UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ |
|
For the quarterly period ended: JuneSeptember 30, 2021
OR
☐ |
|
For the transition period from __________ to __________
000-27205
(Commission File No.)
PEOPLES BANCORP OF NORTH CAROLINA, INC. |
(Exact name of registrant as specified in its charter) |
North Carolina |
| 56-2132396 |
incorporation or organization) |
| (IRS Employer Identification No.) |
|
| |
518 West C Street, Newton, North Carolina |
| 28658 |
(Address of principal executive offices) |
| (Zip Code) |
(828) 464-5620
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name on each exchange on which registered |
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 5,789,1665,661,569 shares of common stock, outstanding at JulyOctober 31, 2021.
INDEX
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| 3 |
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| Consolidated Balance Sheets at |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Certifications |
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Statements made in this Form 10-Q, other than those concerning historical information, should be considered forward-looking statements pursuant to the safe harbor provisions of the Securities Exchange Act of 1934 and the Private Securities Litigation Act of 1995. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management and on the information available to management at the time that this Form 10-Q was prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate,” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, (1) competition in the markets served by the registrant and its subsidiaries, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectibility of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environments and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in other filings with the Securities and Exchange Commission, including but not limited to, those described in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2020.
2 |
Table of Contents |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||||||||||||||
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Consolidated Balance Sheets | Consolidated Balance Sheets | Consolidated Balance Sheets | ||||||||||||||
June 30, 2021 and December 31, 2020 | ||||||||||||||||
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September 30, 2021 and December 31, 2020 | September 30, 2021 and December 31, 2020 | |||||||||||||||
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(Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||
| ||||||||||||||||
|
| June 30, |
| December 31, |
| |||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||
|
| (Unaudited) |
| (Audited) |
|
| September 30, |
| December 31, |
| ||||||
Assets |
|
|
|
|
|
| 2021 |
| 2020 |
| ||||||
|
|
|
|
|
|
| (Unaudited) |
| (Audited) |
| ||||||
Cash and due from banks, including reserve requirements of $0 at both June 30, 2021 and December 31, 2020 |
| $ | 47,151 |
| 42,737 |
| ||||||||||
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| |||||||||||
Cash and due from banks, including reserve requirements of $0 at both September 30, 2021 and December 31, 2020 |
| $ | 42,098 |
| 42,737 |
| ||||||||||
Interest-bearing deposits |
|
| 240,158 |
|
|
| 118,843 |
|
|
| 221,210 |
|
|
| 118,843 |
|
Cash and cash equivalents |
|
| 287,309 |
|
|
| 161,580 |
|
|
| 263,308 |
|
|
| 161,580 |
|
|
|
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| ||||||
Investment securities available for sale |
| 367,529 |
| 245,249 |
|
| 402,905 |
| 245,249 |
| ||||||
Other investments |
|
| 3,758 |
|
|
| 4,155 |
|
|
| 3,725 |
|
|
| 4,155 |
|
Total securities |
|
| 371,287 |
|
|
| 249,404 |
|
|
| 406,630 |
|
|
| 249,404 |
|
|
|
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|
|
|
|
|
| ||||||
Mortgage loans held for sale |
| 5,501 |
| 9,139 |
|
| 9,086 |
| 9,139 |
| ||||||
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|
| ||||||
Loans |
| 888,360 |
| 948,639 |
|
| 891,005 |
| 948,639 |
| ||||||
Less allowance for loan losses |
|
| (9,287 | ) |
|
| (9,908 | ) |
|
| (8,963 | ) |
|
| (9,908 | ) |
Net loans |
|
| 879,073 |
|
|
| 938,731 |
|
|
| 882,042 |
|
|
| 938,731 |
|
|
|
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|
|
|
|
|
|
|
| ||||||
Premises and equipment, net |
| 17,217 |
| 18,600 |
|
| 16,625 |
| 18,600 |
| ||||||
Cash surrender value of life insurance |
| 17,164 |
| 16,968 |
|
| 17,265 |
| 16,968 |
| ||||||
Other real estate |
| 0 |
| 128 |
|
| 0 |
| 128 |
| ||||||
Right of use lease asset |
| 3,017 |
| 3,423 |
|
| 2,861 |
| 3,423 |
| ||||||
Accrued interest receivable and other assets |
|
| 19,005 |
|
|
| 18,202 |
|
|
| 18,434 |
|
|
| 18,202 |
|
Total assets |
| $ | 1,599,573 |
|
|
| 1,416,175 |
|
| $ | 1,616,251 |
|
|
| 1,416,175 |
|
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| ||||||
Liabilities and Shareholders' Equity |
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Deposits: |
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Noninterest-bearing demand |
| $ | 512,577 |
| 456,980 |
|
| $ | 529,118 |
| 456,980 |
| ||||
Interest-bearing demand, MMDA & savings |
| 775,009 |
| 657,834 |
|
| 777,721 |
| 657,834 |
| ||||||
Time, $250,000 or more |
| 26,631 |
| 25,771 |
|
| 26,357 |
| 25,771 |
| ||||||
Other time |
|
| 77,837 |
|
|
| 80,501 |
|
|
| 76,769 |
|
|
| 80,501 |
|
Total deposits |
| 1,392,054 |
| 1,221,086 |
|
| 1,409,965 |
| 1,221,086 |
| ||||||
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Securities sold under agreements to repurchase |
| 31,249 |
| 26,201 |
|
| 32,332 |
| 26,201 |
| ||||||
Junior subordinated debentures |
| 15,464 |
| 15,464 |
|
| 15,464 |
| 15,464 |
| ||||||
Lease liability |
| 3,073 |
| 3,471 |
|
| 2,922 |
| 3,471 |
| ||||||
Accrued interest payable and other liabilities |
|
| 12,359 |
|
|
| 10,054 |
|
|
| 12,026 |
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|
| 10,054 |
|
Total liabilities |
|
| 1,454,199 |
|
|
| 1,276,276 |
|
|
| 1,472,709 |
|
|
| 1,276,276 |
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| ||||||
Commitments |
| 0 |
| 0 |
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Shareholders' equity: |
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Preferred stock, no par value; authorized 5,000,000 shares; no shares issued and outstanding |
| 0 |
| 0 |
| |||||||||||
Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 5,789,166 shares at June 30, 2021 and 5,787,504 shares at December 31, 2020 |
| 56,910 |
| 56,871 |
| |||||||||||
Common stock held by deferred compensation trust, at cost; 158,985 shares at June 30, 2021 and 155,469 shares at December 31, 2020 |
| (1,901 | ) |
| (1,796 | ) | ||||||||||
Preferred stock, no par value; authorized |
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5,000,000 shares; no shares issued and outstanding |
| 0 |
| 0 |
| |||||||||||
Common stock, no par value; authorized |
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| |||||||||||
20,000,000 shares; issued and outstanding 5,661,569 shares |
|
|
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| |||||||||||
at September 30, 2021 and 5,787,504 shares at December 31, 2020 |
| 53,305 |
| 56,871 |
| |||||||||||
Common stock held by deferred compensation trust, at cost; 160,611 |
|
|
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|
| |||||||||||
shares at September 30, 2021 and 155,469 shares at December 31, 2020 |
| (1,946 | ) |
| (1,796 | ) | ||||||||||
Deferred compensation |
| 1,901 |
| 1,796 |
|
| 1,946 |
| 1,796 |
| ||||||
Retained earnings |
| 84,504 |
| 77,628 |
|
| 86,927 |
| 77,628 |
| ||||||
Accumulated other comprehensive income |
|
| 3,960 |
|
|
| 5,400 |
|
|
| 3,310 |
|
|
| 5,400 |
|
Total shareholders' equity |
|
| 145,374 |
|
|
| 139,899 |
|
|
| 143,542 |
|
|
| 139,899 |
|
|
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|
|
|
|
|
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|
|
| ||||||
Total liabilities and shareholders' equity |
| $ | 1,599,573 |
|
|
| 1,416,175 |
|
| $ | 1,616,251 |
|
|
| 1,416,175 |
|
See accompanying Notes to Consolidated Financial Statements.
