-temporary impairment charges, if any.

Management’s evaluation for impairment of these other investments, includes consideration of the financial condition and other available relevant information of the issuer. Based on management’s quarterly evaluation, no impairment has been recorded on these securities.

Loans

Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of: deferred loan fees and costs, accretable yield on acquired loans and non-accretable discount on purchased credit impaired (PCI) loans. Interest income is accrued on the unpaid principal balance of these loans. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed. If the loan is prepaid, any unamortized net fee is recognized at this time. Late charge fees are recognized into income when collected.

Interest income on commercial, mortgage and consumer loans is discontinued according to the following schedules:

•Commercial/agricultural real estate loans past due 90 days or more;

•Commercial and industrial/agricultural operating loans past due 90 days or more;

•Closed end consumer installment loans past due 120 days or more; and

•Residential mortgage loans and open ended consumer installment loans past due 180 days or more.

Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for a loan placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual status. Loans are returned to accrual status when payments are made that bring the loan account current with the contractual term of the loan and a six month payment history has been established. Interest on accruing troubled debt restructured (“TDR”), less than 90 days delinquent, is recognized as income as it accrues, based on the revised terms of the loan over an established period of continued payment.

Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 180 days or more. Closed ended consumer installment loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 120 days or more. Commercial/agricultural real estate, commercial and industrial and agricultural operating loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 90 days or more.

Allowance for Loan Losses

Allowance for Loan Losses – The allowance for loan losses (“ALL”) is a valuation allowance for probable and inherent credit losses in our loan portfolio. Loan losses are charged against the ALL when management believes that the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the ALL. Management estimates the required ALL balance taking into account the following factors: past loan loss experience; the nature, volume and composition of our loan portfolio; known and inherent risks in our portfolio; information about specific borrowers’ ability to repay; estimated collateral values; current economic conditions; and other relevant factors determined by management. The ALL consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for certain qualitative factors. The entire ALL balance is available for any loan that, in management’s judgment, should be charged off.

Impaired Loans

A loan is impaired when full payment under the loan terms is not expected. Impaired loans consist of all TDRs, as well as individual loans not considered a TDR, that are either (1) rated substandard or worse, (2) on nonaccrual status or (3) PCI loans which are impaired at the time of acquisition. Substandard loans, as defined by the OCC, our primary banking regulator, are loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. All TDRs are individually evaluated for impairment. See Note 3, “Loans, Allowance for Loan Losses and Impaired Loans” for more information on what we consider to be a TDR. For TDR’s or substandard loans deemed to be impaired, a specific ALL allocation may be established so that the loan is reported, net, at the lower of (a) its outstanding principal balance; (b) the present value of the loan’s estimated future cash flows using the loan’s existing rate; or (c) at the fair value of any loan collateral, less estimated disposal costs, if repayment is expected solely from the underlying collateral of the loan. For TDRs less than 90+ days past due, and certain substandard loans that are less than 90+ days delinquent, the likelihood of the loan migrating to over 90 days past due is also taken into account when determining the specific ALL allocation for these particular loans. Large groups of smaller balance homogeneous loans, such as non-TDR commercial, consumer and residential real estate loans, are collectively evaluated for ALL purposes, and accordingly, are not separately identified for ALL disclosures.

Acquired Loans

Acquired Loans— Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value with no carryover of related allowance for loan losses. Any allowance for loan loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that no longer are expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including: the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may

no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield.

Loans acquired with deteriorated credit quality are accounted for in accordance with Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30) if, at acquisition, the loans have evidence of credit quality deterioration since origination and it is probable that all contractually required payments will not be collected. At acquisition, the Company considers several factors as indicators that an acquired loan has evidence of deterioration in credit quality. These factors include, but are not limited to: loans 90 days or more past due, loans with an internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.

Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable discount is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan’s total scheduled principal and interest payments over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect.

Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable discount to be subsequently recognized in interest income on a prospective basis over the loan’s remaining life.

Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs (ASC 310-20), whereby the premium or discount derived from the fair market value adjustment, on a loan-by-loan or pooled basis, is recognized into interest income on a level yield basis over the remaining expected life of the loan or pool.

For all acquired loans, the outstanding loan balances less any related accretable discount and/or non-accretable difference is referred to as the loans’ carrying amount.

Loans Held for Sale

Loans Held for Sale — Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They are carried at the lower of aggregate cost or fair value. Gains and losses on sales of loans are recognized at settlement dates, and are determined by the difference between the sales proceeds and the carrying value of the loans after allocating costs to servicing rights retained. Such gains and losses are included as non-interest income in the consolidated statements of operations. All sales are made without recourse. Interest rate lock commitments on mortgage loans to be funded and sold are valued at fair value, and are included in other assets or liabilities, if material.

Transfers of financial assets

Transfers of financial assets—Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the entity, (2) the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and (3) the entity does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.

Mortgage Servicing Rights

Mortgage Servicing Rights— Mortgage servicing rights (“MSR”) assets result as the Company sells loans to investors in the secondary market and retains the rights to service mortgage loans sold to others. MSR assets are initially measured at fair value; assessed for impairment at least annually; carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded in non-interest expense in the consolidated statement of operations.

The valuation of MSRs and related amortization, included in mortgage servicing rights expense in the consolidated statements of operations, thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs. Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing fee income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of outstanding principal; or a fixed amount per loan and are recorded as income when earned.

Goodwill and other intangible assets

Goodwill and other intangible assets—The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management. The Company has one reporting unit as of March 31, 2022 which is related to its banking activities. The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of the Company’s reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the Company’s reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of the Company’s reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the Company’s reporting unit’s goodwill to the implied fair value of goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill.

Foreclosed and Repossessed Assets, net

Foreclosed and Repossessed Assets, net – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis. If the fair value declines subsequent to foreclosure or repossession, a write-down is recorded through expense. Costs incurred after acquisition are expensed and are included in non-interest expense, other in the consolidated statements of operations.

New Markets Tax Credits

New Markets Tax Credits - As a part of its commitment to the communities it serves, in the first quarter of 2022 the Company made an investment in an LLC that is sponsoring a community development project that has been awarded a New Markets Tax Credit (NMTC) through the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. This investment is Community Reinvestment Act eligible and is designed to generate a return primarily through the realization of the tax credit. This LLC is considered a Variable Interest Entity (VIE) as the Company represents the holder of the equity investment at risk, but does not have the ability to direct the activities that most significantly affect the performance of the LLC. As such, the Company is not the primary beneficiary of the VIE and the LLC has not been consolidated. The investment is accounted for using the equity method of accounting and is amortized through non-interest expense as the related tax credits are utilized. The utilization of the tax credit is recognized as a reduction in income tax expense.

Leases

Leases - We determine if an arrangement is a lease at inception. All of our existing leases have been determined to be operating leases under ASC 842. Right-of-use (“ROU”) assets are included in other assets in our consolidated balance sheets. Operating lease liabilities are included in other liabilities in our consolidated balance sheets. Lease expense is included in non-interest expense, occupancy in the consolidated statements of operations.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date, based on the present value of lease payments over the lease term. As none of our existing leases provide an implicit rate, we use our incremental borrowing rate, based on information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, when it is reasonably certain that we will exercise that option. Lease expense is recognized based on the total contractually required lease payments, over the term of the lease, on a straight-line basis.

Debt and equity issuance cost

Debt and equity issuance costs—Debt issuance costs, which consist primarily of fees paid to note lenders, are deferred and included in other borrowings in the consolidated balance sheets. Debt issuance costs with a Company call option that originated prior to 2020 and senior note debt issuance costs, are amortized over the contractual term of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Debt issuance costs that originated in 2020 and thereafter, are amortized through the first Company call option date of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Specific costs associated with the issuance of shares of the Company’s common or preferred stock are netted against proceeds and recorded in stockholders’ equity, as additional paid in capital, on the consolidated balance sheets, in the period of the share issuance.

Advertising, Marketing and Public Relations Expense

Advertising, Marketing and Public Relations Expense—The Company expenses all advertising, marketing and public relations costs as they are incurred.

Income Taxes

Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

The Company regularly reviews the carrying amount of its net deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s net deferred tax assets will not be realized in future periods, a deferred tax valuation allowance would be established. Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. Accordingly, the Company’s evaluation is based on current tax laws as well as management’s expectations of future performance.

Revenue Recognition

Revenue Recognition - The Company’s primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts or other similar contracts.

The Company accounts for revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Topic 606 provides that revenue from contracts with customers be recognized when performance obligations under the terms of a contract are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing service. The company does not have any materially significant payment terms as payment is received shortly after the satisfaction of the performance obligation. The non-interest income line items recognized under the scope of Topic 606 are as follows:

Service charges on deposit accounts - Service charges on accounts consist of monthly service fees, transaction-based fees, overdraft services and other deposit account related fees. The Company’s performance obligation for monthly services fees is generally satisfied over the period in which the service is provided. Revenue for these monthly fees is recognized during the service period. Other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied at the time the service is provided. Payment for service charges on deposit accounts are primarily received immediately or in the following month through a direct charge to a customer’s account.

Interchange income - The Company earns interchange fees when cardholder debit card transaction are processed through card association networks. The interchange rates are generally set by the card association based upon purchase volumes and other factors. Interchange fees represent a percentage of the underlying transaction value. The Company has a continuous contract, based on customary business practices, with the card association networks to make funds available for settlement of card transactions. The Company’s performance obligation is satisfied over time as it makes funds available, and the related income is recognized when received.

Gain (loss) on repossessed assets - The Company records a gain or loss from the sale of repossessed assets, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement. When the company finances the sale of repossessed assets to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the repossessed asset is derecognized and the gain or loss on sale is recorded

upon transfer of control of the property to the buyer. In determining the gain on sale or loss on the sale, the Company adjust the transaction price and related gain or loss on sale if a significant financing component is present.

Non-interest income outside of the scope of Revenue from Contracts with Customers, Topic 606 is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income outside of the scope of Topic 606 includes mortgage banking activities, loan fees and service charges, net gains (losses) on investment securities, settlement proceeds, and other, which is primarily made up of BOLI related income.

Earnings Per Share

Earnings Per Share – Basic earnings per common share is net income or loss divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.

Loss Contingencies

Loss Contingencies—Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable and an amount of loss can be reasonably estimated.

Other Comprehensive Income

Other Comprehensive Income —Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale, net of tax, and is shown on the accompanying consolidated statements of comprehensive income.

Operating Segments

Operating Segments—While our executive officers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.

Reclassifications

Reclassifications – Certain items previously reported were reclassified for consistency with the current presentation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements—The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have potentially significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future.

Recent Accounting Pronouncements—Adopted

ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting--These ASUs provide optional and temporary relief, in the form of optional expedients and exceptions, for applying GAAP to modifications of contacts, hedging relationships and other transactions affected by reference rate (e.g. LIBOR) reforms. ASU 2020-04 and ASU 2021-01 are effective for the Company immediately and through December 31, 2022. The Company utilizes LIBOR, among other indexes, as a reference rate for underwriting variable rate loans. Reference rate reform has not had, nor does the Company expect it to have, a material effect on the Company’s consolidated balance sheet, operations or cash flows.

Recently Issued, But Not Yet Effective Accounting Pronouncements

ASU 2016-13; Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments--The ASU changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. In November, 2019, the FASB issued ASU 2019-10, which delayed the effective date for ASU 2016-13 for smaller reporting companies, resulting in ASU 2016-13 becoming effective in the first quarter of 2023 for the Company. Earlier adoption is permitted; however, the Company does not currently plan to adopt the ASU early. Management is assessing alternative loss estimation methodologies and the Company’s data and system needs in order to evaluate the impact that adoption of this standard will have on the Company’s financial condition and results of operations. The Company anticipates recording the effect of implementing this ASU through a cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which the ASU is effective, which will be January 1, 2023.

ASU 2022-02; Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures - The ASU addresses and amends areas identified by the FASB as part of its post-implementation review of the accounting standard that introduced the current expected credit losses model. The amendments eliminate the accounting

guidance for troubled debt restructurings by creditors that have adopted the current expected credit losses model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has not yet adopted the amendments in ASU 2016-13, ASU 2022-02 becomes effective in the first quarter of 2023. Management is assessing the impact that adoption of this standard will have on the Company’s financial condition and results of operations in conjunction with its assessment of the impact of ASU 2016-13. The Company expects to adopt the guidance for our fiscal year beginning January 1, 2023.

Fair Value Measurement

ASC Topic 820-10, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:

Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3- Significant unobservable inputs that reflect the Company’s assumptions about the factors that market participants would use in pricing an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.

The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).

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INVESTMENT SECURITIES (Tables)

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of March 31, 2022 and December 31, 2021, respectively, were as follows:

Available for sale securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
U.S. government agency obligations	$	23,686	$	298	$	103	$	23,881
Mortgage-backed securities	103,723		9		8,181		95,551
Corporate debt securities	37,087		54		1,195		35,946
Corporate asset-based securities	33,011		—		484		32,527
Total available for sale securities	$	197,507	$	361	$	9,963	$	187,905
December 31, 2021
U.S. government agency obligations	$	25,826	$	440	$	1	$	26,265
Obligations of states and political subdivisions	140		—		—		140
Mortgage-backed securities	107,636		409		878		107,167
Corporate debt securities	35,342		403		157		35,588
Corporate asset-based securities	33,902		133		127		33,908
Total available for sale securities	$	202,846	$	1,385	$	1,163	$	203,068

Schedule of Held-to-Maturity Securities

Held to maturity securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2022
Obligations of states and political subdivisions	$	4,600	$	—	$	32	$	4,568
Mortgage-backed securities	100,294		29		8,916		91,407
Total held to maturity securities	$	104,894	$	29	$	8,948	$	95,975
December 31, 2021
Obligations of states and political subdivisions	$	4,600	$	—	$	7	$	4,593
Mortgage-backed securities	66,541		104		2,061		64,584
Total held to maturity securities	$	71,141	$	104	$	2,068	$	69,177

Schedule of Maturity of Securities

The estimated fair value of securities at March 31, 2022 and December 31, 2021, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Expected maturities may differ from contractual maturities on certain agency and municipal securities due to the call feature.

