QUARTERLY 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 |
(State or other jurisdiction of incorporation or organization) | I.R.S. Employer Identification No. | ||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☑ | |||||||||
Non-accelerated filer | ☐ | Small Reporting Company | |||||||||
Emerging Growth Company |
SHARES OUTSTANDING | ||||||||
CLASS | October 31, 2021 | |||||||
Common Stock | No par value | |||||||
Page | ||||||||
Number | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II | ||||||||
OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2021 | December 31, 2020 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Investment securities available for sale at fair value (amortized cost September 30, 2021 $ | |||||||||||
Stock of Federal Home Loan Bank | |||||||||||
Loans held for sale | |||||||||||
Loans, net of allowance for credit losses September 30, 2021 $ | |||||||||||
Property and equipment, net | |||||||||||
Tax credit real estate investment | |||||||||||
Accrued interest receivable | |||||||||||
Deferred income taxes, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Liabilities | |||||||||||
Noninterest-bearing deposits | $ | $ | |||||||||
Interest-bearing deposits | |||||||||||
Total deposits | $ | $ | |||||||||
Federal Home Loan Bank borrowings | |||||||||||
Accrued interest payable | |||||||||||
Allowance for credit losses on off-balance sheet credit exposures | |||||||||||
Other liabilities | |||||||||||
Total Liabilities | $ | $ | |||||||||
Redeemable Common Stock Held by Employee Stock Ownership Plan (ESOP) | $ | $ | |||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock, | $ | $ | |||||||||
Paid in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income | |||||||||||
Treasury stock at cost (September 30, 2021 | ( | ( | |||||||||
Total Stockholders' Equity | $ | $ | |||||||||
Less maximum cash obligation related to ESOP shares | |||||||||||
Total Stockholders' Equity Less Maximum Cash Obligation Related to ESOP Shares | $ | $ | |||||||||
Total Liabilities & Stockholders' Equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans, including fees | $ | $ | $ | $ | ||||||||||||||||
Investment securities: | ||||||||||||||||||||
Taxable | ||||||||||||||||||||
Nontaxable | ||||||||||||||||||||
Federal funds sold | ||||||||||||||||||||
Total interest income | $ | $ | $ | $ | ||||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | $ | $ | $ | $ | ||||||||||||||||
FHLB borrowings | ||||||||||||||||||||
Total interest expense | $ | $ | $ | $ | ||||||||||||||||
Net interest income | $ | $ | $ | $ | ||||||||||||||||
Provision for credit losses (2021); Provision for loan losses (2020) | ( | ( | ||||||||||||||||||
Net interest income after credit loss expense and provision for loan losses | $ | $ | $ | $ | ||||||||||||||||
Noninterest income: | ||||||||||||||||||||
Net gain on sale of loans | $ | $ | $ | $ | ||||||||||||||||
Trust fees | ||||||||||||||||||||
Service charges and fees | ||||||||||||||||||||
Other noninterest income | ||||||||||||||||||||
Gain on sale of investment securities | ||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Noninterest expenses: | ||||||||||||||||||||
Salaries and employee benefits | $ | $ | $ | $ | ||||||||||||||||
Occupancy | ||||||||||||||||||||
Furniture and equipment | ||||||||||||||||||||
Office supplies and postage | ||||||||||||||||||||
Advertising and business development | ||||||||||||||||||||
Outside services | ||||||||||||||||||||
FDIC insurance assessment | ||||||||||||||||||||
Other noninterest expense | ||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Income before income taxes | $ | $ | $ | $ | ||||||||||||||||
Income taxes | ||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||
Other comprehensive (loss) income | ||||||||||||||||||||
Securities: | ||||||||||||||||||||
Net change in unrealized (loss) income on securities available for sale | $ | ( | $ | ( | $ | ( | $ | |||||||||||||
Reclassification adjustment for net gains realized in net income | ( | |||||||||||||||||||
Income taxes | ( | |||||||||||||||||||
Other comprehensive (loss) income on securities available for sale | $ | ( | $ | ( | $ | ( | $ | |||||||||||||
Derivatives used in cash flow hedging relationships: | ||||||||||||||||||||
Net change in unrealized gain (loss) on derivatives | $ | $ | $ | $ | ( | |||||||||||||||
Income taxes | ( | |||||||||||||||||||
Other comprehensive income (loss) on cash flow hedges | $ | $ | $ | $ | ( | |||||||||||||||
Other comprehensive (loss) income, net of tax | $ | ( | $ | $ | ( | $ | ||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Three Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||||||||||||||
Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Maximum Cash Obligation Related to ESOP Shares | Total | ||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Issuance of | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of | — | — | — | — | |||||||||||||||||||||||||||||||
Unearned restricted stock compensation | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Forfeiture of | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Change related to ESOP shares | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase of | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Issuance of | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of | — | — | — | — | |||||||||||||||||||||||||||||||
Unearned restricted stock compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Forfeiture of | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Change related to ESOP shares | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase of | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||||||||||||||
Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Maximum Cash Obligation Related to ESOP Shares | Total | ||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Issuance of | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of | — | — | — | — | |||||||||||||||||||||||||||||||
Unearned restricted stock compensation | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Forfeiture of | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Change related to ESOP shares | — | — | — | — | |||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends ($ | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
Purchase of | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Cumulative change in accounting principle (Note 1) | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
Balance, January 1, 2021 (as adjusted for change in accounting principle) | ( | ( | |||||||||||||||||||||||||||||||||
Issuance of | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of | — | — | — | — | |||||||||||||||||||||||||||||||
Unearned restricted stock compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Forfeiture of | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Change related to ESOP shares | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends ($ | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||
Purchase of | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash Flows from Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Provision for credit losses (2021) and loan losses (2020) | ( | ||||||||||
Net gain on sale of investment securities available for sale | ( | ||||||||||
Forfeiture of common stock | ( | ( | |||||||||
Share-based compensation | |||||||||||
Compensation expensed through issuance of common stock | |||||||||||
Provision for deferred income taxes | ( | ||||||||||
Net gain on sale of other real estate owned and other repossessed assets | ( | ||||||||||
Increase in accrued interest receivable | ( | ( | |||||||||
Amortization of premium on investment securities, net | |||||||||||
(Increase) decrease in other assets | ( | ||||||||||
Amortization of operating lease right-of-use assets | |||||||||||
Increase (decrease) in accrued interest payable and other liabilities | ( | ||||||||||
Loans originated for sale | ( | ( | |||||||||
Proceeds on sales of loans | |||||||||||
Net gain on sales of loans | ( | ( | |||||||||
Net cash and cash equivalents provided by operating activities | $ | $ | |||||||||
Cash Flows from Investing Activities | |||||||||||
Proceeds from maturities of investment securities available for sale | $ | $ | |||||||||
Proceeds from sales of investment securities available for sale | |||||||||||
Purchases of investment securities available for sale | ( | ( | |||||||||
Purchases of stock of Federal Home Loan Bank | ( | ( | |||||||||
Loans made to customers, net of collections | ( | ||||||||||
Proceeds on sale of other real estate owned and other repossessed assets | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Investment in tax credit real estate | ( | ||||||||||
Net changes from tax credit real estate investment | |||||||||||
Net cash and cash equivalents used in investing activities | $ | ( | $ | ( | |||||||
Cash Flows from Financing Activities | |||||||||||
Net increase in deposits | $ | $ | |||||||||
Net increase in other borrowings | |||||||||||
Issuance of common stock, net of costs | |||||||||||
Purchase of treasury stock | ( | ( | |||||||||
Proceeds from the issuance of common stock through the employee stock purchase plan | |||||||||||
Dividends paid | ( | ( | |||||||||
Net cash and cash equivalents provided by financing activities | $ | $ |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Increase in cash and cash equivalents | $ | $ | |||||||||
Cash and cash equivalents: | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ | |||||||||
Supplemental Disclosures | |||||||||||
Cash payments for: | |||||||||||
Interest paid to depositors | $ | $ | |||||||||
Interest paid on other obligations | |||||||||||
Income taxes paid | |||||||||||
Noncash activities: | |||||||||||
Increase/(decrease) in maximum cash obligation related to ESOP shares | $ | $ | ( | ||||||||
Transfers to other real estate owned | |||||||||||
January 1, 2021 | |||||||||||
As Reported Under ASC 326 | Pre-ASC 326 Adoption | Impact of ASC 326 Adoption | |||||||||
Assets: | |||||||||||
Loans | |||||||||||
Allowance for credit losses on loans | $ | $ | $ | ||||||||
Liabilities: | |||||||||||
Allowance for credit losses on off-balance sheet credit exposures | $ | $ | $ | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Common shares outstanding at the beginning of the period | ||||||||||||||||||||
Weighted average number of net shares (redeemed) issued | ( | ( | ( | |||||||||||||||||
Weighted average shares outstanding (basic) | ||||||||||||||||||||
Weighted average of potential dilutive shares attributable to stock options granted, computed under the treasury stock method | ||||||||||||||||||||
Weighted average number of shares (diluted) | ||||||||||||||||||||
Net income (In thousands) | $ | $ | $ | $ | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||
Diluted | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
(amounts in thousands) | |||||||||||
Net unrealized gain on available-for-sale securities | $ | $ | |||||||||
Tax effect | ( | ( | |||||||||
Net-of-tax amount | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
U.S. Treasury | $ | % | $ | % | |||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | |||||||||||||||||||||||
State and political subdivisions | |||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
Total securities available for sale | $ | % | $ | % |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Allowance for Credit Losses | Estimated Fair Value | |||||||||||||||||||||||||
September 30, 2021 | |||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | ( | ||||||||||||||||||||||||||||
State and political subdivisions | ( | ||||||||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | $ | |||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
December 31, 2020: | |||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | ( | ||||||||||||||||||||||||||||
State and political subdivisions | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ |
Amortized Cost | Fair Value | ||||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due over ten years | |||||||||||
$ | $ | ||||||||||
Mortgage-backed securities and collateralized mortgage obligations | |||||||||||
$ | $ |
September 30, 2021 | September 30, 2020 | ||||||||||
Sales proceeds | $ | $ | |||||||||
Gross realized gains | |||||||||||
Gross realized losses |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2021 Description of Securities | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | ( | % | $ | $ | % | $ | $ | ( | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | % | $ | $ | ( | % | $ | $ | ( | % |
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 Description of Securities | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | # | Fair Value | Unrealized Loss | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | % | $ | $ | % | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | % | $ | $ | ( | % | $ | $ | ( | % |
September 30, 2021 | December 31, 2020 | ||||||||||
(Amounts In Thousands) | |||||||||||
Agricultural | $ | $ | |||||||||
Commercial and financial | |||||||||||
Real estate: | |||||||||||
Construction, 1 to 4 family residential | |||||||||||
Construction, land development and commercial | |||||||||||
Mortgage, farmland | |||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||
Mortgage, multi-family | |||||||||||
Mortgage, commercial | |||||||||||
Loans to individuals | |||||||||||
Obligations of state and political subdivisions | |||||||||||
$ | $ | ||||||||||
Net unamortized fees and costs | |||||||||||
$ | $ | ||||||||||
Less allowance for credit losses (2021) and loan losses (2020) | |||||||||||
$ | $ |
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Credit loss expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, prior to adoption of ASC 326 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Impact of adopting ASC 326 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Credit loss expense | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, individually evaluated for credit losses | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, collectively evaluated for credit losses | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, individually evaluated for credit losses | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, collectively evaluated for credit losses | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Provision | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, individually evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Ending balance, collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses for off-balance sheet credit exposures: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Credit loss expense | ( | ||||||||||||||||||||||||||||||||||||||||||||||