3 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||||||||||||||||||||||||||||||
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Consolidated Statements of Earnings | Consolidated Statements of Earnings | Consolidated Statements of Earnings | ||||||||||||||||||||||||||||||
Three and Six Months Ended June 30, 2021 and 2020 | ||||||||||||||||||||||||||||||||
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Three and Nine Months Ended September 30, 2021 and 2020 | Three and Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||||||||||
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(Dollars in thousands, except per share amounts) | (Dollars in thousands, except per share amounts) | (Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
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| Three months ended |
| Six months ended |
|
| Three months ended |
| Nine months ended |
| ||||||||||||||||||||||
|
| June 30, |
| June 30, |
|
| September 30, |
| September 30, |
| ||||||||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| |||||||||||
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| ||||||||||||||
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Interest income: |
|
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|
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|
|
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|
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|
|
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| ||||||||||||||
Interest and fees on loans |
| $ | 11,003 |
| 10,180 |
| 21,667 |
| 20,860 |
|
| $ | 9,807 |
| 10,507 |
| 31,474 |
| 31,367 |
| ||||||||||||
Interest on due from banks |
| 48 |
| 41 |
| 83 |
| 84 |
|
| 89 |
| 19 |
| 172 |
| 103 |
| ||||||||||||||
Interest on fededal funds sold |
| 0 |
| 22 |
| 0 |
| 145 |
| |||||||||||||||||||||||
Interest on federal funds sold |
| 0 |
| 33 |
| 0 |
| 178 |
| |||||||||||||||||||||||
Interest on investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
U.S. Government sponsored enterprises |
| 682 |
| 651 |
| 1,220 |
| 1,336 |
|
| 679 |
| 528 |
| 1,899 |
| 1,864 |
| ||||||||||||||
State and political subdivisions |
| 758 |
| 684 |
| 1,397 |
| 1,325 |
|
| 825 |
| 717 |
| 2,222 |
| 2,042 |
| ||||||||||||||
Other |
|
| 26 |
|
|
| 60 |
|
|
| 72 |
|
|
| 138 |
|
|
| 21 |
|
|
| 64 |
|
|
| 93 |
|
|
| 202 |
|
Total interest income |
|
| 12,517 |
|
|
| 11,638 |
|
|
| 24,439 |
|
|
| 23,888 |
|
|
| 11,421 |
|
|
| 11,868 |
|
|
| 35,860 |
|
|
| 35,756 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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| ||||||||||||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
NOW, MMDA & savings deposits |
| 543 |
| 448 |
| 1,040 |
| 973 |
| |||||||||||||||||||||||
Interest-bearing demand, MMDA & savings |
| 577 |
| 482 |
| 1,617 |
| 1,455 |
| |||||||||||||||||||||||
Time deposits |
| 191 |
| 224 |
| 403 |
| 501 |
|
| 181 |
| 224 |
| 584 |
| 725 |
| ||||||||||||||
FHLB borrowings |
| 0 |
| 102 |
| 0 |
| 166 |
|
| 0 |
| 103 |
| 0 |
| 269 |
| ||||||||||||||
Junior subordinated debentures |
| 71 |
| 90 |
| 142 |
| 220 |
|
| 69 |
| 76 |
| 211 |
| 296 |
| ||||||||||||||
Other |
|
| 37 |
|
|
| 48 |
|
|
| 72 |
|
|
| 93 |
|
|
| 34 |
|
|
| 57 |
|
|
| 106 |
|
|
| 150 |
|
Total interest expense |
|
| 842 |
|
|
| 912 |
|
|
| 1,657 |
|
|
| 1,953 |
|
|
| 861 |
|
|
| 942 |
|
|
| 2,518 |
|
|
| 2,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net interest income |
| 11,675 |
| 10,726 |
| 22,782 |
| 21,935 |
|
| 10,560 |
| 10,926 |
| 33,342 |
| 32,861 |
| ||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Provision for (recovery of) loan losses |
|
| (226 | ) |
|
| 1,417 |
|
|
| (681 | ) |
|
| 2,938 |
|
|
| (182 | ) |
|
| 522 |
|
|
| (863 | ) |
|
| 3,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net interest income after provision for loan losses |
|
| 11,901 |
|
|
| 9,309 |
|
|
| 23,463 |
|
|
| 18,997 |
|
|
| 10,742 |
|
|
| 10,404 |
|
|
| 34,205 |
|
|
| 29,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Service charges |
| 910 |
| 718 |
| 1,836 |
| 1,826 |
|
| 1,023 |
| 809 |
| 2,859 |
| 2,635 |
| ||||||||||||||
Other service charges and fees |
| 171 |
| 162 |
| 383 |
| 355 |
|
| 187 |
| 188 |
| 570 |
| 543 |
| ||||||||||||||
Gain on sale of investment securities |
| 0 |
| 457 |
| 0 |
| 457 |
|
| 0 |
| 1,688 |
| 0 |
| 2,145 |
| ||||||||||||||
Mortgage banking income |
| 723 |
| 563 |
| 1,593 |
| 885 |
|
| 516 |
| 750 |
| 2,109 |
| 1,635 |
| ||||||||||||||
Insurance and brokerage commissions |
| 238 |
| 205 |
| 498 |
| 447 |
|
| 266 |
| 200 |
| 764 |
| 647 |
| ||||||||||||||
Appraisal management fee income |
| 2,005 |
| 1,734 |
| 3,821 |
| 3,084 |
|
| 1,954 |
| 1,871 |
| 5,775 |
| 4,955 |
| ||||||||||||||
Gain on sale of other real estate |
| 21 |
| 0 |
| 21 |
| 0 |
| |||||||||||||||||||||||
Gain on sale of other assets |
| 104 |
| 0 |
| 104 |
| 0 |
| |||||||||||||||||||||||
Gain (loss) on sale of other real estate |
| 0 |
| (47 | ) |
| 21 |
| (47 | ) | ||||||||||||||||||||||
Miscellaneous |
|
| 1,972 |
|
|
| 1,400 |
|
|
| 3,761 |
|
|
| 2,780 |
|
|
| 1,990 |
|
|
| 1,673 |
|
|
| 5,855 |
|
|
| 4,453 |
|
Total non-interest income |
|
| 6,040 |
|
|
| 5,239 |