	March 31, 2022				December 31, 2021
Available for sale securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	—	$	—	$	140	$	140
Due after one year through five years	4,670		4,524		4,903		4,971
Due after five years through ten years	42,629		41,673		40,410		40,818
Due after ten years	46,485		46,157		49,757		49,972
Total securities with contractual maturities	$	93,784	$	92,354	$	95,210	$	95,901
Mortgage-backed securities	103,723		95,551		107,636		107,167
Total available for sale securities	$	197,507	$	187,905	$	202,846	$	203,068

	March 31, 2022				December 31, 2021
Held to maturity securities	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due after one year through five years	$	4,450	$	4,425	$	4,300	$	4,298
Due after five years through ten years	150		143		300		295
Total securities with contractual maturities	4,600		4,568		4,600		4,593
Mortgage-backed securities	100,294		91,407		66,541		64,584
Total held to maturity securities	$	104,894	$	95,975	$	71,141	$	69,177

Schedule of Available-for-Sale Securities with Unrealized Losses

Securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	Less than 12 Months				12 Months or More				Total
Available for sale securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
U.S. government agency obligations	$	3,716	$	103	$	—	$	—	$	3,716	$	103
Mortgage-backed securities	84,939		7,358		7,469		823		92,408		8,181
Corporate debt securities	29,871		1,157		712		38		30,583		1,195
Corporate asset-based securities	32,527		484		—		—		32,527		484
Total	$	151,053	$	9,102	$	8,181	$	861	$	159,234	$	9,963
December 31, 2021
U.S. government agency obligations	$	1,169	$	1	$	—	$	—	$	1,169	$	1
Mortgage backed securities	89,010		878		—		—		89,010		878
Corporate debt securities	17,240		142		735		15		17,975		157
Corporate asset-based securities	19,296		127		—		—		19,296		127
Total	$	126,715	$	1,148	$	735	$	15	$	127,450	$	1,163

Schedule of Held-to-Maturity Securities with Unrealized Losses

	Less than 12 Months				12 Months or More				Total
Held to maturity securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 31, 2022
Obligations of states and political subdivisions	$	4,568	$	32	$	—	$	—	$	4,568	$	32
Mortgage-backed securities	56,503		4,105		33,773		4,811		90,276		8,916
Total	$	61,071	$	4,137	$	33,773	$	4,811	$	94,844	$	8,948
December 31, 2021
Obligations of states and political subdivisions	$	593	$	7	$	—	$	—	$	593	$	7
Mortgage-backed securities	46,969		1,346		14,716		715		61,685		2,061
Total	$	47,562	$	1,353	$	14,716	$	715	$	62,278	$	2,068

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS (Tables)

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Schedule of Loans by Risk Rating

Below is a summary of originated and acquired loans by type and risk rating as of March 31, 2022:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	569,560	$	659	$	5,070	$	—	$	—	$	575,289
Agricultural real estate	50,111		784		1,788		—		—		52,683
Multi-family real estate	175,186		285		—		—		—		175,471
Construction and land development	86,869		—		128		—		—		86,997
C&I/Agricultural operating:
Commercial and industrial	108,370		48		4		—		—		108,422
Agricultural operating	18,792		68		5,160		—		—		24,020
Residential mortgage:
Residential mortgage	57,145		—		2,730		—		—		59,875
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	7,772		—		70		—		—		7,842
Total originated loans before SBA PPP loans	1,091,688		1,844		15,062		—		—		1,108,594
SBA PPP loans	2,071		—		—		—		—		2,071
Total originated loans	$	1,093,759	$	1,844	$	15,062	$	—	$	—	$	1,110,665
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	111,371	$	—	$	3,114	$	—	$	—	$	114,485
Agricultural real estate	18,424		—		4,609		—		—		23,033
Multi-family real estate	4,016		—		—		—		—		4,016
Construction and land development	729		—		154		—		—		883
C&I/Agricultural operating:
Commercial and industrial	12,342		5		253		—		—		12,600
Agricultural operating	4,501		—		236		—		—		4,737
Residential mortgage:
Residential mortgage	23,507		—		1,391		—		—		24,898
Consumer installment:
Other consumer	346		—		3		—		—		349
Total acquired loans	$	175,236	$	5	$	9,760	$	—	$	—	$	185,001
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	680,931	$	659	$	8,184	$	—	$	—	$	689,774
Agricultural real estate	68,535		784		6,397		—		—		75,716
Multi-family real estate	179,202		285		—		—		—		179,487
Construction and land development	87,598		—		282		—		—		87,880
Commercial/Agricultural non-real estate:
Commercial and industrial	120,712		53		257		—		—		121,022
Agricultural operating	23,293		68		5,396		—		—		28,757
Residential mortgage:
Residential mortgage	80,652		—		4,121		—		—		84,773
Purchased HELOC loans	3,487		—		—		—		—		3,487
Consumer installment:
Originated indirect paper	14,396		—		112		—		—		14,508
Other consumer	8,118		—		73		—		—		8,191
Gross loans before SBA PPP Loans	1,266,924		1,849		24,822		—		—		1,293,595
SBA PPP loans	2,071		—		—		—		—		$	2,071
Gross loans	$	1,268,995	$	1,849	$	24,822	$	—	$	—	$	1,295,666
Less:
Unearned net deferred fees and costs and loans in process											(2,223)
Unamortized discount on acquired loans											(3,267)
Allowance for loan losses											(16,818)
Loans receivable, net											$	1,273,358

Below is a summary of originated and acquired loans by type and risk rating as of December 31, 2021:

	1 to 5		6		7		8		9		TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	572,724	$	667	$	5,004	$	—	$	—	$	578,395
Agricultural real estate	50,834		1,267		271		—		—		52,372
Multi-family real estate	173,760		290		—		—		—		174,050
Construction and land development	75,146		—		3,467		—		—		78,613
C&I/Agricultural operating:
Commercial and industrial	107,798		57		82		—		—		107,937
Agricultural operating	23,935		764		1,503		—		—		26,202
Residential mortgage:
Residential mortgage	60,754		—		3,101		—		—		63,855
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,404		—		69		—		—		8,473
Total Originated loans before SBA PPP loans	1,092,879		3,045		13,815		—		—		1,109,739
SBA PPP loans	8,755		—		—		—		—		8,755
Total originated loans	$	1,101,634	$	3,045	$	13,815	$	—	$	—	$	1,118,494
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	116,839	$	1,314	$	1,917	$	—	$	—	$	120,070
Agricultural real estate	21,051		—		5,072		—		—		26,123
Multi-family real estate	4,299		—		—		—		—		4,299
Construction and land development	735		172		—		—		—		907
C&I/Agricultural operating:
Commercial and industrial	13,931		5		294		—		—		14,230
Agricultural operating	4,936		—		450		—		—		5,386
Residential mortgage:
Residential mortgage	25,869		—		1,266		—		—		27,135
Consumer installment:
Other consumer	398		—		3		—		—		401
Total acquired loans	$	188,058	$	1,491	$	9,002	$	—	$	—	$	198,551
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate	$	689,563	$	1,981	$	6,921	$	—	$	—	698,465
Agricultural real estate	71,885		1,267		5,343		—		—		78,495
Multi-family real estate	178,059		290		—		—		—		178,349
Construction and land development	75,881		172		3,467		—		—		79,520
C&I/Agricultural operating:
Commercial and industrial	121,729		62		376		—		—		122,167
Agricultural operating	28,871		764		1,953		—		—		31,588
Residential mortgage:
Residential mortgage	86,623		—		4,367		—		—		90,990
Purchased HELOC loans	3,706		—		165		—		—		3,871
Consumer installment:
Originated indirect paper	15,818		—		153		—		—		15,971
Other consumer	8,802		—		72		—		—		8,874
Gross loans before SBA PPP loans	1,280,937		4,536		22,817		—		—		1,308,290
SBA PPP loans	8,755		—		—		—		—		8,755
Gross loans	$	1,289,692	$	4,536	$	22,817	$	—	$	—	$	1,317,045
Less:
Unearned net deferred fees and costs and loans in process											(2,482)
Unamortized discount on acquired loans											(3,600)
Allowance for loan losses											(16,913)
Loans receivable, net											$	1,294,050

Schedule of SBA PPP Loans by Round Activity

Schedule of Changes of Impaired Loans and Non-Impaired Loans

Changes in the ALL by loan type for the periods presented below were as follows:

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2022
Allowance for Loan Losses:
Beginning balance, January 1, 2022	$	12,354	$	1,959	$	518	$	225	$	774	$	15,830
Charge-offs	(35)		(63)		—		(9)		—		(107)
Recoveries	3		10		1		10		—		24
Provision	72		198		(59)		(66)		8		153
Total allowance on originated loans	12,394		2,104		460		160		782		15,900
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans:
Beginning balance, January 1, 2022	856		69		130		28		—		1,083
Charge-offs	—		—		(12)		—		—		(12)
Recoveries	—		—		—		—		—		—
Provision	(67)		(11)		(56)		(19)		—		(153)
Total allowance on other acquired loans	789		58		62		9		—		918
Total allowance on acquired loans	789		58		62		9		—		918
Ending balance, March 31, 2022	$	13,183	$	2,162	$	522	$	169	$	782	$	16,818
Allowance for Loan Losses at March 31, 2022:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,280	$	373	$	69	$	—	$	—	$	1,722
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,903	$	1,789	$	453	$	169	$	782	$	15,096
Loans Receivable as of March 31, 2022:											—
Ending balance of originated loans	$	890,440	$	134,513	$	63,362	$	22,350	$	—	$	1,110,665
Ending balance of purchased credit-impaired loans	8,672		1,023		1,024		—		—		10,719
Ending balance of other acquired loans	133,745		16,314		23,874		349		—		174,282
Ending balance of loans	$	1,032,857	$	151,850	$	88,260	$	22,699	$	—	$	1,295,666
Ending balance: individually evaluated for impairment	$	20,597	$	6,605	$	6,838	$	210	$	—	$	34,250
Ending balance: collectively evaluated for impairment	$	1,012,260	$	145,245	$	81,422	$	22,489	$	—	$	1,261,416

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Three months ended March 31, 2021
Allowance for Loan Losses:
Beginning balance, January 1, 2021	$	10,271	$	2,112	$	1,041	$	489	$	906	$	14,819
Charge-offs	—		—		—		(25)		—		(25)
Recoveries	5		8		7		10		—		30
Provision	833		(487)		(107)		(24)		(11)		204
Total allowance on originated loans	$	11,109	$	1,633	$	941	$	450	$	895	$	15,028
Purchased credit impaired loans	—		—		—		—		—		—
Other acquired loans
Beginning balance, January 1, 2021	1,684		141		335		64		—		2,224
Charge-offs	(200)		—		—		—		—		(200)
Recoveries	—		7		1		4		—		12
Provision	(183)		(54)		52		(19)		—		(204)
Total allowance on other acquired loans	1,301		94		388		49		—		1,832
Total allowance on acquired loans	1,301		94		388		49		—		1,832
Ending balance, March 31, 2021	$	12,410	$	1,727	$	1,329	$	499	$	895	$	16,860
Allowance for Loan Losses at March 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	1,094	$	10	$	157	$	—	$	—	$	1,261
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	11,316	$	1,717	$	1,172	$	499	$	895	$	15,599
Loans Receivable as of March 31, 2021
Ending balance of originated loans	$	599,182	$	216,773	$	87,576	$	34,137	$	—	$	937,668
Ending balance of purchased credit-impaired loans	14,856		1,367		1,218		—		—		17,441
Ending balance of other acquired loans	181,438		24,974		38,828		913		—		246,153
Ending balance of loans	$	795,476	$	243,114	$	127,622	$	35,050	$	—	$	1,201,262
Ending balance: individually evaluated for impairment	$	24,948	$	6,197	$	8,843	$	255	$	—	$	40,243
Ending balance: collectively evaluated for impairment	$	770,528	$	236,917	$	118,779	$	34,795	$	—	$	1,161,019

	Commercial/Agricultural Real Estate		C&I/Agricultural operating		Residential Mortgage		Consumer Installment		Unallocated		Total
Allowance for Loan Losses at December 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment	$	797	$	99	$	113	$	—	$	—	$	1,009
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	$	12,413	$	1,929	$	535	$	253	$	774	$	15,904
Loans Receivable as of December 31, 2021:
Ending balance of originated loans	$	883,430	$	142,894	$	67,726	$	24,444	$	—	$	1,118,494
Ending balance of purchased credit-impaired loans	9,060		1,101		1,044		—		—		11,205
Ending balance of other acquired loans	142,339		18,515		26,091		401		—		187,346
Ending balance of loans	$	1,034,829	$	162,510	$	94,861	$	24,845	$	—	$	1,317,045
Ending balance: individually evaluated for impairment	$	21,792	$	3,337	$	7,007	$	257	$	—	$	32,393
Ending balance: collectively evaluated for impairment	$	1,013,037	$	159,173	$	87,854	$	24,588	$	—	$	1,284,652

Schedule of Loans Receivable

Loans receivable by loan type as of the end of the periods shown below were as follows:

	Commercial/Agricultural Real Estate Loans				C&I/Agricultural Operating				Residential Mortgage				Consumer Installment				Totals
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Performing loans
Performing TDR loans	$	2,085	$	4,618	$	608	$	649	$	2,924	$	2,681	$	28	$	36	$	5,645	$	7,984
Performing loans other	1,021,686		1,021,346		149,894		160,570		83,604		90,591		22,581		24,729		1,277,765		1,297,236
Total performing loans	1,023,771		1,025,964		150,502		161,219		86,528		93,272		22,609		24,765		1,283,410		1,305,220
Nonperforming loans (1)
Nonperforming TDR loans	3,502		3,389		639		554		443		593		2		3		4,586		4,539
Nonperforming loans other	5,584		5,476		709		737		1,289		996		88		77		7,670		7,286
Total nonperforming loans	9,086		8,865		1,348		1,291		1,732		1,589		90		80		12,256		11,825
Total loans	$	1,032,857	$	1,034,829	$	151,850	$	162,510	$	88,260	$	94,861	$	22,699	$	24,845	$	1,295,666	$	1,317,045

(1)Nonperforming loans are either 90+ days past due or nonaccrual.

Schedule of Aging Analysis of the Bank Real Estate and Consumer Loans

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of March 31, 2022 and December 31, 2021, respectively, was as follows:

	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Greater Than 89 Days Past Due and Accruing		Total Past Due and Accruing		Nonaccrual Loans		Total Past Due Accruing and Nonaccrual Loans		Current		Total Loans
March 31, 2022
Commercial/Agricultural real estate:
Commercial real estate	$	1,996	$	—	$	—	$	1,996	$	5,503	$	7,499	$	682,275	$	689,774
Agricultural real estate	895		—		—		895		3,454		4,349		71,367		75,716
Multi-family real estate	—		—		—		—		—		—		179,487		179,487
Construction and land development	—		—		—		—		129		129		87,751		87,880
C&I/Agricultural operating:
Commercial and industrial	—		—		—		—		284		284		120,738		121,022
C&I SBA PPP loans	—		—		—		—		—		—		2,071		2,071
Agricultural operating	1,645		—		—		1,645		1,064		2,709		26,048		28,757
Residential mortgage:
Residential mortgage	1,444		392		398		2,234		1,334		3,568		81,205		84,773
Purchased HELOC loans	—		—		—		—		—		—		3,487		3,487
Consumer installment:
Originated indirect paper	39		—		—		39		60		99		14,409		14,508
Other consumer	38		3		—		41		30		71		8,120		8,191
Total	$	6,057	$	395	$	398	$	6,850	$	11,858	$	18,708	$	1,276,958	$	1,295,666
December 31, 2021
Commercial/Agricultural real estate:
Commercial real estate	$	36	$	—	$	—	$	36	$	5,374	$	5,410	$	693,055	$	698,465
Agricultural real estate	498		4		—		502		3,490		3,992		74,503		78,495
Multi-family real estate	—		—		—		—		—		—		178,349		178,349
Construction and land development	—		—		—		—		—		—		79,520		79,520
C&I/Agricultural operating:
Commercial and industrial	—		32		—		32		298		330		121,837		122,167
SBA PPP loans	—		—		—		—		—		—		8,755		8,755
Agricultural operating	1,123		—		—		1,123		993		2,116		29,472		31,588
Residential mortgage:
Residential mortgage	1,471		487		156		2,114		1,268		3,382		87,608		90,990
Purchased HELOC loans	117		—		—		117		165		282		3,589		3,871
Consumer installment:
Originated indirect paper	38		27		—		65		55		120		15,851		15,971
Other consumer	58		10		4		72		22		94		8,780		8,874
Total	$	3,341	$	560	$	160	$	4,061	$	11,665	$	15,726	$	1,301,319	$	1,317,045

