|
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
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.)
|
(Address of Principal Executive Offices) |
(Zip Code) |
(
(Registrant’s Telephone Number, including Area Code) |
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
Emerging growth company
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Page
|
||
PART I.
|
3 | |
Item 1.
|
3 | |
3 |
||
4 | ||
5 | ||
6 | ||
8
|
||
9
|
||
Item 2.
|
35
|
|
Item 4.
|
46
|
|
PART II.
|
47
|
|
Item 1.
|
47
|
|
Item 1A.
|
47
|
|
Item 2.
|
49
|
|
Item 5.
|
49
|
|
Item 6.
|
50
|
|
51
|
(Dollars in thousands, except share data)
|
June 30,
2024
|
December 31,
2023
|
||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Time deposits in other financial institutions
|
|
|
||||||
Cash and cash equivalents
|
|
|
||||||
Equity securities, at fair value (Note 2)
|
|
|
||||||
Securities available for sale, at fair value (Note 2)
|
|
|
||||||
Securities held to maturity, at amortized cost net of credit losses (Note 2)
|
|
|
||||||
Federal Home Loan Bank stock
|
|
|
||||||
Federal Reserve Bank stock
|
|
|
||||||
Loans held for sale
|
|
|
||||||
Loans to other financial institutions (Note 3)
|
|
|
||||||
Core loans (Note 3)
|
|
|
||||||
Total loans held for investment (Note 3)
|
|
|
||||||
Allowance for credit losses (Note 3)
|
(
|
)
|
(
|
)
|
||||
Loans, net
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Other real estate owned, net
|
|
|
||||||
Cash value of life insurance policies
|
|
|
||||||
Goodwill
|
|
|
||||||
Core deposit intangible
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities
|
||||||||
Deposits – noninterest-bearing
|
$
|
|
$
|
|
||||
Deposits – interest-bearing
|
|
|
||||||
Brokered deposits
|
|
|
||||||
Total deposits
|
|
|
||||||
Borrowings
|
|
|
||||||
Subordinated debentures
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Shareholders’ Equity
|
||||||||
Preferred stock; shares authorized:
|
|
|
||||||
Common stock and paid-in capital,
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss, net
|
(
|
)
|
(
|
)
|
||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
(Dollars in thousands, except share data)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Interest income
|
||||||||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities:
|
||||||||||||||||
Taxable
|
|
|
|
|
||||||||||||
Tax exempt
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total interest income
|
|
|
|
|
||||||||||||
Interest expense
|
||||||||||||||||
Deposits
|
|
|
|
|
||||||||||||
Advances from Federal Home Loan Bank
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total interest expense
|
|
|
|
|
||||||||||||
Net interest income
|
|
|
|
|
||||||||||||
Provision for (reversal of) credit losses on loans
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Provision for (reversal of) credit losses on unfunded commitments
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Net Provision for (reversal of) credit losses expense
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Net interest income after provision
|
|
|
|
|
||||||||||||
Noninterest income
|
||||||||||||||||
Customer service charges
|
|
|
|
|
||||||||||||
Insurance and investment commissions
|
|
|
|
|
||||||||||||
Gains on sales of loans
|
|
|
|
|
||||||||||||
Net gains (losses) on sales of securities
|
|
|
|
|
||||||||||||
Net gains on sales and write downs of other assets
|
|
|
|
|
||||||||||||
Earnings on life insurance policies
|
|
|
|
|
||||||||||||
Trust income
|
|
|
|
|
||||||||||||
Change in market value of equity securities
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Other
|
|
|
|
|
||||||||||||
Total noninterest income
|
|
|
|
|
||||||||||||
Noninterest expense
|
||||||||||||||||
Salaries and benefits
|
|
|
|
|
||||||||||||
Occupancy and equipment
|
|
|
|
|
||||||||||||
Data processing
|
|
|
|
|
||||||||||||
Professional fees
|
|
|
|
|
||||||||||||
Supplies and postage
|
|
|
|
|
||||||||||||
Advertising and promotional
|
|
|
|
|
||||||||||||
Intangible amortization
|
|
|
|
|
||||||||||||
FDIC insurance
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total noninterest expense
|
|
|
|
|
||||||||||||
Income before income tax
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Basic earnings per share (Note 4)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted earnings per share (Note 4)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Dividends declared per share
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands) |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive income:
|
||||||||||||||||
Change in net unrealized gain (loss) on available-for-sale securities
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Income tax benefit (expense)
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Less: reclassification adjustment for net (gain) loss included in net income
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
|
|
|
|
||||||||||||
Less: reclassification adjustment for net (gain) loss for fair value hedge
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Less: net unrealized (gains) losses on securities transferred from available-for-sale to held-to-maturity
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
|
|
|
|
||||||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
|
|
|
|
||||||||||||
Reclassification of unrealized gain (loss) upon transfer of securities from available-for-sale to held-to-maturity
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
|
|
|
|
||||||||||||
Amortization of net unrealized (gains) losses on securities transferred from available-for-sale to held-to-maturity
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Unrealized loss on held to maturity securities, net of tax
|
|
|
|
|
||||||||||||
Change in net unrealized gain (loss) on cash flow hedge
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Less: reclassification adjustment for net (gain) loss on cash flow hedge
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
|
|
|
|
||||||||||||
Less: amortization of net unrealized (gains) losses included in net income
|
|
|
|
|
||||||||||||
Income tax benefit (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Unrealized gain (loss) on cash flow hedge instruments, net of tax
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
||||||||||||
Comprehensive income (loss)
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands, except per share data)
|
Number of
Shares
|
Common
Stock and
Paid in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income/(Loss),
Net
|
Total
|
|||||||||||||||
Balance, January 1, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
||||||||||||||||||
Other comprehensive income (loss)
|
|
|
||||||||||||||||||
Shares issued
|
|
|
|
|||||||||||||||||
Effect of employee stock purchases
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||
Cash dividends declared ($
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance, June 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Balance, January 1, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
||||||||||||||||||
Other comprehensive income (loss)
|
|
|
||||||||||||||||||
Shares issued
|
|
|
|
|||||||||||||||||
Effect of employee stock purchases
|
|
|
||||||||||||||||||
Stock options exercised and issued (1)
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||
Cash dividends declared ($
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance, June 30, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(1) | The amount shown represents the number of shares issued in net exercise transactions where shares were surrendered in payment of taxes and/or payment of all or part of the exercise price.
