UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended |
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
Commission file number:
AMERICAN NATIONAL BANKSHARES INC.
(Exact name of registrant as specified in its charter)
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| (I.R.S. Employer Identification No.) |
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(Registrant's telephone number, including area code)
(Not applicable)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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| | ☒ | No | ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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| | ☒ | No | ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | |
| Non-accelerated filer ☐ | Smaller reporting company |
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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| Yes | | No | ☒ |
At July 30, 2021, the Company had
AMERICAN NATIONAL BANKSHARES INC.
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ITEM 1. FINANCIAL STATEMENTS
| American National Bankshares Inc. |
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| Consolidated Balance Sheets |
| (Dollars in thousands, except per share data) |
| (Unaudited) June 30, 2021 | (Audited) December 31, 2020 | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | $ | ||||||
| Interest-bearing deposits in other banks | ||||||||
| Securities available for sale, at fair value | ||||||||
| Restricted stock, at cost | ||||||||
| Loans held for sale | ||||||||
| Loans, net of deferred fees and costs | ||||||||
| Less allowance for loan losses | ( | ) | ( | ) | ||||
| Net loans | ||||||||
| Premises and equipment, net | ||||||||
| Other real estate owned, net of valuation allowance | ||||||||
| Goodwill | ||||||||
| Core deposit intangibles, net | ||||||||
| Bank owned life insurance | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities | ||||||||
| Noninterest-bearing deposits | $ | $ | ||||||
| Interest-bearing deposits | ||||||||
| Total deposits | ||||||||
| Customer repurchase agreements | ||||||||
| Long-term borrowings | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders' equity | ||||||||
| Preferred stock, par value, shares authorized, outstanding | ||||||||
| Common stock, par value, shares authorized, shares outstanding at June 30, 2021 and shares outstanding at December 31, 2020 | ||||||||
| Capital in excess of par value | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income, net | ||||||||
| Total shareholders' equity | ||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| Consolidated Statements of Income |
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| (Dollars in thousands, except per share data) (Unaudited) |
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2021 |
2020 |
2021 |
2020 |
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| Interest and Dividend Income: |
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| Interest and fees on loans |
$ | $ | $ | $ | ||||||||||||
| Interest and dividends on securities: |
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| Taxable |
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| Tax-exempt |
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| Dividends |
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| Other interest income |
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| Total interest and dividend income |
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| Interest Expense: |
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| Interest on deposits |
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| Interest on short-term borrowings |
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| Interest on long-term borrowings |
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| Total interest expense |
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| Net Interest Income |
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| (Recovery of) Provision for loan losses |
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| Net Interest Income After (Recovery of) Provision for Loan Losses |
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| Noninterest Income: |
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| Trust fees |
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| Service charges on deposit accounts |
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| Other fees and commissions |
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| Mortgage banking income |
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| Securities gains, net |
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| Brokerage fees |
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| Income (loss) from Small Business Investment Companies |
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| Income from insurance investments |
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| Losses on premises and equipment, net |
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| Other |
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| Total noninterest income |
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| Noninterest Expense: |
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| Salaries and employee benefits |
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| Occupancy and equipment |
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| FDIC assessment |
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| Bank franchise tax |
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| Core deposit intangible amortization |
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| Data processing |
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| Software |
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| Other real estate owned, net |
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| Other |
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| Total noninterest expense |
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| Income Before Income Taxes |
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| Income Taxes |
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| Net Income |
$ | $ | $ | $ | ||||||||||||
| Net Income Per Common Share: |
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| Basic |
$ | $ | $ | $ | ||||||||||||
| Diluted |
$ | $ | $ | $ | ||||||||||||
| Weighted Average Common Shares Outstanding: |
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| Basic |
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| Diluted |
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The accompanying notes are an integral part of the consolidated financial statements.
| Consolidated Statements of Comprehensive Income |
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| (Dollars in thousands) (Unaudited) |
| Three Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Net income | $ | $ | ||||||
| Other comprehensive income: | ||||||||
| Unrealized gains on securities available for sale | ||||||||
| Tax effect | ( | ) | ( | ) | ||||
| Unrealized losses on cash flow hedges | ( | ) | ( | ) | ||||
| Tax effect | ||||||||
| Other comprehensive income | ||||||||
| Comprehensive income | $ | $ | ||||||
| Six Months Ended June 30, |
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| 2021 |
2020 |
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| Net income |
$ | $ | ||||||
| Other comprehensive income (loss): |
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| Unrealized gains (losses) on securities available for sale |
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| Tax effect |
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| Reclassification adjustment for gains on sales or calls of securities available for sale |
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| Tax effect |
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| Unrealized gains (losses) on cash flow hedges |
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| Tax effect |
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| Other comprehensive income (loss) |
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| Comprehensive income |
$ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| Consolidated Statements of Changes in Shareholders' Equity |
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| Three Months Ended June 30, 2021 and 2020 |
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| (Dollars in thousands, except per share data) (Unaudited) |
| Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | ||||||||||||||||
| Balance, March 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Net income | ||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Stock options exercised ( shares) | ||||||||||||||||||||
| Vesting of restricted stock ( shares) | ( | ) | ||||||||||||||||||
| Equity based compensation ( shares) | ||||||||||||||||||||
| Cash dividends paid, per share | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Net income | ||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Stock repurchased ( shares) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Stock options exercised ( shares) | ||||||||||||||||||||
| Equity based compensation ( shares) | ||||||||||||||||||||
| Cash dividends paid, per share | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| American National Bankshares Inc. |
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| Consolidated Statements of Changes in Shareholders' Equity |
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| Six Months Ended June 30, 2021 and 2020 |
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| (Dollars in thousands, except per share data) (Unaudited) |
| Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | ||||||||||||||||
| Balance, December 31, 2019 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Net income | ||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Stock repurchased ( shares) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Stock options exercised ( shares) | ||||||||||||||||||||
| Vesting of restricted stock ( shares) | ( | ) | ||||||||||||||||||
| Equity based compensation ( shares) | ||||||||||||||||||||
| Cash dividends paid, per share | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Net income | ||||||||||||||||||||
| Other comprehensive (loss) | ( | ) | ( | ) | ||||||||||||||||
| Stock repurchased ( shares) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Stock options exercised ( shares) | ||||||||||||||||||||
| Vesting of restricted stock ( shares) | ( | ) | ||||||||||||||||||
| Equity based compensation ( shares) | ||||||||||||||||||||
| Cash dividends paid, per share | ( | ) | ( | ) | ||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| Consolidated Statements of Cash Flows |
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| (Dollars in thousands) (Unaudited) |
| Six Months Ended June 30, | ||||||||
| 2021 |
2020 |
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| Cash Flows from Operating Activities: |
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| Net income |
$ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Provision for (recovery of) loan losses |
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| Depreciation |
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| Net accretion of acquisition accounting adjustments |
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| Core deposit intangible amortization |
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| Net amortization of securities |
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| Net gain on sale or call of securities available for sale |
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| Gain on sale of loans held for sale |
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| Proceeds from sales of loans held for sale |
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| Originations of loans held for sale |
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| Net loss (gain) on other real estate owned |
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| Net loss on sale or disposal of premises and equipment |
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| Equity based compensation expense |
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| Earnings on bank owned life insurance |
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| Deferred income tax expense |
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| Net change in other assets |
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| Net change in other liabilities |
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| Net cash provided by operating activities |
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| Cash Flows from Investing Activities: |
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| Proceeds from sales of securities available for sale |
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| Proceeds from maturities, calls and paydowns of securities available for sale |
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| Purchases of securities available for sale |
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| Net change in restricted stock |
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| Net decrease (increase) in loans |
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| Proceeds from sale of premises and equipment |
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| Purchases of premises and equipment |
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| Proceeds from sales of other real estate owned |
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| Net cash provided by (used in) investing activities |
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| Cash Flows from Financing Activities: |
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| Net change in noninterest-bearing deposits |
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| Net change in interest-bearing deposits |
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| Net change in customer repurchase agreements |
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| Net change in subordinated debt |
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| Common stock dividends paid |
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| Repurchase of common stock |
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| Proceeds from exercise of stock options |
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| Net cash provided by financing activities |
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| Net Increase in Cash and Cash Equivalents |
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| Cash and Cash Equivalents at Beginning of Period |
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| Cash and Cash Equivalents at End of Period |
$ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
AMERICAN NATIONAL BANKSHARES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Accounting Policies
The consolidated financial statements include the accounts of American National Bankshares Inc. (NASDAQ: AMNB) (the "Company") and its wholly-owned subsidiary, American National Bank and Trust Company (the "Bank"). The Company is a multi-state bank holding company headquartered in Danville, Virginia. The Bank is a community bank organization serving Virginia and North Carolina with
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts 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. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill and intangible assets, other-than-temporary impairment of securities, accounting for merger and acquisition activity, accounting for acquired loans with specific credit-related deterioration, and the valuation of deferred tax assets and liabilities.
COVID-19 spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. On March 13, 2020, the United States President declared a national emergency in the face of a growing public health and economic crisis due to the COVID-19 global pandemic. The government and private sector responses to contain its spread began to significantly affect the Company's operations beginning in March 2020 and will likely continue to adversely affect its operations through 2021, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic will most likely affect future earnings, cash flows and overall financial condition of the Company. These uncertainties include the nature and duration of the financial effects felt by its customers impacting their ability to perform in accordance with their underlying loan agreements, the Company's ability to generate demand for non-loan related products and services, as well as potential declines in real estate values resulting from the market disruption which may impair the recorded values of collateral-dependent loans and other real estate owned. Further, these factors, in addition to those pervasive to the industry and overall U.S. economy, may necessitate an overall valuation of the Company's franchise in such a way an impairment charge to the carrying value of goodwill would be required. Accordingly, significant estimates used in the preparation of the Company's financial statements including those associated with the evaluation of the allowance for loan losses as well as other valuation-based estimates may be subject to significant adjustments in future periods. We have seen significant improvement in the severity of the pandemic, however, as it continues to affect economies around the world and in the United States, it could impact estimates in future periods.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results that may occur for any other period. These statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Certain prior period balances have been reclassified to conform to the current period presentation.
Recently Adopted Accounting Developments
In December 2020, the Consolidated Appropriations Act of 2021 ("CAA") was passed. Under Section 541 of the CAA, Congress extended or modified many of the relief programs first created by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, including the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") and treatment of certain loan modifications related to the COVID-19 pandemic.
The Company has utilized a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act throughout the pandemic. The Company assisted borrowers with modifications to outstanding loan balances of $
The Company continued to participate in the PPP under the CARES Act in the second quarter of 2021, until the program expired. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven. The Company processed a total of $
Recent Accounting Pronouncements and Other Authoritative Accounting Guidance
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission ("SEC") and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. At the one-time evaluation date, the Company qualified as a smaller reporting company and elected to defer the adoption of the standard. The Company is refining the data in the model that will be used upon future adoption of the standard and expects to run concurrent models in the fourth quarter of 2021 and each quarter of 2022 until adoption. The implementation of this ASU will likely result in an adjustment to the Company's reserves when implemented.
In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Certain disclosure requirements have been deleted while the following disclosure requirements have been added: the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715-20-50-3, which state that the following information for defined benefit pension plans should be disclosed: the projected benefit obligation ("PBO") and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation ("ABO") and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-14 to have a material impact on its consolidated financial statements.
Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin ("SAB") 119. SAB 119 updated portions of SEC interpretative guidance to align with ASC 326, Financial Instruments - Credit Losses. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this ASU provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity." The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share calculation in certain areas. In addition, the amendment updates the disclosure requirements for convertible instruments to increase the information transparency. For public business entities, excluding smaller reporting companies, the amendments in the ASU are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements.
Note 2 – Securities
The amortized cost and fair value of investments in securities available for sale at June 30, 2021 were as follows (dollars in thousands):
| June 30, 2021 | ||||||||||||||||
| Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
| Securities available for sale: | ||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| Federal agencies and GSEs | ||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||
| State and municipal | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total securities available for sale | $ | $ | $ | $ | ||||||||||||
The amortized cost and fair value of investments in securities available for sale at December 31, 2020 were as follows (dollars in thousands):
| December 31, 2020 | ||||||||||||||||
| Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
| Securities available for sale: | ||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| Federal agencies and GSEs | ||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||
| State and municipal | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total securities available for sale | $ | $ | $ | $ | ||||||||||||
Restricted Stock
Due to restrictions placed upon the Bank's common stock investment in the Federal Reserve Bank of Richmond ("FRB") and Federal Home Loan Bank of Atlanta ("FHLB"), these securities have been classified as restricted equity securities and carried at cost. The restricted securities are not subject to the investment security classification requirements and are included as a separate line item on the Company's consolidated balance sheets. The FRB requires the Bank to maintain stock with a par value equal to
| June 30, 2021 | December 31, 2020 | |||||||
| FRB stock | $ | $ | ||||||
| FHLB stock | ||||||||
| Total restricted stock | $ | $ | ||||||
Temporarily Impaired Securities
The following table shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2021. The reference point for determining when securities are in an unrealized loss position is month end. Therefore, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.
Available for sale securities that have been in a continuous unrealized loss position, at June 30, 2021, were as follows (dollars in thousands):
| Total | Less than 12 Months | 12 Months or More | ||||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Federal agencies and GSEs | ||||||||||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||||||||||
| State and municipal | ||||||||||||||||||||||||
| Corporate | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The table below shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2020 (dollars in thousands):
| Total | Less than 12 Months | 12 Months or More | ||||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||||
| Federal agencies and GSEs | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||||||||||
| State and municipal | ||||||||||||||||||||||||
| Corporate | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
U.S. Treasury securities: The unrealized losses on the Company's investment in U.S. Treasury securities were caused by normal market fluctuations. of these securities were in an unrealized loss position for 12 months or more. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
Federal agencies and GSEs: The unrealized losses on the Company's investment in
Mortgage-backed securities: The unrealized losses on the Company's investment in
Collateralized Mortgage Obligations: The unrealized losses associated with
State and municipal securities: The unrealized losses on
Corporate securities: The unrealized loss on corporate security was caused by normal market fluctuations and not credit deterioration. This security is not rated, but the Company conducted a thorough internal credit review prior to purchase in May 2021, which determined the investment risk to be acceptable due to the issuer's experienced management team, strong asset quality, and ample levels of capital and liquidity. The contractual terms of this investment do not permit the issuer to settle the security at a price less than the amortized cost basis of the investment. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the Company does consider this investment to be other-than-temporarily impaired at June 30, 2021.
Restricted stock: When evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider restricted stock to be other-than-temporarily impaired at June 30, 2021, and
Other-Than-Temporarily-Impaired Securities
As of June 30, 2021 and December 31, 2020, there were
Realized Gains and Losses
The following table presents the gross realized gains and losses on, and the proceeds from the sale of, securities available for sale during the three and six months ended June 30, 2021 and 2020 (dollars in thousands):
| Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||
| Realized gains: | ||||||||
| Gross realized gains | $ | $ | ||||||
| Gross realized losses | ||||||||
| Net realized gains | $ | $ | ||||||
| Proceeds from sales of securities | $ | $ | ||||||
| Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | |||||||
| Realized gains: | ||||||||
| Gross realized gains | $ | $ | ||||||
| Gross realized losses | ||||||||
| Net realized gains | $ | $ | ||||||
| Proceeds from sales of securities | $ | $ | ||||||
Note 3 – Loans
Loans, net of deferred fees and costs and excluding loans held for sale, at June 30, 2021 and December 31, 2020, were comprised of the following (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Commercial | $ | $ | ||||||
| Commercial real estate: | ||||||||
| Construction and land development | ||||||||
| Commercial real estate - owner occupied | ||||||||
| Commercial real estate - non-owner occupied | ||||||||
| Residential real estate: | ||||||||
| Residential | ||||||||
| Home equity | ||||||||
| Consumer | ||||||||
| Total loans, net of deferred fees and costs | $ | $ | ||||||
Acquired Loans
The outstanding principal balance and the carrying amount of these loans, including loans accounted for under ASC 310-30, included in the consolidated balance sheets at June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Outstanding principal balance | $ | $ | ||||||
| Carrying amount | ||||||||
The outstanding principal balance and related carrying amount of purchased credit impaired loans, for which the Company applies ASC 310-30 to account for interest earned, as of the indicated dates are as follows (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Outstanding principal balance | $ | $ | ||||||
| Carrying amount | ||||||||
The following table presents changes in the accretable yield on acquired impaired loans, for which the Company applies ASC 310-30, for the six months ended June 30, 2021 and the year ended December 31, 2020 (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Balance at January 1 | $ | $ | ||||||
| Accretion | ( | ) | ( | ) | ||||
| Reclassification from nonaccretable difference | ||||||||
| Other changes, net (1) | ( | ) | ||||||
| $ | $ | |||||||
__________________________
(1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate acquired impaired loans, and discounted payoffs that occurred in the period.
Past Due Loans
The following table shows an analysis by portfolio segment of the Company's past due loans at June 30, 2021 (dollars in thousands):
| 30- 59 Days Past Due | 60-89 Days Past Due | 90 Days + Past Due and Still Accruing | Non Accrual Loans | Total Past Due | Current | Total Loans | ||||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | $ | 372,703 | $ | ||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
The following table shows an analysis by portfolio segment of the Company's past due loans at December 31, 2020 (dollars in thousands):
| 30- 59 Days Past Due | 60-89 Days Past Due | 90 Days + Past Due and Still Accruing | Non Accrual Loans | Total Past Due | Current | Total Loans | ||||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | $ | 490,994 | $ | ||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||
| Residential: | ||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Impaired Loans
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at June 30, 2021 (dollars in thousands):
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||
| With no related allowance recorded: | ||||||||||||||||||||
| Commercial | $ | $ | $ | — | $ | $ | ||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | — | |||||||||||||||||||
| Commercial real estate - owner occupied | — | |||||||||||||||||||
| Commercial real estate - non-owner occupied | — | |||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Residential | — | |||||||||||||||||||
| Home equity | — | |||||||||||||||||||
| Consumer | — | |||||||||||||||||||
| $ | 2,488 | $ | 2,488 | $ | — | $ | 2,537 | $ | 44 | |||||||||||
| With a related allowance recorded: | ||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
| Home equity | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| $ | 36 | $ | 29 | $ | 13 | $ | 169 | $ | 3 | |||||||||||
| Total: | ||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
| Home equity | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| $ | $ | $ | 13 | $ | $ | |||||||||||||||
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans with unearned costs that exceed unearned fees.
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at December 31, 2020 (dollars in thousands):
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | ||||||||||||||||
| With no related allowance recorded: | ||||||||||||||||||||
| Commercial | $ | $ | $ | — | $ | $ | ||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | — | |||||||||||||||||||
| Commercial real estate - owner occupied | — | |||||||||||||||||||
| Commercial real estate - non-owner occupied | — | |||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Residential | — | |||||||||||||||||||
| Home equity | — | |||||||||||||||||||
| Consumer | — | |||||||||||||||||||
| $ | $ | $ | — | $ | $ | |||||||||||||||
| With a related allowance recorded: | ||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied (1) | ||||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
| Home equity | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Total: | ||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied | — | |||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Residential | ||||||||||||||||||||
| Home equity | ||||||||||||||||||||
| Consumer | ||||||||||||||||||||
| $ | $ | $ | 30 | $ | $ | |||||||||||||||
__________________________
(1) Allowance is reported as zero in the table due to presentation in thousands and rounding.
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans with unearned costs that exceed unearned fees.
During the three and six months ended June 30, 2021 there were loans modified as TDRs. During the three months ended June 30, 2020, there were loans modified as TDRs. was a home equity loan, and were commercial real estate loans, all included in the impaired loan balances. The home equity loan was an extension of maturity with a pre- and post-modification outstanding recorded investment of $
During the six months ended June 30, 2021, the Company had commercial real estate - non-owner occupied loan with a recorded investment of $
The Bank has continued to assist customers through the DAP program into the second quarter of 2021. On June 30, 2021, the balance of loans remaining in this program was $
The Company continued to participate in the PPP under the CARES Act in the second quarter of 2021, until the program expired. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven. The Company processed a total of $
The loan portfolio consists primarily of commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, and home equity loans. At June 30, 2021, the commercial real estate portfolio included concentrations of $
Residential Real Estate in Process of Foreclosure
The Company had
Risk Grades
The following tables show the Company's loan portfolio broken down by internal risk grading as of June 30, 2021 (dollars in thousands):
Commercial and Consumer Credit Exposure
Credit Risk Profile by Internally Assigned Grade
| Commercial | Construction and Land Development | Commercial Real Estate - Owner Occupied | Commercial Real Estate - Non-owner Occupied | Residential | Home Equity | |||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Consumer Credit Exposure
Credit Risk Profile Based on Payment Activity
| Consumer | ||||
| Performing | $ | |||
| Nonperforming | ||||
| Total | $ | |||
The following tables show the Company's loan portfolio broken down by internal risk grading as of December 31, 2020 (dollars in thousands):
Commercial and Consumer Credit Exposure
Credit Risk Profile by Internally Assigned Grade
| Commercial | Construction and Land Development | Commercial Real Estate -Owner Occupied | Commercial Real Estate - Non-owner Occupied | Residential | Home Equity | |||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||
| Doubtful | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Consumer Credit Exposure
Credit Risk Profile Based on Payment Activity
| Consumer | ||||
| Performing | $ | |||
| Nonperforming | ||||
| Total | $ | |||
Loans classified in the Pass category typically are fundamentally sound, and risk factors are reasonable and acceptable.
Loans classified in the Special Mention category typically have been criticized internally, by loan review or the loan officer, or by external regulators under the current credit policy regarding risk grades.
Loans classified in the Substandard category typically have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are typically characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Loans classified in the Doubtful category typically have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur that may salvage the debt.
Consumer loans are classified as performing or nonperforming. A loan is nonperforming when payments of interest and principal are past due 90 days or more.
Note 4 – Allowance for Loan Losses and Reserve for Unfunded Lending Commitments
Changes in the allowance for loan losses and the reserve for unfunded lending commitments (included in other liabilities) at and for the indicated dates and periods are presented below (dollars in thousands):
| Six Months Ended June 30, 2021 | Year Ended December 31, 2020 | Six Months Ended June 30, 2020 | ||||||||||
| Allowance for Loan Losses |
||||||||||||
| Balance, beginning of period |
$ | $ | $ | |||||||||
| Provision for (recovery of) loan losses |
( |
) | ||||||||||
| Charge-offs |
( |
) | ( |
) | ( |
) | ||||||
| Recoveries |
||||||||||||
| Balance, end of period |
$ | $ | $ | |||||||||
| Reserve for Unfunded Lending Commitments |
||||||||||||
| Balance, beginning of period |
$ | $ | $ | |||||||||
| Provision for (recovery of) unfunded commitments |
( |
) | ||||||||||
| Balance, end of period |
$ | $ | $ | |||||||||
The reserve for unfunded loan commitments is included in other liabilities.
The following table presents changes in the Company's allowance for loan losses by portfolio segment and the related loan balance total by segment at and for the six months ended June 30, 2021 (dollars in thousands):
| Commercial (1) |
Construction and Land Development |
Commercial Real Estate - Owner Occupied |
Commercial Real Estate - Non-owner Occupied |
Residential Real Estate |
Consumer |
Total |
||||||||||||||||||||||
| Allowance for Loan Losses |
||||||||||||||||||||||||||||
| Balance at December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Provision for (recovery of) loan losses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Charge-offs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
| Recoveries |
||||||||||||||||||||||||||||
| Balance at June 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Balance at June 30, 2021: |
||||||||||||||||||||||||||||
| Allowance for Loan Losses |
||||||||||||||||||||||||||||
| Individually evaluated for impairment |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Collectively evaluated for impairment |
||||||||||||||||||||||||||||
| Purchased credit impaired loans |
||||||||||||||||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Loans |
||||||||||||||||||||||||||||
| Individually evaluated for impairment |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Collectively evaluated for impairment |
||||||||||||||||||||||||||||
| Purchased credit impaired loans |
||||||||||||||||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
__________________________
(1) Includes PPP loans, which are guaranteed by the SBA and have
The following table presents changes in the Company's allowance for loan losses by portfolio segment and the related loan balance total by segment at and for the year ended December 31, 2020 (dollars in thousands):
| Commercial (1) |
Construction and Land Development |
Commercial Real Estate - Owner Occupied |
Commercial Real Estate - Non-owner Occupied |
Residential Real Estate |
Consumer |
Total |
||||||||||||||||||||||
| Allowance for Loan Losses |
||||||||||||||||||||||||||||
| Balance at December 31, 2019 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Provision for loan losses |
||||||||||||||||||||||||||||
| Charge-offs |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Recoveries |
||||||||||||||||||||||||||||
| Balance at December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Balance at December 31, 2020: |
||||||||||||||||||||||||||||
| Allowance for Loan Losses |
||||||||||||||||||||||||||||
| Individually evaluated for impairment |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Collectively evaluated for impairment |
||||||||||||||||||||||||||||
| Purchased credit impaired loans |
||||||||||||||||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Loans |
||||||||||||||||||||||||||||
| Individually evaluated for impairment |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Collectively evaluated for impairment |
||||||||||||||||||||||||||||
| Purchased credit impaired loans |
||||||||||||||||||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
__________________________
(1) Includes PPP loans, which are guaranteed by the SBA and have
The allowance for loan losses is allocated to loan segments based upon historical loss factors, risk grades on individual loans, and qualitative factors. Qualitative factors include levels and trends in delinquencies, nonaccrual loans, and charge-offs and recoveries; trends in volume and terms of loans; effects of changes in risk selection, underwriting standards, and lending policies; experience of lending staff; national, regional, and local economic trends and conditions; portfolio concentrations; regulatory and legal factors; competition; quality of loan review system; and value of underlying collateral.
There was a negative provision expense for the second quarter of 2021 of $
Note 5 – Goodwill and Other Intangible Assets
The Company records as goodwill the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Recently adopted ASU 2017-04 simplifies the accounting for goodwill impairment by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit's carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. The Company performs its annual analysis as of June 30 each fiscal year, as well as when an event triggering impairment may have occurred. Due to the COVID-19 pandemic market conditions, the Company determined a triggering event occurred during the first quarter of 2020 and performed an internal assessment for the quarters ended March 30, June 30 and September 30, 2020. An independent assessment of impairment was performed at December 31, 2020. The assessments determined the fair value exceeded the carrying value and did not indicate impairment. The Company performed a qualitive assessment of Goodwill as of June 30, 2021 and determined the fair value exceeded the carrying value.
Core deposit intangibles resulting from the acquisition of MidCarolina Financial Corporation ("MidCarolina") in July 2011 were $
The changes in the carrying amount of goodwill and intangibles for the six months ended June 30, 2021, are as follows (dollars in thousands):
| Goodwill | Intangibles | |||||||
| Balance at December 31, 2020 | $ | $ | ||||||
| Amortization | — | ( | ) | |||||
| Balance at June 30, 2021 | $ | $ | ||||||
Note 6 – Leases
The Company's leases are recorded under ASC 842, Leases. Lease liabilities represent the Company's obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company's incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company's right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. The aggregate right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the Company's consolidated balance sheets.