Schedule of Bank Impaired Loans

A summary of the Company’s loans individually evaluated for impairment as of March 31, 2022, December 31, 2021 and March 31, 2021 was as follows:

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2022
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	13,840	$	14,116	$	—	$	16,626	$	136
C&I/Agricultural operating	6,015		6,167		—		5,319		50
Residential mortgage	6,447		6,528		—		6,882		71
Consumer installment	210		210		—		258		2
Total	$	26,512	$	27,021	$	—	$	29,085	$	259
With An Allowance Recorded:
Commercial/Agricultural real estate	$	6,481	$	6,481	$	1,280	$	5,285	$	11
C&I/Agricultural operating	438		438		373		415		10
Residential mortgage	310		310		69		600		1
Consumer installment	—		—		—		1		—
Total	$	7,229	$	7,229	$	1,722	$	6,301	$	22
March 31, 2022 Totals:
Commercial/Agricultural real estate	$	20,321	$	20,597	$	1,280	$	21,911	$	147
C&I/Agricultural operating	6,453		6,605		373		5,734		60
Residential mortgage	6,757		6,838		69		7,482		72
Consumer installment	210		210		—		259		2
Total	$	33,741	$	34,250	$	1,722	$	35,386	$	281

							Twelve Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	15,521	$	15,905	$	—	$	19,412	$	964
C&I/Agricultural operating	3,153		3,337		—		4,622		146
Residential mortgage	6,221		6,306		—		7,316		316
Consumer installment	256		256		—		306		85
Total	$	25,151	$	25,804	$	—	$	31,656	$	1,511
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,887	$	5,887	$	797	$	4,089	$	62
C&I/Agricultural operating	—		—		99		391		84
Residential mortgage	701		701		113		890		17
Consumer installment	1		1		—		2		—
Total	$	6,589	$	6,589	$	1,009	$	5,372	$	163
December 31, 2021 Totals
Commercial/Agricultural real estate	$	21,408	$	21,792	$	797	$	23,501	$	1,026
C&I/Agricultural operating	3,153		3,337		99		5,013		230
Residential mortgage	6,922		7,007		113		8,206		333
Consumer installment	257		257		—		308		85
Total	$	31,740	$	32,393	$	1,009	$	37,028	$	1,674

							Three Months Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate	$	19,064	$	19,714	$	—	$	21,183	$	239
C&I/Agricultural operating	5,924		6,118		—		6,007		70
Residential mortgage	8,069		8,191		—		8,240		80
Consumer installment	255		255		—		306		3
Total	$	33,312	$	34,278	$	—	$	35,736	$	392
With An Allowance Recorded:
Commercial/Agricultural real estate	$	5,234	$	5,234	$	1,094	$	3,762	$	62
C&I/Agricultural operating	79		79		10		430		—
Residential mortgage	652		652		157		866		8
Consumer installment	—		—		—		1		—
Total	$	5,965	$	5,965	$	1,261	$	5,059	$	70
March 31, 2021 Totals:
Commercial/Agricultural real estate	$	24,298	$	24,948	$	1,094	$	24,945	$	301
C&I/Agricultural operating	6,003		6,197		10		6,437		70
Residential mortgage	8,721		8,843		157		9,106		88
Consumer installment	255		255		—		307		3
Total	$	39,277	$	40,243	$	1,261	$	40,795	$	462

Schedule of Troubled Debt Restructuring

Following is a summary of TDR loans by accrual status as of March 31, 2022 and December 31, 2021.

	March 31, 2022		December 31, 2021
Troubled debt restructure loans:
Accrual status	$	5,645	$	7,984
Non-accrual status	4,586		4,539
Total	$	10,231	$	12,523

The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three months ended March 31, 2022 and March 31, 2021:     

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2022
TDRs:
Commercial/Agricultural real estate	4	$	1,241	$	—	$	—	$	—	$	1,241	$	1,241	$	—
C&I/Agricultural operating	1	—		—		150		—		150		150		—
Residential mortgage	4	31		—		507		—		538		538		—
Consumer installment	—	—		—		—		—		—		—		—
Totals	9	$	1,272	$	—	$	657	$	—	$	1,929	$	1,929	$	—

	Number of Contracts	Maturity Extension		Modified Payment		Modified Under- writing		Other		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve
Three months ended March 31, 2021
TDRs:
Commercial/Agricultural real estate	2	$	38	$	81	$	—	$	—	$	119	$	119	$	—
C&I/Agricultural operating	1	—		—		240		—		240		240		—
Residential mortgage	2	66		—		14		—		80		80		—
Consumer installment	1	6		—		—		—		6		6		—
Totals	6	$	110	$	81	$	254	$	—	$	445	$	445	$	—

A summary of loans by loan segment modified in a troubled debt restructuring as of March 31, 2022 and March 31, 2021, was as follows:

	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	20	$	5,587	30	$	8,656
C&I/Agricultural operating	7	1,247		14	4,800
Residential mortgage	42	3,367		52	3,937
Consumer installment	6	30		9	49
Total troubled debt restructurings	75	$	10,231	105	$	17,442

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2022 and March 31, 2021, as well as the recorded investment in these restructured loans as of March 31, 2022 and March 31, 2021:

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Modifications	Recorded Investment		Number of Modifications	Recorded Investment
Troubled debt restructurings:
Commercial/Agricultural real estate	—	$	—	—	$	—
C&I/Agricultural operating	—	—		—	—
Residential mortgage	—	—		1	19
Consumer installment	—	—		—	—
Total troubled debt restructurings	—	$	—	1	$	19

Schedule of Acquired Loans

The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:

	March 31, 2022		December 31, 2021
Accountable for under ASC 310-30 (Purchased Credit Impaired “PCI” loans)
Outstanding balance	$	10,719	$	11,205
Carrying amount	$	10,210	$	10,552
Accountable for under ASC 310-20 (non-PCI loans)
Outstanding balance	$	174,282	$	187,346
Carrying amount	$	171,524	$	184,399
Total acquired loans
Outstanding balance	$	185,001	$	198,551
Carrying amount	$	181,734	$	194,951

Schedule of Accretable Expense

The table below shows scheduled accretion by year for the accretable difference recognized due to fair value purchase accounting on recent whole bank acquisitions. In addition, the Company has $1.66 million of accretable discount from purchased impaired loans with the original non-accretable discount transferred to accretable discount. The scheduled accretion on this balance is estimated to be $100 per year; however, large balance payoffs, as seen in 2021 and 2020, would accelerate this accretion.

Fiscal years ending December 31,	Purchase Accounting Accretable Discount
2022	$	594
2023	279
2024	131
2025	96
Total	$	1,100

Schedule of Non-Accretable Yield

The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:

	March 31, 2022		December 31, 2021
Balance at beginning of period	$	653	$	1,087
Additions to non-accretable difference for acquired purchased credit impaired loans	—		—
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans	(26)		(105)
Transfers from non-accretable difference to accretable discount	(86)		(329)
Non-accretable difference used to reduce loan principal balance	(32)		—
Balance at end of period	$	509	$	653

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MORTGAGE SERVICING RIGHTS (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Mortgage Servicing Rights Activity

Mortgage servicing rights activity for the three month periods ended March 31, 2022 and March 31, 2021 were as follows:

	As of and for the Three Months Ended		As of and for the Three Months Ended
	March 31, 2022		March 31, 2021
Mortgage servicing rights:
Mortgage servicing rights, beginning of period	$	4,727	$	5,266
Increase in mortgage servicing rights resulting from transfers of financial assets	126		297
Amortization during the period	(239)		(439)
Mortgage servicing rights, end of period	4,614		5,124
Valuation allowance:
Valuation allowance, beginning of period	(566)		(2,014)
Additions	—		—
Recoveries	566		889
Valuation allowance, end of period	—		(1,125)
Mortgage servicing rights, net	$	4,614	$	3,999
Fair value of mortgage servicing rights; end of period	$	5,267	$	4,005

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LEASES (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Schedule of Components of Lease Expense

	Three Months Ended
	March 31, 2022			March 31, 2021
The components of total lease cost were as follows:
Operating lease cost	$	139		$	139
Variable lease cost	10			7
Total lease cost	$	149		$	146
The components of total lease income were as follows:
Operating lease income	$	9		$	7
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	139		$	138
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	—
	March 31, 2022			December 31, 2021
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	$	2,034		$	2,159
Operating lease liabilities	$	2,104		$	2,228
Weighted average remaining lease term in years; operating leases	5.36			5.55
Weighted average discount rate; operating leases	2.75		%	2.73		%

Schedule of Maturities of Operating Lease Liabilities

Cash obligations and receipts under lease contracts are as follows:

Fiscal years ending December 31,	Payments		Receipts
2022	$	420	$	26
2023	506		27
2024	419		10
2025	403		—
2026	346
Thereafter	480
Total	2,574		$	63
Less: effects of discounting	(470)
Lease liability recognized	$	2,104

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DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2022

Deposits [Abstract]

Schedule of Deposits by Type

The following is a summary of deposits by type at March 31, 2022 and December 31, 2021, respectively: 

	March 31, 2022		December 31, 2021
Non-interest bearing demand deposits	$	269,481	$	276,631
Interest bearing demand deposits	423,251		396,231
Savings accounts	241,072		222,674
Money market accounts	321,409		288,985
Certificate accounts	173,010		203,014
Total deposits	$	1,428,223	$	1,387,535

Schedule of Maturities of Time Deposits

At March 31, 2022, the scheduled maturities of time deposits were as follows for the year ended, except December 31, 2022 which is the nine months ended:

December 31, 2022	$	128,883
December 31, 2023	27,613
December 31, 2024	7,508
December 31, 2025	7,264
December 31, 2026	1,398
After December 31, 2027	344
Total	$	173,010

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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2022

Federal Home Loan Banks [Abstract]

Schedule of Federal Home Loan Bank Advances

A summary of Federal Home Loan Bank advances and other borrowings at March 31, 2022 and December 31, 2021 is as follows:

		March 31, 2022						December 31, 2021
	Stated Maturity	Amount		Range of Stated Rates				Amount		Range of Stated Rates
Federal Home Loan Bank advances (1), (2), (3), (4)	2022	$	—	—	%	—	%	$	11,000	2.45	%	2.45	%
	2023	5,000		1.43	%	1.44	%	20,000		1.43	%	1.44	%
	2024	20,530		0.00	%	1.45	%	20,530		0.00	%	1.45	%
	2025	5,000		1.45	%	1.45	%	5,000		1.45	%	1.45	%
	2029	42,500		1.00	%	1.13	%	42,500		1.00	%	1.13	%
	2030	12,500		0.52	%	0.86	%	12,500		0.52	%	0.86	%
Subtotal		85,530						111,530
Unamortized discount on acquired notes		—						(3)
Federal Home Loan Bank advances, net		$	85,530					$	111,527
Senior Notes (5)	2034	$	23,250	3.00	%	3.00	%	$	28,856	3.00	%	3.50	%
Subordinated Notes (6)	2027	$	15,000	6.75	%	6.75	%	$	15,000	6.75	%	6.75	%
	2030	15,000		6.00	%	6.00	%	15,000		6.00	%	6.00	%
	2032	35,000		4.75	%	4.75	%	—		—	%	—	%
		$	65,000					$	30,000
Unamortized debt issuance costs		(1,188)						(430)
Total other borrowings		$	87,062					$	58,426
Totals		$	172,592					$	169,953

(1)    The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $931,498 and $861,900 at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $240,412 compared to $204,271 as of December 31, 2021.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $111,530 and $123,530, during the three months ended March 31, 2022 and the twelve months ended December 31, 2021, respectively.

(3) There are no FHLB borrowings maturing within twelve months of March 31, 2022. The weighted-average interest rate on FHLB borrowings maturing within twelve months as of December 31, 2021 was 2.45%.

(4)    FHLB term notes totaling $55,000 can be called or replaced by the FHLB on a quarterly basis, and if not called, will mature at various dates in 2029 and 2030.

(5)    Senior notes, entered into by the Company in June 2019 consist of the following:

(a) A term note, which was subsequently refinanced in March 2022, requiring quarterly interest-only payments through March 2025, and quarterly principal and interest payments thereafter. Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 3.00%.

(b) A $5,000 line of credit, maturing in August 2022, that remains undrawn upon.

(6)    Subordinated notes resulted from the following:

(a) The Company’s private sale in August 2017, which bears a fixed interest rate of 6.75% for five years. In August 2022, they convert to a three-month LIBOR plus 4.90% rate, and the interest rate will reset quarterly thereafter. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due quarterly.

(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00% for five years. In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

(c) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in March 2022, which bears a fixed interest rate of 4.75% for five years. In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 329 basis points. The note is callable by the Bank when, and anytime after, the floating rate is initially set. Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

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CAPITAL MATTERS (Tables)

3 Months Ended

Mar. 31, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Bank’s Tier 1 (Leverage) and Risk-Based Capital Ratios

The Bank’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio			Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	207,760	14.9	%	$	111,180	> =	8.0	%		$	138,975	> =	10.0	%
Tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	83,385	> =	6.0	%	10	111,180		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	190,942		13.7	%	$	62,539	> =	4.5	%		90,334		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	190,942		11.1	%	68,584		> =	4.0	%		85,729		> =	5.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	187,783	13.4	%	$	111,694	> =	8.0	%		$	139,618	> =	10.0	%
Tier 1 capital (to risk weighted assets)	170,870		12.2	%	83,771		> =	6.0	%		111,694		> =	8.0	%
Common equity tier 1 capital (to risk weighted assets)	170,870		12.2	%	62,828		> =	4.5	%		90,752		> =	6.5	%
Tier 1 leverage ratio (to adjusted total assets)	170,870		10.0	%	68,323		> =	4.0	%		85,403		> =	5.0	%

The Company’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2022 and December 31, 2021, respectively, are presented below:

	Actual				For Capital Adequacy Purposes
	Amount		Ratio		Amount			Ratio
As of March 31, 2022
Total capital (to risk weighted assets)	$	219,277	15.8	%	111,180		> =	8.0	%
Tier 1 capital (to risk weighted assets)	137,459		9.9	%	83,385		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	137,459		9.9	%	62,539		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	137,459		8.0	%	68,584		> =	4.0	%
As of December 31, 2021
Total capital (to risk weighted assets)	$	182,242	13.1	%	$	111,694	> =	8.0	%
Tier 1 capital (to risk weighted assets)	135,329		9.7	%	83,771		> =	6.0	%
Common equity tier 1 capital (to risk weighted assets)	135,329		9.7	%	62,828		> =	4.5	%
Tier 1 leverage ratio (to adjusted total assets)	135,329		7.9	%	68,323		> =	4.0	%

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Restricted Stock Awards

	March 31, 2022			December 31, 2021
	Number of Shares	Weighted Average Grant Price		Number of Shares	Weighted Average Grant Price
Restricted Shares
Unvested and outstanding at beginning of year	75,630	$	11.20	57,242	$	12.23
Granted	38,586	14.00		64,399	10.78
Vested	(23,649)	11.12		(44,511)	13.26
Forfeited	—	—		(1,500)	10.78
Unvested and outstanding at end of period	90,567	$	12.41	75,630	$	11.20

Schedule of Stock Option Activity

	Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
March 31, 2022
Outstanding at beginning of year	65,900	$	11.20
Exercised	(2,500)	8.00
Forfeited or expired	—	—
Outstanding at end of period	63,400	$	11.33	4.52	$	240
Exercisable at end of period	59,200	$	11.16	4.45	$	234
December 31, 2021
Outstanding at beginning of year	72,300	$	11.05
Exercised	(5,800)	8.99
Forfeited or expired	(600)	13.76
Outstanding at end of year	65,900	$	11.20	4.61	$	169
Exercisable at end of year	61,700	$	11.03	4.54	$	169

