|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
None
|
Not Applicable
|
Not Applicable
|
Large accelerated filer ☐
|
|
Non-accelerated filer ☐
|
Smaller reporting company
|
Emerging growth company
|
◾ |
changes in general economic conditions, either nationally, in California, or in our local markets;
|
◾ |
inflation, changes in interest rates, securities market volatility and monetary fluctuations;
|
◾ |
increases in competitive pressures among financial institutions and businesses offering similar products and services;
|
◾ |
risks associated with negative events in the banking industry in the past year, and any legislative and/or bank regulatory actions, that could potentially impact earnings, liquidity and/or the availability of capital or which could
increase the cost of our deposit insurance by the FDIC;
|
◾ |
higher defaults in our loan and lease portfolio than we expect;
|
◾ |
changes in management’s estimate of the adequacy of the allowance for credit losses;
|
◾ |
risks associated with our growth and expansion strategy and related costs;
|
◾ |
increased lending risks associated with our high concentration of real estate loans;
|
◾ |
legislative or regulatory changes or changes in accounting principles, policies or guidelines;
|
◾ |
technological changes;
|
◾ |
operational risks, including processing, information systems, cybersecurity, vendor problems, business interruption, and fraud;
|
◾ |
regulatory or judicial proceedings; and
|
◾ |
other factors and risks including those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.
|
Item 1. |
Business
|
• |
Sacramento County, with branches in Sacramento, Elk Grove, Galt and Walnut Grove. This county had a Population of 1.6 million and a Median Household Income of approximately $83,985. Significant employment sectors include the
following: government, education & health trade, and transportation & utilities. Unemployment was at 4.7%.
|
• |
San Joaquin County, with branches in Lodi, Linden, Stockton, Lockeford and Manteca. This county had a Population of 0.79 million and a Median Household Income of approximately $82,837. Significant employment sectors include the
following: trade, transportation & utilities, government, and education & health services. Unemployment was at 6.8%.
|
• |
Solano County, with a branch in Rio Vista. This county had a Population of 0.45 million and a Median Household Income of approximately $97,037. Significant employment in the following industries: education and health services, trade,
transportation and utilities, and government. Unemployment was at 5.1%.
|
• |
Stanislaus County, with branches in Modesto, Riverbank and Turlock. This county had a Population of 0.55 million and a Median Household Income of approximately $74,872. Significant employment in the following sectors: trade,
transportation & utilities, educational & health services, and government. Unemployment was at 6.9%.
|
• |
Merced County, with branches in Hilmar and Merced. This county had a Population of 0.29 million and a Median Household Income of approximately $64,772. Significant employment in the following sectors: government, trade, transportation
& utilities, and farming. Unemployment was at 10.2%.
|
• |
Alameda County, with a branch in Oakland. This county had a Population of 2.8 million and a Median Household Income of approximately $122,488. Significant employment in the following sectors: professional & business services,
educational & health services, trade, and transportation & utilities. Unemployment was at 4.5%.
|
• |
Contra Costa County, with branches in Concord and Walnut Creek. This county had a Population of 2.8 million and a Median Household Income of approximately $110,455. The Significant employment in the following sectors: professional
& business services, educational & health services, trade, and transportation & utilities. Unemployment was at 4.5%.
|
• |
Napa County, with a branch in Napa. This county had a Population of 0.13 million and a Median Household Income of approximately $105,809. Significant employment in the following sectors: manufacturing, leisure & hospitality,
trade, and educational & health services. Unemployment was at 4.1%.
|
County
|
F&M Bank
Deposits
|
All Banks
Deposits
|
F&M Bank
Deposit
Share
|
|||||||||
(Dollars in thousands)
|
||||||||||||
San Joaquin
|
$
|
1,946,599
|
$
|
15,208,059
|
12.80
|
%
|
||||||
Stanislaus
|
1,011,213
|
11,496,841
|
8.80
|
%
|
||||||||
Merced
|
278,564
|
3,402,530
|
8.19
|
%
|
||||||||
Solano
|
194,503
|
6,843,282
|
2.84
|
%
|
||||||||
Sacramento
|
706,016
|
71,900,266
|
0.98
|
%
|
||||||||
Contra Costa
|
456,919
|
53,024,409
|
0.86
|
%
|
||||||||
Napa
|
19,833
|
5,117,439
|
0.39
|
%
|
||||||||
Alameda
|
27,412
|
66,995,394
|
0.04
|
%
|
||||||||
Total
|
$
|
4,641,059
|
$
|
233,988,220
|
1.98
|
%
|
• |
creating a Financial Stability Oversight Council tasked with identifying and monitoring systemic risks in the financial system;
|
• |
creating the Consumer Financial Protection Bureau (“CFPB”), which is responsible for implementing, examining and enforcing compliance with federal consumer financial protection laws;
|
• |
requiring the FDIC to make its capital requirements for insured depository institutions countercyclical, so that capital requirements increase in times of economic expansion and decrease in times of economic contraction;
|
• |
imposing more stringent capital requirements on bank holding companies and subjecting certain activities, including interstate mergers and acquisitions, to heightened capital conditions;
|
• |
changing the assessment base for federal deposit insurance from the amount of the insured deposits held by the depository institution to the depository institution’s average total consolidated assets less tangible equity, eliminating
the ceiling on the size of the FDIC’s DIF and increasing the floor on the size of the FDIC’s DIF;
|
• |
eliminating all remaining restrictions on interstate banking by authorizing state banks to establish de novo banking offices in any state that would permit a bank chartered in that state to open a banking office at that location;
|
• |
repealing the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts; and
|
• |
in the so-called “Volcker Rule,” subject to numerous exceptions, prohibiting depository institutions and affiliates from certain investments in, and sponsorship of, hedge funds and private equity funds and from engaging in proprietary
trading.
|
• |
4.0% Tier 1 leverage ratio;
|
• |
4.5% CET1 to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7%;
|
• |
6.0% Tier 1 capital to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum Tier 1 capital ratio of at least 8.5%; and
|
• |
8.0% total capital to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum total capital ratio of at least 10.5%.
|
• |
consistent with the Basel I risk-based capital rules, assigning exposures secured by single-family residential properties to either a 50% risk weight for first-lien mortgages that meet prudent underwriting standards or a 100% risk
weight category for all other mortgages;
|
• |
providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (set at 0% under the Basel I risk-based capital rules);
|
• |
assigning a 150% risk weight to all exposures that are nonaccrual or 90 days or more past due (set at 100% under the Basel I risk-based capital rules), except for those secured by single-family residential properties, which will be
assigned a 100% risk weight, consistent with the Basel I risk-based capital rules;
|
• |
applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans; and
|
• |
applying a 250% risk weight to the portion of mortgage servicing rights and deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks that are not deducted from CET1 capital
(set at 100% under the Basel I risk-based capital rules).
|
Minimum
to be
Categorized
as
"Well
Capitalized"
|
Minimum
to be
Categorized
as
"Adequately
Capitalized"
|
Under-capitalized
|
Significantly
Under-
capitalized
|
Critically
Under-
capitalized
|
|||||||||||
Risk-based capital to risk-weighted assets
|
10.00
|
%+
|
8.00
|
%+
|
< 8.00%
|
< 6.00%
|
N/A
|
||||||||
Tier 1 capital to risk-weighted assets
|
8.00
|
%+
|
6.00
|
%+
|
< 6.00%
|
< 4.00%
|
N/A
|
||||||||
CET1 capital to risk-weighted assets
|
6.50
|
%+
|
4.50
|
%+
|
< 4.50%
|
< 3.00%
|
N/A
|
||||||||
Tier 1 leverage capital ratio
|
5.00
|
%+
|
4.00
|
%+
|
< 4.00%
|
< 3.00%
|
N/A
|
||||||||
Tangible equity to assets
|
N/A
|
N/A
|
N/A
|
N/A
|
< 2.00%
|
||||||||||
Supplemental leverage ratio
|
N/A
|
3.00
|
%+
|
< 3.00%
|
N/A
|
N/A
|
• |
control of any other bank or bank holding company or all or substantially all the assets thereof; or
|
• |
more than 5% of the voting shares of a bank or bank holding company which is not already a subsidiary.
|
Item 1A. |
Risk Factors
|
Item 1B. |
Unresolved Staff Comments
|
Item 2. |
Properties
|
Item 3. |
Legal Proceedings
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Year Ended December 31, 2023
|
||||||||||||||||
High
|
Low
|
Close
|
Dividend
Declared
|
|||||||||||||
First quarter
|
$
|
1,088
|
$
|
975
|
$
|
1,015
|
$
|
-
|
||||||||
Second quarter
|
1,020
|
950
|
965
|
8.30
|
||||||||||||
Third quarter
|
1,000
|
934
|
955
|
-
|
||||||||||||
Fourth quarter
|
1,058
|
932
|
1,058
|
8.80
|
Year Ended December 31, 2022
|
||||||||||||||||
High
|
Low
|
Close
|
Dividend
Declared
|
|||||||||||||
First quarter
|
$
|
960
|
$
|
913
|
$
|
950
|
$
|
-
|
||||||||
Second quarter
|
960
|
914
|
927
|
7.85
|
||||||||||||
Third quarter
|
975
|
922
|
956
|
-
|
||||||||||||
Fourth quarter
|
1,088
|
952
|
1,050
|
8.30
|
Period
|
Total number
of shares
purchased
|
Average price
paid per share(2)
|
Total number of shares
purchased as part of
publicly announced
plans or programs
|
Maximum number (or
approximate dollar
value) of shares that
may yet purchased
under the plans or
programs (In
thousands) (1) |
||||||||||||
October 1, 2023 to October 31, 2023
|
918
|
$
|
974.85
|
918
|
$
|
2,564
|
||||||||||
November 1, 2023 to November 30, 2023
|
1,144
|
952.89
|
1,144
|
26,474
|
||||||||||||
December 1, 2023 to December 31, 2023
|
1,980
|
978.46
|
1,980
|
24,536
|
||||||||||||
Total 4th Quarter 2023
|
4,042
|
$
|
970.40
|
4,042
|
$
|
24,536
|
||||||||||
Total 2023
|
20,366
|
$
|
989.57
|
20,366
|
$
|
24,536
|
Item 6. |
Reserved
|
Item 7. |
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
Years Ended December 31
|
||||||||||||
(Dollars in thousands, except per share data)
|
2023
|
2022
|
2021
|
|||||||||
Selected Income Statement Information:
|
||||||||||||
Interest income
|
$
|
253,754
|
$
|
198,413
|
$
|
165,268
|
||||||
Interest expense
|
38,369
|
4,840
|
4,332
|
|||||||||
Net interest income
|
215,385
|
193,573
|
160,936
|
|||||||||
Provision for credit losses
|
9,407
|
6,450
|
1,910
|
|||||||||
Net interest income after provision for credit losses
|
205,978
|
187,123
|
159,026
|
|||||||||
Non-interest income
|
14,914
|
6,178
|
21,056
|
|||||||||
Non-interest expense
|
104,339
|
93,560
|
91,761
|
|||||||||
Income before income tax expense
|
116,553
|
99,741
|
88,321
|
|||||||||
Income tax expense
|
28,239
|
24,651
|
21,985
|
|||||||||
Net income
|
$
|
88,314
|
$
|
75,090
|
$
|
66,336
|
||||||
Selected financial ratios:
|
||||||||||||
Basic and diluted earnings per share
|
$
|
116.61
|
$
|
96.55
|
$
|
84.01
|
||||||
Cash dividends per common share
|
17.10
|
16.15
|
15.30
|
|||||||||
Dividend payout ratio
|
14.66
|
%
|
16.73
|
%
|
18.21
|
%
|
||||||
Net interest margin (tax equivalent)
|
4.30
|
%
|
3.81
|
%
|
3.46
|
%
|
||||||
Non-interest income to average assets
|
0.28
|
%
|
0.12
|
%
|
0.43
|
%
|
||||||
Non-interest expense to average assets
|
1.98
|
%
|
1.75
|
%
|
1.87
|
%
|
||||||
Efficiency ratio
|
45.31
|
%
|
46.84
|
%
|
50.42
|
%
|
||||||
Return on average assets
|
1.68
|
%
|
1.41
|
%
|
1.35
|
%
|
||||||
Return on average equity
|
17.05
|
%
|
16.04
|
%
|
15.00
|
%
|
||||||
Net charge-offs (recoveries) to average loans
|
(0.01
|
%)
|
0.01
|
%
|
(0.01
|
%)
|
As of December 31,
|
||||||||||||
(Dollars in thousands, except per share data)
|
2023
|
2022
|
2021
|
|||||||||
Selected Balance Sheet Information:
|
||||||||||||
Cash and cash equivalents
|
$
|
410,642
|
$
|
588,257
|
$
|
715,460
|
||||||
Investment securities
|
999,750
|
997,817
|
1,007,506
|
|||||||||
Gross loans held for investment
|
3,665,397
|
3,521,718
|
3,247,911
|
|||||||||
Total assets
|
5,308,928
|
5,327,399
|
5,177,720
|
|||||||||
Total deposits
|
4,668,095
|
4,759,269
|
4,640,152
|
|||||||||
Shareholders' equity
|
549,755
|
485,308
|
463,136
|
|||||||||
Average Balances:
|
||||||||||||
Average earning assets
|
5,027,990
|
5,091,684
|
4,656,337
|
|||||||||
Average assets
|
5,270,352
|
5,341,901
|
4,913,999
|
|||||||||
Average shareholders' equity
|
518,035
|
468,001
|
442,246
|
|||||||||
Selected financial ratios:
|
||||||||||||
Book value per share
|
$
|
735.00
|
$
|
631.63
|
$
|
586.51
|
||||||
Tangible book value per share
|
$
|
717.05
|
$
|
613.42
|
$
|
568.04
|
||||||
Allowance for credit losses to total loans
|
2.05
|
%
|
1.90
|
%
|
1.88
|
%
|
||||||
Non-performing assets to total assets
|
0.02
|
%
|
0.03
|
%
|
0.03
|
%
|
||||||
Loans held for investment to deposits
|
78.52
|
%
|
74.00
|
%
|
70.00
|
%
|
||||||
Capital ratios:
|
||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
12.30
|
%
|
11.57
|
%
|
11.68
|
%
|
||||||
Tier 1 capital to risk-weighted assets
|
12.53
|
%
|
11.80
|
%
|
11.94
|
%
|
||||||
Risk-based capital to risk-weighted assets
|
13.78
|
%
|
13.06
|
%
|
13.19
|
%
|
||||||
Tier 1 leverage capital ratio
|
10.38
|
%
|
9.36
|
%
|
8.92
|
%
|
||||||
Tangible common equity ratio(1)
|
10.13
|
%
|
8.87
|
%
|
8.69
|
%
|
• |
Tangible common equity ratio and tangible book value per common share: Given that the use of these measures is prevalent among banking regulators, investors, and analysts, we disclose them in
addition to the related GAAP measures of return on average equity and book value per common share. The reconciliations of these non-GAAP measurements to the GAAP measurements are presented in the following tables for and as of the periods
presented.