(Charge-offs), net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction and land development | Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family | Real Estate: Mortgage, multi- family and commercial | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses for off-balance sheet credit exposures: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, prior to adoption of ASC 326 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Impact of adopting ASC 326 | |||||||||||||||||||||||||||||||||||||||||||||||
Credit loss expense | ( | ||||||||||||||||||||||||||||||||||||||||||||||
(Charge-offs), net recoveries | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Agricultural | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Commercial and Financial | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Construction, 1 to 4 Family Residential | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Construction, Land Development and Commercial | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Mortgage, Farmland | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Mortgage, 1 to 4 Family First Liens | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Mortgage, 1 to 4 Family Junior Liens | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Mortgage, Multi-Family | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Real Estate: Mortgage, Commercial | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Loans to Individuals | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Obligations of State and Political Subdivisions | ||||||||||||||||||||||||||
September 30, 2021 | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving Loans Amortized Cost Basis | Total | ||||||||||||||||||
Grade: | ||||||||||||||||||||||||||
Excellent | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Good | ||||||||||||||||||||||||||
Satisfactory | ||||||||||||||||||||||||||
Monitor | ||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Agricultural | Commercial and Financial | Real Estate: Construction, 1 to 4 family residential | Real Estate: Construction, land development and commercial | ||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Grade: | |||||||||||||||||||||||
Excellent | $ | $ | $ | $ | |||||||||||||||||||
Good | |||||||||||||||||||||||
Satisfactory | |||||||||||||||||||||||
Monitor | |||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||
Substandard | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Real Estate: Mortgage, farmland | Real Estate: Mortgage, 1 to 4 family first liens | Real Estate: Mortgage, 1 to 4 family junior liens | Real Estate: Mortgage, multi- family | ||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Grade: | |||||||||||||||||||||||
Excellent | $ | $ | $ | $ | |||||||||||||||||||
Good | |||||||||||||||||||||||
Satisfactory | |||||||||||||||||||||||
Monitor | |||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||
Substandard | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Real Estate: Mortgage, commercial | Loans to individuals | Obligations of state and political subdivisions | Total | ||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Grade: | |||||||||||||||||||||||
Excellent | $ | $ | $ | $ | |||||||||||||||||||
Good | |||||||||||||||||||||||
Satisfactory | |||||||||||||||||||||||
Monitor | |||||||||||||||||||||||
Special Mention | |||||||||||||||||||||||
Substandard | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
30 - 59 Days Past Due | 60 - 89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans Receivable | Accruing Loans Past Due 90 Days or More | |||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||||||||
September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||||||||||||||
Obligations of state and political subdivisions | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||||||||||||||
Obligations of state and political subdivisions | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||
Non-accrual loans (1) | Interest income recognized on non-accrual | Accruing loans past due 90 days or more | TDR loans | Non- accrual loans (1) | Accruing loans past due 90 days or more | TDR loans | |||||||||||||||||||||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Number of contracts | Recorded investment | Commitments outstanding | Number of contracts | Recorded investment | Commitments outstanding | ||||||||||||||||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||
Number of contracts | Pre-modification recorded investment | Post-modification recorded investment | Number of contracts | Pre-modification recorded investment | Post-modification recorded investment | |||||||||||||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | |||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Commercial and financial | ||||||||||||||||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | ||||||||||||||||||||||||||||||||
Construction, land development and commercial | ||||||||||||||||||||||||||||||||
Mortgage, farmland | ||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first lien | ||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | ||||||||||||||||||||||||||||||||
Mortgage, multi-family | ||||||||||||||||||||||||||||||||
Mortgage, commercial | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
Primary Type of Collateral | |||||||||||||||||||||||||||||||||||
Real Estate | Accounts Receivable | Equipment | Other | Total | ACL Allocation | ||||||||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||||||||
September 30, 2021 | |||||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||||||||
Obligations of state and political subdivisions | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||||||
With no related allowance recorded: | (Amounts In Thousands) | ||||||||||||||||
Agricultural | $ | $ | $ | ||||||||||||||
Commercial and financial | |||||||||||||||||
Real estate: | |||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||
Construction, land development and commercial | |||||||||||||||||
Mortgage, farmland | |||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||
Mortgage, multi-family | |||||||||||||||||
Mortgage, commercial | |||||||||||||||||
Loans to individuals | |||||||||||||||||
$ | $ | $ | |||||||||||||||
With an allowance recorded: | |||||||||||||||||
Agricultural | $ | $ | $ | ||||||||||||||
Commercial and financial | |||||||||||||||||
Real estate: | |||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||
Construction, land development and commercial | |||||||||||||||||
Mortgage, farmland | |||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||
Mortgage, multi-family | |||||||||||||||||
Mortgage, commercial | |||||||||||||||||
Loans to individuals | |||||||||||||||||
$ | $ | $ | |||||||||||||||
Total: | |||||||||||||||||
Agricultural | $ | $ | $ | ||||||||||||||
Commercial and financial | |||||||||||||||||
Real estate: | |||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||
Construction, land development and commercial | |||||||||||||||||
Mortgage, farmland | |||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||
Mortgage, multi-family | |||||||||||||||||
Mortgage, commercial | |||||||||||||||||
Loans to individuals | |||||||||||||||||
$ | $ | $ |
Year ending December 31: | (Amounts In Thousands) | ||||
2021 (excluding the nine months ended September 30, 2021) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | |||||
Less imputed interest | ( | ||||
Total operating lease liabilities | $ |
September 30, 2021 | |||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | |||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||
Financial instrument assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Investment securities | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Loans | |||||||||||||||||||||||||||||
Agricultural | |||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||
Obligations of state and political subdivisions | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Total financial instrument assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Financial instrument liabilities | |||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||||||||
Federal Home Loan Bank borrowings | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Total financial instrument liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Face Amount | |||||||||||||||||||||||||||||
Financial instrument with off-balance sheet risk: | |||||||||||||||||||||||||||||
Loan commitments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Letters of credit | |||||||||||||||||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk | $ | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | |||||||||||||||||||||||||
(Amounts In Thousands) | |||||||||||||||||||||||||||||
Financial instrument assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Investment securities | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Loans | |||||||||||||||||||||||||||||
Agricultural | |||||||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||
Obligations of state and political subdivisions | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Total financial instrument assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Financial instrument liabilities: | |||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest-bearing deposits | |||||||||||||||||||||||||||||
Federal Home Loan Bank borrowings | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Total financial instrument liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Face Amount | |||||||||||||||||||||||||||||
Financial instrument with off-balance sheet risk: | |||||||||||||||||||||||||||||
Loan commitments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Letters of credit | |||||||||||||||||||||||||||||
Total financial instrument liabilities with off-balance-sheet risk | $ | $ | $ | $ | $ |
Level 1 | Quoted prices in active markets for identical assets or liabilities. |
Level 2 | Observable inputs other than quoted prices included within Level 1. Observable inputs include the quoted prices for similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability. |
Level 3 | Unobservable inputs supported by little or no market activity for financial instruments. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
September 30, 2021 | |||||||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | ||||||||||||||||||||
Securities available for sale | (Amounts In Thousands) | ||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | $ | |||||||||||||||||||
State and political subdivisions | |||||||||||||||||||||||
Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | ||||||||||||||||||||
Securities available for sale | (Amounts In Thousands) | ||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | $ | |||||||||||||||||||
State and political subdivisions | |||||||||||||||||||||||
Other securities (FHLB, FHLMC and FNMA) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2021 | Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | Total Losses | Total Losses | |||||||||||||||||||||||||||
(Amounts in Thousands) | ||||||||||||||||||||||||||||||||
Loans (4) | ||||||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Commercial and financial | ||||||||||||||||||||||||||||||||
Real Estate: | — | |||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | ||||||||||||||||||||||||||||||||
Construction, land development and commercial | ||||||||||||||||||||||||||||||||
Mortgage, farmland | ||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | ||||||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | ||||||||||||||||||||||||||||||||
Mortgage, multi-family | ||||||||||||||||||||||||||||||||
Mortgage, commercial | ||||||||||||||||||||||||||||||||
Loans to individuals | ||||||||||||||||||||||||||||||||
Foreclosed assets (5) | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
December 31, 2020 | Year Ended December 31, 2020 | ||||||||||||||||||||||||||||
Readily Available Market Prices(1) | Observable Market Prices(2) | Company Determined Market Prices(3) | Total at Fair Value | Total Losses | |||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||
Loans (4) | |||||||||||||||||||||||||||||
Agricultural | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial and financial | |||||||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | |||||||||||||||||||||||||||||
Construction, land development and commercial | |||||||||||||||||||||||||||||
Mortgage, farmland | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | |||||||||||||||||||||||||||||
Mortgage, multi-family | |||||||||||||||||||||||||||||
Mortgage, commercial | |||||||||||||||||||||||||||||
Loans to individuals | |||||||||||||||||||||||||||||
Foreclosed assets (5) | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
(Amounts In Thousands) | |||||||||||
Firm loan commitments and unused portion of lines of credit: | |||||||||||
Home equity loans | $ | $ | |||||||||
Credit cards | |||||||||||
Commercial, real estate and home construction | |||||||||||
Commercial lines and real estate purchase loans | |||||||||||
Outstanding letters of credit |
Recognized in OCI | Reclassified from AOCI into Income | Recognized in Income on Derivatives | |||||||||||||||||||||||||||
Amount of (Loss) | Category | Amount of Gain (Loss) | Category | Amount of Gain (Loss) | |||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||
Interest rate swap | $ | Interest Expense | $ | Other Income | $ | ||||||||||||||||||||||||
Interest rate swap | ( | Interest Expense | Other Income |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
(Amounts In Thousands) | (Amounts In Thousands) | ||||||||||||||||||||||
Agricultural | $ | 94,210 | 3.55 | % | $ | 94,842 | 3.50 | % | |||||||||||||||
Commercial and financial | 228,181 | 8.60 | 286,242 | 10.56 | |||||||||||||||||||
Real estate: | |||||||||||||||||||||||
Construction, 1 to 4 family residential | 73,167 | 2.76 | 71,117 | 2.62 | |||||||||||||||||||
Construction, land development and commercial | 118,623 | 4.47 | 111,913 | 4.13 | |||||||||||||||||||
Mortgage, farmland | 241,650 | 9.11 | 247,142 | 9.12 | |||||||||||||||||||
Mortgage, 1 to 4 family first liens | 898,333 | 33.85 | 892,089 | 32.92 | |||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 115,308 | 4.34 | 127,833 | 4.72 | |||||||||||||||||||
Mortgage, multi-family | 389,805 | 14.69 | 374,014 | 13.80 | |||||||||||||||||||
Mortgage, commercial | 410,050 | 15.45 | 417,139 | 15.39 | |||||||||||||||||||
Loans to individuals | 32,235 | 1.21 | 31,325 | 1.16 | |||||||||||||||||||
Obligations of state and political subdivisions | 52,299 | 1.97 | 56,488 | 2.08 | |||||||||||||||||||
$ | 2,653,861 | 100.00 | % | $ | 2,710,144 | 100.00 | % | ||||||||||||||||
Net unamortized fees and costs | 927 | 938 | |||||||||||||||||||||
$ | 2,654,788 | $ | 2,711,082 | ||||||||||||||||||||
Less allowance for credit losses (2021) and loan losses (2020) | 35,590 | 37,070 | |||||||||||||||||||||