|
(Dollars in thousands, except per share data)
|
Number of
Shares
|
Common
Stock and
Paid in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income/(Loss),
Net
|
Total
|
|||||||||||||||
Balance, April 1, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
||||||||||||||||||
Other comprehensive income (loss)
|
|
|
||||||||||||||||||
Shares issued
|
|
|
|
|||||||||||||||||
Effect of employee stock purchases
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||
Cash dividends declared ($
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance, June 30, 2023
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Balance, April 1, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
||||||||||||||||||
Other comprehensive income (loss)
|
|
|
||||||||||||||||||
Shares issued
|
|
|
|
|||||||||||||||||
Effect of employee stock purchases
|
|
|
||||||||||||||||||
Stock-based compensation expense
|
|
|
||||||||||||||||||
Cash dividends declared ($
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance, June 30, 2024
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(1) |
The amount shown represents the number of shares issued in net exercise transactions where shares were surrendered in payment of taxes and/or payment of all or part of the exercise price.
|
|
Six Months Ended
June 30,
|
|||||||
(Dollars in thousands)
|
2024
|
2023
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
(Reversal of) provision for credit losses
|
|
(
|
)
|
|||||
Depreciation
|
|
|
||||||
Amortization
|
|
|
||||||
Compensation expense on employee and director stock purchases, stock options, and restricted stock units
|
|
|
||||||
Net change in market value of equity securities
|
|
|
||||||
Gains on sales of loans
|
(
|
)
|
(
|
)
|
||||
Loans originated for sale
|
(
|
)
|
(
|
)
|
||||
Proceeds from loan sales
|
|
|
||||||
Earnings on bank-owned life insurance
|
(
|
)
|
(
|
)
|
||||
Earnings on death benefit from bank-owned life insurance
|
(
|
)
|
|
|||||
Deferred federal income tax (benefit)/expense
|
|
|
||||||
Net change in:
|
||||||||
Other assets
|
|
|
||||||
Other liabilities
|
|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Sales of equity securities
|
|
|
||||||
Maturities, prepayments and calls of securities available for sale
|
|
|
||||||
Maturities, prepayments and calls of securities held to maturity
|
|
|
||||||
Purchases of securities available for sale
|
(
|
)
|
(
|
)
|
||||
Purchases of equity securities
|
(
|
)
|
(
|
)
|
||||
Purchases of securities held to maturity
|
(
|
)
|
(
|
)
|
||||
Purchase of Federal Home Loan Bank stock
|
(
|
)
|
(
|
)
|
||||
Loan originations and payments, net
|
(
|
)
|
(
|
)
|
||||
Proceeds from bank owned life insurance death benefits claim
|
|
|
||||||
Additions to premises and equipment
|
(
|
)
|
(
|
)
|
||||
Payments for derivative contracts settlements
|
|
(
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
|
(
|
)
|
|||||
Net change in short term borrowings
|
|
|
||||||
Issuance of common stock
|
|
|
||||||
Share based compensation withholding obligation
|
(
|
)
|
|
|||||
Cash dividends
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Net change in cash and cash equivalents
|
|
|
||||||
Beginning cash and cash equivalents
|
|
|
||||||
Ending cash and cash equivalents
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes
|
|
|
||||||
Loans transferred to other real estate owned |
June 30, 2024
|
||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
December 31, 2023
|
||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
June 30, 2024
|
||||||||||||||||
(Dollars in thousands)
Available for Sale:
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
State and municipal
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed
|
|
|
(
|
)
|
|
|||||||||||
Corporate
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
(Dollars in thousands)
|
||||||||||||||||
Held to Maturity:
|
||||||||||||||||
U.S. Government and federal agency
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
State and municipal
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed
|
|
|
(
|
)
|
|
|||||||||||
Corporate
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
December 31, 2023
|
||||||||||||||||
(Dollars in thousands)
Available for Sale:
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
State and municipal
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed
|
|
|
(
|
)
|
|
|||||||||||
Corporate
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
(Dollars in thousands)
|
||||||||||||||||
Held to Maturity:
|
||||||||||||||||
U.S. Government and federal agency
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
State and municipal
|
|
|
(
|
)
|
|
|||||||||||
Mortgage-backed
|
|
|
(
|
)
|
|
|||||||||||
Corporate
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
June 30, 2024
|
||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
(Dollars in thousands)
Available for Sale:
|
||||||||||||||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
State and municipal
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
Available for Sale:
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
State and municipal
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
June 30, 2024
|
||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
Held to Maturity:
|
Fair
Value
|
Unrealized Losses
|
Fair
Value
|
Unrealized Losses
|
Fair
Value
|
Unrealized Losses
|
||||||||||||||||||
U.S. Government and federal agency
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
State and municipal
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||
Less than 12 months
|
More than 12 months
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
Held to Maturity:
|
Fair
Value |
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
U.S. Government and federal agency
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
State and municipal
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed
|
|
|
|
|
|
|
||||||||||||||||||
Corporate
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Total temporarily impaired
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Available for Sale Securities maturing within:
|
||||||||||||||||||||
(Dollars in thousands)
|
Less than
1 Year
|
1 Year -
5 Years
|
5 Years -
10 Years
|
More than
10 Years
|
Fair Value
at June 30,
2024
|
|||||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
State and municipal
|
|
|
|
|
|
|||||||||||||||
Corporate
|
|
|
|
|
|
|||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|||||||||||||||
Total debt securities
|
|
|
|
|
|
|||||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|||||||||||||||
Total Available for Sale
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Held to Maturity Securities maturing within:
|
||||||||||||||||||||
(Dollars in thousands)
|
Less than
1 Year
|
1 Year -
5 Years
|
5 Years -
10 Years
|
More than
10 Years
|
Amortized Cost
at June 30,
2024
|
|||||||||||||||
U.S. Government and federal agency
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
State and municipal
|
|
|
|
|
|
|||||||||||||||
Corporate
|
|
|
|
|
|
|||||||||||||||
Asset-backed securities