|
Tangible Common Equity Ratio and
|
December 31,
|
|||||||||||
Tangible Book Value Per Common Share
|
2023
|
2022
|
2021
|
|||||||||
(Dollars in thousands, except per share data)
|
||||||||||||
Shareholders' equity
|
$
|
549,755
|
$
|
485,308
|
$
|
463,136
|
||||||
Less: Intangible assets
|
13,419
|
13,992
|
14,585
|
|||||||||
Tangible common equity
|
$
|
536,336
|
$
|
471,316
|
$
|
448,551
|
||||||
Total Assets
|
$
|
5,308,928
|
$
|
5,327,399
|
$
|
5,177,720
|
||||||
Less: Intangible assets
|
13,419
|
13,992
|
14,585
|
|||||||||
Tangible assets
|
$
|
5,295,509
|
$
|
5,313,407
|
$
|
5,163,135
|
||||||
Tangible common equity ratio(1)
|
10.13
|
%
|
8.87
|
%
|
8.69
|
%
|
||||||
Book value per common share(2)
|
$
|
735.00
|
$
|
631.63
|
$
|
586.51
|
||||||
Tangible book value per common share(3)
|
$
|
717.05
|
$
|
613.42
|
$
|
568.04
|
||||||
Common shares outstanding
|
747,971
|
768,337
|
789,646
|
(1) |
Tangible common equity divided by tangible assets
|
(2) |
Total common equity divided by common shares outstanding.
|
(3) |
Tangible common equity divided by common shares outstanding.
|
December 31,
|
||||||||
(dollars in thousands, except per share amounts)
|
2023
|
2022
|
||||||
Earnings Summary:
|
||||||||
Interest income
|
$
|
253,754
|
$
|
198,413
|
||||
Interest expense
|
38,369
|
4,840
|
||||||
Net interest income
|
215,385
|
193,573
|
||||||
Provision for credit losses
|
9,407
|
6,450
|
||||||
Non-interest income
|
14,914
|
6,178
|
||||||
Non-interest expense
|
104,339
|
93,560
|
||||||
Income before taxes
|
116,553
|
99,741
|
||||||
Income tax expense
|
28,239
|
24,651
|
||||||
Net Income
|
$
|
88,314
|
$
|
75,090
|
||||
Per Common Share Data:
|
||||||||
Diluted earnings per common share
|
$
|
116.61
|
$
|
96.55
|
||||
Book value per common share
|
$
|
735.00
|
$
|
631.63
|
||||
Tangible book value per common share(1)
|
$
|
717.05
|
$
|
613.42
|
||||
Performance Ratios:
|
||||||||
Return on average assets
|
1.68
|
%
|
1.41
|
%
|
||||
Return on average equity
|
17.05
|
%
|
16.04
|
%
|
||||
Net interest margin (tax equivalent)
|
4.30
|
%
|
3.81
|
%
|
||||
Yield on average loans and leases (tax equivalent)
|
5.84
|
%
|
5.00
|
%
|
||||
Cost of average total deposits
|
0.80
|
%
|
0.09
|
%
|
||||
Efficiency ratio
|
45.31
|
%
|
46.84
|
%
|
||||
Loan-to-deposit ratio
|
78.52
|
%
|
74.00
|
%
|
||||
Percentage of checking deposits to total deposits
|
51.76
|
%
|
60.59
|
%
|
||||
Capital Ratios Bancorp:
|
||||||||
Common equity tier 1 capital to risk-weighted assets
|
12.30
|
%
|
11.57
|
%
|
||||
Tier 1 capital to risk-weighted assets
|
12.53
|
%
|
11.80
|
%
|
||||
Risk-based capital to risk-weighted assets
|
13.78
|
%
|
13.06
|
%
|
||||
Tier 1 leverage capital ratio
|
10.38
|
%
|
9.36
|
%
|
||||
Tangible common equity ratio(1)
|
10.13
|
%
|
8.87
|
%
|
(1) |
See "Non-GAAP Measurements"
|
Year ended December 31,
|
||||||||||||||||||||||||
2023
|
2022
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Average
Balance
|
Interest
Income /
Expense
|
Average
Yield /
Rate
|
Average
Balance
|
Interest
Income /
Expense
|
Average
Yield /
Rate
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest earnings deposits in other banks and federal funds sold
|
$
|
519,331
|
$
|
26,872
|
5.17
|
%
|
$
|
704,082
|
$
|
12,102
|
1.72
|
%
|
||||||||||||
Investment securities:(1)
|
||||||||||||||||||||||||
Taxable securities
|
929,503
|
18,886
|
2.03
|
%
|
1,044,954
|
19,678
|
1.88
|
%
|
||||||||||||||||
Non-taxable securities(2)
|
61,029
|
2,888
|
4.73
|
%
|
48,168
|
1,984
|
4.12
|
%
|
||||||||||||||||
Total investment securities
|
990,532
|
21,774
|
2.20
|
%
|
1,093,122
|
21,662
|
1.98
|
%
|
||||||||||||||||
Loans:(3)
|
||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Commercial
|
1,295,101
|
67,955
|
5.25
|
%
|
1,202,548
|
58,966
|
4.90
|
%
|
||||||||||||||||
Agricultural
|
732,241
|
40,446
|
5.52
|
%
|
705,222
|
35,010
|
4.96
|
%
|
||||||||||||||||
Residential and home equity
|
393,100
|
17,605
|
4.48
|
%
|
369,619
|
14,551
|
3.94
|
%
|
||||||||||||||||
Construction
|
179,297
|
12,638
|
7.05
|
%
|
182,523
|
9,788
|
5.36
|
%
|
||||||||||||||||
Total real estate
|
2,599,739
|
138,644
|
5.33
|
%
|
2,459,912
|
118,315
|
4.81
|
%
|
||||||||||||||||
Commercial & industrial
|
479,552
|
33,941
|
7.08
|
%
|
440,510
|
22,452
|
5.10
|
%
|
||||||||||||||||
Agricultural
|
292,079
|
23,399
|
8.01
|
%
|
262,461
|
14,084
|
5.37
|
%
|
||||||||||||||||
Commercial leases
|
125,680
|
8,160
|
6.49
|
%
|
94,040
|
5,702
|
6.06
|
%
|
||||||||||||||||
Consumer and other
|
5,528
|
338
|
6.11
|
%
|
22,008
|
3,469
|
15.76
|
%
|
||||||||||||||||
Total loans and leases
|
3,502,578
|
204,482
|
5.84
|
%
|
3,278,931
|
164,022
|
5.00
|
%
|
||||||||||||||||
Non-marketable securities
|
15,549
|
1,213
|
7.80
|
%
|
15,549
|
1,042
|
6.70
|
%
|
||||||||||||||||
Total interest earning assets
|
5,027,990
|
254,341
|
5.06
|
%
|
5,091,684
|
198,828
|
3.90
|
%
|
||||||||||||||||
Allowance for credit losses
|
(71,461
|
)
|
(62,588
|
)
|
||||||||||||||||||||
Non-interest earning assets
|
313,823
|
312,805
|
||||||||||||||||||||||
Total average assets
|
$
|
5,270,352
|
$
|
5,341,901
|
||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest bearing deposits:
|
||||||||||||||||||||||||
Demand
|
$
|
983,340
|
2,357
|
0.24
|
%
|
$
|
1,120,198
|
1,497
|
0.13
|
%
|
||||||||||||||
Savings and money market accounts
|
1,631,818
|
21,831
|
1.34
|
%
|
1,542,310
|
1,981
|
0.13
|
%
|
||||||||||||||||
Certificates of deposit greater than $250,000
|
245,094
|
7,680
|
3.13
|
%
|
157,623
|
460
|
0.29
|
%
|
||||||||||||||||
Certificates of deposit less than $250,000
|
273,281
|
5,655
|
2.07
|
%
|
215,044
|
411
|
0.19
|
%
|
||||||||||||||||
Total interest bearing deposits
|
3,133,533
|
37,523
|
1.20
|
%
|
3,035,175
|
4,349
|
0.14
|
%
|
||||||||||||||||
Short-term borrowings
|
1
|
-
|
0.00
|
%
|
1
|
-
|
0.00
|
%
|
||||||||||||||||
Subordinated debentures
|
10,310
|
846
|
8.21
|
%
|
10,310
|
491
|
4.76
|
%
|
||||||||||||||||
Total interest bearing liabilities
|
3,143,844
|
38,369
|
1.22
|
%
|
3,045,486
|
4,840
|
0.16
|
%
|
||||||||||||||||
Non-interest bearing deposits
|
1,528,375
|
1,751,797
|
||||||||||||||||||||||
Total funding
|
4,672,219
|
38,369
|
0.82
|
%
|
4,797,283
|
4,840
|
0.10
|
%
|
||||||||||||||||
Other non-interest bearing liabilities
|
80,098
|
76,617
|
||||||||||||||||||||||
Shareholders' equity
|
518,035
|
468,001
|
||||||||||||||||||||||
Total average liabilities and shareholders' equity
|
$
|
5,270,352
|
$
|
5,341,901
|
||||||||||||||||||||
Net interest income and margin(4)
|
$
|
215,972
|
4.30
|
%
|
$
|
193,988
|
3.81
|
%
|
||||||||||||||||
Interest rate spread
|
3.84
|
%
|
3.75
|
%
|
||||||||||||||||||||
Tax Equivalent Adjustment
|
(587
|
)
|
(415
|
)
|
||||||||||||||||||||
Net interest income
|
215,385
|
4.28
|
%
|
193,573
|
3.80
|
%
|
(1) |
Excludes average unrealized (losses) of ($25.8) million and $(24.5) million for the years ended December 31, 2023, and 2022, respectively, which are included in non-interest earning assets.