|
|
| 11,913 |
|
|
| 9,834 |
|
|
| 6,040 |
|
|
| 7,132 |
|
|
| 17,953 |
|
|
| 16,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Salaries and employee benefits |
| 5,666 |
| 5,535 |
| 11,849 |
| 11,259 |
|
| 6,054 |
| 5,737 |
| 17,903 |
| 16,996 |
| ||||||||||||||
Occupancy |
| 1,939 |
| 1,861 |
| 3,892 |
| 3,782 |
|
| 1,999 |
| 1,943 |
| 5,891 |
| 5,725 |
| ||||||||||||||
Professional fees |
| 435 |
| 414 |
| 772 |
| 747 |
|
| 582 |
| 374 |
| 1,354 |
| 1,121 |
| ||||||||||||||
Advertising |
| 154 |
| 196 |
| 297 |
| 414 |
|
| 91 |
| 152 |
| 388 |
| 566 |
| ||||||||||||||
Debit card expense |
| 264 |
| 258 |
| 496 |
| 488 |
|
| 244 |
| 278 |
| 740 |
| 766 |
| ||||||||||||||
FDIC Insurance |
| 164 |
| 48 |
| 196 |
| 88 |
|
| 108 |
| 81 |
| 304 |
| 169 |
| ||||||||||||||
Appraisal management fee expense |
| 1,634 |
| 1,333 |
| 3,090 |
| 2,367 |
|
| 1,556 |
| 1,478 |
| 4,646 |
| 3,845 |
| ||||||||||||||
Other |
|
| 1,876 |
|
|
| 1,807 |
|
|
| 3,808 |
|
|
| 3,756 |
|
|
| 1,934 |
|
|
| 1,871 |
|
|
| 5,742 |
|
|
| 5,627 |
|
Total non-interest expense |
|
| 12,132 |
|
|
| 11,452 |
|
|
| 24,400 |
|
|
| 22,901 |
|
|
| 12,568 |
|
|
| 11,914 |
|
|
| 36,968 |
|
|
| 34,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Earnings before income taxes |
| 5,809 |
| 3,096 |
| 10,976 |
| 5,930 |
|
| 4,214 |
| 5,622 |
| 15,190 |
| 11,552 |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Income tax expense |
|
| 1,194 |
|
|
| 535 |
|
|
| 2,240 |
|
|
| 1,002 |
|
|
| 824 |
|
|
| 1,113 |
|
|
| 3,064 |
|
|
| 2,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net earnings |
| $ | 4,615 |
|
|
| 2,561 |
|
|
| 8,736 |
|
|
| 4,928 |
|
| $ | 3,390 |
|
|
| 4,509 |
|
|
| 12,126 |
|
|
| 9,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Basic net earnings per share |
| $ | 0.82 |
|
|
| 0.46 |
|
|
| 1.55 |
|
|
| 0.87 |
|
| $ | 0.61 |
|
|
| 0.80 |
|
|
| 2.16 |
|
|
| 1.67 |
|
Diluted net earnings per share |
| $ | 0.80 |
|
|
| 0.44 |
|
|
| 1.51 |
|
|
| 0.84 |
|
| $ | 0.59 |
|
|
| 0.78 |
|
|
| 2.10 |
|
|
| 1.62 |
|
Cash dividends declared per share |
| $ | 0.16 |
|
|
| 0.15 |
|
|
| 0.32 |
|
|
| 0.45 |
|
| $ | 0.17 |
|
|
| 0.15 |
|
|
| 0.49 |
|
|
| 0.60 |
|
See accompanying Notes to Consolidated Financial Statements.
4 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Consolidated Statements of Comprehensive Income | Consolidated Statements of Comprehensive Income | Consolidated Statements of Comprehensive Income | ||||||||||||||||||||||||||||||
Three and Six Months Ended June 30, 2021 and 2020 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Three and Nine Months Ended September 30, 2021 and 2020 | Three and Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
| Three months ended |
| Six months ended |
|
| Three months ended |
| Nine months ended |
| ||||||||||||||||||||||
|
| June 30, |
| June 30, |
|
| September 30, |
| September 30, |
| ||||||||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| |||||||||||
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net earnings |
| $ | 4,615 |
| 2,561 |
| 8,736 |
| 4,928 |
|
| $ | 3,390 |
| 4,509 |
| 12,126 |
| 9,437 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Unrealized holding gains (losses) on securities available for sale |
| 2,155 |
| 2,396 |
| (1,870 | ) |
| 5,110 |
|
| (844 | ) |
| 93 |
| (2,714 | ) |
| 5,204 |
| |||||||||||
Reclassification adjustment for gains on securities available for sale included in net earnings |
|
| 0 |
|
|
| (457 | ) |
|
| 0 |
|
|
| (457 | ) |
|
| 0 |
|
|
| (1,688 | ) |
|
| 0 |
|
|
| (2,145 | ) |
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Total other comprehensive income (loss), before income taxes |
|
| 2,155 |
|
|
| 1,939 |
|
|
| (1,870 | ) |
|
| 4,653 |
|
|
| (844 | ) |
|
| (1,595 | ) |
|
| (2,714 | ) |
|
| 3,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Income tax expense (benefit) related to other comprehensive income: |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Income tax expense (benefit) related to other |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
comprehensive income: |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Unrealized holding gains (losses) on securities available for sale |
| 495 |
| 550 |
| (430 | ) |
| 1,174 |
|
| (194 | ) |
| 21 |
| (624 | ) |
| 1,196 |
| |||||||||||
Reclassification adjustment for gains on securities available for sale included in net earnings |
|
| 0 |
|
|
| (105 | ) |
|
| 0 |
|
|
| (105 | ) |
|
| 0 |
|
|
| (388 | ) |
|
| 0 |
|
|
| (493 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Total income tax expense (benefit) related to other comprehensive income |
|
| 495 |
|
|
| 445 |
|
|
| (430 | ) |
|
| 1,069 |
|
|
| (194 | ) |
|
| (367 | ) |
|
| (624 | ) |
|
| 703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Total other comprehensive income (loss), net of tax |
|
| 1,660 |
|
|
| 1,494 |
|
|
| (1,440 | ) |
|
| 3,584 |
|
|
| (650 | ) |
|
| (1,228 | ) |
|
| (2,090 | ) |
|
| 2,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Total comprehensive income |
| $ | 6,275 |
|
|
| 4,055 |
|
|
| 7,296 |
|
|
| 8,512 |
|
| $ | 2,740 |
|
|
| 3,281 |
|
|
| 10,036 |
|
|
| 11,793 |
|
See accompanying Notes to Consolidated Financial Statements.