The Company's long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.
The following tables present information about the Company's leases, as of and for the periods indicated (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Lease liabilities | $ | $ | ||||||
| Right-of-use assets | $ | $ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
| Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | |||||||
| Lease cost | ||||||||
| Operating lease cost | $ | $ | ||||||
| Short-term lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||
| Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |||||||
| Lease cost | ||||||||
| Operating lease cost | $ | $ | ||||||
| Short-term lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||
A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):
| Lease payments due | As of June 30, 2021 | |||
| Six months ending December 31, 2021 | $ | |||
| Twelve months ending December 31, 2022 | ||||
| Twelve months ending December 31, 2023 | ||||
| Twelve months ending December 31, 2024 | ||||
| Twelve months ending December 31, 2025 | ||||
| Twelve months ending December 31, 2026 | ||||
| Thereafter | ||||
| Total undiscounted cash flows | ||||
| Discount | ( | ) | ||
| Lease liabilities | $ | |||
Note 7 – Short-term Borrowings
Short-term borrowings may consist of customer repurchase agreements, overnight borrowings from the FHLB, and federal funds purchased. The Company has federal funds lines of credit established with correspondent banks in the amount of $
| June 30, 2021 | December 31, 2020 | |||||||
| Customer repurchase agreements | $ | $ | ||||||
Note 8 – Long-term Borrowings
Under the terms of its collateral agreement with the FHLB, the Company provides a blanket lien covering all of its residential first mortgage loans, second mortgage loans, home equity lines of credit, and commercial real estate loans. In addition, the Company pledges as collateral its capital stock in the FHLB and deposits with the FHLB. The Company has a line of credit with the FHLB equal to
There were
In the regular course of conducting its business, the Company takes deposits from political subdivisions of the states of Virginia and North Carolina. At June 30, 2021, the Bank's public deposits totaled ,000. The Company is required to provide collateral to secure the deposits that exceed the insurance coverage provided by the Federal Deposit Insurance Corporation. This collateral can be provided in the form of certain types of government or agency bonds or letters of credit from the FHLB. At June 30, 2021, the Company had $
Subordinated Debt
On April 1, 2019, in connection with the HomeTown merger, the Company assumed had $
Junior Subordinated Debt
On April 7, 2006, AMNB Statutory Trust I, a Delaware statutory trust and a wholly owned unconsolidated subsidiary of the Company, issued $
On July 1, 2011, in connection with the MidCarolina merger, the Company assumed $
In accordance with ASC 810-10-15-14, Consolidation – Overall – Scope and Scope Exceptions, the Company did not eliminate through consolidation the Company's $
A description of the junior subordinated debt securities outstanding payable to the trusts is shown below as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| Principal Amount | |||||||||||||
| Issuing Entity | Date Issued | Interest Rate | Maturity Date | June 30, 2021 | December 31, 2020 | ||||||||
| AMNB Statutory Trust I | 4/7/2006 |
| 6/30/2036 | $ | $ | ||||||||
| MidCarolina Trust I | 10/29/2002 |
| 11/7/2032 | ||||||||||
| MidCarolina Trust II | 12/3/2003 |
| 10/7/2033 | ||||||||||
| $ | $ | ||||||||||||
The principal amounts reflected above for the MidCarolina Trusts are net of fair value adjustments of $
Note 9 - Derivative Financial Instruments and Hedging Activities
The Company uses derivative financial instruments ("derivatives") primarily to manage risks to the Company associated with changing interest rates. The Company's derivatives are hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge).
The Company designates derivatives as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Company's trust preferred capital notes. The Company uses interest rate swap agreements as part of its hedging strategy by exchanging variable-rate interest payments on a notional amount equal to the principal amount of the borrowings for fixed-rate interest payments, with such interest rates set based on benchmarked interest rates.
All interest rate swaps were entered into with counterparties that met the Company's credit standards, and the agreements contain collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in these derivative contracts is not significant.
Terms and conditions of the interest rate swaps vary, and amounts receivable or payable are recognized as accrued under the terms of the agreements. The Company assesses the effectiveness of each hedging relationship on a periodic basis. In accordance with ASC 815, Derivatives and Hedging, the effective portions of the derivatives' unrealized gains or losses are recorded as a component of other comprehensive income. Based on the Company's assessment, its cash flow hedges are highly effective, but to the extent that any ineffectiveness exists in the hedge relationships, the amounts would be recorded in interest income and interest expense in the Company's consolidated statements of income.
The following tables present information on the Company's derivative financial instruments as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| June 30, 2021 | ||||||||||||||||||||
| Notional Amount | Positions | Assets | Liabilities | Cash Collateral Pledged | ||||||||||||||||
| Cash flow hedges: | ||||||||||||||||||||
| Interest rate swaps: | ||||||||||||||||||||
| Variable-rate to fixed-rate swaps with counterparty | $ | $ | $ | $ | ||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||
| Notional Amount | Positions | Assets | Liabilities | Cash Collateral Pledged | ||||||||||||||||
| Cash flow hedges: | ||||||||||||||||||||
| Interest rate swaps: | ||||||||||||||||||||
| Variable-rate to fixed-rate swaps with counterparty | $ | $ | $ | $ | $ | |||||||||||||||
Note 10 – Stock Based Compensation
The Company's 2018 Equity Compensation Plan (the "2018 Plan") was adopted by the Board of Directors of the Company on February 20, 2018 and approved by shareholders on May 15, 2018 at the Company's 2018 Annual Meeting of Shareholders. The 2018 Plan provides for the granting of restricted stock awards, incentive and non-statutory options, and other equity-based awards to employees and directors at the discretion of the Compensation Committee of the Board of Directors. The 2018 Plan authorizes the issuance of up to
Stock Options
Accounting guidance requires that compensation cost relating to share-based payment transactions be recognized in the financial statements with measurement based upon the fair value of the equity or liability instruments issued.
A summary of stock option transactions for the six months ended June 30, 2021 is as follows:
| Option Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value ($000) | |||||||||||||
| Outstanding at December 31, 2020 | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Expired | ||||||||||||||||
| Outstanding and exercisable at June 30, 2021 | $ | $ | ||||||||||||||
The fair value of options is estimated at the date of grant using the Black-Scholes option pricing model and expensed over the options' vesting period.
Restricted Stock
The Company from time to time grants shares of restricted stock to key employees and non-employee directors. These awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company's common stock. The value of the stock awarded is established as the fair value of the Company's common stock at the time of the grant. The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants. The majority of the restricted stock granted cliff vests at the end of a
| Shares | Weighted Average Grant Date Value Per Share | |||||||
| Nonvested at December 31, 2020 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Nonvested at June 30, 2021 | $ | |||||||
As of June 30, 2021 and December 31, 2020, there was $
The Company offers its outside directors alternatives with respect to director compensation. For 2021, the regular quarterly board retainer will be received in the form of shares of immediately vested, but restricted stock with a market value of $
Note 11 – Earnings Per Common Share
The following shows the weighted average number of shares used in computing earnings per common share and the effect on the weighted average number of shares of potentially dilutive common stock. Potentially dilutive common stock had no effect on income available to common shareholders. Nonvested restricted shares are included in the computation of basic earnings per share as the holder is entitled to full shareholder benefits during the vesting period including voting rights and sharing in nonforfeitable dividends. The following table presents basic and diluted earnings per share for the three and six month periods ended June 30, 2021 and 2020:
| Three Months Ended June 30, | ||||||||||||||||
| 2021 | 2020 | |||||||||||||||
| Shares | Per Share Amount | Shares | Per Share Amount | |||||||||||||
| Basic earnings per share | $ | $ | ||||||||||||||
| Effect of dilutive securities - stock options | ||||||||||||||||
| Diluted earnings per share | $ | $ | ||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||
| 2021 | 2020 | |||||||||||||||
| Shares | Per Share Amount | Shares | Per Share Amount | |||||||||||||
| Basic earnings per share | $ | $ | ||||||||||||||
| Effect of dilutive securities - stock options | ( | ) | ||||||||||||||
| Diluted earnings per share | $ | $ | ||||||||||||||
Outstanding stock options on common stock whose effects are anti-dilutive are not included in computing diluted earnings per share. There were
Note 12 – Employee Benefit Plans
The following information for the six months ended June 30, 2021 and 2020 pertains to the Company's non-contributory defined benefit pension plan which was frozen in 2009. If lump sum payments exceed the service cost plus interest cost, an additional settlement charge will apply (dollars in thousands):
| Components of Net Periodic Benefit Cost | Six Months Ended June 30, | |||||||
| 2021 | 2020 | |||||||
| Service cost | $ | $ | ||||||
| Interest cost | ||||||||
| Expected return on plan assets | ( | ) | ( | ) | ||||
| Recognized loss due to settlement | ||||||||
| Recognized net actuarial loss | ||||||||
| Net periodic cost | $ | $ | ||||||
Note 13 – Fair Value Measurements
Determination of Fair Value
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the fair value measurements and disclosures topic of ASC 820, Fair Value Measurement, fair value is the price that would be received to sell 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 at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
Fair Value Hierarchy
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
| Level 1 – | Valuation is based on quoted prices in active markets for identical assets and liabilities. |
| Level 2 – | Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. |
| Level 3 – | Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. |
The following describes the valuation techniques used by the Company to measure certain financial assets and financial liabilities recorded at fair value on a recurring basis in the financial statements:
Securities available for sale: Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). If no observable market data is available, valuations are based upon third party model based techniques (Level 3). There were no securities recorded with a Level 3 valuation at June 30, 2021 or December 31, 2020.
Loans held for sale: Loans held for sale are carried at fair value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data, which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded in current period earnings as a component of mortgage banking income on the Company's consolidated statements of income.
Derivative asset (liability) - cash flow hedges: Cash flow hedges are recorded at fair value on a recurring basis. Cash flow hedges are valued by a third party using significant assumptions that are observable in the market and can be corroborated by market data. All of the Company's cash flow hedges are classified as Level 2.
The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at the dates indicated (dollars in thousands):
| Fair Value Measurements at June 30, 2021 Using | ||||||||||||||||
| Balance at June 30, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
| Description | 2021 | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets: | ||||||||||||||||
| Securities available for sale: | ||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| Federal agencies and GSEs | ||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||
| State and municipal | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total securities available for sale | $ | $ | $ | $ | ||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative - cash flow hedges | $ | $ | $ | $ | ||||||||||||
| Fair Value Measurements at December 31, 2020 Using | ||||||||||||||||
| Balance at December 31, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
| Description | 2020 | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets: | ||||||||||||||||
| Securities available for sale: | ||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||
| Federal agencies and GSEs | ||||||||||||||||
| Mortgage-backed and CMOs | ||||||||||||||||
| State and municipal | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total securities available for sale | $ | $ | $ | $ | ||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative - cash flow hedges | $ | $ | $ | $ | ||||||||||||
Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.
The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements:
Impaired loans: Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected when due. The measurement of the loss associated with impaired loans can be based on either the observable market price of the loan, the present value of projected cash flows, or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company's collateral is real estate. The value of real estate collateral is determined utilizing a market valuation approach based on an appraisal, of one year or less, conducted by an independent, licensed appraiser using observable market data (Level 2). The present value of projected cash flows method results in a Level 3 categorization because the calculation relies on the Company's judgment to determine projected cash flows, which are then discounted at the current rate of the loan, or the rate prior to modification if the loan is a TDR. However, if the collateral is a house or building in the process of construction or if an appraisal of the property is more than one year old and not solely based on observable market comparables or management determines the fair value of the collateral is further impaired below the appraised value, then a Level 3 valuation is considered to measure the fair value. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business's financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivable collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the consolidated statements of income.
Other real estate owned: Measurement for fair values for OREO are the same as impaired loans. Any fair value adjustments are recorded in the period incurred as a valuation allowance against OREO with the associated expense included in OREO expense, net on the consolidated statements of income.
The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated (dollars in thousands):
| Fair Value Measurements at June 30, 2021 Using | ||||||||||||||||
| Balance at June 30, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
| Description | 2021 | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets: | ||||||||||||||||
| Impaired loans, net of valuation allowance | $ | $ | $ | $ | ||||||||||||
| Other real estate owned, net | — | |||||||||||||||
| Fair Value Measurements at December 31, 2020 Using | ||||||||||||||||
| Balance at December 31, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
| Description | 2020 | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets: | ||||||||||||||||
| Impaired loans, net of valuation allowance | $ | $ | $ | $ | ||||||||||||
| Other real estate owned, net | ||||||||||||||||
Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 and December 31, 2020:
| Assets | Valuation Technique | Unobservable Input | Range; Weighted Average (1) | |||
| Impaired loans | Discounted appraised value | Selling cost | ||||
|
|
| |||||
| Other real estate owned, net | Discounted appraised value | Selling cost |
__________________________
(1) Unobservable inputs were weighted by the relative fair value of the impaired loans.
ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The carrying values and the exit pricing concept fair values of the Company's financial instruments at June 30, 2021 are as follows (dollars in thousands):
| Fair Value Measurements at June 30, 2021 Using | ||||||||||||||||||||
| Carrying | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Fair Value | ||||||||||||||||
| Value | Level 1 | Level 2 | Level 3 | Balance | ||||||||||||||||
| Financial Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
| Securities available for sale | ||||||||||||||||||||
| Restricted stock | ||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||
| Loans, net of allowance | ||||||||||||||||||||
| Bank owned life insurance | ||||||||||||||||||||
| Accrued interest receivable | ||||||||||||||||||||
| Financial Liabilities: | ||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | |||||||||||||||
| Repurchase agreements | ||||||||||||||||||||
| Junior subordinated debt | ||||||||||||||||||||
| Accrued interest payable | ||||||||||||||||||||
| Derivative - cash flow hedges | ||||||||||||||||||||
The carrying values and the exit pricing concept fair values of the Company's financial instruments at December 31, 2020 are as follows (dollars in thousands):
| Fair Value Measurements at December 31, 2020 Using | ||||||||||||||||||||
| Carrying | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | Fair Value | ||||||||||||||||
| Value | Level 1 | Level 2 | Level 3 | Balance | ||||||||||||||||
| Financial Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
| Securities available for sale | ||||||||||||||||||||
| Restricted stock | ||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||
| Loans, net of allowance | ||||||||||||||||||||
| Bank owned life insurance | ||||||||||||||||||||
| Accrued interest receivable | ||||||||||||||||||||
| Financial Liabilities: | ||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | |||||||||||||||
| Repurchase agreements | ||||||||||||||||||||
| Subordinated debt | ||||||||||||||||||||
| Junior subordinated debt | ||||||||||||||||||||
| Accrued interest payable | ||||||||||||||||||||
| Derivative - cash flow hedges | ||||||||||||||||||||
Note 14 – Segment and Related Information
The Company has reportable segments, community banking and trust and investment services.
Community banking involves making loans to and generating deposits from individuals and businesses. Investment income from securities is also allocated to the community banking segment. Loan fee income, service charges from deposit accounts, and non-deposit fees such as automated teller machine fees and insurance commissions generate additional income for the community banking segment.
Trust and investment services include estate planning, trust account administration, investment management, and retail brokerage. Investment management services include purchasing equity, fixed income, and mutual fund investments for customer accounts. The trust and investment services segment receives fees for investment and administrative services.
Segment information as of and for the three and six months ended June 30, 2021 and 2020 is shown in the following tables (dollars in thousands):
| As of and For the Three Months Ended June 30, 2021 |
||||||||||||
| Community Banking |
Trust and Investment Services |
Total |
||||||||||
| Interest income |
$ | $ | $ | |||||||||
| Interest expense |
||||||||||||
| Noninterest income |
||||||||||||
| Noninterest expense |
||||||||||||
| Income before income taxes |
||||||||||||
| Net income |
||||||||||||
| Depreciation and amortization |
||||||||||||
| Total assets |
||||||||||||
| Goodwill |
||||||||||||
| Capital expenditures |
||||||||||||
| As of and For the Three Months Ended June 30, 2020 |
||||||||||||
| Community Banking |
Trust and Investment Services |
Total |
||||||||||
| Interest income |
$ | $ | $ | |||||||||
| Interest expense |
||||||||||||
| Noninterest income |
||||||||||||
| Noninterest expense |
||||||||||||
| Income before income taxes |
||||||||||||
| Net income |
||||||||||||
| Depreciation and amortization |
||||||||||||
| Total assets |
||||||||||||
| Goodwill |
||||||||||||
| Capital expenditures |
||||||||||||
| As of and For the Six Months Ended June 30, 2021 | ||||||||||||
| Community Banking | Trust and Investment Services | Total | ||||||||||
| Interest income | $ | $ | $ | |||||||||
| Interest expense | ||||||||||||
| Noninterest income | ||||||||||||
| Noninterest expense | ||||||||||||
| Income before income taxes | ||||||||||||
| Net income | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Total assets | ||||||||||||
| Goodwill | ||||||||||||
| Capital expenditures | ||||||||||||
| As of and For the Six Months Ended June 30, 2020 |
||||||||||||
| Community Banking |
Trust and Investment Services |
Total |
||||||||||
| Interest income |
$ | $ | $ | |||||||||
| Interest expense |
||||||||||||
| Noninterest income |
||||||||||||
| Noninterest expense |
||||||||||||
| Income before income taxes |
||||||||||||
| Net income |
||||||||||||
| Depreciation and amortization |
||||||||||||
| Total assets |
||||||||||||
| Goodwill |
||||||||||||
| Capital expenditures |
||||||||||||
Note 15 – Supplemental Cash Flow Information
Supplemental cash flow information as of and for the six months ended June 30, 2021 and 2020 is shown in the following table (dollars in thousands):
| 2021 |
2020 |
|||||||
| Supplemental Schedule of Cash and Cash Equivalents: |
||||||||
| Cash and due from banks |
$ | $ | ||||||
| Interest-bearing deposits in other banks |
||||||||
| Cash and Cash Equivalents |
$ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: |
||||||||
| Cash paid for: |
||||||||
| Interest on deposits and borrowed funds |
$ | $ | ||||||
| Income taxes |
||||||||
| Noncash investing and financing activities: |
||||||||
| Transfer of loans to other real estate owned |
||||||||
| Transfer of loans to repossessions |
||||||||
| Net unrealized gains (losses) on securities available for sale |
( |
) | ||||||
| Net unrealized gains (losses) on cash flow hedges |
( |
) | ||||||
Note 16 – Accumulated Other Comprehensive Income (Loss)
Changes in each component of accumulated other comprehensive income (loss) ("AOCI") for the three and six months ended June 30, 2021 and 2020 were as follows (dollars in thousands):
| For the Three Months Ended | Net Unrealized Gains on Securities | Unrealized (Losses) on Cash Flow Hedges | Adjustments Related to Pension Benefits | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
| Balance at March 31, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Net unrealized gains on securities available for sale, net of tax, $358 | ||||||||||||||||
| Net unrealized losses on cash flow hedges, net of tax, $(28) | ( | ) | ( | ) | ||||||||||||
| Balance at June 30, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Balance at March 31, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net unrealized gains on securities available for sale, net of tax, $295 | ||||||||||||||||
| Net unrealized losses on cash flow hedges, net of tax, $(86) | ( | ) | ( | ) | ||||||||||||
| Balance at June 30, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| For the Six Months Ended | Net Unrealized Gains (Losses) on Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Adjustments Related to Pension Benefits | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
| Balance at December 31, 2019 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net unrealized gains on securities available for sale, net of tax, $1,694 | ||||||||||||||||
| Reclassification adjustment for realized gains on securities, net of tax, $(176) | ( | ) | ( | ) | ||||||||||||
| Unrealized losses on cash flow hedges, net of tax, $(639) | ( | ) | ( | ) | ||||||||||||
| Balance at June 30, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Balance at December 31, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
| Net unrealized losses on securities available for sale, net of tax, $(976) | ( | ) | ( | ) | ||||||||||||
| Net unrealized gains on cash flow hedges, net of tax, $288 | ||||||||||||||||
| Balance at June 30, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
For the Three and Six Months Ended June 30, 2021 and 2020
(dollars in thousands)
| For the Three Months Ended June 30, 2021 | Amount Reclassified from AOCI | Affected Line Item in the Statement of Where Net Income is Presented | ||||
| Details about AOCI Components | ||||||
| Available for sale securities: | ||||||
| Realized gains on sales and calls of securities | $ | Securities gains, net | ||||
| Income taxes | ||||||
| Total reclassifications | $ | Net of tax | ||||
| For the Three Months Ended June 30, 2020 | Amount Reclassified from AOCI | Affected Line Item in the Statement of Where Net Income is Presented | ||||
| Details about AOCI Components | ||||||
| Available for sale securities: | ||||||
| Realized gains on sales and calls of securities | $ | Securities gains, net | ||||
| Income taxes | ||||||
| Total reclassifications | $ | Net of tax | ||||
| For the Six Months Ended June 30, 2021 | Amount Reclassified from AOCI | Affected Line Item in the Statement of Where Net Income is Presented | ||||
| Details about AOCI Components | ||||||
| Available for sale securities: | ||||||
| Realized gains on sales and calls of securities | $ | Securities gains, net | ||||
| Income taxes | ||||||
| Total reclassifications | $ | Net of tax | ||||
| For the Six Months Ended June 30, 2020 | Amount Reclassified from AOCI | Affected Line Item in the Statement of Where Net Income is Presented | ||||
| Details about AOCI Components | ||||||
| Available for sale securities: | ||||||
| Realized gains on sales and calls of securities | $ | Securities gains, net | ||||
| ( | ) | Income taxes | ||||
| Total reclassifications | $ | Net of tax | ||||
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The purpose of this discussion is to focus on important factors affecting the financial condition and results of operations of the Company. The discussion and analysis should be read in conjunction with the Consolidated Financial Statements.
Forward-Looking Statements
This report contains forward-looking statements with respect to the financial condition, results of operations and business of American National Bankshares Inc. (the "Company") and its wholly owned subsidiary, American National Bank and Trust Company (the "Bank"). These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on information available to management at the time these statements and disclosures were prepared. Forward-looking statements are subject to numerous assumptions, estimates, risks, and uncertainties that could cause actual conditions, events, or results to differ materially from those stated or implied by such forward-looking statements.
A variety of factors, some of which are discussed in more detail in Item 1A – Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2020, may affect the operations, performance, business strategy, and results of the Company. Those factors include, but are not limited to, the following:
| • | the impact of the ongoing COVID-19 pandemic and the associated efforts to limit the spread of the virus; |
|
|
|
• |
financial market volatility, including the level of interest rates, could affect the values of financial instruments and the amount of net interest income earned; |
| • | the adequacy of the level of the Company's allowance for loan losses, the amount of loan loss provisions required in future periods, and the failure of assumptions underlying the allowance for loan losses; |
| • |
general economic or business conditions, either nationally or in the market areas in which the Company does business, may be less favorable than expected, resulting in deteriorating credit quality, reduced demand for credit, or a weakened ability to generate deposits; |
| • |
competition among financial institutions may increase, and competitors may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than the Company; |
| • |
businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards and tax laws; |
| • |
the ability to recruit and retain key personnel; |
| • |
cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable and secure electronic systems; and |
| • |
risks associated with mergers and acquisitions and other expansion activities. |
COVID-19 Impact and Response
In March 2020, the outbreak of COVID-19 was recognized as a global pandemic. The spread of the virus created a global health crisis that resulted in unprecedented uncertainty, volatility and disruption in financial markets and in governmental, commercial and consumer activity in the United States and globally. Governmental responses included orders closing businesses not deemed essential and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions, together with responses to the pandemic by many parties, resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses that led to a loss of revenues and a rapid increase in unemployment, disrupted supply chains, market downturns and volatility, changes in consumer behavior, related emergency response legislation and an expectation that the Board of Governors of the Federal Reserve System ("Federal Reserve") will maintain a low interest rate environment for the foreseeable future. In 2020, the Company implemented a business continuity plan and protocols to continue to maintain a high level of care for its employees, customers and communities. The Company transitioned to a majority of its non-branch employees working remotely and assisting customers by appointment only in branches or directing them to drive-thrus or ATMs. In April 2021, the majority of remaining remote workers returned to the office, and the Company fully opened branch lobbies to customers with prudent safety protocols. The Company remains focused on supporting and protecting its employees, customers, and communities while creating shareholder value.
The Bank assisted borrowers through its Disaster Assistance Program ("DAP") adopted in March 2020 in response to the federal banking agencies issuance of the "Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus." This issuance was in response to the COVID-19 pandemic affecting societies and economies around the world. This guidance encouraged financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19. The guidance explained that, in consultation with the Financial Accounting Standards Board ("FASB") staff, the federal banking agencies have concluded that short-term modifications (e.g. six months) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not troubled debt restructurings ("TDRs"). On June 30, 2021, the balance of loans remaining in this program was $2.3 million, compared to $30.0 million at December 31, 2020. Of the $2.3 million outstanding at June 30, 2021, $1.7 million is scheduled to expire in the third quarter of 2021.
The Company continued to participate in the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act into the second quarter of 2021. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven or otherwise repaid. During the second quarter of 2021, the SBA forgave $80.0 million of loans compared to $105.1 million in the first quarter of 2021. Total outstanding net PPP loans were $104.1 million and $211.3 million at June 30, 2021 and December 31, 2020, respectively.
Reclassification
In certain circumstances, reclassifications have been made to prior period information to conform to the 2021 presentation. There were no material reclassifications.
CRITICAL ACCOUNTING POLICIES
The accounting and reporting policies followed by the Company conform with U.S. generally accepted accounting principles ("GAAP") and they conform to general practices within the banking industry. The Company evaluates its critical accounting estimates and assumptions on an ongoing basis and updates them, as needed. Management has discussed the Company's critical accounting policies and estimates with the Audit Committee of the Board of Directors. The Company's critical accounting policies, which are summarized below, relate to (1) the allowance for loan losses, (2) mergers and acquisitions, (3) acquired loans with specific credit-related deterioration, (4) goodwill and intangible assets, (5) deferred tax assets and liabilities, and (6) other-than-temporary impairment of securities. A summary of the Company's significant accounting policies is set forth in Note 1 to the Consolidated Financial Statements contained in the Form 10-K for the year ended December 31, 2020.
The financial information contained within the Company's financial statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained when earning income, recognizing an expense, recovering an asset, or relieving a liability. In addition, GAAP itself may change from one previously acceptable method to another method.
Allowance for Loan Losses
The purpose of the allowance for loan losses ("ALLL") is to provide for probable losses inherent in the loan portfolio. The allowance is increased by the provision for loan losses and by recoveries of previously charged-off loans. Loan charge-offs decrease the allowance.
The goal of the Company is to maintain an appropriate, systematic, and consistently applied process to determine the amounts of the ALLL and the provision for loan loss expense.