|
(2) |
Yields and interest income are calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
|
(3) |
Loan interest income includes loan fees of $6.1 million and $11.6 million for the years ended December 31, 2023 and 2022, respectively.
|
(4) |
Net interest margin is computed by dividing net interest income by average interest earning assets.
|
Year Ended December 31, 2023
compared with 2022
|
||||||||||||
Increase (Decrease) Due to:
|
||||||||||||
(Dollars in thousands)
|
Volume
|
Rate
|
Net
|
|||||||||
Interest income:
|
||||||||||||
Interest earnings deposits in other banks and federal funds sold
|
$
|
(3,913
|
)
|
$
|
18,683
|
$
|
14,770
|
|||||
Investment securities:
|
||||||||||||
Taxable securities
|
(2,274
|
)
|
1,482
|
(792
|
)
|
|||||||
Non-taxable securities
|
581
|
324
|
904
|
|||||||||
Total investment securities
|
(1,694
|
)
|
1,805
|
112
|
||||||||
Loans:
|
||||||||||||
Real estate:
|
||||||||||||
Commercial
|
4,704
|
4,285
|
8,989
|
|||||||||
Agricultural
|
1,379
|
4,057
|
5,436
|
|||||||||
Residential and home equity
|
964
|
2,089
|
3,054
|
|||||||||
Construction
|
(176
|
)
|
3,026
|
2,850
|
||||||||
Total real estate
|
6,872
|
13,457
|
20,329
|
|||||||||
Commercial & industrial
|
2,134
|
9,356
|
11,489
|
|||||||||
Agricultural
|
1,735
|
7,579
|
9,315
|
|||||||||
Commercial leases
|
2,030
|
428
|
2,458
|
|||||||||
Consumer and other
|
(1,723
|
)
|
(1,408
|
)
|
(3,131
|
)
|
||||||
Total loans and leases
|
11,049
|
29,411
|
40,460
|
|||||||||
Non-marketable securities
|
-
|
171
|
171
|
|||||||||
Total interest income
|
5,443
|
50,071
|
55,513
|
|||||||||
Interest expense:
|
||||||||||||
Interest bearing deposits:
|
||||||||||||
Demand
|
(202
|
)
|
1,062
|
860
|
||||||||
Savings and money market accounts
|
122
|
19,729
|
19,850
|
|||||||||
Certificates of deposit greater than $250,000
|
389
|
6,831
|
7,220
|
|||||||||
Certificates of deposit less than $250,000
|
140
|
5,103
|
5,244
|
|||||||||
Total interest bearing deposits
|
450
|
32,725
|
33,174
|
|||||||||
Subordinated debentures
|
-
|
355
|
355
|
|||||||||
Total interest expense
|
450
|
33,080
|
33,529
|
|||||||||
Net interest income
|
$
|
4,993
|
$
|
16,991
|
$
|
21,984
|
|
Years Ended
December 31
|
|||||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
$ Better /
(Worse)
|
% Better /
(Worse)
|
||||||||||||
Selected Income Statement Information:
|
||||||||||||||||
Interest income
|
$
|
253,754
|
$
|
198,413
|
$
|
55,341
|
27.89
|
%
|
||||||||
Interest expense
|
38,369
|
4,840
|
(33,529
|
)
|
(692.75
|
%)
|
||||||||||
Net interest income
|
215,385
|
193,573
|
21,812
|
11.27
|
%
|
|||||||||||
Provision for credit losses
|
9,407
|
6,450
|
(2,957
|
)
|
(45.84
|
%)
|
||||||||||
Net interest income after provision for credit losses
|
205,978
|
187,123
|
18,855
|
10.08
|
%
|
|||||||||||
Non-interest income
|
14,914
|
6,178
|
8,736
|
141.40
|
%
|
|||||||||||
Non-interest expense
|
104,339
|
93,560
|
(10,779
|
)
|
(11.52
|
%)
|
||||||||||
Income before income tax expense
|
116,553
|
99,741
|
16,812
|
16.86
|
%
|
|||||||||||
Income tax expense
|
28,239
|
24,651
|
(3,588
|
)
|
(14.56
|
%)
|
||||||||||
Net income
|
$
|
88,314
|
$
|
75,090
|
$
|
13,224
|
17.61
|
%
|
Years Ended
December 31
|
||||||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
$ Better /
(Worse)
|
% Better /
(Worse)
|
||||||||||||
Non-interest Income:
|
||||||||||||||||
Card processing
|
6,686
|
7,123
|
$
|
(437
|
)
|
(6.14
|
%)
|
|||||||||
Gain on BOLI death benefit
|
4,346
|
-
|
4,346
|
-
|
||||||||||||
Net gain on deferred compensation benefits
|
2,974
|
451
|
2,523
|
559.42
|
%
|
|||||||||||
Service charges on deposit accounts
|
2,755
|
2,794
|
(39
|
)
|
(1.40
|
%)
|
||||||||||
Increase in cash surrender value of BOLI
|
2,027
|
2,233
|
(206
|
)
|
9.23
|
%
|
||||||||||
Net loss on sale of securities available-for-sale
|
(8,199
|
)
|
(10,689
|
)
|
2,490
|
(23.29
|
%)
|
|||||||||
Other
|
4,325
|
4,266
|
59
|
1.38
|
%
|
|||||||||||
Total non-interest income
|
$
|
14,914
|
$
|
6,178
|
$
|
8,736
|
141.40
|
%
|
Years Ended
December 31
|
||||||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
$ Better / (Worse)
|
% Better / (Worse)
|
||||||||||||
Non-interest Expense:
|
||||||||||||||||
Salaries and employee benefits
|
70,883
|
64,250
|
$
|
(6,633
|
)
|
(10.32
|
%)
|
|||||||||
Data Processing
|
5,293
|
4,968
|
(325
|
)
|
(6.54
|
%)
|
||||||||||
Occupancy
|
4,837
|
4,717
|
(120
|
)
|
(2.54
|
%)
|
||||||||||
Net gain on deferred compensation benefits
|
2,974
|
451
|
(2,523
|
)
|
(559.42
|
%)
|
||||||||||
Deposit insurance
|
2,769
|
1,771
|
(998
|
)
|
(56.35
|
%)
|
||||||||||
Professional services
|
2,334
|
2,459
|
125
|
5.08
|
%
|
|||||||||||
Marketing
|
1,885
|
1,324
|
(561
|
)
|
(42.37
|
%)
|
||||||||||
Other
|
13,364
|
13,620
|
256
|
1.88
|
%
|
|||||||||||
Total non-interest expense
|
$
|
104,339
|
$
|
93,560
|
$
|
(10,779
|
)
|
(11.52
|
%)
|
As of December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Available-for-Sale Securities
|
||||||||
U.S. Treasury notes
|
$
|
-
|
$
|
4,964
|
||||
U.S. Government-sponsored securities
|
3,224
|
4,427
|
||||||
Mortgage-backed securities(1)
|
163,838
|
132,528
|
||||||
Collateralized mortgage obligations(1)
|
535
|
1,054
|
||||||
Corporate securities
|
14,605
|
9,581
|
||||||
Other
|
310
|
310
|
||||||
Total available-for-sale securities
|
$
|
182,512
|
$
|
152,864
|
As of December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Held-to-Maturity Securities
|
||||||||
Mortgage-backed securities(1)
|
$
|
664,728
|
$
|
702,858
|
||||
Collateralized mortgage obligations(1)
|
74,170
|
80,186
|
||||||
Municipal securities(2)
|
78,790
|
62,302
|
||||||
Total held-to-maturity securities
|
$
|
817,688
|
$
|
845,346
|
As of December 31, 2023
|
||||||||||||||||||||||||||||||||||||||||
Within One Year
|
After One but
Within Five Years
|
After Five but
Within Ten Years
|
After Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||||||||
Securities available-for-sale
|
||||||||||||||||||||||||||||||||||||||||
U.S. Government-sponsored securities
|
$
|
1
|
5.91
|
%
|
$
|
99
|
6.47
|
%
|
$
|
269
|
6.65
|
%
|
$
|
2,855
|
6.44
|
%
|
3,224
|
6.46
|
%
|
|||||||||||||||||||||
Mortgage-backed securities(1)
|
169
|
1.79
|
%
|
6,138
|
2.57
|
%
|
4,916
|
3.78
|
%
|
152,615
|
3.52
|
%
|
163,838
|
3.44
|
%
|
|||||||||||||||||||||||||
Collateralized mortgage obligations(1)
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
535
|
2.27
|
%
|
535
|
2.27
|
%
|
|||||||||||||||||||||||||
Corporate securities
|
-
|
0.00
|
%
|
14,605
|
5.71
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
14,605
|
5.71
|
%
|
|||||||||||||||||||||||||
Other
|
310
|
8.20
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
310
|
8.20
|
%
|
|||||||||||||||||||||||||
Total securities available-for-sale
|
$
|
480
|
5.94
|
%
|
$
|
20,842
|
4.79
|
%
|
$
|
5,185
|
3.93
|
%
|
$
|
156,005
|
3.57
|
%
|
$
|
182,512
|
3.68
|
%
|
As of December 31, 2023
|
||||||||||||||||||||||||||||||||||||||||
Within One Year
|
After One but
Within Five Years
|
After Five but
Within Ten Years
|
After Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities(1)
|
$
|
-
|
0.00
|
%
|
$
|
2,058
|
0.78
|
%
|
$
|
12,418
|
1.41
|
%
|
$
|
650,252
|
1.90
|
%
|
$
|
664,728
|
1.88
|
%
|
||||||||||||||||||||
Collateralized mortgage obligations(1)
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
74,170
|
1.75
|
%
|
74,170
|
1.75
|
%
|
|||||||||||||||||||||||||
Municipal securities
|
875
|
4.01
|
%
|
15,962
|
4.23
|
%
|
10,703
|
3.76
|
%
|
51,250
|
3.88
|
%
|
78,790
|
3.93
|
%
|
|||||||||||||||||||||||||
Total securities held-to-maturity
|
$
|
875
|
4.01
|
%
|
$
|
18,020
|
3.84
|
%
|
$
|
23,121
|
2.50
|
%
|
$
|
775,672
|
2.02
|
%
|
$
|
817,688
|
2.07
|
%
|
As of December 31, 2022
|
||||||||||||||||||||||||||||||||||||||||
Within One Year
|
After One but
Within Five Years
|
After Five but
Within Ten Years
|
After Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||||||||
Securities available-for-sale
|
||||||||||||||||||||||||||||||||||||||||
U.S. Treasury notes
|
$
|
4,964
|
2.37
|
%
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
4,964
|
2.37
|
%
|
||||||||||||||||||||
U.S. Government-sponsored securities
|
3
|
2.17
|
%
|
53
|
2.29
|
%
|
380
|
4.52
|
%
|
3,991
|
4.52
|
%
|
4,427
|
4.29
|
%
|
|||||||||||||||||||||||||
Mortgage-backed securities(1)
|
13
|
2.82
|
%
|
16,460
|
2.31
|
%
|
15,156
|
2.41
|
%
|
100,899
|
1.82
|
%
|
132,528
|