5 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Changes in Shareholders' Equity | Consolidated Statements of Changes in Shareholders' Equity | Consolidated Statements of Changes in Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three and Six Months Ended June 30, 2021 and 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Three and Nine Months Ended September 30, 2021 and 2020 | Three and Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
| |||||||||||||||||||||||||||||||||||||||||
|
| Common Stock |
| Retained |
| Deferred |
| Common Stock Held By Deferred Compensation |
| Accumulated Other Comprehensive |
|
|
|
|
|
|
| Held By |
| Accumulated |
|
| ||||||||||||||||||||||||||||||||||
|
| Shares |
| Amount |
| Earnings |
| Compensation |
| Trust |
| Income |
| Total |
|
|
|
|
|
| Deferred |
| Other |
|
| |||||||||||||||||||||||||||||||
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
|
| Common Stock |
| Retained |
| Deferred |
| Compensation |
| Comprehensive |
|
| |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
|
| Amount |
|
| Earnings |
|
| Compensation |
|
| Trust |
|
| Income |
|
| Total |
| ||||||||||||||||||||
Balance, As At December 31, 2020 |
| 5,787,504 |
| $ | 56,871 |
| 77,628 |
| 1,796 |
| (1,796 | ) |
| 5,400 |
| 139,899 |
| |||||||||||||||||||||||||||||||||||||||
|
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
| 5,787,504 |
| $ | 56,871 |
| 77,628 |
| 1,796 |
| (1,796 | ) |
| 5,400 |
| 139,899 |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (930 | ) |
| 0 |
| 0 |
| 0 |
| (930 | ) |
| - |
| 0 |
| (930 | ) |
| 0 |
| 0 |
| 0 |
| (930 | ) | ||||||||||||||||||||||||
Restricted stock units exercised |
| 1,662 |
| 39 |
| 0 |
| 0 |
| 0 |
| 0 |
| 39 |
|
| 1,662 |
| 39 |
| 0 |
| 0 |
| 0 |
| 0 |
| 39 |
| ||||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 53 |
| (53 | ) |
| 0 |
| 0 |
|
| - |
| 0 |
| 0 |
| 53 |
| (53 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 4,121 |
| 0 |
| 0 |
| 0 |
| 4,121 |
|
| - |
| 0 |
| 4,121 |
| 0 |
| 0 |
| 0 |
| 4,121 |
| ||||||||||||||||||||||||||
Change in accumulated other comprehensive income, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (3,100 | ) |
|
| (3,100 | ) | ||||||||||||||||||||||||||||
Balance, As At March 31, 2021 |
|
| 5,789,166 |
|
|
| 56,910 |
|
|
| 80,819 |
|
|
| 1,849 |
|
|
| (1,849 | ) |
|
| 2,300 |
|
|
| 140,029 |
| ||||||||||||||||||||||||||||
Change in accumulated other comprehensive loss, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (3,100 | ) |
|
| (3,100 | ) | ||||||||||||||||||||||||||||
Balance, March 31, 2021 |
|
| 5,789,166 |
|
| $ | 56,910 |
|
|
| 80,819 |
|
|
| 1,849 |
|
|
| (1,849 | ) |
|
| 2,300 |
|
|
| 140,029 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (930 | ) |
| 0 |
| 0 |
| 0 |
| (930 | ) |
| - |
| 0 |
| (930 | ) |
| 0 |
| 0 |
| 0 |
| (930 | ) | ||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 52 |
| (52 | ) |
| 0 |
| 0 |
|
| - |
| 0 |
| 0 |
| 52 |
| (52 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 4,615 |
| 0 |
| 0 |
| 0 |
| 4,615 |
|
| - |
| 0 |
| 4,615 |
| 0 |
| 0 |
| 0 |
| 4,615 |
| ||||||||||||||||||||||||||
Change in accumulated other comprehensive income, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,660 |
|
|
| 1,660 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,660 |
|
|
| 1,660 |
|
Balance, As At June 30, 2021 |
|
| 5,789,166 |
|
| $ | 56,910 |
|
|
| 84,504 |
|
|
| 1,901 |
|
|
| (1,901 | ) |
|
| 3,960 |
|
|
| 145,374 |
| ||||||||||||||||||||||||||||
Balance, June 30, 2021 |
|
| 5,789,166 |
|
| $ | 56,910 |
|
|
| 84,504 |
|
|
| 1,901 |
|
|
| (1,901 | ) |
|
| 3,960 |
|
|
| 145,374 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Balance, As At December 31, 2019 |
| 5,912,300 |
| $ | 59,813 |
| 70,663 |
| 1,588 |
| (1,588 | ) |
| 3,644 |
| 134,120 |
| |||||||||||||||||||||||||||||||||||||||
Common stock repurchase |
| (127,597 | ) |
| (3,605 | ) |
| 0 |
| 0 |
| 0 |
| 0 |
| (3,605 | ) | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (967 | ) |
| 0 |
| 0 |
| 0 |
| (967 | ) | ||||||||||||||||||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 45 |
| (45 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 3,390 |
| 0 |
| 0 |
| 0 |
| 3,390 |
| |||||||||||||||||||||||||||||||||||||||||
Change in accumulated other comprehensive loss, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (650 | ) |
|
| (650 | ) | ||||||||||||||||||||||||||||
Balance, September 30, 2021 |
|
| 5,661,569 |
|
| $ | 53,305 |
|
|
| 86,927 |
|
|
| 1,946 |
|
|
| (1,946 | ) |
|
| 3,310 |
|
|
| 143,542 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
| 5,912,300 |
| $ | 59,813 |
| 70,663 |
| 1,588 |
| (1,588 | ) |
| 3,644 |
| 134,120 |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Common stock repurchase |
| (126,800 | ) |
| (2,999 | ) |
| 0 |
| 0 |
| 0 |
| 0 |
| (2,999 | ) |
| (126,800 | ) |
| (2,999 | ) |
| 0 |
| 0 |
| 0 |
| 0 |
| (2,999 | ) | ||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (1,779 | ) |
| 0 |
| 0 |
| 0 |
| (1,779 | ) |
| - |
| 0 |
| (1,779 | ) |
| 0 |
| 0 |
| 0 |
| (1,779 | ) | ||||||||||||||||||||||||
Restricted stock units exercised |
| 2,004 |
| 57 |
| 0 |
|
|
|
|
| 0 |
| 57 |
|
| 2,004 |
| 57 |
| 0 |
| 0 |
| 0 |
| 0 |
| 57 |
| ||||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 64 |
| (64 | ) |
| 0 |
| 0 |
|
| - |
| 0 |
| 0 |
| 64 |
| (64 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 2,367 |
| 0 |
| 0 |
| 0 |
| 2,367 |
|
| - |
| 0 |
| 2,367 |
| 0 |
| 0 |
| 0 |
| 2,367 |
| ||||||||||||||||||||||||||
Change in accumulated other comprehensive income, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2,090 |
|
|
| 2,090 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2,090 |
|
|
| 2,090 |
|
Balance, As At March 31, 2020 |
|
| 5,787,504 |
|
|
| 56,871 |
|
|
| 71,251 |
|
|
| 1,652 |
|
|
| (1,652 | ) |
|
| 5,734 |
|
|
| 133,856 |
| ||||||||||||||||||||||||||||
Balance, March 31, 2020 |
|
| 5,787,504 |
|
| $ | 56,871 |
|
|
| 71,251 |
|
|
| 1,652 |
|
|
| (1,652 | ) |
|
| 5,734 |
|
|
| 133,856 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (870 | ) |
| 0 |
| 0 |
| 0 |
| (870 | ) |
| - |
| 0 |
| (870 | ) |
| 0 |
| 0 |
| 0 |
| (870 | ) | ||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 48 |
| (48 | ) |
| 0 |
| 0 |
|
| - |
| 0 |
| 0 |
| 48 |
| (48 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 2,561 |
| 0 |
| 0 |
| 0 |
| 2,561 |
|
| - |
| 0 |
| 2,561 |
| 0 |
| 0 |
| 0 |
| 2,561 |
| ||||||||||||||||||||||||||
Change in accumulated other comprehensive income, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,494 |
|
|
| 1,494 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,494 |
|
|
| 1,494 |
|
Balance, As At June 30, 2020 |
|
| 5,787,504 |
|
| $ | 56,871 |
|
|
| 72,942 |
|
|
| 1,700 |
|
|
| (1,700 | ) |
|
| 7,228 |
|
|
| 137,041 |
| ||||||||||||||||||||||||||||
Balance, June 30, 2020 |
|
| 5,787,504 |
|
| $ | 56,871 |
|
|
| 72,942 |
|
|
| 1,700 |
|
|
| (1,700 | ) |
|
| 7,228 |
|
|
| 137,041 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock |
| - |
| 0 |
| (871 | ) |
| 0 |
| 0 |
| 0 |
| (871 | ) | ||||||||||||||||||||||||||||||||||||||||
Equity incentive plan, net |
| - |
| 0 |
| 0 |
| 47 |
| (47 | ) |
| 0 |
| 0 |
| ||||||||||||||||||||||||||||||||||||||||
Net earnings |
| - |
| 0 |
| 4,509 |
| 0 |
| 0 |
| 0 |
| 4,509 |
| |||||||||||||||||||||||||||||||||||||||||
Change in accumulated other comprehensive loss, net of tax |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,228 | ) |
|
| (1,228 | ) | ||||||||||||||||||||||||||||
Balance, September 30, 2020 |
|
| 5,787,504 |
|
| $ | 56,871 |
|
|
| 76,580 |
|
|
| 1,747 |
|
|
| (1,747 | ) |
|
| 6,000 |
|
|
| 139,451 |
|
See accompanying Notes to Consolidated Financial Statements.
