ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
(Address of principal executive offices) | (Zip Code) |
(Title of each class) | (Trading symbol) | (Name of each exchange on which registered) |
Large accelerated filer ☐ | Accelerated Filer ☐ | ||||
Smaller reporting company | |||||
Emerging growth company |
ITEM 6. [Reserved] | ||||||||
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6 |
Population (1) | Unemployment Rate (%) (2) | Average Annual Wage (3) | |||||||||||||||
Pennsylvania | 12,972,008 | 3.5 | $ | 65,104 | |||||||||||||
Allegheny | 1,238,090 | 3.4 | 71,552 | ||||||||||||||
Fayette | 126,931 | 5.3 | 46,748 | ||||||||||||||
Greene | 35,369 | 4.2 | 59,852 | ||||||||||||||
Washington | 209,470 | 3.6 | 60,112 | ||||||||||||||
Westmoreland | 353,057 | 3.7 | 52,052 | ||||||||||||||
West Virginia | 1,775,156 | 3.4 | 52,676 | ||||||||||||||
Marshall | 30,115 | 4.4 | 62,712 | ||||||||||||||
Ohio | 41,776 | 3.3 | 50,232 |
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Location | Owned or Leased | |||||||
PENNSYLVANIA | ||||||||
Main Office (Greene County): | ||||||||
100 North Market Street, Carmichaels, PA 15320 | Owned | |||||||
Barron P. "Pat" McCune, Jr. Corporate Center (Washington County): | ||||||||
2111 North Franklin Drive, Washington, PA 15301 | Owned | |||||||
Ralph J. Sommers, Jr. Operations Center (Greene County): | ||||||||
600 Evergreene Drive, Waynesburg, PA 15370 | Owned | |||||||
Branch Offices (Greene County): | ||||||||
30 West Greene Street, Waynesburg, PA 15370 | Owned | |||||||
100 Miller Lane, Waynesburg, PA 15370 | Building Owned, Ground Lease | |||||||
1993 South Eighty Eight Road, Greensboro, PA 15338 | Owned | |||||||
Branch Offices (Washington County): | ||||||||
65 West Chestnut Street, Washington, PA 15301 | Building Owned, Ground Lease | |||||||
4139 Washington Road, McMurray, PA 15317 | Leased | |||||||
200 Main Street, Claysville, PA 15232 | Owned | |||||||
Branch Offices (Fayette County): | ||||||||
545 West Main Street, Uniontown, PA 15401 | Building Owned, Ground Lease | |||||||
Branch Office (Westmoreland County): | ||||||||
1670 Broad Avenue, Belle Vernon, PA 15012 | Owned | |||||||
Branch Office (Allegheny County): | ||||||||
714 Brookline Boulevard, Pittsburgh, PA 15226 | Owned | |||||||
Northern Business Center: | ||||||||
100 Pinewood Lane, Suite 101, Warrendale, PA 15086 | Leased | |||||||
Exchange Underwriters | ||||||||
2111 North Franklin Drive, Washington, PA 15301 | Owned |
WEST VIRGINIA | ||||||||
Branch Offices (Ohio County): | ||||||||
1701 Warwood Avenue, Wheeling, WV 26003 | Owned | |||||||
875 National Road, Wheeling, WV 26003 | Owned | |||||||
Branch Office (Marshall County): | ||||||||
809 Lafayette Avenue, Moundsville, WV 26041 | Owned | |||||||
26 |
Plan Category | Number of securities to be issued upon exercise of outstanding options warrants and rights | Weighted-average exercise price of outstanding options warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) | ||||||||||||||||||||||||||||||||
(A) | (B) | (C) | |||||||||||||||||||||||||||||||||
Equity compensation plans: | |||||||||||||||||||||||||||||||||||
Approved by stockholders | 283,748 | (1) | $ | 24.52 | (1) | 333,335 | (2) | ||||||||||||||||||||||||||||
Not approved by stockholders | — | — | — | ||||||||||||||||||||||||||||||||
Total | 283,748 | $ | 24.52 | 333,335 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of the Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program | |||||||||||||||||||
October 1-31, 2022 | 4,620 | $ | 21.88 | 4,620 | $ | 8,603,128 | |||||||||||||||||
November 1-30, 2022 | 0 | — | 0 | 8,603,128 | |||||||||||||||||||
December 1-31, 2022 | 0 | — | 0 | 8,603,128 | |||||||||||||||||||
Total | 4,620 | $ | 21.88 | 4,620 |
27 |
December 31, | 2022 | 2021 | 2020 | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Selected Financial Condition Data: | |||||||||||||||||
Assets | $ | 1,408,938 | $ | 1,425,479 | $ | 1,416,720 | |||||||||||
Cash and Due From Banks | 103,700 | 119,674 | 160,911 | ||||||||||||||
Securities | 190,058 | 224,974 | 145,400 | ||||||||||||||
Loans, Net | 1,037,054 | 1,009,214 | 1,031,982 | ||||||||||||||
Deposits | 1,268,503 | 1,226,613 | 1,224,569 | ||||||||||||||
Short-Term Borrowings | 8,060 | 39,266 | 41,055 | ||||||||||||||
Other Borrowings | 14,638 | 17,601 | 8,000 | ||||||||||||||
Stockholders’ Equity | 110,155 | 133,124 | 134,530 |
Year Ended December 31, | 2022 | 2021 | 2020 | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Selected Operating Data: | |||||||||||||||||
Interest and Dividend Income | $ | 47,716 | $ | 43,557 | $ | 47,467 | |||||||||||
Interest Expense | 4,781 | 3,405 | 5,563 | ||||||||||||||
Net Interest and Dividend Income | 42,935 | 40,152 | 41,904 | ||||||||||||||
Provision (Recovery) for Loan Losses | 3,784 | (1,125) | 4,000 | ||||||||||||||
Net Interest and Dividend Income After Provision (Recovery) for Loan Losses | 39,151 | 41,277 | 37,904 | ||||||||||||||
Noninterest Income | 9,820 | 16,280 | 9,471 | ||||||||||||||
Noninterest Expense | 34,891 | 42,862 | 56,767 | ||||||||||||||
Income (Loss) Before Income Tax Expense | 14,080 | 14,695 | (9,392) | ||||||||||||||
Income Tax Expense | 2,833 | 3,125 | 1,248 | ||||||||||||||
Net Income (Loss) | $ | 11,247 | $ | 11,570 | $ | (10,640) |
At or For the Year Ended December 31, | 2022 | 2021 | 2020 | ||||||||||||||
Per Common Share Data: | |||||||||||||||||
Earnings (Loss) Per Common Share - Basic | $ | 2.19 | $ | 2.15 | $ | (1.97) | |||||||||||
Earnings (Loss) Per Common Share - Diluted | 2.18 | 2.15 | (1.97) | ||||||||||||||
Dividends Per Common Share | 0.96 | 0.96 | 0.96 | ||||||||||||||
Dividend Payout Ratio (1) | 44.04 | % | 44.65 | % | (48.73) | % | |||||||||||
Book Value Per Common Share | $ | 21.60 | $ | 25.31 | $ | 24.76 | |||||||||||
Common Shares Outstanding | 5,100,189 | 5,260,672 | 5,434,374 |
28 |
At or For the Year Ended December 31, | 2022 | 2021 | 2020 | ||||||||||||||
Selected Financial Ratios: | |||||||||||||||||
Return on Average Assets | 0.80 | % | 0.79 | % | (0.77) | % | |||||||||||
Return on Average Equity | 9.56 | 8.66 | (7.18) | ||||||||||||||
Average Interest-Earning Assets to Average Interest-Bearing Liabilities | 148.00 | 145.44 | 139.89 | ||||||||||||||
Average Equity to Average Assets | 8.36 | 9.12 | 10.75 | ||||||||||||||
Net Interest Rate Spread (2) | 3.07 | 2.81 | 3.13 | ||||||||||||||
Net Interest Rate Spread (Non-GAAP) (2)(4) | 3.08 | 2.82 | 3.15 | ||||||||||||||
Net Interest Margin (3) | 3.24 | 2.92 | 3.30 | ||||||||||||||
Net Interest Margin (Non-GAAP) (3)(4) | 3.25 | 2.94 | 3.32 | ||||||||||||||
Net Charge-Offs to Average Loans | 0.25 | 0.01 | 0.11 | ||||||||||||||
Noninterest Expense to Average Assets | 2.48 | 2.93 | 4.12 | ||||||||||||||
Efficiency Ratio (5) | 66.14 | 75.95 | 110.50 |
Asset Quality Ratios: | |||||||||||||||||
Allowance for Loan Losses to Total Loans | 1.22 | % | 1.13 | % | 1.22 | % | |||||||||||
Allowance for Loan Losses to Nonperforming Loans | 221.06 | 159.40 | 88.15 | ||||||||||||||
Allowance for Loan Losses to Nonaccrual Loans | 320.64 | 233.37 | 117.28 | ||||||||||||||
Delinquent and Nonaccrual Loans to Total Loans | 0.81 | 0.78 | 1.50 | ||||||||||||||
Nonperforming Loans to Total Loans | 0.55 | 0.71 | 1.39 | ||||||||||||||
Nonperforming Loans to Total Assets | 0.41 | 0.51 | 1.02 | ||||||||||||||
Nonperforming Assets to Total Assets | 0.41 | 0.51 | 1.04 |
Capital Ratios: | |||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets (6) | 12.33 | % | 11.95 | % | 11.79 | % | |||||||||||
Tier 1 Capital to Risk-Weighted Assets (6) | 12.33 | 11.95 | 11.79 | ||||||||||||||
Total Capital to Risk-Weighted Assets (6) | 13.58 | 13.18 | 13.04 | ||||||||||||||
Tier 1 Leverage Capital to Adjusted Total Assets (6) | 8.66 | 7.76 | 7.81 |
Other: | |||||||||||||||||
Number of Branch Offices | 13 | 14 | 22 | ||||||||||||||
Number of Full-Time Equivalent Employees | 197 | 200 | 257 |
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2022 | 2021 | ||||||||||||||||||||||
December 31, | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Available-for-Sale Debt Securities: | |||||||||||||||||||||||
U.S. Government Agencies | $ | 53,993 | $ | 44,634 | $ | 53,992 | $ | 52,561 | |||||||||||||||
Obligations of States and Political Subdivisions | 14,053 | 13,342 | 17,951 | 18,955 | |||||||||||||||||||
Mortgage-Backed Securities - Government-Sponsored Enterprises | 46,345 | 41,427 | 55,373 | 56,559 | |||||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | 96,930 | 79,642 | 88,493 | 86,583 | |||||||||||||||||||
Corporate Debt | 9,487 | 8,315 | 7,481 | 7,450 | |||||||||||||||||||
Total Available-for-Sale Debt Securities | $ | 220,808 | 187,360 | $ | 223,290 | 222,108 | |||||||||||||||||
Equity Securities: | |||||||||||||||||||||||
Mutual Funds | 875 | 990 | |||||||||||||||||||||
Other | 1,823 | 1,876 | |||||||||||||||||||||
Total Equity Securities | 2,698 | 2,866 | |||||||||||||||||||||
Total Securities | $ | 190,058 | $ | 224,974 |
One Year or Less | More than One Year Through Five Years | More than Five Years Through Ten Years | More than Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||
Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | Fair Value | Weighted Average Yield | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Government Agencies | $ | — | — | % | $ | 7,849 | 0.96 | % | $ | 36,785 | 1.24 | % | $ | — | — | % | $ | 44,634 | 1.19 | % | ||||||||||||||||||||||||
Obligations of States and Political Subdivisions | 244 | 2.61 | 739 | 3.09 | 11,501 | 3.28 | 858 | 3.18 | 13,342 | 3.25 | ||||||||||||||||||||||||||||||||||
Mortgage Backed Securities - Government-Sponsored Enterprises | — | — | 2,971 | 2.80 | 9,282 | 1.96 | 29,174 | 2.11 | 41,427 | 2.12 | ||||||||||||||||||||||||||||||||||
Collateralized Mortgage Obligations - Government-Sponsored Enterprises | — | — | — | — | — | — | 79,642 | 1.52 | 79,642 | 1.52 | ||||||||||||||||||||||||||||||||||
Corporate Debt Securities | — | — | — | — | 3,815 | 3.31 | 4,500 | 6.92 | 8,315 | 5.20 | ||||||||||||||||||||||||||||||||||
Total Debt Securities | $ | 244 | 2.61 | % | $ | 11,559 | 1.53 | % | $ | 61,383 | 1.81 | % | $ | 114,174 | 1.87 | % | $ | 187,360 | 1.83 | % |
34 |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Percent | Amount | Percent | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||
Residential | $ | 330,725 | 31.5 | % | $ | 320,798 | 31.4 | % | |||||||||||||||
Commercial | 436,805 | 41.6 | 392,124 | 38.5 | |||||||||||||||||||
Construction | 44,923 | 4.3 | 85,028 | 8.3 | |||||||||||||||||||
Commercial and Industrial | 70,044 | 6.7 | 89,010 | 8.7 | |||||||||||||||||||
Consumer | 146,927 | 14.0 | 122,152 | 12.0 | |||||||||||||||||||
Other | 20,449 | 1.9 | 11,684 | 1.1 | |||||||||||||||||||
Total Loans | 1,049,873 | 100.0 | % | 1,020,796 | 100.0 | % | |||||||||||||||||
Allowance for Loan Losses | (12,819) | (11,582) | |||||||||||||||||||||
Loans, Net | $ | 1,037,054 | $ | 1,009,214 |
Real Estate | |||||||||||||||||||||||||||||||||||||||||||||||
Residential | Commercial | Construction | Commercial and Industrial | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Weighted Average Rate | Amount | Weighted Average Rate | Amount | Weighted Average Rate | Amount | Weighted Average Rate | ||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
One Year or Less | $ | 16,317 | 7.40 | % | $ | 19,485 | 6.40 | % | $ | 4,177 | 7.85 | % | $ | 14,118 | 7.02 | % | |||||||||||||||||||||||||||||||
After One Year Through Five Years | 7,410 | 4.32 | 60,700 | 5.62 | 17,772 | 6.75 | 33,240 | 4.92 | |||||||||||||||||||||||||||||||||||||||
After Five Years Through 15 Years | 112,609 | 4.07 | 345,811 | 4.85 | 13,437 | 4.13 | 22,684 | 4.03 | |||||||||||||||||||||||||||||||||||||||
After 15 Years | 194,389 | 3.84 | 10,809 | 3.90 | 9,537 | 3.82 | 2 | 7.50 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 330,725 | 4.10 | % | $ | 436,805 | 5.00 | % | $ | 44,923 | 5.44 | % | $ | 70,044 | 5.05 | % |
Consumer | Other | Total | |||||||||||||||||||||||||||||||||
Amount | Weighted Average Rate | Amount | Weighted Average Rate | Amount | Weighted Average Rate | ||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
One Year or Less | $ | 5,734 | 8.15 | % | $ | 952 | 6.98 | % | $ | 60,783 | 7.09 | % | |||||||||||||||||||||||
After One Year Through Five Years | 84,765 | 4.37 | 418 | 3.08 | 204,305 | 5.05 | |||||||||||||||||||||||||||||
After Five Years Through 15 Years | 54,958 | 5.00 | 16,645 | 3.48 | 566,144 | 4.62 | |||||||||||||||||||||||||||||
After 15 Years | 1,470 | 9.54 | 2,434 | 2.56 | 218,641 | 3.82 | |||||||||||||||||||||||||||||
Total | $ | 146,927 | 4.77 | % | $ | 20,449 | 3.53 | % | $ | 1,049,873 | 4.68 | % |
35 |
Due After December 31, 2023 | Fixed | Adjustable | Total | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Real Estate: | |||||||||||||||||
Residential | $ | 267,046 | $ | 47,362 | $ | 314,408 | |||||||||||
Commercial | 238,933 | 178,387 | 417,320 | ||||||||||||||
Construction | 30,720 | 10,026 | 40,746 | ||||||||||||||
Commercial and Industrial | 47,021 | 8,905 | 55,926 | ||||||||||||||
Consumer | 141,157 | 36 | 141,193 | ||||||||||||||
Other | 16,381 | 3,116 | 19,497 | ||||||||||||||
Total Loans | $ | 741,258 | $ | 247,832 | $ | 989,090 |
2022 | 2021 | ||||||||||||||||||||||||||||||||||
Year Ended December 31, | Average Balance | Percent | Weighted Average Rate | Average Balance | Percent | Weighted Average Rate | |||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
Non-Interest Bearing Demand Deposits | $ | 389,553 | 31.4 | % | — | % | $ | 378,374 | 29.8 | % | — | % | |||||||||||||||||||||||
NOW Accounts | 282,850 | 22.8 | 0.48 | 272,256 | 21.4 | 0.09 | |||||||||||||||||||||||||||||
Savings Accounts | 248,334 | 20.0 | 0.04 | 247,864 | 19.5 | 0.04 | |||||||||||||||||||||||||||||
Money Market Accounts | 194,223 | 15.7 | 0.50 | 201,222 | 15.8 | 0.14 | |||||||||||||||||||||||||||||
Time Deposits | 124,817 | 10.1 | 1.28 | 171,805 | 13.5 | 1.46 | |||||||||||||||||||||||||||||
Total Deposits | $ | 1,239,777 | 100.0 | % | 0.32 | % | $ | 1,271,521 | 100.0 | % | 0.25 | % |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Less than 0.25% | $ | 43,516 | $ | 39,573 | |||||||
0.25% to 0.49% | 10,732 | 20,568 | |||||||||
0.50% to 0.99% | 7,721 | 10,943 | |||||||||
1.00% to 1.49% | 5,929 | 11,110 | |||||||||
1.50% to 1.99% | 4,717 | 7,561 | |||||||||
2.00% to 2.49% | 7,379 | 11,841 | |||||||||
2.49% to 2.99% | 12,779 | 13,427 | |||||||||
3.00% to 3.99% | 16,210 | 21,531 | |||||||||
4.00% or Greater | 143 | 159 | |||||||||
Total Time Deposits | $ | 109,126 | $ | 136,713 |
36 |
Period to Maturity | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | Less Than Or Equal to One Year | More Than One to Two Years | More Than Two to Three Years | More Than Three to Four Years | More Than Four to Five Years | More Than Five Years | Total | Percent of Total | |||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Less than 0.25% | $ | 30,789 | $ | 9,926 | $ | 1,185 | $ | 1,535 | $ | 81 | $ | — | $ | 43,516 | 39.9 | % | |||||||||||||||||||||||||||||||
0.25% to 0.49% | 1,071 | 760 | 785 | 4,686 | 3,430 | — | 10,732 | 9.8 | |||||||||||||||||||||||||||||||||||||||
0.50% to 0.99% | 514 | 669 | 3,844 | 138 | 195 | 2,361 | 7,721 | 7.1 | |||||||||||||||||||||||||||||||||||||||
1.00% to 1.49% | 2,748 | 1,275 | 1,430 | 202 | — | 274 | 5,929 | 5.4 | |||||||||||||||||||||||||||||||||||||||
1.50% to 1.99% | 1,281 | 836 | 788 | 1,579 | 129 | 104 | 4,717 | 4.3 | |||||||||||||||||||||||||||||||||||||||
2.00% to 2.49% | 4,659 | 1,753 | 166 | 31 | 234 | 536 | 7,379 | 6.8 | |||||||||||||||||||||||||||||||||||||||
2.49% to 2.99% | 12,298 | 95 | 386 | — | — | — | 12,779 | 11.7 | |||||||||||||||||||||||||||||||||||||||
3.00% to 3.99% | 15,852 | 285 | 73 | — | — | — | 16,210 | 14.9 | |||||||||||||||||||||||||||||||||||||||
4.00% or Greater | 143 | — | — | — | — | — | 143 | 0.1 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 69,355 | $ | 15,599 | $ | 8,657 | $ | 8,171 | $ | 4,069 | $ | 3,275 | $ | 109,126 | 100.0 | % |
December 31, | 2022 | ||||
(Dollars in Thousands) | |||||
Three Months or Less | $ | 348 | |||
Over Three Months to Six Months | 1,345 | ||||
Over Six Months to One Year | 1,847 | ||||
Over One Year | 2,968 | ||||
Total | $ | 6,508 |
37 |
38 |
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2022 | 2021 | Dollar Change | Percent Change | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Service Fees | $ | 2,160 | $ | 2,331 | $ | (171) | (7.3) | % | ||||||
Insurance Commissions | 5,934 | 5,616 | 318 | 5.7 | % | |||||||||
Other Commissions | 669 | 521 | 148 | 28.4 | % | |||||||||
Net Gain on Sales of Loans | — | 1,143 | (1,143) | (100.0) | % | |||||||||
Net (Loss) Gain on Securities | (168) | 526 | (694) | (131.9) | % | |||||||||
Net Gain on Purchased Tax Credits | 57 | 70 | (13) | (18.6) | % | |||||||||
Gain on Sale of Branches | — | 5,203 | (5,203) | (100.0) | % | |||||||||
Net Gain (Loss) on Disposal of Fixed Assets | 431 | (3) | 434 | 14466.7 | % | |||||||||
Income from Bank-Owned Life Insurance | 561 | 553 | 8 | 1.4 | % | |||||||||
Other Income | 176 | 320 | (144) | (45.0) | % | |||||||||
Total Noninterest Income | $ | 9,820 | $ | 16,280 | $ | (6,460) | (39.7) | % |
39 |
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2022 | 2021 | Dollar Change | Percent Change | |||||||||||
(Dollars in Thousands) | ||||||||||||||
Salaries and Employee Benefits | $ | 18,469 | $ | 19,938 | $ | (1,469) | (7.4) | % | ||||||
Occupancy | 3,047 | 2,968 | 79 | 2.7 | % | |||||||||
Equipment | 739 | 1,034 | (295) | (28.5) | % | |||||||||
Data Processing | 2,152 | 2,154 | (2) | (0.1) | % | |||||||||
FDIC Assessment | 638 | 1,014 | (376) | (37.1) | % | |||||||||
PA Shares Tax | 979 | 887 | 92 | 10.4 | % | |||||||||
Contracted Services | 1,628 | 4,011 | (2,383) | (59.4) | % | |||||||||
Legal and Professional Fees | 1,237 | 994 | 243 | 24.4 | % | |||||||||
Advertising | 527 | 749 | (222) | (29.6) | % | |||||||||
Other Real Estate Owned (Income) | (151) | (183) | 32 | (17.5) | % | |||||||||
Amortization of Intangible Assets | 1,782 | 1,926 | (144) | (7.5) | % | |||||||||
Intangible Assets and Goodwill Impairment | — | 1,178 | (1,178) | (100.0) | % | |||||||||
Writedown of Premises and Equipment | — | 2,293 | (2,293) | (100.0) | % | |||||||||
Other | 3,844 | 3,899 | (55) | (1.4) | % | |||||||||
Total Noninterest Expense | $ | 34,891 | $ | 42,862 | $ | (7,971) | (18.6) | % |
40 |
41 |
2022 | 2021 | ||||||||||||||||||||||
Year Ended December 31, | Average Balance | Interest and Dividends | Yield/ Cost | Average Balance | Interest and Dividends | Yield/ Cost | |||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest-Earning Assets: | |||||||||||||||||||||||
Loans, Net (1) | $ | 1,019,124 | $ | 42,010 | 4.12 | % | $ | 1,014,405 | $ | 39,799 | 3.92 | % | |||||||||||
Securities | |||||||||||||||||||||||
Taxable | 220,818 | 3,852 | 1.74 | 162,987 | 2,990 | 1.83 | |||||||||||||||||
Tax Exempt | 8,383 | 270 | 3.22 | 11,829 | 366 | 3.09 | |||||||||||||||||
Equity Securities | 2,693 | 91 | 3.38 | 2,657 | 84 | 3.16 | |||||||||||||||||
Interest Bearing Deposits at Other Banks | 70,765 | 1,473 | 2.08 | 177,768 | 304 | 0.17 | |||||||||||||||||
Other Interest-Earning Assets | 3,092 | 154 | 4.98 | 3,733 | 186 | 4.98 | |||||||||||||||||
Total Interest-Earning Assets | 1,324,875 | 47,850 | 3.61 | 1,373,379 | 43,729 | 3.18 | |||||||||||||||||
Noninterest-Earning Assets | 81,553 | 91,075 | |||||||||||||||||||||
Total Assets | $ | 1,406,428 | $ | 1,464,454 | |||||||||||||||||||
Liabilities and Stockholders' equity: | |||||||||||||||||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||||||
Interest-Bearing Demand Deposits | $ | 282,850 | $ | 1,362 | 0.48 | % | $ | 272,256 | $ | 232 | 0.09 | % | |||||||||||
Savings | 248,334 | 88 | 0.04 | 247,864 | 98 | 0.04 | |||||||||||||||||
Money Market | 194,223 | 976 | 0.50 | 201,222 | 281 | 0.14 | |||||||||||||||||
Time Deposits | 124,817 | 1,599 | 1.28 | 171,805 | 2,514 | 1.46 | |||||||||||||||||
Total Interest-Bearing Deposits | 850,224 | 4,025 | 0.47 | 893,147 | 3,125 | 0.35 | |||||||||||||||||
Short-term Borrowings: | |||||||||||||||||||||||
Securities Sold Under Agreement to Repurchase | 27,360 | 63 | 0.23 | 43,988 | 98 | 0.22 | |||||||||||||||||
Other Borrowed Funds | 17,609 | 693 | 3.94 | 7,172 | 182 | 2.54 | |||||||||||||||||
Total Interest-Bearing Liabilities | 895,193 | 4,781 | 0.53 | 944,307 | 3,405 | 0.36 | |||||||||||||||||
Noninterest-Bearing Demand Deposits | 389,553 | 378,374 | |||||||||||||||||||||
Other Liabilities | 4,072 | 8,168 | |||||||||||||||||||||
Total Liabilities | 1,288,818 | 1,330,849 | |||||||||||||||||||||
Stockholders' Equity | 117,610 | 133,605 | |||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,406,428 | $ | 1,464,454 | |||||||||||||||||||
Net Interest Income (FTE) (Non-GAAP) (2) | $ | 43,069 | $ | 40,324 | |||||||||||||||||||
Net Interest Rate Spread (FTE) (Non-GAAP) (2)(3) | 3.08 | 2.82 | |||||||||||||||||||||
Net Interest-Earning Assets (4) | $ | 429,682 | $ | 429,072 | |||||||||||||||||||
Net Interest Margin (FTE) (Non-GAAP) (2)(5) | 3.25 | 2.94 | |||||||||||||||||||||
Return on Average Assets | 0.80 | 0.79 | |||||||||||||||||||||
Return on Average Equity | 9.56 | 8.66 | |||||||||||||||||||||
Average Equity to Average Assets | 8.36 | 9.12 | |||||||||||||||||||||
Average Interest-Earning Assets to Average Interest-Bearing Liabilities | 148.00 | 145.44 | |||||||||||||||||||||
PPP Loans | $ | 5,666 | $ | 734 | 12.95 | $ | 45,905 | $ | 2,189 | 4.77 |
42 |
Year Ended December 31, 2022 Compared To Year Ended December 31, 2021 | |||||||||||||||||
Increase (Decrease) Due to | |||||||||||||||||
Volume | Rate | Total | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Interest and Dividend Income: | |||||||||||||||||
Loans, net | $ | 174 | $ | 2,037 | $ | 2,211 | |||||||||||
Securities: | |||||||||||||||||
Taxable | 1,015 | (153) | 862 | ||||||||||||||
Tax-Exempt | (111) | 15 | (96) | ||||||||||||||
Equity Securities | 1 | 6 | 7 | ||||||||||||||
Interest Bearing Deposits at Other Banks | (286) | 1,455 | 1,169 | ||||||||||||||
Other Interest-Earning Assets | (32) | — | (32) | ||||||||||||||
Total Interest-Earning Assets | 761 | 3,360 | 4,121 | ||||||||||||||
Interest Expense: | |||||||||||||||||
Deposits | (126) | 1,026 | 900 | ||||||||||||||
Short-Term Borrowings: | |||||||||||||||||
Securities Sold Under Agreements to Repurchase | (39) | 4 | (35) | ||||||||||||||
Other Borrowed Funds | 371 | 140 | 511 | ||||||||||||||
Total Interest-Bearing Liabilities | 206 | 1,170 | 1,376 | ||||||||||||||
Change in Net Interest Income | $ | 555 | $ | 2,190 | $ | 2,745 |
43 |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Nonaccrual loans: | |||||||||||
Real Estate: | |||||||||||
Residential | $ | 1,649 | $ | 1,393 | |||||||
Commercial | 1,814 | 2,058 | |||||||||
Commercial and Industrial | 415 | 1,496 | |||||||||
Consumer | 120 | 16 | |||||||||
Total Nonaccrual Loans | 3,998 | 4,963 | |||||||||
Accruing Loans Past Due 90 Days or More: | |||||||||||
Consumer | — | — | |||||||||
Total Accruing Loans 90 Days or More Past Due | — | — | |||||||||
Total Nonaccrual Loans and Accruing Loans 90 Days or More Past Due | 3,998 | 4,963 | |||||||||
Troubled Debt Restructurings, Accruing | |||||||||||
Real Estate | |||||||||||
Residential | 534 | 613 | |||||||||
Commercial | 1,260 | 1,674 | |||||||||
Commercial and Industrial | 7 | 16 | |||||||||
Total Troubled Debt Restructurings, Accruing | 1,801 | 2,303 | |||||||||
Total Nonperforming Loans | 5,799 | 7,266 | |||||||||
Real Estate Owned: | |||||||||||
Residential | — | 36 | |||||||||
Commercial | — | — | |||||||||
Total Real Estate Owned | — | 36 | |||||||||
Total Nonperforming Assets | $ | 5,799 | $ | 7,302 | |||||||
Nonaccrual Loans to Total Loans | 0.38 | % | 0.49 | % | |||||||
Nonperforming Loans to Total Loans | 0.55 | 0.71 | |||||||||
Nonperforming Assets to Total Assets | 0.41 | 0.51 |
44 |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Nonaccrual Loans | Total Loans | Nonaccrual Loans to Total Loans | Nonaccrual Loans | Total Loans | Nonaccrual Loans to Total Loans | |||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||
Residential | $ | 1,649 | $ | 330,725 | 0.50 | % | $ | 1,393 | $ | 320,798 | 0.43 | % | |||||||||||
Commercial | 1,814 | 436,805 | 0.42 | 2,058 | 392,124 | 0.52 | |||||||||||||||||
Construction | — | 44,923 | — | — | 85,028 | — | |||||||||||||||||
Commercial and Industrial | 415 | 70,044 | 0.59 | 1,496 | 89,010 | 1.68 | |||||||||||||||||
Consumer | 120 | 146,927 | 0.08 | 16 | 122,152 | 0.01 | |||||||||||||||||
Other | — | 20,449 | — | — | 11,684 | — | |||||||||||||||||
Total | $ | 3,998 | $ | 1,049,873 | 0.38 | % | $ | 4,963 | $ | 1,020,796 | 0.49 | % |
45 |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Special Mention | $ | 43,804 | $ | 55,579 | |||||||
Substandard | 14,499 | 15,069 | |||||||||
Doubtful | 415 | 512 | |||||||||
Loss | — | — | |||||||||
Total | $ | 58,718 | $ | 71,160 |
46 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Balance at Beginning of Year | $ | 11,582 | $ | 12,771 | |||||||
Provision for Loan Losses | 3,784 | (1,125) | |||||||||
Charge-offs: | |||||||||||
Real Estate: | |||||||||||
Residential | (32) | (13) | |||||||||
Commercial | — | (40) | |||||||||
Construction | — | — | |||||||||
Commercial and Industrial | (2,712) | — | |||||||||
Consumer | (151) | (213) | |||||||||
Other | — | — | |||||||||
Total Charge-offs | (2,895) | (266) | |||||||||
Recoveries: | |||||||||||
Real estate: | |||||||||||
Residential | 145 | 17 | |||||||||
Commercial | — | — | |||||||||
Construction | — | — | |||||||||
Commercial and Industrial | 117 | 43 | |||||||||
Consumer | 86 | 142 | |||||||||
Other | — | — | |||||||||
Total Recoveries | 348 | 202 | |||||||||
Net Charge-offs | (2,547) | (64) | |||||||||
Balance at End of Year | $ | 12,819 | $ | 11,582 | |||||||
Allowance for Loan Losses to Total Loans | 1.22 | % | 1.13 | % | |||||||
Allowance for Loan Losses to Nonaccrual Loans | 320.64 | 233.37 | |||||||||
Allowance for Loan Losses to Nonperforming Loans | 221.06 | 159.40 | |||||||||
Net Charge-offs to Average Loans | 0.25 | 0.01 |