|
|
|
|
|
|
|||||||||||||||
Total debt securities
|
|
|
|
|
|
|||||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|||||||||||||||
Total Held to Maturity
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net gains and (losses) recognized during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Less: Net gains and (losses) recognized during the period on securities sold
|
|
|
|
|
||||||||||||
Unrealized gains and (losses) recognized during the reporting period on securities still held at the reporting date
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
June 30, 2024
|
December 31, 2023
|
|||||||||||||||||||
(Dollars in thousands)
|
Balance
|
%
|
Balance
|
%
|
Percent Increase (Decrease)
|
|||||||||||||||
Agricultural
|
$
|
|
|
%
|
$
|
|
|
%
|
(
|
)%
|
||||||||||
Commercial and Industrial
|
|
|
%
|
|
|
%
|
(
|
)%
|
||||||||||||
Commercial Real Estate
|
|
|
%
|
|
|
%
|
|
%
|
||||||||||||
Consumer
|
|
|
%
|
|
|
%
|
(
|
)%
|
||||||||||||
Construction Real Estate
|
|
|
%
|
|
|
%
|
(
|
)%
|
||||||||||||
Residential Real Estate
|
|
|
%
|
|
|
%
|
|
%
|
||||||||||||
Loans to Other Financial Institutions
|
|
|
%
|
|
|
%
|
|
%
|
||||||||||||
Gross Loans
|
$
|
|
$
|
|
||||||||||||||||
Allowance for credit losses
|
|
|
%
|
|
|
%
|
||||||||||||||
Net loans
|
$
|
|
$
|
|
(Dollars in thousands)
|
Agricultural
|
Commercial
And
Industrial |
Consumer
|
Commercial
Real Estate
|
Construction
Real Estate
|
Residential
Real Estate
|
Loans to Other
Financial
Institutions
|
Total
|
||||||||||||||||||||||||
Allowance for Credit Losses Three Months Ended June 30, 2024
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Charge-offs
|
|
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision
|
|
(
|
)
|
|
|
|
|
|
|
|||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Allowance for Credit Losses Six Months Ended June 30, 2024
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Charge-offs
|
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Provision
|
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Individually evaluated for credit loss
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated for credit loss
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Loans
|
||||||||||||||||||||||||||||||||
June 30, 2024
|
||||||||||||||||||||||||||||||||
Individually evaluated for credit loss
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated for credit loss
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
|
Agricultural
|
Commercial and Industrial
|
Consumer
|
Commercial
Real Estate
|
Construction
Real Estate
|
Residential
Real Estate
|
Loans to Other
Financial
Institutions
|
Total
|
||||||||||||||||||||||||
Allowance for Credit Losses December 31, 2023
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Loans
|
||||||||||||||||||||||||||||||||
December 31, 2023
|
||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Collectively evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|||||||||||||||||
Acquired with deteriorated credit quality
|
|
|
|
|
|
|
-
|
|||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
|
Agricultural
|
Commercial and
Industrial
|
Consumer
|
Commercial
Real Estate
|
Construction
Real Estate
|
Residential
Real Estate
|
Loans to Other
Financial Institution
|
Unallocated
|
Total
|
|||||||||||||||||||||||||||
Allowance for Credit Losses Three Months Ended June 30, 2023
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Charge-offs
|
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Provision
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Allowance for Credit Losses Six Months Ended June 30, 2023
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Cumulative effect of change in accounting principle
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
$
|
(
|
)
|
|
|||||||||||||||||||
Charge-offs
|
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Provision
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$ |
|||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Collectively evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Commercial:
|
2024
|
2023
|
2022
|
2021
|
2020
|
Prior
|
Term
Loans
Total
|
Revolving
Loans
|
Grand
Total
|
|||||||||||||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Commercial and Industrial
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Commercial Real Estate
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Total Commercial Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Retail:
|
2024
|
2023
|
2022
|
2021
|
2020
|
Prior
|
Term
Loans
Total
|
Revolving
Loans
|
Grand
Total
|
|||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Construction real estate
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Residential real estate
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Loans to Other Financial Institutions
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs (1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Total Retail Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Commercial:
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Term
Loans
Total
|
Revolving
Loans
|
Grand
Total |
|||||||||||||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Commercial and Industrial
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Commercial Real Estate
|
||||||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Doubtful
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Total Commercial Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Retail:
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Term
Loans
Total
|
Revolving
Loans
|
Grand
Total
|
|||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Construction real estate
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Residential real estate
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Loans to Other Financial Institutions
|
||||||||||||||||||||||||||||||||||||
Performing
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Nonperforming
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Nonaccrual
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Current year-to-date gross write-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Total Retail Loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
For the period ended:
|
June 30, 2024
|
|||||||
Term Extension
|
||||||||
(Dollars in thousands)
|
Amortized
Cost Basis
|
% of Total
Class of
Financing
Receivable
|
||||||
Residential real estate
|
|
|
%
|
|||||
Total
|
$
|
|
For the period ended:
|
December 31, 2023
|
|||||||
Term Extension
|
||||||||
(Dollars in thousands)
|
Amortized
Cost Basis
|
% of Total
Class of
Financing Receivable
|
||||||
Commercial and industrial
|
$
|
|
|
%
|
||||
Residential real estate
|
|
|
%
|
|||||
Total
|
$
|
|
For the period ended:
|
June 30, 2024
|
Term Extension
|
|
Residential real estate
|
Provided with new five year payment plan based on bankruptcy
|
For the period ended:
|
December 31, 2023
|
Term Extension
|
|
Commercial and industrial
|
Termed out line of credit & termed out draw note
|
Residential real estate
|
Provided with new twelve month payment plan to catch up on past due balance.