1.95
|
%
|
|||||||||||||||||||||||||
Collateralized mortgage obligations(1)
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
1,054
|
2.35
|
%
|
1,054
|
2.35
|
%
|
|||||||||||||||||||||||||
Corporate securities
|
-
|
0.00
|
%
|
9,581
|
3.13
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
9,581
|
3.13
|
%
|
|||||||||||||||||||||||||
Other
|
310
|
4.60
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
310
|
4.60
|
%
|
|||||||||||||||||||||||||
Total securities available-for-sale
|
$
|
5,290
|
2.50
|
%
|
$
|
26,094
|
2.61
|
%
|
$
|
15,536
|
2.46
|
%
|
$
|
105,944
|
1.93
|
%
|
$
|
152,864
|
2.11
|
%
|
As of December 31, 2022
|
||||||||||||||||||||||||||||||||||||||||
Within One Year
|
After One but
Within Five Years
|
After Five but
Within Ten Years
|
After Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities(1)
|
$
|
-
|
0.00
|
%
|
$
|
-
|
0.00
|
%
|
$
|
18,197
|
1.22
|
%
|
$
|
684,661
|
1.90
|
%
|
$
|
702,858
|
1.88
|
%
|
||||||||||||||||||||
Collateralized mortgage obligations(1)
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
-
|
0.00
|
%
|
80,186
|
1.80
|
%
|
80,186
|
1.80
|
%
|
|||||||||||||||||||||||||
Municipal securities
|
883
|
5.92
|
%
|
8,058
|
3.98
|
%
|
15,670
|
3.70
|
%
|
37,691
|
4.83
|
%
|
62,302
|
4.45
|
%
|
|||||||||||||||||||||||||
Total securities held-to-maturity
|
$
|
883
|
5.92
|
%
|
$
|
8,058
|
3.98
|
%
|
$
|
33,867
|
2.37
|
%
|
$
|
802,538
|
2.03
|
%
|
$
|
845,346
|
2.07
|
%
|
December 31,
|
||||||||||||||||
2023
|
2022
|
|||||||||||||||
(Dollars in thousands)
|
Dollars
|
Percent of
Total
|
Dollars
|
Percent of
Total
|
||||||||||||
Gross Loans and Leases
|
||||||||||||||||
Real estate:
|
||||||||||||||||
Commercial
|
$
|
1,323,038
|
36.10
|
%
|
$
|
1,328,691
|
37.73
|
%
|
||||||||
Agricultural
|
742,009
|
20.24
|
%
|
726,938
|
20.64
|
%
|
||||||||||
Residential and home equity
|
399,982
|
10.91
|
%
|
387,753
|
11.01
|
%
|
||||||||||
Construction
|
212,362
|
5.80
|
%
|
166,538
|
4.73
|
%
|
||||||||||
Total real estate
|
2,677,391
|
73.05
|
%
|
2,609,920
|
74.11
|
%
|
||||||||||
Commercial & industrial
|
499,373
|
13.62
|
%
|
478,758
|
13.59
|
%
|
||||||||||
Agricultural
|
313,737
|
8.56
|
%
|
314,525
|
8.93
|
%
|
||||||||||
Commercial leases
|
169,684
|
4.63
|
%
|
112,629
|
3.20
|
%
|
||||||||||
Consumer and other
|
5,212
|
0.14
|
%
|
5,886
|
0.17
|
%
|
||||||||||
Total gross loans and leases
|
$
|
3,665,397
|
100.00
|
%
|
$
|
3,521,718
|
100.00
|
%
|
Loan Contractual Maturity
|
||||||||||||||||||||
(Dollars in thousands)
|
One Year or
Less
|
After One
But Within
Five Years
|
After Five
But Within
Fifteen Years
|
After Fifteen
Years
|
Total
|
|||||||||||||||
Gross loan and leases:
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Commercial
|
$
|
47,563
|
$
|
399,501
|
$
|
840,304
|
$
|
35,670
|
$
|
1,323,038
|
||||||||||
Agricultural
|
30,304
|
187,603
|
448,403
|
75,699
|
742,009
|
|||||||||||||||
Residential and home equity
|
142
|
4,326
|
112,464
|
283,050
|
399,982
|
|||||||||||||||
Construction
|
150,149
|
61,688
|
525
|
-
|
212,362
|
|||||||||||||||
Total real estate
|
228,158
|
653,118
|
1,401,696
|
394,419
|
2,677,391
|
|||||||||||||||
Commercial & industrial
|
198,044
|
207,202
|
91,786
|
2,341
|
499,373
|
|||||||||||||||
Agricultural
|
192,404
|
100,159
|
19,499
|
1,675
|
313,737
|
|||||||||||||||
Commercial leases
|
4,857
|
52,136
|
112,691
|
-
|
169,684
|
|||||||||||||||
Consumer and other
|
526
|
3,662
|
1,024
|
-
|
5,212
|
|||||||||||||||
Total gross loans and leases
|
$
|
623,989
|
$
|
1,016,277
|
$
|
1,626,696
|
$
|
398,435
|
$
|
3,665,397
|
||||||||||
Rate Structure for Loans
|
||||||||||||||||||||
Fixed Rate
|
$
|
107,576
|
$
|
636,123
|
$
|
1,156,382
|
$
|
229,512
|
$
|
2,129,593
|
||||||||||
Adjustable Rate
|
516,413
|
380,154
|
470,314
|
168,923
|
1,535,804
|
|||||||||||||||
Total gross loans and leases
|
$
|
623,989
|
$
|
1,016,277
|
$
|
1,626,696
|
$
|
398,435
|
$
|
3,665,397
|
December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Non-performing assets:
|
||||||||
Non-accrual loans and leases
|
||||||||
Real estate:
|
||||||||
Commercial
|
$
|
-
|
$
|
403
|
||||
Agricultural
|
-
|
-
|
||||||
Residential and home equity
|
-
|
-
|
||||||
Construction
|
-
|
168
|
||||||
Total real estate
|
-
|
571
|
||||||
Commercial & industrial
|
-
|
-
|
||||||
Agricultural
|
-
|
-
|
||||||
Commercial leases
|
-
|
-
|
||||||
Consumer and other
|
-
|
-
|
||||||
Total non-performing loans and leases
|
$
|
-
|
$
|
571
|
||||
Other real estate owned ("OREO")
|
$
|
873
|
$
|
873
|
||||
Total non-performing assets
|
$
|
873
|
$
|
1,444
|
||||
Selected ratios:
|
||||||||
Non-performing loans to total loans and leases
|
0.00
|
%
|
0.02
|
%
|
||||
Non-performing assets to total assets
|
0.02
|
%
|
0.03
|
%
|
Year Ended December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Allowance for credit losses:
|
||||||||
Balance at beginning of year
|
$
|
66,885
|
$
|
61,007
|
||||
Provision for credit losses
|
7,750
|
6,057
|
||||||
Charge-offs:
|
||||||||
Real estate:
|
||||||||
Commercial
|
-
|
(170
|
)
|
|||||
Agricultural
|
-
|
-
|
||||||
Residential and home equity
|
(14
|
)
|
(25
|
)
|
||||
Construction
|
-
|
-
|
||||||
Total real estate
|
(14
|
)
|
(195
|
)
|
||||
Commercial & industrial
|
-
|
(324
|
)
|
|||||
Agricultural
|
-
|
-
|
||||||
Commercial leases
|
-
|
-
|
||||||
Consumer and other
|
(46
|
)
|
(62
|
)
|
||||
Total charge-offs
|
(60
|
)
|
(581
|
)
|
||||
Recoveries:
|
||||||||
Real estate:
|
||||||||
Commercial
|
170
|
-
|
||||||
Agricultural
|
-
|
-
|
||||||
Residential and home equity
|
65
|
131
|
||||||
Construction
|
-
|
-
|
||||||
Total real estate
|
235
|
131
|
||||||
Commercial & industrial
|
73
|
195
|
||||||
Agricultural
|
51
|
53
|
||||||
Commercial leases
|
-
|
-
|
||||||
Consumer and other
|
31
|
23
|
||||||
Total recoveries
|
390
|
402
|
||||||
Net recoeries / (charge-offs)
|
330
|
(179
|
)
|
|||||
Balance at end of year
|
$
|
74,965
|
$
|
66,885
|
||||
Selected financial information:
|
||||||||
Net loans and leases held-for-investment
|
$
|
3,654,689
|
$
|
3,512,361
|
||||
Average loans and leases
|
3,502,578
|
3,278,931
|
||||||
Non-performing loans and leases
|
-
|
571
|
||||||
Allowance for credit losses to non-performing loans and leases
|
0.00
|
%
|
11713.66
|
%
|
||||
Net charge-offs / (recoveries) to average loans and leases
|
(0.01
|
%)
|
0.01
|
%
|
||||
Provision for credit losses to average loans and leases
|
0.22
|
%
|
0.18
|
%
|
||||
Allowance for credit losses to gross loans and leases held-for-investment
|
2.05
|
%
|
1.90
|
%
|
Year Ended December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
ACL - Loans and leases
|
$
|
74,965
|
$
|
66,885
|
||||
ACL - Unfunded commitments
|
3,690
|
2,089
|
||||||
Total ACL
|
78,655
|
68,974
|
December 31,
|
||||||||||||||||||||||||
2023
|
2022
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Dollars
|
Percent of
Each Loan
Type to Total
Loans
|
Percent of
ACL to Each
Loan Type
|
Dollars
|
Percent of
Each Loan
Type to Total
Loans
|
Percent of
ACL to Each
Loan Type
|
||||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Commercial
|
$
|
26,093
|
36.10
|
%
|
1.97
|
%
|
$
|
18,055
|
37.73
|
%
|
1.36
|
%
|
||||||||||||
Agricultural
|
7,744
|
20.24
|
%
|
1.04
|
%
|
14,496
|
20.64
|
%
|
1.99
|
%
|
||||||||||||||
Residential and home equity
|
7,770
|
10.91
|
%
|
1.94
|
%
|
7,508
|
11.01
|
%
|
1.94
|
%
|
||||||||||||||
Construction
|
4,432
|
5.80
|
%
|
2.09
|
%
|
3,026
|
4.73
|
%
|
1.82
|
%
|
||||||||||||||
Total real estate
|
46,039
|
73.05
|
%
|
1.72
|
%
|
43,085
|
74.11
|
%
|
1.65
|
%
|
||||||||||||||
Commercial & industrial
|
13,380
|
13.62
|
%
|
2.68
|
%
|
11,503
|
13.59
|
%
|
2.40
|
%
|
||||||||||||||
Agricultural
|
8,872
|
8.56
|
%
|
2.83
|
%
|
10,202
|
8.93
|
%
|
3.24
|
%
|
||||||||||||||
Commercial leases
|
6,537
|
4.63
|
%
|
3.85
|
%
|
1,924
|
3.20
|
%
|
1.71
|
%
|
||||||||||||||
Consumer and other
|
137
|
0.14
|
%
|
2.63
|
%
|
171
|
0.17
|
%
|
2.91
|
%
|
||||||||||||||
Total allowance for credit losses
|
$
|
74,965
|
100.00
|
%
|
2.05
|
%
|
$
|
66,885
|
100.00
|
%
|
1.90
|
%
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||
2023
|
2022
|
2021
|
||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
Average Balance
|
Interest Expense
|
Average Rate
|
Average Balance
|
Interest Expense
|
Average Rate
|
Average Balance
|
Interest Expense
|
Average Rate
|
|||||||||||||||||||||||||||
Total deposits:
|