47 |
Year Ended December 31, | 2022 | 2021 | ||||||
Real Estate: | ||||||||
Residential | (0.03) | % | — | % | ||||
Commercial | — | 0.01 | ||||||
Construction | — | — | ||||||
Commercial and Industrial | 3.90 | (0.04) | ||||||
Consumer | 0.04 | 0.06 | ||||||
Other | — | — | ||||||
Total Loans | 0.25 | % | 0.01 | % |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Percent of Total Loans(1) | Amount | Percent of Total Loans(1) | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||
Residential | $ | 2,074 | 31.5 | % | $ | 1,420 | 31.4 | % | |||||||||||||||
Commercial | 5,810 | 41.6 | 5,960 | 38.5 | |||||||||||||||||||
Construction | 502 | 4.3 | 1,249 | 8.3 | |||||||||||||||||||
Commercial and Industrial | 2,313 | 6.7 | 1,151 | 8.7 | |||||||||||||||||||
Consumer | 1,517 | 14.0 | 1,050 | 12.0 | |||||||||||||||||||
Other | — | 1.9 | — | 1.1 | |||||||||||||||||||
Total Allocated Allowance | 12,216 | 100.0 | 10,830 | 100.0 | |||||||||||||||||||
Unallocated | 603 | — | 752 | — | |||||||||||||||||||
Total Allowance for Loan Losses | $ | 12,819 | 100.0 | % | $ | 11,582 | 100.0 | % |
48 |
Year Ended December 31, | 2022 | 2021 | ||||||
(Dollars in Thousands) | ||||||||
Interest Income per Consolidated Statements of Income (GAAP) | $ | 47,716 | $ | 43,557 | ||||
Adjustment to FTE Basis | 134 | 172 | ||||||
Interest Income (FTE) (Non-GAAP) | 47,850 | 43,729 | ||||||
Interest Expense per Consolidated Statements of Income (GAAP) | 4,781 | 3,405 | ||||||
Net Interest Income (FTE) (Non-GAAP) | $ | 43,069 | $ | 40,324 | ||||
Net Interest Income (GAAP) | $ | 42,935 | $ | 40,152 | ||||
Divided by : Average Interest Earning Assets | $ | 1,324,875 | $ | 1,373,379 | ||||
Net Interest Margin (GAAP) | 3.24 | % | 2.92 | % | ||||
Adjustment to FTE Basis | 0.01 | 0.02 | ||||||
Net Interest Margin (FTE) (Non-GAAP) | 3.25 | % | 2.94 | % | ||||
Net Interest Rate Spread (GAAP) | 3.07 | % | 2.81 | % | ||||
Adjustment to FTE Basis | 0.01 | 0.01 | ||||||
Net Interest Rate Spread (FTE) (Non-GAAP) | 3.08 | % | 2.82 | % |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands, Except Share and Per Share Data) | |||||||||||
Stockholders' Equity (GAAP) (Numerator) | $ | 110,155 | $ | 133,124 | |||||||
Goodwill and Other Intangible Assets, Net | (13,245) | (15,027) | |||||||||
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator) | $ | 96,910 | $ | 118,097 | |||||||
Common Shares Outstanding (Denominator) | 5,100,189 | 5,260,672 | |||||||||
Book Value per Common Share (GAAP) | $ | 21.60 | $ | 25.31 | |||||||
Tangible Book Value per Common Share (Non-GAAP) | $ | 19.00 | $ | 22.45 |
49 |
Payment Due by Period | Total | Less Than Or Equal to One Year | More Than One to Three Years | More Than Three to Five Years | More Than Five Years | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
Certificates of deposit | $ | 109,126 | $ | 69,355 | $ | 24,256 | $ | 12,240 | $ | 3,275 | |||||||||||||||||||
Other Borrowed Funds | 14,638 | — | — | — | 14,638 | ||||||||||||||||||||||||
Operating Lease Obligations | 2,339 | 358 | 627 | 466 | 888 | ||||||||||||||||||||||||
Total | $ | 126,103 | $ | 69,713 | $ | 24,883 | $ | 12,706 | $ | 18,801 |
50 |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | $ | 121,188 | 12.33 | % | $ | 113,086 | 11.95 | % | |||||||||||||||
For Capital Adequacy Purposes | 44,221 | 4.50 | 42,571 | 4.50 | |||||||||||||||||||
To Be Well Capitalized | 63,875 | 6.50 | 61,491 | 6.50 | |||||||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | 121,188 | 12.33 | 113,086 | 11.95 | |||||||||||||||||||
For Capital Adequacy Purposes | 58,961 | 6.00 | 56,761 | 6.00 | |||||||||||||||||||
To Be Well Capitalized | 78,615 | 8.00 | 75,682 | 8.00 | |||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | 133,478 | 13.58 | 124,668 | 13.18 | |||||||||||||||||||
For Capital Adequacy Purposes | 78,615 | 8.00 | 75,682 | 8.00 | |||||||||||||||||||
To Be Well Capitalized | 98,269 | 10.00 | 94,602 | 10.00 | |||||||||||||||||||
Tier I Leverage Capital (to Adjusted Total Assets) | |||||||||||||||||||||||
Actual | 121,188 | 8.66 | 113,086 | 7.76 | |||||||||||||||||||
For Capital Adequacy Purposes | 55,969 | 4.00 | 58,307 | 4.00 | |||||||||||||||||||
To Be Well Capitalized | 69,962 | 5.00 | 72,884 | 5.00 |
51 |
EVE | EVE as a Percent of Portfolio Value of Assets | Net Interest Income at Risk | ||||||||||||||||||||||||||||||||||||||||||||||||
Change in Interest Rates in Basis Points | Dollar Amount | Dollar Change | Percent Change | NPV Ratio | Basis Point Change | Dollar Amount | Dollar Change | Percent Change | ||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
+400 | $ | 96,022 | $ | (69,547) | (42.0) | % | 8.20 | % | (427) | $ | 40,140 | $ | (7,122) | (15.1) | % | |||||||||||||||||||||||||||||||||||
+300 | $ | 110,946 | $ | (54,623) | (33.0) | % | 9.20 | % | (327) | $ | 42,149 | $ | (5,113) | (10.8) | % | |||||||||||||||||||||||||||||||||||
+200 | 127,232 | (38,337) | (23.2) | 10.24 | (223) | 44,182 | (3,080) | (6.5) | ||||||||||||||||||||||||||||||||||||||||||
+100 | 146,058 | (19,511) | (11.8) | 11.38 | (109) | 46,149 | (1,113) | (2.4) | ||||||||||||||||||||||||||||||||||||||||||
Flat | 165,569 | — | — | 12.47 | — | 47,262 | — | — | ||||||||||||||||||||||||||||||||||||||||||
-100 | 184,213 | 18,644 | 11.3 | 13.39 | 92 | 47,491 | 229 | 0.5 | ||||||||||||||||||||||||||||||||||||||||||
-200 | 215,870 | 50,301 | 30.4 | 14.97 | 250 | 46,514 | (748) | (1.6) | ||||||||||||||||||||||||||||||||||||||||||
-300 | 249,488 | 83,919 | 50.7 | 16.49 | 402 | 44,756 | (2,506) | (5.3) | ||||||||||||||||||||||||||||||||||||||||||
-400 | 247,643 | 82,074 | 49.6 | 16.01 | 354 | 42,744 | (4,518) | (9.6) |
52 |
53 |
(a)(1) | Financial Statements | |||||||
The financial statements filed as a part of this Form 10-K are: | ||||||||
(A) | Report of Independent Registered Public Accounting Firm; | |||||||
(B) | Consolidated Statements of Financial Condition at December 31, 2022 and 2021; | |||||||
(C) | Consolidated Statements of Income for the Years Ended December 31, 2022 and 2021; | |||||||
(D) | Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2022 and 2021; | |||||||
(E) | Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022 and 2021; | |||||||
(F) | Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021; and | |||||||
(G) | Notes to Consolidated Financial Statements. | |||||||
(a)(2) | Financial Statement Schedules | |||||||
All financial statement schedules have been omitted as the required information is inapplicable or has been included in the Notes to Consolidated Financial Statements. | ||||||||
(a)(3) | Exhibits | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4 | ||||||||
10.8 | ||||||||
10.9 | ||||||||
10.10 | ||||||||
10.11 | ||||||||
10.12 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 | ||||||||
21 | ||||||||
23.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101.0 | The following materials for the year ended December 31, 2022, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive (Loss) Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Audited Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File (embedded in Inline XBRL contained in Exhibit 101) |
54 |
55 |
CB FINANCIAL SERVICES, INC. | ||||||||
Date: March 10, 2023 | By: | /s/ John H. Montgomery | ||||||
John H. Montgomery | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) |
By: | /s/ John H. Montgomery | By: | /s/ Jamie L. Prah | |||||||||||
John H. Montgomery | Jamie L. Prah | |||||||||||||
President and Chief Executive Officer and | Executive Vice President and Chief Financial Officer | |||||||||||||
Director | (Principal Financial Officer) | |||||||||||||
Date: March 10, 2023 | Date: March 10, 2023 | |||||||||||||
By: | /s/ Mark E. Fox | By: | /s/ Charles R. Guthrie | |||||||||||
Mark E. Fox | Charles R. Guthrie, CPA | |||||||||||||
Director (Chairman of the Board) | Director (Vice Chairman of the Board) | |||||||||||||
Date: March 10, 2023 | Date: March 10, 2023 | |||||||||||||
By: | /s/ Karl G. Baily | By: | /s/ Jonathan A. Bedway | |||||||||||
Karl G. Baily | Jonathan A. Bedway | |||||||||||||
Director | Director | |||||||||||||
Date: March 10, 2023 | Date: March 10, 2023 | |||||||||||||
By: | /s/ Richard B. Boyer | By: | /s/ Ralph Burchianti | |||||||||||
Richard B. Boyer | Ralph Burchianti | |||||||||||||
Director | Senior Executive Vice President and | |||||||||||||
Date: March 10, 2023 | Chief Credit Officer and Director | |||||||||||||
Date: March 10, 2023 | ||||||||||||||
By: | /s/ Joseph N. Headlee | By: | /s/ John J. LaCarte | |||||||||||
Joseph N. Headlee | John J. LaCarte | |||||||||||||
Director | Director | |||||||||||||
Date: March 10, 2023 | Date: March 10, 2023 | |||||||||||||
By: | /s/ Roberta Robinson Olejasz | By: | /s/ John M. Swiatek | |||||||||||
Roberta Robinson Olejasz | John M. Swiatek | |||||||||||||
Director | Director | |||||||||||||
Date: March 10, 2023 | Date: March 10, 2023 | |||||||||||||
By: | /s/ David F. Pollock | |||||||||||||
David F. Pollock | ||||||||||||||
Director | ||||||||||||||
Date: March 10, 2023 |
56 |
Consolidated Statements of Financial Condition at December 31, 2022 and 2021 | |||||
Consolidated Statements of Income for the Years Ended December 31, 2022 and 2021 | |||||
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2022 and 2021 | |||||
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022 and 2021 | |||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 | |||||
57 |
58 |
59 |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands, Except Per Share and Share Data) | |||||||||||
ASSETS | |||||||||||
Cash and Due From Banks: | |||||||||||
Interest Bearing | $ | $ | |||||||||
Non-Interest Bearing | |||||||||||
Total Cash and Due From Banks | |||||||||||
Securities: | |||||||||||
Available-for-Sale Debt Securities, at Fair Value | |||||||||||
Equity Securities, at Fair Value | |||||||||||
Total Securities | |||||||||||
Loans (Net of Allowance for Loan Losses of $ | |||||||||||
Premises and Equipment, Net | |||||||||||
Bank-Owned Life Insurance | |||||||||||
Goodwill | |||||||||||
Intangible Assets, Net | |||||||||||
Accrued Interest Receivable and Other Assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES | |||||||||||
Deposits: | |||||||||||
Demand Deposits | $ | $ | |||||||||
NOW Accounts | |||||||||||
Money Market Accounts | |||||||||||
Savings Accounts | |||||||||||
Time Deposits | |||||||||||
Total Deposits | |||||||||||
Short-Term Borrowings | |||||||||||
Other Borrowed Funds | |||||||||||
Accrued Interest Payable and Other Liabilities | |||||||||||
TOTAL LIABILITIES | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Preferred Stock, No Par Value; | |||||||||||
Common Stock, $ | |||||||||||
Capital Surplus | |||||||||||
Retained Earnings | |||||||||||
Treasury Stock, at Cost ( | ( | ( | |||||||||
Accumulated Other Comprehensive Loss | ( | ( | |||||||||
TOTAL STOCKHOLDERS' EQUITY | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
60 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands, Except Per Share and Share Data) | |||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||
Loans, Including Fees | $ | $ | |||||||||
Securities: | |||||||||||
Taxable | |||||||||||
Tax-Exempt | |||||||||||
Dividends | |||||||||||
Other Interest and Dividend Income | |||||||||||
TOTAL INTEREST AND DIVIDEND INCOME | |||||||||||
INTEREST EXPENSE | |||||||||||
Deposits | |||||||||||
Short-Term Borrowings | |||||||||||
Other Borrowed Funds | |||||||||||
TOTAL INTEREST EXPENSE | |||||||||||
NET INTEREST AND DIVIDEND INCOME | |||||||||||
Provision (Recovery) For Loan Losses | ( | ||||||||||
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION (RECOVERY) FOR LOAN LOSSES | |||||||||||
NONINTEREST INCOME | |||||||||||
Service Fees on Deposits | |||||||||||
Insurance Commissions | |||||||||||
Other Commissions | |||||||||||
Net Gain on Sales of Loans | |||||||||||
Net (Loss) Gain on Securities | ( | ||||||||||
Net Gain on Purchased Tax Credits | |||||||||||
Gain on Sale of Branches | |||||||||||
Net Gain (Loss) on Disposal of Premises and Equipment | ( | ||||||||||
Income from Bank-Owned Life Insurance | |||||||||||
Other Income | |||||||||||
TOTAL NONINTEREST INCOME | |||||||||||
NONINTEREST EXPENSE | |||||||||||
Salaries and Employee Benefits | |||||||||||
Occupancy | |||||||||||
Equipment | |||||||||||
Data Processing | |||||||||||
Federal Deposit Insurance Corporation Assessment | |||||||||||
Pennsylvania Shares Tax | |||||||||||
Contracted Services | |||||||||||
Legal and Professional Fees | |||||||||||
Advertising | |||||||||||
Other Real Estate Owned (Income) | ( | ( | |||||||||
Amortization of Intangible Assets | |||||||||||
Goodwill and Intangible Assets Impairment | |||||||||||
Writedown on Premises and Equipment | |||||||||||
Other | |||||||||||
TOTAL NONINTEREST EXPENSE | |||||||||||
INCOME BEFORE INCOME TAX EXPENSE | |||||||||||
Income Tax Expense | |||||||||||
NET INCOME | $ | $ | |||||||||
EARNINGS PER SHARE | |||||||||||
Basic | $ | $ | |||||||||
Diluted | |||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||
Basic | |||||||||||
Diluted |
61 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Net Income | $ | $ | |||||||||
Other Comprehensive Loss: | |||||||||||
Change in Unrealized Loss on Available-for-Sale Debt Securities | ( | ( | |||||||||
Income Tax Effect | |||||||||||
Reclassification Adjustment for Gain on Sale of Debt Securities Included in Net Income (1) | ( | ||||||||||
Income Tax Effect (2) | |||||||||||
Other Comprehensive Loss, Net of Income Tax Effect | ( | ( | |||||||||
Total Comprehensive (Loss) Income | $ | ( | $ |
62 |
Shares Issued | Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands, Except Per Share and Share Data) | |||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Restricted Stock Awards Forfeited | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of Stock Options | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Treasury Stock Purchased, at Cost ( | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Dividends Declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Restricted Stock Awards Forfeited | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Restricted Stock Awards Granted | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of Stock Options | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Treasury Stock Purchased, at Cost ( | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Dividends Declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
63 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
OPERATING ACTIVITIES | |||||||||||
Net Income | $ | $ | |||||||||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: | |||||||||||
Net Amortization on Securities | |||||||||||
Depreciation and Amortization | |||||||||||
Provision (Recovery) for Loan Losses | ( | ||||||||||
Other Intangible Asset Impairment | |||||||||||
Writedown on Premises and Equipment | |||||||||||
Lease Impairment | |||||||||||
Loss (Gain) on Securities | ( | ||||||||||
Gain on Sale of Branches | ( | ||||||||||
Gain on Purchased Tax Credits | ( | ( | |||||||||
Income from Bank-Owned Life Insurance | ( | ( | |||||||||
Proceeds From Mortgage Loans Sold | |||||||||||
Originations of Mortgage Loans for Sale | ( | ||||||||||
Gain on Sales of Loans | ( | ||||||||||
(Gain) Loss on Sales of Other Real Estate Owned | ( | ( | |||||||||
Noncash Expense for Stock-Based Compensation | |||||||||||
(Increase) Decrease in Accrued Interest Receivable | ( | ||||||||||
(Gain) Loss on Disposal of Premises and Equipment | ( | ||||||||||
Increase (Decrease) in Deferred Income Tax | ( | ||||||||||
(Decrease) Increase in Taxes Payable | ( | ||||||||||
Decrease in Accrued Interest Payable | ( | ( | |||||||||
Other, Net | ( | ||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
INVESTING ACTIVITIES | |||||||||||
Securities Available for Sale: | |||||||||||
Proceeds From Principal Repayments and Maturities | |||||||||||
Purchases of Securities | ( | ( | |||||||||
Proceeds from Sales of Securities | |||||||||||
Proceeds from Loans Sold | |||||||||||
Net (Increase) Decrease in Loans | ( | ||||||||||
Purchase of Premises and Equipment | ( | ( | |||||||||
Proceeds from Disposal of Premises and Equipment | |||||||||||
Proceeds From Sales of Other Real Estate Owned | |||||||||||
Decrease in Restricted Equity Securities | |||||||||||
NET CASH USED IN INVESTING ACTIVITIES | ( | ( | |||||||||
FINANCING ACTIVITIES | |||||||||||
Net Increase in Deposits | |||||||||||
Sale of Deposits, Net of Purchase Premium | ( | ||||||||||
Decrease in Short-Term Borrowings | ( | ( | |||||||||
Principal Payments on Other Borrowed Funds | ( | ( | |||||||||
Proceeds from Issuance of Subordinated Debt, Net of Debt Issuance Costs | |||||||||||
Cash Dividends Paid | ( | ( | |||||||||
Treasury Stock, Purchases at Cost | ( | ( | |||||||||
Exercise of Stock Options | |||||||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | ( | ||||||||||
DECREASE IN CASH AND DUE FROM BANKS | ( | ( | |||||||||
CASH AND DUE FROM BANKS AT BEGINNING OF THE YEAR | |||||||||||
CASH AND DUE FROM BANKS AT END OF THE YEAR | $ | $ |
64 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||
Cash Paid for: | |||||||||||
Interest on Deposits and Borrowings (Including Interest Credited to Deposit Accounts of $ | $ | $ | |||||||||
Income Taxes | |||||||||||
SUPPLEMENTAL NONCASH DISCLOSURE: | |||||||||||
Real Estate Acquired in Settlement of Loans | $ | $ | |||||||||
Right of Use ("ROU") Asset Recognized | |||||||||||
Lease Liability Recognized |
65 |
66 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
67 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
68 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
69 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
70 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
71 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
72 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
73 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
74 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
75 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands, Except Share and Per Share Data) | |||||||||||
Net Income | $ | $ | |||||||||
Weighted-Average Basic Common Shares Outstanding | |||||||||||
Dilutive Effect of Common Stock Equivalents (Stock Options and Restricted Stock) | |||||||||||
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding | |||||||||||
Earnings Per Share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted |
Year Ended December 31, | 2022 | 2021 | |||||||||
Stock Options | |||||||||||
Restricted Stock |
2022 | |||||||||||||||||||||||
December 31, | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Available-for-Sale Debt Securities: | |||||||||||||||||||||||
U.S. Government Agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Obligations of States and Political Subdivisions | ( | ||||||||||||||||||||||
Mortgage-Backed Securities - Government-Sponsored Enterprises | ( | ||||||||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | ( | ||||||||||||||||||||||
Corporate Debt | ( | ||||||||||||||||||||||
Total Available-for-Sale Debt Securities | $ | $ | $ | ( | |||||||||||||||||||
Equity Securities: | |||||||||||||||||||||||
Mutual Funds | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Equity Securities | |||||||||||||||||||||||
Total Securities | $ |
76 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2021 | |||||||||||||||||||||||
December 31, | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Available-for-Sale Debt Securities: | |||||||||||||||||||||||
U.S. Government Agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Obligations of States and Political Subdivisions | |||||||||||||||||||||||
Mortgage-Backed Securities - Government-Sponsored Enterprises | ( | ||||||||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | ( | ||||||||||||||||||||||
Corporate Debt | ( | ||||||||||||||||||||||
Total Available-for-Sale Debt Securities | $ | $ | $ | ( | |||||||||||||||||||
Equity Securities: | |||||||||||||||||||||||
Mutual Funds | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Equity Securities | |||||||||||||||||||||||
Total Securities | $ |
2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government Agencies | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Obligations of States and Political Subdivisions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-Backed Securities - Government Sponsored Enterprises | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Debt | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | Number of Securities | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government Agencies | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Mortgage-Backed Securities - Government Sponsored Enterprises | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Debt | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
77 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | |||||||||||
December 31, | Amortized Cost | Fair Value | |||||||||
(Dollars in Thousands) | |||||||||||
Due in One Year or Less | $ | $ | |||||||||
Due after One Year through Five Years | |||||||||||
Due after Five Years through Ten Years | |||||||||||
Due after Ten Years | |||||||||||
Total | $ | $ |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Debt Securities | |||||||||||
Gross Realized Gain | $ | $ | |||||||||
Gross Realized Loss | |||||||||||
Net Gain on Debt Securities | $ | $ | |||||||||
Equity Securities | |||||||||||
Net Unrealized (Loss) Gain Recognized on Securities Held | $ | ( | $ | ||||||||
Net Realized Gain Recognized on Securities Sold | |||||||||||
Net (Loss) Gain on Equity Securities | $ | ( | $ | ||||||||
Net (Loss) Gain on Securities | $ | ( | $ |
78 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Real Estate: | |||||||||||
Residential | $ | $ | |||||||||
Commercial | |||||||||||
Construction | |||||||||||
Commercial and Industrial | |||||||||||
Consumer | |||||||||||
Other | |||||||||||
Total Loans | $ | $ | |||||||||
Allowance for Loan Losses | ( | ( | |||||||||
Loans, Net | $ | $ |
PPP Loans Remaining | |||||||||||
Number of Loans | Principal Balance | Net Deferred Origination Fees | |||||||||
(Dollars in Thousands) | |||||||||||
December 31, 2020 | $ | $ | |||||||||
PPP Loans Originated | |||||||||||
PPP Loan Forgiveness | ( | ( | ( | ||||||||
Principal Payments or Net Deferred Origination Fees Recognized on Unforgiven PPP Loans | — | ( | ( | ||||||||
December 31, 2021 | $ | $ | |||||||||
PPP Loans Originated | $ | $ | |||||||||
PPP Loan Forgiveness | ( | ( | ( | ||||||||
Principal Payments or Net Deferred Origination Fees Recognized on Unforgiven PPP Loans | — | ( | ( | ||||||||
December 31, 2022 | $ | $ |
79 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | |||||||||||||||||||||||||||||
December 31, | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ |
2021 | |||||||||||||||||||||||||||||
December 31, | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ |
2022 | |||||||||||||||||||||||||||||||||||||||||
December 31, | Loans Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days Or More Past Due | Total Past Due | Non- Accrual | Total Loans | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ | $ | $ |
80 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2021 | |||||||||||||||||||||||||||||||||||||||||
December 31, | Loans Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days Or More Past Due | Total Past Due | Non- Accrual | Total Loans | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ | $ | $ |
2022 | |||||||||||||||||||||||||||||
December 31, | Recorded Investment | Related Allowance | Unpaid Principal Balance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
With No Related Allowance Recorded: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | — | $ | $ | $ | |||||||||||||||||||||||
Commercial | — | ||||||||||||||||||||||||||||
Construction | — | ||||||||||||||||||||||||||||
Commercial and Industrial | — | ||||||||||||||||||||||||||||
Total With No Related Allowance Recorded | $ | $ | — | $ | $ | $ | |||||||||||||||||||||||
With A Related Allowance Recorded: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Total With A Related Allowance Recorded | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total Impaired Loans: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Total Impaired Loans | $ | $ | $ | $ | $ |
81 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2021 | |||||||||||||||||||||||||||||
December 31, | Recorded Investment | Related Allowance | Unpaid Principal Balance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
With No Related Allowance Recorded: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | — | $ | $ | $ | |||||||||||||||||||||||
Commercial | — | ||||||||||||||||||||||||||||
Construction | — | ||||||||||||||||||||||||||||
Commercial and Industrial | — | ||||||||||||||||||||||||||||
Total With No Related Allowance Recorded | $ | $ | — | $ | $ | $ | |||||||||||||||||||||||
With A Related Allowance Recorded: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Total With A Related Allowance Recorded | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total Impaired Loans: | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Residential | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||
Commercial and Industrial | |||||||||||||||||||||||||||||
Total Impaired Loans | $ | $ | $ | $ | $ |
82 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Year Ended December 31, 2021 | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Related Allowance | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Real Estate | |||||||||||||||||||||||
Commercial | $ | $ | $ | ||||||||||||||||||||
Total | $ | $ | $ |
Real Estate Residential | Real Estate Commercial | Real Estate Construction | Commercial and Industrial | Consumer | Other | Unallocated | Total | ||||||||||||||||||||||||||||||||||||||||
)Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Provision (Recovery) for Loan Losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Individually Evaluated for Impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Collectively Evaluated for Potential Impairment | $ | $ | $ | $ | $ | $ | $ | $ |