$ | 2,619,198 | $ | 2,674,012 |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Amount | % of Total Allowance | % of Loans to Total Loans | Amount | % of Total Allowance | % of Loans to Total Loans | ||||||||||||||||||||||||||||||
(In Thousands) | (In Thousands) | ||||||||||||||||||||||||||||||||||
Agricultural | $ | 2,118 | 5.95 | % | 3.55 | % | $ | 2,508 | 6.77 | % | 3.50 | % | |||||||||||||||||||||||
Commercial and financial | 4,348 | 12.22 | 8.60 | 4,885 | 13.18 | 10.56 | |||||||||||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||||
Construction, 1 to 4 family residential | 762 | 2.14 | 2.76 | 907 | 2.45 | 2.62 | |||||||||||||||||||||||||||||
Construction, land development and commercial | 1,535 | 4.31 | 4.47 | 1,412 | 3.81 | 4.13 | |||||||||||||||||||||||||||||
Mortgage, farmland | 4,663 | 13.10 | 9.11 | 4,173 | 11.26 | 9.12 | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family first liens | 7,922 | 22.26 | 33.85 | 10,871 | 29.32 | 32.92 | |||||||||||||||||||||||||||||
Mortgage, 1 to 4 family junior liens | 2,942 | 8.27 | 4.34 | 1,497 | 4.04 | 4.72 | |||||||||||||||||||||||||||||
Mortgage, multi-family | 3,713 | 10.43 | 14.69 | 4,462 | 12.04 | 13.80 | |||||||||||||||||||||||||||||
Mortgage, commercial | 6,505 | 18.28 | 15.45 | 4,953 | 13.36 | 15.39 | |||||||||||||||||||||||||||||
Loans to individuals | 633 | 1.78 | 1.21 | 752 | 2.03 | 1.16 | |||||||||||||||||||||||||||||
Obligations of state and political subdivisions | 449 | 1.26 | 1.97 | 650 | 1.74 | 2.08 | |||||||||||||||||||||||||||||
$ | 35,590 | 100.00 | % | 100.00 | % | $ | 37,070 | 100.00 | % | 100.00 | % |
Actual | For Capital Adequacy Purposes | |||||||||||||||||||
Amount | Ratio | Ratio | ||||||||||||||||||
As of September 30, 2021: | ||||||||||||||||||||
Company: | ||||||||||||||||||||
Community Bank Leverage ratio | $ | 478,368 | 11.99 | % | 8.500 | % | ||||||||||||||
Bank: | ||||||||||||||||||||
Community Bank Leverage ratio | 478,951 | 12.01 | 8.500 |
Actual | For Capital Adequacy Purposes | |||||||||||||||||||
Amount | Ratio | Ratio | ||||||||||||||||||
As of December 31, 2020: | ||||||||||||||||||||
Company: | ||||||||||||||||||||
Community Bank Leverage ratio | $ | 452,123 | 11.91 | % | 8.00 | % | ||||||||||||||
Bank: | ||||||||||||||||||||
Community Bank Leverage ratio | 453,073 | 11.94 | 8.00 |
Increase (Decrease) in Net Interest Income | |||||||||||||||||||||||||||||
Change in Average Balance | Change in Average Rate | Volume Changes | Rate Changes | Net Change | |||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Loans, net | $ | (40,757) | (0.07) | % | $ | (1,648) | $ | (1,406) | $ | (3,054) | |||||||||||||||||||
Taxable securities | 58,102 | (0.52) | 607 | (634) | (27) | ||||||||||||||||||||||||
Nontaxable securities | 23,396 | (0.33) | 468 | (548) | (80) | ||||||||||||||||||||||||
Federal funds sold | 419,563 | (0.24) | 1,134 | (1,283) | (149) | ||||||||||||||||||||||||
$ | 460,304 | $ | 561 | $ | (3,871) | $ | (3,310) | ||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 200,364 | (0.32) | % | $ | (804) | $ | 2,423 | $ | 1,619 | |||||||||||||||||||
Savings deposits | 219,772 | (0.19) | (499) | 1,434 | 935 | ||||||||||||||||||||||||
Time deposits | (37,519) | (0.46) | 638 | 2,246 | 2,884 | ||||||||||||||||||||||||
FHLB borrowings | (80,000) | (0.10) | 1,789 | 81 | 1,870 | ||||||||||||||||||||||||
Interest-bearing other liabilities | (1) | (0.79) | — | — | — | ||||||||||||||||||||||||
$ | 302,616 | $ | 1,124 | $ | 6,184 | $ | 7,308 | ||||||||||||||||||||||
Change in net interest income | $ | 1,685 | $ | 2,313 | $ | 3,998 |
(Tax Equivalent Basis) | 2021 | 2020 | ||||||||||||
Yield on average interest-earning assets | 3.30 | % | 3.88 | % | ||||||||||
Rate on average interest-bearing liabilities | 0.63 | 1.08 | ||||||||||||
Net interest spread | 2.67 | % | 2.80 | % | ||||||||||
Effect of noninterest-bearing funds | 0.16 | 0.25 | ||||||||||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets) | 2.83 | % | 3.05 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Net gain on sale of loans | $ | 6,243 | $ | 4,859 | $ | 1,384 | 28.48 | % | |||||||||||||||
Trust fees | 9,645 | 7,450 | 2,195 | 29.46 | |||||||||||||||||||
Service charges and fees | 8,729 | 7,427 | 1,302 | 17.53 | |||||||||||||||||||
Other noninterest income | 647 | 462 | 185 | 40.04 | |||||||||||||||||||
Gain on sale of investment securities | — | 10 | (10) | (100.00) | |||||||||||||||||||
$ | 25,264 | $ | 20,208 | $ | 5,056 | 25.02 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 31,484 | $ | 29,818 | $ | 1,666 | 5.59 | % | |||||||||||||||
Occupancy | 3,135 | 3,248 | (113) | (3.48) | |||||||||||||||||||
Furniture and equipment | 5,523 | 5,778 | (255) | (4.41) | |||||||||||||||||||
Office supplies and postage | 1,268 | 1,333 | (65) | (4.88) | |||||||||||||||||||
Advertising and business development | 1,480 | 1,479 | 1 | 0.07 | |||||||||||||||||||
Outside services | 9,781 | 8,020 | 1,761 | 21.96 | |||||||||||||||||||
FDIC insurance assessment | 777 | 617 | 160 | 25.93 | |||||||||||||||||||
Other noninterest expense | 1,668 | 1,861 | (193) | (10.37) | |||||||||||||||||||
$ | 55,116 | $ | 52,154 | $ | 2,962 | 5.68 |
Increase (Decrease) in Net Interest Income | |||||||||||||||||||||||||||||
Change in Average Balance | Change in Average Rate | Volume Changes | Rate Changes | Net Change | |||||||||||||||||||||||||
(Amounts in Thousands) | |||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||
Loans, net | $ | (111,056) | 0.07 | % | $ | (1,428) | $ | 663 | $ | (765) | |||||||||||||||||||
Taxable securities | 79,512 | (0.49) | 295 | (244) | 51 | ||||||||||||||||||||||||
Nontaxable securities | 35,003 | (0.35) | 231 | (194) | 37 | ||||||||||||||||||||||||
Federal funds sold | 350,448 | 0.05 | 89 | 97 | 186 | ||||||||||||||||||||||||
$ | 353,907 | $ | (813) | $ | 322 | $ | (491) | ||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 155,850 | (0.20) | % | $ | (159) | $ | 541 | $ | 382 | |||||||||||||||||||
Savings deposits | 235,776 | (0.09) | (143) | 249 | 106 | ||||||||||||||||||||||||
Time deposits | (85,287) | (0.48) | 435 | 740 | 1,175 | ||||||||||||||||||||||||
FHLB borrowings | (80,000) | (0.12) | 600 | 30 | 630 | ||||||||||||||||||||||||
Interest-bearing other liabilities | (3) | 0.12 | — | — | — | ||||||||||||||||||||||||
$ | 226,336 | $ | 733 | $ | 1,560 | $ | 2,293 | ||||||||||||||||||||||
Change in net interest income | $ | (80) | $ | 1,882 | $ | 1,802 |
(Tax Equivalent Basis) | 2021 | 2020 | ||||||||||||
Yield on average interest-earning assets | 3.24 | % | 3.62 | % | ||||||||||
Rate on average interest-bearing liabilities | 0.57 | 0.96 | ||||||||||||
Net interest spread | 2.67 | % | 2.66 | % | ||||||||||
Effect of noninterest-bearing funds | 0.15 | 0.24 | ||||||||||||
Net interest margin (tax equivalent interest income divided by average interest-earning assets) | 2.82 | % | 2.90 | % |
Three Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Net gain on sale of loans | $ | 1,512 | $ | 2,303 | $ | (791) | (34.35) | % | |||||||||||||||
Trust fees | 3,568 | 2,494 | 1,074 | 43.06 | |||||||||||||||||||
Service charges and fees | 3,075 | 2,636 | 439 | 16.65 | |||||||||||||||||||
Other noninterest income | 89 | 77 | 12 | 15.58 | |||||||||||||||||||
$ | 8,244 | $ | 7,510 | $ | 734 | 9.77 |
Three Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | ||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Salaries and employee benefits | $ | 10,281 | $ | 10,108 | $ | 173 | 1.71 | % | |||||||||||||||
Occupancy | 955 | 1,067 | (112) | (10.50) | |||||||||||||||||||
Furniture and equipment | 1,652 | 2,028 | (376) | (18.54) | |||||||||||||||||||
Office supplies and postage | 428 | 425 | 3 | 0.71 | |||||||||||||||||||
Advertising and business development | 496 | 340 | 156 | 45.88 | |||||||||||||||||||
Outside services | 3,496 | 2,818 | 678 | 24.06 | |||||||||||||||||||
FDIC insurance assessment | 267 | 223 | 44 | 19.73 | |||||||||||||||||||
Other noninterest expense | 623 | 1,046 | (423) | (40.44) | |||||||||||||||||||
$ | 18,198 | $ | 18,055 | $ | 143 | 0.79 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs (1) | ||||||||||
July 1 to July 31 | 6,627 | $ | 65.50 | 6,627 | 114,168 | |||||||||
August 1 to August 31 | 1,928 | 66.37 | 1,928 | 112,240 | ||||||||||
September 1 to September 30 | 11,001 | 66.50 | 11,001 | 101,239 | ||||||||||
Total | 19,556 | $ | 66.15 | 19,556 | 101,239 |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosure |
Item 5. | Other Information |
Item 6. | Exhibits |
3.1 | |||||
3.2 | |||||
4.1 | |||||
31 | |||||
32 | |||||
101.INS | XBRL Instance Document (1), (2) | ||||
101.SCH | XBRL Taxonomy Extension Schema Document (1) | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (1) | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (1) | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (1) | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (1) |
HILLS BANCORPORATION | |||||||||||
Date: | November 5, 2021 | By: /s/ Dwight O. Seegmiller | |||||||||
Dwight O. Seegmiller, Director, President and Chief Executive Officer | |||||||||||
Date: | November 5, 2021 | By: /s/ Joseph A. Schueller | |||||||||
Joseph A. Schueller, Treasurer, Chief Financial Officer and Chief Accounting Officer |
Date: | November 5, 2021 | By: /s/ Dwight O. Seegmiller | |||||||||
Dwight O. Seegmiller, Director, President and Chief Executive Officer |
Date: | November 5, 2021 | By: /s/ Joseph A. Schueller | |||||||||
Joseph A. Schueller, Treasurer, Chief Financial Officer and Chief Accounting Officer |
Date: | November 5, 2021 | By: /s/ Dwight O. Seegmiller | |||||||||
Dwight O. Seegmiller, Director, President and Chief Executive Officer |
Date: | November 5, 2021 | By: /s/ Joseph A. Schueller | |||||||||
Joseph A. Schueller, Treasurer, Chief Financial Officer and Chief Accounting Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
ASSETS | ||
Investment securities available for sale, amortized cost | $ 495,580 | $ 396,670 |
Loans, allowance for loan losses | $ 35,590 | $ 37,070 |
STOCKHOLDERS' EQUITY | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 10,329,937 | 10,330,242 |
Treasury stock at cost (in shares) | 1,042,426 | 999,247 |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Interest income: | ||||
Loans, including fees | $ 29,004 | $ 29,750 | $ 86,956 | $ 89,975 |
Investment securities: | ||||
Taxable | 940 | 889 | 2,629 | 2,656 |
Nontaxable | 963 | 933 | 2,880 | 2,941 |
Federal funds sold | 289 | 103 | 652 | 801 |
Total interest income | 31,196 | 31,675 | 93,117 | 96,373 |
Interest expense: | ||||
Deposits | 3,414 | 5,077 | 11,416 | 16,854 |
FHLB borrowings | 758 | 1,388 | 2,248 | 4,118 |
Total interest expense | 4,172 | 6,465 | 13,664 | 20,972 |
Net interest income | 27,024 | 25,210 | 79,453 | 75,401 |
Provision for credit losses (2021); Provision for loan losses (2020) | 82 | (157) | (4,561) | 4,500 |
Net interest income after credit loss expense and provision for loan losses | 26,942 | 25,367 | 84,014 | 70,901 |
Noninterest income: | ||||
Net gain on sale of loans | 1,512 | 2,303 | 6,243 | 4,859 |
Other noninterest income | 89 | 77 | 647 | 462 |
Gain on sale of investment securities | 0 | 0 | 0 | 10 |
Noninterest income | 8,244 | 7,510 | 25,264 | 20,208 |
Noninterest expenses: | ||||
Salaries and employee benefits | 10,281 | 10,108 | 31,484 | 29,818 |
Occupancy | 955 | 1,067 | 3,135 | 3,248 |
Furniture and equipment | 1,652 | 2,028 | 5,523 | 5,778 |
Office supplies and postage | 428 | 425 | 1,268 | 1,333 |
Advertising and business development | 496 | 340 | 1,480 | 1,479 |
Outside services | 3,496 | 2,818 | 9,781 | 8,020 |
FDIC insurance assessment | 267 | 223 | 777 | 617 |
Other noninterest expense | 623 | 1,046 | 1,668 | 1,861 |
Noninterest expenses | 18,198 | 18,055 | 55,116 | 52,154 |
Income before income taxes | 16,988 | 14,822 | 54,162 | 38,955 |
Income taxes | 3,863 | 3,392 | 12,230 | 8,739 |
Net income | $ 13,125 | $ 11,430 | $ 41,932 | $ 30,216 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.41 | $ 1.22 | $ 4.50 | $ 3.22 |
Diluted (in dollars per share) | $ 1.41 | $ 1.22 | $ 4.50 | $ 3.22 |
Trust fees | ||||
Noninterest income: | ||||
Fee income | $ 3,568 | $ 2,494 | $ 9,645 | $ 7,450 |
Service charges and fees | ||||
Noninterest income: | ||||
Fee income | $ 3,075 | $ 2,636 | $ 8,729 | $ 7,427 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,125 | $ 11,430 | $ 41,932 | $ 30,216 |
Securities: | ||||
Net change in unrealized (loss) income on securities available for sale | (1,510) | (84) | (6,017) | 8,220 |
Reclassification adjustment for net gains realized in net income | 0 | 0 | 0 | (10) |
Income taxes | 377 | 21 | 1,502 | (2,049) |
Other comprehensive (loss) income on securities available for sale | (1,133) | (63) | (4,515) | 6,161 |
Derivatives used in cash flow hedging relationships: | ||||
Net change in unrealized gain (loss) on derivatives | 0 | 364 | 0 | (726) |
Income taxes | 0 | (91) | 0 | 181 |
Other comprehensive income (loss) on cash flow hedges | 0 | 273 | 0 | (545) |
Other comprehensive (loss) income, net of tax | (1,133) | 210 | (4,515) | 5,616 |
Comprehensive income | $ 11,992 | $ 11,640 | $ 37,417 | $ 35,832 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of common stock (in shares) | 1,204 | 13,120 | 5,957 | 105,542 |
Issuance of common stock purchased under the employee stock purchase plan (in shares) | 1,725 | 1,861 | 5,564 | 5,430 |
Forfeiture of shares of common stock (in shares) | 2,114 | 3,188 | 5,869 | 4,211 |
Cash dividends (in dollars per share) | $ 0.94 | $ 0.89 | ||