The Company uses certain practices to manage its credit risk. These practices include (1) appropriate lending limits for loan officers, (2) a loan approval process, (3) careful underwriting of loan requests, including analysis of borrowers, cash flows, collateral, and market risks, (4) regular monitoring of the portfolio, including diversification by type and geography, (5) review of loans by the Loan Review department, which operates independently of loan production, (6) regular meetings of the Credit Committee to discuss portfolio and policy changes and make decisions on large or unusual loan requests, and (7) regular meetings of the Asset Quality Committee which reviews the status of individual loans.
Risk grades are assigned as part of the loan origination process. From time to time, risk grades may be modified as warranted by the facts and circumstances surrounding the credit.
Calculation and analysis of the ALLL is prepared quarterly by the Finance Department. The Company's Credit Committee, Risk and Compliance Committee, Audit Committee, and the Board of Directors review the allowance for adequacy.
The Company's ALLL has two basic components: the formula allowance and the specific allowance. Each of these components is determined based upon estimates and judgments.
The formula allowance uses historical loss experience as an indicator of future losses, along with various qualitative factors, including levels and trends in delinquencies, nonaccrual loans, and charge-offs and recoveries; trends in volume and terms of loans; effects of changes in risk selection, underwriting standards, and lending policies; experience of lending staff; national, regional, and local economic trends and conditions; portfolio concentrations; regulatory and legal factors; competition; quality of loan review system; and value of underlying collateral. In the formula allowance for commercial and commercial real estate loans, the historical loss rate is combined with the qualitative factors, resulting in an adjusted loss factor for each risk-grade category of loans. The period-end balances for each loan risk-grade category are multiplied by the adjusted loss factor. Allowance calculations for residential real estate and consumer loans are calculated based on historical losses for each product category without regard to risk grade. This loss rate is combined with qualitative factors resulting in an adjusted loss factor for each product category.
The specific allowance uses various techniques to arrive at an estimate of loss for specifically identified impaired loans. These include:
| • |
The present value of expected future cash flows discounted at the loan's effective interest rate. The effective interest rate on a loan is the rate of return implicit in the loan (that is, the contractual interest rate adjusted for any net deferred loan fees or costs and any premium or discount existing at the origination or acquisition of the loan); |
|
| • |
The loan's observable market price; or |
|
| • | The fair value of the collateral, net of estimated costs to dispose, if the loan is collateral dependent. |
The use of these computed values is inherently subjective and actual losses could be greater or less than the estimates.
No single statistic, formula, or measurement determines the adequacy of the allowance. Management makes subjective and complex judgments about matters that are inherently uncertain, and different amounts would be reported under different conditions or using different assumptions. For analytical purposes, management allocates a portion of the allowance to specific loan categories and specific loans. However, the entire allowance is used to absorb credit losses inherent in the loan portfolio, including identified and unidentified losses.
The relationships and ratios used in calculating the allowance, including the qualitative factors, may change from period to period as facts and circumstances evolve. Furthermore, management cannot provide assurance that in any particular period the Bank will not have sizable credit losses in relation to the amount reserved. Management may find it necessary to significantly adjust the allowance, considering current factors at the time.
Mergers and Acquisitions
Business combinations are accounted for under the FASB Accounting Standards Codification ("ASC") 805, Business Combinations, using the acquisition method of accounting. The acquisition method of accounting requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. To determine the fair values, the Company will rely on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analysis or other valuation techniques. Under the acquisition method of accounting, the Company will identify the acquirer and the closing date and apply applicable recognition principles and conditions.
Acquisition-related costs are costs the Company incurs to effect a business combination. Those costs include advisory, legal, accounting, valuation, and other professional or consulting fees. Some other examples of costs to the Company include systems conversions, integration planning, consultants, and advertising costs. The Company will account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities will be recognized in accordance with other applicable GAAP. These acquisition-related costs have been and will be included within the consolidated statements of income classified within the noninterest expense caption.
Acquired Loans with Specific Credit-Related Deterioration
Acquired loans with specific credit deterioration are accounted for by the Company in accordance with ASC 310-30, Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality. Certain acquired loans, those for which specific credit-related deterioration, since origination, is identified, are recorded at fair value reflecting the present value of the amounts expected to be collected. Income recognition on these loans is based on a reasonable expectation about the timing and amount of cash flows to be collected. In accounting for purchased credit impaired loans, such loans are not classified as nonaccrual when they become 90 days past due. They are considered to be accruing because their interest income relates to the accretable yield and not to contractual interest payments.
Goodwill and Intangible Assets
Recently adopted Accounting Standards Update 2017-04 simplifies the accounting for goodwill impairment by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit's carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. Due to the COVID-19 pandemic market conditions, the Company determined a triggering event occurred during the first quarter of 2020 and performed an internal assessment for the quarters ended March 30, June 30 and September 30, 2020. An independent assessment of impairment was performed at December 31, 2020. The assessments determined the fair value exceeded the carrying value and did not indicate impairment. The Company performed a qualitive assessment of Goodwill as of June 30, 2021 and determined the fair value exceeded the carrying value. The impact of COVID-19 on market conditions and other changes in the economic environment, operations, or other adverse events could result in future impairment charges which could have a material adverse impact on the Company's operating results. If future conditions warrant, the Company will have independent impairment assessments performed.
Deferred Tax Assets and Liabilities
The realization of deferred income tax assets is assessed and a valuation allowance is recorded if it is "more likely than not" that all or a portion of the deferred tax asset will not be realized. "More likely than not" is defined as greater than a 50% chance. Management considers all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed.
Other-than-temporary Impairment of Securities
Impairment of securities occurs when the fair value of a security is less than its amortized cost. For debt securities, impairment is considered other-than-temporary and recognized in its entirety in net income if either (1) the Company intends to sell the security or (2) it is more-likely-than-not that the Company will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-likely-than-not that it will be required to sell the security before recovery, the Company must determine what portion of the impairment is attributable to a credit loss, which occurs when the amortized cost basis of the security exceeds the present value of the cash flows expected to be collected from the security. If there is no credit loss, there is no other-than-temporary impairment. If there is a credit loss, other-than-temporary impairment exists, and the credit loss must be recognized in net income and the remaining portion of impairment must be recognized in other comprehensive income.
Non-GAAP Presentations
Non-GAAP presentations are provided because the Company believes these may be valuable to investors. These include (1) the analysis of net interest income presented on a taxable equivalent basis to facilitate performance comparisons among various taxable and tax-exempt assets and (2) the calculation of the efficiency ratio.
Internet Access to Corporate Documents
The Company provides access to its Securities and Exchange Commission ("SEC") filings through a link on the Investor Relations page of the Company's website at www.amnb.com. Reports available include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after the reports are filed electronically with the SEC. The information on the Company's website is not incorporated into this report or any other filing the Company makes with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
RESULTS OF OPERATIONS
Executive Overview
Second quarter 2021 financial highlights include the following:
| • | Earnings produced a return on average assets (annualized) of 1.38% for the second quarter of 2021, compared to 1.49% in the previous quarter and 0.80% for the same quarter in the prior year. |
| • |
Average deposits grew 3.7% during the quarter and 15.1% over the same quarter of 2020; the cost of interest-bearing deposits decreased to 0.21% in the second quarter, compared to 0.30% in the previous quarter and 0.64% in the same quarter of the prior year. |
| • | Fully taxable equivalent net interest margin was 3.00% for the quarter, down from 3.20% in the previous quarter and from 3.22% in the same quarter of the prior year.* |
| • | Noninterest revenues decreased $780 thousand, or 13.2%, when compared to the previous quarter, and increased $1.3 million, or 34.1%, compared to the same quarter in the prior year. |
| • | Noninterest expense increased $572 thousand, or 4.1%, when compared to the previous quarter, and increased $2.2 million, or 17.7%, when compared to the same quarter in the prior year. |
| • |
The Company recorded a negative provision for loan losses in the second quarter of 2021 of $1.4 million and no provision in the first quarter, compared to a provision expense of $4.8 million in the second quarter in the prior year. Annualized net charge-offs (recoveries) as a percentage of average loans outstanding were (0.01%) for the second quarter of 2021, 0.00% for the first quarter of 2021 and 0.06% for the corresponding quarter in the prior year. |
| • | Nonperforming assets as a percentage of total assets were 0.07% at June 30, 2021, down from 0.10% at March 31, 2021 and 0.16% at June 30, 2020. |
*Refer to the Non-GAAP Financial Measures within this section for further information on this non-GAAP financial measurement.
Net Interest Income
Net interest income is the difference between interest income on earning assets, primarily loans and securities, and interest expense on interest-bearing liabilities, primarily deposits and other funding sources. Fluctuations in interest rates as well as volume and mix changes in earning assets and interest-bearing liabilities can materially impact net interest income. The following discussion of net interest income is presented on a taxable equivalent basis to facilitate performance comparisons among various taxable and tax-exempt assets, such as certain state and municipal securities. A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis. Net interest income divided by average earning assets is referred to as the net interest margin. The net interest spread represents the difference between the weighted rate earned on average earning assets and the weighted rate paid on average interest-bearing liabilities.
Three months ended June 30, 2021 and 2020
Net interest income on a taxable equivalent basis was $21.8 million, an increase of $1.5 million, or 7.4%, for the second quarter of 2021 compared to $20.3 million for the same quarter of 2020. The increase in net interest income from the same quarter in the prior year was attributable to an increase in earning assets associated with PPP loans and reduced deposit costs from a significantly lower rate environment. Average loan balances for the 2021 quarter were down $89,151,000 or 4.3%, over the 2020 quarter, primarily due to PPP forgiveness. PPP loans had a net balance of $104,143,000 at June 30, 2021, earn 1% interest, and generate fee income that is being accreted over the life of the loans or at forgiveness. The interest income from the total PPP portfolio generated $360,000 in revenues for the second quarter of 2021. Total net PPP fees recognized in net interest income during the second quarter of 2021 were $1,783,000, enhanced by the accelerated amortization of fees and costs on the forgiveness of $80,000,000 in PPP loans. Loan yields for the quarter were 12 basis points higher than the 2020 quarter.
For the second quarter of 2021, the Company's yield on interest-earning assets was 3.20%, compared to 3.70% for the second quarter of 2020. The cost of interest-bearing liabilities was 0.30% for the 2021 period compared to 0.74%. for the 2020 period The interest rate spread was 2.90% for the 2021 period compared to 2.96% for the 2020 period. The net interest margin, on a fully taxable equivalent basis, was 3.00% for the 2021 period compared to 3.22%, for the 2020 period, a decrease of 22 basis points. The decrease in net interest margin was driven by declining interest rates and the impact of lower rates on the PPP lending.
The following presentation is an analysis of net interest income and related yields and rates, on a taxable equivalent basis, for the three months ended June 30, 2021 and 2020. Nonaccrual loans are included in average balances. Interest income on nonaccrual loans is only recognized when the loan returns to accrual status or at full payment of principal.
| Net Interest Income Analysis (dollars in thousands) |
| Three Months Ended June 30, |
||||||||||||||||||||||||
| 2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||
| Average Balance |
Income/Expense |
Yield/Rate |
||||||||||||||||||||||
| Loans: |
||||||||||||||||||||||||
| Commercial |
$ | 391,871 | $ | 513,765 | $ | 4,458 | $ | 4,377 | 4.56 | % | 3.43 | % | ||||||||||||
| Real estate |
1,564,747 | 1,529,723 | 16,551 | 16,901 | 4.23 | 4.42 | ||||||||||||||||||
| Consumer |
7,062 | 9,343 | 112 | 149 | 6.36 | 6.41 | ||||||||||||||||||
| Total loans |
1,963,680 | 2,052,831 | 21,121 | 21,427 | 4.30 | 4.18 | ||||||||||||||||||
| Securities: |
||||||||||||||||||||||||
| U.S. Treasury |
41,840 | 2,250 | 114 | 9 | 1.09 | 1.60 | ||||||||||||||||||
| Federal agencies and GSEs |
102,730 | 47,197 | 298 | 284 | 1.16 | 2.41 | ||||||||||||||||||
| Mortgage-backed and CMOs |
281,820 | 203,268 | 961 | 1,059 | 1.36 | 2.08 | ||||||||||||||||||
| State and municipal |
62,204 | 42,742 | 323 | 288 | 2.08 | 2.70 | ||||||||||||||||||
| Other securities |
24,387 | 20,202 | 311 | 272 | 5.10 | 5.39 | ||||||||||||||||||
| Total securities |
512,981 | 315,659 | 2,007 | 1,912 | 1.56 | 2.42 | ||||||||||||||||||
| Deposits in other banks |
432,555 | 157,508 | 98 | 33 | 0.09 | 0.08 | ||||||||||||||||||
| Total interest-earning assets |
2,909,216 | 2,525,998 | 23,226 | 23,372 | 3.20 | 3.70 | ||||||||||||||||||
| Non-earning assets |
209,471 | 229,472 | ||||||||||||||||||||||
| Total assets |
$ | 3,118,687 | $ | 2,755,470 | ||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||||
| Demand |
$ | 468,684 | $ | 371,451 | 37 | 115 | 0.03 | 0.12 | ||||||||||||||||
| Money market |
701,957 | 554,318 | 215 | 591 | 0.12 | 0.43 | ||||||||||||||||||
| Savings |
239,887 | 192,354 | 6 | 24 | 0.01 | 0.05 | ||||||||||||||||||
| Time |
350,675 | 446,307 | 664 | 1,748 | 0.76 | 1.58 | ||||||||||||||||||
| Total deposits |
1,761,203 | 1,564,430 | 922 | 2,478 | 0.21 | 0.64 | ||||||||||||||||||
| Customer repurchase agreements |
37,591 | 43,716 | 5 | 66 | 0.05 | 0.61 | ||||||||||||||||||
| Long-term borrowings |
35,584 | 35,575 | 469 | 493 | 5.27 | 5.54 | ||||||||||||||||||
| Total interest-bearing liabilities |
1,834,378 | 1,643,721 | 1,396 | 3,037 | 0.30 | 0.74 | ||||||||||||||||||
| Noninterest-bearing demand deposits |
915,898 | 760,901 | ||||||||||||||||||||||
| Other liabilities |
22,201 | 22,797 | ||||||||||||||||||||||
| Shareholders' equity |
346,210 | 328,051 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity |
$ | 3,118,687 | $ | 2,755,470 | ||||||||||||||||||||
| Interest rate spread |
2.90 | % | 2.96 | % | ||||||||||||||||||||
| Net interest margin |
3.00 | % | 3.22 | % | ||||||||||||||||||||
| Net interest income (taxable equivalent basis) |
21,830 | 20,335 | ||||||||||||||||||||||
| Less: Taxable equivalent adjustment |
59 | 75 | ||||||||||||||||||||||
| Net interest income |
$ | 21,771 | $ | 20,260 | ||||||||||||||||||||
| Changes in Net Interest Income (Rate/Volume Analysis) |
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| (in thousands) |
| Three Months Ended June 30, |
||||||||||||
| 2021 vs. 2020 |
||||||||||||
| Change |
||||||||||||
| Increase |
Attributable to |
|||||||||||
| (Decrease) |
Rate |
Volume |
||||||||||
| Interest income |
||||||||||||
| Loans: |
||||||||||||
| Commercial |
$ | 81 | $ | 1,264 | $ | (1,183 | ) | |||||
| Real estate |
(350 | ) | (731 | ) | 381 | |||||||
| Consumer |
(37 | ) | (1 | ) | (36 | ) | ||||||
| Total loans |
(306 | ) | 532 | (838 | ) | |||||||
| Securities: |
||||||||||||
| U.S. Treasury |
105 | (4 | ) | 109 | ||||||||
| Federal agencies and GSEs |
14 | (200 | ) | 214 | ||||||||
| Mortgage-backed and CMOs |
(98 | ) | (433 | ) | 335 | |||||||
| State and municipal |
35 | (76 | ) | 111 | ||||||||
| Other securities |
39 | (15 | ) | 54 | ||||||||
| Total securities |
95 | (728 | ) | 823 | ||||||||
| Deposits in other banks |
65 | 3 | 62 | |||||||||
| Total interest income |
(146 | ) | (193 | ) | 47 | |||||||
| Interest expense |
||||||||||||
| Deposits: |
||||||||||||
| Demand |
(78 | ) | (102 | ) | 24 | |||||||
| Money market |
(376 | ) | (503 | ) | 127 | |||||||
| Savings |
(18 | ) | (23 | ) | 5 | |||||||
| Time |
(1,084 | ) | (766 | ) | (318 | ) | ||||||
| Total deposits |
(1,556 | ) | (1,394 | ) | (162 | ) | ||||||
| Customer repurchase agreements |
(61 | ) | (53 | ) | (8 | ) | ||||||
| Long-term borrowings |
(24 | ) | (24 | ) | — | |||||||
| Total interest expense |
(1,641 | ) | (1,471 | ) | (170 | ) | ||||||
| Net interest income (taxable equivalent basis) |
$ | 1,495 | $ | 1,278 | $ | 217 | ||||||
Six months ended June 30, 2021 and 2020
Net interest income on a taxable equivalent basis was $44.3 million, an increase of $3,990,000, or 9.9%, compared to $40.3 million in the same period of 2020. The increase in net interest income from the same period in the prior year was attributable to an increase in earning assets associated with PPP and reduced deposit costs from a significantly lower rate environment. Average loan balances for the 2021 period were up $49,330,000, or 2.5%, over the 2020 period, primarily due to PPP lending. These loans had a net balance of $104,143,000 at June 30, 2021, earn 1% interest, and generate fee income that is being accreted over the life of the loans or until forgiveness where the fee income is fully accreted into income. The interest income from the total PPP portfolio generated $886,000 in revenues for the six months of 2021. Total net PPP fees recognized in net interest income during the period of 2021 were $4,637,000, enhanced by the accelerated amortization of fees and costs on the forgiveness of $185,100,000 in PPP loans. Loan yields for the 2021 period were 4 basis points lower than the 2020 period.
For the six months ended June 30, 2021, the Company's yield on interest-earning assets was 3.32%, compared to 3.95% for the prior year period. The cost of interest-bearing liabilities was 0.35% for the 2021 period compared to 0.87% for the 2020 period. The interest rate spread was 2.97% for the 2021 period compared to 3.08% for the 2020 period. The net interest margin, on a fully taxable equivalent basis, was 3.10% in the 2021 period compared to 3.36% in the 2020 period, a decrease of 26 basis points. The decrease in net interest margin was driven by declining interest rates and the impact of lower rates on the PPP lending.
The following presentation is an analysis of net interest income and related yields and rates, on a taxable equivalent basis, for the six months ended June 30, 2021 and 2020. Nonaccrual loans are included in average balances. Interest income on nonaccrual loans is only recognized when the loan returns to accrual status or at full payment of principal.
| Net Interest Income Analysis (dollars in thousands) |
| Six Months Ended June 30, |
||||||||||||||||||||||||
| 2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||
| Average Balance |
Income/Expense |
Yield/Rate |
||||||||||||||||||||||
| Loans: |
||||||||||||||||||||||||
| Commercial |
$ | 428,073 | $ | 423,343 | $ | 10,249 | $ | 7,919 | 4.83 | % | 3.76 | % | ||||||||||||
| Real estate |
1,556,465 | 1,509,520 | 32,941 | 34,564 | 4.23 | 4.58 | ||||||||||||||||||
| Consumer |
7,347 | 9,692 | 238 | 307 | 6.53 | 6.37 | ||||||||||||||||||
| Total loans |
1,991,885 | 1,942,555 | 43,428 | 42,790 | 4.37 | 4.41 | ||||||||||||||||||
| Securities: |
||||||||||||||||||||||||
| U.S. Treasury |
28,645 | 5,650 | 126 | 44 | 0.88 | 1.56 | ||||||||||||||||||
| Federal agencies and GSEs |
104,026 | 75,254 | 602 | 861 | 1.16 | 2.29 | ||||||||||||||||||
| Mortgage-backed and CMOs |
269,977 | 200,521 | 1,934 | 2,202 | 1.43 | 2.20 | ||||||||||||||||||
| State and municipal |
60,359 | 41,784 | 637 | 576 | 2.11 | 2.76 | ||||||||||||||||||
| Other securities |
23,013 | 19,486 | 588 | 537 | 5.11 | 5.51 | ||||||||||||||||||
| Total securities |
486,020 | 342,695 | 3,887 | 4,220 | 1.60 | 2.46 | ||||||||||||||||||
| Deposits in other banks |
384,111 | 115,209 | 175 | 297 | 0.09 | 0.52 | ||||||||||||||||||
| Total interest-earning assets |
2,862,016 | 2,400,459 | 47,490 | 47,307 | 3.32 | 3.95 | ||||||||||||||||||
| Non-earning assets |
211,057 | 223,072 | ||||||||||||||||||||||
| Total assets |
$ | 3,073,073 | $ | 2,623,531 | ||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||||
| Demand |
$ | 459,867 | $ | 351,404 | 77 | 238 | 0.03 | 0.14 | ||||||||||||||||
| Money market |
693,002 | 534,828 | 491 | 1,779 | 0.14 | 0.67 | ||||||||||||||||||
| Savings |
233,680 | 185,625 | 13 | 77 | 0.01 | 0.08 | ||||||||||||||||||
| Time |
364,318 | 458,140 | 1,628 | 3,696 | 0.90 | 1.62 | ||||||||||||||||||
| Total deposits |
1,750,867 | 1,529,997 | 2,209 | 5,790 | 0.25 | 0.76 | ||||||||||||||||||
| Customer repurchase agreements |
40,651 | 42,617 | 16 | 195 | 0.08 | 0.92 | ||||||||||||||||||
| Other short-term borrowings |
— | 2 | — | — | — | 0.50 | ||||||||||||||||||
| Long-term borrowings |
35,612 | 35,565 | 952 | 999 | 5.35 | 5.62 | ||||||||||||||||||
| Total interest-bearing liabilities |
1,827,130 | 1,608,181 | 3,177 | 6,984 | 0.35 | 0.87 | ||||||||||||||||||
| Noninterest-bearing demand deposits |
879,214 | 667,632 | ||||||||||||||||||||||
| Other liabilities |
22,497 | 21,906 | ||||||||||||||||||||||
| Shareholders' equity |
344,232 | 325,812 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity |
$ | 3,073,073 | $ | 2,623,531 | ||||||||||||||||||||
| Interest rate spread |
2.97 | % | 3.08 | % | ||||||||||||||||||||
| Net interest margin |
3.10 | % | 3.36 | % | ||||||||||||||||||||
| Net interest income (taxable equivalent basis) |
44,313 | 40,323 | ||||||||||||||||||||||
| Less: Taxable equivalent adjustment |
119 | 144 | ||||||||||||||||||||||
| Net interest income |
$ | 44,194 | $ | 40,179 | ||||||||||||||||||||
| Changes in Net Interest Income (Rate/Volume Analysis) |
|||||||||||
| (in thousands) |
| Six Months Ended June 30, |
||||||||||||
| 2021 vs. 2020 |
||||||||||||
| Change |
||||||||||||
| Increase |
Attributable to |
|||||||||||
| (Decrease) |
Rate |
Volume |
||||||||||
| Interest income |
||||||||||||
| Loans: |
||||||||||||
| Commercial |
$ | 2,330 | $ | 2,241 | $ | 89 | ||||||
| Real estate |
(1,623 | ) | (2,674 | ) | 1,051 | |||||||
| Consumer |
(69 | ) | 7 | (76 | ) | |||||||
| Total loans |
638 | (426 | ) | 1,064 | ||||||||
| Securities: |
||||||||||||
| U.S. Treasury |
82 | (27 | ) | 109 | ||||||||
| Federal agencies and GSEs |
(259 | ) | (517 | ) | 258 | |||||||
| Mortgage-backed and CMOs |
(268 | ) | (898 | ) | 630 | |||||||
| State and municipal |
61 | (156 | ) | 217 | ||||||||
| Other securities |
51 | (41 | ) | 92 | ||||||||
| Total securities |
(333 | ) | (1,639 | ) | 1,306 | |||||||
| Deposits in other banks |
(122 | ) | (393 | ) | 271 | |||||||
| Total interest income |
183 | (2,458 | ) | 2,641 | ||||||||
| Interest expense |
||||||||||||
| Deposits: |
||||||||||||
| Demand |
(161 | ) | (218 | ) | 57 | |||||||
| Money market |
(1,288 | ) | (1,701 | ) | 413 | |||||||
| Savings |
(64 | ) | (80 | ) | 16 | |||||||
| Time |
(2,068 | ) | (1,417 | ) | (651 | ) | ||||||
| Total deposits |
(3,581 | ) | (3,416 | ) | (165 | ) | ||||||
| Customer repurchase agreements |
(179 | ) | (170 | ) | (9 | ) | ||||||
| Long-term borrowings |
(47 | ) | (48 | ) | 1 | |||||||
| Total interest expense |
(3,807 | ) | (3,634 | ) | (173 | ) | ||||||
| Net interest income (taxable equivalent basis) |
$ | 3,990 | $ | 1,176 | $ | 2,814 | ||||||
Noninterest Income
Three months ended June 30, 2021 and 2020
For the quarter ended June 30, 2021, noninterest income increased $1,307,000, or 34.1%, compared to the comparable 2020 quarter. Details of individual accounts are shown in the table below.
| Three Months Ended June 30, |
||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Noninterest income: |
||||||||||||||||
| Trust fees |
$ | 1,240 | $ | 953 | $ | 287 | 30.1 | % | ||||||||
| Service charges on deposit accounts |
630 | 541 | 89 | 16.5 | ||||||||||||
| Other fees and commissions |
1,358 | 951 | 407 | 42.8 | ||||||||||||
| Mortgage banking income |
1,142 | 893 | 249 | 27.9 | ||||||||||||
| Brokerage fees |
250 | 172 | 78 | 45.3 | ||||||||||||
| Income (loss) from Small Business Investment Companies |
591 | (119 | ) | 710 | 596.6 | |||||||||||
| Income from insurance investments |
141 | 223 | (82 | ) | (36.8 | ) | ||||||||||
| Losses on premises and equipment, net |
(432 | ) | — | (432 | ) | (100.0 | ) | |||||||||
| Other |
222 | 221 | 1 | 0.5 | ||||||||||||
| Total noninterest income |
$ | 5,142 | $ | 3,835 | $ | 1,307 | 34.1 | |||||||||
Trust fees increased $287,000 for the three months ended June 30, 2021 compared to the same quarter in 2020 as a result of growth in clients and growth in market value. Other fees and commissions increased $407,000 in the 2021 quarter compared to the 2020 quarter due to increased usage of debit cards. Mortgage banking income increased $249,000 in the 2021 quarter compared to the 2020 quarter, primarily due to increased volume as rates hit historical lows. Income from Small Business Investment Companies increased $710,000, primarily the result of additional income distributions during the three months ended June 30, 2021compared to the same quarter in 2020. During the second quarter of 2021, the Company recognized a loss on premises and equipment, net of $438,000 from the sale of a building acquired in the HomeTown Bankshares Corporation acquisition compared to no losses in the 2020 quarter.