6 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||||||||||||||
|
|
|
| |||||||||||||
Consolidated Statements of Cash Flows | Consolidated Statements of Cash Flows | Consolidated Statements of Cash Flows | ||||||||||||||
Six Months Ended June 30, 2021 and 2020 | ||||||||||||||||
|
|
|
| |||||||||||||
Nine Months Ended September 30, 2021 and 2020 | Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||
|
|
|
| |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
|
| 2021 |
| 2020 |
|
| 2021 |
|
| 2020 |
| |||||
|
| (Unaudited) |
| (Unaudited) |
|
| (Unaudited) |
| (Unaudited) |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Net earnings |
| $ | 8,736 |
| 4,928 |
|
| $ | 12,126 |
| 9,437 |
| ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation, amortization and accretion |
| 2,549 |
| 2,017 |
|
| 3,991 |
| 3,080 |
| ||||||
Provision for (recovery of) loan losses |
| (681 | ) |
| 2,938 |
|
| (863 | ) |
| 3,460 |
| ||||
Deferred income taxes |
| (18 | ) |
| (16 | ) |
| (27 | ) |
| (25 | ) | ||||
Gain on sale of investment securities |
| 0 |
| (457 | ) |
| 0 |
| (2,145 | ) | ||||||
Gain on sale of other real estate |
| (21 | ) |
| 0 |
|
| (21 | ) |
| 0 |
| ||||
Write-down of other real estate |
| 0 |
| 47 |
| |||||||||||
Gain on sale of other assets |
| (104 | ) |
| 0 |
| ||||||||||
Restricted stock expense |
| (100 | ) |
| (75 | ) |
| (166 | ) |
| (73 | ) | ||||
Proceeds from sales of mortgage loans held for sale |
| 54,006 |
| 43,832 |
|
| 76,086 |
| 78,526 |
| ||||||
Origination of mortgage loans held for sale |
| (50,368 | ) |
| (50,009 | ) |
| (76,033 | ) |
| (83,069 | ) | ||||
Change in: |
|
|
|
|
|
|
|
|
|
| ||||||
Cash surrender value of life insurance |
| (196 | ) |
| (188 | ) |
| (297 | ) |
| (283 | ) | ||||
Right of use lease asset |
| 406 |
| 255 |
|
| 562 |
| 525 |
| ||||||
Other assets |
| 53 |
| (212 | ) |
| 416 |
| (219 | ) | ||||||
Lease liability |
| (398 | ) |
| (244 | ) |
| (549 | ) |
| (508 | ) | ||||
Other liabilities |
|
| 2,405 |
|
|
| 3,214 |
|
|
| 2,138 |
|
|
| (677 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||||
Net cash provided by operating activities |
|
| 16,373 |
|
|
| 5,983 |
|
|
| 17,259 |
|
|
| 8,076 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Purchases of investment securities available for sale |
| (141,780 | ) |
| (37,340 | ) |
| (186,793 | ) |
| (90,233 | ) | ||||
Proceeds from sales, calls and maturities of investment securities available for sale |
| 5,300 |
| 20,592 |
|
| 6,010 |
| 52,289 |
| ||||||
Proceeds from paydowns of investment securities available for sale |
| 11,073 |
| 9,305 |
|
| 18,335 |
| 14,635 |
| ||||||
Proceeds from paydowns on other investments |
| 88 |
| 88 |
|
| 132 |
| 132 |
| ||||||
Redemptions (purchases) of FHLB stock |
| 331 |
| (3,031 | ) |
| 331 |
| (3,031 | ) | ||||||
Net change in loans |
| 60,339 |
| (116,854 | ) |
| 57,552 |
| (120,781 | ) | ||||||
Purchases of premises and equipment |
| (339 | ) |
| (1,085 | ) |
| (379 | ) |
| (2,298 | ) | ||||
Purchases of bank owned life insurance |
| 0 |
| (140 | ) | |||||||||||
Proceeds from sale of other assets |
| 515 |
| 0 |
| |||||||||||
Proceeds from sale of other real estate and repossessions |
|
| 149 |
|
|
| 0 |
|
|
| 149 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net cash used by investing activities |
|
| (64,839 | ) |
|
| (128,325 | ) |
|
| (104,148 | ) |
|
| (149,427 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Net change in deposits |
| 170,968 |
| 187,812 |
|
| 188,879 |
| 219,879 |
| ||||||
Net change in securities sold under agreement to repurchase |
| 5,048 |
| 7,526 |
|
| 6,131 |
| 9,930 |
| ||||||
Proceeds from FHLB borrowings |
| 0 |
| 70,000 |
|
| 0 |
| 70,000 |
| ||||||
Repayments of FHLB borrowings |
| 0 |
| 0 |
| |||||||||||
Repayment of Junior Subordinated Debt |
| 0 |
| (155 | ) |
| 0 |
| (155 | ) | ||||||
Proceeds from Fed Funds purchased |
| 0 |
| (6,935 | ) |
| 0 |
| (6,935 | ) | ||||||
Repayments of Fed Funds purchased |
| 0 |
| 6,935 |
|
| 0 |
| 6,935 |
| ||||||
Restricted stock units exercised |
| 39 |
| 57 |
|
| 39 |
| 57 |
| ||||||
Common stock repurchased |
| 0 |
| (2,999 | ) |
| (3,605 | ) |
| (2,999 | ) | |||||
Cash dividends paid on common stock |
|
| (1,860 | ) |
|
| (2,647 | ) |
|
| (2,827 | ) |
|
| (3,520 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||||
Net cash provided by financing activities |
|
| 174,195 |
|
|
| 259,594 |
|
|
| 188,617 |
|
|
| 293,192 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net change in cash and cash equivalents |
| 125,729 |
| 137,252 |
|
| 101,728 |
| 151,841 |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents at beginning of period |
|
| 161,580 |
|
|
| 52,387 |
|
|
| 161,580 |
|
|
| 52,387 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents at end of period |
| $ | 287,309 |
|
|
| 189,639 |
|
| $ | 263,308 |
|
|
| 204,228 |
|
7 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Cash Flows, continued
Six Months Ended June 30, 2021 and 2020
(Dollars in thousands)
PEOPLES BANCORP OF NORTH CAROLINA, INC. | PEOPLES BANCORP OF NORTH CAROLINA, INC. | |||||||||||||||
|
|
|
| |||||||||||||
Consolidated Statements of Cash Flows, continued | Consolidated Statements of Cash Flows, continued | |||||||||||||||
|
|
|
| |||||||||||||
Nine Months Ended September 30, 2021 and 2020 | Nine Months Ended September 30, 2021 and 2020 | |||||||||||||||
|
|
|
| |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
|
|
|
| |||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||
|
| (Unaudited) |
| (Unaudited) |
| |||||||||||
|
|
|
|
|
| |||||||||||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
| ||||||
Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
| ||||||
Interest |
| $ | 1,653 |
| 1,909 |
|
| $ | 1,658 |
| 1,908 |
| ||||
Income taxes |
| $ | 2,000 |
| 796 |
|
| $ | 3,221 |
| 1,651 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||||
Noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
| ||||||
Change in unrealized gain on investment securities available for sale, net |
| $ | (1,440 | ) |
| 3,584 |
|
| $ | (2,090 | ) |
| 2,356 |
| ||
Issuance of accrued restricted stock units |
| $ | 39 |
| 57 |
|
| $ | 39 |
| 57 |
| ||||
Transfer of premises and equipment to other assets held for sale |
| $ | 408 |
| - |
| ||||||||||
Transfers of loans to other real estate and repossessions |
| $ | 0 |
| 175 |
| ||||||||||
Transfers of premises and equipment to other assets held for sale |
| $ | 408 |
| 0 |
|
See accompanying Notes to Consolidated Financial Statements.
8 |
Table of Contents |
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Notes to Consolidated Financial Statements (Unaudited)
(1) |
|