Schedule of Information related to Stock Option Plan

Information related to the 2008 Equity Incentive Plan for the respective periods follows:

	Three months ended March 31, 2022		Twelve months ended December 31, 2021
Intrinsic value of options exercised	$	19	$	28
Cash received from options exercised	$	20	$	52
Tax benefit realized from options exercised	$	—	$	—

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FAIR VALUE ACCOUNTING (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Assets Measured on Recurring Basis

The following tables present the financial instruments measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Investment securities:
U.S. government agency obligations	$	23,881	$	—	$	23,881	$	—
Mortgage-backed securities	95,551		—		95,551		—
Corporate debt securities	35,946		—		35,946		—
Corporate asset-backed securities	32,527		—		32,527		—
Total investment securities	187,905		—		187,905		—
Equity Investments:
Equity Investments	331		331		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,291		331		—		—
Total	$	189,196	$	331	$	187,905	$	—
December 31, 2021
Investment securities:
U.S. government agency obligations	$	26,265	$	—	$	26,265	$	—
Obligations of states and political subdivisions	140		—		140		—
Mortgage-backed securities	107,167		—		107,167		—
Corporate debt securities	35,588		—		35,588		—
Corporate asset backed securities	33,908		—		33,908		—
Total investment securities	203,068		—		203,068		—
Equity Investments:
Equity Investments	368		368		—		—
Equity investments measured at NAV(1)	960		—		—		—
Total equity investments	1,328		368		—		—
Total	$	204,396	$	368	$	203,068	$	—

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

Schedule of Assets Measured on Nonrecurring Basis

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of March 31, 2022 and December 31, 2021:

	Carrying Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	$	—	$	—	$	1,368
Impaired loans with allocated allowances	5,507		—		—		5,507
Mortgage servicing rights	4,614		—		—		5,267
Total	$	11,489	$	—	$	—	$	12,142
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	$	—	$	—	$	1,408
Impaired loans with allocated allowances	5,580		—		—		5,580
Mortgage servicing rights	4,161		—		—		4,312
Total	$	11,149	$	—	$	—	$	11,300

Schedule of Fair Value of Assets

The following table represents additional quantitative information about assets measured at fair value on a

recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at

March 31, 2022.

	Fair Value		Valuation Techniques (1)	Significant Unobservable Inputs (2)	Range
March 31, 2022
Foreclosed and repossessed assets, net	$	1,368	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,507	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	5,267	Discounted cash flows	Discounted rates	9% - 12%
December 31, 2021
Foreclosed and repossessed assets, net	$	1,408	Appraisal value	Estimated costs to sell	10% - 15%
Impaired loans with allocated allowances	$	5,580	Appraisal value	Estimated costs to sell	10% - 15%
Mortgage servicing rights	$	4,312	Discounted cash flows	Discounted rates	9% - 12%

(1)     Fair value is generally determined through independent third-party appraisals of the underlying

    collateral, which generally includes various level 3 inputs which are not observable.

(2)     The fair value basis of impaired loans and real estate owned may be adjusted to reflect management

    estimates of disposal costs including, but not limited to, real estate brokerage commissions, legal fees,

    and delinquent property taxes.

Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:

		March 31, 2022				December 31, 2021
	Valuation Method Used	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	(Level I)	$	84,364	$	84,364	$	47,691	$	47,691
Other interest-bearing deposits	(Level II)	1,511		1,527		1,511		1,535
Securities available for sale “AFS”	(Level II)	187,905		187,905		203,068		203,068
Securities held to maturity “HTM”	(Level II)	104,894		95,975		71,141		69,177
Equity investments	(Level I)	331		331		368		368
Equity investments valued at NAV(1)	N/A	960		960		960		960
Other investments	(Level II)	15,084		15,084		15,305		15,305
Loans receivable, net	(Level III)	1,273,358		1,343,482		1,294,050		1,319,293
Loans held for sale	(Level II)	2,528		2,528		6,670		6,670
Mortgage servicing rights	(Level III)	4,614		5,267		4,161		4,312
Accrued interest receivable	(Level I)	4,179		4,179		3,916		3,916
Financial liabilities:
Deposits	(Level III)	$	1,428,223	$	1,428,630	$	1,387,535	$	1,388,390
FHLB advances	(Level II)	85,530		85,039		111,527		113,285
Other borrowings	(Level I)	87,062		87,062		58,426		58,426
Accrued interest payable	(Level I)	375		375		586		586

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Earnings per Share

Earnings per share is based on the weighted average number of shares outstanding for the period. A reconciliation of the basic and diluted earnings per share is as follows:

	Three Months Ended
(Share count in thousands)	March 31, 2022		March 31, 2021
Basic
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Basic earnings per share	$	0.45	$	0.50
Diluted
Net income attributable to common stockholders	$	4,706	$	5,506
Weighted average common shares outstanding	10,527		10,980
Add: Dilutive stock options outstanding	14		6
Average shares and dilutive potential common shares	10,541		10,986
Diluted earnings per share	$	0.45	$	0.50
Additional common stock option shares that have not been included due to their antidilutive effect	—		22,400

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OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss)

The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three months ended
	March 31, 2022						March 31, 2021
	Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount		Before-Tax Amount		Tax Benefit (Expense)		Net-of-Tax Amount
Unrealized losses on securities:
Net unrealized losses arising during the period	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)
Other comprehensive loss	$	(9,824)	$	2,701	$	(7,123)	$	(672)	$	186	$	(486)

Schedule of Changes in Accumulated Balances for Each Component of Other Comprehensive Income (Loss)

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2021 and the three months ended March 31, 2022 were as follows:

	Unrealized Gains (Losses) on AFS Securities		Other Accumulated Comprehensive Income (Loss), net of tax
Beginning Balance, January 1, 2021	$	2,056	$	1,490
Current year-to-date other comprehensive loss	(1,834)		(1,329)
Ending balance, December 31, 2021	$	222	$	161
Current year-to-date other comprehensive loss	(9,824)		(7,123)
Ending balance, March 31, 2022	$	(9,602)	$	(6,962)

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2022 USD ($) branch	Mar. 31, 2022 USD ($) operating_segment	Mar. 31, 2022 USD ($) reporting_unit	Mar. 31, 2022 USD ($) segment	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Liquidating investment period (in years)	10 years
Other investments	$ 15,084	$ 15,084	$ 15,084	$ 15,084	$ 15,084	$ 15,084		$ 15,305
Loans charged off past due more than days	180 days
Closed end loan charged off past due more than days	120 days
Number of operating segments				1		1
Number of reporting units | reporting_unit					1
Carrying amount of investment		163					$ 0
Other Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying amount of investment		3,833
FHLB
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other investments	$ 7,650	7,650	7,650	$ 7,650	$ 7,650	$ 7,650		7,877
Federal Reserve Bank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other investments	5,205	5,205	5,205	5,205	5,205	5,205		5,200
Bankers Bank Stock
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other investments	$ 2,229	$ 2,229	$ 2,229	$ 2,229	$ 2,229	$ 2,229		$ 2,228
Commercial Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income discontinued over delinquent days	90 days
Closed End Consumer Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income discontinued over delinquent days	120 days
Real Estate and Open Ended Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income discontinued over delinquent days	180 days
Wisconsin and Minnesota
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of branch locations | branch			25

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INVESTMENT SECURITIES - Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost	$ 197,507	$ 202,846
Gross Unrealized Gains	361	1,385
Gross Unrealized Losses	9,963	1,163
Estimated Fair Value	187,905	203,068
U.S. government agency obligations
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost	23,686	25,826
Gross Unrealized Gains	298	440
Gross Unrealized Losses	103	1
Estimated Fair Value	23,881	26,265
Obligations of states and political subdivisions
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost		140
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Estimated Fair Value		140
Mortgage-backed securities
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost	103,723	107,636
Gross Unrealized Gains	9	409
Gross Unrealized Losses	8,181	878
Estimated Fair Value	95,551	107,167
Corporate debt securities
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost	37,087	35,342
Gross Unrealized Gains	54	403
Gross Unrealized Losses	1,195	157
Estimated Fair Value	35,946	35,588
Corporate asset-based securities
Summary of amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale
Amortized Cost	33,011	33,902
Gross Unrealized Gains	0	133
Gross Unrealized Losses	484	127
Estimated Fair Value	$ 32,527	$ 33,908

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INVESTMENT SECURITIES - Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 104,894	$ 71,141
Gross Unrealized Gains	29	104
Gross Unrealized Losses	8,948	2,068
Estimated Fair Value	95,975	69,177
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	4,600	4,600
Gross Unrealized Gains	0	0
Gross Unrealized Losses	32	7
Estimated Fair Value	4,568	4,593
Mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	100,294	66,541
Gross Unrealized Gains	29	104
Gross Unrealized Losses	8,916	2,061
Estimated Fair Value	$ 91,407	$ 64,584

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INVESTMENT SECURITIES - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Sales of available for sale securities	$ 0	$ 0
Federal Reserve Bank
Debt Securities, Available-for-sale [Line Items]
Borrowings outstanding under line of credit facility	0		$ 0
U.S. government agency obligations | Asset Pledged as Collateral | Specific Municipal Deposits
Debt Securities, Available-for-sale [Line Items]
Securities pledged as collateral	3,570,000		3,934,000
Mortgage-backed securities | MPF Credit Enhancement Fee
Debt Securities, Available-for-sale [Line Items]
Securities pledged as collateral	220,000		267,000
Mortgage-backed securities | Asset Pledged as Collateral | Specific Municipal Deposits
Debt Securities, Available-for-sale [Line Items]
Securities pledged as collateral	2,645,000		2,879,000
Mortgage-backed securities | Asset Pledged as Collateral | Federal Reserve Bank
Debt Securities, Available-for-sale [Line Items]
Securities pledged as collateral	$ 5,813,000		$ 863,000

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INVESTMENT SECURITIES - Maturity of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Amortized Cost
Due in one year or less	$ 0	$ 140
Due after one year through five years	4,670	4,903
Due after five years through ten years	42,629	40,410
Due after ten years	46,485	49,757
Total securities with contractual maturities	93,784	95,210
Amortized Cost	197,507	202,846
Estimated Fair Value
Due in one year or less	0	140
Due after one year through five years	4,524	4,971
Due after five years through ten years	41,673	40,818
Due after ten years	46,157	49,972
Total securities with contractual maturities	92,354	95,901
Securities available for sale “AFS”	187,905	203,068
Mortgage backed securities
Amortized Cost
Mortgage-backed securities	103,723	107,636
Estimated Fair Value
Mortgage-backed securities	$ 95,551	$ 107,167

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INVESTMENT SECURITIES - Maturity of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Amortized Cost
Due after one year through five years	$ 4,450	$ 4,300
Due after five years through ten years	150	300
Total securities with contractual maturities	4,600	4,600
Mortgage-backed securities	100,294	66,541
Total held to maturity securities	104,894	71,141
Estimated Fair Value
Due after one year through five years	4,425	4,298
Due after five years through ten years	143	295
Total securities with contractual maturities	4,568	4,593
Mortgage-backed securities	91,407	64,584
Total held to maturity securities	$ 95,975	$ 69,177

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INVESTMENT SECURITIES - Investment Category of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value
Less than 12 Months	$ 151,053	$ 126,715
12 Months or More	8,181	735
Total	159,234	127,450
Unrealized Loss
Less than 12 Months	9,102	1,148
12 Months or More	861	15
Total	9,963	1,163
U.S. government agency obligations
Fair Value
Less than 12 Months	3,716	1,169
12 Months or More	0	0
Total	3,716	1,169
Unrealized Loss
Less than 12 Months	103	1
12 Months or More	0	0
Total	103	1
Mortgage-backed securities
Fair Value
Less than 12 Months	84,939	89,010
12 Months or More	7,469	0
Total	92,408	89,010
Unrealized Loss
Less than 12 Months	7,358	878
12 Months or More	823	0
Total	8,181	878
Corporate debt securities
Fair Value
Less than 12 Months	29,871	17,240
12 Months or More	712	735
Total	30,583	17,975
Unrealized Loss
Less than 12 Months	1,157	142
12 Months or More	38	15
Total	1,195	157
Corporate asset-based securities
Fair Value
Less than 12 Months	32,527	19,296
12 Months or More	0	0
Total	32,527	19,296
Unrealized Loss
Less than 12 Months	484	127
12 Months or More	0	0
Total	$ 484	$ 127

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INVESTMENT SECURITIES - Investment Category of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value
Less than 12 Months	$ 61,071	$ 47,562
12 Months or More	33,773	14,716
Total	94,844	62,278
Unrealized Loss
Less than 12 Months	4,137	1,353
12 Months or More	4,811	715
Total	8,948	2,068
Obligations of states and political subdivisions
Fair Value
Less than 12 Months	4,568	593
12 Months or More	0	0
Total	4,568	593
Unrealized Loss
Less than 12 Months	32	7
12 Months or More	0	0
Total	32	7
Mortgage-backed securities
Fair Value
Less than 12 Months	56,503	46,969
12 Months or More	33,773	14,716
Total	90,276	61,685
Unrealized Loss
Less than 12 Months	4,105	1,346
12 Months or More	4,811	715
Total	$ 8,916	$ 2,061

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) troubled_debt_restructuring	Dec. 31, 2021 USD ($) troubled_debt_restructuring	Mar. 31, 2021 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused commitments	$ 288,001	$ 270,985
Impaired financing receivable, recorded investment	33,741	31,740	$ 39,277
Recorded Investment	$ 10,231	$ 12,523
Number of delinquent TDR | troubled_debt_restructuring	0	1
Recorded investment in delinquent TDR		$ 4
Number of TDR commitments meeting our TDR criteria | troubled_debt_restructuring	1	0
Total amount of TDR commitments meeting TDR criteria	$ 27
Available line of credit loan, amount	49	$ 10
Accretable expense from purchased impaired loans	1,660
Expected balance (as a percent)	100
TDR Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	6,716	9,860
Purchased Credit Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	10,210	10,552
Substandard non-TDR loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	16,815	11,328
Performing loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	5,645	7,984
Acquired Loans | Purchased Credit Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	10,719	11,205
Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	10,231		17,442
Commercial/Agricultural Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired financing receivable, recorded investment	20,321	$ 21,408	24,298
Commercial/Agricultural Real Estate | Originated Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 5,587		$ 8,656
Commercial/Agricultural Real Estate | Agricultural real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan-to-value ratio (as a percent)	75.00%