|
For the period ended:
|
|
June 30, 2024
|
||
(Dollars in thousands)
|
|
Term extension
|
||
Commercial and industrial
|
|
|||
Residential real estate
|
|
|||
Total
|
$
|
|
For the period ended:
|
December 31, 2023
|
|||
(Dollars in thousands)
|
Term extension
|
|||
Commercial and industrial
|
|
|||
Residential real estate
|
|
|||
Total
|
$
|
|
For the period ended:
|
June 30, 2024
|
|||||||||||||||
(Dollars in thousands)
|
Current
|
30-89 days
|
Greater than 90 days
|
Total
|
||||||||||||
Commercial and industrial
|
$
|
|
|
|
$
|
|
||||||||||
Residential real estate
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
For the period ended:
|
December 31, 2023
|
|||||||||||||||
(Dollars in thousands)
|
Current
|
30-89 days
|
Greater than 90 days
|
Total
|
||||||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Residential real estate
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
As of June 30, 2024
|
||||||||||||
(Dollars in thousands)
|
Nonaccrual loans with
no ACL
|
Total nonaccrual
loans
|
Interest income
recognized year to date on
nonaccrual loans
|
|||||||||
Consumer
|
$
|
|
$
|
|
$
|
|
||||||
Commercial real estate
|
|
|
|
|||||||||
Residential real estate
|
|
|
|
|||||||||
Total nonaccrual loans
|
$
|
|
$
|
|
$
|
|
As of June 30, 2023
|
||||||||||||
(Dollars in thousands)
|
Nonaccrual loans with
no ACL
|
Total nonaccrual
loans
|
Interest income
recognized year to date on
nonaccrual loans |
|||||||||
Residential real estate
|
$
|
|
$
|
|
$
|
|
||||||
Total nonaccrual loans
|
$
|
|
$
|
|
$
|
|
As of December 31, 2023
|
||||||||||||
(Dollars in thousands)
|
Nonaccrual loans with
no ACL
|
Total nonaccrual
loans
|
Interest income
recognized year to date on
nonaccrual loans
|
|||||||||
Commercial and industrial
|
$
|
|
$
|
|
$
|
|
||||||
Residential real estate
|
|
|
|
|||||||||
Total nonaccrual loans
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
|
Loans
Past Due
30 to 59
Days (1)
|
Loans
Past Due
60 to 89
Days (1)
|
Loans
Past Due
Greater
Than 90
Days (1)
|
Total (1)
|
Loans Not
Past Due |
Total
Loans
|
Loans
90 Days
Past
Due and
Accruing
|
|||||||||||||||||||||
June 30, 2024
|
||||||||||||||||||||||||||||
Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Construction real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Residential real estate
|
|
|
|
|
|
|
||||||||||||||||||||||
Loans to Other Financial Institutions
|
|
|
|
|
|
|
||||||||||||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||||||
Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Construction real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Residential real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loans to Other Financial Institutions
|
|
|
|
|
|
|
||||||||||||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
(Dollars in thousands, except share data)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Basic
|
||||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average common shares outstanding
|
||||||||||||||||
Basic earnings per common shares
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
||||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average common shares outstanding
|
|
|
|
|
||||||||||||
Plus dilutive stock options and restricted stock units
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding and potentially dilutive shares
|
|
|
|
|
||||||||||||
Diluted earnings per common share
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
|
Carrying
Amount
|
Estimated
Fair Value
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||||
June 30, 2024
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Equity securities at fair value
|
|
|
|
|
|
|||||||||||||||
Securities available for sale
|
|
|
|
|
|
|||||||||||||||
Securities held to maturity
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank and Federal
|
||||||||||||||||||||
Reserve Bank stock
|
|
|
|
|
|
|||||||||||||||
Loans held for sale
|
|
|
|
|
|
|||||||||||||||
Loans, net
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Interest rate lock commitments
|
|
|
|
|
|
|||||||||||||||
Interest rate derivative contracts
|
|
|
|
|
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Noninterest-bearing deposits
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|||||||||||||||
Brokered deposits
|
|
|
|
|
|
|||||||||||||||
Borrowings
|
|
|
|
|
|
|||||||||||||||
Subordinated debentures
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Interest rate derivative contracts
|
|
|
|
|
|
|||||||||||||||
December 31, 2023
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Equity securities at fair value
|
|
|
|
|
|
|||||||||||||||
Securities available for sale
|
|
|
|
|
|
|||||||||||||||
Securities held to maturity
|
|
|
|
|
|
|||||||||||||||
Federal Home Loan Bank and Federal
|
||||||||||||||||||||
Reserve Bank stock
|
|
|
|
|
|
|||||||||||||||
Loans held for sale
|
|
|
|
|
|
|||||||||||||||
Loans, net
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Interest rate lock commitments
|
|
|
|
|
|
|||||||||||||||
Interest rate derivative contracts
|
|
|
|
|
|
|||||||||||||||
Liabilities
|
||||||||||||||||||||
Noninterest-bearing deposits
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|||||||||||||||
Brokered deposits
|
|
|
|
|
|
|||||||||||||||
Borrowings
|
|
|
|
|
|
|||||||||||||||
Subordinated debentures
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Interest rate derivative contracts
|
|
|
|
|
|
(Dollars in thousands)
|
Quoted
Prices
In Active
Markets
for Identical
Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Balance
at Date Indicated
|
||||||||||||
Equity Securities Held at Fair Value - June 30, 2024
|
||||||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investment Securities, Available for Sale - June 30, 2024
|
||||||||||||||||
U.S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
State and municipal
|
|
|
|
|
||||||||||||
Mortgage-backed
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Asset-backed securities
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative Instruments - June 30, 2024
|
||||||||||||||||
Interest rate derivative contracts - assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate derivative contracts - liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Equity Securities Held at Fair Value - December 31, 2023
|
||||||||||||||||
Equity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investment Securities, Available for Sale - December 31, 2023
|
||||||||||||||||
U. S. Treasury notes and bonds
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
State and municipal
|
|
|
|
|
||||||||||||
Mortgage-backed
|
|
|
|
|
||||||||||||
Corporate
|
|
|
|
|
||||||||||||
Asset-backed securities
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative Instruments - December 31, 2023
|
||||||||||||||||
Interest rate derivative contracts - assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate derivative contracts - liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
Six Months Ended
June 30,
|
||||||||
(Dollars in thousands)
|
2024
|
2023
|
||||||
Equity Securities Held at Fair Value
|
||||||||
Balance, January 1
|
$
|