The consolidated financial statements include the financial statements of Peoples Bancorp of North Carolina, Inc. and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc. (“PIS”), Real Estate Advisory Services, Inc. (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC (collectively called the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The Bank formerly operated three banking offices focused on the Latino population that were operated as a division of the Bank under the name Banco de la Gente (“Banco”). Two of these offices remain open as Bank branches that offer the same banking services offered in the Bank’s other branches such as the taking of deposits and the making of loans. The consolidated financial statements in this report (other than the Consolidated Balance Sheet at December 31, 2020) are unaudited. In the opinion of management, all adjustments (none of which were other than normal accruals other than Correction of an Error noted below) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates. The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance. A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2020 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 6, 2021 Annual Meeting of Shareholders. Correction of an Error Subsequent to issuance of the Company’s December 31, 2020 Form 10-K, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability. For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020. On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $0.78 to $0.80 for the three months ended September 30, 2020 and from $1.62 to $1.67 for the nine months ended September 30, 2020. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 4 to the financial statements below. In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares. |
9 |
|
Table of Contents |
The Bank formerly operated three banking offices focused on the Latino population that were operated as a division of the Bank under the name Banco de la Gente (“Banco”). Two of these offices remain open as Bank branches that offer the same banking services offered in the Bank’s other branches such as the taking of deposits and the making of loans.
The consolidated financial statements in this report (other than the Consolidated Balance Sheet at December 31, 2020) are unaudited. In the opinion of management, all adjustments (none of which were other than normal accruals) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates.
The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance. A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2020 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 6, 2021 Annual Meeting of Shareholders.
Correction of an Error
Subsequent to issuance of the Company’s December 31, 2020 Form 10-K, it was identified that the Company’s non-qualified deferred compensation plan had not been properly recorded on the Consolidated Balance Sheets. The deferred compensation plan requires all deferral amounts and contributions to be held in a rabbi trust, and the assets held by the trust should be recorded on the Company’s financial statements along with a corresponding liability.
For balances related to mutual fund investments held in the rabbi trust, the accrued interest receivable and other assets, accrued interest payable and other liabilities, total assets, and total liabilities line items on the Consolidated Balance Sheets were adjusted as of December 31, 2020 to reflect the asset and corresponding liability associated with the portion of the rabbi trust held in mutual fund investments. This resulted in an increase to these line items of $1.3 million. Additionally, an adjustment to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets has been made to disclose the number of shares of Company stock held by the rabbi trust and the cost basis for those shares, as well as a corresponding liability for the deferred compensation as of December 31, 2020.
On the Consolidated Statements of Earnings, basic earnings per share has been adjusted from $0.44 to $0.46 for the three months ended June 30, 2020 and from $0.84 to $0.87 for the six months ended June 30, 2020. The impact of the changes in the fair value of the mutual funds held in the rabbi trust and the changes in the deferred compensation liability that were not previously recorded were not considered material to the financial statements. These changes to basic earnings per share are also reflected within Note 4 to the financial statements.
In addition to the adjustments to the presentation of the Company’s shareholders’ equity on the Consolidated Balance Sheets, the Company adjusted the presentation of the Consolidated Statements of Changes in Shareholders’ Equity for all periods presented to reflect the Company shares held within the rabbi trust, as well as the corresponding deferred compensation associated with these shares.
The Company’s Consolidated Statements of Cash Flows were adjusted for the six months ended June
The Company’s Consolidated Statements of Cash Flows were adjusted for the nine months ended September 30, 2020 in order to reflect the changes to other assets and other liabilities made on the Consolidated Balance Sheets.
Recent Accounting Pronouncements
The following table provides a summary of ASUs issued by the Financial Accounting Standards Board (“FASB”) that the Company has recently adopted. |
Recently Adopted Accounting Guidance
ASU | Description | Effective Date | Effect on Financial Statements or Other Significant Matters | |
ASU 2019-07: Codification Updates to SEC Sections | Guidance updated for various Topics of the ASC to align the guidance in various SEC sections of the ASC with the requirements of certain SEC final rules. | Effective upon issuance | The adoption of this guidance did not have a material impact on the | |
ASU 2018-13: Disclosure | Updates the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement. | January 1, 2020 | The adoption of this guidance did not have a material impact on the | |
ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606 | Clarifies the interaction between the guidance for certain collaborative arrangements and the new revenue recognition financial accounting and reporting standard. | January 1, 2020 | The adoption of this guidance did not have a material impact on the | |
ASU 2018-19: Leases (Topic 842): Codification Improvements | Provides guidance to address concerns companies had raised about an accounting exception they would lose when assessing the fair value of underlying assets under the leases standard and clarify that lessees and lessors are exempt from a certain interim disclosure requirement associated with adopting the new standard. | January 1, 2020 | The adoption of this guidance did not have a material impact on the | |
ASU 2018-14: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20) | Updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. | January 1, 2021 | The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. | |
ASU 2019-12: Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | Guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. | January 1, 2021 | The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. |
Table of Contents |
The following table provides a summary of ASU’s issued by the FASB that the Company has not adopted as of June 30, 2021, which may impact the Company’s financial statements.