Six months ended June 30, 2021 and 2020
For the six months ended June 30, 2021, noninterest income increased $2,734,000, or 32.8%, compared to the comparable 2020 period. Details of individual accounts are shown in the table below.
| Six Months Ended June 30, |
||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Noninterest income: |
||||||||||||||||
| Trust fees |
$ | 2,446 | $ | 1,965 | $ | 481 | 24.5 | % | ||||||||
| Service charges on deposit accounts |
1,252 | 1,262 | (10 | ) | (0.8 | ) | ||||||||||
| Other fees and commissions |
2,497 | 1,892 | 605 | 32.0 | ||||||||||||
| Mortgage banking income |
2,460 | 1,442 | 1,018 | 70.6 | ||||||||||||
| Securities gains, net |
— | 814 | (814 | ) | (100.0 | ) | ||||||||||
| Brokerage fees |
468 | 383 | 85 | 22.2 | ||||||||||||
| Income (loss) from Small Business Investment Companies |
1,019 | (64 | ) | 1,083 | 1,692.2 | |||||||||||
| Income from insurance investments |
929 | 271 | 658 | 242.8 | ||||||||||||
| Losses on premises and equipment, net |
(481 | ) | (82 | ) | (399 | ) | 486.6 | |||||||||
| Other |
474 | 447 | 27 | 6.0 | ||||||||||||
| Total noninterest income |
$ | 11,064 | $ | 8,330 | $ | 2,734 | 32.8 | |||||||||
Trust fees increased $481,000 for the six months ended June 30, 2021 compared to the same period in 2020 as a result of growth in clients and growth in market value. Other fees and commissions increased $605,000 in the 2021 period compared to the 2020 period due to increased usage of debit cards. Mortgage banking income increased $1,018,000 in the 2021 period compared to the 2020 period, primarily due to increased volume of applications for purchases and refinancing as rates have hit historical lows. There were no net securities gains in the 2021 period compared to $814,000 in the same period in 2020. Income from Small Business Investment Companies and income from insurance investments increased $1,083,000 and $658,000, respectively, during the six months ended June 30, 2021 compared to the same period in 2020. The increase in income from insurance investments was primarily the result of an additional bonus distribution received in 2021. Losses on premises and equipment, net increased $399,000 from the 2020 period, primarily from the loss of $438,000 recognized in the 2021 period on the sale of a building acquired in the HomeTown Bankshares Corporation acquisition.
Noninterest Expense
Three months ended June 30, 2021 and 2020
For the three months ended June 30, 2021, noninterest expense increased $2,205,000, or 17.7%, compared to the same quarter of 2020. Details of individual accounts are shown in the table below.
| Three Months Ended June 30, |
||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Noninterest Expense |
||||||||||||||||
| Salaries and employee benefits |
$ | 8,178 | $ | 6,191 | $ | 1,987 | 32.1 | % | ||||||||
| Occupancy and equipment |
1,502 | 1,327 | 175 | 13.2 | ||||||||||||
| FDIC assessment |
226 | 176 | 50 | 28.4 | ||||||||||||
| Bank franchise tax |
443 | 425 | 18 | 4.2 | ||||||||||||
| Core deposit intangible amortization |
371 | 417 | (46 | ) | (11.0 | ) | ||||||||||
| Data processing |
698 | 785 | (87 | ) | (11.1 | ) | ||||||||||
| Software |
338 | 403 | (65 | ) | (16.1 | ) | ||||||||||
| Other real estate owned, net |
10 | 15 | (5 | ) | (33.3 | ) | ||||||||||
| Other |
2,871 | 2,693 | 178 | 6.6 | ||||||||||||
| Total noninterest expense |
$ | 14,637 | $ | 12,432 | $ | 2,205 | 17.7 | |||||||||
Salaries and employee benefits increased $1,987,000 in the 2021 quarter as compared to the 2020 quarter; impacted by decreased deferrals associated with loan origination costs under the PPP program. The second quarter of 2021 reflected $100,000 in deferred costs related to the PPP program compared to $1,600,000 in the 2020 quarter. The increase in occupancy and equipment expense in the second quarter of 2021 compared to the second quarter of 2020 reflects additional expenses related to the opening of the Raleigh branch and enhancements in technology. Other expenses increased $178,000 compared to the same quarter of 2020 as a result of increased loan related expenses and investment management expenses.
Six months ended June 30, 2021 and 2020
For the six months ended June 30, 2021, noninterest expense increased $2,936,000, or 11.4%, compared to the same period of 2020. Details of individual accounts are shown in the table below.
| Six Months Ended June 30, |
||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Noninterest Expense |
||||||||||||||||
| Salaries and employee benefits |
$ | 15,696 | $ | 13,551 | $ | 2,145 | 15.8 | % | ||||||||
| Occupancy and equipment |
3,035 | 2,693 | 342 | 12.7 | ||||||||||||
| FDIC assessment |
450 | 271 | 179 | 66.1 | ||||||||||||
| Bank franchise tax |
881 | 851 | 30 | 3.5 | ||||||||||||
| Core deposit intangible amortization |
752 | 844 | (92 | ) | (10.9 | ) | ||||||||||
| Data processing |
1,476 | 1,548 | (72 | ) | (4.7 | ) | ||||||||||
| Software |
667 | 759 | (92 | ) | (12.1 | ) | ||||||||||
| Other real estate owned, net |
127 | 6 | 121 | 2,016.7 | ||||||||||||
| Other |
5,618 | 5,243 | 375 | 7.2 | ||||||||||||
| Total noninterest expense |
$ | 28,702 | $ | 25,766 | $ | 2,936 | 11.4 | |||||||||
Salaries and employee benefits increased $2,145,000 in the 2021 period as compared to the 2020 period. Salaries and employee benefits expenses were impacted by decreased deferrals associated with loan origination costs under the PPP program. The six months ended June 30, 2021 reflected $704,000 in deferred costs related to the PPP program compared to $1,636,000 in the 2020 period. The six months ended June 30, 2021 also included increased mortgage commissions due to increased loan production. The increase in occupancy and equipment expense in the period of 2021 compared to the period of 2020 reflects expenses related to the opening of the Raleigh branch and enhancements in technology. The Federal Deposit Insurance Corporation ("FDIC") assessment expense in the 2020 period was positively impacted by the Small Bank Assessment Credit. Other real estate owned ("OREO"), net expense was $127,000 in the six months ended June 30, 2021 compared $6,000 in the same period in 2020; the result of a loss on the sale of OREO of $111,000 during the 2021 period. Other expenses increased $375,000 compared to the same quarter of 2020 primarily from increased loan related expenses and investment management expenses.
Non-GAAP Financial Measures
The efficiency ratio is calculated by dividing noninterest expense excluding (1) gains or losses on the sale of OREO, (2) core deposit intangible amortization and (3) merger related expense by net interest income including tax equivalent income on nontaxable loans and securities and noninterest income and excluding (a) gains or losses on securities and (b) gains or losses on sale or disposal of premises and equipment. The efficiency ratio for the 2021 quarter was 52.06% compared to 49.74% for the 2020 quarter. The efficiency ratio is a non-GAAP financial measure that the Company believes provides investors with important information regarding operational efficiency. Such information is not prepared in accordance with GAAP and should not be construed as such. Management believes, however, such financial information is meaningful to the reader in understanding operating performance but cautions that such information not be viewed as a substitute for GAAP information. The Company, in referring to its net income, is referring to income under GAAP. The components of the efficiency ratio calculation are summarized in the following table (dollars in thousands):
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Efficiency Ratio |
||||||||||||||||
| Noninterest expense |
$ | 14,637 | $ | 12,432 | $ | 28,702 | $ | 25,766 | ||||||||
| Add/subtract: gain/loss on sale of OREO, net of write-downs |
— | 8 | (111 | ) | 35 | |||||||||||
| Subtract: core deposit intangible amortization |
(371 | ) | (417 | ) | (752 | ) | (844 | ) | ||||||||
| $ | 14,266 | $ | 12,023 | $ | 27,839 | $ | 24,957 | |||||||||
| Net interest income |
$ | 21,771 | $ | 20,260 | $ | 44,194 | $ | 40,179 | ||||||||
| Tax equivalent adjustment |
59 | 75 | 119 | 144 | ||||||||||||
| Noninterest income |
5,142 | 3,835 | 11,064 | 8,330 | ||||||||||||
| Subtract: gain on securities |
— | — | — | (814 | ) | |||||||||||
| Add: loss on fixed assets |
432 | — | 481 | 82 | ||||||||||||
| $ | 27,404 | $ | 24,170 | $ | 55,858 | $ | 47,921 | |||||||||
| Efficiency ratio |
52.06 | % | 49.74 | % | 49.84 | % | 52.08 | % | ||||||||
Net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Because a portion of interest income earned by the Company is nontaxable, the tax equivalent net interest income is considered in the calculation of this ratio. Tax equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit for both the 2021 and 2020 periods is 21%. The reconciliation of tax equivalent net interest income, which is not a measurement under GAAP, to net interest income, is reflected in the table below (dollars in thousands):
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Reconciliation of Net Interest Income to Tax-Equivalent Net Interest Income |
||||||||||||||||
| Non-GAAP measures: |
||||||||||||||||
| Interest income - loans |
$ | 21,121 | $ | 21,427 | $ | 43,428 | $ | 42,790 | ||||||||
| Interest income - investments and other |
2,105 | 1,945 | 4,062 | 4,517 | ||||||||||||
| Interest expense - deposits |
(922 | ) | (2,478 | ) | (2,209 | ) | (5,790 | ) | ||||||||
| Interest expense - customer repurchase agreements |
(5 | ) | (66 | ) | (16 | ) | (195 | ) | ||||||||
| Interest expense - long-term borrowings |
(469 | ) | (493 | ) | (952 | ) | (999 | ) | ||||||||
| Total net interest income |
$ | 21,830 | $ | 20,335 | $ | 44,313 | $ | 40,323 | ||||||||
| Less non-GAAP measures: |
||||||||||||||||
| Tax benefit realized on non-taxable interest income - loans |
$ | (34 | ) | $ | (48 | ) | $ | (68 | ) | $ | (90 | ) | ||||
| Tax benefit realized on non-taxable interest income - municipal securities |
(25 | ) | (27 | ) | (51 | ) | (54 | ) | ||||||||
| GAAP measures net interest income |
$ | 21,771 | $ | 20,260 | $ | 44,194 | $ | 40,179 | ||||||||
Income Taxes
The effective tax rate for the second quarter of 2021 was 21.00% compared to 20.60% for the second quarter of 2020. The increased rate for second quarter of 2020was a result of reduced tax-exempt income during the 2021 quarter. The effective tax rate is ordinarily lower than the statutory rate of 21% due to the benefit of tax-exempt interest, tax-exempt changes in the cash surrender value of bank owned life insurance and excess tax benefits recognized on the exercise of stock options and the vesting of restricted stock.
Fair Value Impact to Net Interest Margin
The Company's fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. The net accretion impact for the three and six months ended June 30, 2021 and 2020, as well as the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
| Loan |
Deposit |
Borrowings |
||||||||||||||
| Accretion |
Accretion |
Amortization |
Total |
|||||||||||||
| For the three months ended June 30, 2021 |
$ | 879 | $ | 21 | $ | (25 | ) | $ | 875 | |||||||
| For the three months ended June 30, 2020 |
775 | 47 | (21 | ) | 801 | |||||||||||
| For the six months ended June 30, 2021 |
1,831 | 43 | (51 | ) | 1,823 | |||||||||||
| For the six months ended June 30, 2020 |
1,681 | 120 | (42 | ) | 1,759 | |||||||||||
| For the remaining six months of 2021 (estimated) |
857 | 35 | (52 | ) | 840 | |||||||||||
| For the years ending (estimated): |
||||||||||||||||
| 2022 |
1,320 | 50 | (102 | ) | 1,268 | |||||||||||
| 2023 |
774 | 30 | (102 | ) | 702 | |||||||||||
| 2024 |
516 | 5 | (102 | ) | 419 | |||||||||||
| 2025 |
406 | 2 | (102 | ) | 306 | |||||||||||
| 2026 |
288 | 1 | (102 | ) | 187 | |||||||||||
| Thereafter (estimated) |
1,138 | 2 | (640 | ) | 500 | |||||||||||
Impact of Inflation and Changing Prices
The majority of assets and liabilities of a financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. The most significant effect of inflation is on noninterest expense, which tends to rise during periods of inflation. Changes in interest rates have a greater impact on a financial institution's profitability than do the effects of higher costs for goods and services. Through its balance sheet management practices, the Company has the ability to react to those changes and measure and monitor its interest rate and liquidity risk. Price inflation has been consistently modest over the past several years.
CHANGES IN FINANCIAL POSITION
BALANCE SHEET ANALYSIS
Securities
The securities portfolio generates income, plays a major role in the management of interest rate sensitivity, provides a source of liquidity, and is used to meet collateral requirements. The securities portfolio consists primarily of high credit quality investments, mostly federal agency, mortgage-backed, and state and municipal securities.
The available for sale securities portfolio was $555,444,000 at June 30, 2021, compared to $466,091,000 at December 31, 2020, an increase of $89,353,000, or 19.2%. At June 30, 2021, the available for sale portfolio had an amortized cost of $549,811,000, resulting in a net unrealized gain of $5,633,000. At December 31, 2020, the available for sale portfolio had an amortized cost of $455,992,000, resulting in a net unrealized gain of $10,099,000.
During the six months ended June 30, 2021, the Company did not sell any securities. This compares to the six months ended June 30, 2020, when the Company sold $5,000,000 in par value bonds and realized a net gain of $814,000.
The Company is cognizant of the continuing historically low and steady rate environment and has elected to execute an asset liability strategy of purchasing high quality taxable securities with relatively low optionality and moderate and overall balanced duration.
Loans
The loan portfolio consists primarily of commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, and home equity loans. At June 30, 2021, the commercial real estate portfolio included concentrations of $73,978,000, $42,441,000 and $193,992,000 in hotel, restaurants, and retail loans, respectively. These concentrations total 16.1% of total loans, excluding loans in process.
Total loans were $1,914,371,000 at June 30, 2021, compared to $2,015,056,000 at December 31, 2020, a decrease of $100,685,000, or 5.0%. At June 30, 2021, net PPP loans, which are in the commercial loan category, totaled $104,100,000, compared to $211,275,000 at December 31, 2020.
Average loans were $1,963,680,000 for the second quarter of 2021, compared to $2,052,831,000 for the second quarter of 2020, a decrease of $89,151,000, or 4.3%, primarily related to PPP forgiveness.
Loans held for sale totaled $13,807,000 at June 30, 2021 and $15,591,000 at December 31, 2020. Secondary loan production volume was $80,208,000 for the six month period ended June 30, 2021 and $66,905,000 for the same period of 2020. These loans were approximately 35% purchase and 65% refinancing for the quarter ended June 30, 2021, and for the year ended December 31, 2020.
Management of the loan portfolio is organized around portfolio segments. Each segment is comprised of various loan types that are reflective of operational and regulatory reporting requirements. The following table presents the Company's loan portfolio by segment as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Commercial |
$ | 372,759 | $ | 491,256 | ||||
| Commercial real estate: |
||||||||
| Construction and land development |
133,592 | 140,071 | ||||||
| Commercial real estate - owner occupied |
384,095 | 373,680 | ||||||
| Commercial real estate - non-owner occupied |
650,862 | 627,569 | ||||||
| Residential real estate: |
||||||||
| Residential |
264,680 | 269,137 | ||||||
| Home equity |
100,835 | 104,881 | ||||||
| Consumer |
7,548 | 8,462 | ||||||
| Total loans, net of deferred fees and costs |
$ | 1,914,371 | $ | 2,015,056 | ||||
Provision for Loan Losses
The Company had a negative provision for loan losses of ($1,352,000) for the second quarter of 2021, as compared to no expense for the first quarter of 2021, and $4,759,000 for the same period in the previous year. The second quarter of 2021 negative provision was primarily driven by significant improvement in both national and local economic conditions, particularly declining levels of unemployment rates and jobless claims, substantial growth in retail sales, and a strong rebound in both current and projected gross domestic product growth. Ongoing low charge-off and delinquency rates and overall strong asset quality metrics also contributed to the negative provision. Net recoveries for the three months ended June 30, 2021 were $33,000 compared to net charge-offs of $317,000 for the same 2020 period.
Allowance for Loan Losses
The purpose of the ALLL is to provide for probable losses inherent in the loan portfolio. The allowance is increased by the provision for loan losses and by recoveries of previously charged-off loans. Loan charge-offs decrease the allowance.
At June 30, 2021, the ALLL was $20,097,000, compared to $21,403,000 at December 31, 2020. The ALLL as a percentage of total loans at such dates was 1.05% and 1.06%, respectively. The ALLL as a percentage of loans without PPP loans at June 30, 2021 was 1.11% compared to 1.19% at December 31, 2020. PPP loans are 100% guaranteed by the SBA so there is no allowance associated with the loans in the program. Management will continue to evaluate the adequacy of the Company's ALLL as more economic data becomes available and as changes within the Company's portfolio are known. The effects of the pandemic may require adjustments in the ALLL in future periods.
The Company recognized a recovery of provision expense in the second quarter of 2021 of $1.4 million, primarily accounting for the significant decrease from December 31, 2021 in the ALLL. The recovery was driven by significant improvement in both national and local economic conditions, particularly declining levels of unemployment rates and jobless claims, substantial growth in retail sales, and a strong rebound in both current and projected gross domestic product growth. Ongoing low charge-off and delinquency rates and overall strong asset quality metrics also contributed to the negative provision.
As part of the Company's methodology to evaluate the adequacy of its ALLL, the Company computed its ASC 450 loan balance by reducing total loans by acquired loans and loans that were evaluated for impairment individually. The FASB ASC 450 loan loss reserve balance is the total ALLL reduced by allowances associated with these other pools of loans.
The general allowance, ASC 450 (FAS 5) reserves to FASB ASC 450 loans, was 1.12% at June 30, 2021, compared to 1.16% at December 31, 2020. On a dollar basis, the reserve was $19,302,000 at June 30, 2021, compared to $20,534,000 at December 31, 2020. This segment of the allowance represents by far the largest portion of the loan portfolio and the largest aggregate risk.
The specific allowance, ASC 310-40 (FAS 114) reserves to FASB ASC 310-40 loans, was 0.49% at June 30, 2021, compared to 1.06% at December 31, 2020. On a dollar basis, the reserve was $12,400 at June 30, 2021, compared to $30,000 at December 31, 2020. There is ongoing turnover in the composition of the impaired loan population, which decreased by a net $328,000 over December 31, 2020.
The specific allowance does not include reserves related to acquired loans with deteriorated credit quality. This reserve was $783,000 at June 30, 2021 compared to $839,000 at December 31, 2020. This is the only portion of the reserve related to purchased credit impaired loans. Cash flow expectations for these loans are reviewed on a quarterly basis and unfavorable changes in those estimates relative to the initial estimates can result in the need for additional loan loss provision. The following table presents the Company's loan loss and recovery experience for the periods indicated (dollars in thousands):
| Six Months Ended June 30, 2021 | Year Ended December 31, 2020 |
|||||||
| Balance at beginning of period |
$ | 21,403 | $ | 13,152 | ||||
| Charge-offs: |
||||||||
| Construction and land development |
— | — | ||||||
| Commercial real estate - owner occupied |
3 | 17 | ||||||
| Commercial real estate - non-owner occupied |
— | 165 | ||||||
| Residential real estate |
17 | 90 | ||||||
| Home equity |
— | 27 | ||||||
| Total real estate |
20 | 299 | ||||||
| Commercial and industrial |
— | 505 | ||||||
| Consumer |
31 | 202 | ||||||
| Total charge-offs |
51 | 1,006 | ||||||
| Recoveries: |
||||||||
| Construction and land development |
— | 2 | ||||||
| Commercial real estate - owner occupied |
4 | 12 | ||||||
| Commercial real estate - non-owner occupied |
3 | 50 | ||||||
| Residential real estate |
5 | 63 | ||||||
| Home equity |
27 | 22 | ||||||
| Total real estate |
39 | 149 | ||||||
| Commercial and industrial |
19 | 65 | ||||||
| Consumer |
39 | 127 | ||||||
| Total recoveries |
97 | 341 | ||||||
| Net charge-offs (recoveries) |
(46 | ) | 665 | |||||
| (Recovery of) Provision for loan losses |
(1,352 | ) | 8,916 | |||||
| Balance at end of period |
$ | 20,097 | $ | 21,403 | ||||
Asset Quality Indicators
The following table provides qualitative indicators relevant to the Company's loan portfolio for the six month-period and year indicated below.
| Asset Quality Ratios |
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| June 30, 2021 | December 31, 2020 | |||||||
| Allowance to loans (1) |
1.05 | % | 1.06 | % | ||||
| ASC 450 (FAS 5) ALLL to ASC 450 loans (2) |
1.12 | 1.16 | ||||||
| Net charge-offs (recoveries) to allowance (3) |
(0.46 | ) | 3.11 | |||||
| Net charge-offs to average loans (3) |
— | 0.03 | ||||||
| Nonperforming assets to total assets |
0.07 | 0.12 | ||||||
| Nonperforming loans to loans |
0.11 | 0.13 | ||||||
| Provision to net charge-offs (recoveries) (3) |
2,939.13 | 1,340.75 | ||||||
| Provision (recovery) to average loans (3) |
(0.14 | ) | 0.44 | |||||
| Allowance to nonperforming loans |
921.04 | 793.88 | ||||||
__________________________
(1) - Excluding PPP loans, 1.11% at June 30, 2021 and 1.19% at December 31, 2020
(2) - Excluding PPP loans, 1.19% at June 30, 2021 and 1.32% at December 31, 2020
(3) - Annualized
Nonperforming Assets (Loans and Other Real Estate Owned)
Nonperforming loans include loans on which interest is no longer accrued and accruing loans that are contractually past due 90 days or more. Nonperforming loans include loans originated and loans acquired exclusive of purchased credit impaired loans.
Nonperforming loans to total loans were 0.11% at June 30, 2021 and 0.13% at December 31, 2020.
Nonperforming assets include nonperforming loans, OREO and repossessions. Nonperforming assets represented 0.07% and 0.12% of total assets at June 30, 2021 and December 31, 2020, respectively.
In most cases, it is the policy of the Company that any loan that becomes 90 days past due will automatically be placed on nonaccrual loan status, accrued interest reversed out of income, and further interest accrual ceased. Any payments received on such loans will be credited to principal. In some cases a loan in process of renewal may become 90 days past due. In these instances the loan may still be accruing because of a delayed renewal process in which the customer has not been billed. In accounting for acquired impaired loans, such loans are not classified as nonaccrual when they become 90 days past due. They are considered to be accruing because their interest income relates to the accretable yield and not to contractual interest payments.
Loans will only be restored to full accrual status after six consecutive months of payments that were each less than 30 days delinquent. The Company strictly adheres with this policy before restoring a loan to normal accrual status.
The following table presents the Company's nonperforming assets as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| Nonperforming Assets |
| June 30, 2021 | December 31, 2020 | |||||||
| Nonaccrual loans: |
||||||||
| Real estate |
$ | 1,999 | $ | 2,328 | ||||
| Commercial |
56 | 100 | ||||||
| Consumer |
2 | 6 | ||||||
| Total nonaccrual loans |
2,057 | 2,434 | ||||||
| Loans past due 90 days and accruing interest: |
||||||||
| Real estate |
125 | 262 | ||||||
| Total nonperforming loans |
2,182 | 2,696 | ||||||
| Other real estate owned |
213 | 958 | ||||||
| Total nonperforming assets |
$ | 2,395 | $ | 3,654 | ||||
Impaired Loans
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The following table shows loans that were considered impaired, exclusive of purchased credit impaired loans, as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| Impaired Loans |
| June 30, 2021 | December 31, 2020 | |||||||
| Accruing |
$ | 697 | $ | 758 | ||||
| Nonaccruing |
1,827 | 2,094 | ||||||
| Total impaired loans |
$ | 2,524 | $ | 2,852 | ||||
Troubled Debt Restructurings
TDRs exist whenever the Company makes a concession to a customer based on the customer's financial distress that would not have otherwise been made in the normal course of business.
There were $1,914,000 in TDRs at June 30, 2021 compared to $1,976,000 at December 31, 2020. These loans are included in the impaired loan table above.
During the second quarter of 2021, the Bank continued to assist borrowers through the DAP. On June 30, 2021, the balance of loans remaining in this program was $2.3 million, or less than 1.0% of the total portfolio, compared to $30.0 million, or 1.5%, at December 31, 2020. At June 30, 2021, $1.7 million of the $2.3 million interest only modifications are set to expire in the third quarter of 2021.
Other Real Estate Owned
OREO was $213,000 and $958,000 as of June 30, 2021 and December 31, 2020, respectively. OREO is initially recorded at fair value, less estimated costs to sell, at the date of foreclosure. Loan losses resulting from foreclosure are charged against the ALLL at that time. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of the new cost basis or fair value, less estimated costs to sell with any additional write-downs charged against earnings. For significant assets, these valuations are typically outside annual appraisals. The following table shows the Company's OREO as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| Other Real Estate Owned |
| June 30, 2021 | December 31, 2020 | |||||||
| Construction and land development |
$ | 213 | $ | 443 | ||||
| Commercial real estate - owner occupied |
— | 230 | ||||||
| Residential real estate |
— | 237 | ||||||
| Home equity |
— | 48 | ||||||
| Total other real estate owned |
$ | 213 | $ | 958 | ||||
Deposits
The Company's deposits consist primarily of checking, money market, savings, and consumer and commercial time deposits. Total deposits were $2,769,750,000 at June 30, 2021 compared to $2,611,330,000 at December 31, 2020, an increase of $158,420,000, or 6.1%. The growth during the second quarter of 2021 is a result of continued higher than average cash balances being maintained by customers as elevated savings rates and liquidity patterns continue. This pattern has been prevalent since the second quarter of 2020 and is consistent with trends at other commercial banks.
Average interest-bearing deposits were $1,761,203,000 for the second quarter of 2021, compared to $1,564,430,000 for the second quarter of 2020, an increase of $196,773,000, or 12.6%. Average noninterest-bearing deposits for the 2021 quarter were $915,898,000, compared to $760,901,000 for the 2020 quarter, an increase of $154,997,000, or 20.4%.
The Company's primary focus on the liability side of the balance sheet is growing core deposits and their affiliated relationships. The Company's cost of interest-bearing deposits for the second quarter of 2021 was 0.21%, down from 0.64% for the second quarter of 2020.
Shareholders' Equity
The Company's capital management strategy is to be classified as "well capitalized" under regulatory capital ratios and provide as high as possible total return to shareholders.
Shareholders' equity was $347,633,000 at June 30, 2021 compared to $337,894,000 at December 31, 2020, an increase of $9,739,000, or 2.9%.
The Company paid cash dividends of $0.54 per share during the first six months of 2021 while the aggregate basic and diluted earnings per share for the same period was $0.99.