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Originated and Acquired Loans by Type and Risk (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	$ 1,295,666	$ 1,317,045	$ 1,201,262
Unearned net deferred fees and costs and loans in process	(2,223)	(2,482)
Unamortized discount on acquired loans	(3,267)	(3,600)
Allowance for loan losses	(16,818)	(16,913)	(16,860)
Loans receivable, net	1,273,358	1,294,050
1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,268,995	1,289,692
6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,849	4,536
7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	24,822	22,817
8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I SBA PPP loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,071	8,755
C&I SBA PPP loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,071	8,755
C&I SBA PPP loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I SBA PPP loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I SBA PPP loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I SBA PPP loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,110,665	1,118,494	937,668
Allowance for loan losses	(15,900)	(15,830)	(15,028)	$ (14,819)
Originated Loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,093,759	1,101,634
Originated Loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,844	3,045
Originated Loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	15,062	13,815
Originated Loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans | C&I SBA PPP loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,071	8,755
Originated Loans | C&I SBA PPP loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,071	8,755
Originated Loans | C&I SBA PPP loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans | C&I SBA PPP loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans | C&I SBA PPP loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated Loans | C&I SBA PPP loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated loans before SBA PPP loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,108,594	1,109,739
Originated loans before SBA PPP loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,091,688	1,092,879
Originated loans before SBA PPP loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,844	3,045
Originated loans before SBA PPP loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	15,062	13,815
Originated loans before SBA PPP loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Originated loans before SBA PPP loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Acquired Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	185,001	198,551
Allowance for loan losses	(918)		(1,832)
Acquired Loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	175,236	188,058
Acquired Loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	5	1,491
Acquired Loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	9,760	9,002
Acquired Loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Acquired Loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Gross loans before SBA PPP Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,293,595	1,308,290
Gross loans before SBA PPP Loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,266,924	1,280,937
Gross loans before SBA PPP Loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,849	4,536
Gross loans before SBA PPP Loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	24,822	22,817
Gross loans before SBA PPP Loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Gross loans before SBA PPP Loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,032,857	1,034,829	795,476
Allowance for loan losses	(13,183)		(12,410)
Commercial/Agricultural Real Estate | Commercial real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	689,774	698,465
Commercial/Agricultural Real Estate | Commercial real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	680,931	689,563
Commercial/Agricultural Real Estate | Commercial real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	659	1,981
Commercial/Agricultural Real Estate | Commercial real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	8,184	6,921
Commercial/Agricultural Real Estate | Commercial real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Commercial real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Agricultural real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	75,716	78,495
Commercial/Agricultural Real Estate | Agricultural real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	68,535	71,885
Commercial/Agricultural Real Estate | Agricultural real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	784	1,267
Commercial/Agricultural Real Estate | Agricultural real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	6,397	5,343
Commercial/Agricultural Real Estate | Agricultural real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Agricultural real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Multi-family real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	179,487	178,349
Commercial/Agricultural Real Estate | Multi-family real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	179,202	178,059
Commercial/Agricultural Real Estate | Multi-family real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	285	290
Commercial/Agricultural Real Estate | Multi-family real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Multi-family real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Multi-family real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Construction and land development
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	87,880	79,520
Commercial/Agricultural Real Estate | Construction and land development | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	87,598	75,881
Commercial/Agricultural Real Estate | Construction and land development | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	172
Commercial/Agricultural Real Estate | Construction and land development | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	282	3,467
Commercial/Agricultural Real Estate | Construction and land development | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Construction and land development | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	890,440	883,430	599,182
Allowance for loan losses	(12,394)	(12,354)	(11,109)	(10,271)
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	575,289	578,395
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	569,560	572,724
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	659	667
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	5,070	5,004
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Commercial real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	52,683	52,372
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	50,111	50,834
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	784	1,267
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,788	271
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Agricultural real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	175,471	174,050
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	175,186	173,760
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	285	290
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Multi-family real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	86,997	78,613
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	86,869	75,146
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	128	3,467
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Originated Loans | Construction and land development | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Allowance for loan losses	(789)		(1,301)
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	114,485	120,070
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	111,371	116,839
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	1,314
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3,114	1,917
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Commercial real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	23,033	26,123
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	18,424	21,051
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,609	5,072
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Agricultural real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,016	4,299
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,016	4,299
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Multi-family real estate | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	883	907
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	729	735
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	172
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	154	0
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Commercial/Agricultural Real Estate | Acquired Loans | Construction and land development | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	151,850	162,510	243,114
Allowance for loan losses	(2,162)		(1,727)
C&I/Agricultural operating | Commercial and industrial
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	121,022	122,167
C&I/Agricultural operating | Commercial and industrial | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	120,712	121,729
C&I/Agricultural operating | Commercial and industrial | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	53	62
C&I/Agricultural operating | Commercial and industrial | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	257	376
C&I/Agricultural operating | Commercial and industrial | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Commercial and industrial | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Agricultural operating
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	28,757	31,588
C&I/Agricultural operating | Agricultural operating | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	23,293	28,871
C&I/Agricultural operating | Agricultural operating | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	68	764
C&I/Agricultural operating | Agricultural operating | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	5,396	1,953
C&I/Agricultural operating | Agricultural operating | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Agricultural operating | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | C&I SBA PPP loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,071	8,755
C&I/Agricultural operating | Originated Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	134,513	142,894	216,773
Allowance for loan losses	(2,104)	(1,959)	(1,633)	(2,112)
C&I/Agricultural operating | Originated Loans | Commercial and industrial
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	108,422	107,937
C&I/Agricultural operating | Originated Loans | Commercial and industrial | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	108,370	107,798
C&I/Agricultural operating | Originated Loans | Commercial and industrial | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	48	57
C&I/Agricultural operating | Originated Loans | Commercial and industrial | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4	82
C&I/Agricultural operating | Originated Loans | Commercial and industrial | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Originated Loans | Commercial and industrial | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Originated Loans | Agricultural operating
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	24,020	26,202
C&I/Agricultural operating | Originated Loans | Agricultural operating | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	18,792	23,935
C&I/Agricultural operating | Originated Loans | Agricultural operating | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	68	764
C&I/Agricultural operating | Originated Loans | Agricultural operating | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	5,160	1,503
C&I/Agricultural operating | Originated Loans | Agricultural operating | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Originated Loans | Agricultural operating | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Acquired Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Allowance for loan losses	(58)		(94)
C&I/Agricultural operating | Acquired Loans | Commercial and industrial
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	12,600	14,230
C&I/Agricultural operating | Acquired Loans | Commercial and industrial | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	12,342	13,931
C&I/Agricultural operating | Acquired Loans | Commercial and industrial | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	5	5
C&I/Agricultural operating | Acquired Loans | Commercial and industrial | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	253	294
C&I/Agricultural operating | Acquired Loans | Commercial and industrial | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Acquired Loans | Commercial and industrial | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Acquired Loans | Agricultural operating
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,737	5,386
C&I/Agricultural operating | Acquired Loans | Agricultural operating | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,501	4,936
C&I/Agricultural operating | Acquired Loans | Agricultural operating | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Acquired Loans | Agricultural operating | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	236	450
C&I/Agricultural operating | Acquired Loans | Agricultural operating | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
C&I/Agricultural operating | Acquired Loans | Agricultural operating | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	88,260	94,861	127,622
Allowance for loan losses	(522)		(1,329)
Residential Mortgage | Residential mortgage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	84,773	90,990
Residential Mortgage | Residential mortgage | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	80,652	86,623
Residential Mortgage | Residential mortgage | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Residential mortgage | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	4,121	4,367
Residential Mortgage | Residential mortgage | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Residential mortgage | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Purchased HELOC loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3,487	3,871
Residential Mortgage | Purchased HELOC loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3,487	3,706
Residential Mortgage | Purchased HELOC loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Purchased HELOC loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	165
Residential Mortgage | Purchased HELOC loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Purchased HELOC loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	63,362	67,726	87,576
Allowance for loan losses	(460)	(518)	(941)	(1,041)
Residential Mortgage | Originated Loans | Residential mortgage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	59,875	63,855
Residential Mortgage | Originated Loans | Residential mortgage | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	57,145	60,754
Residential Mortgage | Originated Loans | Residential mortgage | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans | Residential mortgage | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	2,730	3,101
Residential Mortgage | Originated Loans | Residential mortgage | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans | Residential mortgage | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans | Purchased HELOC loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3,487	3,871
Residential Mortgage | Originated Loans | Purchased HELOC loans | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3,487	3,706
Residential Mortgage | Originated Loans | Purchased HELOC loans | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans | Purchased HELOC loans | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	165
Residential Mortgage | Originated Loans | Purchased HELOC loans | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Originated Loans | Purchased HELOC loans | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Acquired Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Allowance for loan losses	(62)		(388)
Residential Mortgage | Acquired Loans | Residential mortgage
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	24,898	27,135
Residential Mortgage | Acquired Loans | Residential mortgage | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	23,507	25,869
Residential Mortgage | Acquired Loans | Residential mortgage | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Acquired Loans | Residential mortgage | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	1,391	1,266
Residential Mortgage | Acquired Loans | Residential mortgage | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Residential Mortgage | Acquired Loans | Residential mortgage | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	22,699	24,845	35,050
Allowance for loan losses	(169)		(499)
Consumer Installment | Originated indirect paper
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	14,508	15,971
Consumer Installment | Originated indirect paper | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	14,396	15,818
Consumer Installment | Originated indirect paper | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated indirect paper | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	112	153
Consumer Installment | Originated indirect paper | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated indirect paper | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Other consumer
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	8,191	8,874
Consumer Installment | Other consumer | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	8,118	8,802
Consumer Installment | Other consumer | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Other consumer | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	73	72
Consumer Installment | Other consumer | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Other consumer | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	22,350	24,444	34,137
Allowance for loan losses	(160)	(225)	(450)	$ (489)
Consumer Installment | Originated Loans | Originated indirect paper
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	14,508	15,971
Consumer Installment | Originated Loans | Originated indirect paper | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	14,396	15,818
Consumer Installment | Originated Loans | Originated indirect paper | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans | Originated indirect paper | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	112	153
Consumer Installment | Originated Loans | Originated indirect paper | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans | Originated indirect paper | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans | Other consumer
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	7,842	8,473
Consumer Installment | Originated Loans | Other consumer | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	7,772	8,404
Consumer Installment | Originated Loans | Other consumer | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans | Other consumer | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	70	69
Consumer Installment | Originated Loans | Other consumer | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Originated Loans | Other consumer | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Acquired Loans
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Allowance for loan losses	(9)		$ (49)
Consumer Installment | Acquired Loans | Other consumer
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	349	401
Consumer Installment | Acquired Loans | Other consumer | 1 to 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	346	398
Consumer Installment | Acquired Loans | Other consumer | 6
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Acquired Loans | Other consumer | 7
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	3	3
Consumer Installment | Acquired Loans | Other consumer | 8
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	0	0
Consumer Installment | Acquired Loans | Other consumer | 9
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Balance	$ 0	$ 0

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Changes in the ALL by Loan Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Allowance for Loan Losses:
Beginning balance	$ 16,913
Provision	0	$ 0
Ending balance	16,818	16,860
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	1,722	1,261	$ 1,009
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	15,096	15,599	15,904
Loans Receivable:
Total Loans	1,295,666	1,201,262	1,317,045
Ending balance: individually evaluated for impairment	34,250	40,243	32,393
Ending balance: collectively evaluated for impairment	1,261,416	1,161,019	1,284,652
Originated Loans
Allowance for Loan Losses:
Beginning balance	15,830	14,819
Charge-offs	(107)	(25)
Recoveries	24	30
Provision	153	204
Ending balance	15,900	15,028
Loans Receivable:
Total Loans	1,110,665	937,668	1,118,494
Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	10,719	17,441	11,205
Other acquired loans
Allowance for Loan Losses:
Beginning balance	1,083	2,224
Charge-offs	(12)	(200)
Recoveries	0	12
Provision	(153)	(204)
Ending balance	918
Loans Receivable:
Total Loans	174,282	246,153	187,346
Acquired Loans
Allowance for Loan Losses:
Ending balance	918	1,832
Loans Receivable:
Total Loans	185,001		198,551
Commercial/Agricultural Real Estate
Allowance for Loan Losses:
Ending balance	13,183	12,410
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	1,280	1,094	797
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	11,903	11,316	12,413
Loans Receivable:
Total Loans	1,032,857	795,476	1,034,829
Ending balance: individually evaluated for impairment	20,597	24,948	21,792
Ending balance: collectively evaluated for impairment	1,012,260	770,528	1,013,037
Commercial/Agricultural Real Estate | Originated Loans
Allowance for Loan Losses:
Beginning balance	12,354	10,271
Charge-offs	(35)	0
Recoveries	3	5
Provision	72	833
Ending balance	12,394	11,109
Loans Receivable:
Total Loans	890,440	599,182	883,430
Commercial/Agricultural Real Estate | Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	8,672	14,856	9,060
Commercial/Agricultural Real Estate | Other acquired loans
Allowance for Loan Losses:
Beginning balance	856	1,684
Charge-offs	0	(200)
Recoveries	0	0
Provision	(67)	(183)
Ending balance	789
Loans Receivable:
Total Loans	133,745	181,438	142,339
Commercial/Agricultural Real Estate | Acquired Loans
Allowance for Loan Losses:
Ending balance	789	1,301
C&I/Agricultural operating
Allowance for Loan Losses:
Ending balance	2,162	1,727
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	373	10	99
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	1,789	1,717	1,929
Loans Receivable:
Total Loans	151,850	243,114	162,510
Ending balance: individually evaluated for impairment	6,605	6,197	3,337
Ending balance: collectively evaluated for impairment	145,245	236,917	159,173
C&I/Agricultural operating | Originated Loans
Allowance for Loan Losses:
Beginning balance	1,959	2,112
Charge-offs	(63)	0
Recoveries	10	8
Provision	198	(487)
Ending balance	2,104	1,633
Loans Receivable:
Total Loans	134,513	216,773	142,894
C&I/Agricultural operating | Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	1,023	1,367	1,101
C&I/Agricultural operating | Other acquired loans
Allowance for Loan Losses:
Beginning balance	69	141
Charge-offs	0	0
Recoveries	0	7
Provision	(11)	(54)
Ending balance	58
Loans Receivable:
Total Loans	16,314	24,974	18,515
C&I/Agricultural operating | Acquired Loans
Allowance for Loan Losses:
Ending balance	58	94
Residential Mortgage
Allowance for Loan Losses:
Ending balance	522	1,329
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	69	157	113
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	453	1,172	535
Loans Receivable:
Total Loans	88,260	127,622	94,861
Ending balance: individually evaluated for impairment	6,838	8,843	7,007
Ending balance: collectively evaluated for impairment	81,422	118,779	87,854
Residential Mortgage | Originated Loans
Allowance for Loan Losses:
Beginning balance	518	1,041
Charge-offs	0	0
Recoveries	1	7
Provision	(59)	(107)
Ending balance	460	941
Loans Receivable:
Total Loans	63,362	87,576	67,726
Residential Mortgage | Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	1,024	1,218	1,044
Residential Mortgage | Other acquired loans
Allowance for Loan Losses:
Beginning balance	130	335
Charge-offs	(12)	0
Recoveries	0	1
Provision	(56)	52
Ending balance	62
Loans Receivable:
Total Loans	23,874	38,828	26,091
Residential Mortgage | Acquired Loans
Allowance for Loan Losses:
Ending balance	62	388
Consumer Installment
Allowance for Loan Losses:
Ending balance	169	499
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	0	0	0
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	169	499	253
Loans Receivable:
Total Loans	22,699	35,050	24,845
Ending balance: individually evaluated for impairment	210	255	257
Ending balance: collectively evaluated for impairment	22,489	34,795	24,588
Consumer Installment | Originated Loans
Allowance for Loan Losses:
Beginning balance	225	489
Charge-offs	(9)	(25)
Recoveries	10	10
Provision	(66)	(24)
Ending balance	160	450
Loans Receivable:
Total Loans	22,350	34,137	24,444
Consumer Installment | Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	0	0	0
Consumer Installment | Other acquired loans
Allowance for Loan Losses:
Beginning balance	28	64
Charge-offs	0	0
Recoveries	0	4
Provision	(19)	(19)
Ending balance	9
Loans Receivable:
Total Loans	349	913	401
Consumer Installment | Acquired Loans
Allowance for Loan Losses:
Ending balance	9	49
Unallocated
Allowance for Loan Losses:
Ending balance	782	895
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Amount of allowance for loan losses arising from loans individually evaluated for impairment	0	0	0
Amount of allowance for loan losses arising from loans collectively evaluated for impairment	782	895	774
Loans Receivable:
Total Loans	0	0	0
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	0	0	0
Unallocated | Originated Loans
Allowance for Loan Losses:
Beginning balance	774	906
Charge-offs	0	0
Recoveries	0	0
Provision	8	(11)
Ending balance	782	895
Loans Receivable:
Total Loans	0	0	0
Unallocated | Purchased credit impaired loans
Allowance for Loan Losses:
Ending balance	0	0
Loans Receivable:
Total Loans	0	0	0
Unallocated | Other acquired loans
Allowance for Loan Losses:
Beginning balance	0	0
Charge-offs	0	0
Recoveries	0	0
Provision	0	0
Ending balance	0
Loans Receivable:
Total Loans	0	0	$ 0
Unallocated | Acquired Loans
Allowance for Loan Losses:
Ending balance	$ 0	$ 0