Purchase of common stock (in shares) | 19,556 | 29,807 | 49,136 | 112,407 |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company considers that it operates as one business segment, a commercial bank. Operating results for the nine month period ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. For further information, refer to the consolidated financial statements and footnotes thereto included in the Form 10-K Annual Report of Hills Bancorporation and subsidiary (the “Company”) for the year ended December 31, 2020 filed with the Securities Exchange Commission on March 5, 2021. The consolidated balance sheet as of December 31, 2020, has been derived from the audited consolidated financial statements for that period. The Company evaluated subsequent events through the filing date of its quarterly report on Form 10-Q with the SEC. Accounting Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain Significant Estimates: The allowance for credit losses and loan losses, fair values of securities and other financial instruments, and share-based compensation expense involve certain significant estimates made by management. These estimates are reviewed by management routinely and it is reasonably possible that circumstances that exist at September 30, 2021 may change in the near-term and the effect could be material to the consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Revenue Recognition: Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the Company’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, letters of credit and investment securities. Interest income on loans and investment securities is recognized on the accrual method in accordance with written contracts. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC 606 are the following: Service charges and fees on deposit accounts represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue which includes interchange income, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when the Company’s performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. Trust income represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and similar fiduciary activities. Revenue is recognized when our performance obligation is completed each month, which is generally the time that payment is received. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity's obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. As of September 30, 2021, the Company did not have any significant contract balances. An entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. The Company has not incurred or capitalized any contract acquisition costs as of September 30, 2021. Tax Credit Real Estate: Tax credit real estate represents three multi-family rental properties, three assisted living rental properties, a multi-tenant rental property for persons with disabilities, and a multi-family senior living rental property, all of which are affordable housing projects as of September 30, 2021. The Bank has a 99% or greater limited partnership interest in each limited partnership. The investment in each was completed after the projects had been developed by the general partner. The Company evaluates the recoverability of the carrying value on a regular basis. If the recoverability was determined to be in doubt, a valuation allowance would be established by way of a charge to expense. Depreciation expense is provided on a straight-line basis over the estimated useful life of the assets. Expenditures for normal repairs and maintenance are charged to expense as incurred. In 2016, the Company adopted ASU 2015-02 and the investments in tax credit real estate are recorded for all years presented using the equity method of accounting, with the exception of the investment in the affordable housing project described below. The operations of the properties are not expected to contribute significantly to the Company’s income before income taxes. However, the properties do contribute in the form of income tax credits, which lowers the Company’s effective tax rate. Once established, the credits on each property last for ten years and are passed through from the limited partnerships to the Bank and reduces the consolidated federal tax liability of the Company. In February 2021, the Company provided construction financing and contributed capital of $4.18 million to Del Ray Ridge LP, as limited partner, which owns and operates an affordable housing property in Iowa City, Iowa. The Company accounts for the investment in this tax credit real estate using the proportional amortization method as provided for under Accounting Standards Codification (ASC) 323-740. The investment qualifies for the proportional amortization method as it meets all of the criteria under ASC 323-740-25-1. Substantially all of the projected benefits are from tax credits and other tax benefits due to the minimum buyout clause included in the partnership agreement. Adoption of New Financial Accounting Standard Codification 326 (ASC 326 (CECL)): On January 1, 2021, the Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the recognition of the allowance for credit losses be estimated using the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet (OBS) credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and OBS credit exposures. Results for reporting periods beginning January 1, 2021 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to retained earnings of $4.75 million as of January 1, 2021 for the cumulative effect of adopting ASC 326, which includes deferred taxes of $1.58 million. The transition adjustment includes a $2.75 million increase to the Allowance for Credit Losses and the recording of a $3.58 million Allowance for Credit Losses on OBS Credit Exposures. The following table illustrates the impact of ASC 326 (amounts in thousands).
Available-For-Sale Debt Securities and the Allowance For Credit Losses On Available-For-Sale Debt Securities: Debt securities that we might not hold until maturity are classified as available for sale ("AFS") and are reported at the fair value in the balance sheet. Fair value measurement is based upon quoted market prices in active markets, if available. If quoted prices in active markets are not available, fair value is measured using pricing models or other model-based valuation techniques such as present value of future cash flows, which consider prepayment assumptions and other factors such as credit losses and market liquidity. Unrealized gains and losses are excluded from earnings and reported, net of tax, in other comprehensive income ("OCI"). Purchase premiums and discounts are recognized in interest income using the effective interest method over the life of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For AFS debt securities, a decline in fair value due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of whether any decline in fair value is due to a credit loss, all relevant information is considered at the individual security level. For asset-backed securities performance indicators considered related to the underlying assets include default rates, delinquency rates, percentage of nonperforming assets, debt-to-collateral ratios, third-party guarantees, current levels of subordination, vintage, geographic concentration, analyst reports and forecasts, credit ratings and other market data. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. If we intend to sell a debt security or more likely than not we will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged against the allowance for credit losses with any incremental impairment reported in earnings. Accrued interest receivable on AFS debt securities totaled $2.18 million at September 30, 2021 and is excluded from the estimate of credit losses. Allowance for Credit Losses on Tax Credit Real Estate Investments: On a regular basis, the Company evaluates recoverability of the carrying value of the tax credit real estate investments to determine if an allowance for credit losses is necessary. The allowance for credit losses is measured by a comparison of the carrying amount of the investments to the future undiscounted cash flows expected to be generated by the investment properties, including the low-income housing tax credits and any estimated proceeds from eventual disposition. If there is an indication of impairment, the allowance for credit losses would be established with a charge to credit loss expense. There were no indications of impairment based on management's evaluation and therefore no allowance for credit losses was determined necessary as of September 30, 2021. Loans Held for Sale: Loans held for sale are stated at the lower of aggregate cost or estimated fair value. Loans are sold on a non-recourse basis with servicing released and gains and losses are recognized based on the difference between sales proceeds and the carrying value of the loan. The Company has had very few experiences of repurchasing loans previously sold into the secondary market. A specific reserve was not considered necessary based on the Company’s historical experience with repurchase activity. Loans Held For Investment: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost net of the allowance for credit losses. Amortized cost is the principal balance outstanding, net of deferred loan fees and costs. Accrued interest receivable on loans held for investment totaled $10.13 million at September 30, 2021 and is excluded from the estimate of credit losses. Interest income is accrued on the unpaid principal balance. Nonrefundable loan fees and origination costs are deferred and recognized as a yield adjustment over the life of the related loan. The policy for charging off loans is consistent throughout all loan categories. A loan is charged off based on criteria that includes but is not limited to: delinquency status, financial condition of the entire customer credit line and underlying collateral coverage, economic or external conditions that might impact full repayment of the loan, legal issues, overdrafts, and the customer’s willingness to work with the Company. The accrual of interest income on loans is discontinued when, in the opinion of management, there is reasonable doubt as to the borrower's ability to meet payments of interest or principal when they become due, which is generally when a loan is 90 days or more past due unless the loan is well secured and in the process of collection. When a loan is placed on nonaccrual status, all previously accrued and unpaid interest is reversed against interest income. Loans are returned to an accrual status when all of the principal and interest amounts contractually due are brought current and repayment of the remaining contractual principal and interest is expected. A loan may also return to accrual status if additional collateral is received from the borrower and, in the opinion of management, the financial position of the borrower indicates that there is no longer any reasonable doubt as to the collection of the amount contractually due. Payment received on nonaccrual loans are applied first to principal. Once principal is recovered, any remaining payments received are applied to interest income. A loan is accounted for and reported as a troubled debt restructuring ("TDR") when, for economic or legal reasons, we grant a concession to a borrower experiencing financial difficulty that we would not otherwise consider. These concessions may include rate reductions, principal forgiveness, extension of maturity date and other actions intended to minimize potential losses to the Company. A restructuring that results in only an insignificant delay in payment is not considered a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal or collateral value and the contractual amount due, or the delay in timing of the restructured payment period is insignificant relative to the frequency of payments, the debt's original contractual maturity or original expected duration. TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are nonperforming as of the date of modification generally remain as nonaccrual until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period, normally at least six months. TDRs with temporary below-market concessions remain designated as a TDR regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be de-designated as a TDR. Management evaluates loans where there is a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower for purposes of estimating the allowance for credit losses. Section 4013 of the Coronavirus Aid, Relief and Economic Security (CARES) Act, “Temporary Relief From Troubled Debt Restructurings,” allows financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. In March 2020, various regulatory agencies, including the FRB and the FDIC, issued an interagency statement, effective immediately, on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not to be considered TDRs. This includes short-term (e.g., six months) modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. See Note 5 for further discussion. Allowance for Credit Losses For Loans Held For Investment: Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses for loans. The allowance for credit losses is an estimate of expected losses inherent within the Company's existing loans held for investment portfolio. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures is accounted for as a separate liability on the balance sheet. The allowance for credit losses for loans held for investment, as reported in our consolidated balance sheet, is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. The loan loss estimation process involves procedures to appropriately consider the unique characteristics of loan portfolio segments which consist of agricultural, 1 to 4 family first and junior liens, commercial, and consumer lending. These segments are further disaggregated into loan classes, the level at which credit risk is monitored. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. The key components in this estimation process include the following: •An initial forecast period of one year for all portfolio segments and OBS credit exposures. This period reflects management's expectation of losses based on forward-looking economic scenarios over that time. •A historical loss forecast period covering the remaining contractual life, adjusted for prepayments, by portfolio segment based on the change in key historical economic variables. •A reversion period of up to 3 years connecting the initial loss forecast to the historical loss forecast based on economic conditions at the measurement date. •We primarily utilize the discounted cash flow (DCF) method to estimate credit losses by portfolio segment. The DCF methods obtain estimated life-time credit losses using the conceptual components described above. The exceptions being for the credit card and overdraft portfolios which utilize a remaining life methodology to estimate credit losses. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process for estimation of expected credit losses. The following provides the credit quality indicators and risk elements that are most relevant and most carefully considered and monitored for each loan portfolio segment. Agricultural - Agricultural operating loans include loans made to finance agricultural production and other loans to farmers and farming operations. Agricultural loans also include mortgage loans secured by farmland. Agricultural operating loans, most of which are secured by crops and machinery, are provided to finance capital improvement and farm operations as well as acquisitions of livestock and machinery. The ability of the borrower to repay may be affected by many factors outside of the borrower’s control including adverse weather conditions, loss of livestock due to disease or other factors, declines in market prices for agricultural products and the impact of government regulations. The ultimate repayment of agricultural operating loans is dependent upon the profitable operation or management of the agricultural entity. Agricultural operating loans generally have a term of one year and may have a fixed or variable rate. Mortgage loans secured by farmland are made to individuals and businesses within the Company's trade area. The primary source of repayment is the cash flow generated by the collateral underlying the loan. The secondary repayment source would be the liquidation of the collateral. Terms for real estate loans secured by farmland range from one to ten years with an amortization period of 25 years or less. Generally, interest rates are fixed for mortgage loans secured by farmland. Key economic forecasts used in estimating expected credit losses for this segment include the Iowa unemployment rate and the national real gross domestic product (GDP). 