||||||||||||||||||||||||||||||||||||
Interest bearing deposits:
|
||||||||||||||||||||||||||||||||||||
Demand
|
$
|
983,340
|
$
|
2,357
|
0.24
|
%
|
$
|
1,120,198
|
$
|
1,497
|
0.13
|
%
|
$
|
1,024,009
|
$
|
1,128
|
0.11
|
%
|
||||||||||||||||||
Savings and money market
|
1,631,818
|
21,831
|
1.34
|
%
|
1,542,310
|
1,981
|
0.13
|
%
|
1,352,258
|
1,458
|
0.11
|
%
|
||||||||||||||||||||||||
Certificates of deposit greater than $250,000
|
245,094
|
7,680
|
3.13
|
%
|
157,623
|
460
|
0.29
|
%
|
170,040
|
701
|
0.41
|
%
|
||||||||||||||||||||||||
Certificates of deposit less than $250,000
|
273,281
|
5,655
|
2.07
|
%
|
215,044
|
411
|
0.19
|
%
|
235,746
|
730
|
0.31
|
%
|
||||||||||||||||||||||||
Total interest bearing deposits
|
3,133,533
|
37,523
|
1.20
|
%
|
3,035,175
|
4,349
|
0.14
|
%
|
2,782,053
|
4,017
|
0.14
|
%
|
||||||||||||||||||||||||
Non-interest bearing deposits
|
1,528,375
|
1,751,797
|
1,610,611
|
|||||||||||||||||||||||||||||||||
Total deposits
|
$
|
4,661,908
|
$
|
37,523
|
0.80
|
%
|
$
|
4,786,972
|
$
|
4,349
|
0.09
|
%
|
$
|
4,392,664
|
$
|
4,017
|
0.09
|
%
|
December 31
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Non-Maturity Deposits greater than $250,000
|
$
|
2,496,749
|
$
|
2,872,754
|
||||
Certificates of deposit greater than $250,000, by maturity:
|
||||||||
Less than 3 months
|
84,460
|
45,078
|
||||||
3 months to 6 months
|
111,866
|
30,426
|
||||||
6 months to 12 months
|
107,080
|
44,189
|
||||||
More than 12 months
|
15,423
|
9,153
|
||||||
Total certificates of deposit greater than $250,000
|
$
|
318,829
|
$
|
128,846
|
||||
Total deposits greater than $250,000
|
$
|
2,815,578
|
$
|
3,001,600
|
December 31, 2023
|
||||||||||||||||||||||||
Actual
|
Required for Capital
Adequacy Purposes
|
Minimum to be Categorized as
"Well Capitalized" Under
Prompt Corrective Action
Regulation
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Bancorp:
|
||||||||||||||||||||||||
CET1 capital to risk-weighted assets
|
$
|
546,045
|
12.30
|
%
|
$
|
199,724
|
4.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 capital to risk-weighted assets
|
556,045
|
12.53
|
%
|
266,298
|
6.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Risk-based capital to risk-weighted assets
|
611,815
|
13.78
|
%
|
355,064
|
8.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Tier 1 leverage capital ratio
|
556,045
|
10.38
|
%
|
214,267
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank:
|
||||||||||||||||||||||||
CET1 capital to risk-weighted assets
|
$
|
557,500
|
12.56
|
%
|
$
|
199,722
|
4.50
|
%
|
$
|
288,487
|
6.50
|
%
|
||||||||||||
Tier 1 capital to risk-weighted assets
|
557,500
|
12.56
|
%
|
266,295
|
6.00
|
%
|
355,061
|
8.00
|
%
|
|||||||||||||||
Risk-based capital to risk-weighted assets
|
613,270
|
13.82
|
%
|
355,061
|
8.00
|
%
|
443,826
|
10.00
|
%
|
|||||||||||||||
Tier 1 leverage capital ratio
|
557,500
|
10.42
|
%
|
214,078
|
4.00
|
%
|
267,597
|
5.00
|
%
|
December 31, 2022
|
||||||||||||||||||||||||
Actual
|
Required for Capital
Adequacy Purposes |
Minimum to be Categorized as
"Well Capitalized" Under
Prompt Corrective Action
Regulation
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Bancorp:
|
||||||||||||||||||||||||
CET1 capital to risk-weighted assets
|
$
|
493,438
|
11.57
|
%
|
$
|
191,984
|
4.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Tier 1 capital to risk-weighted assets
|
503,438
|
11.80
|
%
|
255,978
|
6.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Risk-based capital to risk-weighted assets
|
556,964
|
13.06
|
%
|
341,305
|
8.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Tier 1 leverage capital ratio
|
503,438
|
9.36
|
%
|
215,201
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank:
|
||||||||||||||||||||||||
CET1 capital to risk-weighted assets
|
$
|
502,838
|
11.79
|
%
|
$
|
191,970
|
4.50
|
%
|
$
|
277,290
|
6.50
|
%
|
||||||||||||
Tier 1 capital to risk-weighted assets
|
502,838
|
11.79
|
%
|
255,960
|
6.00
|
%
|
341,280
|
8.00
|
%
|
|||||||||||||||
Risk-based capital to risk-weighted assets
|
556,361
|
13.04
|
%
|
341,280
|
8.00
|
%
|
426,600
|
10.00
|
%
|
|||||||||||||||
Tier 1 leverage capital ratio
|
502,838
|
9.35
|
%
|
215,018
|
4.00
|
%
|
268,772
|
5.00
|
%
|
Amount of Commitment Expiration per Period
|
||||||||||||||||||||
(Dollars in thousands)
|
Total
Committed
Amount
|
Less than
One Year
|
One to
Three
Years
|
Three to
Five Years
|
After Five
Years
|
|||||||||||||||
Off-balance sheet commitments
|
||||||||||||||||||||
Commitments to extend credit
|
$
|
1,150,142
|
$
|
584,486
|
$
|
337,252
|
$
|
43,055
|
$
|
185,349
|
||||||||||
Standby letters of credit
|
16,858
|
11,657
|
3,781
|
920
|
500
|
|||||||||||||||
Total off-balance sheet commitments
|
$
|
1,167,000
|
$
|
596,143
|
$
|
341,033
|
$
|
43,975
|
$
|
185,849
|
As of December 31, 2023
|
||||||||||||||||||||
(Dollars in thousands)
|
Total Credit
Line Limit
|
Current
Credit Line
Available
|
Outstanding
Amount
|
Remaining
Credit Line
Available
|
Value of
Collateral
Pledged
|
|||||||||||||||
Additional liquidity sources:
|
||||||||||||||||||||
Federal Reserve BIC
|
$
|
1,141,910
|
$
|
1,141,910
|
$
|
-
|
$
|
1,141,910
|
$
|
1,513,447
|
||||||||||
Federal Home Loan Bank
|
760,054
|
760,054
|
-
|
760,054
|
1,271,227
|
|||||||||||||||
FRB Bank Term Funding Program
|
134,910
|
134,910
|
-
|
134,910
|
134,910
|
|||||||||||||||
US Bank Fed Funds
|
50,000
|
50,000
|
-
|
50,000
|
-
|
|||||||||||||||
PCBB Fed Funds
|
50,000
|
50,000
|
-
|
50,000
|
-
|
|||||||||||||||
FHLB Fed Funds
|
18,000
|
18,000
|
-
|
18,000
|
-
|
|||||||||||||||
Total additional liquidity sources
|
$
|
2,154,874
|
$
|
2,154,874
|
$
|
-
|
$
|
2,154,874
|
$
|
2,919,584
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk
|
Estimated Change in
Net Interest Income (NII) (as a % of NII) |
Estimated Change in
Economic Value of Equity
(EVE)
(as a % of EVE)
|
|||||||
December 31, 2023
|
||||||||
+300 bps
|
0.9
|
%
|
(8.1
|
%)
|
||||
+200 bps
|
0.4
|
%
|
(5.9
|
%)
|
||||
+100 bps
|
0.4
|
%
|
(2.2
|
%)
|
||||
0 bps
|
-
|
-
|
||||||
-100 bps
|
(2.0
|
%)
|
(1.6
|
%)
|
||||
-200 bps
|
(4.1
|
%)
|
(5.6
|
%)
|
||||
-300 bps
|
(6.4
|
%)
|
(12.4
|
%)
|
Page
|
||
Report of Independent Registered Public Accounting Firm (
Report of Independent Registered Public Accounting Firm (
|
75 |
Consolidated Financial Statements
|
||
Consolidated Statements of Financial Condition as of December 31, 2023, and 2022
|
78
|
|
Consolidated Statements of Income for the three years ended December 31, 2023, 2022 and 2021
|
79
|
|
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2023, 2022 and 2021
|
80
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the three years ended December 31, 2023, 2022 and 2021
|
81
|
|
Consolidated Statements of Cash Flows for the three years ended December 31, 2023, 2022 and 2021
|
82
|
|
Notes to the Consolidated Financial Statements
|
83
|
• |
Obtaining an understanding of the Company’s process for establishing the ACL, including the models selected by management to estimate quantitative components of the ACL and qualitative adjustments made to the ACL. This
includes the process utilized by management to challenge the model results and determine the best estimate of the ACL as of the statement of financial condition date.
|
• |
Evaluating the design and testing the operating effectiveness of controls relating to the development and approval of the ACL methodology, management’s identification, determination and controls related to the significant
assumptions used in the models, controls around the reliability and accuracy of the data used in the models, analysis of the ACL results and management’s review and approval of the ACL.
|
• |
Determining whether the loan portfolio is segmented by similar risk characteristics.
|
• |
Evaluating the identification and measurement of the qualitative adjustments, including the basis for concluding an adjustment was warranted and compared the adjustments utilized by management to both internal portfolio
metrics and external macroeconomic data to support the adjustments and evaluating the trends in such adjustments. We evaluated information that corroborates or contradicts management’s identification and measurement of
qualitative factors.
|
• |
Testing the completeness and accuracy of internal loan level data used as the basis for the calculation.
|
• |
Testing the mathematical accuracy and computation of the ACL.