ASU | Description | Effective Date | Effect on Financial Statements or Other Significant Matters | |
ASU 2020-01: Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) | Guidance to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. | January 1, 2021 | The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. | |
ASU 2021-06: Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946) | Amends SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. | Effective upon issuance | The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. | |
ASU 2020-02: Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update) | Guidance to add and amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 119 related to the new credit losses standard and comments by the SEC staff related to the revised effective date of the new leases standard. | Effective upon issuance | The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. |
11 |
Table of Contents |
The following table provides a summary of ASU’s issued by the FASB that the Company has not adopted as of September 30, 2021, which may impact the Company’s financial statements. | |
Recently Issued Accounting Guidance Not Yet Adopted |
ASU | Description | Effective Date | Effect on Financial Statements or Other Significant Matters | |
ASU 2016-13: Measurement of Credit Losses on Financial Instruments | Provides guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. | See ASU 2019-10 below. | The Company will apply this guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The Company is still evaluating the impact of this guidance on its consolidated financial statements. The Company has formed a Current Expected Credit Losses (“CECL”) committee and implemented a model from a third-party vendor for running CECL calculations. The Company is currently developing CECL model assumptions and comparing results to current allowance for loan loss calculations. The Company plans to run parallel calculations leading up to the effective date of this guidance to ensure it is prepared for implementation by the effective date. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. | |
|
|
|
| |
ASU 2018-19: Codification Improvements to Topic 326, Financial Instruments—Credit Losses | Aligns the implementation date of the topic for annual financial statements of nonpublic companies with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the topic, but rather, should be accounted for in accordance with the leases topic. | See ASU 2019-10 below. | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. | |
ASU 2019-04: Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments | Addresses unintended issues accountants flagged when implementing ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. | See ASU 2019-10 below. | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. | |
ASU 2019-05: Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief | Guidance to provide entities with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments. | See ASU 2019-10 below. | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. See ASU 2016-13 above. | |
ASU 2019-10: Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates | Guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected credit losses (CECL), leases and hedging. | January 1, 2023 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. |
|
|
|
|
ASU 2019-11: Codification Improvements to Topic 326, Financial Instruments—Credit Losses | Guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments affect a variety of Topics in the ASC. | January 1, 2023 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. |
12 |
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Table of Contents |
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|
| Effect on | |
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|
|
| |
|
|
|
| |
ASU 2020-03: Codification Improvements to Financial Instruments | Guidance to clarify that the contractual term of a net investment in a lease, determined in accordance with the leases standard, should be the contractual term used to measure expected credit losses under ASC 326. | January 1, 2023 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. | |
ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting | Guidance that provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be in effect for a limited time through December 31, 2022. | March 12, 2020 through December 31, 2022 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. |
|
|
|
| |
ASU 2020-06: Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity | Guidance to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. | January 1, 2022 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. | |
ASU 2021-05: Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate | Updated guidance that requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if certain conditions are met | January 1, 2022 | The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. |
Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures. Reclassification Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications did not have any impact on shareholders’ equity or net earnings. |
(2) | Investment Securities |
Investment securities available for sale at September 30, 2021 and December 31, 2020 are as follows: |
Reclassification
Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications did not have any impact on shareholders’ equity or net earnings.
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| September 30, 2021 |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Fair Value |
| ||||
U.S Treasuries |
| $ | 7,963 |
|
|
| 39 |
|
|
| 12 |
|
|
| 7,990 |
|
U.S. Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
sponsored enterprises |
|
| 14,566 |
|
|
| 289 |
|
|
| 178 |
|
|
| 14,677 |
|
Mortgage-backed securities |
|
| 222,526 |
|
|
| 2,427 |
|
|
| 1,648 |
|
|
| 223,305 |
|
State and political subdivisions |
|
| 153,551 |
|
|
| 4,327 |
|
|
| 945 |
|
|
| 156,933 |
|
Total |
| $ | 398,606 |
|
|
| 7,082 |
|
|
| 2,783 |
|
|
| 402,905 |
|
13 |
|
Table of Contents |
Investment securities available for sale at June 30, 2021 and December 31, 2020 are as follows:
(Dollars in thousands) |
|
|
|
|
|
|
|
| ||||||||
|
| June 30, 2021 |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Estimated Fair Value |
| ||||
U.S Treasuries |
| $ | 7,961 |
|
|
| 30 |
|
|
| 31 |
|
|
| 7,960 |
|
U.S. Government sponsored enterprises |
|
| 15,098 |
|
|
| 291 |
|
|
| 195 |
|
|
| 15,194 |
|
Mortgage-backed securities |
|
| 207,289 |
|
|
| 2,483 |
|
|
| 654 |
|
|
| 209,118 |
|
State and political subdivisions |
|
| 132,038 |
|
|
| 4,185 |
|
|
| 966 |
|
|
| 135,257 |
|
Total |
| $ | 362,386 |
|
|
| 6,989 |
|
|
| 1,846 |
|
|
| 367,529 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
| December 31, 2020 |
|
| December 31, 2020 |
| ||||||||||||||||||||||||||
|
| Amortized Cost |
| Gross Unrealized Gains |
| Gross Unrealized Losses |
| Estimated Fair Value |
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Fair Value |
| |||||||||||
U.S. Government sponsored enterprises |
| $ | 7,384 |
| 331 |
| 208 |
| 7,507 |
| ||||||||||||||||||||||
U.S. Government |