1 to 4 Family First and Junior Liens - The 1 to 4 family first and junior liens portfolio segment is comprised of the single family and home equity loan classes, which are underwritten after evaluating a borrower's capacity to repay, credit, and collateral. Several factors are considered when assessing a borrower's capacity, including the borrower's employment, income, current debt, assets, and level of equity in the property. Credit refers to how well a borrower manages their current and prior debts as documented by a credit report that provides credit scores and the borrower's current and past information about their credit history. Collateral refers to the type and use of property, occupancy, and market value. Property appraisals are obtained to assist in evaluating collateral. Loan-to-property value and debt-to-income ratios, loan amount, and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends such as conditions that negatively affect housing prices and demand and levels of unemployment. Key economic forecasts used in estimating expected credit losses for this segment include the Iowa unemployment rate and the all-transactions house price index for Iowa. Commercial - The commercial loan portfolio segment is comprised of the commercial real estate mortgage, multifamily residential mortgage, construction/land development and commercial and financial loan classes, whose underwriting standards consider the factors described for single family and home equity loan classes as well as others when assessing the borrower's and associated guarantors or other related party's financial position. These other factors include assessing liquidity, the level and composition of net worth, leverage, considering all other lender amounts and position, an analysis of cash expected to flow through the obligors including the outflow to other lenders, vacancies and prior experience with the borrower. This information is used to assess adequate financial capacity, profitability, and experience. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity, and availability of long-term financing. Key economic forecasts used in estimating expected credit losses for this segment include the Iowa unemployment rate, the all-transactions house price index for Iowa, the Iowa real GDP and the commercial real estate price index (for commercial real estate). Consumer Lending - The Bank offers consumer loans to individuals including personal loans and automobile loans. These consumer loans typically have shorter terms, lower balances, higher yields and higher risks of default than real estate-related loans. Consumer loans collections are dependent on the borrower's continuing financial stability and are more likely to be affected by adverse personal circumstances. Collateral for these loans generally includes automobiles, boats, recreational vehicles and real estate. However, depending on the overall financial condition of the borrower, some loans are made on an unsecured basis. The collateral securing these loans may depreciate over time, may be difficult to recover and may fluctuate in value based on condition. Key economic forecasts used in estimating expected credit losses for this segment include the Iowa unemployment rate and the Iowa real GDP. Determining the Contractual Term: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. Credit Loss Measurement: The allowance level is influenced by loan volumes, loan credit quality indicator migration or delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan. For these loans, we recognize expected credit loss equal to the amount by which the net realizable value of the loan is less than the amortized cost basis of the loan (which is net of previous charge- offs and deferred loan fees and costs), except when the loan is collateral dependent, that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. All appraised values are adjusted for market-related trends based on the Company's experience in sales and other appraisals of similar property types as well as estimated selling costs. Each quarter management reviews all collateral-dependent loans on a loan-by-loan basis to determine whether updated appraisals are necessary based on loan performance, collateral type and guarantor support. At times, the Company measures the fair value of collateral-dependent loans using appraisals with dates prior to one year from the date of review. These appraisals are discounted by applying current, observable market data about similar property types such as sales contracts, estimations of value by individuals familiar with the market, other appraisals, sales or collateral assessments based on current market activity until updated appraisals are obtained. Depending on the length of time since an appraisal was performed, the data provided through reviews and estimated selling costs, collateral values are typically discounted by 0-35%. The use of an appraisal that exceeds twelve months needs approval by the credit underwriting department. Third-party appraisals are obtained from a pre-approved list of independent, third-party, local appraisal firms maintained by the credit underwriting department. Approval and addition to the list is based on experience, reputation, character, consistency and knowledge of the respective real estate market. Generally, appraisals are internally reviewed by the credit underwriting department to ensure the quality of the appraisal and the expertise and independence of the appraiser. Once the expected credit loss amount is determined an allowance is provided for equal to the calculated expected credit loss and included in the allowance for credit losses. If the calculated expected credit loss is determined to be permanent or not recoverable, the amount of expected credit loss will be charged off. Factors considered by management in determining if the expected credit loss is permanent or not recoverable include whether management judges the loan to be uncollectible, repayment is deemed to be protracted beyond reasonable time frames, or the loss becomes evident owing to the borrower's lack of assets or, for single family loans, the loan is 90 days or more past due unless both well-secured and in the process of collection. In estimating the component of the allowance for credit losses for loans that share similar risk characteristics with other loans, such loans are segregated into loan classes. Loans are designated into loan classes based on loans pooled by product types and similar risk characteristics or areas of risk concentration. In determining the allowance for credit losses, we derive an estimated credit loss assumption from a model that categorizes loan pools based on loan type and purpose. This model calculates an expected loss percentage for each loan class by considering the probability of default, using life-of-loan analysis periods for all loan segments, and the historical severity of loss, based on the aggregate net lifetime losses incurred per loan class. The default and severity factors used to calculate the allowance for credit losses for loans that share similar risk characteristics with other loans are adjusted for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio related to: (1) lending policies and procedures; (2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio; (3) the nature and volume of the loan portfolio including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified or graded loans and the volume of nonaccrual loans; (6) the quality of our loan review system and (7) the value of underlying collateral for collateralized loans. Additional factors include the existence and effect of any concentrations of credit, and changes in the level of such concentrations and the effect of external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio. Such factors are used to adjust the historical probabilities of default and severity of loss so that they reflect management expectation of future conditions based on a reasonable and supportable forecast. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the bank reduces, on a straight-line basis over the remaining life of the loans, the adjustments so that model reverts back to the historical rates of default and severity of loss. Credit card receivables do not have stated maturities. In determining the estimated life of a credit card receivable, management first estimates the future cash flows expected to be received and then applies those expected future cash flows to the credit card balance. Expected credit losses for credit cards are determined through use of the remaining life method. The remaining life method utilizes average annual charge-off rates and remaining life to estimate the allowance for credit losses. This is done by estimating the amount and timing of principal payments expected to be received as payment for the balance outstanding as of the reporting period and applying those principal payments against the balance outstanding as of the reporting period along with the average annual charge-off rate until the expected payments have been fully allocated. Allowance for Credit Losses on Off-Balance Sheet Credit Exposures, Including Unfunded Loan Commitments: The Company maintains a separate allowance for credit losses from off-balance-sheet credit exposures, including unfunded loan commitments, which is disclosed on the balance sheet. Management estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for loan loss methodology to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan type. No credit loss estimate is reported for off- balance-sheet credit exposures that are unconditionally cancelable by the Company, such as credit card receivables, or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. The allowance for credit losses on OBS credit exposures is adjusted as a provision for credit loss expense. Categories of OBS credit exposures correspond to the loan portfolio segments described previously. Effect of New Financial Accounting Standards: In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing specific exceptions included in Topic 740, introducing other simplifications and making technical corrections. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The adoption of ASU 2019-12 by the Company on January 1, 2021 did not have a material impact on the financial statements. In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs. The amendments in this Update clarify that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. For each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess (that is, the premium) shall be amortized to the next call date, unless the guidance in paragraph 310-20-35-26 is applied to consider estimated prepayments. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is not permitted. The adoption of the ASU by the Company on January 1, 2021 did not have a material impact on the financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which consists of two sections. The first applicable section contains amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure section and provide the option to give certain information either on the face of the financial statements or in the notes to the financial statements. The second section contains Codification improvements that vary in nature. The amendments in this Update do not change GAAP and, therefore, are not expected to result in a significant change in practice. For public business entities, these amendments are effective for annual periods beginning after December 15, 2020. The adoption of the ASU by the Company on January 1, 2021 did not have a material impact on the financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40), Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The amendments in this ASU affect entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. An entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in Topic 718, Compensation-Stock Compensation. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company is in the process of evaluating the impact of this ASU on the financial statements.
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed using the weighted average number of actual common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur from the exercise of common stock options outstanding. ESOP shares are considered outstanding for this calculation unless unearned. The computation of basic and diluted earnings per share for the periods presented is as follows:
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Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table summarizes the balances of each component of accumulated other comprehensive income (AOCI), included in stockholders’ equity, at September 30, 2021 and December 31, 2020:
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The carrying values of investment securities at September 30, 2021 and December 31, 2020 are summarized in the following table (dollars in thousands):
Investment securities have been classified in the consolidated balance sheets according to management’s intent. Available-for-sale securities consist of debt securities not classified as trading or held to maturity. Available-for-sale securities are stated at fair value, and unrealized holding gains and losses, net of the related deferred tax effect, are reported as a separate component of stockholders' equity. Municipal bonds are comprised of general obligation bonds and revenue bonds issued by various municipal corporations. As of September 30, 2021 and December 31, 2020, all securities held were rated investment grade based upon external ratings where available and, where not available, based upon management knowledge of the local issuers and their financial situations. There were no trading or held to maturity securities as of September 30, 2021 or December 31, 2020. The carrying amount of available-for-sale securities, fair values and allowance for credit losses were as follows as of September 30, 2021 and December 31, 2020 (in thousands):
The amortized cost and estimated fair value of available-for-sale securities classified according to their contractual maturities at September 30, 2021, were as follows (in thousands) below. Expected maturities of MBS may differ from contractual maturities because the mortgages underlying the securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary.