On September 17, 2019, the federal banking agencies jointly issued a final rule required by the Economic Growth, Regulatory Relief, and Consumer Protection Act ("EGRRCPA") that will permit qualifying banks and bank holding companies that have less than $10 billion in consolidated assets to elect to opt into the Community Bank Leverage Ratio ("CBLR") framework. Under the final rule, banks and bank holding companies that opt into the CBLR framework and maintain a CBLR of greater than 9% would not be subject to other risk-based and leverage capital requirements under the Basel III Capital Rules and will be deemed to have met the well capitalized ratio requirements under the "prompt corrective action" framework. On April 6, 2020, the federal bank regulatory agencies announced the issuance of two interim final rules that make changes to the CBLR framework and implement Section 4012 of the CARES Act. The first lowered the required leverage ratio to 8% for the remainder of 2020 while the second provides a transition back to the 9% requirement. This transition will allow community banking organizations to focus on supporting lending to creditworthy households and businesses given the recent strains on the U.S. economy caused by COVID-19. The CBLR framework was first available for banking organizations to use in their March 31, 2020 regulatory reports. The Company and the Bank do not currently expect to opt into the CBLR framework.
The following table provides information on the regulatory capital ratios for the Company and the Bank at June 30, 2021 and December 31, 2020. Management believes, as of June 30, 2021, that the Company and the Bank more than satisfy all capital adequacy requirements to which they are subject.
| Percentage At June 30, 2021 | Percentage At December 31, 2020 | |||||||||||||||
| Risk-Based Capital Ratios: |
Company |
Bank |
Company |
Bank |
||||||||||||
| Common equity tier 1 capital ratio |
12.79 | % | 13.46 | % | 12.36 | % | 12.86 | % | ||||||||
| Tier 1 capital ratio |
14.19 | 13.46 | 13.78 | 12.86 | ||||||||||||
| Total capital ratio |
15.21 | 14.48 | 15.18 | 13.97 | ||||||||||||
| Leverage Capital Ratio: |
||||||||||||||||
| Tier 1 leverage ratio |
9.44 | 8.95 | 9.48 | 8.85 | ||||||||||||
Stock Repurchase Program
The Company has an approved one year stock repurchase plan that authorizes the repurchase of up to 350,000 shares of the Company's common stock through December 31, 2021.
The Company repurchased 93,212 shares at an average cost of $34.73 per share, for a total of $3,237,000, in the second quarter of 2021. During the six month period ended June 30, 2021, the Company repurchased 147,235 shares at an average cost of $32.81 per share, for a total cost of $4,831,000. In the six month period ended June 30, 2020, the Company repurchased 140,526 shares at an average cost of $35.44 per share, for a total cost of $4,981,000.
Liquidity
Liquidity is the ability of the Company to convert assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities in a timely manner. Liquidity management involves maintaining the Company's ability to meet the daily cash flow requirements of its customers, whether they are borrowers requiring funds or depositors desiring to withdraw funds. Additionally, the Company requires cash for various operating needs including dividends to shareholders, the servicing of debt, and the payment of general corporate expenses. The Company manages its exposure to fluctuations in interest rates through policies approved by the Asset Liability Committee ("ALCO") and Board of Directors, both of which receive periodic reports of the Company's interest rate risk and liquidity position. The Company uses a computer simulation model to assist in the management of the future liquidity needs of the Company.
Liquidity sources include on balance sheet and off balance sheet sources.
Balance sheet liquidity sources include cash, amounts due from banks, loan repayments, and increases in deposits. The Company also maintains a large, high quality, very liquid bond portfolio, which is generally 50% to 60% unpledged and would, accordingly, be available for sale if necessary.
Off balance sheet sources include lines of credit from the Federal Home Loan Bank of Atlanta ("FHLB"), federal funds lines of credit, and access to the Federal Reserve Bank of Richmond's discount window.
The Company has a line of credit with the FHLB, equal to 30% of the Bank's assets, subject to the amount of collateral pledged. Under the terms of its collateral agreement with the FHLB, the Company provides a blanket lien covering all of its residential first mortgage loans, second mortgage loans, home equity lines of credit, and commercial real estate loans. In addition, the Company pledges as collateral its capital stock in and deposits with the FHLB. The Company had $275,000,000 and $245,000,000 outstanding in letters of credit at June 30, 2021 and December 31, 2020, respectively. These letters of credit provide the Bank with alternate collateral for securing public entity deposits above FDIC insurance levels, thereby providing less need for collateral pledging from the securities portfolio, and thereby maximizing on balance sheet liquidity.
Short-term borrowings are discussed in Note 7 and long-term borrowings are discussed in Note 8 in the Consolidated Financial Statements included in this report.
The Company has federal funds lines of credit established with correspondent banks in the amount of $60,000,000 and has access to the Federal Reserve Bank of Richmond's discount window.
The Company has a relationship with Promontory Network, the sponsoring entity for the Certificate of Deposit Account Registry Service® ("CDARS"). Through CDARS, the Company is able to provide deposit customers with access to aggregate FDIC insurance in amounts exceeding $250,000. This gives the Company the ability, as and when needed, to attract and retain large deposits from insurance conscious customers. With CDARS, the Company has the option to keep deposits on balance sheet or sell them to other members of the network. Additionally, subject to certain limits, the Bank can use CDARS to purchase cost-effective funding without collateralization and in lieu of generating funds through traditional brokered CDs or the FHLB. In this manner, CDARS can provide the Company with another funding option. Thus, CDARS serves as a deposit-gathering tool and an additional liquidity management tool. Under EGRRCPA, a well-capitalized bank with a CAMELS rating of 1 or 2 may hold reciprocal deposits up to the lesser of 20% of its total liabilities or $5 billion without those deposits being treated as brokered deposits. Deposits through the CDARS program as of June 30, 2021 and December 31, 2020, were $550,000 and $4,342,000, respectively.
COVID-19 and the participation in the PPP and the DAP programs could significantly impact the Company's liquidity. Average deposits grew 12.6% in the second quarter of 2021 compared to the same quarter of 2020, partially due to customer deposits of loan proceeds from the PPP loan program forgiveness. Customers have continued to maintain higher cash balances through the second quarter of 2021 as future liquidity needs remain uncertain. This buildup of cash reserves primarily accounts for the significant increase over the same period of 2020. Management believes that the resources available to the Company will provide sufficient and timely liquidity, both on and off the balance sheet, to support its programs and operations.
Off-Balance Sheet Activities
The Company enters into certain financial transactions in the ordinary course of performing traditional banking services that result in off-balance sheet transactions. Other than subsidiaries to issue trust preferred securities, the Company does not have any off-balance sheet subsidiaries. Off-balance sheet transactions at June 30, 2021 and at December 31, 2020 were as follows (dollars in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Commitments to extend credit |
$ | 521,572 | $ | 503,272 | ||||
| Standby letters of credit |
12,921 | 17,355 | ||||||
| Mortgage loan rate-lock commitments |
16,137 | 26,883 | ||||||
Commitments to extend credit to customers represent legally binding agreements with fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being funded, the total commitment amounts do not necessarily represent future funding requirements. Standby letters of credit are conditional commitments issued by the Company guaranteeing the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Management
Effectively managing market risk is essential to achieving the Company's financial objectives. Market risk reflects the risk of economic loss resulting from changes in interest rates and market prices. The Company is generally not subject to currency exchange risk or commodity price risk. The Company's primary market risk exposure is interest rate risk; however, market risk also includes liquidity risk. Both are discussed in the following sections.
Interest Rate Risk Management
Interest rate risk and its impact on net interest income is a primary market risk exposure. The Company manages its exposure to fluctuations in interest rates through policies approved by the ALCO and Board of Directors, both of which receive and review periodic reports of the Company's interest rate risk position.
The Company uses computer simulation analysis to measure the sensitivity of projected earnings to changes in interest rates. Simulation takes into account current balance sheet volumes and the scheduled repricing dates instrument level optionality, and maturities of assets and liabilities. It incorporates numerous assumptions including growth, changes in the mix of assets and liabilities, prepayments, and average rates earned and paid. Based on this information, management uses the model to project net interest income under multiple interest rate scenarios.
A balance sheet is considered asset sensitive when its earning assets (loans and securities) reprice faster or to a greater extent than its liabilities (deposits and borrowings). An asset sensitive balance sheet will produce relatively more net interest income when interest rates rise and less net interest income when they decline. Based on the Company's simulation analysis, management believes the Company's interest sensitivity position at June 30, 2021 is asset sensitive. Management expects that the general direction of short-term market interest rates will be stable, but the outlook is less certain for longer-term rates during the remainder of 2021.
Earnings Simulation
The following table shows the estimated impact of changes in interest rates on net interest income as of June 30, 2021 (dollars in thousands), assuming instantaneous and parallel changes in interest rates, and expected levels of assets and liabilities. Net interest income for the following twelve months is projected to increase when interest rates are higher than current rates.
| Estimated Changes in Net Interest Income |
| June 30, 2021 |
||||||||
| Change in Net Interest Income | ||||||||
| Change in interest rates |
Amount |
Percent |
||||||
| Up 4.00% |
$ | 22,647 | 28.2 | % | ||||
| Up 3.00% |
16,945 | 21.1 | ||||||
| Up 2.00% |
11,189 | 13.9 | ||||||
| Up 1.00% |
5,443 | 6.8 | ||||||
| Flat |
— | — | ||||||
| Down 0.25% |
(918 | ) | (1.1 | ) | ||||
| Down 1.00% (1) |
(2,740 | ) | (3.4 | ) | ||||
__________________________
(1) This scenario is deemed highly improbable at this time due to the current near zero interest rate environment.
Management cannot predict future interest rates or their exact effect on net interest income. Computations of future effects of hypothetical interest rate changes are based on numerous assumptions and should not be relied upon as indicative of actual results. Certain limitations are inherent in such computations. Assets and liabilities may react differently than projected to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag changes in market interest rates. Interest rate shifts may not be parallel.
Any changes in interest rates can cause substantial changes in the amount of prepayments of loans and mortgage-backed securities, which may in turn affect the Company's interest rate sensitivity position. Additionally, credit risk may rise if an interest rate increase adversely affects the ability of borrowers to service their debt. Decrease in yields due to the current rate environment have been projected in the model simulation.
Economic Value Simulation
Economic value simulation is used to calculate the estimated fair value of assets and liabilities over different interest rate environments. Economic values are calculated based on discounted cash flow analysis. The net economic value of equity is the economic value of all assets minus the economic value of all liabilities. The change in net economic value over different rate environments is an indication of the longer-term earnings capability of the balance sheet. The same assumptions are used in the economic value simulation as in the earnings simulation. The economic value simulation uses instantaneous rate shocks to the balance sheet.
The following table reflects the estimated change in net economic value over different rate environments using economic value simulation for the balances at the quarterly period ended June 30, 2021 (dollars in thousands):
| Estimated Changes in Economic Value of Equity |
| June 30, 2021 |
||||||||||||
| Change in interest rates |
Amount |
$ Change |
% Change |
|||||||||
| Up 4.00% |
$ | 542,401 | $ | 261,053 | 92.8 | % | ||||||
| Up 3.00% |
491,707 | 210,359 | 74.8 | |||||||||
| Up 2.00% |
433,740 | 152,392 | 54.2 | |||||||||
| Up 1.00% |
364,014 | 82,666 | 29.4 | |||||||||
| Flat |
281,348 | — | — | |||||||||
| Down 0.25% |
253,426 | (27,922 | ) | (9.9 | ) | |||||||
| Down 1.00% (1) |
154,682 | (126,666 | ) | (45.0 | ) | |||||||
__________________________
(1) This scenario is deemed highly improbable at this time due to the current zero interest rate environment.
Due to the historically low interest rate environment, no measurement was considered necessary for a further decline in interest rates. Due to the significant drop in short-term interest rates as a result of the economic impact of the COVID-19 pandemic, the valuation of the deposit portfolio decreased significantly in addition to the earning asset portfolio.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company's management, including the Chief Executive Officer and Chief Financial Officer, evaluated the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of June 30, 2021. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective, as of such date, to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. There were no significant changes in the Company's internal controls over financial reporting that occurred during the quarter ended June 30, 2021 that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.
The nature of the business of the Company ordinarily results in a certain amount of litigation. The Company is involved in various legal proceedings, all of which are considered incidental to the normal conduct of business. Management believes that these proceedings will not have a material adverse effect on the consolidated financial position or consolidated results of operations of the Company.
There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 8, 2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Sales of Unregistered Securities - None
(b) Use of Proceeds - Not applicable
(c) Issuer Purchases of Securities
Stock Repurchase Program; Other
The Company has an approved one year stock repurchase plan that authorizes the repurchase of up to 350,000 shares of the Company's common stock through December 31, 2021. Repurchases may be made through open market purchases or in privately negotiated transactions, and shares repurchased will be returned to the status of authorized and unissued shares of common stock. The actual timing, number, and value of shares repurchased under the program will be determined by management.
Shares of the Company's common stock were repurchased during the three months ended June 30, 2021 as detailed below. Under the stock repurchase program, the Company has the remaining authority to repurchase up to 202,765 shares of the Company's common stock as of June 30, 2021.
| Period Beginning on First Day of Month Ended |
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 Plans or Programs |
||||||||||||
| April 30, 2021 |
11,555 | $ | 33.81 | 11,555 | 284,422 | |||||||||||
| May 31, 2021 |
53,941 | 34.79 | 53,941 | 230,481 | ||||||||||||
| June 30, 2021 |
27,716 | 34.98 | 27,716 | 202,765 | ||||||||||||
| Total |
93,212 | $ | 34.73 | 93,212 | ||||||||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
(a) Required 8-K disclosures
None
(b) Changes in Nominating Process
None
| 31.1 |
Section 302 Certification of Jeffrey V. Haley, President and Chief Executive Officer. |
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| 31.2 |
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| 32.1 |
Section 906 Certification of Jeffrey V. Haley, President and Chief Executive Officer. |
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| 32.2 |
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| 101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
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| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Inline eXtensible Business Reporting Language (included with Exhibit 101). |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AMERICAN NATIONAL BANKSHARES INC. |
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/s/ Jeffrey V. Haley |
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Jeffrey V. Haley |
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President and Chief Executive Officer |
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| Date - August 6, 2021 |
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(principal executive officer) |
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By: |
/s/ Jeffrey W. Farrar |
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Jeffrey W. Farrar |
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Executive Vice President, |
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Chief Operating Officer and |
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Chief Financial Officer |
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| Date - August 6, 2021 |
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(principal financial officer) |
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/s/ Cathy W. Liles |
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Cathy W. Liles |
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Senior Vice President and |
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Chief Accounting Officer |
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| Date - August 6, 2021 |
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(principal accounting officer) |
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Exhibit 31.1 |
CERTIFICATIONS |
I, Jeffrey V. Haley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of American National Bankshares Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 6, 2021
/s/ Jeffrey V. Haley
Jeffrey V. Haley
President and Chief Executive Officer
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Exhibit 31.2 |
CERTIFICATIONS |
I, Jeffrey W. Farrar, certify that:
1. I have reviewed this quarterly report on Form 10-Q of American National Bankshares Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 6, 2021
/s/ Jeffrey W. Farrar
Jeffrey W. Farrar
Executive Vice President, Chief Operating Officer and Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of American National Bankshares Inc. (the "Company") for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey V. Haley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Jeffrey V. Haley
Jeffrey V. Haley
President and Chief Executive Officer
August 6, 2021
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of American National Bankshares Inc. (the "Company") for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey W. Farrar, Executive Vice President, Chief Operating Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Jeffrey W. Farrar
Jeffrey W. Farrar
Executive Vice President, Chief Operating Officer and Chief Financial Officer
August 6, 2021
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Preferred stock, par value (in dollars per share) | $ 5 | $ 5 |
| Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
| Preferred stock, shares outstanding (in shares) | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 1 | $ 1 |
| Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
| Common stock, shares outstanding (in shares) | 10,875,756 | 10,982,367 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Net income | $ 10,766 | $ 5,482 | $ 22,055 | $ 14,024 |
| Unrealized gains on securities available for sale | 1,416 | 1,659 | (4,466) | 7,848 |
| Tax effect | (295) | (358) | 976 | (1,694) |
| Unrealized losses on cash flow hedges | (408) | (129) | 1,373 | (2,958) |
| Tax effect | 86 | 28 | (288) | 639 |
| Other comprehensive income | 799 | 1,200 | (2,405) | 3,197 |
| Comprehensive income | $ 11,565 | $ 6,682 | 19,650 | 17,221 |
| Reclassification adjustment for gains on sales or calls of securities available for sale | 0 | (814) | ||
| Tax effect | $ 0 | $ 176 | ||
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Total |
|---|---|---|---|---|---|
| Balance at Dec. 31, 2019 | $ 11,019 | $ 158,244 | $ 151,478 | $ (483) | $ 320,258 |
| Net income | 0 | 0 | 14,024 | 0 | 14,024 |
| Other comprehensive income | 0 | 0 | 0 | 3,197 | 3,197 |
| Stock options exercised | 2 | 28 | 0 | 0 | 30 |
| Vesting of restricted stock | 18 | (18) | 0 | 0 | 0 |
| Equity based compensation | 13 | 808 | 0 | 0 | 821 |
| Cash dividends paid | 0 | 0 | (5,916) | 0 | (5,916) |
| Stock repurchased | (141) | (4,840) | 0 | 0 | (4,981) |
| Balance at Jun. 30, 2020 | 10,911 | 154,222 | 159,586 | 2,714 | 327,433 |
| Balance at Mar. 31, 2020 | 10,898 | 153,817 | 157,064 | 1,514 | 323,293 |
| Net income | 0 | 0 | 5,482 | 0 | 5,482 |
| Other comprehensive income | 0 | 0 | 0 | 1,200 | 1,200 |
| Stock options exercised | 0 | 1 | 0 | 0 | 1 |
| Vesting of restricted stock | 6 | (6) | 0 | 0 | 0 |
| Equity based compensation | 7 | 410 | 0 | 0 | 417 |
| Cash dividends paid | 0 | 0 | (2,960) | 0 | (2,960) |
| Balance at Jun. 30, 2020 | 10,911 | 154,222 | 159,586 | 2,714 | 327,433 |
| Balance at Dec. 31, 2020 | 10,926 | 154,850 | 169,681 | 2,437 | 337,894 |
| Net income | 0 | 0 | 22,055 | 0 | 22,055 |
| Other comprehensive income | 0 | 0 | 0 | (2,405) | (2,405) |
| Stock options exercised | 5 | 81 | 0 | 0 | 86 |
| Vesting of restricted stock | 15 | (15) | 0 | 0 | 0 |
| Equity based compensation | 12 | 715 | 0 | 0 | 727 |
| Cash dividends paid | 0 | 0 | (5,893) | 0 | (5,893) |
| Stock repurchased | (147) | (4,684) | 0 | 0 | (4,831) |
| Balance at Jun. 30, 2021 | 10,811 | 150,947 | 185,843 | 32 | 347,633 |
| Balance at Mar. 31, 2021 | 10,894 | 153,651 | 178,015 | (767) | 341,793 |
| Net income | 0 | 0 | 10,766 | 0 | 10,766 |
| Other comprehensive income | 0 | 0 | 0 | 799 | 799 |
| Stock options exercised | 5 | 81 | 0 | 0 | 86 |
| Equity based compensation | 5 | 359 | 0 | 0 | 364 |
| Cash dividends paid | 0 | 0 | (2,938) | 0 | (2,938) |
| Stock repurchased | (93) | (3,144) | 0 | 0 | (3,237) |
| Balance at Jun. 30, 2021 | $ 10,811 | $ 150,947 | $ 185,843 | $ 32 | $ 347,633 |
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Stock options exercised, shares (in shares) | 5,180 | 50 | 5,180 | 1,793 |
| Vesting of restricted stock, shares (in shares) | 5,296 | 15,315 | 17,541 | |
| Equity based compensation, shares (in shares) | 5,617 | 6,768 | 35,444 | 31,513 |
| Cash dividends paid, per share (in dollars per share) | $ 0.27 | $ 0.27 | $ 0.54 | $ 0.54 |
| Stock repurchased, shares (in shares) | 93,212 | 147,235 | 140,526 | |
Note 1 - Accounting Policies |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Notes to Financial Statements | |
| Significant Accounting Policies [Text Block] |
Note 1 – Accounting Policies
The consolidated financial statements include the accounts of American National Bankshares Inc. (NASDAQ: AMNB) (the "Company") and its wholly-owned subsidiary, American National Bank and Trust Company (the "Bank"). The Company is a multi-state bank holding company headquartered in Danville, Virginia. The Bank is a community bank organization serving Virginia and North Carolina with 26 banking offices. In addition to traditional retail, commercial and mortgage offerings, the Bank also provides trust and investment services through its Trust and Investment Services Division.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts 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. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill and intangible assets, other-than-temporary impairment of securities, accounting for merger and acquisition activity, accounting for acquired loans with specific credit-related deterioration, and the valuation of deferred tax assets and liabilities.
COVID-19 spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. On March 13, 2020, the United States President declared a national emergency in the face of a growing public health and economic crisis due to the COVID-19 global pandemic. The government and private sector responses to contain its spread began to significantly affect the Company's operations beginning in March 2020 and will likely continue to adversely affect its operations through 2021, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic will most likely affect future earnings, cash flows and overall financial condition of the Company. These uncertainties include the nature and duration of the financial effects felt by its customers impacting their ability to perform in accordance with their underlying loan agreements, the Company's ability to generate demand for non-loan related products and services, as well as potential declines in real estate values resulting from the market disruption which may impair the recorded values of collateral-dependent loans and other real estate owned. Further, these factors, in addition to those pervasive to the industry and overall U.S. economy, may necessitate an overall valuation of the Company's franchise in such a way an impairment charge to the carrying value of goodwill would be required. Accordingly, significant estimates used in the preparation of the Company's financial statements including those associated with the evaluation of the allowance for loan losses as well as other valuation-based estimates may be subject to significant adjustments in future periods. We have seen significant improvement in the severity of the pandemic, however, as it continues to affect economies around the world and in the United States, it could impact estimates in future periods.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results that may occur for any other period. These statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Certain prior period balances have been reclassified to conform to the current period presentation.
Recently Adopted Accounting Developments
In December 2020, the Consolidated Appropriations Act of 2021 ("CAA") was passed. Under Section 541 of the CAA, Congress extended or modified many of the relief programs first created by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, including the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") and treatment of certain loan modifications related to the COVID-19 pandemic.
The Company has utilized a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act throughout the pandemic. The Company assisted borrowers with modifications to outstanding loan balances of $347.0 million in the aggregate since the beginning of the pandemic in March 2020. At June 30, 2021, interest only modification balances outstanding totaled $2.3 million compared to $19.3 million at March 31, 2021, representing less than 1.0% of total loans held for investment for both periods. Of the $2.3 million outstanding, modifications for $1.7 million are scheduled to expire in the third quarter of 2021.
The Company continued to participate in the PPP under the CARES Act in the second quarter of 2021, until the program expired. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven. The Company processed a total of $364.2 million in PPP loans since the beginning of the program with $80.0 million forgiven in the second quarter of 2021 compared to $105.1 million in the first quarter of 2021. Total outstanding net PPP loans were $104.1 million and $211.3 million at June 30, 2021 and December 31, 2020, respectively.
Recent Accounting Pronouncements and Other Authoritative Accounting Guidance
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission ("SEC") and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. At the one-time evaluation date, the Company qualified as a smaller reporting company and elected to defer the adoption of the standard. The Company is refining the data in the model that will be used upon future adoption of the standard and expects to run concurrent models in the fourth quarter of 2021 and each quarter of 2022 until adoption. The implementation of this ASU will likely result in an adjustment to the Company's reserves when implemented.
In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Certain disclosure requirements have been deleted while the following disclosure requirements have been added: the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715-20-50-3, which state that the following information for defined benefit pension plans should be disclosed: the projected benefit obligation ("PBO") and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation ("ABO") and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-14 to have a material impact on its consolidated financial statements.
Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin ("SAB") 119. SAB 119 updated portions of SEC interpretative guidance to align with ASC 326, Financial Instruments - Credit Losses. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this ASU provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity." The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share calculation in certain areas. In addition, the amendment updates the disclosure requirements for convertible instruments to increase the information transparency. For public business entities, excluding smaller reporting companies, the amendments in the ASU are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements.
|
Note 2 - Securities |
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| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] |
Note 2 – Securities
The amortized cost and fair value of investments in securities available for sale at June 30, 2021 were as follows (dollars in thousands):
The amortized cost and fair value of investments in securities available for sale at December 31, 2020 were as follows (dollars in thousands):
Restricted Stock
Due to restrictions placed upon the Bank's common stock investment in the Federal Reserve Bank of Richmond ("FRB") and Federal Home Loan Bank of Atlanta ("FHLB"), these securities have been classified as restricted equity securities and carried at cost. The restricted securities are not subject to the investment security classification requirements and are included as a separate line item on the Company's consolidated balance sheets. The FRB requires the Bank to maintain stock with a par value equal to 3.00% of its outstanding capital and an additional 3.00% is on call. The FHLB requires the Bank to maintain stock in an amount equal to 3.75% of outstanding borrowings and a specific percentage of the Bank's total assets. The cost of restricted stock at June 30, 2021 and December 31, 2020 was as follows (dollars in thousands):
Temporarily Impaired Securities
The following table shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2021. The reference point for determining when securities are in an unrealized loss position is month end. Therefore, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.
Available for sale securities that have been in a continuous unrealized loss position, at June 30, 2021, were as follows (dollars in thousands):
The table below shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2020 (dollars in thousands):
U.S. Treasury securities: The unrealized losses on the Company's investment in U.S. Treasury securities were caused by normal market fluctuations. of these securities were in an unrealized loss position for 12 months or more. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
Federal agencies and GSEs: The unrealized losses on the Company's investment in 23 government sponsored entities ("GSE") securities were caused by normal market fluctuations. of these securities were in an unrealized loss position for 12 months or more. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
Mortgage-backed securities: The unrealized losses on the Company's investment in 14 GSE mortgage-backed securities were caused by normal market fluctuations. of these securities were in an unrealized loss position for 12 months or more. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company's investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
Collateralized Mortgage Obligations: The unrealized losses associated with 12 GSE collateralized mortgage obligations ("CMOs") were due to normal market fluctuations. of these securities was in an unrealized loss position for 12 months or more. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company's investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
State and municipal securities: The unrealized losses on 22 state and municipal securities were caused by normal market fluctuations. of these securities were in an unrealized loss position for 12 months or more. These securities are of high credit quality (rated AA- or higher), and principal and interest payments have been made timely. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does consider those investments to be other-than-temporarily impaired at June 30, 2021.