XML

LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Loans Receivable by Loan Type (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Loans receivable
Total Loans	$ 1,295,666	$ 1,317,045	$ 1,201,262
Performing loans
Loans receivable
TDR loans	5,645	7,984
Loans other	1,277,765	1,297,236
Total Loans	1,283,410	1,305,220
Nonperforming loans
Loans receivable
TDR loans	4,586	4,539
Loans other	7,670	7,286
Total Loans	12,256	11,825
Commercial/Agricultural Real Estate
Loans receivable
Total Loans	1,032,857	1,034,829	795,476
Commercial/Agricultural Real Estate | Performing loans
Loans receivable
TDR loans	2,085	4,618
Loans other	1,021,686	1,021,346
Total Loans	1,023,771	1,025,964
Commercial/Agricultural Real Estate | Nonperforming loans
Loans receivable
TDR loans	3,502	3,389
Loans other	5,584	5,476
Total Loans	9,086	8,865
C&I/Agricultural operating
Loans receivable
Total Loans	151,850	162,510	243,114
C&I/Agricultural operating | Performing loans
Loans receivable
TDR loans	608	649
Loans other	149,894	160,570
Total Loans	150,502	161,219
C&I/Agricultural operating | Nonperforming loans
Loans receivable
TDR loans	639	554
Loans other	709	737
Total Loans	1,348	1,291
Residential Mortgage
Loans receivable
Total Loans	88,260	94,861	127,622
Residential Mortgage | Performing loans
Loans receivable
TDR loans	2,924	2,681
Loans other	83,604	90,591
Total Loans	86,528	93,272
Residential Mortgage | Nonperforming loans
Loans receivable
TDR loans	443	593
Loans other	1,289	996
Total Loans	1,732	1,589
Consumer Installment
Loans receivable
Total Loans	22,699	24,845	$ 35,050
Consumer Installment | Performing loans
Loans receivable
TDR loans	28	36
Loans other	22,581	24,729
Total Loans	22,609	24,765
Consumer Installment | Nonperforming loans
Loans receivable
TDR loans	2	3
Loans other	88	77
Total Loans	$ 90	$ 80

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Aging Analysis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	$ 1,290,176	$ 1,310,963
Nonaccrual Loans	11,858	11,665
Total Past Due Accruing and Nonaccrual Loans	18,708	15,726
Total Loans	1,295,666	1,317,045	$ 1,201,262
C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Total Loans	2,071	8,755
Financial Asset, Past Due
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	6,850	4,061
30-59 Days Past Due
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	6,057	3,341
60-89 Days Past Due
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	395	560
Greater Than 89 Days
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	398	160
Financial Asset, Not Past Due
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,276,958	1,301,319
Commercial/Agricultural Real Estate
Aging analysis of the Bank's real estate and consumer loans
Total Loans	1,032,857	1,034,829	795,476
Commercial/Agricultural Real Estate | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	5,503	5,374
Total Past Due Accruing and Nonaccrual Loans	7,499	5,410
Total Loans	689,774	698,465
Commercial/Agricultural Real Estate | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	3,454	3,490
Total Past Due Accruing and Nonaccrual Loans	4,349	3,992
Total Loans	75,716	78,495
Commercial/Agricultural Real Estate | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	0	0
Total Past Due Accruing and Nonaccrual Loans	0	0
Total Loans	179,487	178,349
Commercial/Agricultural Real Estate | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	129	0
Total Past Due Accruing and Nonaccrual Loans	129	0
Total Loans	87,880	79,520
Commercial/Agricultural Real Estate | Financial Asset, Past Due | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,996	36
Commercial/Agricultural Real Estate | Financial Asset, Past Due | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	895	502
Commercial/Agricultural Real Estate | Financial Asset, Past Due | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Financial Asset, Past Due | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | 30-59 Days Past Due | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,996	36
Commercial/Agricultural Real Estate | 30-59 Days Past Due | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	895	498
Commercial/Agricultural Real Estate | 30-59 Days Past Due | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | 30-59 Days Past Due | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | 60-89 Days Past Due | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | 60-89 Days Past Due | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	4
Commercial/Agricultural Real Estate | 60-89 Days Past Due | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | 60-89 Days Past Due | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Greater Than 89 Days | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Greater Than 89 Days | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Greater Than 89 Days | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Greater Than 89 Days | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Commercial/Agricultural Real Estate | Financial Asset, Not Past Due | Commercial real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	682,275	693,055
Commercial/Agricultural Real Estate | Financial Asset, Not Past Due | Agricultural real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	71,367	74,503
Commercial/Agricultural Real Estate | Financial Asset, Not Past Due | Multi-family real estate
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	179,487	178,349
Commercial/Agricultural Real Estate | Financial Asset, Not Past Due | Construction and land development
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	87,751	79,520
C&I/Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Total Loans	151,850	162,510	243,114
C&I/Agricultural operating | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	284	298
Total Past Due Accruing and Nonaccrual Loans	284	330
Total Loans	121,022	122,167
C&I/Agricultural operating | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	0	0
Total Past Due Accruing and Nonaccrual Loans	0	0
Total Loans	2,071	8,755
C&I/Agricultural operating | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	1,064	993
Total Past Due Accruing and Nonaccrual Loans	2,709	2,116
Total Loans	28,757	31,588
C&I/Agricultural operating | Financial Asset, Past Due | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	32
C&I/Agricultural operating | Financial Asset, Past Due | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | Financial Asset, Past Due | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,645	1,123
C&I/Agricultural operating | 30-59 Days Past Due | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | 30-59 Days Past Due | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | 30-59 Days Past Due | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,645	1,123
C&I/Agricultural operating | 60-89 Days Past Due | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	32
C&I/Agricultural operating | 60-89 Days Past Due | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | 60-89 Days Past Due | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | Greater Than 89 Days | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | Greater Than 89 Days | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | Greater Than 89 Days | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
C&I/Agricultural operating | Financial Asset, Not Past Due | Commercial and industrial
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	120,738	121,837
C&I/Agricultural operating | Financial Asset, Not Past Due | C&I SBA PPP loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	2,071	8,755
C&I/Agricultural operating | Financial Asset, Not Past Due | Agricultural operating
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	26,048	29,472
Residential Mortgage
Aging analysis of the Bank's real estate and consumer loans
Total Loans	88,260	94,861	127,622
Residential Mortgage | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	1,334	1,268
Total Past Due Accruing and Nonaccrual Loans	3,568	3,382
Total Loans	84,773	90,990
Residential Mortgage | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	0	165
Total Past Due Accruing and Nonaccrual Loans	0	282
Total Loans	3,487	3,871
Residential Mortgage | Financial Asset, Past Due | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	2,234	2,114
Residential Mortgage | Financial Asset, Past Due | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	117
Residential Mortgage | 30-59 Days Past Due | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	1,444	1,471
Residential Mortgage | 30-59 Days Past Due | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	117
Residential Mortgage | 60-89 Days Past Due | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	392	487
Residential Mortgage | 60-89 Days Past Due | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Residential Mortgage | Greater Than 89 Days | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	398	156
Residential Mortgage | Greater Than 89 Days | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Residential Mortgage | Financial Asset, Not Past Due | Residential mortgage
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	81,205	87,608
Residential Mortgage | Financial Asset, Not Past Due | Purchased HELOC loans
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	3,487	3,589
Consumer Installment
Aging analysis of the Bank's real estate and consumer loans
Total Loans	22,699	24,845	$ 35,050
Consumer Installment | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	60	55
Total Past Due Accruing and Nonaccrual Loans	99	120
Total Loans	14,508	15,971
Consumer Installment | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Nonaccrual Loans	30	22
Total Past Due Accruing and Nonaccrual Loans	71	94
Total Loans	8,191	8,874
Consumer Installment | Financial Asset, Past Due | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	39	65
Consumer Installment | Financial Asset, Past Due | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	41	72
Consumer Installment | 30-59 Days Past Due | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	39	38
Consumer Installment | 30-59 Days Past Due | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	38	58
Consumer Installment | 60-89 Days Past Due | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	27
Consumer Installment | 60-89 Days Past Due | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	3	10
Consumer Installment | Greater Than 89 Days | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	0
Consumer Installment | Greater Than 89 Days | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	0	4
Consumer Installment | Financial Asset, Not Past Due | Originated indirect paper
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	14,409	15,851
Consumer Installment | Financial Asset, Not Past Due | Other consumer
Aging analysis of the Bank's real estate and consumer loans
Outstanding balance	$ 8,120	$ 8,780

XML

LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Bank impaired loans
With no related allowance recorded, Recorded investment	$ 26,512	$ 33,312	$ 25,151
With an allowance recorded, Recorded investment	7,229	5,965	6,589
Recorded investment, Total	33,741	39,277	31,740
With no related allowance recorded, unpaid principal balance	27,021	34,278	25,804
With an allowance recorded, unpaid principal balance	7,229	5,965	6,589
Unpaid principal balance, Total	34,250	40,243	32,393
With an allowance recorded, Related allowance	1,722	1,261	1,009
With no related allowance recorded, Average recorded investment	29,085	35,736	31,656
With an allowance recorded, Average recorded investment	6,301	5,059	5,372
Average recorded investment, Total	35,386	40,795	37,028
With no related allowance recorded, Interest income recognized	259	392	1,511
With an allowance recorded, Interest income recognized	22	70	163
Interest income recognized, Total	281	462	1,674
Commercial/Agricultural Real Estate
Bank impaired loans
With no related allowance recorded, Recorded investment	13,840	19,064	15,521
With an allowance recorded, Recorded investment	6,481	5,234	5,887
Recorded investment, Total	20,321	24,298	21,408
With no related allowance recorded, unpaid principal balance	14,116	19,714	15,905
With an allowance recorded, unpaid principal balance	6,481	5,234	5,887
Unpaid principal balance, Total	20,597	24,948	21,792
With an allowance recorded, Related allowance	1,280	1,094	797
With no related allowance recorded, Average recorded investment	16,626	21,183	19,412
With an allowance recorded, Average recorded investment	5,285	3,762	4,089
Average recorded investment, Total	21,911	24,945	23,501
With no related allowance recorded, Interest income recognized	136	239	964
With an allowance recorded, Interest income recognized	11	62	62
Interest income recognized, Total	147	301	1,026
C&I/Agricultural operating
Bank impaired loans
With no related allowance recorded, Recorded investment	6,015	5,924	3,153
With an allowance recorded, Recorded investment	438	79	0
Recorded investment, Total	6,453	6,003	3,153
With no related allowance recorded, unpaid principal balance	6,167	6,118	3,337
With an allowance recorded, unpaid principal balance	438	79	0
Unpaid principal balance, Total	6,605	6,197	3,337
With an allowance recorded, Related allowance	373	10	99
With no related allowance recorded, Average recorded investment	5,319	6,007	4,622
With an allowance recorded, Average recorded investment	415	430	391
Average recorded investment, Total	5,734	6,437	5,013
With no related allowance recorded, Interest income recognized	50	70	146
With an allowance recorded, Interest income recognized	10	0	84
Interest income recognized, Total	60	70	230
Residential Mortgage
Bank impaired loans
With no related allowance recorded, Recorded investment	6,447	8,069	6,221
With an allowance recorded, Recorded investment	310	652	701
Recorded investment, Total	6,757	8,721	6,922
With no related allowance recorded, unpaid principal balance	6,528	8,191	6,306
With an allowance recorded, unpaid principal balance	310	652	701
Unpaid principal balance, Total	6,838	8,843	7,007
With an allowance recorded, Related allowance	69	157	113
With no related allowance recorded, Average recorded investment	6,882	8,240	7,316
With an allowance recorded, Average recorded investment	600	866	890
Average recorded investment, Total	7,482	9,106	8,206
With no related allowance recorded, Interest income recognized	71	80	316
With an allowance recorded, Interest income recognized	1	8	17
Interest income recognized, Total	72	88	333
Consumer Installment
Bank impaired loans
With no related allowance recorded, Recorded investment	210	255	256
With an allowance recorded, Recorded investment	0	0	1
Recorded investment, Total	210	255	257
With no related allowance recorded, unpaid principal balance	210	255	256
With an allowance recorded, unpaid principal balance	0	0	1
Unpaid principal balance, Total	210	255	257
With an allowance recorded, Related allowance	0	0	0
With no related allowance recorded, Average recorded investment	258	306	306
With an allowance recorded, Average recorded investment	1	1	2
Average recorded investment, Total	259	307	308
With no related allowance recorded, Interest income recognized	2	3	85
With an allowance recorded, Interest income recognized	0	0	0
Interest income recognized, Total	$ 2	$ 3	$ 85

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - TDR Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Receivables [Abstract]
Accrual status	$ 5,645	$ 7,984
Non-accrual status	4,586	4,539
Total	$ 10,231	$ 12,523

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - TDR Loan Modifications (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) contract	Mar. 31, 2021 USD ($) contract
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of Contracts | contract	9	6
Pre-Modification Outstanding Recorded Investment	$ 1,929	$ 445
Post-Modification Outstanding Recorded Investment	1,929	445
Specific Reserve	0	0
Maturity Extension
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	1,272	110
Modified Payment
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	81
Modified Under- writing
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	657	254
Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	$ 0	$ 0
Commercial/Agricultural Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of Contracts | contract	4	2
Pre-Modification Outstanding Recorded Investment	$ 1,241	$ 119
Post-Modification Outstanding Recorded Investment	1,241	119
Specific Reserve	0	0
Commercial/Agricultural Real Estate | Maturity Extension
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	1,241	38
Commercial/Agricultural Real Estate | Modified Payment
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	81
Commercial/Agricultural Real Estate | Modified Under- writing
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
Commercial/Agricultural Real Estate | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	$ 0	$ 0
C&I/Agricultural operating
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of Contracts | contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 150	$ 240
Post-Modification Outstanding Recorded Investment	150	240
Specific Reserve	0	0
C&I/Agricultural operating | Maturity Extension
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
C&I/Agricultural operating | Modified Payment
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
C&I/Agricultural operating | Modified Under- writing
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	150	240
C&I/Agricultural operating | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	$ 0	$ 0
Residential Mortgage
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of Contracts | contract	4	2
Pre-Modification Outstanding Recorded Investment	$ 538	$ 80
Post-Modification Outstanding Recorded Investment	538	80
Specific Reserve	0	0
Residential Mortgage | Maturity Extension
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	31	66
Residential Mortgage | Modified Payment
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
Residential Mortgage | Modified Under- writing
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	507	14
Residential Mortgage | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	$ 0	$ 0
Consumer Installment
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of Contracts | contract	0	1
Pre-Modification Outstanding Recorded Investment	$ 0	$ 6
Post-Modification Outstanding Recorded Investment	0	6
Specific Reserve	0	0
Consumer Installment | Maturity Extension
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	6
Consumer Installment | Modified Payment
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
Consumer Installment | Modified Under- writing
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	0	0
Consumer Installment | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Modifications	$ 0	$ 0