As of September 30, 2021 investment securities with a carrying value of $10.14 million were pledged to collateralize other borrowings. As of September 30, 2021, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders' equity. There were no sales of available-for-sale securities for the three months ended September 30, 2021 and 2020. Sales proceeds and gross realized gains and losses on available-for-sale securities were as follows for the nine months ended September 30, 2021 and 2020 (in thousands):
The following table shows the fair value, gross unrealized losses and the percentage of fair value represented by gross unrealized losses of applicable investment securities owned by the Company, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020 (in thousands):
The Company considered the following information in reaching the conclusion that the impairments disclosed in the table above are temporary and not other-than-temporary impairments. None of the unrealized losses in the above table was due to the deterioration in the credit quality of any of the issues that might result in the non-collection of contractual principal and interest. The unrealized losses are due to changes in interest rates. The Company has not recognized any unrealized loss in income because management does not have the intent to sell the securities included in the previous table. Management has concluded that it is more likely than not that the Company will not be required to sell these securities prior to recovery of the amortized cost basis. The securities are of high credit quality (investment grade credit ratings) and principal and interest payments are made timely with no payments past due as of September 30, 2021. The fair value is expected to recover as the securities approach maturity. The U.S. Treasury and other securities are issued and guaranteed by U.S. government-sponsored entities and agencies. The mortgage-backed securities and collateralized mortgage obligations have implied U.S. government guarantees of the agency securities. The Company evaluates if a credit loss exists by monitoring to ensure it has adequate credit support considering the nature of the investment, number and significance of investments in an unrealized loss position, collectability or delinquency issues, the underlying financial statements of the issuers, credit ratings and subsequent changes thereto, and other available relevant information. Considering the above factors and total unrealized losses being insignificant as of September 30, 2021, management has determined that no allowance for credit losses is necessary for the securities portfolio as of September 30, 2021.
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Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans Classes of loans are as follows:
As of September 30, 2021 and December 31, 2020, the Company has outstanding balances of $24.55 million and $86.50 million, respectively, of loans issued under the Paycheck Protection Program (PPP) and $0.33 million and $2.12 million, respectively, of deferred PPP loan fees recorded with commercial and financial loans. For the nine months ended September 30, 2021, the Company has recognized $5.48 million of deferred PPP loan fees in interest income and has received total forgiveness payments of $160.48 million from the SBA. For the nine months ended September 30, 2020, there were $1.26 million PPP loan fees recognized and no forgiveness payments received from the SBA. Changes in the allowance for credit losses, the allowance for credit losses applicable to individually evaluated loans and the related loan balance of individually evaluated loans for the three and nine months ended September 30, 2021 were as follows:
Changes in the allowance for loan losses for the three and nine months ended September 30, 2020 were as follows:
Changes in the allowance for credit losses for off-balance sheet credit exposures for the three and nine months ended September 30, 2021 were as follows:
Credit loss expense for off-balance sheet credit exposures is included in credit loss expense on the consolidated statement of income for the three and nine months ended September 30, 2021. Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading in accordance with applicable bank regulations. The Company's risk rating methodology assigns risk ratings ranging from 1 to 6, where a higher rating represents higher risk. The Company differentiates its lending portfolios into loans sharing common risk characteristics for which expected credit loss is measured on a pool basis and loans not sharing common risk characteristics for which credit loss is measured individually. The below are descriptions of the credit quality indicators: Excellent – Excellent rated loans are prime quality loans covered by highly liquid collateral with generous margins or supported by superior current financial conditions reflecting substantial net worth, relative to total credit extended, and based on assets of a stable and non-speculative nature whose values can be readily verified. Identified repayment source or cash flow is abundant and assured. Loans are secured with cash, cash equivalents, or collateral with very low loan to values. The borrower would qualify for unsecured debt and guarantors provide excellent secondary support to the relationship. The borrower has a long-term relationship with Hills Bank, maintains high deposit balances and has an established payment history with Hills Bank and an established business in an established industry. Good – Good rated loans are adequately secured by readily marketable collateral or good financial condition characterized by liquidity, flexibility and sound net worth. Loans are supported by sound primary and secondary payment sources and timely and accurate financial information. The relationship is not quite as strong as a borrower that is assigned an excellent rating but still has a very strong liquidity position, low leverage, and track record of strong performance. These loans have a strong collateral position with limited risk to bank capital. The collateral will not materially lose value in a distressed liquidation. Guarantors provide additional secondary support to mitigate possible bank losses. The borrower has a long-term relationship with Hills Bank with an established track record of payments; loans with shorter remaining loan amortization; deposit balances are consistent; loan payments could be made from cash reserves in the interim period; and source of income is coming from a stable industry. Satisfactory – Satisfactory rated loans are loans to borrowers of average financial means not especially vulnerable to changes in economic or other circumstances, where the major support for the extension is sufficient collateral of a marketable nature, and the primary source of repayment is seen to be clear and adequate. The borrower's financial performance is consistent, ratios and trends are positive and the primary repayment source can clearly be identified and supported with acceptable financial information. The loan relationship could be vulnerable to changes in economic or industry conditions but have the ability to absorb unexpected issues. The loan collateral coverage is considered acceptable and guarantors can provide financial support but net worth might not be as liquid as a 1 or 2 rated relationship. The borrower has an established relationship with Hills Bank. The relationship is making timely loan payments, any operating line is revolving and deposit balances are positive with limited to no overdrafts. Management and industry is considered stable. Monitor – Monitor rated loans are identified by management as warranting special attention for a variety of reasons that may bear on ultimate collectability. This may be due to adverse trends, a particular industry, loan structure, or repayment that is dependent on projections, or a one-time occurrence. The relationship liquidity levels are minimal and the borrower’s leverage position is brought into question. The primary repayment source is showing signs of being stressed or is not proven. If the borrower performs as planned, the loan will be repaid. The collateral coverage is still considered acceptable but there might be some concern with the type of real estate securing the debt or highly dependent on chattel assets. Some loans may be better secured than others. Guarantors still provide some support but there is not an abundance of financial strength supporting the guaranty. A monitor credit may be appropriate when the borrower is experiencing rapid growth which is impacting liquidity levels and increasing debt levels. Other attributes to consider would include if the business is a start-up or newly acquired, if the relationship has significant financing relationships with other financial institutions, the quality of financial information being received, management depth of the company, and changes to the business model. The track history with Hills Bank has some deficiencies such as slow payments or some overdrafts. Special Mention – Special mention rated loans are supported by a marginal payment capacity and are marginally protected by collateral. There are identified weaknesses that if not monitored and corrected may adversely affect the Company’s credit position. A special mention credit would typically have a weakness in one of the general categories (cash flow, collateral position or payment history) but not in all categories. Potential indicators of a special mention would include past due payments, overdrafts, management issues, poor financial performance, industry issues, or the need for additional short-term borrowing. The ability to continue to make payments is in question; there are “red flags” such as past due payments, non-revolving credit lines, overdrafts, and the inability to sell assets. The borrower is experiencing delinquent taxes, legal issues, etc., obtaining financial information has become a challenge, collateral coverage is marginal at best, and the value and condition could be brought into question. Collateral document deficiencies have been noted and if not addressed, could become material. Guarantors provide minimal support for this relationship. The credit may include an action plan or follow up established in the asset quality process. There is a change in the borrower’s communication pattern. Industry issues may be impacting the relationship. Adverse credit scores or history of payment deficiencies could be noted. Substandard – Substandard loans are not adequately supported by the paying capacity of the borrower and may be inadequately collateralized. These loans have a well-defined weakness or weaknesses. Full repayment of the loan(s) according to the original terms and conditions is in question or not expected. For these loans, it is more probable than not that the Company could sustain some loss if the deficiency(ies) is not corrected. There are identified shortfalls in the primary repayment source such as carry over debt, past due payments, and overdrafts. Obtaining quality and timely financial information is a weakness. The loan is under secured with exposure that could impact bank capital. It appears the liquidation of collateral has become the repayment source. The collateral may be difficult to foreclose or have little to no value. Collateral documentation deficiencies have been noted during the review process. Guarantor(s) provide minimal to no support of the relationship. The borrower’s communication with the bank continues to decrease and the borrower is not addressing the situation. There is some concern about the borrower’s ability and willingness to repay the loans. Problems may be the result of external issues such as economic or industry related issues. The following tables present the credit quality indicators and origination years by type of loan in each category as of September 30, 2021 (amounts in thousands):
The following table presents the credit quality indicators by type of loans in each category as of December 31, 2020 (amounts in thousands):
Past due loans as of September 30, 2021 and December 31, 2020 were as follows:
The Company does not have a material amount of loans that are past due less than 90 days where there are serious doubts as to the ability of the borrowers to comply with the loan repayment terms. Certain nonaccrual and TDR loan information by loan type at September 30, 2021 and December 31, 2020, was as follows:
(1)There were $2.76 million and $2.97 million of TDR loans included within nonaccrual loans as of September 30, 2021 and December 31, 2020, respectively. Loans 90 days or more past due that are still accruing interest decreased $0.01 million from December 31, 2020 to September 30, 2021. As of September 30, 2021 there were six accruing loans past due 90 days or more with an average loan balance of $0.17 million. There were 12 accruing loans past due 90 days or more as of December 31, 2020 with an average loan balance of $0.09 million. The accruing loans past due 90 days or more balances are believed to be adequately collateralized and the Company expects to collect all principal and interest as contractually due under these loans. The Company may modify the terms of a loan to maximize the collection of amounts due. Such a modification is considered a troubled debt restructuring (“TDR”). In most cases, the modification is either a reduction in interest rate, conversion to interest only payments or an extension of the maturity date. The borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term, so a concessionary modification is granted to the borrower that would otherwise not be considered. TDR loans accrue interest as long as the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. Section 4013 of the CARES Act, “Temporary Relief From Troubled Debt Restructurings,” allows financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. In March 2020, various regulatory agencies, including the FRB and the FDIC, issued an interagency statement, effective immediately, on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not to be considered TDRs. This includes short-term (e.g., six months) modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. As of September 30, 2021, the total amount of the eligible loans in deferral (deferral of principal and/or interest) that met the requirements set forth under the CARES Act and therefore were not considered TDRs was 16 loans, totaling $9.5 million. As of December 31, 2020, there were 13 loans, totaling $9.4 million that met the requirements and were not considered TDRs. Throughout 2020, COVID-19 related payment deferrals provided for customers totaled approximately 14.82% of total loans. As of September 30, 2021 and December 31, 2020, COVID-19 related payment deferrals were approximately 0.13% and 1.20% of total loans, respectively. Below is a summary of information for TDR loans as of September 30, 2021 and December 31, 2020:
The following is a summary of TDR loans that were modified during the three and nine months ended September 30, 2021:
The Company has allocated $0.02 million of allowance for TDR loans and the Company had commitments to lend $0.16 million in additional borrowings to restructured loan customers as of September 30, 2021. The Company had commitments to lend $0.04 million in additional borrowings to restructured loan customers as of December 31, 2020. These commitments were in the normal course of business. The additional borrowings were not used to facilitate payments on these loans. The modifications of the terms of loans performed during the nine months ended September 30, 2021 included extensions of the maturity date. There were no TDR loans that were in payment default (defined as past due 90 days or more) during the period ended September 30, 2021 and the year ended December 31, 2020. The following table presents the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:
Pre-ASC 326 (CECL) adoption impaired loans information as of December 31, 2020 is as follows:
Post-ASC 326 CECL Adoption: The changes in the ACL in 2021 compared to December 31, 2020 is the result of the following factors: $2.75 million increase upon adoption of ASC 326 (CECL) on January 1, 2021; changes after adoption for the nine months ended September 30, 2021 include improvements in the economic factor forecasts, primarily Iowa unemployment, used in the ACL calculation which resulted in a decrease of $1.14 million; decrease in loan volume which resulted in a decrease of $0.75 million; changes in prepayment and curtailment rates resulting in a decrease of $1.03 million; decreases in historical loss rates along with net recoveries in the first half of 2021 resulting in a decrease of $1.59 million; decreases in the individually analyzed loans reserve of $0.42 million; and increases in qualitative factors determined necessary by management which resulted in an increase of $0.71 million. The extent to which collateral secures collateral-dependent loans is provided in the previous individually analyzed loans table and changes in the extent to which collateral secures its collateral-dependent loans are described below. Collateral-dependent loans decreased $3.97 million from December 31, 2020 to September 30, 2021. Collateral-dependent loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and TDR loans. Collateral-dependent loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Collateral-dependent loans were 0.63% of loans held for investment as of September 30, 2021 and 0.76% as of December 31, 2020. The decrease in collateral-dependent loans is due to a decrease of $0.52 million in loans with a specific reserve, a decrease in nonaccrual loans of $1.13 million, a decrease in 90 days or more accruing loans of $0.01 million and a decrease in TDR loans of $2.26 million from December 31, 2020 to September 30, 2021. There were no significant changes noted in the extent to which collateral secures collateral-dependent loans. The Company regularly reviews a substantial portion of the loans in the portfolio and assesses whether the loans share common risk characteristics for which expected credit loss is measured on a pool basis or if the loans do not share common risk characteristics and therefore expected credit loss is measured on an individual loan basis. If the loans are assessed for credit losses on an individual basis, the Company determines if a specific allowance is appropriate. In addition, the Company's management also reviews and, where determined necessary, provides allowances for particular loans based upon (1) reviews of specific borrowers and (2) management’s assessment of areas that management considers are of higher credit risk, including loans that have been restructured or where a TDR is reasonably possible. Loans that are determined not to be collateral-dependent and for which there are no specific allowances are classified into one or more risk categories and expected credit loss is measured on a pool basis. See Note 1 Adoption of New Financial Accounting Standard for further discussion of the allowance for credit losses for loans held for investment. Specific allowances for credit losses on loans assessed individually are established if the loan balances exceed the net present value of the relevant future cash flows or the fair value of the relevant collateral based on updated appraisals and/or updated collateral analysis for the properties if the loan is collateral dependent. The Company may recognize a charge off or record a specific allowance related to an individually analyzed loan if there is a collateral shortfall or it is unlikely the borrower can make all principal and interest payments as contractually due. For loans that are collateral-dependent, losses are evaluated based on the portion of a loan that exceeds the fair market value of the collateral. In general, this is the amount that the carrying value of the loan exceeds the related appraised value less estimated costs to sell the collateral. Generally, it is the Company’s policy not to rely on appraisals that are older than one year prior to the date the credit loss is being measured. The most recent appraisal values may be adjusted if, in the Company’s judgment, experience and other market data indicate that the property’s value, use, condition, exit market or other variables affecting its value may have changed since the appraisal was performed. The charge off or loss adjustment supported by an appraisal is considered the minimum charge off. Any adjustments made to the appraised value are to provide an additional charge off or specific reserve based on the applicable facts and circumstances. In instances where there is an estimated decline in value, a specific reserve may be provided or a charge off taken pending confirmation of the amount of the loss from an updated appraisal. Upon receipt of the new appraisals, an additional specific reserve may be provided or charge off taken based on the appraised value of the collateral. On average, appraisals are obtained within one month of order.