|
December 31,
|
||||||||
(Dollars in thousands, except share and per share amounts) | 2023 | 2022 | ||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest bearing deposits with banks
|
|
|
||||||
Total cash and cash equivalents
|
|
|
||||||
Securities available-for-sale, amortized cost $
|
|
|
||||||
Securities held-to-maturity, fair value $
|
|
|
||||||
Allowance for credit losses - securities held-to-maturity
|
( |
) | ( |
) | ||||
Total investment securities
|
|
|
||||||
Non-marketable securities
|
||||||||
Loans and leases held-for-investment, net of unearned income
|
|
|
||||||
Allowance for credit losses - loans and leases
|
(
|
)
|
(
|
)
|
||||
Loans held for investment, net
|
|
|
||||||
Bank-owned life insurance
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Deferred income tax assets
|
||||||||
Accrued interest receivable
|
||||||||
Goodwill
|
||||||||
Other intangibles
|
||||||||
Other real estate owned
|
||||||||
Other assets
|
||||||||
Total Assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Non-interest bearing
|
$
|
|
$
|
|
||||
Interest bearing:
|
||||||||
Demand
|
||||||||
Savings and money market
|
||||||||
Certificates of deposit
|
||||||||
Total interest bearing
|
|
|||||||
Total deposits
|
|
|
||||||
Subordinated debentures
|
|
|
||||||
Interest payable and other liabilities
|
||||||||
Total Liabilities
|
|
|
||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Preferred shares,
|
|
|
||||||
Common shares, $
|
||||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income/(loss), net of taxes
|
(
|
)
|
(
|
)
|
||||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(Dollars in thousands, except share and per share amounts) |
2023
|
2022
|
2021
|
|||||||||
Interest income
|
||||||||||||
Interest and fees on loans and leases
|
$
|
|
$
|
|
$
|
|
||||||
Interest and dividends on investment securities
|
|
|
|
|||||||||
Interest on deposits with others
|
||||||||||||
Total interest income
|
|
|
|
|||||||||
Interest expense
|
||||||||||||
Deposits
|
|
|
|
|||||||||
Subordinated debentures
|
|
|
|
|||||||||
Total interest expense
|
|
|
|
|||||||||
Net interest income
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Net interest income after provision for credit losses
|
|
|
|
|||||||||
Non-interest income
|
||||||||||||
Card processing
|
||||||||||||
Gain on BOLI death benefit
|
||||||||||||
Net gain on deferred compensation benefits
|
|
|
|
|||||||||
Service charges on deposit accounts
|
|
|
|
|||||||||
Increase in cash surrender value of BOLI
|
|
|
|
|||||||||
Net (loss)/gain on sale of securities available-for-sale
|
(
|
)
|
(
|
)
|
|
|||||||
Other
|
|
|
|
|||||||||
Total non-interest income
|
|
|
|
|||||||||
Non-interest expense
|
||||||||||||
Salaries and employee benefits
|
|
|
|
|||||||||
Data Processing
|
|
|
|
|||||||||
Occupancy
|
|
|
|
|||||||||
Net gain on deferred compensation benefits
|
||||||||||||
Deposit insurance
|
||||||||||||
Professional services
|
||||||||||||
Marketing
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total non-interest expense
|
|
|
|
|||||||||
INCOME BEFORE INCOME TAXES |
|
|
|
|||||||||
Income tax expense
|
|
|
|
|||||||||
NET INCOME
|
$
|
|
$
|
|
$
|
|
||||||
Earnings per common share: |
||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
||||||
Diluted
|
$ | $ | $ | |||||||||
Weighted average number of common shares
|
||||||||||||
Basic
|
||||||||||||
Diluted
|
Year Ended December 31,
|
||||||||||||
(Dollars in thousands) |
2023
|
2022
|
2021
|
|||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive income
|
||||||||||||
Unrealized gains/(losses) on available-for-sale securities
|
|
(
|
)
|
(
|
)
|
|||||||
Reclassification adjustment for losses/(gains) on available-for-sale securities
|
|
|
(
|
)
|
||||||||
Amortization of unrealized loss on securities transferred to held-to-maturity
|
( |
) | ( |
) | ( |
) | ||||||
Net unrealized gains/(losses) on available-for-sale securities
|
( |
) | ( |
) | ||||||||
Income tax (expense)/benefit
|
(
|
)
|
|
|
||||||||
Other comprehensive income/(loss), net of tax
|
|
(
|
)
|
(
|
)
|
|||||||
Total comprehensive income
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands, except share and per share amounts) |
Common
Shares
|
Amount |
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
(Loss)/Income
|
Total
|
||||||||||||||||||
Balance as of January 1, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
- |
|
|
|||||||||||||||||||||
Other comprehensive loss, net of tax
|
- |
( |
) | ( |
) | |||||||||||||||||||
Cash dividends declared ($
|
- |
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance as of December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
- |
|
|
|||||||||||||||||||||
Other comprehensive loss, net of tax
|
- |
( |
) | ( |
) | |||||||||||||||||||
Cash dividends declared ($
|
- |
(
|
)
|
(
|
)
|
|||||||||||||||||||
Repurchase of common stock
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Balance as of December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
- |
|
|
|||||||||||||||||||||
Other comprehensive income, net of tax
|
- |
|||||||||||||||||||||||
Cash dividends declared ($
|
- |
(
|
)
|
(
|
)
|
|||||||||||||||||||
Repurchase of common stock
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Balance as of December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Year Ended December 31,
|
||||||||||||
(Dollars in thousands) |
2023
|
2022
|
2021
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Provision for credit losses
|
|
|
|
|||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Net amortization of securities premiums and discounts
|
(
|
)
|
|
|
||||||||
Increase in cash surrender value of BOLI
|
( |
) | ( |
) | ( |
) | ||||||
Gain on BOLI death benefit
|
( |
) | ||||||||||
(Increase)/decrease in deferred income taxes, net
|
(
|
)
|
|
(
|
)
|
|||||||
Losses/(gains) on sale of securities available-for-sale
|
|
|
(
|
)
|
||||||||
Net changes in:
|
||||||||||||
Other assets
|
( |
) | ( |
) | ( |
) | ||||||
Other liabilities
|
||||||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Net change in loans and leases held-for-investment
|
( |
) | ( |
) | ( |
) | ||||||
Purchase of available-for-sale securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of held-to-maturity securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of non-marketable securities
|
( |
) | ||||||||||
Proceeds from sales, maturities, calls and pay downs of available-for-sale securities
|
|
|
|
|||||||||
Proceeds from maturities, calls and pay downs of held-to-maturity securities
|
|
|
|
|||||||||
Purchase of bank-owned life insurance
|
( |
) | ||||||||||
Purchase of premises and equipment
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Purchase of other investments
|
( |
) | ( |
) | ( |
) | ||||||
Redemption of other investments
|
||||||||||||
Proceeds from bank-owned life insurance
|
||||||||||||
Proceeds from sale of assets
|
|
|
|
|||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Net (decrease)/increase in deposits
|
(
|
)
|
|
|
||||||||
Cash dividends paid
|
( |
) | ( |
) | ( |
) | ||||||
Net cash used in share repurchase of common stock
|
(
|
)
|
(
|
)
|
|
|||||||
Net cash used in/provided by financing activities
|
(
|
)
|
|
|
||||||||
Net change in cash and cash equivalents
|
(
|
)
|
(
|
)
|
|
|||||||
Cash and cash equivalents, beginning of year
|
|
|
|
|||||||||
Cash and cash equivalents, end of year
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid for interest
|
$ | $ | $ | |||||||||
Income taxes paid
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental disclosures of non-cash transactions:
|
||||||||||||
Investment securities available-for-sale transferred to held-to-maturity
|
$ | $ | $ | |||||||||
Net change in unrealized gains/(losses) on securities available-for-sale
|
$ | ( |
) | $ | $ | |||||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
|
$
|
|
$
|
|
◾
|
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses.
|
◾
|
Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments.
|
◾
|
Changes in the nature and volume of the portfolio and in the terms of loans.
|
◾
|
Changes in the experience, ability, and depth of lending management and other relevant staff.
|
◾
|
Changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans.
|
◾
|
Changes in the quality of the institution’s loan review system.
|
◾
|
Changes in the value of underlying collateral for collateral-dependent loans.
|
◾
|
The existence and effect of any concentrations of credit, and changes in the level of such concentrations.
|
◾
|
The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio.
|
Building and building improvements
|
|
Leasehold improvements
|
|
Furniture and equipment
|
|
Computers, software and equipment
|
|
|
Gross Unrealized
|
|
||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
As of December 31, 2023 | ||||||||||||||||
U.S. Government-sponsored securities
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Mortgage-backed securities(1)
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations(1)
|
|
|
|
|
||||||||||||
Corporate securities
|
||||||||||||||||
Other
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
Gross Unrealized
|
||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
As of December 31, 2022 | ||||||||||||||||
U.S. Treasury notes
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
U.S. Government-sponsored securities
|
|
|
|
|
||||||||||||
Mortgage-backed securities(1)
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations(1) | ||||||||||||||||
Corporate securities
|
||||||||||||||||
Other
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Gross Unrealized
|
|||||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gains
|
Losses
|
Fair Value
|
Allowance
for Credit
Losses
|
|||||||||||||||
As of December 31, 2023
|
||||||||||||||||||||
Mortgage-backed securities(1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | |||||||||||
Collateralized mortgage obligations(1)
|
|
|
|
|
||||||||||||||||
Municipal securities
|
|
|
|
|
||||||||||||||||
Total held-to-maturity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
Gross Unrealized
|
||||||||||||||||||||
(Dollars in thousands)
|
Amortized
Cost
|
Gains
|
Losses
|
Fair Value
|
Allowance
for Credit
Losses
|
|||||||||||||||
As of December 31, 2022
|
||||||||||||||||||||
Mortgage-backed securities(1)
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | |||||||||||
Collateralized mortgage obligations(1)
|
||||||||||||||||||||
Municipal securities
|
||||||||||||||||||||
Total held-to-maturity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
December 31, 2023
|
||||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||||||||||
U.S. Government-sponsored securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Mortgage-backed securities(1)
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized mortgage obligations(1)
|
||||||||||||||||||||||||
Corporate securities
|
||||||||||||||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
December 31, 2022
|
||||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||||||||||
U.S. Treasury notes
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
U.S. Government-sponsored securities
|
|
|
|
|
|
|
|
|||||||||||||||||
Mortgage-backed securities(1)
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized mortgage obligations
|
||||||||||||||||||||||||
Corporate securities
|
||||||||||||||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||
(Dollars in thousands)
|
Municipal
securities |
Mortgage-backed
securities
|
Collateralized
mortgage
obligations
|
Total
|
||||||||||||
Allowance for credit losses - securities
|
||||||||||||||||
Beginning Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Provision for credit losses
|
|
|
|
|
||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||
(Dollars in thousands)
|
Municipal
securities |
Mortgage-backed
securities
|
Collateralized
mortgage
obligations
|
Total
|
||||||||||||
Allowance for credit losses - securities
|
||||||||||||||||
Beginning Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Provision for credit losses
|
|
|
|
|
||||||||||||
Ending Balance
|
$
|
|
$
|
|
$
|
|
$
|
|
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
(Dollars in thousands) |
Amortized Cost
|
Fair Value
|
Amortized Cost
|
Fair Value
|
||||||||||||
Securities
maturing in: |
||||||||||||||||
One year or less
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
After one year through
five years
|
|
|
|
|
||||||||||||
After five years through
ten years
|
|
|
|
|
||||||||||||
After ten years
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Held-to-Maturity
|
||||||||||||||||
Amortized Cost
|
||||||||||||||||
(Dollars in thousands)
|
AAA/AA/A
|
BBB/BB/B
|
Not Rated
|
Total
|
||||||||||||
December 31, 2023
|
||||||||||||||||
Municipal securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Held-to-Maturity
|
||||||||||||||||
Amortized Cost
|
||||||||||||||||
(Dollars in thousands)
|
AAA/AA/A
|
BBB/BB/B
|
Not Rated
|
Total
|
||||||||||||
December 31, 2022
|
||||||||||||||||
Municipal securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
(Dollars in thousands)
|
Gross Proceeds
|
Gross Gains
|
Gross Losses
|
|||||||||
2023
|
$
|
|
$
|
|
$
|
|
||||||
2022
|
$ |
|
$ |
|
$ |
|
||||||
2021
|
$ |
|
$ |
|
$ |
|
December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Loans and leases held-for-investment, net
|
||||||||
Real estate:
|
||||||||
Commercial
|
$
|
|
$
|
|
||||