Real Estate Residential | Real Estate Commercial | Real Estate Construction | Commercial and Industrial | Consumer | Other | Unallocated | Total | ||||||||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
(Recovery) Provision for Loan Losses | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Individually Evaluated for Impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Collectively Evaluated for Potential Impairment | $ | $ | $ | $ | $ | $ | $ | $ |
83 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | |||||||||||||||||||||||||||||||||||||||||
December 31, | Real Estate Residential | Real Estate Commercial | Real Estate Construction | Commercial and Industrial | Consumer | Other | Total | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||
Individually Evaluated for Impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively Evaluated for Potential Impairment | |||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ | $ | $ |
2021 | |||||||||||||||||||||||||||||||||||||||||
December 31, | Real Estate Residential | Real Estate Commercial | Real Estate Construction | Commercial and Industrial | Consumer | Other | Total | ||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||||||||
Individually Evaluated for Impairment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Collectively Evaluated for Potential Impairment | |||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | $ | $ | $ | $ | $ | $ |
Accretable Discount | |||||
(Dollars in Thousands) | |||||
Balance at December 31, 2020 | $ | ||||
Accretable Yield | ( | ||||
Balance at December 31, 2021 | |||||
Accretable Yield | ( | ||||
Balance at December 31, 2022 | $ |
2022 | 2021 | ||||||||||
(Dollars in Thousands) | |||||||||||
Balance, January 1 | $ | $ | |||||||||
Additions | |||||||||||
Payments | ( | ( | |||||||||
Balance, December 31 | $ | $ |
84 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||
(Dollars in Thousands) | |||||||||||
Land | $ | $ | |||||||||
Building | |||||||||||
Leasehold Improvements | |||||||||||
Furniture, Fixtures, and Equipment | |||||||||||
Fixed Assets in Process | |||||||||||
Total Premises and Equipment | |||||||||||
Less: Accumulated Depreciation and Amortization | ( | ( | |||||||||
Premises and Equipment, Net | $ | $ |
85 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | |||||||||||||||||||||||||
December 31, | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Impairment | Net Carrying Value | |||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Core Deposit Intangible | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||
Customer List | ( | ( | ||||||||||||||||||||||||
Total Intangible Assets | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ |
Amount | |||||
(Dollars in Thousands) | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 and Thereafter | |||||
Total Estimated Intangible Asset Amortization Expense | $ |
86 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | 2022 | ||||
(Dollars in Thousands) | |||||
One Year or Less | $ | ||||
Over One Through Two Years | |||||
Over Two Through Three Years | |||||
Over Three Through Four Years | |||||
Over Four Through Five Years | |||||
Over Five Years | |||||
Total | $ |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Weighted Average Rate | Amount | Weighted Average Rate | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Securities Sold Under Agreements to Repurchase: | |||||||||||||||||||||||
Balance at Period End | $ | % | $ | % | |||||||||||||||||||
Average Balance Outstanding During the Period | |||||||||||||||||||||||
Maximum Amount Outstanding at any Month End | |||||||||||||||||||||||
Securities Collateralizing the Agreements at Period-End: | |||||||||||||||||||||||
Carrying Value | $ | $ | |||||||||||||||||||||
Market Value |
87 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Weighted Average Rate | Amount | Weighted Average Rate | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Due in One Year | $ | % | $ | % | |||||||||||||||||||
Due After One Year to Two Years | |||||||||||||||||||||||
Due After Two Years to Three Years | |||||||||||||||||||||||
Total | $ | $ |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Current Payable | $ | $ | |||||||||
Deferred Benefit | ( | ( | |||||||||
Total Provision | $ | $ |
88 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Deferred Tax Assets: | |||||||||||
Allowance for Loan Losses | $ | $ | |||||||||
Non-Accrual Loan Interest | |||||||||||
Amortization of Intangibles | |||||||||||
Unrealized Loss of AFS - Merger Tax Adjustment | |||||||||||
Postretirement Benefits | |||||||||||
Net Unrealized Loss on Securities | |||||||||||
Stock-Based Compensation Expense | |||||||||||
Gas Lease - Deferred Revenue | |||||||||||
Accrued Payroll | |||||||||||
Purchase Accounting Adjustments - Acquired Loans | |||||||||||
Lease Liability | |||||||||||
Right of Use Asset Impairment | |||||||||||
Purchase Accounting Adjustments - Fixed Assets | |||||||||||
Restructuring Costs | |||||||||||
Other | |||||||||||
Gross Deferred Tax Assets | |||||||||||
Deferred Tax Liabilities: | |||||||||||
Deferred Origination Fees and Costs | |||||||||||
Discount Accretion | |||||||||||
Depreciation | |||||||||||
Net Unrealized Gain on Equity Securities | |||||||||||
Mortgage Servicing Rights | |||||||||||
Accrued Payroll | |||||||||||
ROU Asset | |||||||||||
Purchase Accounting Adjustments - Core Deposit Intangible | |||||||||||
Purchase Accounting Adjustments - Fixed Assets | |||||||||||
Purchase Accounting Adjustments - Certificates of Deposit | |||||||||||
Goodwill | |||||||||||
Other | |||||||||||
Gross Deferred Tax Liabilities | |||||||||||
Net Deferred Tax Assets | $ | $ |
89 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||||||||||||||
Year Ended December 31, | Amount | Percent of Pre-tax Income | Amount | Percent of Pre-tax Income | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Provision at Statutory Rate | $ | % | $ | % | |||||||||||||||||||
State Taxes (Net of Federal Benefit) | |||||||||||||||||||||||
Tax-Free Income | ( | ( | ( | ( | |||||||||||||||||||
BOLI Income | ( | ( | ( | ( | |||||||||||||||||||
Stock Options - ISO | |||||||||||||||||||||||
Goodwill Impairment | |||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
Actual Tax Expense and Effective Rate | $ | % | $ | % |
2022 | |||||
Number of Restricted Shares Granted | |||||
Weighted Average Grant Date Common Stock Price | $ | ||||
Restricted Shares Market Value Before Tax | $ | ||||
Number of Stock Options Granted | |||||
Stock Options Market Value Before Tax | $ | ||||
Summary of Significant Assumptions for Newly Issued Stock Options | |||||
Expected Life in Years | |||||
Expected Dividend Yield | |||||
Risk-free Interest Rate | |||||
Expected Volatility | |||||
Weighted Average Grant Date Fair Value | $ |
90 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||||||||||||||||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | ||||||||||||||||||||||||||||||
Outstanding Options at Beginning of Year | $ | $ | |||||||||||||||||||||||||||||||||
Granted | |||||||||||||||||||||||||||||||||||
Exercised | ( | ( | |||||||||||||||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||||||||||||||
Outstanding Options at End of Year | |||||||||||||||||||||||||||||||||||
Exercisable Options at End of Year | $ | $ |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Service Period in Years | |||||||||||||||
Nonvested Options December 31, 2020 | $ | ||||||||||||||||
Granted | $ | ||||||||||||||||
Exercised | ( | $ | |||||||||||||||
Forfeited | $ | ||||||||||||||||
Nonvested Options December 31, 2021 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ||||||||||||||||
Forfeited | ( | ||||||||||||||||
Nonvested Options at December 31, 2022 | $ |
91 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Number of Shares | Weighted Average Grant Date Fair Value Price | Weighted Average Remaining Service Period in Years | |||||||||||||||
Nonvested at December 31, 2020 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ||||||||||||||||
Forfeited | ( | ||||||||||||||||
Nonvested Restricted Stock at December 31, 2021 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ||||||||||||||||
Forfeited | ( | ||||||||||||||||
Nonvested Restricted Stock at December 31, 2022 | $ |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Standby Letters of Credit | $ | $ | |||||||||
Performance Letters of Credit | |||||||||||
Construction Mortgages | |||||||||||
Personal Lines of Credit | |||||||||||
Overdraft Protection Lines | |||||||||||
Home Equity Lines of Credit | |||||||||||
Commercial Lines of Credit | |||||||||||
Total | $ | $ |
92 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
93 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||||||||||||||
December 31, | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | $ | % | $ | % | |||||||||||||||||||
For Capital Adequacy Purposes | |||||||||||||||||||||||
To Be Well Capitalized | |||||||||||||||||||||||
Tier I Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | |||||||||||||||||||||||
For Capital Adequacy Purposes | |||||||||||||||||||||||
To Be Well Capitalized | |||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | |||||||||||||||||||||||
Actual | |||||||||||||||||||||||
For Capital Adequacy Purposes | |||||||||||||||||||||||
To Be Well Capitalized | |||||||||||||||||||||||
Tier I Leverage Capital (to Adjusted Total Assets) | |||||||||||||||||||||||
Actual | |||||||||||||||||||||||
For Capital Adequacy Purposes | |||||||||||||||||||||||
To Be Well Capitalized |
Year Ended December 31, | 2022 | 2021 | ||||||
(Dollars in Thousands) | ||||||||
Operating | $ | $ | ||||||
Short-term | ||||||||
Variable | ||||||||
Total Lease Expense | $ | $ |
December 31, | 2022 | 2021 | ||||||
(Dollars in Thousands) | ||||||||
Operating Leases: | ||||||||
ROU Assets | $ | $ | ||||||
Weighted Average Lease Term in Years | ||||||||
Weighted Average Discount Rate | % | % |
94 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | 2022 | ||||
(Dollars in Thousands) | |||||
Maturity Analysis: | |||||
Due in One Year | $ | ||||
Due After One Year to Two Years | |||||
Due After Two Years to Three Years | |||||
Due After Three Years to Four Years | |||||
Due After Four to Five Years | |||||
Due After Five Years | |||||
Total | $ | ||||
Less: Present Value Discount | |||||
Lease Liabilities | $ |
Servicing Rights | Valuation Allowance | Net Carrying Value | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
December 31, 2020 | $ | $ | ( | $ | |||||||||||||
Additions | — | ||||||||||||||||
Amortization | ( | — | ( | ||||||||||||||
Valuation Allowance Adjustment | — | ||||||||||||||||
December 31, 2021 | $ | $ | ( | $ | |||||||||||||
Additions | — | ||||||||||||||||
Amortization | ( | — | ( | ||||||||||||||
Valuation Allowance Adjustment | — | ||||||||||||||||
December 31, 2022 | $ | $ | $ |
95 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | Fair Value Hierarchy | 2022 | 2021 | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Securities: | |||||||||||||||||
Available-for-Sale Debt Securities | |||||||||||||||||
U.S. Government Agencies | Level 2 | $ | $ | ||||||||||||||
Obligations of States and Political Subdivisions | Level 2 | ||||||||||||||||
Mortgage-Backed Securities - Government-Sponsored Enterprises | Level 2 | ||||||||||||||||
Collateralized Mortgage Obligations - Government Sponsored Enterprises | Level 2 | ||||||||||||||||
Corporate Debt | Level 2 | ||||||||||||||||
Total Available-for-Sale Debt Securities | |||||||||||||||||
Equity Securities | |||||||||||||||||
Mutual Funds | Level 1 | ||||||||||||||||
Other | Level 1 | ||||||||||||||||
Total Equity Securities | |||||||||||||||||
Total Securities | $ | $ |
96 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Financial Asset | Fair Value Hierarchy | December 31, 2022 | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Impaired Loans Individually Assessed | Level 3 | $ | Appraisal of Collateral (1) | Appraisal Adjustments (2) | to | |||||||||||||||||||||
Financial Asset | Fair Value Hierarchy | December 31, 2021 | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average | ||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||
Impaired Loans Individually Assessed | Level 3 | $ | Appraisal of Collateral (1) | Appraisal Adjustments (2) | to | |||||||||||||||||||||
MSRs | Level 3 | Discounted Cash Flow | Discount Rate | to | ||||||||||||||||||||||
Prepayment Speed | to | |||||||||||||||||||||||||
OREO | Level 3 | Appraisal of Collateral (1) | Liquidation Expenses (2) | to |
97 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2022 | 2021 | ||||||||||||||||||||||||||||
December 31, | Fair Value Hierarchy | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and Due From Banks: | |||||||||||||||||||||||||||||
Interest Bearing | Level 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
Non-Interest Bearing | Level 1 | ||||||||||||||||||||||||||||
Securities | See Above | ||||||||||||||||||||||||||||
Loans, Net | Level 3 | ||||||||||||||||||||||||||||
Restricted Stock | Level 2 | ||||||||||||||||||||||||||||
Mortgage Servicing Rights | Level 3 | ||||||||||||||||||||||||||||
Accrued Interest Receivable | Level 2 | ||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Deposits | Level 2 | ||||||||||||||||||||||||||||
Short-term Borrowings | Level 2 | ||||||||||||||||||||||||||||
Other Borrowed Funds | |||||||||||||||||||||||||||||
FHLB Borrowings | Level 2 | ||||||||||||||||||||||||||||
Subordinated Debt | Level 2 | ||||||||||||||||||||||||||||
Accrued Interest Payable | Level 2 |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Non-employee Compensation | $ | $ | |||||||||
Printing and Supplies | |||||||||||
Postage | |||||||||||
Telephone | |||||||||||
Charitable Contributions | |||||||||||
Dues and Subscriptions | |||||||||||
Loan Expenses | |||||||||||
Meals and Entertainment | |||||||||||
Travel | |||||||||||
Training | |||||||||||
Bank Assessment | |||||||||||
Insurance | |||||||||||
Miscellaneous | |||||||||||
TOTAL OTHER NONINTEREST EXPENSE | $ | $ |
98 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
ASSETS | |||||||||||
Cash and Due From Banks | $ | $ | |||||||||
Equity Securities, at Fair Value | |||||||||||
Investment in Community Bank | |||||||||||
Other Assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Other Borrowings | $ | $ | |||||||||
Other Liabilities | |||||||||||
Stockholders' Equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
Interest and Dividend Income | $ | $ | |||||||||
Dividend from Bank Subsidiary | |||||||||||
Interest Expense | |||||||||||
Net Interest and Dividend Income | |||||||||||
Net (Loss) Gain on Securities | ( | ||||||||||
Noninterest Expense | |||||||||||
Income Before Undistributed Net Income of Subsidiary and Income Tax Expense (Benefit) | |||||||||||
Undistributed Net Income of Subsidiary | |||||||||||
Income Before Income Tax (Benefit) Expense | |||||||||||
Income Tax (Benefit) Expense | ( | ||||||||||
NET INCOME | $ | $ |
99 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Year Ended December 31, | 2022 | 2021 | |||||||||
(Dollars in Thousands) | |||||||||||
OPERATING ACTIVITIES | |||||||||||
Net Income | $ | $ | |||||||||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: | |||||||||||
Undistributed Net Income of Subsidiary | ( | ( | |||||||||
Noncash Expense for Stock-Based Compensation | |||||||||||
Loss (Gain) on Equity Securities | ( | ||||||||||
Other, net | ( | ||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
INVESTING ACTIVITIES | |||||||||||
Purchases of Equity Securities | ( | ||||||||||
Proceeds from Sales of Equity Securities | |||||||||||
NET CASH USED IN INVESTING ACTIVITIES | ( | ||||||||||
FINANCING ACTIVITIES | |||||||||||
Net Proceeds from Other Borrowings | |||||||||||
Cash Dividends Paid | ( | ( | |||||||||
Treasury Stock, Purchases at Cost | ( | ( | |||||||||
Exercise of Stock Options | |||||||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | ( | ||||||||||
(DECREASE) INCREASE IN CASH AND DUE FROM BANKS | ( | ||||||||||
CASH AND DUE FROM BANKS AT BEGINNING OF THE YEAR | |||||||||||
CASH AND DUE FROM BANKS AT END OF THE YEAR | $ | $ |
100 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Community Bank | Exchange Underwriters, Inc. | CB Financial Services, Inc. | Net Eliminations | Consolidated | |||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
Assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Liabilities | ( | ||||||||||||||||||||||||||||
Stockholders' Equity | ( | ||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||
Assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Liabilities | ( | ||||||||||||||||||||||||||||
Stockholders' Equity | ( | ||||||||||||||||||||||||||||
Year Ended December 31, 2022 | |||||||||||||||||||||||||||||
Interest and Dividend Income | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||
Net Interest and Dividend Income | ( | ||||||||||||||||||||||||||||
Provision (Recovery) for Loan Losses | |||||||||||||||||||||||||||||
Net Interest and Dividend Income After (Recovery) Provision for Loan Losses | ( | ||||||||||||||||||||||||||||
Noninterest Income (Loss) | ( | ||||||||||||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||||||||
Undistributed Net Income of Subsidiary | ( | ||||||||||||||||||||||||||||
Income Before Income Tax Expense | ( | ||||||||||||||||||||||||||||
Income Tax (Benefit) Expense | ( | ||||||||||||||||||||||||||||
Net Income | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Year Ended December 31, 2021 | |||||||||||||||||||||||||||||
Interest and Dividend Income | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||
Net Interest and Dividend Income | ( | ||||||||||||||||||||||||||||
(Recovery) Provision for Loan Losses | ( | ( | |||||||||||||||||||||||||||
Net Interest and Dividend Income After (Recovery) Provision for Loan Losses | ( | ||||||||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||||||||
Undistributed Net Income of Subsidiary | ( | ||||||||||||||||||||||||||||
Income Before Income Tax Expense | ( | ||||||||||||||||||||||||||||
Income Tax Expense | |||||||||||||||||||||||||||||
Net Income | $ | $ | $ | $ | ( | $ |
101 |
To the Bank | Community Bank 2111 North Franklin Drive, Suite 200 Washington, PA 15301 | ||||
To Executive: | Most recent address on file with the Bank |
COMMUNITY BANK | |||||
By: /s/ John H. Montgomery | |||||
Name: John H. Montgomery | |||||
Title: President and Chief Executive Officer | |||||
EXECUTIVE | |||||
/s/ Jennifer George | |||||
Jennifer George |
Date: | March 10, 2023 | /s/ John H. Montgomery | |||||||||
John H. Montgomery | |||||||||||
President and Chief Executive Officer |
Date: | March 10, 2023 | /s/ Jamie L. Prah | |||||||||
Jamie L. Prah | |||||||||||
Executive Vice President and Chief Financial Officer |
Date: | March 10, 2023 | /s/ John H. Montgomery | |||||||||
John H. Montgomery | |||||||||||
President and Chief Executive Officer | |||||||||||
Date: | March 10, 2023 | /s/ Jamie L. Prah | |||||||||
Jamie L. Prah | |||||||||||
Executive Vice President and Chief Financial Officer |
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Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | FORVIS, LLP (formerly BKD, LLP) |
Auditor Location | Pittsburgh, Pennsylvania |
Auditor Firm ID | 686 |
Consolidated Statements of Financial Condition (Parentheticals) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 12,819 | $ 11,582 |
Preferred stock, share authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.4167 | $ 0.4167 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 5,708,433 | 5,680,993 |
Common stock, shares outstanding (in shares) | 5,100,189 | 5,260,672 |
Treasury stock, at cost (in shares) | 608,244 | 420,321 |
Consolidated Statement of Comprehensive (Loss) Income - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|||||
Statement of Comprehensive Income [Abstract] | ||||||
Net Income | $ 11,247 | $ 11,570 | ||||
Other Comprehensive Loss: | ||||||
Change in Unrealized Loss on Available-for-Sale Debt Securities | (32,266) | (5,288) | ||||
Income Tax Effect | 6,952 | 1,136 | ||||
Reclassification Adjustment for Gain on Sale of Debt Securities Included in Net Income | [1] | 0 | (225) | |||
Income Tax Effect | [2] | 0 | 48 | |||
Other Comprehensive Loss, Net of Income Tax Effect | (25,314) | (4,329) | ||||
Total Comprehensive (Loss) Income | $ (14,067) | $ 7,241 | ||||
|
Consolidated Statements of Changes in Stockholders' Equity (Parentheticals) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||
Purchase of common stock (in shares) | 195,033 | 178,252 |
Dividends paid, per share (in dollars per share) | $ 0.96 | $ 0.96 |
Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Cash Flows [Abstract] | ||
Interest credit to deposit accounts | $ 4,144 | $ 3,432 |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc., and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly owned subsidiary, Exchange Underwriters, Inc. (“Exchange Underwriters” or “EU”). CB Financial Services, Inc., Community Bank and Exchange Underwriters, Inc. are collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated in consolidation. Nature of Operations The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, insurance commissions, and fees generated from deposit services to its customers. The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. After the consolidation of one branch in 2022, and consolidation of six and sale of two branches in 2021, the Bank operates from 10 offices in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania and three offices in Marshall and Ohio Counties in West Virginia. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, a full-service, independent insurance agency. The Company has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2022 through the date the consolidated financial statements are being issued for items that should potentially be recognized or disclosed in these consolidated financial statements. Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with general practice within the banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition, and income and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to fair value of securities available for sale, determination of the allowance for losses on loans, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, other-than-temporary impairment evaluations of securities, the valuation of deferred tax assets and the evaluation of goodwill and core deposit intangible impairment. Revenue Recognition Income on loans and securities is recognized as earned on the accrual method. Gains and losses on sales of mortgages are based on the difference between the selling price and the carrying value of the related mortgage sold. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Accounting Standards Codification ("ASC") Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The Company’s revenue from contracts with customers within the scope of ASC Topic 606 is recognized within Noninterest Income with the exception of Other Real Estate Owned (“OREO”) Income, which is accounted for in Noninterest Expense. The following narrative describes the Company’s revenue streams accounted for under the guidance of ASC Topic 606: Service Fees: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees include services fees for ATM usage, stop payment charges, statement production, ACH and wire transfers, which are recognized into income at the occurrence of an executed transaction and the point in time the Company fulfills the customer’s request. Account maintenance fees, which are primarily based on monthly maintenance activities, are earned over the course of the month, and satisfy the Company’s performance obligation. Overdraft fees are recognized as the overdrafts on customer’s accounts are incurred. The services fees are automatically withdrawn from the customer’s account balance per their account agreement with the Company. In addition, the Company earns interchange fees from debit/credit cardholder transactions conducted through the applicable payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The Company currently does not offer a cardholder rewards program. Insurance Commissions: EU derives commission and fee income from direct and agency bill insurance policies. Direct bill policies are invoiced directly from the insurance company provider to the customer. Once the customer remits payment for the policy, the insurance company provider then remits the commission or fee income to EU on a monthly basis. Agency bill policies are invoiced from EU, the insurance underwriting agency, to the customer. EU records the insurance company policy payable and the commission or fee income earned on the policy. As all insurance policies are contracts with customers, each policy has different terms and conditions. EU utilizes a report from their core insurance data processing program, The Agency Manager (“TAM”), that captures all in-force policies that are active in the system and annualizes the commission over the life of each individual contract. The report then provides an overall commission and fee income total for the monthly reporting financial statement period. This income is then compared to the amount of direct and agency bill income recorded in TAM for the reporting month and an adjustment to income is made according to the report. This is the income recognized for the portion of the insurance contract that has been earned by EU and subsequently the Company. Other Commissions: The Company earns other commissions, such as wealth management referral fees, check sales and safe deposit box rentals to customers. The wealth management referral fees are earned as a referral when a bank customer initiates a customer relationship with an associated wealth management firm. These fees fulfill the contract/agreement between the Company and the wealth management firm. Check sales are recognized as customers contact the Company for check supplies or the customer initiates the check order through the Company website to our third-party check company. These commissions are recognized as the third-party check company satisfies the contract of providing check stock to our customers. Safe deposit box rental income is recognized on a monthly basis, per each contract agreement with our customers. The safe deposit box income is automatically withdrawn from the customer’s deposit account on a monthly basis as this revenue is earned by the contract. Gains (Losses) on Sales of Other Real Estate Owned ("OREO"): The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. It is not common policy that the Company will finance an OREO property with the buyer. It is the Company’s practice to sell loan collateral recognized as an OREO property to free the Company of any additional loss exposure. Operating Segments An operating segment is defined as a component of an enterprise that engages in business activities which generate revenue and incur expense, and the operating results of which are reviewed by management. At December 31, 2022, the Company’s business activities are comprised of two operating segments, which are community banking and insurance brokerage services. The Company has evaluated the provisions of ASC Topic 280, Segment Reporting, and determined that segment reporting information related to EU (Insurance Brokerage Services segment) is required to be presented because the segment has adopted a board of directors that conducts board meetings independent from the Company. In addition, the segment comprises a significant amount to total noninterest income, even though the segment is less than 10% of the combined assets of the Company. See Note 19 – Segment Reporting and Related Information for more information. Cash and Due From Banks The Company has defined cash and due from banks as cash on hand and those amounts due from depository institutions, interest-bearing deposits with other banks with original maturities of less than 90 days, and federal funds sold. The Company maintains cash deposits in other depository institutions that occasionally exceed the amount of deposit insurance available. Management periodically assesses the financial condition of these institutions and believes that the risk of any possible credit loss is minimal. Generally, the Company is required to maintain average reserve balances in vault cash with the Federal Reserve Bank based upon outstanding balances of deposit transaction accounts. However, as announced on March 15, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent, effective March 26, 2020, in light of the shift to an ample reserves regime. This action eliminates the need to maintain balances in accounts at the Federal Reserve Bank to satisfy reserve requirements, thereby freeing up liquidity in the banking system to support lending. Therefore, at December 31, 2022, and 2021, there were no reserve requirements with the Federal Reserve Bank. Securities Securities are classified at the time of purchase, based on management’s intentions and ability, as securities held to maturity or securities available-for-sale. Debt securities acquired with the intent and the ability to hold to maturity are stated at cost adjusted for amortization of premium and accretion of discount, which are computed using a level yield method and recognized as adjustments to interest income. Unrealized holding gains and losses for available-for-sale debt securities are reported as a separate component of stockholders’ equity, net of tax, until realized. Equity securities are measured at fair value with the change in fair value recognized in Net Gain on Securities within the noninterest income category in the Consolidated Statements of Income. Realized securities gains and losses, if any, are computed using the specific identification method. Interest and dividends on securities are recognized as income when earned. Declines in the fair value of individual securities below amortized cost that are other-than-temporary result in write-downs of the individual securities to their fair value. In estimating other-than-temporary impairment of securities, securities are evaluated on at least a quarterly basis to determine whether a decline in their value is other-than-temporary. In estimating other-than temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether or not the Company intends to sell or expect that it is more likely than not that it will be required to sell the security before an anticipated recovery in fair value. Once a decline in value for a debt security is determined to be other than temporary, the other-than-temporary impairment is separated in (a) the amount of total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to credit loss is recognized in earnings. The amount of other-than-temporary impairment related to other factors is recognized in other comprehensive loss. Common stock of the Federal Home Loan Bank (“FHLB”) and of Atlantic Community Bankers’ Bank (“ACBB”) represent ownership in organizations that are wholly owned by other financial institutions. These restricted equity securities are accounted for based on industry guidance in ASC Sub-Topic 325-20, which requires the investment to be carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. Included in accrued interest and other assets are FHLB stock of $2.7 million and $3.3 million at December 31, 2022 and 2021, respectively, and ACBB stock of $85,000 at December 31, 2022 and 2021. The Company periodically evaluates its FHLB restricted stock for possible impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. The Company believes its holdings in the stock are ultimately recoverable at par value at December 31, 2022, and, therefore, determined that FHLB stock was not impaired. In addition, the Company has ample liquidity and does not require redemption of its FHLB stock in the foreseeable future. Loans Receivable and Allowance for Loan Losses Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan fees and the allowance for loan losses. The Company’s loan portfolio is segmented to enable management to monitor risk and performance. The real estate loans are further segregated into three classes. Residential mortgages include those secured by residential properties and include home equity loans, while commercial mortgages consist of loans to commercial borrowers secured by commercial real estate. Construction loans typically consist of loans to build commercial buildings and acquire and develop residential real estate. The commercial and industrial segment consists of loans to finance the activities of commercial customers as well as Payroll Protection Program ("PPP") loans. The consumer segment consists primarily of indirect auto loans as well as personal installment loans and personal or overdraft lines of credit. Other loan primarily consist of municipal loans to local governments. Residential mortgage loans are typically longer-term loans and, therefore, generally present greater interest rate risk than the consumer and commercial loans. Under certain economic conditions, housing values may decline, which may increase the risk that the collateral values are not sufficient. Commercial real estate loans generally present a higher level of risk than loans secured by residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income-producing properties, and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired. Construction loans are originated to individuals to finance the construction of residential dwellings and are also originated for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. Construction loans generally provide for the payment of interest only during the construction phase, which is usually 12 to 18 months. At the end of the construction phase, the loan generally converts to a permanent residential or commercial mortgage loan. Construction loan risks include overfunding in comparison to the plans, untimely completion of work, and leasing and stabilization after project completion. Commercial and industrial loans are generally secured by business assets, inventories, accounts receivable, etc., which present collateral risk. Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans; however, they have additional credit risk due to the type of collateral securing the loan. Accrual of interest on loans is generally discontinued when it is determined that a reasonable doubt exists as to the collectability of principal and interest or when a loan becomes contractually past due by 90 days or more with respect to principal or interest. When a loan is placed on non-accrual status, any accrued but uncollected interest is reversed from current income. Payments received on nonaccrual loans are applied against principal. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and current and future payments are reasonably assured. The Company uses an eight-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are not considered criticized and are aggregated as “pass” rated. The criticized rating categories used by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted. In the normal course of business, the Company modifies loan terms for various reasons. These reasons may include a retention strategy to compete in the current interest rate environment, and to extend a loan term and re-amortize to better match the loan’s payment stream with the borrower’s cash flows. A modified loan is considered a troubled debt restructuring (“TDR”) when the Company has determined that the borrower is experiencing financial difficulties and the Company grants a concession to the borrower, except for an insignificant delay in payment. TDRs typically are the result of loss mitigation activities whereby concessions are granted to minimize loss and avoid foreclosure or repossession of collateral. The Company evaluates the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. To make this determination a credit review is performed to assess the ability of the borrower to meet their obligations. When the Company restructures a loan for a troubled borrower, the loan terms (i.e., interest rate, payment, amortization period and/or maturity date) are modified in such a way to enable the borrower to cover the modified debt service payments based on current financials and cash flow adequacy. If the hardship is thought to be temporary, then modified terms are offered only for that time period. Where possible, the Company obtains additional collateral and/or secondary payment sources at the time of the restructure. To date, the Company has not forgiven any principal as a restructuring concession. The Company will not offer modified terms if it believes that modifying the loan terms will only delay an inevitable permanent default. All loans designated as TDRs are considered impaired loans and may be in either accruing or non-accruing status. The Company’s policy for recognizing interest income on TDRs does not differ from its overall policy for interest recognition. TDRs are considered to be in payment default if, subsequent to modification, the loans are transferred to nonaccrual status. A loan may be removed from nonaccrual TDR status if it has performed according to its modified terms for at least six consecutive months. The performance and credit quality of the loan portfolio are also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Loan origination and commitment fees as well as certain direct loan origination costs are deferred and the net amount either accreted or amortized as an adjustment to the related loan’s yield over the contractual lives of the related loans. The allowance for loan losses (“allowance”) is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance based on potential losses in the current loan portfolio, which includes an assessment of economic conditions, changes in the nature and volume of the loan portfolio, loan loss experience, volume and severity of past due, classified and nonaccrual loans as well as other loan modifications, quality of the Company’s loan review system, the degree of oversight by the Company’s board of directors, existence and effect of any concentrations of credit and changes in the level of such concentrations, effect of external factors, such as competition and legal and regulatory requirements, and other relevant factors. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making evaluations. Additions are made to the allowance through periodic provisions charged to income and recovery of principal and interest on loans previously charged-off. Losses of principal are charged directly to the allowance when a loss occurs or when a determination is made that the specific loss is probable. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revisions as more information becomes available. The allowance consists of specific and general components. The specific component relates to loans that are classified as impaired. A loan is considered impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due for principal and interest according to the original contractual terms of the loan agreement. Generally, management considers all substandard, doubtful, and loss-rated loans, nonaccrual loans, and TDRs for impairment. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The maximum period without payment that typically can occur before a loan is considered for impairment is 90 days. Impairment is measured based on the present value of expected future cash flows discounted at a loan’s effective interest rate, or as a practical expedient, the observable market price, or, if the loan is collateral dependent, the fair value of the underlying collateral. When the measurement of an impaired loan is less than the recorded investment in the loan, the impairment is recorded in a specific valuation allowance. This specific valuation allowance is periodically adjusted for significant changes in the amount or timing of expected future cash flows, observable market price or fair value of the collateral. The specific valuation allowance, or allowance for impaired loans, is part of the total allowance for loan losses. Cash payments received on impaired loans that are considered nonaccrual are recorded as a direct reduction of the recorded investment in the loan. When the recorded investment has been fully collected, receipts are recorded as recoveries to the allowance for loan losses until the previously charged-off principal is fully recovered. Subsequent amounts collected are recognized as interest income. If no charge-off exists, then once the recorded investment has been fully collected, any future amounts collected would be recognized as interest income. Impaired loans are not returned to accrual status until all amounts due, both principal and interest, are current and a sustained payment history has been demonstrated. The general allowance component covers pools of loans by loan class. Management determines historical loss experience for each segment of loans using the five-year rolling average of the net charge-off data within each segment. Qualitative and environmental factors are also considered that are likely to cause estimated credit losses associated with the Bank’s existing portfolio to differ from historical loss experience, and include levels and trends in delinquency and impaired loans; levels and trends in net charge-offs, trends in volume and terms of loans; change in underwriting, policies, procedures, practices and key personnel; national and local economic trends; industry conditions, and effects of changes in high-risk credit circumstances. The qualitative and environmental factors are reviewed on a quarterly basis to ensure they are reflective of current conditions in the portfolio and economy. An unallocated component, which is a part of the general allowance component, is maintained to cover uncertainties that could affect the Company’s estimate of probable losses. Loans that were acquired in previous mergers, were recorded at fair value with no carryover of the related allowance for credit losses. The fair value of the acquired loans was estimated by management with the assistance of a third-party valuation specialist. For performing loans acquired in a merger, the excess of expected cash flows over the estimated fair value, at acquisition, is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require an evaluation to determine the need for an allowance. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount, which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our allowance. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment. The Company grants commercial, residential, and other consumer loans to customers at its branch locations throughout southwestern Pennsylvania in Greene, Washington, Allegheny, Fayette and Westmoreland Counties and in the panhandle of West Virginia in Marshall and Ohio Counties. Although the Company had a diversified loan portfolio at December 31, 2022 and 2021, a substantial portion of its debtors’ ability to honor their contracts is determined by the economic environment of these counties within the tri-state region footprint. Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is principally computed on the straight-line method over the estimated useful lives of the related assets, which range from to seven years for furniture, fixtures and equipment, and 27.5 to 40 years for building premises. Leasehold improvements are amortized over the shorter of their estimated useful lives or their respective lease terms, which range from to fifteen years. Expenditures for maintenance and repairs are charged to expense when incurred while costs of major additions and improvements are capitalized. Bank-Owned Life Insurance The Company is the owner and beneficiary of bank-owned life insurance (“BOLI”) policies on certain employees. The earnings from the BOLI policies are recognized as a component of noninterest income. The BOLI policies are an asset that can be liquidated, if necessary, with associated tax costs. However, the Company intends to hold these policies and, accordingly, the Company has not provided for deferred income taxes on the earnings from the increase in cash surrender value. Real Estate Owned Real estate owned acquired in settlement of foreclosed loans is carried as a component of Other Assets at the lower of cost or fair value, less estimated cost to sell. Prior to foreclosure, the estimated collectible value of the collateral is evaluated to determine if a partial charge-off of the loan balance is necessary. After transfer to real estate owned, any subsequent write-downs are charged against noninterest expense. Direct costs incurred in the foreclosure process and subsequent holding costs incurred on such properties are recorded as expenses of current operations. Real estate owned was none and $36,000 at December 31, 2022 and 2021, respectively. Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance in ASC Topic 740, Income Taxes. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination, the term more likely than not means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date, and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties on income taxes as a component of income tax expense. Goodwill and Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually on October 31 or more frequently if triggering events occur or impairment indicators exist. The Company operates two reporting units – Community Banking segment and Insurance Brokerage Services segment. The Company has assigned 100% of the goodwill to the Community Banking reporting unit. In assessing the impairment, the Company has the the option to perform either a qualitative analysis to determine whether it is necessary to perform the goodwill impairment test, or the Company may elect to perform a quantitative goodwill impairment test. Under the qualitative assessment, the Company assesses the existence of events or circumstances to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, including, goodwill. If this is more likely than not, the goodwill impairment test is used to identify potential goodwill impairment and measure the amount of a goodwill impairment loss to be recognized, if any. The estimated fair value of the community banking reporting unit is compared to its carrying value, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired, and no impairment loss is recognized. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized based on the excess of the a reporting unit's carrying value over its fair value. The Company did not record any goodwill impairment for the years ended December 31, 2022 and 2021. Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles acquired in mergers, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing at last annually. The amortization expense represents the estimated decline in value of the underlying asset. Core deposit intangibles are primarily amortized over 6.5 to 9.3 years on the straight-line method. Customer renewal lists are amortized over their estimated useful lives of 9.5 years. We monitor other intangibles for impairment and evaluate carrying amounts, as necessary. Estimates and assumptions are used in determining the fair value of other intangible assets. There were no events or changes in circumstances indicating impairment of other intangible assets at December 31, 2022. The Company recorded impairment related to core deposit intangible of $1.2 million for the year ended December 31, 2021. Future events could cause us to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment. Any resulting impairment could have a material adverse impact on the Company’s financial condition and results of operations. Refer to Note 6—Goodwill and Intangible Assets for additional details. Mortgage Servicing Rights (“MSRs”) The Company has agreements for the express purpose of selling loans in the secondary market. The Company maintains all servicing rights for these loans. MSRs are recognized when commitments are made to fund a loan to be sold and are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to sold mortgages that are serviced and are included in Accrued Interest Receivable and Other Assets on the accompanying Consolidated Statements of Financial Condition. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of MSRs is netted against servicing fee income in Other Income within the noninterest income category in the Consolidated Statements of Income. MSRs are evaluated for impairment based on the estimated fair value of the MSRs. MSRs are stratified by certain risk characteristics, primarily loan term and note rate. If temporary impairment exists within a risk stratification tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the estimated fair value. If it is later determined that all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced. Treasury Stock The purchase of the Company’s common stock is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on the average cost basis, with any excess proceeds being credited to capital surplus. Comprehensive (Loss) Income Comprehensive (loss) income consists of net income and other comprehensive loss. Other comprehensive loss is comprised of unrealized holding losses and reclassification adjustment for gain on sale of available-for-sale debt securities, net of tax. Earnings Per Share The Company provides dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated utilizing the reported net income as the numerator and weighted average shares outstanding as the denominator. The computation of diluted earnings per share differs in that the denominator is adjusted for the dilutive effects of any options and convertible securities. Treasury shares are not deemed outstanding for earnings per share calculations. Stock-Based Compensation In 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The purpose of the 2021 Plan is to provide officers, employees and directors of the Company and the Bank with additional incentives to promote the growth and performance of the Company and to further align their interests with those of the Company’s stockholders through the ownership of additional common stock of the Company. In addition, the 2021 Plan provides the Company with flexibility to continue to attract and retain highly qualified officers and directors by offering a competitive compensation program that is linked to the performance of the Company's common stock. The effective date of the 2021 Plan was May 19, 2021, which was the date the 2021 Plan satisfied the applicable stockholder approval requirement. The 2021 Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the 2021 Plan on or after the day immediately prior to the ten-year anniversary of the effective date of the 2021 Plan. Awards may be granted under the 2021 Plan as incentive and non-statutory stock options, restricted stock awards, restricted stock units or any combination thereof, The maximum number of shares of Company common stock that may be delivered to participants under the 2021 Plan is equal to 500,000 shares of Company common stock (the “Share Limit”). Shares of Company common stock subject to the Share Limit may be issued pursuant to grants of stock options, restricted stock awards or restricted stock units, provided, however that the Share Limit is reduced, on a one-for-one basis, for each share of common stock subject to a stock option grant, and on a two and one-half-for-one basis for each share of common stock issued pursuant to restricted stock awards or restricted stock unit awards. If any award granted under the 2021 Plan expires, terminates, is canceled or is forfeited without being settled or exercised or is settled without the issuance of shares of common stock, shares of Company common stock subject to such award will be made available for future grant under the 2021 Plan. If any shares are surrendered or tendered to pay the exercise price of a stock option, such shares will not again be available for grant under the 2021 Plan. In addition, shares of common stock withheld in payment for purposes of satisfying tax withholding obligations with respect to an award do not become available for re-issuance under the 2021 Plan. Employees and directors of the Company or its subsidiaries are eligible to receive awards under the 2021 Equity Incentive Plan, except that non-employees may not be granted incentive stock options. In 2015, the Company’s stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”), which has similar characteristics to the 2021 Plan. The effective date of the 2015 Plan was May 20, 2015. The 2015 Plan shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2021 Plan, no more awards can be granted under the 2015 Plan. The 2015 Plan reserved an aggregate number of shares, of which two-thirds of the shares (271,431) could be issued as stock options and one-third of the shares (135,715) could be be issued as restricted stock awards or units. ASC Topic 718, Compensation – Stock Compensation, requires recognizing the compensation cost in the financial statements for stock-based payment transactions. Stock option expense is measured based on the grant date fair value of the stock options issued. The per share fair value of stock options granted is calculated using the Black-Scholes-Merton option pricing model, using assumptions for expected life, expected dividend yield, risk-free interest rate and an expected volatility. The Company uses the simplified method to determine the expected term because it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The stock option exercise price is equal to the market value on the date of grant. Restricted stock award expense is measured based on the market price of the Company’s common stock at the date of the grant. Unrecognized compensation expense is recognized ratably over the remaining service period, generally defined as the vesting period, for all nonvested restricted stock awards and stock options. Restricted stock awards and stock options are typically granted with a year vesting period at a vesting rate of 20% per year. The contractual life of stock options is typically 10 years from the date of grant. Advertising Costs Advertising costs are expensed as incurred. Impairment of Long-Lived Assets The Company routinely performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable and are in excess of their fair value, less estimated costs to sell. If estimated recoverable amounts are lower than carrying values, assets are considered impaired and reduced to fair value with the recognized impairment charges recorded in noninterest expense in the Consolidated Statements of Income. Long-lived assets are tested for impairment individually or as part of an asset group. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The Company follows ASC 360, Property, Plant and Equipment, which requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used: Step 1 – Consider whether Indicators of Impairment are Present. The following are examples of such events or changes in circumstances. •A significant decrease in the market price of a long-lived asset (asset group). •A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition. •A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator. •An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group). •A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group). •A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. Step 2—Test for Recoverability If indicators of impairment are present, the Company performs a recoverability test comparing the sum of the estimated undiscounted cash flows attributable to the long-lived asset or asset group in question to the carrying amount of the long-lived asset or asset group. Step 3—Measurement of an Impairment Loss If the undiscounted cash flows used in the recoverability test are less than the carrying amount of the long-lived asset (asset group), the Company estimates the fair value of the long-lived asset or asset group and recognizes an impairment loss when the carrying amount of the long-lived asset or asset group exceeds the estimated fair value. An impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group must not reduce the carrying amount of that asset below its fair value whenever the fair value is determinable without undue cost and effort. ASC 360 prohibits the subsequent reversal of an impairment loss for an asset held and used. Recent Accounting Standards In August 2021, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-06, Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. The SEC rule changes update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years. The rules also eliminate certain disclosure items that are duplicative of other SEC rules and requirements of U.S. GAAP. The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K. The rules are intended to help ensure that investors have access to more meaningful, relevant information to facilitate their investment and voting decisions. The amendments are effective prospectively for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The adoption of this ASU did not have a material impact on the Company's consolidated statements of financial condition or results of operation. In March 2020, the Financial Accounting Standard Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. The elective guidance in the ASU applies to modifications of contract terms that will directly replace, or have the potential to replace, an affected rate with another interest rate index, as well as certain contemporaneous modifications of other contract terms related to the replacement of an affected rate. The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. The optional expedient allows companies to account for the modification as if it was not substantial (i.e., do not treat as an extinguishment of debt). The ASU is intended to help stakeholders during the global market-wide reference rate transition period. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company has formed a cross-functional team to lead the transition from LIBOR to a planned adoption of an alternate index. The Company is in the process of implementing fallback language for loans or working with lead participating banks and expects to adopt the LIBOR transition relief allowed by the optional expedient under this standard. As of December 31, 2022, the Company has identified approximately $129.0 million in outstanding loan balances and a $5.0 million corporate debt security tied to the LIBOR reference rate. The Company has not yet made any contract modifications. The Company is currently evaluating the potential impact of this guidance on its consolidated statements of financial statements and results of operations. In December 2019, FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes. ASU 2019-12 provides amendments intended to reduce the cost and complexity in accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes the following exceptions from ASC 740, Income Taxes: (i) exceptions to the incremental approach for intraperiod tax allocation; (ii) exceptions to accounting for basis differences when a foreign subsidiary becomes an equity method investment or a foreign equity method investment become a subsidiary; and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 provides the following amendments that simplify and improve guidance with Topic 740: (i) franchise taxes that are based partially on income; (ii) transactions that result in a step up in the tax basis of goodwill; (iii) separate financial statements of legal entities that are not subject to tax; (iv) enacted changes in tax laws in interim periods; and (v) employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this ASU did not have a material impact on the Company's consolidated statements of financial condition or results of operation. In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP; and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this ASU requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU 2016-13 amendments affect loans, HTM debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of January 1, 2023. In preparation for the implementation of this ASU, the Company has formed a cross-functional team, contracted with a third-party software provider, and is consulting with a third-party professional advisory service to assist in the model development. The Company has adopted ASU No. 2016-13 (Topic 326) effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized costs and unfunded commitments.. The Company has largely completed its assessment of related processes, internal controls, and data sources and has developed, documented, and validated discounted cash flow (DCF) model utilizing a third-party software provider. Our allowance for credit losses (“ACL”) estimate uses DCF model and estimation techniques based on historical loss experience, current borrower characteristics, current conditions, forecasts of future economic conditions and other relevant factors. The Company will use models and other loss estimation techniques that are responsive to changes in forecasted economic conditions to interpret borrower and economic factors in order to estimate the ACL. The Company also applies qualitative factors to account for information that may not be reflected in quantitatively derived results. Qualitative factors include: changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; changes in management; changes in the quality of the Bank’s loan review process; the existence of any concentrations of credit and other external factors to ensure the ACL reflects our expected credit losses. The Company expects its ACL estimate to be sensitive to various factors such as current economic conditions. The ACL includes off-balance sheet credit exposures (OBS) such as unfunded loan commitments. While the Company continues to analyze and evaluate the impact of the adoption of this guidance on the Company’s consolidated financial statements, based upon the Company’s fourth quarter parallel run, assessment of the composition, characteristics and credit quality of the Company's loan portfolio, as well as the economic conditions in effect as of the adoption date - January 1, 2023, management estimates the adoption of ASC 326 will result in will result in a decrease of approximately $3.4 million to the Company’s ACL related to loans receivable and increase of approximately $700,000 in ACL for unfunded commitments. Net impact of the adopting ASC 326, will result in approximately $2.1 million increase to retained earnings, net of deferred taxes. The adjustment recorded upon adoption to record the ACL may fall outside of management’s estimate based on material changes in the economic forecast and conditions and composition of the loan portfolio used in calculating the allowance for credit losses upon adoption. In December 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Comptroller of the Currency (“OCC”) approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ adoption of the CECL methodology. The final rule provides banking organizations the option to phase-in, over a three-year period, the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. The Company does not expect to use the phase in option upon adoption of this is ASU.
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Earnings Per Share | EARNINGS PER SHARE There are no convertible securities, which would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statements of Income is used as the numerator. The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation.
The dilutive effect on weighted average diluted common shares outstanding is the result of outstanding stock options and nonvested restricted stock. The following table presents as of the periods indicated (a) options to purchase shares of common stock that were outstanding but not included in the computation of earnings per share because the options' exercise price was greater than the average market price of the common shares for the period, and (b) shares of restricted stock awards that were not included in the computation of diluted earnings per share because the hypothetical repurchase of shares under the treasury stock method exceeded the weighted average nonvested restricted awards, therefore the effects would be anti-dilutive.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | SECURITIES The amortized cost and fair value of securities available-for-sale as of the dates indicated are as follows:
The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at the dates indicated:
For debt securities, the Company does not believe any individual unrealized loss as of December 31, 2022 or 2021, represents an other-than-temporary impairment. The securities that are temporarily impaired at December 31, 2022 and 2021, relate principally to changes in interest rates subsequent to the acquisition of the specific securities. The Company does not intend to sell and it is not more likely than not that it will be required to sell, any of the securities in an unrealized loss position before recovery of its amortized cost or maturity of the security. Securities available-for-sale with a fair value of $175.6 million and $121.0 million at December 31, 2022 and 2021, respectively, are pledged to secure public deposits, short-term borrowings and for other purposes as required or permitted by law. The scheduled maturities of securities available-for-sale are summarized as follows. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay debt obligations with or without prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are classified in the table below based on their contractual maturity date; however, regular principal payments and prepayments of principal are received on a monthly basis.
The following table presents the gross realized gain and loss on sales of debt securities, as well as gain and loss on equity securities from both sales and market adjustments for the periods indicated. All gains and losses presented in the table below are reported in Net Gain on Securities on the Consolidated Statements of Income.
In 2022, there were no gross realized gains or losses on the sale of debt securities. In 2021, the realized gain on the sale of debt securities was recognized to mitigate investment-credit risk and to reinvest in higher yielding, longer-term investments as well as to mitigate call risk in a declining interest rate environment.
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Loans and Related Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Related Allowance for Loan Losses | LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES The following table summarizes the major classifications of loans as of the dates indicated:
The SBA reopened the PPP in January 2021 and began accepting applications for both First Draw and Second Draw PPP Loans. Second Draw PPP Loans were available for certain eligible borrowers that previously received a PPP loan. A Second Draw PPP Loan has the same general terms as the First Draw PPP Loan. A borrower was generally eligible for a Second Draw PPP Loan if the borrower previously received a First Draw PPP Loan and will or had used the full amount only for authorized uses, had no more than 300 employees, and demonstrated at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. For most borrowers, the maximum amount of a Second Draw PPP Loan was 2.5x average monthly 2019 or 2020 payroll costs up to $2.0 million. Loan payments are deferred for borrowers who apply for loan forgiveness until the SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks). For PPP loans made in 2021, the processing fee from the SBA was the lesser of 50% or $2,500 for loans up to $50,000, 5% for loans greater than $50,000 and up to $350,000, 3% for loans greater than $350,000 and less than $2.0 million and 1% for loans of at least $2.0 million. The following table presents PPP loan activity segregated by loans originated in 2020 and 2021.
Net deferred origination fees recognized on PPP loans totaled $673,000 and $1.7 million during the years ended December 31, 2022 and 2021. All PPP loans are classified as commercial and industrial loans. No allowance for loan loss was allocated to the PPP loan portfolio due to the Bank complying with the lender obligations that ensure SBA guarantee. Total unamortized net deferred loan fees were $1.2 million and $1.9 million at December 31, 2022 and 2021, respectively. $5,000 and $678,000 of net deferred PPP loan origination fees were unearned as of December 31, 2022 and 2021. The following table presents loans summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the internal risk rating system as of dates indicated. At December 31, 2022 and 2021, there were no loans in the criticized category of loss.
The decrease of $11.8 million in the special mention category as of December 31, 2022 compared to December 31, 2021 was mainly from commercial real estate and commercial and industrial loan upgrades and payoffs, and a $2.7 million commercial and industrial loan charge-off. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of the dates indicated:
The decrease in nonaccrual commercial and industrial loans at December 31, 2022 compared to December 31, 2021 is primarily related to the payoff in the current year of a client relationship that included two nonperforming commercial and industrial loans for $1.5 million Total unrecorded interest income related to nonaccrual loans was $203,000 and $122,000 for the year ended December 31, 2022 and 2021, respectively. A summary of the loans considered impaired and evaluated for impairment as of the dates indicated are as follows:
The recorded investment of loans evaluated for impairment decreased $575,000 at December 31, 2022 compared to December 31, 2021 and was largely related to commercial real estate loans. This was primarily the result in the current period of no longer separately evaluating for impairment certain commercial real estate loans secured by hotels that have manageable loan-to-value ratios and exhibited an ability to cash flow during the COVID-19 pandemic. At December 31, 2021, there was one loan in forbearance for a $1.9 million commercial real estate loan secured by a hotel, which was considered a troubled debt restructuring upon providing an additional forbearance period and modified payment terms. The loan was substandard rated at December 31, 2022 and 2021, respectively, and is designated as a nonaccrual loan. The recorded investment of residential real estate loans for which formal foreclosure proceedings were in process according to applicable requirements of the local jurisdiction was $1.4 million and $571,000 at December 31, 2022 and 2021, respectively. The concessions granted for the TDRs in the portfolio primarily consist of, but are not limited to, modification of payment or other terms and extension of maturity date. Loans classified as TDRs consisted of 12 and 15 loans totaling $4.0 million and $4.7 million as of December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, a $39,000 residential real estate loan and two commercial real estate loans of $270,000 previously modified in TDRs paid off. During the year ended December 31, 2021, one residential real estate loans totaling $3,000 and a $8,000 commercial and industrial loan previously modified in TDRs paid off. No TDRs subsequently defaulted during the years ended December 31, 2022 and 2021, respectively. No loans were modified into a TDR during the year ended December 31, 2022. The following table presents information at the time of modification related to loans modified as TDRs during the period indicated.
Loans acquired in connection with the previous mergers were recorded at their estimated fair value at the acquisition date and did not include a carryover of the allowance for loan losses because the determination of the fair value of acquired loans incorporated credit risk assumptions. The loans acquired with evidence of deterioration in credit quality since origination for which it was probable that all contractually required payments would not be collected were not significant to the consolidated financial statements of the Company. The activity in the allowance for loan loss summarized by primary segments and segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for potential impairment as of December 31, 2022 and 2021 is summarized below:
The following tables present the major classifications of loans summarized by individually evaluated for impairment and collectively evaluated for potential impairment as of December 31, 2022 and 2021:
The following table presents changes in the accretable discount on the loans acquired at fair value for the dates indicated.
Certain directors and executive officers of the Company, including family members or companies in which they are principal owners, are loan customers of the Company. Such loans are made in the normal course of business, and summarized as follows:
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Premises and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | PREMISES AND EQUIPMENT Major classifications of premises and equipment are summarized as follows:
Depreciation and amortization expense on premises and equipment was $1.0 million and $950,000 for the years ended December 31, 2022 and 2021, respectively. Branch Optimization and Operational Efficiency Initiatives and Impairment of Long-Lived Assets In 2021, the Company announced the implementation of branch optimization and operational efficiency strategic initiatives to improve the Bank’s financial performance and operations in order to position the Bank for continued profitable growth through the optimization of its branch network while expanding technology and infrastructure investments in its remaining locations. The decision was the result of a comprehensive internal study that measured branch performance by comparing financial and non-financial indicators to growth opportunities, while evolving changes in consumer preferences, largely driven by the global pandemic, led to an acceleration of branch optimization efforts. The Bank also completed a comprehensive review of its branch network and operating environment to identify solutions to improve operating performance. This review prioritized profitability, efficiency, infrastructure and client experience improvements, automation in operations, and digital marketing and technology investments and the Bank is in process of implementing operational efficiencies related to individualized processes within its branch network and operating environment. The Bank has substantially completed these initiatives through the consolidation of six branches that was completed on June 30, 2021. In addition, CB Financial, Community Bank, and Citizens Bank of West Virginia, Inc. (“Citizens Bank”) executed a Purchase and Assumption Agreement (the “Agreement”) pursuant to which Citizens Bank agreed to purchase certain loans and other assets, and assume certain deposits and other liabilities, of the branch offices of Community Bank located in Buckhannon, West Virginia, and New Martinsville, West Virginia. The divestiture of two branches in December 2021 resulted in the sale of $102.8 million of deposits, $6.1 million of loans and $795,000 of premises and equipment and the recognition of a $5.2 million pre-tax gain on sale from a 5.0% premium paid by Citizens Bank on the assumed deposits. The branch optimization initiative reduced the Bank's branch network to 14 branches as of December 31, 2021. As a result of the events and changes in circumstances associated with the branch optimization initiatives whereby six branches were consolidated and two others were divested, the Company performed assessments of the recoverability of long-lived assets to determine whether their carrying values may not be recoverable. Utilizing guidance in ASC 360, the Company performed the three step process to identify, recognize and measure the impairment of the long-lived assets. •For the six locations that were consolidated: ◦Three locations were written down to the fair value of the land based on the appraised value due to plans to raze the buildings. ◦Two locations were marketed for sale and were written down to fair value based on the appraised value. One of these locations was subsequently donated resulting in a $230,000 charitable donation. ◦One location was leased. Refer to Note 14 for further discussion of the impairment of the right of use asset associated with the operating lease. •For the two branches that were divested, the fair value of the premises and equipment was determined using the contractual terms of the Agreement, whereby the premises and equipment were purchased at the acquisition date for $795,000 based on the Company's net book value, net of a $338,000 contractual discount. For the year ended December 31, 2021, the Company recognized $2.3 million in charges on the premises and equipment as a Writedown on Premises and Equipment in the Consolidated Statements of Income. The branch optimization and operational efficiency initiatives resulted in $7.5 million of restructuring-related and other expenses for the year ended December 31, 2021. The expenses include the aforementioned $2.3 million writedown on premises and equipment and $1.2 million impairment of intangible assets associated with the branch sales (refer to Note 6 for further information), as well as $4.1 million of expenses related to contracted services, employee severance costs, branch lease impairment (refer to Note 14 for further information), professional fees, data processing fees, charitable donations, legal and other expenses for the year ended December 31, 2021.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company's Consolidated Balance Sheets include goodwill of $9.7 million as of December 31, 2022 and 2021, respectively, all of which relates to Community Banking segment. Intangible Assets The following table presents a summary of intangible assets subject to amortization at the dates indicated.