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesThe Bank leases branch offices, parking facilities and certain equipment under operating leases. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. As the options are reasonably certain to be exercised, they are recognized as part of the right-of-use assets and lease liabilities. For the nine months ended September 30, 2021 and 2020, total operating lease expense was $0.44 million and $0.42 million respectively, and is included in occupancy expenses in the consolidated statements of income. Included in this for the nine months ended September 30, 2021 and 2020 were $0.37 million and $0.35 million, respectively, of operating lease costs, $0.03 million and $0.03 million, respectively, of short term lease costs, and $0.04 million and $0.04 million, respectively, of variable lease costs. For the nine months ended September 30, 2021 and 2020, cash paid for amounts included in the measurement of operating lease liabilities was $0.38 million and $0.35 million, respectively. As of September 30, 2021 and December 31, 2020, operating lease right-of-use assets included in other assets was $2.57 million and $2.86 million respectively. Operating lease liabilities were $2.63 million and $2.91 million as of September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, the weighted average remaining lease term for operating leases was 10.01 years and 10.27 years, respectively, and the weighted average discount rate for operating leases was 3.48% and 3.45%, respectively. Discount rates used were determined from FHLB borrowing rates for comparable terms. As of September 30, 2021, maturities of lease liabilities were as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The carrying value and estimated fair values of the Company's financial instruments as of September 30, 2021 are as follows:
(1)Considered Level 1 under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. The carrying value and estimated fair values of the Company's financial instruments as of December 31, 2020 are as follows:
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. Fair value of financial instruments: FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) provides a single definition for fair value, a framework for measuring fair value and expanded disclosures concerning fair value. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company determines the fair market value of its financial instruments based on the fair value hierarchy established in ASC 820. There are three levels of inputs that may be used to measure fair value as follows:
It is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. The Company is required to use observable inputs, to the extent available, in the fair value estimation process unless that data results from forced liquidations or distressed sales. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value. ASSETS Investment securities available for sale: Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If a quoted price is not available, the fair value is obtained from benchmarking the security against similar securities. U.S. Treasury securities are considered Level 1 with the remaining securities considered Level 2. The pricing for investment securities is obtained from an independent source. There are no Level 3 investment securities owned by the Company. The Company obtains an understanding of the independent source’s valuation methodologies used to determine fair value by level of security. The Company validates assigned fair values on a sample basis using an additional third-party provider pricing service to determine if the fair value measurement is reasonable. Due to the nature of our investment portfolio, we do not expect significant and unusual fluctuations as fair value changes primarily relate to interest rate changes. No unusual fluctuations were identified during the nine months ended September 30, 2021. If a fluctuation requiring investigation was identified, the Company would research the change with the independent source or other available information. Loans held for sale and Loans: ASU 2016-01, Financial Instruments -Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Methodologies utilized for this financial statement period are as follows: •Income Approach: Fair value is determined based on a discounted cash flow analysis. The discounted cash flow analysis was based on the contractual maturity of the loan and market indications of rates, prepayment speeds, defaults and credit risk. •Asset Approach: Fair value is determined based on the estimated values of the underlying collateral or individual analysis of receipts. This provides a better indication of value than the contractual income streams as these loans are not performing or exhibit strong signs indicative of non-performance. Fair value has been estimated in accordance with ASC 820, Fair Value Measurements and Disclosures, and is intended to represent the price that would be received in an orderly transaction between market participants as of the measurement date. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, at least one significant assumption not observable in the market was utilized. These unobservable assumptions reflect estimates that market participants would use in pricing the asset or liability. Inputs to these valuation techniques are subjective in nature, involve uncertainties and require significant judgment and therefore cannot be determined with precision. Accordingly, the fair value estimates presented are not necessarily indicative of the amounts to be realized in a current market exchange. Loans are classified as Level 3. Loans held for sale are carried at historical cost. The carrying amount is a reasonable estimate of fair value because of the short time between origination of the loan and its sale on the secondary market (Level 2). The market is active for these loans and as a result prices for similar assets are available. Individually analyzed loans under ASC 326 CECL: See Note 1 for further discussion of individually analyzed loans under CECL. Impaired loans pre-ASC 326: A loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a loan is considered impaired, the amount of reserve required under ASC 310, Receivables, is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material loans deemed impaired using the fair value of the collateral for collateral dependent loans or based on the present value of the estimated future cash flows of interest and principal discounted at the loans effective interest rate or the fair value of the loan if determinable. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. All appraised values are adjusted for market-related trends based on the Company's experience in sales and other appraisals of similar property types as well as estimated selling costs. Each quarter management reviews all collateral dependent impaired loans on a loan-by-loan basis to determine whether updated appraisals are necessary based on loan performance, collateral type and guarantor support. At times, the Company measures the fair value of collateral dependent impaired loans using appraisals with dates prior to one year from the date of review. These appraisals are discounted by applying current, observable market data about similar property types such as sales contracts, estimations of value by individuals familiar with the market, other appraisals, sales or collateral assessments based on current market activity until updated appraisals are obtained. Depending on the length of time since an appraisal was performed, the data provided through reviews and estimated selling costs, collateral values are typically discounted by 0-35%. These loans are considered Level 3 as the instruments used to determine fair market value require significant management judgment and estimation. Foreclosed assets: The Company does not record foreclosed assets at fair value on a recurring basis. Foreclosed assets consist mainly of other real estate owned but may include other types of assets repossessed by the Company. Foreclosed assets are adjusted to the lower of carrying value or fair value less the cost of disposal. Fair value is generally based upon independent market prices or appraised values of the collateral, and may include a marketability discount as deemed necessary by management based on its experience with similar types of real estate. The value of foreclosed assets is evaluated periodically as a nonrecurring fair value adjustment. Foreclosed assets are classified as Level 3. Off-balance sheet instruments: Fair values for outstanding letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of the outstanding letters of credit is not significant. Unfunded loan commitments are not valued since the loans are generally priced at market at the time of funding (Level 2). Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below represents the balances of assets and liabilities measured at fair value on a recurring basis:
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. There were no transfers between Levels 1, 2 or 3 during the nine months ended September 30, 2021 and the year ended December 31, 2020. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company is required to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The valuation methodologies used to measure these fair value adjustments are described above. The following tables present the Company’s assets that are measured at fair value on a nonrecurring basis.
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. (4)Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. (5)Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (continued)
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. (4)Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. (5)Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
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Stock Repurchase Program |
9 Months Ended |
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Sep. 30, 2021 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase ProgramOn July 26, 2005, the Company’s Board of Directors authorized a program to repurchase up to a total of 1,500,000 shares of the Company’s common stock (the “2005 Stock Repurchase Program”). The Company’s Board of Directors has authorized the 2005 Stock Repurchase Program through December 31, 2022. The Company expects the purchases pursuant to the 2005 Stock Repurchase Program to be made from time to time in private transactions at a price equal to the most recent quarterly independent appraisal of the shares of the Company’s common stock and with the Board reviewing the overall results of the 2005 Stock Repurchase Program on a quarterly basis. All purchases made pursuant to the 2005 Stock Repurchase Program since its inception have been made on that basis. The amount and timing of stock repurchases will be based on various factors, such as the Board’s assessment of the Company’s capital structure and liquidity, the amount of interest shown by shareholders in selling shares of stock to the Company at their appraised value, and applicable regulatory, legal and accounting factors. The Company has purchased 1,398,761 shares of its common stock in privately negotiated transactions from August 1, 2005 through September 30, 2021. Of these 1,398,761 shares, 19,556 shares were purchased during the quarter ended September 30, 2021, at an average price per share of $66.15. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Concentrations of credit risk: The Bank’s loans, commitments to extend credit, unused lines of credit and outstanding letters of credit have been granted to customers within the Bank's market area. Investments in securities issued by state and political subdivisions within the state of Iowa totaled approximately $86.49 million. The concentrations of credit by type of loan are set forth in Note 5 to the Consolidated Financial Statements. Outstanding letters of credit were granted primarily to commercial borrowers. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent upon the economic conditions in Johnson, Linn and Washington Counties, Iowa. Contingencies: In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions, some of which seek substantial relief or damages. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management believes at this time that the outcome of such litigation will not have a material adverse effect on the Company’s business, financial conditions, or results of operations. The outbreak of Coronavirus Disease 2019 (“COVID-19”) continues to adversely impact a broad range of industries in which the Company’s customers operate and impair their ability to fulfill their financial obligations to the Company. The World Health Organization declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused significant disruptions in the U.S. economy and is highly likely to disrupt banking and other financial activity in the areas in which the Company operates and could also potentially create widespread business continuity issues for the Company. The Company’s business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates or is unsuccessful, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows. See Note 5 for further discussion regarding the financial impact of COVID-19. Financial instruments with off-balance sheet risk: The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, credit card participations and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, credit card participations and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Bank’s commitments at September 30, 2021 and December 31, 2020 is as follows:
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Income Taxes |
9 Months Ended |
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Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesFederal income tax expense for the nine months ended September 30, 2021 and 2020 was computed using the consolidated effective federal tax rate. The Company also recognized income tax expense pertaining to state franchise taxes payable individually by the subsidiary bank. The Company files a consolidated tax return for federal purposes and separate tax returns for State of Iowa purposes. The tax years ended December 31, 2020, 2019, and 2018 remain subject to examination by the Internal Revenue Service. For state tax purposes, the tax years ended December 31, 2020, 2019, and 2018 remain open for examination. There were no material unrecognized tax benefits at September 30, 2021 and December 31, 2020 and therefore no interest or penalties on unrecognized tax benefits has been recorded. As of September 30, 2021, the Company does not anticipate any significant increase in unrecognized tax benefits during the twelve-month period ending September 30, 2022. Income taxes as a percentage of income before taxes were 22.58% for the nine months ended September 30, 2021 and 22.43% for the same period in 2020. |
Derivative Financial Instruments |
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Derivative Financial Instruments | Derivative Financial Instruments In the normal course of business, the Bank may use derivative financial instruments to manage its interest rate risk. These instruments carry varying degrees of credit, interest rate and market or liquidity risks. Derivative instruments are recognized as either assets or liabilities in the accompanying financial statement and are measured at fair value. The Bank’s objectives are to add stability to its net interest margin and to manage its exposure to movements in interest rates. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amount to be exchanged between the counterparties. The Bank is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. The Bank minimizes this risk by entering into derivative contracts with large, stable financial institutions. The Bank has not experienced any losses from nonperformance by counterparties. The Bank monitors counterparty risk in accordance with the provisions of ASC 815. In addition, the Bank’s interest rate-related derivative instruments contain language outlining collateral pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits which are determined by credit ratings of each counterparty. The Bank terminated one interest rate swap in December 2020 and the other matured in November 2020, therefore the Bank was not required to pledge collateral as of September 30, 2021 and December 31, 2020. Cash Flow Hedges: The Bank executed two forward-starting interest rate swap transactions on November 7, 2013. One of the interest rate swap transactions had an effective date of November 9, 2015, and an expiration date of November 9, 2020, effectively converting $25.00 million of variable rate debt to fixed rate debt. The other interest rate swap transaction had an effective date of November 7, 2016 and an expiration date of November 7, 2023, effectively converting $25.00 million of variable rate debt to fixed rate debt. For accounting purposes, these swap transactions were designated as a cash flow hedge of the changes in cash flows attributable to changes in three-month LIBOR, the benchmark interest rate being hedged, associated with the interest payments made on an amount of the Bank’s debt principal equal to the then-outstanding swap notional amount. At inception, the Bank asserted that the underlying principal balance would remain outstanding throughout the hedge transaction making it probable that sufficient LIBOR-based interest payments would exist through the maturity date of the swaps. The Bank terminated the remaining interest rate swap in December 2020 and in connection with the termination paid $2.684 million to the counterparty. The losses realized on the interest rate swap were reclassified into the income statement from other comprehensive income. In connection with the termination of the swap, the related FHLB borrowings were paid off. There were no remaining derivative instruments designated as cash flow hedges as of September 30, 2021 and December 31, 2020. There were no gains or losses recognized on the Bank's derivative instruments designated as cash flow hedges for the nine months ended September 30, 2021. The table below identifies the gains and losses recognized on the Bank’s derivative instruments designated as cash flow hedges for the nine months ended September 30, 2020:
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and with instructions for Form 10-Q and Regulation S-X. These financial statements include all adjustments (consisting of normal recurring accruals) which in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company considers that it operates as one business segment, a commercial bank.