|
$
|
|
||||
Total realized and unrealized gains included in noninterest income
|
|
|
||||||
Net purchases, sales, calls, and maturities
|
|
|
||||||
Net transfers into Level 3
|
|
|
||||||
Balance, June 30,
|
$
|
|
$
|
|
||||
Amount of total losses for the period included in earning attributable to the change in
unrealized gains (losses) relating to assets and liabilities still held at June 30,
|
$
|
|
$
|
|
(Dollars in thousands)
|
Balances at
Dates
Indicated
|
Quoted Prices
In Active Markets
for Identical
Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Collateral Dependent Loans
|
||||||||||||||||
June 30, 2024
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2023
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other Real Estate
|
||||||||||||||||
June 30, 2024
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2023
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(Dollars in thousands)
|
2024
|
2023
|
2024
|
2023
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interchange income
|
|
|
|
|
||||||||||||
Investment commission income
|
|
|
|
|
||||||||||||
Trust fee income
|
|
|
|
|
||||||||||||
Other charges and fees for customer services
|
|
|
|
|
||||||||||||
Noninterest income from contracts with customers within the scope of ASC 606
|
|
|
|
|
||||||||||||
Noninterest income within the scope of other GAAP topics
|
|
|
|
|
||||||||||||
Total noninterest income
|
$
|
|
$
|
|
$
|
|
$
|
|
June 30, 2024
|
December 31, 2023
|
|||||||||
(Dollars in thousands)
|
Balance Sheet
Location
|
Fair Value
|
Balance Sheet
Location
|
Fair Value
|
||||||
Derivatives designated as hedging instruments
|
||||||||||
Interest rate contracts
|
|
$
|
|
|
$
|
|
||||
Interest rate contracts
|
|
$
|
|
|
$
|
|
Location and Amount of Gain or
(Loss)
Recognized in Income on Fair Value
and Cash Flow Hedging
Relationships
|
Location and Amount of Gain or
(Loss)
Recognized in Income on Fair Value
and Cash Flow Hedging
Relationships
|
|||||||||||||||||||||||||||||||
Three months
ended June 30,
2024
|
Three months
ended June 30,
2023
|
Six months
ended June 30,
2024
|
Six months
ended June 30,
2023
|
|||||||||||||||||||||||||||||
(Dollars in thousands)
|
Interest Income
|
Interest Expense
|
Interest Income
|
Interest Expense
|
Interest Income
|
Interest Expense
|
Interest Income
|
Interest Expense
|
||||||||||||||||||||||||
Total amounts of income and expense line items presented in the consolidated statements of income in which the effects of fair value or cash flow hedges are
recorded
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||
|
||||||||||||||||||||||||||||||||
Gain or (loss) on fair value hedging relationships:
|
||||||||||||||||||||||||||||||||
Interest rate contracts:
|
||||||||||||||||||||||||||||||||
Hedged items
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Derivatives designated as hedging instruments
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Amount excluded from effectiveness testing recognized in earnings based on amortization approach
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Gain or (loss) on cash flow hedging relationships:
|
||||||||||||||||||||||||||||||||
Interest rate contracts:
|
||||||||||||||||||||||||||||||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Amount excluded from effectiveness testing recognized in earnings based on amortization approach
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
Line Item in the Statement of
Financial Position in which the
Hedged Item is included
|
Amortized cost of the
Hedged Assets/(Liabilities)
|
June 30, 2024
Cumulative amount of Fair
Value Hedging Adjustment
included in the carrying
amount of the Hedged
Assets/(Liabilities)
|
||||||
|
$
|
|
$
|
(
|
)
|
(Dollars in thousands)
|
June 30, 2024
|
December 31, 2023
|
||||||
Maturity of July 2025 with fixed interest rate of
|
$
|
|
$
|
|
||||
Maturity of January 2026 with fixed interest rate of
|
|
|
||||||
Maturity of December 2026 with fixed interest rate of
|
|
|
||||||
Total advances outstanding at period end
|
$
|
|
$
|
|
(Dollars in thousands)
|
June 30, 2024
|
December 31, 2023
|
||||||
Maturity of May 2024 with fixed interest rate of
|
$
|
|
$
|
|
||||
Maturity of December 2024 with fixed interest rate of
|
|
|
||||||
Maturity of January 2025 with fixed interest rate of
|
|
|||||||
Total BTFP outstanding at period end
|
$
|
|
$
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2024
|
2023
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Average
|
Average
|
||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Loans (1)(3)(4)(5)
|
$
|
1,435,966
|
$
|
21,981
|
6.16
|
%
|
$
|
1,218,860
|
$
|
15,986
|
5.26
|
%
|
||||||||||||
Taxable securities (2)
|
696,023
|
5,471
|
3.16
|
756,239
|
5,378
|
2.85
|
||||||||||||||||||
Nontaxable securities (1)
|
290,258
|
1,785
|
2.47
|
296,952
|
1,758
|
2.38
|
||||||||||||||||||
Other
|
80,280
|
1,092
|
5.47
|
41,075
|
571
|
5.57
|
||||||||||||||||||
Interest-earning assets
|
2,502,527
|
30,329
|
4.87
|
2,313,126
|
23,693
|
4.11
|
||||||||||||||||||
Noninterest-earning assets
|
145,189
|
109,441
|
||||||||||||||||||||||
Total assets
|
$
|
2,647,716
|
$
|
2,422,567
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$
|
876,344
|
$
|
2,921
|
1.34
|
%
|
$
|
815,179
|
$
|
1,905
|
0.94
|
%
|
||||||||||||
Savings deposits
|
333,056
|
649
|
0.78
|
372,651
|
345
|
0.37
|
||||||||||||||||||
Certificates of deposit
|
391,620
|
4,331
|
4.45
|
285,160
|
2,225
|
3.13
|
||||||||||||||||||
Brokered deposit
|
34,218
|
424
|
4.98
|
49,679
|
581
|
4.69
|
||||||||||||||||||
Borrowings
|
210,000
|
2,480
|
4.75
|
144,231
|
1,717
|
4.78
|
||||||||||||||||||
Subordinated debentures
|
35,596
|
412
|
4.65
|
35,352
|
407
|
4.62
|
||||||||||||||||||
Other
|
26,426
|
356
|
5.41
|
3,763
|
45
|
4.81
|
||||||||||||||||||
Interest-bearing liabilities
|
1,907,260
|
11,573
|
2.44
|
1,706,015
|
7,225
|
1.70
|
||||||||||||||||||
Demand deposits
|
516,308
|
534,106
|
||||||||||||||||||||||
Other noninterest-bearing liabilities
|
13,406
|
10,534
|
||||||||||||||||||||||
Total liabilities
|
2,436,974
|
2,250,655
|
||||||||||||||||||||||
Shareholders’ equity
|
210,742
|
171,912
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
2,647,716
|
$
|
2,422,567
|
||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1)
|
$
|
18,756
|
$
|
16,468
|
||||||||||||||||||||
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)
|
3.01
|
%
|
2.86
|
%
|
||||||||||||||||||||
Reconciliation to Reported Net Interest Income
|
||||||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1)
|
$
|
18,756
|
$
|
16,468
|
||||||||||||||||||||
Adjustment for taxable equivalent interest
|
(385
|
)
|
(377
|
)
|
||||||||||||||||||||
Net interest income (GAAP)
|
$
|
18,371
|
$
|
16,091
|
||||||||||||||||||||
Net interest margin (GAAP)
|
2.95
|
%
|
2.79
|
%
|
(1) |
Adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax rate of 21%. The presentation of these measures on a
tax-equivalent basis is not in accordance with GAAP, but is customary in the banking industry. These non-GAAP measures ensure comparability with respect to both taxable and tax-exempt loans and securities.