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Loans by Loan Segment (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) contract	Mar. 31, 2021 USD ($) contract	Dec. 31, 2021 USD ($)
Troubled Debt Restructuring
Number of Modifications	9	6
Recorded Investment | $	$ 10,231		$ 12,523
Commercial/Agricultural Real Estate
Troubled Debt Restructuring
Number of Modifications	4	2
C&I/Agricultural operating
Troubled Debt Restructuring
Number of Modifications	1	1
Residential Mortgage
Troubled Debt Restructuring
Number of Modifications	4	2
Consumer Installment
Troubled Debt Restructuring
Number of Modifications	0	1
Originated Loans
Troubled Debt Restructuring
Number of Modifications	75	105
Recorded Investment | $	$ 10,231	$ 17,442
Originated Loans | Commercial/Agricultural Real Estate
Troubled Debt Restructuring
Number of Modifications	20	30
Recorded Investment | $	$ 5,587	$ 8,656
Originated Loans | C&I/Agricultural operating
Troubled Debt Restructuring
Number of Modifications	7	14
Recorded Investment | $	$ 1,247	$ 4,800
Originated Loans | Residential Mortgage
Troubled Debt Restructuring
Number of Modifications	42	52
Recorded Investment | $	$ 3,367	$ 3,937
Originated Loans | Consumer Installment
Troubled Debt Restructuring
Number of Modifications	6	9
Recorded Investment | $	$ 30	$ 49

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) contract	Mar. 31, 2021 USD ($) contract
Considered in Default at Period End:
Number of Modifications | contract	0	1
Recorded Investment | $	$ 0	$ 19
Commercial/Agricultural Real Estate
Considered in Default at Period End:
Number of Modifications | contract	0	0
Recorded Investment | $	$ 0	$ 0
C&I/Agricultural operating
Considered in Default at Period End:
Number of Modifications | contract	0	0
Recorded Investment | $	$ 0	$ 0
Residential Mortgage
Considered in Default at Period End:
Number of Modifications | contract	0	1
Recorded Investment | $	$ 0	$ 19
Consumer Installment
Considered in Default at Period End:
Number of Modifications | contract	0	0
Recorded Investment | $	$ 0	$ 0

XML

LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Acquired Loans Outstanding Balance and the Carrying Amount (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	$ 1,290,176	$ 1,310,963
Carrying amount	1,273,358	1,294,050
Purchased credit impaired loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	10,719	11,205
Carrying amount	10,210	10,552
Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	174,282	187,346
Carrying amount	171,524	184,399
Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding balance	185,001	198,551
Carrying amount	$ 181,734	$ 194,951

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Accretable Expense (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Receivables [Abstract]
2022	$ 594
2023	279
2024	131
2025	96
Total	$ 1,100

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LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS - Non-Accretable Yield (Details) - Acquired Loans - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Non-Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 653	$ 1,087
Additions to non-accretable difference for acquired purchased credit impaired loans	0	0
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans	(26)	(105)
Transfers from non-accretable difference to accretable discount	(86)	(329)
Non-accretable difference used to reduce loan principal balance	(32)	0
Balance at end of period	$ 509	$ 653

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MORTGAGE SERVICING RIGHTS - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Finite-Lived Intangible Assets [Line Items]
Deposits	$ 1,428,223		$ 1,387,535
Servicing fees	$ 351	$ 352
Discounted rates | Minimum
Finite-Lived Intangible Assets [Line Items]
Servicing asset, measurement input	0.09	0.09
Discounted rates | Maximum
Finite-Lived Intangible Assets [Line Items]
Servicing asset, measurement input	0.12	0.12
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Deposits	$ 4,748		2,781
Mortgage servicing rights
Finite-Lived Intangible Assets [Line Items]
Residential mortgage loans serviced for others	$ 552,236		$ 556,086

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MORTGAGE SERVICING RIGHTS - Servicing Asset at Amortized Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Mortgage servicing rights:
Mortgage servicing rights, beginning of period	$ 4,161
Increase in mortgage servicing rights resulting from transfers of financial assets	(126)	$ (297)
Amortization during the period	327	450
Mortgage servicing rights, end of period	4,614
Mortgage servicing rights
Mortgage servicing rights:
Mortgage servicing rights, beginning of period	4,727	5,266
Increase in mortgage servicing rights resulting from transfers of financial assets	126	297
Amortization during the period	(239)	(439)
Mortgage servicing rights, end of period	4,614	5,124
Valuation allowance:
Valuation allowance, beginning of period	(566)	(2,014)
Additions	0	0
Recoveries	566	889
Valuation allowance, end of period	0	(1,125)
Mortgage servicing rights, net	4,614	3,999
Fair value of mortgage servicing rights; end of period	$ 5,267	$ 4,005

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LEASES - Narrative (Details)	Mar. 31, 2022 lease
Lessee, Lease, Description [Line Items]
Operating lease renewal term	5 years
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	6 years 3 months
Corporate Offices
Lessee, Lease, Description [Line Items]
Number of properties subject to operating leases (in leases)	1
Bank Branch Offices
Lessee, Lease, Description [Line Items]
Number of properties subject to operating leases (in leases)	5
ATM Location
Lessee, Lease, Description [Line Items]
Number of properties subject to operating leases (in leases)	1

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LEASES - Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
The components of total lease cost were as follows:
Operating lease cost	$ 139	$ 139
Variable lease cost	10	7
Total lease cost	149	146
The components of total lease income were as follows:
Operating lease income	9	7
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	139	138
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	0	$ 0
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	2,034		$ 2,159
Operating lease liabilities	$ 2,104		$ 2,228
Weighted average remaining lease term in years; operating leases	5 years 4 months 9 days		5 years 6 months 18 days
Weighted average discount rate; operating leases (as a percent)	2.75%		2.73%

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LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Payments
2022	$ 420
2023	506
2024	419
2025	403
2026	346
Thereafter	480
Total	2,574
Less: effects of discounting	(470)
Lease liability recognized	2,104	$ 2,228
Receipts
2022	26
2023	27
2024	10
2025	0
Total	$ 63

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DEPOSITS - Deposits by Type (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Deposits [Abstract]
Non-interest bearing demand deposits	$ 269,481	$ 276,631
Interest bearing demand deposits	423,251	396,231
Savings accounts	241,072	222,674
Money market accounts	321,409	288,985
Certificate accounts	173,010	203,014
Total deposits	$ 1,428,223	$ 1,387,535

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DEPOSITS - Maturities of Time Deposits (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Deposits [Abstract]
December 31, 2022	$ 128,883
December 31, 2023	27,613
December 31, 2024	7,508
December 31, 2025	7,264
December 31, 2026	1,398
After December 31, 2027	344
Total	$ 173,010

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DEPOSITS - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Deposits [Abstract]
Time deposits at or above FDIC insurance limit	$ 19,762	$ 22,381
Brokered deposits	$ 11	$ 11

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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS - Schedule of Federal Home Loan Bank Advances (Details)		1 Months Ended			3 Months Ended	12 Months Ended
	Jun. 30, 2019	Apr. 30, 2027	Sep. 30, 2025	Aug. 31, 2022	Mar. 31, 2022 USD ($) borrowing	Dec. 31, 2021 USD ($)
Summary of Federal Home Loan Bank advances
Federal Home Loan Bank advances, net					$ 85,530,000	$ 111,527,000
Long-term debt, gross					172,592,000	169,953,000
Banks available and unused portion of borrowing agreement					240,412,000	204,271,000
Maximum month-end amounts outstanding					111,530,000	123,530,000
Senior Notes - Variable Rate due June 2031 | Revolving Credit Facility
Summary of Federal Home Loan Bank advances
Maximum borrowing capacity						5,000,000
FHLB
Summary of Federal Home Loan Bank advances
FHLB advances, maturity 2021					0	11,000,000
FHLB advances, maturity 2022					5,000,000	20,000,000
FHLB advances, maturity 2023					20,530,000	20,530,000
FHLB advances, maturity 2024					5,000,000	5,000,000
FHLB advances, maturity 2025					42,500,000	42,500,000
FHLB advances, maturity 2029					12,500,000	12,500,000
FHLB advances, maturity 2030
FHLB advances, maturities summary					85,530,000	111,530,000
Less: unamortized debt issuance costs					0	(3,000)
Federal Home Loan Bank advances, net					85,530,000	111,527,000
FHLB advances					$ 931,498,000	$ 861,900,000
Number of FHLB borrowings maturing within twelve months | borrowing					0
Weighted-average interest rate (as a percent)						2.45%
FHLB | Minimum
Summary of Federal Home Loan Bank advances
Range of stated rates, 2021 (as a percent)					0.00%	2.45%
Range of stated rates, 2022 (as a percent)					1.43%	1.43%
Range of stated rates, 2023 (as a percent)					0.00%	0.00%
Range of stated rates, 2024 (as a percent)					1.45%	1.45%
Range of stated rates, 2025 (as a percent)					1.00%	1.00%
Range of stated rates, 2029 (as a percent)					0.52%	0.52%
Range of stated rates, 2030 (as a percent)
FHLB | Maximum
Summary of Federal Home Loan Bank advances
Range of stated rates, 2021 (as a percent)					0.00%	2.45%
Range of stated rates, 2022 (as a percent)					1.44%	1.44%
Range of stated rates, 2023 (as a percent)					1.45%	1.45%
Range of stated rates, 2024 (as a percent)					1.45%	1.45%
Range of stated rates, 2025 (as a percent)					1.13%	1.13%
Range of stated rates, 2029 (as a percent)					0.86%	0.86%
Range of stated rates, 2030 (as a percent)
Senior Notes
Summary of Federal Home Loan Bank advances
Less: unamortized debt issuance costs					$ (1,188,000)	$ (430,000)
Long-term debt, gross					87,062,000	58,426,000
Senior Notes | Senior Notes
Summary of Federal Home Loan Bank advances
Long-term debt, gross					$ 23,250,000	$ 28,856,000
Senior Notes | Senior Notes | Prime Rate
Summary of Federal Home Loan Bank advances
Basis spread on variable rate (as a percent)	0.75%
Senior Notes | Senior Notes | Minimum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)	3.00%				3.00%	3.00%
Senior Notes | Senior Notes | Maximum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					3.00%	3.50%
Subordinated Notes
Summary of Federal Home Loan Bank advances
Long-term debt, gross					$ 65,000,000	$ 30,000,000
Subordinated Notes | Subordinated Notes due 2027
Summary of Federal Home Loan Bank advances
Long-term debt, gross					$ 15,000,000	$ 15,000,000
Stated interest rate (as a percent)					6.75%
Debt instrument, term					5 years
Subordinated Notes | Subordinated Notes due 2027 | LIBOR | Forecast
Summary of Federal Home Loan Bank advances
Basis spread on variable rate (as a percent)				4.90%
Subordinated Notes | Subordinated Notes due 2027 | Minimum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					6.75%	6.75%
Subordinated Notes | Subordinated Notes due 2027 | Maximum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					6.75%	6.75%
Subordinated Notes | Subordinated Notes due 2030
Summary of Federal Home Loan Bank advances
Long-term debt, gross					$ 15,000,000	$ 15,000,000
Stated interest rate (as a percent)					6.00%
Debt instrument, term					5 years
Subordinated Notes | Subordinated Notes due 2030 | Secured Overnight Financing Rate (SOFR) | Forecast
Summary of Federal Home Loan Bank advances
Basis spread on variable rate (as a percent)			5.91%
Subordinated Notes | Subordinated Notes due 2030 | Minimum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					6.00%	6.00%
Subordinated Notes | Subordinated Notes due 2030 | Maximum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					6.00%	6.00%
Subordinated Notes | Subordinated Notes due 2032
Summary of Federal Home Loan Bank advances
Long-term debt, gross					$ 35,000,000
Stated interest rate (as a percent)					4.75%
Debt instrument, term					5 years
Subordinated Notes | Subordinated Notes due 2032 | Secured Overnight Financing Rate (SOFR) | Forecast
Summary of Federal Home Loan Bank advances
Basis spread on variable rate (as a percent)		3.29%
Subordinated Notes | Subordinated Notes due 2032 | Minimum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					4.75%
Subordinated Notes | Subordinated Notes due 2032 | Maximum
Summary of Federal Home Loan Bank advances
Stated interest rate (as a percent)					4.75%
Federal Home Loan Bank Advances
Summary of Federal Home Loan Bank advances
FHLB, advances					$ 55,000,000

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FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS - Narrative (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
FHLB
Debt Instrument [Line Items]
Letters of credit outstanding, amount	$ 209,400,000	$ 176,150,000
Line of Credit | Federal Reserve Bank Paycheck Protection Program Liquidity Facility
Debt Instrument [Line Items]
Outstanding balances of debt instrument	0	0
Maximum month-end outstanding amount	$ 0	$ 0