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Revenue Recognition | Revenue Recognition: Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the Company’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, letters of credit and investment securities. Interest income on loans and investment securities is recognized on the accrual method in accordance with written contracts. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC 606 are the following: Service charges and fees on deposit accounts represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue which includes interchange income, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when the Company’s performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. Trust income represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and similar fiduciary activities. Revenue is recognized when our performance obligation is completed each month, which is generally the time that payment is received. A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity's obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. As of September 30, 2021, the Company did not have any significant contract balances. An entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less.
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Effect of New Financial Accounting Standards | Effect of New Financial Accounting Standards: In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing specific exceptions included in Topic 740, introducing other simplifications and making technical corrections. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The adoption of ASU 2019-12 by the Company on January 1, 2021 did not have a material impact on the financial statements. In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs. The amendments in this Update clarify that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. For each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess (that is, the premium) shall be amortized to the next call date, unless the guidance in paragraph 310-20-35-26 is applied to consider estimated prepayments. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is not permitted. The adoption of the ASU by the Company on January 1, 2021 did not have a material impact on the financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which consists of two sections. The first applicable section contains amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate disclosure section and provide the option to give certain information either on the face of the financial statements or in the notes to the financial statements. The second section contains Codification improvements that vary in nature. The amendments in this Update do not change GAAP and, therefore, are not expected to result in a significant change in practice. For public business entities, these amendments are effective for annual periods beginning after December 15, 2020. The adoption of the ASU by the Company on January 1, 2021 did not have a material impact on the financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40), Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The amendments in this ASU affect entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. An entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in Topic 718, Compensation-Stock Compensation. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company is in the process of evaluating the impact of this ASU on the financial statements.
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Earnings Per Share | Earnings Per ShareBasic earnings per share is computed using the weighted average number of actual common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur from the exercise of common stock options outstanding. ESOP shares are considered outstanding for this calculation unless unearned. |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of ASC 326 | The following table illustrates the impact of ASC 326 (amounts in thousands).
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per share | The computation of basic and diluted earnings per share for the periods presented is as follows:
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Accumulated Other Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive income (AOCI) | The following table summarizes the balances of each component of accumulated other comprehensive income (AOCI), included in stockholders’ equity, at September 30, 2021 and December 31, 2020:
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying values of investment securities | The carrying values of investment securities at September 30, 2021 and December 31, 2020 are summarized in the following table (dollars in thousands):
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Carrying amount of available-for-sale securities and approximate fair values | The carrying amount of available-for-sale securities, fair values and allowance for credit losses were as follows as of September 30, 2021 and December 31, 2020 (in thousands):
There were no sales of available-for-sale securities for the three months ended September 30, 2021 and 2020. Sales proceeds and gross realized gains and losses on available-for-sale securities were as follows for the nine months ended September 30, 2021 and 2020 (in thousands):
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Available-for-sale securities classified as per contractual maturities | The amortized cost and estimated fair value of available-for-sale securities classified according to their contractual maturities at September 30, 2021, were as follows (in thousands) below. Expected maturities of MBS may differ from contractual maturities because the mortgages underlying the securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary.
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Available-for-sale securities, summary of proceeds, gains and losses | The carrying amount of available-for-sale securities, fair values and allowance for credit losses were as follows as of September 30, 2021 and December 31, 2020 (in thousands):
There were no sales of available-for-sale securities for the three months ended September 30, 2021 and 2020. Sales proceeds and gross realized gains and losses on available-for-sale securities were as follows for the nine months ended September 30, 2021 and 2020 (in thousands):
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Available-for-sale securities, continuous unrealized loss position, fair value | The following table shows the fair value, gross unrealized losses and the percentage of fair value represented by gross unrealized losses of applicable investment securities owned by the Company, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020 (in thousands):
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Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of classes of loans | Classes of loans are as follows:
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Schedule of changes in allowance for loan losses | Changes in the allowance for credit losses, the allowance for credit losses applicable to individually evaluated loans and the related loan balance of individually evaluated loans for the three and nine months ended September 30, 2021 were as follows:
Changes in the allowance for loan losses for the three and nine months ended September 30, 2020 were as follows:
The following table presents the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:
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Schedule of allowance for credit losses for off-balance sheet credit exposure | Changes in the allowance for credit losses for off-balance sheet credit exposures for the three and nine months ended September 30, 2021 were as follows:
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Schedule of credit quality indicators by type of loans | The following table presents the credit quality indicators by type of loans in each category as of December 31, 2020 (amounts in thousands):
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Schedule of past due loans | Past due loans as of September 30, 2021 and December 31, 2020 were as follows:
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Schedule of impaired loan information | Certain nonaccrual and TDR loan information by loan type at September 30, 2021 and December 31, 2020, was as follows:
(1)There were $2.76 million and $2.97 million of TDR loans included within nonaccrual loans as of September 30, 2021 and December 31, 2020, respectively.
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Schedule of information for TDR loans | Below is a summary of information for TDR loans as of September 30, 2021 and December 31, 2020:
The following is a summary of TDR loans that were modified during the three and nine months ended September 30, 2021:
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Schedule of impaired loans | Pre-ASC 326 (CECL) adoption impaired loans information as of December 31, 2020 is as follows:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of lease liabilities, Topic 842 | As of September 30, 2021, maturities of lease liabilities were as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying value and estimated fair values of entity's financial instruments | The carrying value and estimated fair values of the Company's financial instruments as of September 30, 2021 are as follows:
(1)Considered Level 1 under Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. The carrying value and estimated fair values of the Company's financial instruments as of December 31, 2020 are as follows:
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
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Schedule of assets and liabilities measured at fair value on a recurring basis | The table below represents the balances of assets and liabilities measured at fair value on a recurring basis:
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market.
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Schedule of assets measured at fair value on a nonrecurring basis | The following tables present the Company’s assets that are measured at fair value on a nonrecurring basis.
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. (4)Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. (5)Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (continued)
(1)Considered Level 1 under ASC 820. (2)Considered Level 2 under ASC 820. (3)Considered Level 3 under ASC 820 and are based on valuation models that use significant assumptions that are not observable in an active market. (4)Represents carrying value and related write-downs of loans for which adjustments are based on the value of the collateral. The carrying value of loans fully-charged off is zero. (5)Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of banks commitments | A summary of the Bank’s commitments at September 30, 2021 and December 31, 2020 is as follows:
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identification of the gains and losses recognized on the derivative instruments designated as cash flow hedges | There were no gains or losses recognized on the Bank's derivative instruments designated as cash flow hedges for the nine months ended September 30, 2021. The table below identifies the gains and losses recognized on the Bank’s derivative instruments designated as cash flow hedges for the nine months ended September 30, 2020:
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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Tax effect | $ (1,418) | $ (2,920) |
Net-of-tax amount | 4,267 | 8,782 |
Net unrealized loss on available-for-sale securities [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Net unrealized gain (loss) | $ 5,685 | $ 11,702 |
Leases (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Lessee, Lease, Description [Line Items] | |||
Operating lease, renewal term | 10 years | ||
Operating lease, option to termination term | 1 year | ||
Operating lease expense | $ 440 | $ 420 | |
Operating lease cost | 370 | 350 | |
Short-term lease cost | 30 | 30 | |
Variable lease cost | 40 | 40 | |
Operating lease payments | 380 | $ 350 | |
Operating lease, right-of-use asset | 2,570 | $ 2,860 | |
Total operating lease liabilities | $ 2,628 | $ 2,910 | |
Weighted average remaining lease term | 10 years 3 days | 10 years 3 months 7 days | |
Weighted average discount rate | 3.48% | 3.45% | |
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term | 1 year | ||
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term | 15 years |
Leases - Minimum Future Rental Commitments, Topic 842 (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
2021 (excluding the nine months ended September 30, 2021) | $ 117 | |
2022 | 464 | |
2023 | 317 | |
2024 | 250 | |
2025 | 254 | |
Thereafter | 1,755 | |
Total lease payments | 3,157 | |
Less imputed interest | (529) | |
Total operating lease liabilities | $ 2,628 | $ 2,910 |
Stock Repurchase Program (Details) - $ / shares |
3 Months Ended | 9 Months Ended | 194 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Jul. 26, 2005 |
|
Equity [Abstract] | ||||||
Maximum number of share authorized to repurchase under the program (in shares) | 1,500,000 | |||||
Common stock purchased during the period (in shares) | 19,556 | 29,807 | 49,136 | 112,407 | 1,398,761 | |
Average price per share (in dollars per share) | $ 66.15 |
Income Taxes (Details) - USD ($) |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Income Tax Examination [Line Items] | |||
Effective tax rate | 22.58% | 22.43% | |
Unrecognized tax benefits | $ 0 | $ 0 | |
Interest or penalties on unrecognized tax benefits | 0 | $ 0 | |
Increase in unrecognized tax benefits is reasonably possible | $ 0 | ||
Internal Revenue Service (IRS) [Member] | |||
Income Tax Examination [Line Items] | |||
Income tax examination, years under examination | December 31, 2020, 2019, and 2018 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Examination [Line Items] | |||
Income tax examination, years under examination | December 31, 2020, 2019, and 2018 |
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