Corporate securities: The unrealized loss on corporate security was caused by normal market fluctuations and not credit deterioration. This security is not rated, but the Company conducted a thorough internal credit review prior to purchase in May 2021, which determined the investment risk to be acceptable due to the issuer's experienced management team, strong asset quality, and ample levels of capital and liquidity. The contractual terms of this investment do not permit the issuer to settle the security at a price less than the amortized cost basis of the investment. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the Company does consider this investment to be other-than-temporarily impaired at June 30, 2021. Restricted stock: When evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider restricted stock to be other-than-temporarily impaired at June 30, 2021, and no impairment has been recognized.
Other-Than-Temporarily-Impaired Securities
As of June 30, 2021 and December 31, 2020, there were no securities classified as other-than-temporarily impaired.
Realized Gains and Losses
The following table presents the gross realized gains and losses on, and the proceeds from the sale of, securities available for sale during the three and six months ended June 30, 2021 and 2020 (dollars in thousands):
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Note 3 - Loans |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
Note 3 – Loans
Loans, net of deferred fees and costs and excluding loans held for sale, at June 30, 2021 and December 31, 2020, were comprised of the following (dollars in thousands):
Acquired Loans
The outstanding principal balance and the carrying amount of these loans, including loans accounted for under ASC 310-30, included in the consolidated balance sheets at June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):
The outstanding principal balance and related carrying amount of purchased credit impaired loans, for which the Company applies ASC 310-30 to account for interest earned, as of the indicated dates are as follows (dollars in thousands):
The following table presents changes in the accretable yield on acquired impaired loans, for which the Company applies ASC 310-30, for the six months ended June 30, 2021 and the year ended December 31, 2020 (dollars in thousands):
__________________________ (1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate acquired impaired loans, and discounted payoffs that occurred in the period.
Past Due Loans
The following table shows an analysis by portfolio segment of the Company's past due loans at June 30, 2021 (dollars in thousands):
The following table shows an analysis by portfolio segment of the Company's past due loans at December 31, 2020 (dollars in thousands):
Impaired Loans
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at June 30, 2021 (dollars in thousands):
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans with unearned costs that exceed unearned fees.
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at December 31, 2020 (dollars in thousands):
__________________________ (1) Allowance is reported as zero in the table due to presentation in thousands and rounding.
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans with unearned costs that exceed unearned fees.
During the three and six months ended June 30, 2021 there were loans modified as TDRs. During the three months ended June 30, 2020, there were loans modified as TDRs. was a home equity loan, and were commercial real estate loans, all included in the impaired loan balances. The home equity loan was an extension of maturity with a pre- and post-modification outstanding recorded investment of $6,000. The commercial real estate loans were payment deferrals with an aggregate pre- and post-modification outstanding recorded investment of $1,158,000. In addition, in the six months ended June 30, 2020 there was one residential real estate loan modified as a TDR during the first quarter. This TDR was included in the impaired loan balances and was a payment deferral with a pre- and post- modification outstanding recorded investment of $82,000.
During the six months ended June 30, 2021, the Company had commercial real estate - non-owner occupied loan with a recorded investment of $259,000 at restructure and commercial loan with a recorded investment of $106,000 at restructure that subsequently defaulted within 12 months of modification. During the six months ended June 30, 2020, the Company had commercial real estate loan with a recorded investment of $1,052,000 that subsequently defaulted within 12 months of modification. The Company defines defaults as one or more payments that occur more than 90 days past the due date, charge-off or foreclosure subsequent to modification.
The Bank has continued to assist customers through the DAP program into the second quarter of 2021. On June 30, 2021, the balance of loans remaining in this program was $2.3 million, or less than 1.0% of the total portfolio, compared to $30.0 million, or 1.5%, at December 31, 2020. At June 30, 2021, of the interest only modifications balances of $2.3 million outstanding, $1.7 million are scheduled to expire in the third quarter.
The Company continued to participate in the PPP under the CARES Act in the second quarter of 2021, until the program expired. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven. The Company processed a total of $364.2 million in PPP loans since the beginning of the program with $80.0 million forgiven in the second quarter of 2021 compared to $105.1 million in the first quarter of 2021.Total outstanding net PPP loans were $104.1 million and $211.3 million at June 30, 2021 and December 31, 2020, respectively.
The loan portfolio consists primarily of commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, and home equity loans. At June 30, 2021, the commercial real estate portfolio included concentrations of $73,978,000, $42,441,000 and $193,992,000 in hotel, restaurants, and retail loans, respectively. These concentrations total 3.7%, 2.2%, and 10.2% of total loans, respectively, excluding loans in process.
Residential Real Estate in Process of Foreclosure
The Company had no residential loans in process of foreclosure at June 30, 2021 and $387,000 residential loans in process of foreclosure at December 31, 2020, respectively. The Company had no residential other real estate owned ("OREO") at June 30, 2021 in process of foreclosure and had $285,000 in residential OREO in process of foreclosure at December 31, 2020.
Risk Grades
The following tables show the Company's loan portfolio broken down by internal risk grading as of June 30, 2021 (dollars in thousands):
Commercial and Consumer Credit Exposure Credit Risk Profile by Internally Assigned Grade
Consumer Credit Exposure Credit Risk Profile Based on Payment Activity
The following tables show the Company's loan portfolio broken down by internal risk grading as of December 31, 2020 (dollars in thousands):
Commercial and Consumer Credit Exposure Credit Risk Profile by Internally Assigned Grade
Consumer Credit Exposure Credit Risk Profile Based on Payment Activity
Loans classified in the Pass category typically are fundamentally sound, and risk factors are reasonable and acceptable.
Loans classified in the Special Mention category typically have been criticized internally, by loan review or the loan officer, or by external regulators under the current credit policy regarding risk grades.
Loans classified in the Substandard category typically have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are typically characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Loans classified in the Doubtful category typically have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur that may salvage the debt.
Consumer loans are classified as performing or nonperforming. A loan is nonperforming when payments of interest and principal are past due 90 days or more.
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Note 4 - Allowance for Loan Losses and Reserve for Unfunded Lending Commitments |
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| Allowance for Credit Losses [Text Block] |
Note 4 – Allowance for Loan Losses and Reserve for Unfunded Lending Commitments
Changes in the allowance for loan losses and the reserve for unfunded lending commitments (included in other liabilities) at and for the indicated dates and periods are presented below (dollars in thousands):
The reserve for unfunded loan commitments is included in other liabilities.
The following table presents changes in the Company's allowance for loan losses by portfolio segment and the related loan balance total by segment at and for the six months ended June 30, 2021 (dollars in thousands):
__________________________ (1) Includes PPP loans, which are guaranteed by the SBA and have no related allowance.
The following table presents changes in the Company's allowance for loan losses by portfolio segment and the related loan balance total by segment at and for the year ended December 31, 2020 (dollars in thousands):
__________________________ (1) Includes PPP loans, which are guaranteed by the SBA and have no related allowance.
The allowance for loan losses is allocated to loan segments based upon historical loss factors, risk grades on individual loans, and qualitative factors. Qualitative factors include levels and trends in delinquencies, nonaccrual loans, and charge-offs and recoveries; trends in volume and terms of loans; effects of changes in risk selection, underwriting standards, and lending policies; experience of lending staff; national, regional, and local economic trends and conditions; portfolio concentrations; regulatory and legal factors; competition; quality of loan review system; and value of underlying collateral.
There was a negative provision expense for the second quarter of 2021 of $1.4 million, compared to $4.8 million for the same quarter in the previous year. The second quarter of 2021 negative provision was primarily driven by significant improvement in both national and local economic conditions, particularly declining levels of unemployment rates and jobless claims, substantial growth in retail sales, and a strong rebound in both current and projected gross domestic product ("GDP") growth. Ongoing low charge-off and delinquency rates and overall strong asset quality metrics also contributed to the negative provision. The provision for loan losses for the 2020 quarter reflected an increase in the allowance based on a qualitative assessment of the declining and uncertain economic landscape in the wake of the COVID-19 pandemic. Sharp declines in employment, GDP, housing and auto sales, housing starts and business activity in general indicated a higher risk of probable losses in the Bank's portfolio.
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Note 5 - Goodwill and Other Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Text Block] |
Note 5 – Goodwill and Other Intangible Assets
The Company records as goodwill the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Recently adopted ASU 2017-04 simplifies the accounting for goodwill impairment by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit's carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. The Company performs its annual analysis as of June 30 each fiscal year, as well as when an event triggering impairment may have occurred. Due to the COVID-19 pandemic market conditions, the Company determined a triggering event occurred during the first quarter of 2020 and performed an internal assessment for the quarters ended March 30, June 30 and September 30, 2020. An independent assessment of impairment was performed at December 31, 2020. The assessments determined the fair value exceeded the carrying value and did not indicate impairment. The Company performed a qualitive assessment of Goodwill as of June 30, 2021 and determined the fair value exceeded the carrying value.
Core deposit intangibles resulting from the acquisition of MidCarolina Financial Corporation ("MidCarolina") in July 2011 were $6,556,000 and were amortized on an accelerated basis over 108 months ending June 2020. Core deposit intangibles resulting from the acquisitions of MainStreet BankShares, Inc. in January 2015 and HomeTown Bankshares Corporation ("HomeTown") in April 2019 were $10,039,000 in the aggregate and are being amortized on an accelerated basis over 120 months.
The changes in the carrying amount of goodwill and intangibles for the six months ended June 30, 2021, are as follows (dollars in thousands):
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Note 6 - Leases |
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| Lessee, Operating Leases [Text Block] |
Note 6 – Leases
The Company's leases are recorded under ASC 842, Leases. Lease liabilities represent the Company's obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company's incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company's right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. The aggregate right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the Company's consolidated balance sheets.
The Company's long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.
The following tables present information about the Company's leases, as of and for the periods indicated (dollars in thousands):
A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):
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Note 7 - Short-term Borrowings |
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| Short-term Debt [Text Block] |
Note 7 – Short-term Borrowings
Short-term borrowings may consist of customer repurchase agreements, overnight borrowings from the FHLB, and federal funds purchased. The Company has federal funds lines of credit established with correspondent banks in the amount of $60,000,000 and has access to the FRB's discount window. Customer repurchase agreements are collateralized by securities of the U.S. Government or GSEs. They mature daily. The interest rates may be changed at the discretion of the Company. The securities underlying these agreements remain under the Company's control. FHLB overnight borrowings contain floating interest rates that may change daily at the discretion of the FHLB. Federal funds purchased are unsecured overnight borrowings from other financial institutions. Short-term borrowings consisted of the following at June 30, 2021 and December 31, 2020 (dollars in thousands):
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Note 8 - Long-term Borrowings |
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| Long-term Debt [Text Block] |
Note 8 – Long-term Borrowings
Under the terms of its collateral agreement with the FHLB, the Company provides a blanket lien covering all of its residential first mortgage loans, second mortgage loans, home equity lines of credit, and commercial real estate loans. In addition, the Company pledges as collateral its capital stock in the FHLB and deposits with the FHLB. The Company has a line of credit with the FHLB equal to 30% of the Company's assets, subject to the amount of collateral pledged. As of June 30, 2021, ,000 in eligible collateral was pledged under the blanket floating lien agreement which covers both short-term and long-term borrowings.
There were no long-term borrowings with FHLB as of June 30, 2021 or December 31, 2020.
In the regular course of conducting its business, the Company takes deposits from political subdivisions of the states of Virginia and North Carolina. At June 30, 2021, the Bank's public deposits totaled ,000. The Company is required to provide collateral to secure the deposits that exceed the insurance coverage provided by the Federal Deposit Insurance Corporation. This collateral can be provided in the form of certain types of government or agency bonds or letters of credit from the FHLB. At June 30, 2021, the Company had $275,000,000 in letters of credit with the FHLB outstanding, as well as ,000 in agency, state, and municipal securities, pledged to provide collateral for such deposits.
Subordinated Debt
On April 1, 2019, in connection with the HomeTown merger, the Company assumed had $7,500,000 in aggregate principal amount of fixed-to-floating rate subordinated notes issued to various institutional accredited investors. A fair value adjustment of $30,000 was recorded on the subordinated debt as a result of the acquisition of HomeTown on April 1, 2019, and was amortized into interest expense through December 30, 2020. The notes had a maturity date of December 30, 2025 and had an annual fixed interest rate of 6.75% until December 30, 2020. Thereafter, the notes had a floating interest rate based on LIBOR. Interest was paid semi-annually, in arrears, on June 30 and December 30 of each year during the fixed interest rate period. Interest was paid quarterly, in arrears, on March 30, June 30, September 30 and December 30 throughout the floating interest rate period or earlier redemption date. The interest rate at June 30, 2021 was 5.30%. This debt was paid in full and the notes were redeemed on June 30, 2021.
Junior Subordinated Debt
On April 7, 2006, AMNB Statutory Trust I, a Delaware statutory trust and a wholly owned unconsolidated subsidiary of the Company, issued $20,000,000 of preferred securities (the "Trust Preferred Securities") in a private placement pursuant to an applicable exemption from registration. The Trust Preferred Securities mature on June 30, 2036, but may be redeemed at the Company's option beginning on September 30, 2011. Distributions are cumulative and will accrue from the date of original issuance but may be deferred by the Company from time to time for up to 20 consecutive quarterly periods. The Company has guaranteed the payment of all required distributions on the Trust Preferred Securities. The proceeds of the Trust Preferred Securities received by the trust, along with proceeds of $619,000 received by the trust from the issuance of common securities by the trust to the Company, were used to purchase $20,619,000 of the Company's junior subordinated debt securities (the "Junior Subordinated Debt"), issued pursuant to junior subordinated debentures entered into between the Company and Wilmington Trust Company, as trustee. The proceeds of the Junior Subordinated Debt were used to fund the cash portion of the merger consideration to the former shareholders of Community First Financial Corporation in connection with the Company's acquisition of that company in 2006, and for general corporate purposes.
On July 1, 2011, in connection with the MidCarolina merger, the Company assumed $8,764,000 in junior subordinated debt to MidCarolina Trust I and MidCarolina Trust II, two separate Delaware statutory trusts (the "MidCarolina Trusts"), to fully and unconditionally guarantee the preferred securities issued by the MidCarolina Trusts. These long-term obligations, which currently qualify as Tier 1 capital, constitute a full and unconditional guarantee by the Company of the MidCarolina Trusts' obligations. The MidCarolina Trusts were not consolidated in the Company's financial statements.
In accordance with ASC 810-10-15-14, Consolidation – Overall – Scope and Scope Exceptions, the Company did not eliminate through consolidation the Company's $619,000 equity investment in AMNB Statutory Trust I or the $264,000 equity investment in the MidCarolina Trusts. Instead, the Company reflected these equity investments in other assets in the consolidated balance sheets.
A description of the junior subordinated debt securities outstanding payable to the trusts is shown below as of June 30, 2021 and December 31, 2020 (dollars in thousands):
The principal amounts reflected above for the MidCarolina Trusts are net of fair value adjustments of $638,000 and $564,000 at June 30, 2021 and $666,000 and $587,000 at December 31, 2020, respectively. The original fair value adjustments of $1,197,000 and $1,021,000 were recorded as a result of the acquisition of MidCarolina on July 1, 2011, and are being amortized into interest expense over the remaining lives of the respective borrowings. |
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Note 9 - Derivative Financial Instruments and Hedging Activities |
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
Note 9 - Derivative Financial Instruments and Hedging Activities
The Company uses derivative financial instruments ("derivatives") primarily to manage risks to the Company associated with changing interest rates. The Company's derivatives are hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge).
The Company designates derivatives as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Company's trust preferred capital notes. The Company uses interest rate swap agreements as part of its hedging strategy by exchanging variable-rate interest payments on a notional amount equal to the principal amount of the borrowings for fixed-rate interest payments, with such interest rates set based on benchmarked interest rates.
All interest rate swaps were entered into with counterparties that met the Company's credit standards, and the agreements contain collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in these derivative contracts is not significant.
Terms and conditions of the interest rate swaps vary, and amounts receivable or payable are recognized as accrued under the terms of the agreements. The Company assesses the effectiveness of each hedging relationship on a periodic basis. In accordance with ASC 815, Derivatives and Hedging, the effective portions of the derivatives' unrealized gains or losses are recorded as a component of other comprehensive income. Based on the Company's assessment, its cash flow hedges are highly effective, but to the extent that any ineffectiveness exists in the hedge relationships, the amounts would be recorded in interest income and interest expense in the Company's consolidated statements of income.
The following tables present information on the Company's derivative financial instruments as of June 30, 2021 and December 31, 2020 (dollars in thousands):
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Note 10 - Stock-based Compensation |
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| Share-based Payment Arrangement [Text Block] |
Note 10 – Stock Based Compensation
The Company's 2018 Equity Compensation Plan (the "2018 Plan") was adopted by the Board of Directors of the Company on February 20, 2018 and approved by shareholders on May 15, 2018 at the Company's 2018 Annual Meeting of Shareholders. The 2018 Plan provides for the granting of restricted stock awards, incentive and non-statutory options, and other equity-based awards to employees and directors at the discretion of the Compensation Committee of the Board of Directors. The 2018 Plan authorizes the issuance of up to 675,000 shares of common stock.
Stock Options
Accounting guidance requires that compensation cost relating to share-based payment transactions be recognized in the financial statements with measurement based upon the fair value of the equity or liability instruments issued.
A summary of stock option transactions for the six months ended June 30, 2021 is as follows:
The fair value of options is estimated at the date of grant using the Black-Scholes option pricing model and expensed over the options' vesting period. No stock options have been granted since 2009. Replacement stock option awards representing 40,753 shares of the Company's common stock were issued in conjunction with the HomeTown acquisition in 2019. As of June 30, 2021, there were no nonvested stock option grants and no unrecognized compensation expense. The outstanding options have a remaining final maturity date of December 2024.
Restricted Stock
The Company from time to time grants shares of restricted stock to key employees and non-employee directors. These awards help align the interests of these employees and directors with the interests of the shareholders of the Company by providing economic value directly related to increases in the value of the Company's common stock. The value of the stock awarded is established as the fair value of the Company's common stock at the time of the grant. The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants. The majority of the restricted stock granted cliff vests at the end of a 36-month period beginning on the date of the grant. The remainder vests -third each year beginning on the date of the grant. Nonvested restricted stock activity for the six months ended June 30, 2021 is summarized in the following table.
As of June 30, 2021 and December 31, 2020, there was $1,130,000 and $797,000 respectively, in unrecognized compensation cost related to nonvested restricted stock granted under the 2018 Plan. The weighted average period over which this cost is expected to be recognized is 1.70 years. The share based compensation expense for nonvested restricted stock was $343,000 and $409,000 during the first six months of 2021 and 2020, respectively.
The Company offers its outside directors alternatives with respect to director compensation. For 2021, the regular quarterly board retainer will be received in the form of shares of immediately vested, but restricted stock with a market value of $10,000. Monthly meeting fees can be received as $800 per meeting in cash or $1,000 in immediately vested, but restricted stock. Board policy requires the directors to maintain ownership of a minimum aggregate market value of $250,000 with respect to shares received for service on the Board. Only outside directors receive board fees. The Company issued 11,914 and 13,704 shares and recognized share based compensation expense of $384,000 and $412,000 during the first six months of 2021 and 2020, respectively.
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Note 11 - Earnings Per Common Share |
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| Earnings Per Share [Text Block] |
Note 11 – Earnings Per Common Share
The following shows the weighted average number of shares used in computing earnings per common share and the effect on the weighted average number of shares of potentially dilutive common stock. Potentially dilutive common stock had no effect on income available to common shareholders. Nonvested restricted shares are included in the computation of basic earnings per share as the holder is entitled to full shareholder benefits during the vesting period including voting rights and sharing in nonforfeitable dividends. The following table presents basic and diluted earnings per share for the three and six month periods ended June 30, 2021 and 2020:
Outstanding stock options on common stock whose effects are anti-dilutive are not included in computing diluted earnings per share. There were no anti-dilutive stock options for the three or six months ended June 30, 2021 and 2020.
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Note 12 - Employee Benefit Plans |
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| Retirement Benefits [Text Block] |
Note 12 – Employee Benefit Plans
The following information for the six months ended June 30, 2021 and 2020 pertains to the Company's non-contributory defined benefit pension plan which was frozen in 2009. If lump sum payments exceed the service cost plus interest cost, an additional settlement charge will apply (dollars in thousands):
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Note 13 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
Note 13 – Fair Value Measurements
Determination of Fair Value
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the fair value measurements and disclosures topic of ASC 820, Fair Value Measurement, fair value is the price that would be received to sell 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 at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
Fair Value Hierarchy
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
The following describes the valuation techniques used by the Company to measure certain financial assets and financial liabilities recorded at fair value on a recurring basis in the financial statements:
Securities available for sale: Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). If no observable market data is available, valuations are based upon third party model based techniques (Level 3). There were no securities recorded with a Level 3 valuation at June 30, 2021 or December 31, 2020.
Loans held for sale: Loans held for sale are carried at fair value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data, which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded in current period earnings as a component of mortgage banking income on the Company's consolidated statements of income.
Derivative asset (liability) - cash flow hedges: Cash flow hedges are recorded at fair value on a recurring basis. Cash flow hedges are valued by a third party using significant assumptions that are observable in the market and can be corroborated by market data. All of the Company's cash flow hedges are classified as Level 2.
The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at the dates indicated (dollars in thousands):
Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.
The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements:
Impaired loans: Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected when due. The measurement of the loss associated with impaired loans can be based on either the observable market price of the loan, the present value of projected cash flows, or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company's collateral is real estate. The value of real estate collateral is determined utilizing a market valuation approach based on an appraisal, of one year or less, conducted by an independent, licensed appraiser using observable market data (Level 2). The present value of projected cash flows method results in a Level 3 categorization because the calculation relies on the Company's judgment to determine projected cash flows, which are then discounted at the current rate of the loan, or the rate prior to modification if the loan is a TDR. However, if the collateral is a house or building in the process of construction or if an appraisal of the property is more than one year old and not solely based on observable market comparables or management determines the fair value of the collateral is further impaired below the appraised value, then a Level 3 valuation is considered to measure the fair value. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business's financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivable collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the consolidated statements of income.
Other real estate owned: Measurement for fair values for OREO are the same as impaired loans. Any fair value adjustments are recorded in the period incurred as a valuation allowance against OREO with the associated expense included in OREO expense, net on the consolidated statements of income.
The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated (dollars in thousands):
Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 and December 31, 2020:
__________________________ (1) Unobservable inputs were weighted by the relative fair value of the impaired loans.
ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The carrying values and the exit pricing concept fair values of the Company's financial instruments at June 30, 2021 are as follows (dollars in thousands):
The carrying values and the exit pricing concept fair values of the Company's financial instruments at December 31, 2020 are as follows (dollars in thousands):
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Note 14 - Segment and Related Information |
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| Segment Reporting Disclosure [Text Block] |
Note 14 – Segment and Related Information
The Company has reportable segments, community banking and trust and investment services.
Community banking involves making loans to and generating deposits from individuals and businesses. Investment income from securities is also allocated to the community banking segment. Loan fee income, service charges from deposit accounts, and non-deposit fees such as automated teller machine fees and insurance commissions generate additional income for the community banking segment.
Trust and investment services include estate planning, trust account administration, investment management, and retail brokerage. Investment management services include purchasing equity, fixed income, and mutual fund investments for customer accounts. The trust and investment services segment receives fees for investment and administrative services.
Segment information as of and for the three and six months ended June 30, 2021 and 2020 is shown in the following tables (dollars in thousands):
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Note 15 - Supplemental Cash Flow Information |
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| Cash Flow, Supplemental Disclosures [Text Block] |
Note 15 – Supplemental Cash Flow Information
Supplemental cash flow information as of and for the six months ended June 30, 2021 and 2020 is shown in the following table (dollars in thousands):
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Note 16 - Accumulated Other Comprehensive Income (Loss) |
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| Comprehensive Income (Loss) Note [Text Block] |
Note 16 – Accumulated Other Comprehensive Income (Loss)
Changes in each component of accumulated other comprehensive income (loss) ("AOCI") for the three and six months ended June 30, 2021 and 2020 were as follows (dollars in thousands):
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) For the Three and Six Months Ended June 30, 2021 and 2020 (dollars in thousands)
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Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Basis of Accounting, Policy [Policy Text Block] | The consolidated financial statements include the accounts of American National Bankshares Inc. (NASDAQ: AMNB) (the "Company") and its wholly-owned subsidiary, American National Bank and Trust Company (the "Bank"). The Company is a multi-state bank holding company headquartered in Danville, Virginia. The Bank is a community bank organization serving Virginia and North Carolina with 26 banking offices. In addition to traditional retail, commercial and mortgage offerings, the Bank also provides trust and investment services through its Trust and Investment Services Division.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts 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. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill and intangible assets, other-than-temporary impairment of securities, accounting for merger and acquisition activity, accounting for acquired loans with specific credit-related deterioration, and the valuation of deferred tax assets and liabilities.
COVID-19 spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. On March 13, 2020, the United States President declared a national emergency in the face of a growing public health and economic crisis due to the COVID-19 global pandemic. The government and private sector responses to contain its spread began to significantly affect the Company's operations beginning in March 2020 and will likely continue to adversely affect its operations through 2021, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic will most likely affect future earnings, cash flows and overall financial condition of the Company. These uncertainties include the nature and duration of the financial effects felt by its customers impacting their ability to perform in accordance with their underlying loan agreements, the Company's ability to generate demand for non-loan related products and services, as well as potential declines in real estate values resulting from the market disruption which may impair the recorded values of collateral-dependent loans and other real estate owned. Further, these factors, in addition to those pervasive to the industry and overall U.S. economy, may necessitate an overall valuation of the Company's franchise in such a way an impairment charge to the carrying value of goodwill would be required. Accordingly, significant estimates used in the preparation of the Company's financial statements including those associated with the evaluation of the allowance for loan losses as well as other valuation-based estimates may be subject to significant adjustments in future periods. We have seen significant improvement in the severity of the pandemic, however, as it continues to affect economies around the world and in the United States, it could impact estimates in future periods.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results that may occur for any other period. These statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Certain prior period balances have been reclassified to conform to the current period presentation.
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| New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Developments
In December 2020, the Consolidated Appropriations Act of 2021 ("CAA") was passed. Under Section 541 of the CAA, Congress extended or modified many of the relief programs first created by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, including the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") and treatment of certain loan modifications related to the COVID-19 pandemic.
The Company has utilized a Disaster Assistance Program for borrowers in accordance with Section 4013 of the CARES Act throughout the pandemic. The Company assisted borrowers with modifications to outstanding loan balances of $347.0 million in the aggregate since the beginning of the pandemic in March 2020. At June 30, 2021, interest only modification balances outstanding totaled $2.3 million compared to $19.3 million at March 31, 2021, representing less than 1.0% of total loans held for investment for both periods. Of the $2.3 million outstanding, modifications for $1.7 million are scheduled to expire in the third quarter of 2021.