Agricultural
|
|
|
||||||
Residential and home equity
|
|
|
||||||
Construction
|
|
|
||||||
Total real estate
|
|
|
||||||
Commercial & industrial
|
||||||||
Agricultural
|
|
|
||||||
Commercial leases
|
|
|
||||||
Consumer and other
|
|
|
||||||
Total gross loans and leases
|
|
|
||||||
Unearned income
|
(
|
)
|
(
|
)
|
||||
Total net loans and leases
|
|
|
||||||
Allowance for credit losses
|
(
|
)
|
(
|
)
|
||||
Total loans and leases held-for-investment, net
|
$
|
|
$
|
|
|
December 31, 2023
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Current
|
30-89 Days
Past Due
|
90+ Days Past
Due
|
Non-
accrual
|
Total Past
Due
|
Total
|
||||||||||||||||||
Loans and leases held-for-investment, net
|
||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||
Residential and home equity
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Total real estate
|
|
|
|
|
|
|
||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||
Commercial leases
|
|
|
|
|
|
|
||||||||||||||||||
Consumer and other
|
|
|
|
|
|
|
||||||||||||||||||
Total loans and leases, net
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31, 2022
|
|||||||||||||||||||||||
(Dollars in thousands)
|
Current
|
30-89 Days
Past Due
|
90+ Days Past
Due
|
Non-
accrual
|
Total Past
Due
|
Total
|
||||||||||||||||||
Loans and leases held-for-investment, net
|
||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||
Residential and home equity
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Total real estate
|
|
|
|
|
|
|
||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
||||||||||||||||||
Commercial leases
|
|
|
|
|
|
|
||||||||||||||||||
Consumer and other
|
|
|
|
|
|
|
||||||||||||||||||
Total loans and leases, net
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31,
|
|||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Non-accrual loans and leases:
|
||||||||
Non-accrual loans and leases
|
||||||||
Real estate:
|
||||||||
Commercial
|
$
|
|
$
|
|
||||
Agricultural
|
|
|
||||||
Residential and home equity
|
|
|
||||||
Construction
|
|
|
||||||
Total real estate
|
|
|
||||||
Commercial & industrial
|
|
|
||||||
Agricultural
|
|
|
||||||
Commercial leases
|
|
|
||||||
Consumer and other
|
|
|
||||||
Total non-accrual loans and leases
|
$ |
|
$ |
|
December 31, 2023
|
||||||||||||||||||||||||||||
Amortized cost associated with the following modification types:
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
Interest
Rate
reduction
|
Maturity
or term
extension
|
Principal
foregiveness
|
Payment
deferral |
Multiple
modification
types1
|
Total2
|
Percentage
of total
loans3
|
|||||||||||||||||||||
Loans and leases held-for-investment, net
|
||||||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
%
|
||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Residential and home equity
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Construction
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Total real estate
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Commercial leases
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Consumer and other
|
|
|
|
|
|
|
|
%
|
||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
%
|
(Dollars in thousands)
|
December 31, 2022
|
|||
Troubled debt restructured loans and leases:
|
||||
Accruing TDR loans and leases
|
||||
Real estate:
|
||||
Commercial
|
$
|
|
||
Agricultural
|
|
|||
Residential and home equity
|
|
|||
Construction
|
|
|||
Total real estate
|
|
|||
Commercial & industrial
|
|
|||
Agricultural
|
|
|||
Commercial leases
|
|
|||
Consumer and other
|
|
|||
Subtotal
|
|
|||
Non-accruing TDR loans and leases
|
||||
Accruing TDR loans and leases
|
||||
Real estate:
|
$
|
-
|
||
Commercial
|
|
|||
Agricultural
|
|
|||
Residential and home equity
|
|
|||
Total real estate
|
|
|||
Commercial & industrial
|
|
|||
Agricultural
|
|
|||
Commercial leases
|
|
|||
Consumer and other
|
|
|||
Subtotal
|
|
|||
Total TDR loans and leases
|
$
|
|
December 31, 2022
|
||||||||||||||||||||||||
(Dollars in thousands)
|
# of Accruing TDR
|
$ of Accruing TDR
|
# of Non-accruing TDR
|
$ of Non- accruing TDR
|
# of Total TDR
|
$ of Total TDR
|
||||||||||||||||||
Loan and lease TDRs
|
||||||||||||||||||||||||
2022
|
|
$
|
|
|
$
|
|
|
$
|
|
|||||||||||||||
2021
|
|
|
|
|
|
|
||||||||||||||||||
2020
|
|
|
|
|
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
||||||||||||||||||
Prior
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
|
$
|
|
|
$
|
|
|
$
|
|
|
December 31, 2023
|
|||||||||||||||||||
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Sub-
standard
|
Total Loans
& Leases
|
Total
Allowance
for Credit
Losses
|
|||||||||||||||
Loans and leases held for investment, net
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Residential and home equity
|
|
|
|
|
|
|||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
Total real estate
|
|
|
|
|
|
|||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Commercial leases
|
|
|
|
|
|
|||||||||||||||
Consumer and other
|
|
|
|
|
|
|||||||||||||||
Total loans and leases, net
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31, 2022
|
|||||||||||||||||||
(Dollars in thousands)
|
Pass
|
Special
Mention
|
Sub-
standard
|
Total Loans
& Leases
|
Total
Allowance
for Loan
Losses
|
|||||||||||||||
Loans and leases held for investment, net
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Residential and home equity
|
|
|
|
|
|
|||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
Total real estate
|
|
|
|
|
|
|||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Commercial leases
|
|
|
|
|
|
|||||||||||||||
Consumer and other
|
|
|
|
|
|
|||||||||||||||
Total loans and leases, net
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving Loans
Amortized Cost
|
Total
|
||||||||||||||||||||||||
Net loans and leases held for investment
|
||||||||||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Residential and home equity
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Residential and home equity
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Residential and home equity
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Construction
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total construction
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Construction
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total Real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial & industrial
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial & industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial & industrial
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31, 2023
|
|||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving Loans
Amortized Cost
|
Total
|
||||||||||||||||||||||||
Net loans and leases held for investment
|
||||||||||||||||||||||||||||||||
Commercial leases
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial leases
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial leases
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer and other
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Consumer and other
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer and other
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total net loans and leases
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total net loans and leases
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
2022
|
2021
|
2020
|
2019
|
2018
|
Prior
|
Revolving Loans
Amortized Cost
|
Total
|
||||||||||||||||||||||||
Net loans and leases held for investment
|
||||||||||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Residential and home equity
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Residential and home equity
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Residential and home equity
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Construction
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total construction
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Construction
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total Real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial & industrial
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial & industrial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial & industrial
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Agricultural
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Agricultural
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year
|
||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
2022
|
2021
|
2020
|
2019
|
2018
|
Prior
|
Revolving Loans
Amortized Cost
|
Total
|
||||||||||||||||||||||||
Net loans and leases held for investment
|
||||||||||||||||||||||||||||||||
Commercial leases
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial leases
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Commercial leases
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer and other
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Consumer and other
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Consumer and other
|
||||||||||||||||||||||||||||||||
Current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total net loans and leases
|
||||||||||||||||||||||||||||||||
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Special mention
|
|
|
|
|
|
|
|
$
|
|
|||||||||||||||||||||||
Substandard
|
|
|
|
|
|
|
|
$
|
|
|||||||||||||||||||||||
Total net loans and leases
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total current-period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31,
|
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Balance at beginning of the period
|
$
|
|
$
|
|
||||
New loans or advances during year
|
|
|
||||||
Repayments
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
|
$
|
|
|
Year Ended December 31, 2023
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Commercial &
Agricultural
R/E
|
Construction
|
Residential &
Home Equity |
Commercial
&
Agricultural
|
Commercial
Leases
|
Consumer &
Other
|
Total
|
|||||||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||||||||||||||
Balance at beginning of year
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Provision for/(recapture of) credit losses
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||
Charge-offs
|
|
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) / recoveries
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||
Balance at end of year
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Year Ended December 31, 2022
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
Commercial &
Agricultural
R/E
|
Construction
|
Residential &
Home Equity
|
Commercial
&
Agricultural
|
Commercial
Leases
|
Consumer &
Other
|
Total
|
|||||||||||||||||||||
Allowance for credit losses:
|
||||||||||||||||||||||||||||
Balance at beginning of year
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Impact of Adopting ASC 326 |
( |
) | ( |
) | ||||||||||||||||||||||||
Provision for/(recapture of) credit losses
|
|
(
|
)
|
|
|
|
(
|
)
|
|
|||||||||||||||||||
Charge-offs
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) / recoveries
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||
Balance at end of year
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
||||||||||||
(Dollars in thousands)
|
Real Estate
|
Vehicles and
Equipment
|
Total
|
|||||||||
Collateral dependent loans and leases
|
||||||||||||
Real estate:
|
||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
||||||
Agricultural
|
|
|
|
|||||||||
Residential and home equity
|
|
|
|
|||||||||
Construction
|
|
|
|
|||||||||
Total Real estate
|
|
|
|
|||||||||
Commercial & industrial
|
|
|
|
|||||||||
Agricultural
|
|
|
|
|||||||||
Commercial leases
|
|
|
|
|||||||||
Consumer and other
|
|
|
|
|||||||||
Total gross loans and leases
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||
(Dollars in thousands)
|
Real Estate
|
Vehicles and
Equipment
|
Total
|
|||||||||
Collateral dependent loans and leases
|
||||||||||||
Real estate:
|
||||||||||||
Commercial
|
$
|
|
$
|
|
$
|
|
||||||
Agricultural
|
|
|
|
|||||||||
Residential and home equity
|
|
|
|
|||||||||
Construction
|
|
|
|
|||||||||
Total Real estate
|
|
|
|
|||||||||
Commercial & industrial
|
|
|
|
|||||||||
Agricultural
|
|
|
|
|||||||||
Commercial leases
|
|
|
|
|||||||||
Consumer and other
|
|
|
|
|||||||||
Total gross loans and leases
|
$
|
|
$
|
|
$
|
|
December 31, | ||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Premises and equipment: |
||||||||
Buildings and land
|
$
|
|
$
|
|
||||
Furniture, fixtures, and equipment
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Subtotal
|
|
|
||||||
Accumulated depreciation and amortization
|
(
|
)
|
(
|
)
|
||||
Total premises and equipment
|
$
|
|
$
|
|
December 31, |
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Certificates of deposit:
|
||||||||
Certificates of deposit less than or equal to $250,000
|
$ | $ | ||||||
Certificates of deposit greater than $250,000
|
||||||||
Total certificates of deposit
|
$ |
$ |
(Dollars in thousands)
|
Amount
|
|||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Total certificates of deposit
|
$
|
|
●
|
Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
●
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in
markets that are not active, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds).
|
●
|
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company’s best information and assumptions
that a market participant would consider.