On June 10, 2021, an Agreement was executed with Citizens Bank pursuant to which Citizens Bank agreed to assume certain deposits of the branch offices of Community Bank located in Buckhannon, West Virginia, and in New Martinsville, West Virginia. In 2018, the Company recorded a core deposit intangible asset related to the acquisition of these two branches as part of the merger with First West Virginia Bancorp, Inc. As a result of signing the Agreement and the sale of a portion of the deposits associated with the remaining core deposit intangible, the Company performed an evaluation to determine whether the core deposit intangible was impaired. As a result of the evaluation, the Company determined the carrying amount of the core deposit intangible was impaired $1.2 million. The Company recorded the impairment in Intangible Asset and Goodwill Impairment on the Consolidated Statements of Income. Amortization of intangible assets totaled $1.8 million and $1.9 million for the years ended December 31, 2022 and 2021, respectively. The estimated amortization expense of intangible assets assumes no activities, such as acquisitions, which would result in additional amortizable intangible assets. Estimated amortization expense of intangible assets in subsequent fiscal years is as follows.
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | DEPOSITS The following table shows the maturities of time deposits for the next five years and beyond.
The balance in time deposits that meet or exceed the FDIC insurance limit of $250,000 totaled $30.8 million and $40.6 million as of December 31, 2022 and 2021, respectively. The aggregate amount of demand deposits that are overdrawn and have been reclassified as loans was $613,000 and $192,000 as of December 31, 2022 and 2021, respectively. Certain directors and executive officers of the Company, including family members or companies in which they are principal owners, are deposit customers of the Company. The total deposits of directors and executive officers was $5.7 million and $7.3 million as of December 31, 2022 and 2021, respectively.
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Short-term Borrowings |
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Short-Term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Borrowings | SHORT-TERM BORROWINGS Borrowings with original maturities of one year or less are classified as short-term and may consist of borrowings with the FHLB, securities sold under agreements to repurchase or borrowings on revolving lines of credit with the Federal Reserve Bank or other correspondent banks. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are overnight sweep accounts with next-day maturities utilized by commercial customers to earn interest on their funds. U.S. government agencies, mortgage-backed securities, and collateralized mortgage obligations are pledged as collateral under these agreements in an amount at least equal to the outstanding balance and the collateral pledging requirements are monitored on a daily basis. The following table sets forth the components of short-term borrowings for the years indicated.
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Other Borrowed Funds |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Borrowed Funds | OTHER BORROWED FUNDS FHLB, Federal Reserve Bank, and Fed Fund Borrowing Arrangements The Bank maintained a credit arrangement with the FHLB with a maximum borrowing limit of approximately $435.3 million and $427.2 million as of December 31, 2022 and 2021, respectively, and available borrowing capacity of $407.4 million at December 31, 2022. This arrangement is subject to annual renewal and is secured by a blanket security agreement on $602.5 million of residential and commercial mortgage loans and the Bank’s investment in FHLB stock. Under this arrangement the Bank had available a variable rate line of credit in the amount of $150.0 million as of December 31, 2022 and 2021, of which, there was no outstanding balance as of December 31, 2022 and 2021. Fixed rate, long-term advances from the FHLB with remaining maturities are as follows at the dates indicated:
As an alternative to pledging securities, the FHLB periodically provides standby letters of credit on behalf of the Bank to secure certain public deposits in excess of the level insured by the FDIC. If the FHLB is required to make payment for a beneficiary’s draw, the payment amount is converted into a collateralized advance to the Bank. Standby letters of credit issued on our behalf by the FHLB to secure public deposits were $26.2 million and $62.0 million as of December 31, 2022 and 2021. The Bank maintains a Borrower-In-Custody of Collateral line of credit agreement with the Federal Reserve Bank (“FRB”) for $119.0 million that requires monthly certification of collateral, is subject to annual renewal and is secured by $172.9 million of commercial and consumer indirect auto loans. The Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million as of December 31, 2022 and 2021, respectively, of which no draws are outstanding other than the subordinated debt disclosed below. Subordinated Debt In December 2021, the Company entered into a term loan in the principal amount of $15.0 million, evidenced by a term note which matures on December 15, 2031 ("2031 Note"). The 2031 Note is an unsecured subordinated obligation of the Company and may be repaid in whole or in part, without penalty, on any interest payment date on or after December 15, 2026 and at any time upon the occurrence of certain events. The 2031 Note initially bears a fixed interest rate of 3.875% per year to, but excluding, December 15, 2026 and thereafter at a floating rate equal to the then-current three-month term SOFR plus 280 basis points. The 2031 Note qualifies as Tier 2 capital under regulatory guidelines. The 2031 Note is recorded on the Consolidated Statements of Financial Condition in Other Borrowed Funds, net of remaining debt issuance costs. At December 31, 2022 and 2021, the principal balance and unamortized debt issuance costs for the 2031 Note were $15.0 million, and $362,000 and $399,000, respectively.
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Income Taxes |
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Income Taxes | INCOME TAXES Reconciliation of income tax provision for the periods indicated are as follows:
The tax effects of deductible and taxable temporary differences that gave rise to significant portions of the net deferred tax assets and liabilities are as follows:
Deferred taxes at December 31, 2022 and 2021, are included in Accrued Interest Receivable and Other Assets in the accompanying Consolidated Statements of Financial Condition. A reconciliation of the federal income tax expense at statutory income tax rates and the actual income tax expense on income before taxes for the periods indicated is as follows:
The Company’s federal, Pennsylvania and West Virginia income tax returns are no longer subject to examination by applicable tax authorities for years before 2019. As of December 31, 2022 and 2021, there were no unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. There were no interest or penalties accrued at December 31, 2022 and 2021.
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Employee Benefits |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | EMPLOYEE BENEFITS Savings and Profit Sharing Plan The Company maintains a Cash or Deferred Profit-sharing Section 401(k) Plan with contributions matching those by eligible employees for the first 4% of an employee’s contribution at the rate of $0.25 on the dollar. All employees who are over the age of 18 and completed three months of employment are eligible to participate in the plan. The Company made contributions of $233,000 and $296,000 for the years ended December 31, 2022 and 2021, respectively, to this plan. The 401(k) Plan includes a “safe harbor” provision and a discretionary retirement contribution. The Company made contributions of $404,000 and $659,000 for the “safe harbor” provision and discretionary retirement contribution for the years ended December 31, 2022 and 2021, respectively. Equity Incentive Plan Details of the restricted stock award and stock option grants under the 2021 Equity Incentive Plan are summarized for the year ended December 31, 2022 as follows. The Company did not grant restricted stock awards or stock options for the year ended December 31, 2021.
The Company recognizes expense over a five-year vesting period for the restricted stock awards and stock options. Stock-based compensation expense related to restricted stock awards and stock options was $600,000 and $566,000 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, total unrecognized compensation expense was $429,715 and $65,000, respectively, related to stock options, and $1.4 million and $1.3 million related to restricted stock awards. At December 31, 2022, the unrecognized compensation expense related to stock options and restricted stock is expected to be recognized over the weighted average remaining vesting period of 4.92 years. In conjunction with non-qualified stock options, the Company recognized a tax benefit due to an exercise of non-qualified stock options for $2,000 for the year ended December 31, 2022, compared to the accrued tax benefit of $5,000 for the year ended December 31, 2021. In the current year, there was an exercise of non-qualified stock options with a tax expense of $4,000 partially offset by the benefit of $2,000. Intrinsic value represents the amount by which the fair value of the underlying stock at December 31, 2022 and 2021, exceeds the exercise price of the stock options. The intrinsic value of outstanding stock options was $25,470 and $296,000 at December 31, 2022 and 2021, respectively. At December 31, 2022, there were 333,335 shares of common stock available and reserved under the 2021 Plan to be issued of which a maximum of 333,335 shares may be issued as stock options and 133,334 shares may be issued as restricted stock awards or units based on the terms of the Plan whereby the Share Limit is reduced, on a one-for-one basis, for each share of common stock subject to a stock option grant, and on a two and one-half-for-one basis for each share of common stock issued pursuant to restricted stock awards or units. At December 31, 2022, 27,765 restricted shares and 104,465 options have been granted under the 2021 Plan. At December 31, 2021, under the 2021 Plan, 500,000 or 200,000 shares,were available to be issued in connection with the exercise of stock options and restricted stock awards or units; and under the 2015 Plan, no shares were available to issue. The 2015 Plan shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2021 Plan, no more awards can be granted under the 2015 Plan. The following table presents stock option data for the period indicated:
The following table presents restricted stock award data for the period indicated.
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingent Liabilities | COMMITMENTS AND CONTINGENT LIABILITIES The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business primarily to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and performance letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and performance letters of credit written is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Commitments and conditional obligations are evaluated the same as on-balance-sheet instruments but do not have a corresponding reserve recorded. The Company’s opinion on not implementing a corresponding reserve for off-balance-sheet instruments is supported by historical factors of no losses recorded due to these items. The Company is continually evaluating these items for credit quality and any future need for the corresponding reserve. The unused and available credit balances of financial instruments whose contracts represent credit risk are as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Performance letters of credit represent conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance-related contracts. The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized upon expiration of the letter. For secured letters of credit, the collateral is typically Company deposit instruments or customer business assets. The Company recorded no liability associated with standby letters of credit as of December 31, 2022 and 2021.
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Stockholders' Equity and Regulatory Capital |
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Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Regulatory Capital | STOCKHOLDERS'S EQUITY AND REGULATORY CAPITAL In June 2021, the Company authorized a program to repurchase up to $7.5 million of its outstanding shares of common stock. Under the program, repurchases may be transacted in the open-market or in negotiated private transactions and are conducted pursuant to a trading plan adopted in accordance with limitations set forth in Rule 10b5-1 of the Securities and Exchange Commission. The Rule 10b5-1 repurchase plan allows the Company to repurchase its shares during periods when it would normally not be active in the market due to its internal trading blackout period. Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to various factors, including but not limited to, the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. On February 15, 2022, the Company completed this stock repurchase program. In connection with the program, the Company repurchased a total of 308,996 shares of the Company’s common stock at an average price of $24.27 per share. In April 2022, the Company authorized a new repurchase program of $10.0 million of its outstanding shares of common stock. As of December 31, 2022 the Company had repurchased 62,178 shares at an average price of $22.47 per share for a total of $1.4 million. The plan is set to expire on May 1, 2023 and has a remaining value of $8.6 million to repurchase. On January 26, 2023, the Company's Board of Directors declared a cash dividend of $0.25 per outstanding share of common stock, which was paid on February 28, 2023. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Under the Regulatory Capital Rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier I capital above its minimum risk-based capital requirements in an amount greater than 2.5% of total risk-weighted assets. As of December 31, 2022 and 2021, the Bank was considered "well capitalized" under the regulatory framework for prompt corrective action. At December 31, 2022 and 2021, the Bank's capital ratios were not affected by loans modified in accordance with Section 4013 of the CARES Act. In addition, PPP loans received a zero-percent risk weight under the regulatory capital rules regardless of whether they were pledged as collateral to the Federal Reserve Bank's PPP lending facility, but were included in the Bank's leverage ratio requirement due to the Bank not pledging the loans as collateral to the PPP lending facility. The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized at the dates indicated.
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Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Leases | OPERATING LEASES The Company evaluates all contracts at commencement to determine if a lease is present. In accordance with ASC Topic 842, leases are defined as either operating or finance leases. The Company's lease contracts are classified as operating leases and create operating ROU assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. The leases are primarily ROU assets of land and building for branch and loan production locations. ROU assets are reported in and the related lease liabilities in on the Consolidated Statements of Financial Condition. The following tables present the lease expense, ROU assets, weighted average term, discount rate and maturity analysis of lease liabilities for operating leases for the periods and dates indicated.
Impairment of ROU Assets ROU assets from operating leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present. ASC 360 requires three steps to identify, recognize and measure impairment. If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount. If the undiscounted cash flows used in the recoverability test are less than the carrying amount, the Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3). At June 30, 2021, the Company consolidated six branches as part of its branch optimization initiative. One of the branches was leased and the Company performed the three-step evaluation as outlined above to determine whether the operating lease was impaired. As part of the recoverability test, the Company elected to exclude operating lease liabilities from the carrying amount of the asset group. The undiscounted future cash flows used in the recoverability test were based on assumptions made by the Company rather than market participant assumptions. Since an election was made to exclude operating lease liabilities from the asset or asset group, all future cash lease payments for the lease were also excluded. In addition, the Company elected to exclude operating lease liabilities from the estimated fair value, consistent with the recoverability test When determining the fair value of the ROU asset, the Company estimated what market participants would pay to lease the asset. The ROU asset was valued assuming its highest and best use in its current form. Based on the analysis, the Company concluded that the ROU asset for this branch was fully impaired as of June 30, 2021, resulting in a remaining ROU carrying value of zero and the recognition of a $227,000 impairment for year ended December 31, 2021. The impairment was recognized in Occupancy expense on the Consolidated Statements of Income.
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Mortgage Servicing Rights |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Servicing Rights | MORTGAGE SERVICING RIGHTS The following table presents MSR activity and net carrying values for the periods indicated.
Amortization of MSRs and the period change in the valuation allowance are reported in Other Income on the Consolidated Statements of Income. Real estate loans serviced for others, which are not included in the Consolidated Statements of Financial Condition, totaled $83.4 million and $96.6 million at December 31, 2022 and 2021, respectively.
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Fair Value Disclosure |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosure | FAIR VALUE DISCLOSURE ASC Topic 820 “Fair Value Measurement” defines fair value and provides the framework for measuring fair value and required disclosures about fair value measurements. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the transaction date. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used in valuation methods to determine fair value. The three levels of fair value hierarchy are as follows: Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available. Level 2 - Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets, and other observable inputs. Level 3 - Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows, and other similar techniques. This hierarchy requires the use of observable market data when available. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The following table presents the financial assets measured at fair value on a recurring basis and reported on the Consolidated Statements of Financial Condition as of the dates indicated, by level within the fair value hierarchy. The majority of the Company’s securities are included in Level 2 of the fair value hierarchy. Fair values for Level 2 securities were primarily determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The standard inputs that are normally used include benchmark yields of like securities, reportable trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. There were no transfers from Level 1 to Level 2 and no transfers into or out of Level 3 during the years ended December 31, 2022 and 2021, respectively.
The following table presents the financial assets measured at fair value on a nonrecurring basis on the Consolidated Statements of Financial Condition as of the dates indicated by level within the fair value hierarchy. The table also presents the significant unobservable inputs used in the fair value measurements. Impaired loans that are collateral dependent are written down to fair value through the establishment of specific reserves. Techniques used to value the collateral that secure the impaired loans include quoted market prices for identical assets classified as Level 1 inputs or observable inputs, employed by certified appraisers, for similar assets classified as Level 2 inputs. In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level 3 inputs.
(1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include various Level 3 inputs, which are not identifiable. (2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of appraisal adjustments and liquidation expense are presented as a percent of the appraisal. Impaired loans are evaluated and valued at the time the loan is identified as impaired, at the lower of cost or fair value. Fair value is measured based on the value of the collateral securing the loans and is classified as Level 3 in the fair value hierarchy. At December 31, 2022 and 2021, the fair value of impaired loans consists of the loan balance of $1.6 million and $2.3 million less their specific valuation allowances of $24,000 and $299,000, respectively. The fair value of MSRs is determined by calculating the present value of estimated future net servicing cash flows, considering expected mortgage loan prepayment rates, discount rates, servicing costs and other economic factors, which are determined based on current market conditions. The expected rate of mortgage loan prepayments is the most significant factor driving the value of MSRs. MSRs are considered impaired if the carrying value exceeds fair value. Since the valuation model includes significant unobservable inputs as listed above, MSRs are classified as Level 3. OREO properties are evaluated at the time of acquisition and recorded at fair value, less estimated selling costs. After acquisition, OREO is recorded at the lower of cost or fair value, less estimated selling costs. The fair value of an OREO property is determined from a qualified independent appraisal and is classified as Level 3 in the fair value hierarchy. Financial instruments are defined as cash, evidence of an ownership in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses and other factors, as determined through various option pricing formulas or simulation modeling. As many of these assumptions result from judgments made by management based upon estimates that are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in the assumptions on which the estimated fair values are based may have significant impact on the resulting estimated fair values. The estimated fair values of the Company’s financial instruments at the dates indicated are as follows:
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Other Noninterest Expense |
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Other Noninterest Expense | OTHER NONINTEREST EXPENSE The details for other noninterest expense for the Company’s Consolidated Statements of Income are as follows:
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Condensed Financial Statements of Parent Company |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Statements of Parent Company | CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY Financial information pertaining only to CB Financial Services, Inc., is as follows: Statements of Financial Condition
Statements of Income
Statements of Cash Flows
The Parent Company's Statements of Comprehensive (Loss) Income and Statements of Changes in Stockholders' Equity are identical to the Consolidated Statements of Comprehensive (Loss) Income and the Consolidated Statements of Changes in Stockholders' Equity and are not presented.
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Segment Reporting and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting and Related Information | SEGMENT REPORTING AND RELATED INFORMATIONAt December 31, 2022, the Company’s business activities were comprised of two operating segments, which are community banking and insurance brokerage services. CB Financial Services, Inc. is the parent company of the Bank and Exchange Underwriters, a wholly owned subsidiary of the Bank. Exchange Underwriters has an independent board of directors from the Company and is managed separately from the banking and related financial services that the Company offers. Exchange Underwriters is an independent insurance agency that offers property, casualty, commercial liability, surety and other insurance products. The following table represents selected financial data for the Company’s subsidiaries and consolidated results for 2022 and 2021.
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc., and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly owned subsidiary, Exchange Underwriters, Inc. (“Exchange Underwriters” or “EU”). CB Financial Services, Inc., Community Bank and Exchange Underwriters, Inc. are collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated in consolidation.
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Nature of Operations | Nature of Operations The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, insurance commissions, and fees generated from deposit services to its customers. The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. After the consolidation of one branch in 2022, and consolidation of six and sale of two branches in 2021, the Bank operates from 10 offices in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania and three offices in Marshall and Ohio Counties in West Virginia. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, a full-service, independent insurance agency. The Company has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2022 through the date the consolidated financial statements are being issued for items that should potentially be recognized or disclosed in these consolidated financial statements.
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Use of Estimates | Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with general practice within the banking industry. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition, and income and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to fair value of securities available for sale, determination of the allowance for losses on loans, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, other-than-temporary impairment evaluations of securities, the valuation of deferred tax assets and the evaluation of goodwill and core deposit intangible impairment.
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Revenue Recognition | Revenue Recognition Income on loans and securities is recognized as earned on the accrual method. Gains and losses on sales of mortgages are based on the difference between the selling price and the carrying value of the related mortgage sold. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Accounting Standards Codification ("ASC") Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The Company’s revenue from contracts with customers within the scope of ASC Topic 606 is recognized within Noninterest Income with the exception of Other Real Estate Owned (“OREO”) Income, which is accounted for in Noninterest Expense. The following narrative describes the Company’s revenue streams accounted for under the guidance of ASC Topic 606: Service Fees: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees include services fees for ATM usage, stop payment charges, statement production, ACH and wire transfers, which are recognized into income at the occurrence of an executed transaction and the point in time the Company fulfills the customer’s request. Account maintenance fees, which are primarily based on monthly maintenance activities, are earned over the course of the month, and satisfy the Company’s performance obligation. Overdraft fees are recognized as the overdrafts on customer’s accounts are incurred. The services fees are automatically withdrawn from the customer’s account balance per their account agreement with the Company. In addition, the Company earns interchange fees from debit/credit cardholder transactions conducted through the applicable payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The Company currently does not offer a cardholder rewards program. Insurance Commissions: EU derives commission and fee income from direct and agency bill insurance policies. Direct bill policies are invoiced directly from the insurance company provider to the customer. Once the customer remits payment for the policy, the insurance company provider then remits the commission or fee income to EU on a monthly basis. Agency bill policies are invoiced from EU, the insurance underwriting agency, to the customer. EU records the insurance company policy payable and the commission or fee income earned on the policy. As all insurance policies are contracts with customers, each policy has different terms and conditions. EU utilizes a report from their core insurance data processing program, The Agency Manager (“TAM”), that captures all in-force policies that are active in the system and annualizes the commission over the life of each individual contract. The report then provides an overall commission and fee income total for the monthly reporting financial statement period. This income is then compared to the amount of direct and agency bill income recorded in TAM for the reporting month and an adjustment to income is made according to the report. This is the income recognized for the portion of the insurance contract that has been earned by EU and subsequently the Company. Other Commissions: The Company earns other commissions, such as wealth management referral fees, check sales and safe deposit box rentals to customers. The wealth management referral fees are earned as a referral when a bank customer initiates a customer relationship with an associated wealth management firm. These fees fulfill the contract/agreement between the Company and the wealth management firm. Check sales are recognized as customers contact the Company for check supplies or the customer initiates the check order through the Company website to our third-party check company. These commissions are recognized as the third-party check company satisfies the contract of providing check stock to our customers. Safe deposit box rental income is recognized on a monthly basis, per each contract agreement with our customers. The safe deposit box income is automatically withdrawn from the customer’s deposit account on a monthly basis as this revenue is earned by the contract. Gains (Losses) on Sales of Other Real Estate Owned ("OREO"): The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. It is not common policy that the Company will finance an OREO property with the buyer. It is the Company’s practice to sell loan collateral recognized as an OREO property to free the Company of any additional loss exposure.
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Operating Segments | Operating Segments An operating segment is defined as a component of an enterprise that engages in business activities which generate revenue and incur expense, and the operating results of which are reviewed by management. At December 31, 2022, the Company’s business activities are comprised of two operating segments, which are community banking and insurance brokerage services. The Company has evaluated the provisions of ASC Topic 280, Segment Reporting, and determined that segment reporting information related to EU (Insurance Brokerage Services segment) is required to be presented because the segment has adopted a board of directors that conducts board meetings independent from the Company. In addition, the segment comprises a significant amount to total noninterest income, even though the segment is less than 10% of the combined assets of the Company. See Note 19 – Segment Reporting and Related Information for more information.