The Company continued to participate in the PPP under the CARES Act in the second quarter of 2021, until the program expired. The loans are 100% guaranteed by the SBA and therefore do not have a related allowance. The SBA paid the Bank a processing fee based on the size of the loan which is amortized to income over the life of the loan or until the loan is forgiven. The Company processed a total of $364.2 million in PPP loans since the beginning of the program with $80.0 million forgiven in the second quarter of 2021 compared to $105.1 million in the first quarter of 2021. Total outstanding net PPP loans were $104.1 million and $211.3 million at June 30, 2021 and December 31, 2020, respectively.
Recent Accounting Pronouncements and Other Authoritative Accounting Guidance
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission ("SEC") and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. At the one-time evaluation date, the Company qualified as a smaller reporting company and elected to defer the adoption of the standard. The Company is refining the data in the model that will be used upon future adoption of the standard and expects to run concurrent models in the fourth quarter of 2021 and each quarter of 2022 until adoption. The implementation of this ASU will likely result in an adjustment to the Company's reserves when implemented.
In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The amendments in this ASU modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Certain disclosure requirements have been deleted while the following disclosure requirements have been added: the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715-20-50-3, which state that the following information for defined benefit pension plans should be disclosed: the projected benefit obligation ("PBO") and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation ("ABO") and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-14 to have a material impact on its consolidated financial statements.
Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin ("SAB") 119. SAB 119 updated portions of SEC interpretative guidance to align with ASC 326, Financial Instruments - Credit Losses. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The amendments in this ASU provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, "Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity." The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share calculation in certain areas. In addition, the amendment updates the disclosure requirements for convertible instruments to increase the information transparency. For public business entities, excluding smaller reporting companies, the amendments in the ASU are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements.
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Note 2 - Securities (Tables) |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marketable Securities [Table Text Block] |
|
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| Schedule of Cost of Investments in Restricted Stock [Table Text Block] |
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| Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value [Table Text Block] |
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| Realized Gain (Loss) on Investments [Table Text Block] |
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Note 3 - Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
|
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| Schedule of Outstanding and Carrying Amount of Certain Loans Acquired in Transfer [Table Text Block] |
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| Schedule of Changes in Accretable Yield on Acquired Loans [Table Text Block] |
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| Financing Receivable, Past Due [Table Text Block] |
|
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| Impaired Financing Receivables [Table Text Block] |
|
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| Financing Receivable Credit Quality Indicators [Table Text Block] |
|
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Note 4 - Allowance for Loan Losses and Reserve for Unfunded Lending Commitments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financing Receivable, Allowance for Credit Loss [Table Text Block] |
|
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Note 5 - Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||
| Schedule of Intangible Assets and Goodwill [Table Text Block] |
|
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Note 6 - Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease, Cost [Table Text Block] |
|
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| Lessee, Operating Lease, Liability, Maturity [Table Text Block] |
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Note 7 - Short-term Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||
| Notes Tables | |||||||||||||||||||
| Schedule of Short-term Debt [Table Text Block] |
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Note 8 - Long-term Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments [Table Text Block] |
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Note 9 - Derivative Financial Instruments and Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Interest Rate Derivatives [Table Text Block] |
|
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Note 10 - Stock-based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stock Options Roll Forward [Table Text Block] |
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| Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] |
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Note 11 - Earnings Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
|
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Note 12 - Employee Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Net Benefit Costs [Table Text Block] |
|
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Note 13 - Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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| Fair Value Measurements, Nonrecurring [Table Text Block] |
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| Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] |
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| Fair Value, by Balance Sheet Grouping [Table Text Block] |
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Note 14 - Segment and Related Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Note 15 - Supplemental Cash Flow Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] |
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Note 16 - Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] |
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| Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] |
|
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Note 1 - Accounting Policies (Details Textual) $ in Millions |
6 Months Ended | 12 Months Ended | 16 Months Ended | |
|---|---|---|---|---|
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
| Number of Banking Offices | 26 | 26 | ||
| Financing Receivable, Loans Modified During Period | $ 347.0 | |||
| Financing Receivable, Deferred Payments | $ 2.3 | $ 30.0 | $ 2.3 | $ 19.3 |
| Financing Receivable, Deferred Payments, Percentage of Portfolio | 1.00% | 1.50% | 1.00% | |
| Financing Receivable, Loans Modified, Scheduled to Expire, Outstanding Amount | $ 1.7 | $ 1.7 | ||
| Financing Receivable, Paycheck Protection Program Loans Originated Through the CARES Act | 104.1 | $ 211.3 | ||
| SBA CARES Act Paycheck Protection Program [Member] | ||||
| Financing Receivable, Applications Approved, Amount | 364.2 | 364.2 | ||
| Financing Receivable, Deferred Payments, Forgiven Amount | $ 80.0 | $ 80.0 | $ 105.1 |
Note 2 - Securities - Cost of Restricted Stock (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Total restricted stock | $ 8,035 | $ 8,715 |
| FRB Stock [Member] | ||
| Total restricted stock | 6,479 | 6,458 |
| FHLB Stock [Member] | ||
| Total restricted stock | $ 1,556 | $ 2,257 |
Note 2 - Securities - Realized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Gross realized gains | $ 0 | $ 0 | $ 0 | $ 814 |
| Gross realized losses | 0 | 0 | 0 | 0 |
| Net realized gains | 0 | 0 | 0 | 814 |
| Proceeds from sales of securities available for sale | $ 0 | $ 0 | $ 0 | $ 5,811 |
Note 3 - Loans - Loans (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|||
|---|---|---|---|---|---|
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 1,914,371 | $ 2,015,056 | |||
| Commercial Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 372,759 | [1] | 491,256 | ||
| Commercial Real Estate Portfolio Segment [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 133,592 | 140,071 | |||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 384,095 | 373,680 | |||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Residential Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 365,515 | 374,018 | |||
| Residential Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Residential Portfolio Segment [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 264,680 | 269,137 | |||
| Residential Portfolio Segment [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 100,835 | 104,881 | |||
| Consumer Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 7,548 | $ 8,462 | |||
| |||||
Note 3 - Loans - Acquired Loans (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Outstanding principal balance | $ 198,788 | $ 251,730 |
| Carrying amount | 189,794 | 241,008 |
| Outstanding principal balance | 31,868 | 37,417 |
| Carrying amount | $ 25,199 | $ 30,201 |
Note 3 - Loans - Accretable Yield on Acquired Impaired Loans (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|||
| Balance | $ 6,513 | $ 7,893 | ||
| Accretion | (1,459) | (3,553) | ||
| Reclassification from nonaccretable difference | 714 | 2,233 | ||
| Other changes, net | [1] | 298 | (60) | |
| Balance | $ 6,066 | $ 6,513 | ||
| ||||
Note 3 - Loans - Past Due Loans (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|||
|---|---|---|---|---|---|
| Loans, net of deferred fees and costs | $ 1,914,371 | $ 2,015,056 | |||
| 90 days past due and still accruing | 125 | 262 | |||
| Nonaccrual loans | 2,057 | 2,434 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1,914,371 | 2,015,056 | |||
| Financial Asset, 30 to 59 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 289 | 1,143 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 289 | 1,143 | |||
| Financial Asset, 60 to 89 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 1 | 234 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1 | 234 | |||
| Financial Asset, Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 2,472 | 4,073 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 2,472 | 4,073 | |||
| Financial Asset, Not Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 1,911,899 | 2,010,983 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1,911,899 | 2,010,983 | |||
| Commercial Portfolio Segment [Member] | |||||
| Loans, net of deferred fees and costs | 372,759 | [1] | 491,256 | ||
| 90 days past due and still accruing | 0 | 0 | |||
| Nonaccrual loans | 56 | 100 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 372,759 | [1] | 491,256 | ||
| Commercial Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 153 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 153 | |||
| Commercial Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 9 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 9 | |||
| Commercial Portfolio Segment [Member] | Financial Asset, Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 56 | 262 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 56 | 262 | |||
| Commercial Real Estate Portfolio Segment [Member] | Construction and Land Development [Member] | |||||
| Loans, net of deferred fees and costs | 133,592 | 140,071 | |||
| 90 days past due and still accruing | 0 | 0 | |||
| Nonaccrual loans | 3 | 5 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 133,592 | 140,071 | |||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 384,095 | 373,680 | |||
| 90 days past due and still accruing | 0 | 209 | |||
| Nonaccrual loans | 33 | 304 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 384,095 | 373,680 | |||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 650,862 | 627,569 | |||
| 90 days past due and still accruing | 0 | 0 | |||
| Nonaccrual loans | 958 | 1,158 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Construction and Land Development [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 168 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 168 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 54 | 62 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 54 | 62 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Construction and Land Development [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Past Due [Member] | Construction and Land Development [Member] | |||||
| Loans, net of deferred fees and costs | 3 | 173 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 3 | 173 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Past Due [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 87 | 575 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 87 | 575 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Past Due [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 958 | 1,158 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 958 | 1,158 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | Construction and Land Development [Member] | |||||
| Loans, net of deferred fees and costs | 133,589 | 139,898 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 133,589 | 139,898 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 384,008 | 373,105 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 384,008 | 373,105 | |||
| Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 649,904 | 626,411 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 649,904 | 626,411 | |||
| Residential Portfolio Segment [Member] | |||||
| Loans, net of deferred fees and costs | 365,515 | 374,018 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 365,515 | 374,018 | |||
| Residential Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans, net of deferred fees and costs | 650,862 | 627,569 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Residential Portfolio Segment [Member] | Residential [Member] | |||||
| Loans, net of deferred fees and costs | 264,680 | 269,137 | |||
| 90 days past due and still accruing | 125 | 53 | |||
| Nonaccrual loans | 940 | 792 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 264,680 | 269,137 | |||
| Residential Portfolio Segment [Member] | Home Equity Line of Credit [Member] | |||||
| Loans, net of deferred fees and costs | 100,835 | 104,881 | |||
| 90 days past due and still accruing | 0 | 0 | |||
| Nonaccrual loans | 66 | 69 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 100,835 | 104,881 | |||
| Residential Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Residential [Member] | |||||
| Loans, net of deferred fees and costs | 155 | 711 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 155 | 711 | |||
| Residential Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Home Equity Line of Credit [Member] | |||||
| Loans, net of deferred fees and costs | 64 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 64 | 0 | |||
| Residential Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Residential [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 211 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 211 | |||
| Residential Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Home Equity Line of Credit [Member] | |||||
| Loans, net of deferred fees and costs | 0 | 0 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Residential Portfolio Segment [Member] | Financial Asset, Past Due [Member] | Residential [Member] | |||||
| Loans, net of deferred fees and costs | 1,220 | 1,767 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1,220 | 1,767 | |||
| Residential Portfolio Segment [Member] | Financial Asset, Past Due [Member] | Home Equity Line of Credit [Member] | |||||
| Loans, net of deferred fees and costs | 130 | 69 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 130 | 69 | |||
| Residential Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | Residential [Member] | |||||
| Loans, net of deferred fees and costs | 263,460 | 267,370 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 263,460 | 267,370 | |||
| Residential Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | Home Equity Line of Credit [Member] | |||||
| Loans, net of deferred fees and costs | 100,705 | 104,812 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 100,705 | 104,812 | |||
| Consumer Portfolio Segment [Member] | |||||
| Loans, net of deferred fees and costs | 7,548 | 8,462 | |||
| 90 days past due and still accruing | 0 | 0 | |||
| Nonaccrual loans | 1 | 6 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,548 | 8,462 | |||
| Consumer Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 16 | 49 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 16 | 49 | |||
| Consumer Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 1 | 14 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1 | 14 | |||
| Consumer Portfolio Segment [Member] | Financial Asset, Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 18 | 69 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | 18 | 69 | |||
| Consumer Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | |||||
| Loans, net of deferred fees and costs | 7,530 | 8,393 | |||
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 7,530 | $ 8,393 | |||
| |||||
Note 3 - Loans - Impaired Loan Balances by Portfolio Segment (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
||||
| Recorded investment, with no related allowance recorded | $ 2,524 | $ 2,554 | |||
| Unpaid principal balance, with no related allowance recorded | 2,517 | 2,557 | |||
| Average recorded investment, with no related allowance recorded | 2,706 | 2,089 | |||
| Interest income recognized, with no related allowance recorded | 47 | 173 | |||
| Recorded investment, with a related allowance recorded | 298 | ||||
| Unpaid principal balance, with a related allowance recorded | 292 | ||||
| Related allowance | 30 | ||||
| Average recorded investment, with a related allowance recorded | 818 | ||||
| Interest income recognized, with a related allowance recorded | 39 | ||||
| Recorded investment | 2,852 | ||||
| Unpaid principal balance | 2,849 | ||||
| Average recorded investment | 2,907 | ||||
| Interest income recognized | 212 | ||||
| Commercial Portfolio Segment [Member] | |||||
| Recorded investment, with no related allowance recorded | 0 | 18 | |||
| Unpaid principal balance, with no related allowance recorded | 0 | 18 | |||
| Average recorded investment, with no related allowance recorded | 6 | 23 | |||
| Interest income recognized, with no related allowance recorded | 0 | 6 | |||
| Recorded investment, with a related allowance recorded | 19 | 39 | |||
| Unpaid principal balance, with a related allowance recorded | 12 | 33 | |||
| Related allowance | 12 | 29 | |||
| Average recorded investment, with a related allowance recorded | 32 | 382 | |||
| Interest income recognized, with a related allowance recorded | 1 | 15 | |||
| Recorded investment | 19 | 57 | |||
| Unpaid principal balance | 12 | 51 | |||
| Average recorded investment | 38 | 405 | |||
| Interest income recognized | 1 | 21 | |||
| Commercial Real Estate Portfolio Segment [Member] | Construction and Land Development [Member] | |||||
| Recorded investment, with no related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with no related allowance recorded | 0 | 0 | |||
| Average recorded investment, with no related allowance recorded | 0 | 0 | |||
| Interest income recognized, with no related allowance recorded | 0 | 0 | |||
| Recorded investment, with a related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with a related allowance recorded | 0 | 0 | |||
| Related allowance | 0 | 0 | |||
| Average recorded investment, with a related allowance recorded | 0 | 0 | |||
| Interest income recognized, with a related allowance recorded | 0 | 0 | |||
| Recorded investment | 0 | 0 | |||
| Unpaid principal balance | 0 | 0 | |||
| Average recorded investment | 0 | 0 | |||
| Interest income recognized | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Recorded investment, with no related allowance recorded | 20 | 286 | |||
| Unpaid principal balance, with no related allowance recorded | 17 | 283 | |||
| Average recorded investment, with no related allowance recorded | 112 | 357 | |||
| Interest income recognized, with no related allowance recorded | 1 | 27 | |||
| Recorded investment, with a related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with a related allowance recorded | 0 | 0 | |||
| Related allowance | 0 | 0 | |||
| Average recorded investment, with a related allowance recorded | 0 | 0 | |||
| Interest income recognized, with a related allowance recorded | 0 | 0 | |||
| Recorded investment | 20 | 286 | |||
| Unpaid principal balance | 17 | 283 | |||
| Average recorded investment | 112 | 357 | |||
| Interest income recognized | 1 | 27 | |||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Recorded investment, with no related allowance recorded | 1,067 | 1,148 | |||
| Unpaid principal balance, with no related allowance recorded | 1,067 | 1,147 | |||
| Average recorded investment, with no related allowance recorded | 1,107 | 766 | |||
| Interest income recognized, with no related allowance recorded | 20 | 75 | |||
| Recorded investment, with a related allowance recorded | 0 | 122 | [1] | ||
| Unpaid principal balance, with a related allowance recorded | 0 | 122 | [1] | ||
| Related allowance | 0 | 0 | [1] | ||
| Average recorded investment, with a related allowance recorded | 41 | 180 | [1] | ||
| Interest income recognized, with a related allowance recorded | 0 | 15 | [1] | ||
| Recorded investment | 1,067 | 1,270 | |||
| Unpaid principal balance | 1,067 | 1,269 | |||
| Average recorded investment | 1,148 | 946 | |||
| Interest income recognized | 20 | 90 | |||
| Residential Portfolio Segment [Member] | Residential [Member] | |||||
| Recorded investment, with no related allowance recorded | 1,396 | 1,096 | |||
| Unpaid principal balance, with no related allowance recorded | 1,399 | 1,103 | |||
| Average recorded investment, with no related allowance recorded | 1,307 | 912 | |||
| Interest income recognized, with no related allowance recorded | 23 | 62 | |||
| Recorded investment, with a related allowance recorded | 17 | 137 | |||
| Unpaid principal balance, with a related allowance recorded | 17 | 137 | |||
| Related allowance | 1 | 1 | |||
| Average recorded investment, with a related allowance recorded | 96 | 256 | |||
| Interest income recognized, with a related allowance recorded | 2 | 9 | |||
| Recorded investment | 1,413 | 1,233 | |||
| Unpaid principal balance | 1,416 | 1,240 | |||
| Average recorded investment | 1,403 | 1,168 | |||
| Interest income recognized | 25 | 71 | |||
| Residential Portfolio Segment [Member] | Home Equity Line of Credit [Member] | |||||
| Recorded investment, with no related allowance recorded | 5 | 6 | |||
| Unpaid principal balance, with no related allowance recorded | 5 | 6 | |||
| Average recorded investment, with no related allowance recorded | 5 | 31 | |||
| Interest income recognized, with no related allowance recorded | 0 | 3 | |||
| Recorded investment, with a related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with a related allowance recorded | 0 | 0 | |||
| Related allowance | 0 | 0 | |||
| Average recorded investment, with a related allowance recorded | 0 | 0 | |||
| Interest income recognized, with a related allowance recorded | 0 | 0 | |||
| Recorded investment | 5 | 6 | |||
| Unpaid principal balance | 5 | 6 | |||
| Average recorded investment | 5 | 31 | |||
| Interest income recognized | 0 | 3 | |||
| Consumer Portfolio Segment [Member] | |||||
| Recorded investment, with no related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with no related allowance recorded | 0 | 0 | |||
| Average recorded investment, with no related allowance recorded | 0 | 0 | |||
| Interest income recognized, with no related allowance recorded | 0 | 0 | |||
| Recorded investment, with a related allowance recorded | 0 | 0 | |||
| Unpaid principal balance, with a related allowance recorded | 0 | 0 | |||
| Related allowance | 0 | 0 | |||
| Average recorded investment, with a related allowance recorded | 0 | 0 | |||
| Interest income recognized, with a related allowance recorded | 0 | 0 | |||
| Recorded investment | 0 | 0 | |||
| Unpaid principal balance | 0 | 0 | |||
| Average recorded investment | 0 | 0 | |||
| Interest income recognized | $ 0 | $ 0 | |||
| |||||
Note 3 - Loans - Credit Risk Profile (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|||
|---|---|---|---|---|---|
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 1,914,371 | $ 2,015,056 | |||
| Commercial Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 372,759 | [1] | 491,256 | ||
| Commercial Portfolio Segment [Member] | Pass [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 362,981 | 479,416 | |||
| Commercial Portfolio Segment [Member] | Special Mention [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 9,147 | 10,956 | |||
| Commercial Portfolio Segment [Member] | Substandard [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 631 | 865 | |||
| Commercial Portfolio Segment [Member] | Doubtful [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 19 | |||
| Commercial Real Estate Portfolio Segment [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 133,592 | 140,071 | |||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 384,095 | 373,680 | |||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 129,300 | 131,770 | |||
| Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 362,848 | 350,376 | |||
| Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 2,869 | 2,505 | |||
| Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 12,745 | 14,621 | |||
| Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1,423 | 5,796 | |||
| Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 8,502 | 8,474 | |||
| Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Construction and Land Development [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 209 | |||
| Residential Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 365,515 | 374,018 | |||
| Residential Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 627,569 | |||
| Residential Portfolio Segment [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 264,680 | 269,137 | |||
| Residential Portfolio Segment [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 100,835 | 104,881 | |||
| Residential Portfolio Segment [Member] | Pass [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 635,173 | 612,688 | |||
| Residential Portfolio Segment [Member] | Pass [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 259,130 | 262,677 | |||
| Residential Portfolio Segment [Member] | Pass [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 100,472 | 104,608 | |||
| Residential Portfolio Segment [Member] | Special Mention [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,982 | 9,196 | |||
| Residential Portfolio Segment [Member] | Special Mention [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 2,510 | 3,665 | |||
| Residential Portfolio Segment [Member] | Special Mention [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Residential Portfolio Segment [Member] | Substandard [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,707 | 5,563 | |||
| Residential Portfolio Segment [Member] | Substandard [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 3,040 | 2,795 | |||
| Residential Portfolio Segment [Member] | Substandard [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 363 | 273 | |||
| Residential Portfolio Segment [Member] | Doubtful [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 122 | |||
| Residential Portfolio Segment [Member] | Doubtful [Member] | Residential [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Residential Portfolio Segment [Member] | Doubtful [Member] | Home Equity Line of Credit [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 0 | 0 | |||
| Consumer Portfolio Segment [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,548 | 8,462 | |||
| Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,541 | 8,456 | |||
| Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | |||||
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 7 | $ 6 | |||
| |||||
Note 4 - Allowance for Loan Losses and Reserve for Unfunded Lending Commitments (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Loans and Leases Receivable, Allowance, Ending Balance | $ 20,097 | $ 18,507 | $ 20,097 | $ 18,507 | $ 21,403 | $ 13,152 |
| Provision for Loan and Lease Losses, Total | (1,352) | $ 4,759 | (1,352) | $ 5,712 | 8,916 | |
| SBA CARES Act Paycheck Protection Program [Member] | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | $ 0 | $ 0 | $ 0 | |||
Note 4 - Allowance for Loan Losses and Reserve for Unfunded Lending Commitments - Changes in Allowance for Loan Losses and Reserve for Unfunded Lending Commitments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|||||
| Balance, beginning of period | $ 21,403 | $ 13,152 | $ 13,152 | ||||||
| Provision for Loan and Lease Losses, Total | $ (1,352) | $ 4,759 | (1,352) | 5,712 | 8,916 | ||||
| Charge-offs | (51) | (549) | (1,006) | ||||||
| Recoveries | 97 | 192 | 341 | ||||||
| Balance, end of period | 20,097 | 18,507 | 20,097 | 18,507 | 21,403 | ||||
| Individually evaluated for impairment | 13 | 13 | 30 | ||||||
| Collectively evaluated for impairment | 19,301 | 19,301 | 20,534 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 20,097 | 18,507 | 20,097 | 18,507 | 21,403 | ||||
| Individually evaluated for impairment | 2,524 | 2,524 | 2,852 | ||||||
| Collectively evaluated for impairment | 1,886,648 | 1,886,648 | 1,982,003 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 1,914,371 | 1,914,371 | 2,015,056 | ||||||
| Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 839 | ||||||||
| Balance, end of period | 783 | 783 | 839 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 783 | 783 | 839 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 25,199 | 25,199 | 30,201 | ||||||
| Unfunded Loan Commitment [Member] | |||||||||