|
(2) |
Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.
|
(3) |
Loans include both loans to other financial institutions and loans held for sale.
|
(4) |
Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $1.9 million and $1.6 million in the second quarter of 2024 and 2023, respectively.
|
(5) |
Interest on loans included net origination fees and accretion income related to acquired loans. Accretion income related to acquired loans was $279,000 and $444,000 in the second quarter of 2024 and 2023,
respectively
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
2024
|
2023
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Average
|
Average
|
||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Loans (1)(3)(4)(5)
|
$
|
1,424,266
|
$
|
42,788
|
6.04
|
%
|
$
|
1,210,611
|
$
|
30,876
|
5.10
|
%
|
||||||||||||
Taxable securities (2)
|
703,266
|
10,819
|
3.09
|
756,967
|
10,291
|
2.72
|
||||||||||||||||||
Nontaxable securities (1)
|
290,944
|
3,573
|
2.47
|
296,969
|
3,575
|
2.41
|
||||||||||||||||||
Other
|
72,172
|
1,978
|
5.51
|
30,325
|
748
|
4.93
|
||||||||||||||||||
Interest-earning assets
|
2,490,648
|
59,158
|
4.78
|
2,294,872
|
45,490
|
3.96
|
||||||||||||||||||
Noninterest-earning assets
|
143,734
|
112,160
|
||||||||||||||||||||||
Total assets
|
$
|
2,634,382
|
$
|
2,407,032
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$
|
879,858
|
$
|
6,498
|
1.49
|
%
|
$
|
845,140
|
$
|
3,477
|
0.82
|
%
|
||||||||||||
Savings deposits
|
335,776
|
1,290
|
0.77
|
389,742
|
618
|
0.32
|
||||||||||||||||||
Certificates of deposit
|
384,630
|
8,446
|
4.42
|
266,611
|
3,504
|
2.63
|
||||||||||||||||||
Brokered deposit
|
34,463
|
868
|
5.06
|
31,322
|
733
|
4.68
|
||||||||||||||||||
Borrowings
|
212,418
|
5,004
|
4.74
|
103,900
|
2,425
|
4.67
|
||||||||||||||||||
Subordinated debentures
|
35,566
|
824
|
4.66
|
35,321
|
809
|
4.58
|
||||||||||||||||||
Other
|
22,413
|
601
|
5.40
|
1,888
|
45
|
4.78
|
||||||||||||||||||
Interest-bearing liabilities
|
1,905,124
|
23,531
|
2.48
|
1,673,924
|
11,611
|
1.39
|
||||||||||||||||||
Demand deposits
|
511,241
|
550,281
|
||||||||||||||||||||||
Other noninterest-bearing liabilities
|
12,743
|
12,721
|
||||||||||||||||||||||
Total liabilities
|
2,429,108
|
2,236,926
|
||||||||||||||||||||||
Shareholders’ equity
|
205,274
|
170,106
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
2,634,382
|
$
|
2,407,032
|
||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1)
|
$
|
35,627
|
$
|
33,879
|
||||||||||||||||||||
Net interest margin (tax-equivalent basis) (Non-GAAP) (1)
|
2.88
|
%
|
2.95
|
%
|
||||||||||||||||||||
Reconciliation to Reported Net Interest Income
|
||||||||||||||||||||||||
Net interest income (tax-equivalent basis) (Non-GAAP) (1)
|
$
|
35,627
|
$
|
33,879
|
||||||||||||||||||||
Adjustment for taxable equivalent interest
|
(782
|
)
|
(776
|
)
|
||||||||||||||||||||
Net interest income (GAAP)
|
$
|
34,845
|
$
|
33,103
|
||||||||||||||||||||
Net interest margin (GAAP)
|
2.81
|
%
|
2.88
|
%
|
(1) |
Adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets. The adjustment uses an incremental tax rate of 21%. The presentation of these measures on a
tax-equivalent basis is not in accordance with GAAP, but is customary in the banking industry. These non-GAAP measures ensure comparability with respect to both taxable and tax-exempt loans and securities.
|
(2) |
Taxable securities include dividend income from Federal Home Loan Bank and Federal Reserve Bank stock.
|
(3) |
Loans include both loans to other financial institutions and loans held for sale.
|
(4) |
Non-accruing loan balances are included in the balances of average loans. Non-accruing loan average balances were $1.8 million and $1.5 million in the first six months of 2024 and 2023, respectively.