|
December 31, 2023
|
Fair Value Measurements
|
|||||||||||||||||||
(Dollars in thousands)
|
Carrying Amount
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||||
Fair valued on a recurring basis:
|
||||||||||||||||||||
Available-for-sale securities
|
||||||||||||||||||||
U.S. Government-sponsored securities
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Mortgage-backed securities
|
||||||||||||||||||||
Collateralized mortgage obligations
|
||||||||||||||||||||
Corporate securities
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Fair valued on a non-recurring basis:
|
||||||||||||||||||||
Collateral dependent loans
|
$ | $ | $ | $ | $ | |||||||||||||||
Other real estate owned
|
December 31, 2022
|
Fair Value Measurements
|
|||||||||||||||||||
(Dollars in thousands)
|
Carrying Amount
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||||
Fair valued on a recurring basis:
|
||||||||||||||||||||
Available-for-sale securities
|
||||||||||||||||||||
U.S. Treasury notes
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
U.S. Government-sponsored securities
|
|
|
|
|
|
|||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||
Collateralized mortgage obligations
|
||||||||||||||||||||
Corporate securities
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
|
||||||||||||||||||||
Fair valued on a non-recurring basis:
|
||||||||||||||||||||
Collateral dependent loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Other real estate owned
|
December 31, 2023
|
Fair Value Measurements
|
|||||||||||||||||||
(Dollars in thousands)
|
Carrying Amount
|
Level 1
|
Level 2
|
Level 3
|
Total Fair Value
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Held-to-maturity securities
|
|
|
|
|
|
|||||||||||||||
Non-marketable securities
|
|
|
|
|
|
|||||||||||||||
Loans and leases, net
|
|
|
|
|
|
|||||||||||||||
Bank-owned life insurance
|
||||||||||||||||||||
|
||||||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Total deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Subordinated debentures
|
|
|
|
|
|
December 31, 2022
|
Fair Value Measurements
|
|||||||||||||||||||
(Dollars in thousands)
|
Carrying Amount
|
Level 1
|
Level 2
|
Level 3
|
Total Fair Value
|
|||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Held-to-maturity securities
|
|
|
|
|
|
|||||||||||||||
Non-marketable securities
|
|
|
|
|
|
|||||||||||||||
Loans and leases, net
|
|
|
|
|
|
|||||||||||||||
Bank-owned life insurance
|
||||||||||||||||||||
|
||||||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Total deposits |
$ | $ | $ | $ | $ | |||||||||||||||
Subordinated debentures |
|
|
|
|
|
December 31, |
||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Commitments to extend credit, including
unsecured commitments of $
|
$
|
|
$
|
|
||||
Stand-by letters of credit, including unsecured commitments of $
|
|
|
|
Year Ended December 31,
|
|||||||
(in thousands except for percent and period data)
|
2023
|
2022
|
||||||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
|
||||||||
Operating Cash Flow from Operating Leases
|
$
|
|
$
|
|
||||
Weighted-Average Remaining Lease Term - Operating Leases, in Years
|
|
|
||||||
Weighted-Average Discount Rate - Operating Leases
|
|
%
|
|
%
|
(Dollars in thousands)
|
Amount
|
|||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
||||
2029
and beyond
|
|
|||
Total lease payments
|
|
|||
Discount
|
(
|
)
|
||
Net present value of lease liabilities
|
$
|
|
Year Ended December 31, |
||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
2021
|
|||||||||
Income tax expense / (benefit) | ||||||||||||
Current:
|
||||||||||||
Federal
|
$
|
|
$
|
|
$
|
|
||||||
State
|
|
|
|
|||||||||
Total current expense
|
|
|
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
(
|
)
|
|
|
||||||||
State
|
|
|
(
|
)
|
||||||||
Total current deferred benefit
|
(
|
)
|
|
(
|
)
|
|||||||
Provision for
income tax expense
|
$
|
|
$
|
|
$
|
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
2023
|
2022
|
2021
|
|||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||||||||
Effective income tax rate
|
||||||||||||||||||||||||
Federal statutory rate
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||||||
State taxes, net of Federal income tax benefit
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Low-income housing tax credits
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
||||||||||||
Compensation expense
|
( |
) | ( |
%) | ( |
) | ( |
%) |
||||||||||||||||
Bank owned life insurance
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
||||||||||||
Tax-exempt interest income
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
(
|
)
|
(
|
%)
|
||||||||||||
Other, net
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Total provision for income tax expense and effective
tax rate
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
|
December 31,
|
|||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Deferred income tax assets:
|
||||||||
Allowance for credit losses
|
$
|
|
$
|
|
||||
Deferred compensation
|
|
|
||||||
Unrealized losses on debt securities | ||||||||
Accrued liabilities
|
|
|
||||||
Tax credit carry forward
|
||||||||
State income taxes
|
|
|
||||||
Lease liabilities
|
|
|
||||||
Acquired net operating losses
|
|
|
||||||
Low-income housing tax investments
|
|
|
||||||
Acquired loans fair valuation
|
|
|
||||||
Acquired OREO fair valuation
|
|
|
||||||
Other
|
|
|
||||||
Total deferred income tax assets
|
|
|
||||||
|
||||||||
Deferred income tax liabilities:
|
||||||||
Commercial leasing
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Premises and equipment
|
(
|
)
|
(
|
)
|
||||
Deferred loan and lease costs | ( |
) | ( |
) | ||||
Right of use leasing asset
|
(
|
)
|
(
|
)
|
||||
Core deposit intangible asset
|
(
|
)
|
(
|
)
|
||||
Accretion on investment securities
|
(
|
)
|
(
|
)
|
||||
FHLB dividends
|
(
|
)
|
(
|
)
|
||||
Other | ( |
) | ( |
) | ||||
Prepaid assets
|
(
|
)
|
(
|
)
|
||||
Total deferred income tax liabilities
|
(
|
)
|
(
|
)
|
||||
Net deferred income tax assets
|
$
|
|
$
|
|
December 31, | ||||||||
(Dollars in thousands)
|
2023
|
2022
|
||||||
Balance Sheets | ||||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Investment in subsidiaries
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and shareholders’ equity | ||||||||
Subordinated debentures
|
$
|
|
$
|
|
||||
Other liabilities
|
|
|
||||||
Shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
2021
|
|||||||||
Statements of Income | ||||||||||||
Dividend and other income from subsidiaries
|
$
|
|
$
|
|
$
|
|
||||||
Interest and dividends
|
|
|
|
|||||||||
Total income
|
||||||||||||
Reimbursement of expenses from subsidiaries
|
||||||||||||
Other expenses
|
||||||||||||
Total expense
|
||||||||||||
Income before income taxes
|
||||||||||||
Income tax benefit
|
|
|
|
|||||||||
Equity in undistributed net income of subsidiaries
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
|
Year Ended December 31,
|
|||||||||||
(Dollars in thousands) |
2023
|
2022
|
2021
|
|||||||||
Statements of Cash Flows | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Equity in undistributed net income of the Bank
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Change in other assets and liabilities
|
||||||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Securities sold or matured
|
||||||||||||
Net cash used in investing activities
|
|
|
|
|||||||||
Cash flows from financing activities:
|
||||||||||||
Common stock repurchases
|
(
|
)
|
(
|
)
|
|
|||||||
Cash dividends paid
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net used in financing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net change in cash and cash equivalents
|
(
|
)
|
|
(
|
)
|
|||||||
Cash and cash equivalents, beginning of year
|
|
|
|
|||||||||
Cash and cash equivalents, end of year
|
$
|
|
$
|
|
$
|
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A. |
Controls and Procedures
|
/s/ Kent A. Steinwert
|
/s/ Bart R. Olson
|
|
Kent A. Steinwert
|
Bart R. Olson
|
|
Chairman, President, and Chief Executive Officer
|
Executive Vice President and Chief Financial Officer
|
(1) |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
(2) |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and
|
(3) |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
Item 10. |
Directors, Executive Officers and Corporate Governance
|
Item 11. |
Executive Compensation
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence
|
Item 14. |
Principal Accounting Fees and Services
|
Item 15. |
Exhibits and Financial Statement Schedules
|
(a) |
The following documents are filed as a part of this Form 10-K:
|
(1)
|
Financial Statements and
|
(2) |
Financial Statement schedules required to be filed by Item 8 of this Form 10-K.
|
(3) |
The following exhibits are required by Item 601 of Regulation S-K and are included as part of this Form 10-K:
|
Exhibit
Number
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation filed on Registrant’s Form 10-K for the year ended
December 31, 2022, and incorporated herein by reference.
|
3.2
|
Amended and Restated By-Laws filed on Registrant’s Form 10-K for the year ended December 31, 2022,
and incorporated herein by reference.
|
3.3
|
Certificate of Designation for the Series A Junior Participating Preferred Stock (included as Exhibit A to the
Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August 5, 2008, filed as Exhibit 4.1 below), filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is
incorporated herein by reference.
|
4.1
|
Rights Agreement between Farmers & Merchants Bancorp and Registrar and Transfer Company, dated as of August
5, 2008, including Form of Right Certificate attached thereto as Exhibit B, filed on the Registrant’s Form 10-Q for the quarter ended June 30, 2008, is incorporated herein by reference.
|
4.2
|
Amendment No. 1 to Rights Agreement between Farmers & Merchants Bancorp and Computershare Trust, N.A., as Rights
Agent, dated as of February 18, 2016, incorporated herein by reference to Exhibit 4.2 of the Registrant’s Form 8-A/A filed on February 19, 2016.
|
4.3
|
Description of F&M Bancorp Capital Stock, filed on Registrant’s Form 10-K for the year
ended December 31, 2019.
|
10.1
|
Amended and Restated Employment Agreement effective August 1, 2019, between Farmers & Merchants Bank of Central
California and Kent A. Steinwert, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2019, is incorporated herein by reference.
|
10.3
|
Amended and Restated Employment Agreement effective August 1, 2019, between Farmers & Merchants Bank of Central
California and Deborah E. Skinner, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2019, is incorporated herein by reference.
|
10.10
|
Amended and Restated Employment Agreement effective August 1, 2019, between Farmers & Merchants Bank of Central
California and Ryan J. Misasi, filed on Registrant’s Form 10-Q for the quarter ended June 30, 2019, is incorporated herein by reference.
|
10.11
|
Employment Agreement effective May 1, 2017, between Farmers & Merchants Bank of Central California and David M.
Zitterow, filed on the Registrant’s Current Report on Form 8-K dated June 30, 2017, is incorporated herein by reference.
|
10.12
|
Employment Agreement effective August 1, 2022, between Farmers & Merchants Bank of Central
California and Kyle Koelbel, filed on the Registrant’s Form 10-Q for the quarter ended September 30, 2022, is incorporated herein by reference.
|
10.15
|
Executive Retirement Plan – Performance Component as amended on
November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference.
|
10.16
|
Executive Retirement Plan – Retention Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q
for the period ended September 30, 2010, is incorporated herein by reference.
|
10.17
|
Executive Retirement Plan – Salary Component, amended and restated on November 29, 2014, filed on Registrant’s
Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
10.19
|
Executive Retirement Plan – Equity Component, amended and restated on November 29, 2014, filed on Registrant’s
Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
10.20
|
Senior Management Retention Plan, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K
for the year ended December 31, 2014, is incorporated herein by reference.
|
10.21
|
Employment Agreement effective March 27, 2023, between Farmers & Merchants Bank of Central
California and Bart R. Olson, filed on Registrant’s Form 10-Q for the quarter ended March 31, 2023, is incorporated herein by reference.
|
10.22
|
Employment Agreement effective April 1, 2023, between Farmers & Merchants Bank of Central
California and John W. Weubbe, filed on Registrant’s Form 10-Q for the quarter ended March 31, 2023, is incorporated herein by reference.
|
21
|
Subsidiaries of the Registrant, filed on Registrant’s Form 10-K for the year ended December 31, 2003,
is incorporated herein by reference.
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
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).
|
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)
|
FARMERS & MERCHANTS BANCORP
|
|
(Registrant) |
|
/s/ Kent A. Steinwert
|
|
Kent A. Steinwert
|
|
Director, Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ Kent A. Steinwert
|
Director, Chairman, President and Chief Executive Officer
|
|
Kent A. Steinwert
|
(Principal Executive Officer)
|
|
/s/ Bart R. Olson
|
Executive Vice President and Chief Financial Officer
|
|
Bart R. Olson
|
(Principal Financial and Accounting Officer)
|
|
/s/ Edward Corum, Jr.
|
Director
|
|
Edward Corum, Jr.
|
||
/s/ Stephenson K. Green | Director | |
Stephenson K. Green | ||
/s/ Gary Long | Director | |
Gary Long | ||
/s/ Kevin Sanguinetti
|
Director
|
|
Kevin Sanguinetti
|
||
/s/ Calvin Suess
|
Director
|
|
Calvin Suess
|
||
/s/ Craig James
|
Director
|
|
Craig James
|