| Balance, beginning of period | 304 | 329 | 329 | ||||||
| Provision for (recovery of) loan losses | 1 | 12 | (25) | ||||||
| Balance, end of period | 305 | $ 341 | 305 | 341 | 304 | ||||
| Commercial Portfolio Segment [Member] | |||||||||
| Balance, beginning of period | 3,373 | [1] | 2,657 | 2,657 | |||||
| Provision for Loan and Lease Losses, Total | (457) | 1,156 | |||||||
| Charge-offs | 0 | [1] | (505) | ||||||
| Recoveries | 19 | [1] | 65 | ||||||
| Balance, end of period | [1] | 2,935 | 2,935 | 3,373 | |||||
| Individually evaluated for impairment | 12 | [1] | 12 | [1] | 29 | ||||
| Collectively evaluated for impairment | 2,902 | [1] | 2,902 | [1] | 3,318 | ||||
| Loans and Leases Receivable, Allowance, Ending Balance | [1] | 2,935 | 2,935 | 3,373 | |||||
| Individually evaluated for impairment | 19 | [1] | 19 | [1] | 57 | ||||
| Collectively evaluated for impairment | 372,578 | [1] | 372,578 | [1] | 490,736 | ||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 372,759 | [1] | 372,759 | [1] | 491,256 | ||||
| Commercial Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 26 | ||||||||
| Balance, end of period | 21 | [1] | 21 | [1] | 26 | ||||
| Loans and Leases Receivable, Allowance, Ending Balance | 21 | [1] | 21 | [1] | 26 | ||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 162 | [1] | 162 | [1] | 463 | ||||
| Construction and Land Development [Member] | |||||||||
| Balance, beginning of period | 1,927 | 1,161 | 1,161 | ||||||
| Provision for Loan and Lease Losses, Total | (355) | 764 | |||||||
| Charge-offs | 0 | 0 | |||||||
| Recoveries | 0 | 2 | |||||||
| Balance, end of period | 1,572 | 1,572 | 1,927 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 1,572 | 1,572 | 1,927 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 1,572 | 1,572 | 1,927 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 133,350 | 133,350 | 139,833 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 133,592 | 133,592 | 140,071 | ||||||
| Construction and Land Development [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 0 | ||||||||
| Balance, end of period | 0 | 0 | 0 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | 0 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 242 | 242 | 238 | ||||||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | |||||||||
| Balance, beginning of period | 4,340 | 2,474 | 2,474 | ||||||
| Provision for Loan and Lease Losses, Total | 27 | 1,871 | |||||||
| Charge-offs | (3) | (17) | |||||||
| Recoveries | 4 | 12 | |||||||
| Balance, end of period | 4,368 | 4,368 | 4,340 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 4,166 | 4,166 | 4,138 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 4,368 | 4,368 | 4,340 | ||||||
| Individually evaluated for impairment | 20 | 20 | 286 | ||||||
| Collectively evaluated for impairment | 374,128 | 374,128 | 360,579 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 384,095 | 384,095 | 373,680 | ||||||
| Commercial Real Estate Portfolio Segment [Member] | Owner Occupied Commercial Real Estate [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 202 | ||||||||
| Balance, end of period | 202 | 202 | 202 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 202 | 202 | 202 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 9,947 | 9,947 | 12,815 | ||||||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||||||
| Balance, beginning of period | 7,626 | 3,781 | 3,781 | ||||||
| Provision for Loan and Lease Losses, Total | (241) | 3,960 | |||||||
| Charge-offs | 0 | (165) | |||||||
| Recoveries | 3 | 50 | |||||||
| Balance, end of period | 7,388 | 7,388 | 7,626 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 6,953 | 6,953 | 7,185 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 7,388 | 7,388 | 7,626 | ||||||
| Individually evaluated for impairment | 1,067 | 1,067 | 1,270 | ||||||
| Collectively evaluated for impairment | 640,737 | 640,737 | 616,498 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 650,862 | 627,569 | ||||||
| Commercial Real Estate Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 441 | ||||||||
| Balance, end of period | 435 | 435 | 441 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 435 | 435 | 441 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 9,058 | 9,058 | 9,801 | ||||||
| Residential Portfolio Segment [Member] | |||||||||
| Balance, beginning of period | 4,067 | 3,023 | 3,023 | ||||||
| Provision for Loan and Lease Losses, Total | (306) | 1,076 | |||||||
| Charge-offs | (17) | (117) | |||||||
| Recoveries | 32 | 85 | |||||||
| Balance, end of period | 3,776 | 3,776 | 4,067 | ||||||
| Individually evaluated for impairment | 1 | 1 | 1 | ||||||
| Collectively evaluated for impairment | 3,650 | 3,650 | 3,896 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 3,776 | 3,776 | 4,067 | ||||||
| Individually evaluated for impairment | 1,418 | 1,418 | 1,239 | ||||||
| Collectively evaluated for impairment | 358,320 | 358,320 | 365,967 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 365,515 | 365,515 | 374,018 | ||||||
| Residential Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 170 | ||||||||
| Balance, end of period | 125 | 125 | 170 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 125 | 125 | 170 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 5,777 | 5,777 | 6,812 | ||||||
| Residential Portfolio Segment [Member] | Non-owner Occupied Commercial Real Estate [Member] | |||||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 650,862 | 650,862 | 627,569 | ||||||
| Consumer Portfolio Segment [Member] | |||||||||
| Balance, beginning of period | 70 | $ 56 | 56 | ||||||
| Provision for Loan and Lease Losses, Total | (20) | 89 | |||||||
| Charge-offs | (31) | (202) | |||||||
| Recoveries | 39 | 127 | |||||||
| Balance, end of period | 58 | 58 | 70 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 58 | 58 | 70 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 58 | 58 | 70 | ||||||
| Individually evaluated for impairment | 0 | 0 | 0 | ||||||
| Collectively evaluated for impairment | 7,535 | 7,535 | 8,390 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | 7,548 | 7,548 | 8,462 | ||||||
| Consumer Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member] | |||||||||
| Balance, beginning of period | 0 | ||||||||
| Balance, end of period | 0 | 0 | 0 | ||||||
| Loans and Leases Receivable, Allowance, Ending Balance | 0 | 0 | 0 | ||||||
| Loans and Leases Receivable, Net of Deferred Income, Total | $ 13 | $ 13 | $ 72 | ||||||
| |||||||||
Note 5 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) |
1 Months Ended | 52 Months Ended |
|---|---|---|
Jul. 31, 2011 |
Apr. 30, 2019 |
|
| MidCarolina Financial Corporation [Member] | ||
| Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 6,556,000 | |
| Finite-Lived Intangible Asset, Useful Life (Month) | 108 months | |
| MainStreet BancShares, Inc and HomeTown Bankshares Corporation [Member] | ||
| Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 10,039,000 | |
| Finite-Lived Intangible Asset, Useful Life (Month) | 120 months |
Note 5 - Goodwill and Other Intangible Assets - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Balance, goodwill | $ 85,048 | |||
| Balance, intangibles | 6,091 | |||
| Amortization, intangibles | $ (371) | $ (417) | (752) | $ (844) |
| Balance, goodwill | 85,048 | $ 85,048 | 85,048 | $ 85,048 |
| Balance, intangibles | $ 5,339 | $ 5,339 | ||
Note 6 - Leases - Lease Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Right-of-use assets | $ 4,412 | $ 4,412 | $ 4,878 | ||
| Weighted average remaining lease term (years) (Year) | 7 years 29 days | 7 years 29 days | 7 years 3 months 29 days | ||
| Weighted average discount rate | 3.05% | 3.05% | 3.03% | ||
| Operating lease cost | $ 268 | $ 249 | $ 537 | $ 499 | |
| Short-term lease cost | 1 | 1 | 2 | 2 | |
| Total lease cost | 269 | 250 | 539 | 501 | |
| Cash paid for amounts included in the measurement of lease liabilities | 264 | $ 243 | 516 | $ 485 | |
| Other Liabilities [Member] | |||||
| Lease liabilities | $ 4,496 | $ 4,496 | $ 4,940 | ||
Note 6 - Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Six months ending December 31, 2021 | $ 533 | |
| Twelve months ending December 31, 2022 | 1,044 | |
| Twelve months ending December 31, 2023 | 945 | |
| Twelve months ending December 31, 2024 | 515 | |
| Twelve months ending December 31, 2025 | 473 | |
| Twelve months ending December 31, 2026 | 260 | |
| Thereafter | 1,289 | |
| Total undiscounted cash flows | 5,059 | |
| Discount | (563) | |
| Other Liabilities [Member] | ||
| Lease liabilities | $ 4,496 | $ 4,940 |
Note 7 - Short-term Borrowings (Details Textual) |
Jun. 30, 2021
USD ($)
|
|---|---|
| Federal Funds [Member] | |
| Line of Credit Facility, Maximum Borrowing Capacity | $ 60,000,000 |
Note 7 - Short-term Borrowings - Short-term Borrowings (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Customer repurchase agreements | $ 35,440 | $ 42,551 |
Note 8 - Long-term Borrowings (Details Textual) |
6 Months Ended | 21 Months Ended | ||||
|---|---|---|---|---|---|---|
|
Apr. 07, 2006
USD ($)
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 30, 2020 |
Apr. 01, 2019
USD ($)
|
Jul. 01, 2011
USD ($)
|
|
| Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | $ 921,061,000 | |||||
| Long-term Federal Home Loan Bank Advances, Total | 0 | $ 0 | ||||
| Public Deposit Accounts | 338,167,000 | |||||
| Subordinated Debt, Ending Balance | $ 28,181,000 | 35,630,000 | ||||
| Subordinated Borrowing, Interest Rate | 5.30% | 6.75% | ||||
| Proceeds from Issuance of Long-term Debt, Total | $ 20,000,000 | |||||
| Number of Consecutive Quarterly Periods for Deferral of Distributions on Trust Preferred Securities, Maximum | 20 | |||||
| Proceeds from Issuance of Common Stock | $ 619,000 | |||||
| Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust, Total | $ 20,619,000 | |||||
| MidCarolina Trusts [Member] | ||||||
| Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust, Total | $ 8,764,000 | |||||
| Equity Method Investments | $ 264,000 | |||||
| AMNB Statutory Trust I [Member] | ||||||
| Equity Method Investments | 619,000 | |||||
| MidCarolina Trust I [Member] | ||||||
| Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust, Fair Value Adjustment | 638,000 | 666,000 | 1,197,000 | |||
| MidCarolina Trust II [Member] | ||||||
| Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust, Fair Value Adjustment | 564,000 | 587,000 | $ 1,021,000 | |||
| HomeTown Bankshares Corporation [Member] | ||||||
| Subordinated Debt, Ending Balance | $ 7,500,000 | |||||
| US States and Political Subdivisions Debt Securities [Member] | ||||||
| Deposit Liabilities, Collateral Issued, Financial Instruments | $ 113,882,000 | |||||
| FHLB Line of Credit [Member] | ||||||
| Debt Instrument, Percentage of Assets | 30.00% | |||||
| Letters of Credit Outstanding, Amount | $ 275,000,000 | |||||
| Subordinated Debt [Member] | HomeTown Bankshares Corporation [Member] | ||||||
| Liabilities, Fair Value Adjustment | $ 30,000 | |||||
Note 8 - Long-term Borrowings - Junior Subordinated Debt Outstanding Payables (Details) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
Apr. 07, 2006 |
|
| Principal amount | $ 20,619,000 | ||
| Junior Subordinated Debt [Member] | |||
| Principal amount | $ 28,181,000 | $ 28,130,000 | |
| Junior Subordinated Debt [Member] | AMNB Statutory Trust I [Member] | |||
| Principal amount | 20,619,000 | 20,619,000 | |
| Junior Subordinated Debt [Member] | MidCarolina Trust I [Member] | |||
| Principal amount | 4,517,000 | 4,489,000 | |
| Junior Subordinated Debt [Member] | MidCarolina Trust II [Member] | |||
| Principal amount | $ 3,045,000 | $ 3,022,000 | |
| London Interbank Offered Rate (LIBOR) [Member] | Junior Subordinated Debt [Member] | AMNB Statutory Trust I [Member] | |||
| Interest rate | 1.35% | ||
| London Interbank Offered Rate (LIBOR) [Member] | Junior Subordinated Debt [Member] | MidCarolina Trust I [Member] | |||
| Interest rate | 3.45% | ||
| London Interbank Offered Rate (LIBOR) [Member] | Junior Subordinated Debt [Member] | MidCarolina Trust II [Member] | |||
| Interest rate | 2.95% |
Note 9 - Derivative Financial Instruments and Hedging Activities - Derivative Financial Instruments (Details) - Cash Flow Hedging [Member] - Interest Rate Swap [Member] $ in Thousands |
Jun. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|---|---|---|
| Notional amount | $ 28,500 | $ 28,500 |
| Positions | 3 | 3 |
| Assets | $ 0 | $ 0 |
| Liabilities | 3,495 | 4,868 |
| Cash collateral pledged | $ 4,050 | $ 5,750 |
Note 10 - Stock-based Compensation (Details Textual) - USD ($) |
6 Months Ended | 138 Months Ended | ||||
|---|---|---|---|---|---|---|
Apr. 01, 2019 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Feb. 20, 2018 |
|
| Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 0 | 0 | ||||
| Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 0 | $ 0 | ||||
| Regular Quarterly Retainer of Vested Restricted Stock | 10,000 | |||||
| Monthly Meeting Fees Director Could Receive in Cash | 800 | |||||
| Monthly Meeting Fees Director Could Receive in Vested Restricted Stock | 1,000 | |||||
| Minimum Aggregate Value of Ownership Required for Board of Directors | 250,000 | 250,000 | ||||
| Restricted Stock [Member] | ||||||
| Share Based Compensation Arrangement by Share Based Payment Award, Options, Acquired in Period (in shares) | 40,753 | |||||
| Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 1,130,000 | $ 1,130,000 | $ 797,000 | |||
| Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year 8 months 12 days | |||||
| Share-based Payment Arrangement, Expense | $ 343,000 | $ 409,000 | ||||
| Restricted Stock [Member] | Director [Member] | ||||||
| Share-based Payment Arrangement, Expense | $ 384,000 | $ 412,000 | ||||
| Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares) | 11,914 | 13,704 | ||||
| Restricted Stock [Member] | Cliff Vested [Member] | ||||||
| Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Month) | 36 months | |||||
| Restricted Stock [Member] | Vesting Each Year After Cliff Vesting [Member] | ||||||
| Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.33% | |||||
| The 2018 Plan [Member] | ||||||
| Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 675,000 | |||||
Note 10 - Stock-based Compensation - Stock Option Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 138 Months Ended | ||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
|
| Outstanding, option shares (in shares) | 10,541 | ||||
| Outstanding, weighted average exercise price (in dollars per share) | $ 16.63 | ||||
| Granted, option shares (in shares) | 0 | 0 | |||
| Granted, weighted average exercise price (in dollars per share) | $ 0 | ||||
| Exercised, option shares (in shares) | (5,180) | (50) | (5,180) | (1,793) | |
| Exercised, weighted average exercise price (in dollars per share) | $ 16.63 | ||||
| Forfeited, option shares (in shares) | (332) | ||||
| Forfeited, weighted average exercise price (in dollars per share) | $ 16.63 | ||||
| Expired, option shares (in shares) | 0 | ||||
| Expired, weighted average exercise price (in dollars per share) | $ 0 | ||||
| Outstanding and exercisable, option shares (in shares) | 5,029 | 5,029 | 5,029 | ||
| Outstanding and exercisable, weighted average exercise price (in dollars per share) | $ 16.63 | $ 16.63 | $ 16.63 | ||
| Outstanding and exercisable, weighted average remaining contractual term (Year) | 3 years 5 months 19 days | ||||
| Outstanding and exercisable, aggregate intrinsic value | $ 72,719 | $ 72,719 | $ 72,719 | ||
Note 10 - Stock Based Compensation - Nonvested Restricted Stock Activity (Details) - Restricted Stock [Member] |
6 Months Ended |
|---|---|
|
Jun. 30, 2021
$ / shares
shares
| |
| Nonvested, shares (in shares) | shares | 58,539 |
| Nonvested, weighted average grant date value per share (in dollars per share) | $ / shares | $ 34.81 |
| Granted, shares (in shares) | shares | 24,550 |
| Granted, weighted average grant date value per share (in dollars per share) | $ / shares | $ 28.24 |
| Vested, shares (in shares) | shares | (16,144) |
| Vested, weighted average grant date value per share (in dollars per share) | $ / shares | $ 38.74 |
| Forfeited, shares (in shares) | shares | (1,020) |
| Forfeited, weighted average grant date value per share (in dollars per share) | $ / shares | $ 28.84 |
| Nonvested, shares (in shares) | shares | 65,925 |
| Nonvested, weighted average grant date value per share (in dollars per share) | $ / shares | $ 31.50 |
Note 11 - Earnings Per Common Share (Details Textual) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Share-based Payment Arrangement, Option [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 0 | 0 | 0 | 0 |
Note 11 - Earnings Per Common Share - Earnings Per Common Share (Details) - $ / shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Basic earnings per share (in shares) | 10,919,333 | 10,959,545 | 10,945,256 | 10,992,365 |
| Basic earnings per share (in dollars per share) | $ 0.99 | $ 0.50 | $ 2.02 | $ 1.28 |
| Effect of dilutive securities - stock options (in shares) | 3,823 | 3,703 | 4,267 | 4,914 |
| Effect of dilutive securities - stock options (in dollars per share) | $ 0 | $ 0 | $ (0.01) | $ 0 |
| Diluted earnings per share (in shares) | 10,923,156 | 10,963,248 | 10,949,523 | 10,997,279 |
| Diluted earnings per share (in dollars per share) | $ 0.99 | $ 0.50 | $ 2.01 | $ 1.28 |
Note 12 - Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Service cost | $ 0 | $ 0 |
| Interest cost | 45 | 76 |
| Expected return on plan assets | (115) | (142) |
| Recognized loss due to settlement | 46 | 60 |
| Recognized net actuarial loss | 88 | 70 |
| Net periodic cost | $ 64 | $ 64 |
Note 13 - Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Securities available for sale | $ 555,444 | $ 466,091 |
| US Treasury Securities [Member] | ||
| Securities available for sale | 54,999 | 34,998 |
| US Government-sponsored Enterprises Debt Securities [Member] | ||
| Securities available for sale | 89,257 | 106,023 |
| US States and Political Subdivisions Debt Securities [Member] | ||
| Securities available for sale | 64,591 | 59,099 |
| Corporate Debt Securities [Member] | ||
| Securities available for sale | 20,392 | 13,189 |
| Fair Value, Recurring [Member] | ||
| Securities available for sale | 555,444 | 466,091 |
| Loans held for sale | 13,807 | 15,591 |
| Fair Value, Recurring [Member] | Cash Flow Hedging [Member] | ||
| Derivative - cash flow hedges | 3,495 | 4,868 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Loans held for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Cash Flow Hedging [Member] | ||
| Derivative - cash flow hedges | 0 | 0 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 555,444 | 466,091 |
| Loans held for sale | 13,807 | 15,591 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash Flow Hedging [Member] | ||
| Derivative - cash flow hedges | 3,495 | 4,868 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | 0 | 0 |
| Loans held for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Cash Flow Hedging [Member] | ||
| Derivative - cash flow hedges | 0 | 0 |
| Fair Value, Recurring [Member] | US Treasury Securities [Member] | ||
| Securities available for sale | 54,999 | 34,998 |
| Fair Value, Recurring [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 54,999 | 34,998 |
| Fair Value, Recurring [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | ||
| Securities available for sale | 89,257 | 106,023 |
| Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 89,257 | 106,023 |
| Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Collateralized Mortgage Obligations [Member] | ||
| Securities available for sale | 326,205 | 252,782 |
| Fair Value, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 326,205 | 252,782 |
| Fair Value, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
| Securities available for sale | 64,591 | 59,099 |
| Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 64,591 | 59,099 |
| Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | ||
| Securities available for sale | 20,392 | 13,189 |
| Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Securities available for sale | 0 | 0 |
| Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Securities available for sale | 20,392 | 13,189 |
| Fair Value, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Securities available for sale | $ 0 | $ 0 |
Note 13 - Fair Value Measurements - Assets Measured on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Impaired loans, net of valuation allowance | $ 23 | $ 268 |
| Other real estate owned, net | 213 | 958 |
| Fair Value, Inputs, Level 1 [Member] | ||
| Impaired loans, net of valuation allowance | 0 | 0 |
| Other real estate owned, net | 0 | |
| Fair Value, Inputs, Level 2 [Member] | ||
| Impaired loans, net of valuation allowance | 0 | 0 |
| Other real estate owned, net | 0 | 0 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Impaired loans, net of valuation allowance | 23 | 268 |
| Other real estate owned, net | $ 213 | $ 958 |
Note 13 - Fair Value Measurements - Quantitative Information About Level 3 Fair Value Measurements (Details) - Fair Value, Inputs, Level 3 [Member] |
Jun. 30, 2021 |
[1] | ||
|---|---|---|---|---|
| Valuation Technique, Discounted Appraisal Value [Member] | Measurement Input, Cost to Sell [Member] | ||||
| Impaired loans | 0.0800 | |||
| Other real estate owned, net | 0.0800 | |||
| Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Minimum [Member] | ||||
| Impaired loans | 0.0413 | |||
| Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Maximum [Member] | ||||
| Impaired loans | 0.072 | |||
| Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Weighted Average [Member] | ||||
| Impaired loans | 0.0521 | |||
| ||||
Note 13 - Fair Value Measurements - Carrying and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Securities available for sale | $ 555,444 | $ 466,091 |
| Reported Value Measurement [Member] | ||
| Cash and cash equivalents | 540,537 | 374,370 |
| Securities available for sale | 555,444 | 466,091 |
| Restricted stock | 8,035 | 8,715 |
| Loans held for sale | 13,807 | 15,591 |
| Loans, net of allowance | 1,894,274 | 1,993,653 |
| Bank owned life insurance | 28,791 | 28,482 |
| Accrued interest receivable | 5,934 | 7,193 |
| Deposits | 2,769,750 | 2,611,330 |
| Repurchase agreements | 35,440 | 42,551 |
| Junior subordinated debt | 7,500 | |
| Accrued interest payable | 460 | 778 |
| Derivative - cash flow hedges | 3,495 | 4,868 |
| Reported Value Measurement [Member] | Junior Subordinated Debt [Member] | ||
| Junior subordinated debt | 28,181 | 28,130 |
| Estimate of Fair Value Measurement [Member] | ||
| Cash and cash equivalents | 540,537 | 374,370 |
| Securities available for sale | 555,444 | 466,091 |
| Restricted stock | 8,035 | 8,715 |
| Loans held for sale | 13,807 | 15,591 |
| Loans, net of allowance | 1,889,222 | 1,992,326 |
| Bank owned life insurance | 28,791 | 28,482 |
| Accrued interest receivable | 5,934 | 7,193 |
| Deposits | 2,772,254 | 2,615,157 |
| Repurchase agreements | 35,440 | 42,551 |
| Junior subordinated debt | 7,522 | |
| Accrued interest payable | 460 | 778 |
| Derivative - cash flow hedges | 3,495 | 4,868 |
| Estimate of Fair Value Measurement [Member] | Junior Subordinated Debt [Member] | ||
| Junior subordinated debt | 25,490 | 21,696 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Cash and cash equivalents | 540,537 | 374,370 |
| Securities available for sale | 0 | 0 |
| Restricted stock | 0 | 0 |
| Loans held for sale | 0 | 0 |
| Loans, net of allowance | 0 | 0 |
| Bank owned life insurance | 0 | 0 |
| Accrued interest receivable | 0 | 0 |
| Deposits | 0 | 0 |
| Repurchase agreements | 0 | 0 |
| Junior subordinated debt | 0 | |
| Accrued interest payable | 0 | 0 |
| Derivative - cash flow hedges | 0 | 0 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Junior Subordinated Debt [Member] | ||
| Junior subordinated debt | 0 | 0 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Cash and cash equivalents | 0 | 0 |
| Securities available for sale | 555,444 | 466,091 |
| Restricted stock | 8,035 | 8,715 |
| Loans held for sale | 13,807 | 15,591 |
| Loans, net of allowance | 0 | 0 |
| Bank owned life insurance | 28,791 | 28,482 |
| Accrued interest receivable | 5,934 | 7,193 |
| Deposits | 2,772,254 | 2,615,157 |
| Repurchase agreements | 35,440 | 42,551 |
| Junior subordinated debt | 7,522 | |
| Accrued interest payable | 460 | 778 |
| Derivative - cash flow hedges | 3,495 | 4,868 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Junior Subordinated Debt [Member] | ||
| Junior subordinated debt | 0 | 0 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Cash and cash equivalents | 0 | 0 |
| Securities available for sale | 0 | 0 |
| Restricted stock | 0 | 0 |
| Loans held for sale | 0 | 0 |
| Loans, net of allowance | 1,889,222 | 1,992,326 |
| Bank owned life insurance | 0 | 0 |
| Accrued interest receivable | 0 | 0 |
| Deposits | 0 | 0 |
| Repurchase agreements | 0 | 0 |
| Junior subordinated debt | 0 | |
| Accrued interest payable | 0 | 0 |
| Derivative - cash flow hedges | 0 | 0 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Junior Subordinated Debt [Member] | ||
| Junior subordinated debt | $ 25,490 | $ 21,696 |
Note 14 - Segment and Related Information (Details Textual) |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Number of Reportable Segments | 2 |
Note 14 - Segment and Related Information - Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Interest income | $ 23,167 | $ 23,297 | $ 47,371 | $ 47,163 | |
| Interest expense | 1,396 | 3,037 | 3,177 | 6,984 | |
| Noninterest income | 5,142 | 3,835 | 11,064 | 8,330 | |
| Noninterest expense | 14,637 | 12,432 | 28,702 | 25,766 | |
| Income before income taxes | 13,628 | 6,904 | 27,908 | 17,031 | |
| Net income | 10,766 | 5,482 | 22,055 | 14,024 | |
| Depreciation and amortization | 932 | 941 | 1,893 | 1,889 | |
| Total assets | 3,201,584 | 2,864,539 | 3,201,584 | 2,864,539 | $ 3,050,010 |
| Goodwill | 85,048 | 85,048 | 85,048 | 85,048 | $ 85,048 |
| Capital expenditures | 454 | 463 | 700 | 1,370 | |
| Community Banking [Member] | Operating Segments [Member] | |||||
| Interest income | 23,167 | 23,297 | 47,371 | 47,163 | |
| Interest expense | 1,396 | 3,037 | 3,177 | 6,984 | |
| Noninterest income | 3,652 | 2,710 | 8,150 | 5,982 | |
| Noninterest expense | 13,958 | 11,890 | 27,359 | 24,611 | |
| Income before income taxes | 12,817 | 6,321 | 27,148 | 15,838 | |
| Net income | 10,125 | 5,019 | 21,454 | 13,046 | |
| Depreciation and amortization | 929 | 938 | 1,890 | 1,883 | |
| Total assets | 3,201,315 | 2,864,361 | 3,201,315 | 2,864,361 | |
| Goodwill | 85,048 | 85,048 | 85,048 | 85,048 | |
| Capital expenditures | 454 | 463 | 700 | 1,366 | |
| Trust and Investment Services [Member] | Operating Segments [Member] | |||||
| Interest income | 0 | 0 | 0 | 0 | |
| Interest expense | 0 | 0 | 0 | 0 | |
| Noninterest income | 1,490 | 1,125 | 2,914 | 2,348 | |
| Noninterest expense | 679 | 542 | 1,343 | 1,155 | |
| Income before income taxes | 811 | 583 | 760 | 1,193 | |
| Net income | 641 | 463 | 601 | 978 | |
| Depreciation and amortization | 3 | 3 | 3 | 6 | |
| Total assets | 269 | 178 | 269 | 178 | |
| Goodwill | 0 | 0 | 0 | 0 | |
| Capital expenditures | $ 0 | $ 0 | $ 0 | $ 4 | |
Note 15 - Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Cash and due from banks | $ 38,237 | $ 44,607 |
| Interest-bearing deposits in other banks | 502,300 | 206,998 |
| Cash and Cash Equivalents | 540,537 | 251,605 |
| Interest on deposits and borrowed funds | 3,495 | 7,193 |
| Income taxes | 4,222 | 4,036 |
| Transfer of loans to other real estate owned | 0 | 47 |
| Transfer of loans to repossessions | 0 | 362 |
| Net unrealized gains (losses) on securities available for sale | (4,466) | 7,034 |
| Net unrealized gains (losses) on cash flow hedges | $ 1,373 | $ (2,958) |
Note 16 - Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Balance | $ 341,793 | $ 323,293 | $ 337,894 | $ 320,258 |
| Balance | 347,633 | 327,433 | 347,633 | 327,433 |
| AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member] | ||||
| Balance | 3,309 | 7,117 | 7,920 | 2,902 |
| Net unrealized gains (losses) on securities available for sale, net of tax | 1,121 | 1,301 | (3,490) | 6,154 |
| Net unrealized gains (losses) on cash flow hedges, net of tax | 0 | 0 | 0 | 0 |
| Balance | 4,430 | 8,418 | 4,430 | 8,418 |
| Reclassification adjustment for realized gains on securities, net of tax | (638) | |||
| Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | ||||
| Balance | (2,439) | (4,302) | (3,846) | (2,084) |
| Net unrealized gains (losses) on securities available for sale, net of tax | 0 | 0 | 0 | 0 |
| Net unrealized gains (losses) on cash flow hedges, net of tax | (322) | (101) | 1,085 | (2,319) |
| Balance | (2,761) | (4,403) | (2,761) | (4,403) |
| Reclassification adjustment for realized gains on securities, net of tax | 0 | |||
| Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
| Balance | (1,637) | (1,301) | (1,637) | (1,301) |
| Net unrealized gains (losses) on securities available for sale, net of tax | 0 | 0 | 0 | 0 |
| Net unrealized gains (losses) on cash flow hedges, net of tax | 0 | 0 | 0 | 0 |
| Balance | (1,637) | (1,301) | (1,637) | (1,301) |
| Reclassification adjustment for realized gains on securities, net of tax | 0 | |||
| AOCI Attributable to Parent [Member] | ||||
| Balance | (767) | 1,514 | 2,437 | (483) |
| Net unrealized gains (losses) on securities available for sale, net of tax | 1,121 | 1,301 | (3,490) | 6,154 |
| Net unrealized gains (losses) on cash flow hedges, net of tax | (322) | (101) | 1,085 | (2,319) |
| Balance | $ 32 | $ 2,714 | $ 32 | 2,714 |
| Reclassification adjustment for realized gains on securities, net of tax | $ (638) | |||
Note 16 - Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) (Parentheticals) - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Reclassification adjustment for realized gains on securities, tax | $ 0 | $ (176) |
Note 16 - Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of AOCI (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Securities gains, net | $ 0 | $ 0 | $ 0 | $ 814 |
| Income taxes | 2,862 | 1,422 | 5,853 | 3,007 |
| Total reclassifications | 10,766 | 5,482 | 22,055 | 14,024 |
| Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
| Total reclassifications | 0 | 0 | 0 | 638 |
| Reclassification out of Accumulated Other Comprehensive Income [Member] | AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member] | ||||
| Securities gains, net | 0 | 0 | 0 | 814 |
| Income taxes | $ 0 | $ 0 | $ 0 | $ (176) |