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Cash and Due From Banks | Cash and Due From Banks The Company has defined cash and due from banks as cash on hand and those amounts due from depository institutions, interest-bearing deposits with other banks with original maturities of less than 90 days, and federal funds sold. The Company maintains cash deposits in other depository institutions that occasionally exceed the amount of deposit insurance available. Management periodically assesses the financial condition of these institutions and believes that the risk of any possible credit loss is minimal. Generally, the Company is required to maintain average reserve balances in vault cash with the Federal Reserve Bank based upon outstanding balances of deposit transaction accounts. However, as announced on March 15, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent, effective March 26, 2020, in light of the shift to an ample reserves regime. This action eliminates the need to maintain balances in accounts at the Federal Reserve Bank to satisfy reserve requirements, thereby freeing up liquidity in the banking system to support lending. Therefore, at December 31, 2022, and 2021, there were no reserve requirements with the Federal Reserve Bank.
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Securities | Securities Securities are classified at the time of purchase, based on management’s intentions and ability, as securities held to maturity or securities available-for-sale. Debt securities acquired with the intent and the ability to hold to maturity are stated at cost adjusted for amortization of premium and accretion of discount, which are computed using a level yield method and recognized as adjustments to interest income. Unrealized holding gains and losses for available-for-sale debt securities are reported as a separate component of stockholders’ equity, net of tax, until realized. Equity securities are measured at fair value with the change in fair value recognized in Net Gain on Securities within the noninterest income category in the Consolidated Statements of Income. Realized securities gains and losses, if any, are computed using the specific identification method. Interest and dividends on securities are recognized as income when earned. Declines in the fair value of individual securities below amortized cost that are other-than-temporary result in write-downs of the individual securities to their fair value. In estimating other-than-temporary impairment of securities, securities are evaluated on at least a quarterly basis to determine whether a decline in their value is other-than-temporary. In estimating other-than temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether or not the Company intends to sell or expect that it is more likely than not that it will be required to sell the security before an anticipated recovery in fair value. Once a decline in value for a debt security is determined to be other than temporary, the other-than-temporary impairment is separated in (a) the amount of total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to credit loss is recognized in earnings. The amount of other-than-temporary impairment related to other factors is recognized in other comprehensive loss. Common stock of the Federal Home Loan Bank (“FHLB”) and of Atlantic Community Bankers’ Bank (“ACBB”) represent ownership in organizations that are wholly owned by other financial institutions. These restricted equity securities are accounted for based on industry guidance in ASC Sub-Topic 325-20, which requires the investment to be carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. Included in accrued interest and other assets are FHLB stock of $2.7 million and $3.3 million at December 31, 2022 and 2021, respectively, and ACBB stock of $85,000 at December 31, 2022 and 2021. The Company periodically evaluates its FHLB restricted stock for possible impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. The Company believes its holdings in the stock are ultimately recoverable at par value at December 31, 2022, and, therefore, determined that FHLB stock was not impaired. In addition, the Company has ample liquidity and does not require redemption of its FHLB stock in the foreseeable future.
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Loans Receivable and Allowance for Loan Losses | Loans Receivable and Allowance for Loan Losses Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan fees and the allowance for loan losses. The Company’s loan portfolio is segmented to enable management to monitor risk and performance. The real estate loans are further segregated into three classes. Residential mortgages include those secured by residential properties and include home equity loans, while commercial mortgages consist of loans to commercial borrowers secured by commercial real estate. Construction loans typically consist of loans to build commercial buildings and acquire and develop residential real estate. The commercial and industrial segment consists of loans to finance the activities of commercial customers as well as Payroll Protection Program ("PPP") loans. The consumer segment consists primarily of indirect auto loans as well as personal installment loans and personal or overdraft lines of credit. Other loan primarily consist of municipal loans to local governments. Residential mortgage loans are typically longer-term loans and, therefore, generally present greater interest rate risk than the consumer and commercial loans. Under certain economic conditions, housing values may decline, which may increase the risk that the collateral values are not sufficient. Commercial real estate loans generally present a higher level of risk than loans secured by residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income-producing properties, and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired. Construction loans are originated to individuals to finance the construction of residential dwellings and are also originated for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. Construction loans generally provide for the payment of interest only during the construction phase, which is usually 12 to 18 months. At the end of the construction phase, the loan generally converts to a permanent residential or commercial mortgage loan. Construction loan risks include overfunding in comparison to the plans, untimely completion of work, and leasing and stabilization after project completion. Commercial and industrial loans are generally secured by business assets, inventories, accounts receivable, etc., which present collateral risk. Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans; however, they have additional credit risk due to the type of collateral securing the loan. Accrual of interest on loans is generally discontinued when it is determined that a reasonable doubt exists as to the collectability of principal and interest or when a loan becomes contractually past due by 90 days or more with respect to principal or interest. When a loan is placed on non-accrual status, any accrued but uncollected interest is reversed from current income. Payments received on nonaccrual loans are applied against principal. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and current and future payments are reasonably assured. The Company uses an eight-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are not considered criticized and are aggregated as “pass” rated. The criticized rating categories used by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted. In the normal course of business, the Company modifies loan terms for various reasons. These reasons may include a retention strategy to compete in the current interest rate environment, and to extend a loan term and re-amortize to better match the loan’s payment stream with the borrower’s cash flows. A modified loan is considered a troubled debt restructuring (“TDR”) when the Company has determined that the borrower is experiencing financial difficulties and the Company grants a concession to the borrower, except for an insignificant delay in payment. TDRs typically are the result of loss mitigation activities whereby concessions are granted to minimize loss and avoid foreclosure or repossession of collateral. The Company evaluates the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. To make this determination a credit review is performed to assess the ability of the borrower to meet their obligations. When the Company restructures a loan for a troubled borrower, the loan terms (i.e., interest rate, payment, amortization period and/or maturity date) are modified in such a way to enable the borrower to cover the modified debt service payments based on current financials and cash flow adequacy. If the hardship is thought to be temporary, then modified terms are offered only for that time period. Where possible, the Company obtains additional collateral and/or secondary payment sources at the time of the restructure. To date, the Company has not forgiven any principal as a restructuring concession. The Company will not offer modified terms if it believes that modifying the loan terms will only delay an inevitable permanent default. All loans designated as TDRs are considered impaired loans and may be in either accruing or non-accruing status. The Company’s policy for recognizing interest income on TDRs does not differ from its overall policy for interest recognition. TDRs are considered to be in payment default if, subsequent to modification, the loans are transferred to nonaccrual status. A loan may be removed from nonaccrual TDR status if it has performed according to its modified terms for at least six consecutive months. The performance and credit quality of the loan portfolio are also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Loan origination and commitment fees as well as certain direct loan origination costs are deferred and the net amount either accreted or amortized as an adjustment to the related loan’s yield over the contractual lives of the related loans. The allowance for loan losses (“allowance”) is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance based on potential losses in the current loan portfolio, which includes an assessment of economic conditions, changes in the nature and volume of the loan portfolio, loan loss experience, volume and severity of past due, classified and nonaccrual loans as well as other loan modifications, quality of the Company’s loan review system, the degree of oversight by the Company’s board of directors, existence and effect of any concentrations of credit and changes in the level of such concentrations, effect of external factors, such as competition and legal and regulatory requirements, and other relevant factors. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making evaluations. Additions are made to the allowance through periodic provisions charged to income and recovery of principal and interest on loans previously charged-off. Losses of principal are charged directly to the allowance when a loss occurs or when a determination is made that the specific loss is probable. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revisions as more information becomes available. The allowance consists of specific and general components. The specific component relates to loans that are classified as impaired. A loan is considered impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due for principal and interest according to the original contractual terms of the loan agreement. Generally, management considers all substandard, doubtful, and loss-rated loans, nonaccrual loans, and TDRs for impairment. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The maximum period without payment that typically can occur before a loan is considered for impairment is 90 days. Impairment is measured based on the present value of expected future cash flows discounted at a loan’s effective interest rate, or as a practical expedient, the observable market price, or, if the loan is collateral dependent, the fair value of the underlying collateral. When the measurement of an impaired loan is less than the recorded investment in the loan, the impairment is recorded in a specific valuation allowance. This specific valuation allowance is periodically adjusted for significant changes in the amount or timing of expected future cash flows, observable market price or fair value of the collateral. The specific valuation allowance, or allowance for impaired loans, is part of the total allowance for loan losses. Cash payments received on impaired loans that are considered nonaccrual are recorded as a direct reduction of the recorded investment in the loan. When the recorded investment has been fully collected, receipts are recorded as recoveries to the allowance for loan losses until the previously charged-off principal is fully recovered. Subsequent amounts collected are recognized as interest income. If no charge-off exists, then once the recorded investment has been fully collected, any future amounts collected would be recognized as interest income. Impaired loans are not returned to accrual status until all amounts due, both principal and interest, are current and a sustained payment history has been demonstrated. The general allowance component covers pools of loans by loan class. Management determines historical loss experience for each segment of loans using the five-year rolling average of the net charge-off data within each segment. Qualitative and environmental factors are also considered that are likely to cause estimated credit losses associated with the Bank’s existing portfolio to differ from historical loss experience, and include levels and trends in delinquency and impaired loans; levels and trends in net charge-offs, trends in volume and terms of loans; change in underwriting, policies, procedures, practices and key personnel; national and local economic trends; industry conditions, and effects of changes in high-risk credit circumstances. The qualitative and environmental factors are reviewed on a quarterly basis to ensure they are reflective of current conditions in the portfolio and economy. An unallocated component, which is a part of the general allowance component, is maintained to cover uncertainties that could affect the Company’s estimate of probable losses. Loans that were acquired in previous mergers, were recorded at fair value with no carryover of the related allowance for credit losses. The fair value of the acquired loans was estimated by management with the assistance of a third-party valuation specialist. For performing loans acquired in a merger, the excess of expected cash flows over the estimated fair value, at acquisition, is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require an evaluation to determine the need for an allowance. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount, which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our allowance. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment. The Company grants commercial, residential, and other consumer loans to customers at its branch locations throughout southwestern Pennsylvania in Greene, Washington, Allegheny, Fayette and Westmoreland Counties and in the panhandle of West Virginia in Marshall and Ohio Counties. Although the Company had a diversified loan portfolio at December 31, 2022 and 2021, a substantial portion of its debtors’ ability to honor their contracts is determined by the economic environment of these counties within the tri-state region footprint.
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Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is principally computed on the straight-line method over the estimated useful lives of the related assets, which range from to seven years for furniture, fixtures and equipment, and 27.5 to 40 years for building premises. Leasehold improvements are amortized over the shorter of their estimated useful lives or their respective lease terms, which range from to fifteen years. Expenditures for maintenance and repairs are charged to expense when incurred while costs of major additions and improvements are capitalized.
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Bank Owned Life Insurance | Bank-Owned Life Insurance The Company is the owner and beneficiary of bank-owned life insurance (“BOLI”) policies on certain employees. The earnings from the BOLI policies are recognized as a component of noninterest income. The BOLI policies are an asset that can be liquidated, if necessary, with associated tax costs. However, the Company intends to hold these policies and, accordingly, the Company has not provided for deferred income taxes on the earnings from the increase in cash surrender value.
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Real Estate Owned | Real Estate OwnedReal estate owned acquired in settlement of foreclosed loans is carried as a component of Other Assets at the lower of cost or fair value, less estimated cost to sell. Prior to foreclosure, the estimated collectible value of the collateral is evaluated to determine if a partial charge-off of the loan balance is necessary. After transfer to real estate owned, any subsequent write-downs are charged against noninterest expense. Direct costs incurred in the foreclosure process and subsequent holding costs incurred on such properties are recorded as expenses of current operations. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance in ASC Topic 740, Income Taxes. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination, the term more likely than not means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date, and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties on income taxes as a component of income tax expense.
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually on October 31 or more frequently if triggering events occur or impairment indicators exist. The Company operates two reporting units – Community Banking segment and Insurance Brokerage Services segment. The Company has assigned 100% of the goodwill to the Community Banking reporting unit. In assessing the impairment, the Company has the the option to perform either a qualitative analysis to determine whether it is necessary to perform the goodwill impairment test, or the Company may elect to perform a quantitative goodwill impairment test. Under the qualitative assessment, the Company assesses the existence of events or circumstances to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, including, goodwill. If this is more likely than not, the goodwill impairment test is used to identify potential goodwill impairment and measure the amount of a goodwill impairment loss to be recognized, if any. The estimated fair value of the community banking reporting unit is compared to its carrying value, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired, and no impairment loss is recognized. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized based on the excess of the a reporting unit's carrying value over its fair value. The Company did not record any goodwill impairment for the years ended December 31, 2022 and 2021. Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles acquired in mergers, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing at last annually. The amortization expense represents the estimated decline in value of the underlying asset. Core deposit intangibles are primarily amortized over 6.5 to 9.3 years on the straight-line method. Customer renewal lists are amortized over their estimated useful lives of 9.5 years. We monitor other intangibles for impairment and evaluate carrying amounts, as necessary. Estimates and assumptions are used in determining the fair value of other intangible assets. There were no events or changes in circumstances indicating impairment of other intangible assets at December 31, 2022. The Company recorded impairment related to core deposit intangible of $1.2 million for the year ended December 31, 2021. Future events could cause us to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment. Any resulting impairment could have a material adverse impact on the Company’s financial condition and results of operations. Refer to Note 6—Goodwill and Intangible Assets for additional details.
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Mortgage Servicing Rights ("MSRs") | Mortgage Servicing Rights (“MSRs”) The Company has agreements for the express purpose of selling loans in the secondary market. The Company maintains all servicing rights for these loans. MSRs are recognized when commitments are made to fund a loan to be sold and are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to sold mortgages that are serviced and are included in Accrued Interest Receivable and Other Assets on the accompanying Consolidated Statements of Financial Condition. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of MSRs is netted against servicing fee income in Other Income within the noninterest income category in the Consolidated Statements of Income. MSRs are evaluated for impairment based on the estimated fair value of the MSRs. MSRs are stratified by certain risk characteristics, primarily loan term and note rate. If temporary impairment exists within a risk stratification tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the estimated fair value. If it is later determined that all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced.
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Treasury Stock | Treasury Stock The purchase of the Company’s common stock is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on the average cost basis, with any excess proceeds being credited to capital surplus.
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Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income consists of net income and other comprehensive loss. Other comprehensive loss is comprised of unrealized holding losses and reclassification adjustment for gain on sale of available-for-sale debt securities, net of tax.
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Earnings Per Share | Earnings Per Share The Company provides dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated utilizing the reported net income as the numerator and weighted average shares outstanding as the denominator. The computation of diluted earnings per share differs in that the denominator is adjusted for the dilutive effects of any options and convertible securities. Treasury shares are not deemed outstanding for earnings per share calculations.
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Stock-based Compensation | Stock-Based Compensation In 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The purpose of the 2021 Plan is to provide officers, employees and directors of the Company and the Bank with additional incentives to promote the growth and performance of the Company and to further align their interests with those of the Company’s stockholders through the ownership of additional common stock of the Company. In addition, the 2021 Plan provides the Company with flexibility to continue to attract and retain highly qualified officers and directors by offering a competitive compensation program that is linked to the performance of the Company's common stock. The effective date of the 2021 Plan was May 19, 2021, which was the date the 2021 Plan satisfied the applicable stockholder approval requirement. The 2021 Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the 2021 Plan on or after the day immediately prior to the ten-year anniversary of the effective date of the 2021 Plan. Awards may be granted under the 2021 Plan as incentive and non-statutory stock options, restricted stock awards, restricted stock units or any combination thereof, The maximum number of shares of Company common stock that may be delivered to participants under the 2021 Plan is equal to 500,000 shares of Company common stock (the “Share Limit”). Shares of Company common stock subject to the Share Limit may be issued pursuant to grants of stock options, restricted stock awards or restricted stock units, provided, however that the Share Limit is reduced, on a one-for-one basis, for each share of common stock subject to a stock option grant, and on a two and one-half-for-one basis for each share of common stock issued pursuant to restricted stock awards or restricted stock unit awards. If any award granted under the 2021 Plan expires, terminates, is canceled or is forfeited without being settled or exercised or is settled without the issuance of shares of common stock, shares of Company common stock subject to such award will be made available for future grant under the 2021 Plan. If any shares are surrendered or tendered to pay the exercise price of a stock option, such shares will not again be available for grant under the 2021 Plan. In addition, shares of common stock withheld in payment for purposes of satisfying tax withholding obligations with respect to an award do not become available for re-issuance under the 2021 Plan. Employees and directors of the Company or its subsidiaries are eligible to receive awards under the 2021 Equity Incentive Plan, except that non-employees may not be granted incentive stock options. In 2015, the Company’s stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”), which has similar characteristics to the 2021 Plan. The effective date of the 2015 Plan was May 20, 2015. The 2015 Plan shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2021 Plan, no more awards can be granted under the 2015 Plan. The 2015 Plan reserved an aggregate number of shares, of which two-thirds of the shares (271,431) could be issued as stock options and one-third of the shares (135,715) could be be issued as restricted stock awards or units. ASC Topic 718, Compensation – Stock Compensation, requires recognizing the compensation cost in the financial statements for stock-based payment transactions. Stock option expense is measured based on the grant date fair value of the stock options issued. The per share fair value of stock options granted is calculated using the Black-Scholes-Merton option pricing model, using assumptions for expected life, expected dividend yield, risk-free interest rate and an expected volatility. The Company uses the simplified method to determine the expected term because it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The stock option exercise price is equal to the market value on the date of grant. Restricted stock award expense is measured based on the market price of the Company’s common stock at the date of the grant. Unrecognized compensation expense is recognized ratably over the remaining service period, generally defined as the vesting period, for all nonvested restricted stock awards and stock options. Restricted stock awards and stock options are typically granted with a year vesting period at a vesting rate of 20% per year. The contractual life of stock options is typically 10 years from the date of grant.
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Advertising Costs | Advertising Costs Advertising costs are expensed as incurred.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company routinely performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable and are in excess of their fair value, less estimated costs to sell. If estimated recoverable amounts are lower than carrying values, assets are considered impaired and reduced to fair value with the recognized impairment charges recorded in noninterest expense in the Consolidated Statements of Income. Long-lived assets are tested for impairment individually or as part of an asset group. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The Company follows ASC 360, Property, Plant and Equipment, which requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used: Step 1 – Consider whether Indicators of Impairment are Present. The following are examples of such events or changes in circumstances. •A significant decrease in the market price of a long-lived asset (asset group). •A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition. •A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator. •An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group). •A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group). •A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. Step 2—Test for Recoverability If indicators of impairment are present, the Company performs a recoverability test comparing the sum of the estimated undiscounted cash flows attributable to the long-lived asset or asset group in question to the carrying amount of the long-lived asset or asset group. Step 3—Measurement of an Impairment Loss If the undiscounted cash flows used in the recoverability test are less than the carrying amount of the long-lived asset (asset group), the Company estimates the fair value of the long-lived asset or asset group and recognizes an impairment loss when the carrying amount of the long-lived asset or asset group exceeds the estimated fair value. An impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group must not reduce the carrying amount of that asset below its fair value whenever the fair value is determinable without undue cost and effort. ASC 360 prohibits the subsequent reversal of an impairment loss for an asset held and used.
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Recent Accounting Standards | Recent Accounting Standards In August 2021, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-06, Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. The SEC rule changes update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years. The rules also eliminate certain disclosure items that are duplicative of other SEC rules and requirements of U.S. GAAP. The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K. The rules are intended to help ensure that investors have access to more meaningful, relevant information to facilitate their investment and voting decisions. The amendments are effective prospectively for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The adoption of this ASU did not have a material impact on the Company's consolidated statements of financial condition or results of operation. In March 2020, the Financial Accounting Standard Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. The elective guidance in the ASU applies to modifications of contract terms that will directly replace, or have the potential to replace, an affected rate with another interest rate index, as well as certain contemporaneous modifications of other contract terms related to the replacement of an affected rate. The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. The optional expedient allows companies to account for the modification as if it was not substantial (i.e., do not treat as an extinguishment of debt). The ASU is intended to help stakeholders during the global market-wide reference rate transition period. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company has formed a cross-functional team to lead the transition from LIBOR to a planned adoption of an alternate index. The Company is in the process of implementing fallback language for loans or working with lead participating banks and expects to adopt the LIBOR transition relief allowed by the optional expedient under this standard. As of December 31, 2022, the Company has identified approximately $129.0 million in outstanding loan balances and a $5.0 million corporate debt security tied to the LIBOR reference rate. The Company has not yet made any contract modifications. The Company is currently evaluating the potential impact of this guidance on its consolidated statements of financial statements and results of operations. In December 2019, FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes. ASU 2019-12 provides amendments intended to reduce the cost and complexity in accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes the following exceptions from ASC 740, Income Taxes: (i) exceptions to the incremental approach for intraperiod tax allocation; (ii) exceptions to accounting for basis differences when a foreign subsidiary becomes an equity method investment or a foreign equity method investment become a subsidiary; and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 provides the following amendments that simplify and improve guidance with Topic 740: (i) franchise taxes that are based partially on income; (ii) transactions that result in a step up in the tax basis of goodwill; (iii) separate financial statements of legal entities that are not subject to tax; (iv) enacted changes in tax laws in interim periods; and (v) employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this ASU did not have a material impact on the Company's consolidated statements of financial condition or results of operation. In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP; and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this ASU requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU 2016-13 amendments affect loans, HTM debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of January 1, 2023. In preparation for the implementation of this ASU, the Company has formed a cross-functional team, contracted with a third-party software provider, and is consulting with a third-party professional advisory service to assist in the model development. The Company has adopted ASU No. 2016-13 (Topic 326) effective January 1, 2023 using the modified retrospective approach for all financial assets measured at amortized costs and unfunded commitments.. The Company has largely completed its assessment of related processes, internal controls, and data sources and has developed, documented, and validated discounted cash flow (DCF) model utilizing a third-party software provider. Our allowance for credit losses (“ACL”) estimate uses DCF model and estimation techniques based on historical loss experience, current borrower characteristics, current conditions, forecasts of future economic conditions and other relevant factors. The Company will use models and other loss estimation techniques that are responsive to changes in forecasted economic conditions to interpret borrower and economic factors in order to estimate the ACL. The Company also applies qualitative factors to account for information that may not be reflected in quantitatively derived results. Qualitative factors include: changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; changes in management; changes in the quality of the Bank’s loan review process; the existence of any concentrations of credit and other external factors to ensure the ACL reflects our expected credit losses. The Company expects its ACL estimate to be sensitive to various factors such as current economic conditions. The ACL includes off-balance sheet credit exposures (OBS) such as unfunded loan commitments. While the Company continues to analyze and evaluate the impact of the adoption of this guidance on the Company’s consolidated financial statements, based upon the Company’s fourth quarter parallel run, assessment of the composition, characteristics and credit quality of the Company's loan portfolio, as well as the economic conditions in effect as of the adoption date - January 1, 2023, management estimates the adoption of ASC 326 will result in will result in a decrease of approximately $3.4 million to the Company’s ACL related to loans receivable and increase of approximately $700,000 in ACL for unfunded commitments. Net impact of the adopting ASC 326, will result in approximately $2.1 million increase to retained earnings, net of deferred taxes. The adjustment recorded upon adoption to record the ACL may fall outside of management’s estimate based on material changes in the economic forecast and conditions and composition of the loan portfolio used in calculating the allowance for credit losses upon adoption. In December 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Comptroller of the Currency (“OCC”) approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ adoption of the CECL methodology. The final rule provides banking organizations the option to phase-in, over a three-year period, the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. The Company does not expect to use the phase in option upon adoption of this is ASU.