|
(5) |
Interest on loans included net origination fees and accretion income related to acquired loans. Accretion income related to acquired loans was $669,000 and $916,000 in the first six months of 2024 and
2023, respectively
|
Three Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2024 Over 2023
|
|||||||||||
Total
|
Volume
|
Rate
|
||||||||||
Increase (decrease) in interest income (1)
|
||||||||||||
Loans (2)
|
$
|
5,995
|
$
|
3,063
|
$
|
2,932
|
||||||
Taxable securities
|
93
|
(1,947
|
)
|
2,040
|
||||||||
Nontaxable securities (2)
|
27
|
(192
|
)
|
219
|
||||||||
Other
|
521
|
592
|
(71
|
)
|
||||||||
Net change in interest income
|
6,636
|
1,516
|
5,120
|
|||||||||
Increase (decrease) in interest expense (1)
|
||||||||||||
Interest-bearing demand deposits
|
1,016
|
152
|
864
|
|||||||||
Savings deposits
|
304
|
(241
|
)
|
545
|
||||||||
Certificates of deposit
|
2,106
|
990
|
1,116
|
|||||||||
Brokered deposit
|
(157
|
)
|
(374
|
)
|
217
|
|||||||
Borrowings
|
763
|
837
|
(74
|
)
|
||||||||
Subordinated debentures
|
5
|
2
|
3
|
|||||||||
Other
|
311
|
304
|
7
|
|||||||||
Net change in interest expense
|
4,348
|
1,670
|
2,678
|
|||||||||
Net change in tax-equivalent net interest income
|
$
|
2,288
|
$
|
(154
|
)
|
$
|
2,442
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
2024 Over 2023
|
|||||||||||
Total
|
Volume
|
Rate
|
||||||||||
Increase (decrease) in interest income (1)
|
||||||||||||
Loans (2)
|
$
|
11,912
|
$
|
6,679
|
$
|
5,233
|
||||||
Taxable securities
|
528
|
(1,517
|
)
|
2,045
|
||||||||
Nontaxable securities (2)
|
(2
|
)
|
(143
|
)
|
141
|
|||||||
Other
|
1,230
|
1,156
|
74
|
|||||||||
Net change in interest income
|
13,668
|
6,175
|
7,493
|
|||||||||
Increase (decrease) in interest expense (1)
|
||||||||||||
Interest-bearing demand deposits
|
3,021
|
192
|
2,829
|
|||||||||
Savings deposits
|
672
|
(227
|
)
|
899
|
||||||||
Certificates of deposit
|
4,942
|
2,297
|
2,645
|
|||||||||
Brokered deposit
|
135
|
84
|
51
|
|||||||||
Borrowings
|
2,579
|
2,552
|
27
|
|||||||||
Subordinated debentures
|
15
|
5
|
10
|
|||||||||
Other
|
556
|
551
|
4
|
|||||||||
Net change in interest expense
|
11,920
|
5,454
|
6,465
|
|||||||||
Net change in tax-equivalent net interest income
|
$
|
1,748
|
$
|
721
|
$
|
1,028
|
(1) |
The volume variance is computed as the change in volume (average balance) multiplied by the previous year’s interest rate. The rate variance is computed as the change in interest rate multiplied by the
previous year’s volume (average balance). The change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.
|
(2) |
Interest on nontaxable investment securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 21%.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2024
|
2023
|
2024
|
2023
|
|||||||||||||
Cost of deposits
|
1.56
|
%
|
0.98
|
%
|
1.59
|
%
|
0.80
|
%
|
||||||||
Cost of funds
|
1.92
|
%
|
1.29
|
%
|
1.95
|
%
|
1.04
|
%
|
(Dollars in thousands)
|
2024
|
2023
|
||||||||||||||
Charge-offs
|
Recoveries
|
Charge-offs
|
Recoveries
|
|||||||||||||
Agricultural
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Commercial and industrial
|
1
|
11
|
-
|
29
|
||||||||||||
Consumer
|
451
|
226
|
271
|
129
|
||||||||||||
Commercial real estate
|
-
|
-
|
-
|
13
|
||||||||||||
Construction real estate
|
-
|
-
|
-
|
-
|
||||||||||||
Residential real estate
|
-
|
7
|
-
|
5
|
||||||||||||
$
|
452
|
$
|
244
|
$
|
271
|
$
|
176
|
June 30, 2024
|
December 31, 2023
|
|||||||||||||||||||
(Dollars in thousands)
|
Call Report Codes
|
Balance
|
%
|
Balance
|
%
|
|||||||||||||||
Construction & Development Loans
|
1A2
|
$
|
93,678
|
6.5
|
%
|
$
|
112,877
|
8.0
|
%
|
|||||||||||
1-4 Family Loans
|
1A1, 1C1, 1C2A, 1C2B
|
370,542
|
25.8
|
%
|
347,036
|
24.6
|
%
|
|||||||||||||
Multifamily Loans
|
1D
|
|
57,893
|
4.0
|
%
|
56,563
|
4.0
|
%
|
||||||||||||
Owner Occupied CRE Loans
|
1E1
|
296,818
|
20.6
|
%
|
281,515
|
20.0
|
%
|
|||||||||||||
Non-Owner Occupied CRE Loans
|
1E2
|
318,655
|
22.2
|
%
|
298,265
|
21.1
|
%
|
|||||||||||||
Commercial & Industrial Loans
|
2A2, 4A
|
|
216,899
|
15.1
|
%
|
219,849
|
15.6
|
%
|
||||||||||||
Farm & Agriculture Loans
|
1B, 3
|
42,579
|
3.0
|
%
|
46,515
|
3.3
|
%
|
|||||||||||||
Consumer & Other Loans
|
6B, 6C, 6D, 8, 9b2,10B
|
40,463
|
2.8
|
%
|
48,033
|
3.4
|
%
|
|||||||||||||
|
||||||||||||||||||||
Total Loans
|
|
$
|
1,437,527
|
$
|
1,410,653
|
(Dollars in thousands)
|
June 30,
|
December 31,
|
||||||
2024
|
2023
|
|||||||
Loans accounted for on a nonaccrual basis
|
$
|
2,086
|
$
|
1,723
|
||||
Accruing loans which are contractually past due 90 days or more as to principal or interest payments
|
-
|
-
|
||||||
Loans defined as “troubled loan modifications” which are not included above
|
46
|
189
|
||||||
Total
|
$
|
2,132
|
$
|
1,912
|
Minimum Required
|
||||||||||||||||||||||||
to be Well
|
||||||||||||||||||||||||
Minimum Required
|
Capitalized Under
|
|||||||||||||||||||||||
for Capital
|
Prompt Corrective
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Actual
|
Adequacy Purposes
|
Action Regulations
|
|||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
June 30, 2024
|
||||||||||||||||||||||||
ChoiceOne Financial Services Inc.