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CAPITAL MATTERS - Schedule of Bank’s Tier 1 (Leverage) and Risk-Based Capital Ratios (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk weighted assets), Actual, Amount	$ 207,760	$ 187,783
Total capital (to risk weighted assets), Actual, Ratio	0.149	0.134
Total capital (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 111,180	$ 111,694
Total capital (to risk weighted assets), For Capital Adequacy Purposes, Ratio	0.080	0.080
Total capital (to risk weighted assets), To Be Well Capitalized, Amount	$ 138,975	$ 139,618
Total capital (to risk weighted assets), To Be Well Capitalized, Ratio	0.100	0.100
Tier 1 capital (to risk weighted assets), Actual, Amount	$ 190,942	$ 170,870
Tier 1 capital (to risk weighted assets), Actual, Ratio	0.137	0.122
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 83,385	$ 83,771
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes, Ratio	0.060	0.060
Tier 1 capital (to risk weighted assets), To Be Well Capitalized, Amount	$ 111,180	$ 111,694
Tier 1 capital (to risk weighted assets), To Be Well Capitalized, Ratio	0.080	0.080
Common equity tier 1 (to risk weighted assets), Actual, Amount	$ 190,942	$ 170,870
Common equity tier 1 (to risk weighted assets), Actual, Ratio	13.70%	12.20%
Common equity tier 1 (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 62,539	$ 62,828
Common equity tier 1 (to risk weighted assets), For Capital Adequacy Purposes, Ratio	4.50%	4.50%
Common equity tier 1 (to risk weighted assets), To Be Well Capitalized, Amount	$ 90,334	$ 90,752
Common equity tier 1 (to risk weighted assets), To Be Well Capitalized, Ratio	6.50%	6.50%
Tier 1 leverage ratio (to adjusted total assets), Actual, Amount	$ 190,942	$ 170,870
Tier 1 leverage ratio (to adjusted total assets), Actual, Ratio	0.111	0.100
Tier 1 leverage ratio (to adjusted total assets), For Capital Adequacy Purposes, Amount	$ 68,584	$ 68,323
Tier 1 leverage ratio (to adjusted total assets), For Capital Adequacy Purposes, Ratio	0.040	0.040
Tier 1 leverage ratio (to adjusted total assets), To Be Well Capitalized, Amount	$ 85,729	$ 85,403
Tier 1 leverage ratio (to adjusted total assets), To Be Well Capitalized, Ratio	0.050	0.050
Citizens Community Bancorp, Inc.
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total capital (to risk weighted assets), Actual, Amount	$ 219,277	$ 182,242
Total capital (to risk weighted assets), Actual, Ratio	0.158	0.131
Total capital (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 111,180	$ 111,694
Total capital (to risk weighted assets), For Capital Adequacy Purposes, Ratio	0.080	0.080
Tier 1 capital (to risk weighted assets), Actual, Amount	$ 137,459	$ 135,329
Tier 1 capital (to risk weighted assets), Actual, Ratio	0.099	0.097
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 83,385	$ 83,771
Tier 1 capital (to risk weighted assets), For Capital Adequacy Purposes, Ratio	0.060	0.060
Common equity tier 1 (to risk weighted assets), Actual, Amount	$ 137,459	$ 135,329
Common equity tier 1 (to risk weighted assets), Actual, Ratio	9.90%	9.70%
Common equity tier 1 (to risk weighted assets), For Capital Adequacy Purposes, Amount	$ 62,539	$ 62,828
Common equity tier 1 (to risk weighted assets), For Capital Adequacy Purposes, Ratio	4.50%	4.50%
Tier 1 leverage ratio (to adjusted total assets), Actual, Amount	$ 137,459	$ 135,329
Tier 1 leverage ratio (to adjusted total assets), Actual, Ratio	0.080	0.079
Tier 1 leverage ratio (to adjusted total assets), For Capital Adequacy Purposes, Amount	$ 68,584	$ 68,323
Tier 1 leverage ratio (to adjusted total assets), For Capital Adequacy Purposes, Ratio	0.040	0.040

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STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Mar. 27, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (shares)	63,400		65,900	72,300
2008 Equity Incentive Plan and 2018 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related to awards	$ 1	$ 3
2008 Equity Incentive Plan and 2018 Equity Incentive Plan | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense related to awards	$ 195	$ 171
2018 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock reserved and available for issuance (shares)					350,000
Options outstanding (shares)	0
2018 Equity Incentive Plan | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-option instruments outstanding (shares)	214,394
2018 Equity Incentive Plan | Performance-based restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-option instruments outstanding (shares)	11,834
Vesting period of shares, in years	3 years
2008 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of Equity Incentive Plan	10 years
Options granted (shares)	63,400
Expiry period of unexercised incentive stock options	10 years
2008 Equity Incentive Plan | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-option instruments granted (shares)	400
2008 Equity Incentive Plan | Restricted stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of shares, in years	2 years
2008 Equity Incentive Plan | Restricted stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of shares, in years	5 years
2008 Equity Incentive Plan | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of shares, in years	5 years

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STOCK-BASED COMPENSATION - Restricted Stock Award (Details) - Restricted stock - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Number of Shares
Unvested and outstanding at beginning of year (shares)	75,630	57,242
Granted (shares)	38,586	64,399
Vested (shares)	(23,649)	(44,511)
Forfeited (shares)	0	(1,500)
Unvested and outstanding at end of period (shares)	90,567	75,630
Weighted Average Grant Price
Unvested and outstanding at beginning of year (USD per share)	$ 11.20	$ 12.23
Granted (USD per share)	14.00	10.78
Vested (USD per share)	11.12	13.26
Forfeited (USD per share)	0	10.78
Unvested and outstanding at end of period (USD per share)	$ 12.41	$ 11.20

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STOCK-BASED COMPENSATION - Common Stock Options Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Option Shares
Outstanding at beginning of period (shares)	65,900	72,300
Exercised (shares)	(2,500)	(5,800)
Forfeited or expired (shares)	0	(600)
Outstanding at end of period (shares)	63,400	65,900
Exercisable at end of period (shares)	59,200	61,700
Weighted Average Exercise Price
Outstanding at beginning of period (USD per share)	$ 11.20	$ 11.05
Exercised (USD per share)	8.00	8.99
Forfeited or expired (USD per share)	0	13.76
Outstanding at end of period (USD per share)	11.33	11.20
Weighted Average Exercise Price, Exercisable at end of year (USD per share)	$ 11.16	$ 11.03
Weighted Average Remaining Contractual Term in Years, Outstanding at end of period	4 years 6 months 7 days	4 years 7 months 9 days
Weighted Average Remaining Contractual Term in Years, Exercisable at end of period	4 years 5 months 12 days	4 years 6 months 14 days
Aggregate intrinsic value, outstanding at end of period	$ 240	$ 169
Aggregate intrinsic value, exercisable at end of period	$ 234	$ 169

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STOCK-BASED COMPENSATION - 2004 Stock Option and Incentive Plan and 2008 Equity Incentive Plan Information (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
Intrinsic value of options exercised	$ 19		$ 28
Cash received from options exercised	20	$ 0	52
Tax benefit realized from options exercised	$ 0		$ 0

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FAIR VALUE ACCOUNTING - Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	$ 187,905	$ 203,068
U.S. government agency obligations
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	23,881	26,265
Obligations of states and political subdivisions
Assets Measured on a Recurring Basis
Securities available for sale “AFS”		140
Mortgage-backed securities
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	95,551	107,167
Corporate debt securities
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	35,946	35,588
Fair Value, Measurements, Recurring
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	187,905	203,068
Total equity investments	1,291	1,328
Total	189,196	204,396
Fair Value, Measurements, Recurring | Equity Investments
Assets Measured on a Recurring Basis
Total equity investments	331	368
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Total equity investments	331	368
Total	331	368
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Equity Investments
Assets Measured on a Recurring Basis
Total equity investments	331	368
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	187,905	203,068
Total equity investments	0	0
Total	187,905	203,068
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Equity Investments
Assets Measured on a Recurring Basis
Total equity investments	0	0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Total equity investments	0	0
Total	0	0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Equity Investments
Assets Measured on a Recurring Basis
Total equity investments	0	0
Fair Value, Measurements, Recurring | NAV | Equity Investments
Assets Measured on a Recurring Basis
Total equity investments	960	960
Fair Value, Measurements, Recurring | U.S. government agency obligations
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	23,881	26,265
Fair Value, Measurements, Recurring | U.S. government agency obligations | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | U.S. government agency obligations | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	23,881	26,265
Fair Value, Measurements, Recurring | U.S. government agency obligations | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets Measured on a Recurring Basis
Securities available for sale “AFS”		140
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”		0
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”		140
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”		0
Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	95,551	107,167
Fair Value, Measurements, Recurring | Mortgage-backed securities | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Mortgage-backed securities | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	95,551	107,167
Fair Value, Measurements, Recurring | Mortgage-backed securities | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Corporate debt securities
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	35,946	35,588
Fair Value, Measurements, Recurring | Corporate debt securities | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Corporate debt securities | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	35,946	35,588
Fair Value, Measurements, Recurring | Corporate debt securities | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Corporate asset-backed securities
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	32,527	33,908
Fair Value, Measurements, Recurring | Corporate asset-backed securities | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	0	0
Fair Value, Measurements, Recurring | Corporate asset-backed securities | Significant Other Observable Inputs (Level 2)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	32,527	33,908
Fair Value, Measurements, Recurring | Corporate asset-backed securities | Significant Unobservable Inputs (Level 3)
Assets Measured on a Recurring Basis
Securities available for sale “AFS”	$ 0	$ 0

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FAIR VALUE ACCOUNTING - Assets Measured on a Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets Measured on a Nonrecurring Basis
Carrying Value	$ 11,489	$ 11,149
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Significant Other Observable Inputs (Level 2)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Significant Unobservable Inputs (Level 3)
Assets Measured on a Nonrecurring Basis
Carrying Value	12,142	11,300
Foreclosed and repossessed assets, net
Assets Measured on a Nonrecurring Basis
Carrying Value	1,368	1,408
Foreclosed and repossessed assets, net | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Foreclosed and repossessed assets, net | Significant Other Observable Inputs (Level 2)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Foreclosed and repossessed assets, net | Significant Unobservable Inputs (Level 3)
Assets Measured on a Nonrecurring Basis
Carrying Value	1,368	1,408
Impaired loans with allocated allowances
Assets Measured on a Nonrecurring Basis
Carrying Value	5,507	5,580
Impaired loans with allocated allowances | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Impaired loans with allocated allowances | Significant Other Observable Inputs (Level 2)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Impaired loans with allocated allowances | Significant Unobservable Inputs (Level 3)
Assets Measured on a Nonrecurring Basis
Carrying Value	5,507	5,580
Mortgage servicing rights
Assets Measured on a Nonrecurring Basis
Carrying Value	4,614	4,161
Mortgage servicing rights | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Mortgage servicing rights | Significant Other Observable Inputs (Level 2)
Assets Measured on a Nonrecurring Basis
Carrying Value	0	0
Mortgage servicing rights | Significant Unobservable Inputs (Level 3)
Assets Measured on a Nonrecurring Basis
Carrying Value	$ 5,267	$ 4,312

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FAIR VALUE ACCOUNTING - Level 3 Fair Value Inputs (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2021
Discounted rates | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing asset, measurement input	0.09		0.09
Discounted rates | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing asset, measurement input	0.12		0.12
Fair Value, Inputs, Level 3 | Foreclosed and repossessed assets, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of loans receivable	$ 1,368	$ 1,408
Fair Value, Inputs, Level 3 | Foreclosed and repossessed assets, net | Estimated costs to sell | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed and repossessed assets, impaired loans, measurement input	0.10	0.10
Fair Value, Inputs, Level 3 | Foreclosed and repossessed assets, net | Estimated costs to sell | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed and repossessed assets, impaired loans, measurement input	0.15	0.15
Fair Value, Inputs, Level 3 | Impaired loans with allocated allowances
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of loans receivable	$ 5,507	$ 5,580
Fair Value, Inputs, Level 3 | Impaired loans with allocated allowances | Estimated costs to sell | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed and repossessed assets, impaired loans, measurement input	0.10	0.10
Fair Value, Inputs, Level 3 | Impaired loans with allocated allowances | Estimated costs to sell | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed and repossessed assets, impaired loans, measurement input	0.15	0.15
Fair Value, Inputs, Level 3 | Mortgage servicing rights
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of mortgage servicing rights; end of period	$ 5,267	$ 4,312
Fair Value, Inputs, Level 3 | Mortgage servicing rights | Discounted rates | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing asset, measurement input	0.09	0.09
Fair Value, Inputs, Level 3 | Mortgage servicing rights | Discounted rates | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing asset, measurement input	0.12	0.12

XML

FAIR VALUE ACCOUNTING - Carrying Amount and Estimated Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financial assets:
Securities available for sale "AFS"	$ 187,905	$ 203,068
Securities held to maturity “HTM”	95,975	69,177
Carrying Amount | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Financial assets:
Cash and cash equivalents	84,364	47,691
Equity investments	331	368
Accrued interest receivable	4,179	3,916
Financial liabilities:
Other borrowings	87,062	58,426
Accrued interest payable	375	586
Carrying Amount | Significant Other Observable Inputs (Level 2)
Financial assets:
Other interest-bearing deposits	1,511	1,511
Securities available for sale "AFS"	187,905	203,068
Securities held to maturity “HTM”	104,894	71,141
Other investments	15,084	15,305
Loans held for sale	2,528	6,670
Financial liabilities:
FHLB advances	85,530	111,527
Carrying Amount | Significant Unobservable Inputs (Level 3)
Financial assets:
Loans receivable, net	1,273,358	1,294,050
Mortgage servicing rights	4,614	4,161
Financial liabilities:
Deposits	1,428,223	1,387,535
Carrying Amount | NAV
Financial assets:
Equity investments	960	960
Estimated Fair Value | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Financial assets:
Cash and cash equivalents	84,364	47,691
Equity investments	331	368
Accrued interest receivable	4,179	3,916
Financial liabilities:
Other borrowings	87,062	58,426
Accrued interest payable	375	586
Estimated Fair Value | Significant Other Observable Inputs (Level 2)
Financial assets:
Other interest-bearing deposits	1,527	1,535
Securities available for sale "AFS"	187,905	203,068
Securities held to maturity “HTM”	95,975	69,177
Other investments	15,084	15,305
Loans held for sale	2,528	6,670
Financial liabilities:
FHLB advances	85,039	113,285
Estimated Fair Value | Significant Unobservable Inputs (Level 3)
Financial assets:
Loans receivable, net	1,343,482	1,319,293
Mortgage servicing rights	5,267	4,312
Financial liabilities:
Deposits	1,428,630	1,388,390
Estimated Fair Value | NAV
Financial assets:
Equity investments	$ 960	$ 960

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EARNINGS PER SHARE - Schedule of Reconciliation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Basic
Net income attributable to common stockholders	$ 4,706	$ 6,057	$ 4,997	$ 4,706	$ 5,506
Weighted average common shares outstanding (shares)	10,527				10,980
Basic earnings per share (USD per share)	$ 0.45				$ 0.50
Diluted
Net income attributable to common stockholders	$ 4,706	$ 6,057	$ 4,997	$ 4,706	$ 5,506
Weighted average common shares outstanding (shares)	10,527				10,980
Add: Dilutive stock options outstanding (shares)	14				6
Average shares and dilutive potential common shares (shares)	10,541				10,986
Diluted earnings per share (USD per share)	$ 0.45				$ 0.50
Additional common stock option shares that have not been included due to their antidilutive effect (shares)	0				22,400

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OTHER COMPREHENSIVE INCOME (LOSS) - Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Before-Tax Amount
Other comprehensive loss	$ (9,824)	$ (672)
Tax Benefit (Expense)
Other comprehensive loss	2,701	186
Net-of-Tax Amount
Other comprehensive loss	(7,123)	(486)
Unrealized Gains (Losses) on Securities
Before-Tax Amount
Net unrealized losses arising during the period	(9,824)	(672)
Tax Benefit (Expense)
Net unrealized losses arising during the period	2,701	186
Net-of-Tax Amount
Net unrealized losses arising during the period	$ (7,123)	$ (486)

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OTHER COMPREHENSIVE INCOME (LOSS) - Changes in the Accumulated Balances (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021
Changes in the accumulated balances for each component of other comprehensive income
Balance at beginning of period	$ 170,866	$ 160,564	$ 160,564
Current year-to-date other comprehensive loss	(7,123)	(486)
Balance at end of period	165,494	160,662	164,016
Unrealized Gains (Losses) on AFS Securities
Changes in the accumulated balances for each component of other comprehensive income
Balance at beginning of period	222	2,056	2,056
Current year-to-date other comprehensive loss	(9,824)		(1,834)
Balance at end of period	(9,602)
Other Accumulated Comprehensive Income (Loss), net of tax
Changes in the accumulated balances for each component of other comprehensive income
Balance at beginning of period	161	1,490	1,490
Current year-to-date other comprehensive loss	(7,123)		(1,329)
Balance at end of period	$ (6,962)	$ 1,004	$ 2,060

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OTHER COMPREHENSIVE INCOME (LOSS) - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Equity [Abstract]
Reclassifications out of accumulated other comprehensive income (loss)	$ 0	$ 0