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Earnings Per Share (Tables) |
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Schedule of Weighted Average Common Shares Denominator, Basic and Diluted | The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation.
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents as of the periods indicated (a) options to purchase shares of common stock that were outstanding but not included in the computation of earnings per share because the options' exercise price was greater than the average market price of the common shares for the period, and (b) shares of restricted stock awards that were not included in the computation of diluted earnings per share because the hypothetical repurchase of shares under the treasury stock method exceeded the weighted average nonvested restricted awards, therefore the effects would be anti-dilutive.
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Fair Value of Investment Securities Available-for-sale | The amortized cost and fair value of securities available-for-sale as of the dates indicated are as follows:
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Schedule of Gross Unrealized Losses and Fair Value on Investments | The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at the dates indicated:
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Schedule of Maturities of Investment Securities Available-for-sale | The scheduled maturities of securities available-for-sale are summarized as follows. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay debt obligations with or without prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are classified in the table below based on their contractual maturity date; however, regular principal payments and prepayments of principal are received on a monthly basis.
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Schedule of Realized Gain (Loss) | The following table presents the gross realized gain and loss on sales of debt securities, as well as gain and loss on equity securities from both sales and market adjustments for the periods indicated. All gains and losses presented in the table below are reported in Net Gain on Securities on the Consolidated Statements of Income.
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Loans and Related Allowance for Loan Losses (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Major Classifications of Loans | The following table summarizes the major classifications of loans as of the dates indicated:
The following table presents PPP loan activity segregated by loans originated in 2020 and 2021.
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Summary of Loans by Internal Risk Rating System | The following table presents loans summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the internal risk rating system as of dates indicated. At December 31, 2022 and 2021, there were no loans in the criticized category of loss.
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Summary of Loan Portfolio | The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of the dates indicated:
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Summary of Loans Impaired | A summary of the loans considered impaired and evaluated for impairment as of the dates indicated are as follows:
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Summary of Related to Loans Modified as TDRs | The following table presents information at the time of modification related to loans modified as TDRs during the period indicated.
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Summary of Allowance for Loan Losses by Segment | The activity in the allowance for loan loss summarized by primary segments and segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for potential impairment as of December 31, 2022 and 2021 is summarized below:
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Summary of Major Loan Classifications | The following tables present the major classifications of loans summarized by individually evaluated for impairment and collectively evaluated for potential impairment as of December 31, 2022 and 2021:
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Schedule of Changes in Accretable Discount on Loans Acquired at Fair Value | The following table presents changes in the accretable discount on the loans acquired at fair value for the dates indicated.
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Premises and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Major Classifications of Premises and Equipment | Major classifications of premises and equipment are summarized as follows:
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Core Deposit Intangible Assets | The following table presents a summary of intangible assets subject to amortization at the dates indicated.
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense of intangible assets in subsequent fiscal years is as follows.
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Deposits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Time Deposits | The following table shows the maturities of time deposits for the next five years and beyond.
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Short-term Borrowings (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Borrowings | The following table sets forth the components of short-term borrowings for the years indicated.
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Other Borrowed Funds (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Remaining Maturities of Long-term Advances from the FHLB | Fixed rate, long-term advances from the FHLB with remaining maturities are as follows at the dates indicated:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Income Tax Provision | Reconciliation of income tax provision for the periods indicated are as follows:
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Summary of Net Deferred Tax Assets and Liabilities | The tax effects of deductible and taxable temporary differences that gave rise to significant portions of the net deferred tax assets and liabilities are as follows:
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Reconciliation of Federal Income Tax Expense | A reconciliation of the federal income tax expense at statutory income tax rates and the actual income tax expense on income before taxes for the periods indicated is as follows:
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Employee Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Awards and Stock Option Grants | Details of the restricted stock award and stock option grants under the 2021 Equity Incentive Plan are summarized for the year ended December 31, 2022 as follows. The Company did not grant restricted stock awards or stock options for the year ended December 31, 2021.
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Summary of Stock Option Data | The following table presents stock option data for the period indicated:
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Summary of Restricted Stock Award Data | The following table presents restricted stock award data for the period indicated.
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Commitments and Contingent Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unused and Available Credit Balances | The unused and available credit balances of financial instruments whose contracts represent credit risk are as follows:
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Stockholders' Equity and Regulatory Capital (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Actual Capital Ratios | The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized at the dates indicated.
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Operating Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The following tables present the lease expense, ROU assets, weighted average term, discount rate and maturity analysis of lease liabilities for operating leases for the periods and dates indicated.
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Summary of Maturity Analysis of Lease Liabilities for Operating Leases |
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Mortgage Servicing Rights (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Servicing Assets at Fair Value | The following table presents MSR activity and net carrying values for the periods indicated.
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Fair Value Disclosure (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the financial assets measured at fair value on a recurring basis and reported on the Consolidated Statements of Financial Condition as of the dates indicated, by level within the fair value hierarchy. The majority of the Company’s securities are included in Level 2 of the fair value hierarchy. Fair values for Level 2 securities were primarily determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The standard inputs that are normally used include benchmark yields of like securities, reportable trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. There were no transfers from Level 1 to Level 2 and no transfers into or out of Level 3 during the years ended December 31, 2022 and 2021, respectively.
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Fair Value Measurement on a Nonrecurring Basis | The following table presents the financial assets measured at fair value on a nonrecurring basis on the Consolidated Statements of Financial Condition as of the dates indicated by level within the fair value hierarchy. The table also presents the significant unobservable inputs used in the fair value measurements. Impaired loans that are collateral dependent are written down to fair value through the establishment of specific reserves. Techniques used to value the collateral that secure the impaired loans include quoted market prices for identical assets classified as Level 1 inputs or observable inputs, employed by certified appraisers, for similar assets classified as Level 2 inputs. In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level 3 inputs.
(1) Fair value is generally determined through independent appraisals of the underlying collateral, which may include various Level 3 inputs, which are not identifiable. (2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of appraisal adjustments and liquidation expense are presented as a percent of the appraisal.
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Fair Value, by Balance Sheet Grouping | The estimated fair values of the Company’s financial instruments at the dates indicated are as follows:
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Other Noninterest Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Noninterest Expenses | The details for other noninterest expense for the Company’s Consolidated Statements of Income are as follows:
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Condensed Financial Statements of Parent Company (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet | Financial information pertaining only to CB Financial Services, Inc., is as follows: Statements of Financial Condition
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Condensed Income Statement |
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Condensed Cash Flow Statement |
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Segment Reporting and Related Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Financial Data of Subsidiaries | The following table represents selected financial data for the Company’s subsidiaries and consolidated results for 2022 and 2021.
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Earnings Per Share - Narrative (Details) - shares |
12 Months Ended | |
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Dec. 31, 2022 |
Dec. 31, 2021 |
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Earnings Per Share [Abstract] | ||
Convertible securities (in shares) | 0 | 0 |
Earnings Per Share - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
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Dec. 31, 2022 |
Dec. 31, 2021 |
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Earnings Per Share [Abstract] | ||
Net Income | $ 11,247 | $ 11,570 |
Weighted-Average Common Shares Outstanding (in shares) | 5,136,670 | 5,382,441 |
Dilutive Effect of Common Stock Equivalents (Stock Options and Restricted Stock) (in shares) | 12,642 | 10,288 |
Diluted (in shares) | 5,149,312 | 5,392,729 |
Earnings Per Share: | ||
Basic (in dollars per share) | $ 2.19 | $ 2.15 |
Diluted (in dollars per share) | $ 2.18 | $ 2.15 |
Earnings Per Share - Schedule of Computation of Diluted Earnings Per Share (Details) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Stock Options | ||
Earnings Per Share [Line Items] | ||
Shares of common stock outstanding not included in diluted earnings per share (in shares) | 163,348 | 69,741 |
Restricted Stock | ||
Earnings Per Share [Line Items] | ||
Shares of common stock outstanding not included in diluted earnings per share (in shares) | 38,140 | 17,100 |
Securities - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Investment Securities [Line Items] | ||
Debt securities, available-for-sale, realized gain | $ 0 | $ 225 |
Public Deposits, Short Term Borrowings And Other | ||
Investment Securities [Line Items] | ||
Investment securities available for sale | $ 175,600 | $ 121,000 |
Securities - Maturities of Investment Securities Available-for-sale and Held-to-maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Amortized Cost | ||
Due in One Year or Less | $ 245 | |
Due after One Year through Five Years | 12,844 | |
Due after Five Years through Ten Years | 71,716 | |
Due after Ten Years | 136,003 | |
Amortized Cost | 220,808 | $ 223,290 |
Fair Value | ||
Due in One Year or Less | 244 | |
Due after One Year through Five Years | 11,559 | |
Due after Five Years through Ten Years | 61,383 | |
Due after Ten Years | 114,174 | |
Fair Value | $ 187,360 | $ 222,108 |
Securities - Gains (Losses) of Sales of Available-for-sale Investment Securities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Debt Securities | ||
Gross Realized Gain | $ 0 | $ 225 |
Gross Realized Loss | 0 | 0 |
Net Gain on Debt Securities | 0 | 225 |
Equity Securities | ||
Net Unrealized (Loss) Gain Recognized on Securities Held | (168) | 295 |
Net Realized Gain Recognized on Securities Sold | 0 | 6 |
Net (Loss) Gain on Equity Securities | (168) | 301 |
Net (Loss) Gain on Securities | $ (168) | $ 526 |
Loans and Related Allowance for Loan Losses - Loans Classified as TDRs (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
loan
| |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Number of Contracts | loan | 1 |
Pre- Modification Outstanding Recorded Investment | $ 1,958 |
Post- Modification Outstanding Recorded Investment | 1,958 |
Related Allowance | $ 0 |
Real Estate | Commercial | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Number of Contracts | loan | 1 |
Pre- Modification Outstanding Recorded Investment | $ 1,958 |
Post- Modification Outstanding Recorded Investment | 1,958 |
Related Allowance | $ 0 |
Loans and Related Allowance for Loan Losses - Accretable Discount on Loans Acquired at Fair Value (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Beginning balance | $ 726 | $ 1,194 |
Accretable Yield | (239) | (468) |
Ending balance | $ 487 | $ 726 |
Loans and Related Allowance for Loan Losses - Related Party Loans (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 15,639 | $ 10,893 |
Additions | 4,650 | 6,644 |
Payments | (2,871) | (1,898) |
Ending balance | $ 17,418 | $ 15,639 |
Premises and Equipment - Classifications of Premises and Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Total Premises and Equipment | $ 34,313 | $ 34,285 |
Less: Accumulated Depreciation and Amortization | (16,469) | (15,886) |
Premises and Equipment, Net | 17,844 | 18,399 |
Land | ||
Total Premises and Equipment | 2,344 | 2,380 |
Building | ||
Total Premises and Equipment | 19,374 | 19,475 |
Leasehold Improvements | ||
Total Premises and Equipment | 749 | 730 |
Furniture, Fixtures, and Equipment | ||
Total Premises and Equipment | 10,201 | 10,283 |
Fixed Assets in Process | ||
Total Premises and Equipment | $ 1,645 | $ 1,417 |
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 10, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 9,732 | $ 9,732 | |
Other Intangible Asset Impairment | $ 1,200 | 0 | 1,178 |
Amortization of other intangible assets | $ 1,782 | $ 1,926 |
Goodwill and Intangible Assets - Summary of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 10, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 13,660 | $ 15,903 | |
Accumulated Amortization | (10,147) | (9,430) | |
Impairment | $ (1,200) | 0 | (1,178) |
Net Carrying Value | 3,513 | 5,295 | |
Core Deposits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 11,860 | 14,103 | |
Accumulated Amortization | (9,310) | (8,783) | |
Impairment | (1,178) | ||
Net Carrying Value | 2,550 | 4,142 | |
Customer Lists | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,800 | 1,800 | |
Accumulated Amortization | (837) | (647) | |
Impairment | 0 | ||
Net Carrying Value | $ 963 | $ 1,153 |
Goodwill and Intangible Assets - Future Amortization (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,782 | |
2024 | 1,147 | |
2025 | 189 | |
2026 | 189 | |
2027 | 189 | |
2028 and Thereafter | 17 | |
Net Carrying Value | $ 3,513 | $ 5,295 |
Deposits - Maturities of Time Deposits (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deposits [Abstract] | ||
One Year or Less | $ 69,355 | |
Over One Through Two Years | 15,599 | |
Over Two Through Three Years | 8,657 | |
Over Three Through Four Years | 8,171 | |
Over Four Through Five Years | 4,069 | |
Over Five Years | 3,275 | |
Total | $ 109,126 | $ 136,713 |
Deposits - Narrative (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deposits [Line Items] | ||
Time deposit balance that meet or exceed FDIC insurance limit | $ 30,800 | $ 40,600 |
Deposits reclassified as loans | 613 | 192 |
Director and Executive Officer | ||
Deposits [Line Items] | ||
Related party deposits | $ 5,700 | $ 7,300 |
Short-term Borrowings - Federal Funds Purchased and Short-term Borrowings (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Amount | ||
Balance at Period End | $ 8,060 | $ 39,266 |
Securities Sold under Agreements to Repurchase | ||
Amount | ||
Balance at Period End | 8,060 | 39,266 |
Average Balance Outstanding During the Period | 27,381 | 43,988 |
Maximum Amount Outstanding at any Month End | 39,219 | 52,777 |
Carrying Value | 10,947 | 59,867 |
Market Value | $ 9,396 | $ 59,339 |
Weighted Average Rate | ||
Balance at Period End | 0.19% | 0.17% |
Average Balance Outstanding During the Period | 0.23% | 0.22% |
Other Borrowed Funds - Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Amount | ||
Due in One Year | $ 0 | $ 3,000 |
Due After One Year to Two Years | 0 | 0 |
Due After Two Years to Three Years | 0 | 0 |
Total | $ 0 | $ 3,000 |
Weighted Average Rate | ||
Due in One Year | 0.00% | 2.41% |
Due After One Year to Two Years | 0.00% | 0.00% |
Due After Two Years to Three Years | 0.00% | 0.00% |
Weighted Average | ||
Weighted Average Rate | ||
Total | 0.00% | 2.41% |
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Current Payable | $ 3,368 | $ 3,373 |
Deferred Benefit | (535) | (248) |
Income Tax Expense | $ 2,833 | $ 3,125 |
Income Taxes - Federal Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Amount | ||
Provision at Statutory Rate | $ 2,957 | $ 3,086 |
State Taxes (Net of Federal Benefit) | 222 | 198 |
Tax-Free Income | (192) | (216) |
BOLI Income | (122) | (124) |
Stock Options - ISO | 25 | 12 |
Goodwill Impairment | 0 | 1 |
Other | (57) | 168 |
Income Tax Expense | $ 2,833 | $ 3,125 |
Percent of Pre-tax Income | ||
Provision at Statutory Rate | 21.00% | 21.00% |
State Taxes (Net of Federal Benefit) | 1.60% | 1.40% |
Tax-Free Income | (1.40%) | (1.50%) |
BOLI Income | (0.90%) | (0.90%) |
Stock Options - ISO | 0.20% | 0.10% |
Goodwill Impairment | 0.00% | 0.00% |
Other | (0.40%) | 1.00% |
Actual Tax Expense and Effective Rate, Percentage | 20.10% | 21.10% |
Income Taxes - Narrative (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Accrued interest and penalties | $ 0 | $ 0 |
Employee Benefits - Restricted Stock Award Activity (Details) - Restricted Stock - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Number of Shares | ||
Beginning balance (in shares) | 56,140 | 76,190 |
Granted (in shares) | 27,765 | 0 |
Vested (in shares) | (16,065) | (19,600) |
Forfeited (in shares) | (3,715) | (450) |
Ending balance (in shares) | 64,125 | 56,140 |
Weighted Average Grant Date Fair Value Price | ||
Beginning balance (in dollars per share) | $ 23.90 | $ 24.08 |
Granted (in dollars per share) | 25.29 | 0 |
Vested (in dollars per share) | 24.60 | 24.67 |
Forfeited ( in dollars per share) | 24.01 | 20.38 |
Ending balance (in dollars per share) | $ 24.32 | $ 23.90 |
Weighted Average Remaining Service Period in Years | ||
Beginning balance | 5 years 3 months 18 days | 6 years 3 months 18 days |
Granted | 4 years 3 months 18 days | 0 years |
Vested | 4 years 2 months 12 days | 5 years 2 months 12 days |
Ending balance | 4 years 3 months 18 days | 5 years 3 months 18 days |
Commitments and Contingent Liabilities - Unused and Available Credit Balances of Financial Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Commitments [Line Items] | ||
Other commitments | $ 156,666 | $ 175,847 |
Standby Letters of Credit | ||
Other Commitments [Line Items] | ||
Other commitments | 110 | 110 |
Performance Letters of Credit | ||
Other Commitments [Line Items] | ||
Other commitments | 1,064 | 2,873 |
Construction Mortgages | ||
Other Commitments [Line Items] | ||
Other commitments | 45,722 | 55,597 |
Personal Lines of Credit | ||
Other Commitments [Line Items] | ||
Other commitments | 6,824 | 7,055 |
Overdraft Protection Lines | ||
Other Commitments [Line Items] | ||
Other commitments | 5,241 | 5,709 |
Home Equity Lines of Credit | ||
Other Commitments [Line Items] | ||
Other commitments | 22,784 | 21,187 |
Commercial Lines of Credit | ||
Other Commitments [Line Items] | ||
Other commitments | $ 74,921 | $ 83,316 |
Commitments and Contingent Liabilities - Narrative (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Standby Letters of Credit | ||
Other Commitments [Line Items] | ||
Liability associated with standby letters of credit | $ 0 | $ 0 |
Stockholders' Equity and Regulatory Capital - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands |
8 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jan. 26, 2023 |
Dec. 31, 2022 |
Feb. 15, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Apr. 30, 2022 |
Jun. 30, 2021 |
|
Schedule of Capitalization, Equity [Line Items] | |||||||
Authorized repurchase amount | $ 10,000 | $ 7,500 | |||||
Purchase of common stock (in shares) | 62,178 | 308,996 | 195,033 | 178,252 | |||
Average price (in dollars per share) | $ 22.47 | $ 24.27 | |||||
Common stock repurchases | $ 1,400 | $ 4,802 | $ 4,143 | ||||
Remaining repurchase amount | $ 8,600 | $ 8,600 | |||||
Subsequent Event | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Dividends declare, per share (in dollars per share) | $ 0.25 |
Operating Leases - Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Leases [Abstract] | ||
Operating | $ 350 | $ 330 |
Short-term | 0 | 34 |
Variable | 28 | 31 |
Total Lease Expense | 378 | 395 |
Operating Leases: | ||
ROU Assets | $ 1,926 | $ 674 |
Weighted Average Lease Term (in years) | 8 years 1 month 17 days | 7 years 3 months 29 days |
Weighted Average Discount Rate (as a percent) | 2.87% | 2.51% |
Operating Leases - Maturity of Operating Lease (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
Due in One Year | $ 358 |
Due After One Year to Two Years | 355 |
Due After Two Years to Three Years | 272 |
Due After Three Years to Four Years | 233 |
Due After Four to Five Years | 233 |
Due After Five Years | 888 |
Total | 2,339 |
Less: Present Value Discount | 251 |
Lease Liabilities | $ 2,088 |
Operating Leases - Narrative (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022
USD ($)
branch
|
Dec. 31, 2021
USD ($)
branch
|
Jun. 30, 2021
branch
|
|
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Accrued Interest Receivable and Other Assets | Accrued Interest Receivable and Other Assets | |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Interest Payable and Other Liabilities | Accrued Interest Payable and Other Liabilities | |
Number of branches consolidated | branch | 1 | 6 | 6 |
Number of branches consolidated and leased | branch | 1 | 1 | |
ROU Assets | $ 1,926 | $ 674 | |
Lease Impairment | $ 0 | 227 | |
Held for sale | |||
Lessee, Lease, Description [Line Items] | |||
ROU Assets | 0 | ||
Lease Impairment | $ 227 |
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Servicing Rights | ||
Beginning balance | $ 829 | $ 1,029 |
Additions | 0 | 100 |
Amortization | (196) | (300) |
Ending balance | 633 | 829 |
Valuation Allowance | ||
Beginning balance | (99) | (373) |
Valuation Allowance Adjustment | 99 | 274 |
Ending balance | 0 | (99) |
Net Carrying Value | ||
Beginning balance | 730 | 656 |
Additions | 0 | 100 |
Amortization | (196) | (300) |
Valuation Allowance Adjustment | 99 | 274 |
Ending balance | 633 | 730 |
Real estate loans services for others | $ 83,400 | $ 96,600 |
Fair Value Disclosure - Narrative (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Recorded investment | $ 1,615 | $ 2,279 |
Related allowance | $ 24 | $ 299 |
Other Noninterest Expense - Components of Other Noninterest Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Other Income and Expenses [Abstract] | ||
Non-employee Compensation | $ 570 | $ 611 |
Printing and Supplies | 250 | 281 |
Postage | 339 | 312 |
Telephone | 518 | 612 |
Charitable Contributions | 173 | 323 |
Dues and Subscriptions | 174 | 156 |
Loan Expenses | 538 | 390 |
Meals and Entertainment | 143 | 122 |
Travel | 173 | 107 |
Training | 61 | 52 |
Bank Assessment | 194 | 180 |
Insurance | 275 | 233 |
Miscellaneous | 436 | 520 |
TOTAL OTHER NONINTEREST EXPENSE | $ 3,844 | $ 3,899 |
Condensed Financial Statements of Parent Company - Statement of Financial Condition (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
ASSETS | |||
Cash and Due From Banks | $ 20,743 | $ 55,706 | |
Equity Securities, at Fair Value | 2,698 | 2,866 | |
TOTAL ASSETS | 1,408,938 | 1,425,479 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Other Borrowings | 14,638 | 17,601 | |
Stockholders' Equity | 110,155 | 133,124 | $ 134,530 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,408,938 | 1,425,479 | |
Parent Company | |||
ASSETS | |||
Cash and Due From Banks | 14,516 | 18,567 | |
Equity Securities, at Fair Value | 1,822 | 1,877 | |
Investment in Community Bank | 107,727 | 126,262 | |
Other Assets | 814 | 1,123 | |
TOTAL ASSETS | 124,879 | 147,829 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Other Borrowings | 14,638 | 14,601 | |
Other Liabilities | 86 | 104 | |
Stockholders' Equity | 110,155 | 133,124 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 124,879 | $ 147,829 |
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