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$
|
244,728
|
13.5
|
%
|
$
|
145,342
|
8.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Common equity Tier 1 capital (to risk weighted assets)
|
194,426
|
10.7
|
81,755
|
4.5
|
N/A
|
N/A
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
198,926
|
10.9
|
109,007
|
6.0
|
N/A
|
N/A
|
||||||||||||||||||
Tier 1 capital (to average assets)
|
198,926
|
7.7
|
103,594
|
4.0
|
N/A
|
N/A
|
||||||||||||||||||
|
||||||||||||||||||||||||
ChoiceOne Bank
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$
|
240,366
|
13.2
|
%
|
$
|
145,175
|
8.0
|
%
|
$
|
181,469
|
10.0
|
%
|
||||||||||||
Common equity Tier 1 capital (to risk weighted assets)
|
226,752
|
12.5
|
81,661
|
4.5
|
117,955
|
6.5
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
226,752
|
12.5
|
108,881
|
6.0
|
145,175
|
8.0
|
||||||||||||||||||
Tier 1 capital (to average assets)
|
226,752
|
8.8
|
103,507
|
4.0
|
129,384
|
5.0
|
||||||||||||||||||
|
||||||||||||||||||||||||
December 31, 2023
|
||||||||||||||||||||||||
ChoiceOne Financial Services Inc.
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$
|
233,840
|
13.0
|
%
|
$
|
144,441
|
8.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Common equity Tier 1 capital (to risk weighted assets)
|
185,412
|
10.3
|
81,248
|
4.5
|
N/A
|
N/A
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
189,912
|
10.5
|
108,331
|
6.0
|
N/A
|
N/A
|
||||||||||||||||||
Tier 1 capital (to average assets)
|
189,912
|
7.5
|
101,337
|
4.0
|
N/A
|
N/A
|
||||||||||||||||||
|
||||||||||||||||||||||||
ChoiceOne Bank
|
||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$
|
224,095
|
12.4
|
%
|
$
|
144,274
|
8.0
|
%
|
$
|
180,342
|
10.0
|
%
|
||||||||||||
Common equity Tier 1 capital (to risk weighted assets)
|
212,283
|
11.8
|
81,154
|
4.5
|
117,223
|
6.5
|
||||||||||||||||||
Tier 1 capital (to risk weighted assets)
|
212,283
|
11.8
|
108,205
|
6.0
|
144,274
|
8.0
|
||||||||||||||||||
Tier 1 capital (to average assets)
|
212,283
|
8.4
|
101,244
|
4.0
|
126,555
|
5.0
|
• |
the continued accuracy of the representations and warranties made by the parties in the Merger Agreement;
|
• |
the approval by Fentura shareholders of the Merger Agreement and the merger;
|
• |
the approval by ChoiceOne shareholders of the amendment to our articles of incorporation to increase the number of authorized shares of ChoiceOne common stock from 15,000,000 shares to 30,000,000 shares and
the issuance of ChoiceOne common stock as merger consideration;
|
• |
the performance by each party of its respective obligations under the Merger Agreement;
|
• |
the receipt of required regulatory approvals, including the approval of the Federal Reserve and the Michigan Department of Insurance and Financial Services;
|
• |
the absence of any injunction, order, or decree restraining, enjoining or otherwise prohibiting the Fentura acquisition; and
|
• |
the absence of any material adverse change in the financial condition, business or results of operations of Fentura and The State Bank.
|
• |
the potential for unexpected costs, delays and challenges that may arise in integrating acquisitions into our existing business;
|
• |
limitations on our ability to realize the expected cost savings and synergies from an acquisition;
|
• |
challenges related to integrating acquired operations, including our ability to retain key employees and maintain relationships with significant customers and depositors;
|
• |
challenges related to the integration of businesses that operate in new geographic areas, including difficulties in identifying and gaining access to customers in new markets; and
|
• |
the discovery of previously unknown liabilities following an acquisition associated with the acquired business.
|
Exhibit
Number
|
Document
|
||
Agreement and Plan of Merger by and between ChoiceOne Financial Services, Inc. and Fentura Financial, Inc. dated July 25, 2024. Previously filed with the Commission on July 25, 2024 in ChoiceOne Financial
Services, Inc.’s Current Report on Form 8-K, Exhibit 2.1. Here incorporated by reference.
|
|||
Restated Articles of Incorporation of ChoiceOne Financial Services, Inc. Previously filed as an exhibit to ChoiceOne’s Form 10-K Annual Report for the year ended December 31, 2022. Here incorporated by
reference.
|
|||
Bylaws of ChoiceOne as currently in effect and any amendments thereto. Previously filed as an exhibit to ChoiceOne’s Form 8-K filed April 21, 2021. Here incorporated by reference.
|
|||
Advances, Pledge and Security Agreement between ChoiceOne Bank and the Federal Home Loan Bank of Indianapolis. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.’s Form 10-K Annual Report
for the year ended December 31, 2013. Here incorporated by reference.
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Form of 3.25% Fixed-to-Floating Rate Subordinated Note due September 3, 2031. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.’s Form 8-K filed September 7, 2021. Here incorporated by
reference.
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Form of 3.25% Fixed-to-Floating Rate Global Subordinated Note due September 3, 2031. Previously filed as an exhibit to ChoiceOne Financial Services, Inc.’s Form 8-K filed September 7, 2021. Here
incorporated by reference.
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Certification of Chief Executive Officer
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Certification of Chief Financial Officer
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Certification pursuant to 18 U.S.C. § 1350.
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101.INS
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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
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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CHOICEONE FINANCIAL SERVICES, INC.
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Date: August 14, 2024
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/s/ Kelly J. Potes
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Kelly J. Potes
Chief Executive Officer
(Principal Executive Officer)
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Date: August 14, 2024
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/s/ Adom J. Greenland
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Adom J. Greenland
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
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