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
sponsored enterprises |
| $ | 7,384 |
| 331 |
| 208 |
| 7,507 |
| ||||||||||||||||||||||
Mortgage-backed securities |
| 143,095 |
| 2,812 |
| 593 |
| 145,314 |
|
| 143,095 |
| 2,812 |
| 593 |
| 145,314 |
| ||||||||||||||
State and political subdivisions |
|
| 87,757 |
|
|
| 4,758 |
|
|
| 87 |
|
|
| 92,428 |
|
|
| 87,757 |
|
|
| 4,758 |
|
|
| 87 |
|
|
| 92,428 |
|
Total |
| $ | 238,236 |
|
| 7,901 |
|
| 888 |
|
| 245,249 |
|
| $ | 238,236 |
|
|
| 7,901 |
|
|
| 888 |
|
|
| 245,249 |
|
The current fair value and associated unrealized losses on investments in securities with unrealized losses at JuneSeptember 30, 2021 and December 31, 2020 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| September 30, 2021 |
| |||||||||||||||||||||
|
| Less than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||
U.S. Treasuries |
| $ | 4,994 |
|
|
| 12 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4,994 |
|
|
| 12 |
|
U.S. Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
sponsored enterprises |
|
| 5,386 |
|
|
| 5 |
|
|
| 3,442 |
|
|
| 173 |
|
|
| 8,828 |
|
|
| 178 |
|
Mortgage-backed securities |
|
| 114,889 |
|
|
| 1,505 |
|
|
| 5,897 |
|
|
| 143 |
|
|
| 120,786 |
|
|
| 1,648 |
|
State and political subdivisions |
|
| 37,729 |
|
|
| 800 |
|
|
| 3,757 |
|
|
| 145 |
|
|
| 41,486 |
|
|
| 945 |
|
Total |
| $ | 162,998 |
|
|
| 2,322 |
|
|
| 13,096 |
|
|
| 461 |
|
|
| 176,094 |
|
|
| 2,783 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| December 31, 2020 |
| |||||||||||||||||||||
|
| Less than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||
U.S. Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
sponsored enterprises |
| $ | 0 |
|
|
| 0 |
|
|
| 4,193 |
|
|
| 208 |
|
|
| 4,193 |
|
|
| 208 |
|
Mortgage-backed securities |
|
| 80,827 |
|
|
| 565 |
|
|
| 4,762 |
|
|
| 28 |
|
|
| 85,589 |
|
|
| 593 |
|
State and political subdivisions |
|
| 7,126 |
|
|
| 87 |
|
|
| 0 |
|
|
| 0 |
|
|
| 7,126 |
|
|
| 87 |
|
Total |
| $ | 87,953 |
|
|
| 652 |
|
|
| 8,955 |
|
|
| 236 |
|
|
| 96,908 |
|
|
| 888 |
|
At September 30, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $2.8 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2021 tables above, one out of two U.S. Treasury securities, 35 out of 145 securities issued by state and political subdivisions and 43 out of 97 securities issued by U.S. Government sponsored enterprises contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed. The amortized cost and estimated fair value of investment securities available for sale at September 30, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. |
14 |
Table of Contents |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| June 30, 2021 |
| |||||||||||||||||||||
|
| Less than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||
U.S. Treasuries |
| $ | 4,975 |
|
|
| 31 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4,975 |
|
|
| 31 |
|
U.S. Government sponsored enterprises |
|
| 5,515 |
|
|
| 4 |
|
|
| 3,841 |
|
|
| 191 |
|
|
| 9,356 |
|
|
| 195 |
|
Mortgage-backed securities |
|
| 41,819 |
|
|
| 635 |
|
|
| 1,980 |
|
|
| 19 |
|
|
| 43,799 |
|
|
| 654 |
|
State and political subdivisions |
|
| 34,460 |
|
|
| 966 |
|
|
| 0 |
|
|
| 0 |
|
|
| 34,460 |
|
|
| 966 |
|
Total |
| $ | 86,769 |
|
|
| 1,636 |
|
|
| 5,821 |
|
|
| 210 |
|
|
| 92,590 |
|
|
| 1,846 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| December 31, 2020 |
| |||||||||||||||||||||
|
| Less than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||
U.S. Government sponsored enterprises |
| $ | 0 |
|
|
| 0 |
|
|
| 4,193 |
|
|
| 208 |
|
|
| 4,193 |
|
|
| 208 |
|
Mortgage-backed securities |
|
| 80,827 |
|
|
| 565 |
|
|
| 4,762 |
|
|
| 28 |
|
|
| 85,589 |
|
|
| 593 |
|
State and political subdivisions |
|
| 7,126 |
|
|
| 87 |
|
|
| 0 |
|
|
| 0 |
|
|
| 7,126 |
|
|
| 87 |
|
Total |
| $ | 87,953 |
|
|
| 652 |
|
|
| 8,955 |
|
|
| 236 |
|
|
| 96,908 |
|
|
| 888 |
|
At June 30, 2021, unrealized losses in the investment securities portfolio relating to debt securities totaled $1.8 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the June 30, 2021 tables above, one out of two U.S. Treasury securities, 29 out of 129 securities issued by state and political subdivisions and 21 out of 92 securities issued by U.S. Government sponsored enterprises contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed.
The amortized cost and estimated fair value of investment securities available for sale at June 30, 2021, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
June 30, 2021 |
|
|
|
| ||||
(Dollars in thousands) |
|
|
|
| ||||
|
| Amortized Cost |
|
| Estimated Fair Value |
| ||
Due within one year |
| $ | 12,347 |
|
|
| 12,511 |
|
Due from one to five years |
|
| 10,160 |
|
|
| 10,812 |
|
Due from five to ten years |
|
| 102,044 |
|
|
| 104,879 |
|
Due after ten years |
|
| 30,546 |
|
|
| 30,209 |
|
Mortgage-backed securities |
|
| 207,289 |
|
|
| 209,118 |
|
Total |
| $ | 362,386 |
|
|
| 367,529 |
|
No securities available for sale were sold during the three and six months ended June 30, 2021. Proceeds from sales of securities available for sale during the three and six months ended June 30, 2020 were $17.0 million and resulted in net gains of $457,000.
Securities with a fair value of approximately $79.3 million and $77.3 million at June 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and for other purposes as required by law.
September 30, 2021 |
|
|
|
| ||||
(Dollars in thousands) |
|
|
|
| ||||
|
| Amortized Cost |
|
| Fair Value |
| ||
Due within one year |
| $ | 11,591 |
|
|
| 11,689 |
|
Due from one to five years |
|
| 10,143 |
|
|
| 10,763 |
|
Due from five to ten years |
|
| 136,387 |
|
|
| 139,315 |
|
Due after ten years |
|
| 17,959 |
|
|
| 17,833 |
|
Mortgage-backed securities |
|
| 222,526 |
|
|
| 223,305 |
|
Total |
| $ | 398,606 |
|
|
| 402,905 |
|
No securities available for sale were sold during the three and nine months ended September 30, 2021. Proceeds from sales of securities available for sale during the three months ended September 30, 2020 were $29.2 million and resulted in net gains of $1.7 million. Proceeds from sales of securities available for sale during the nine months ended September 30, 2020 were $46.1 million and resulted in net gains of $2.1 million. Securities with a fair value of approximately $90.6 million and $77.3 million at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and for other purposes as required by law. |
(3) | Loans |
Major classifications of |
(3) Loans
Major classifications of loans at June 30, 2021 and December 31, 2020 are summarized as follows:
(Dollars in thousands) |
|
|
|
|
|
| ||
|
| June 30, 2021 |
|
| December 31, 2020 |
| ||
Real estate loans: |
|
|
|
|
|
| ||
Construction and land development |
| $ | 90,579 |
|
|
| 94,124 |
|
Single-family residential |
|
| 257,901 |
|
|
| 272,325 |
|
Single-family residential - Banco de la Gente non-traditional |
|
| 25,198 |
|
|
| 26,883 |
|
Commercial |
|
| 340,216 |
|
|
| 332,971 |
|
Multifamily and farmland |
|
| 59,142 |
|
|
| 48,880 |
|
Total real estate loans |
|
| 773,036 |
|
|
| 775,183 |
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
Commercial loans |
|
| 104,506 |
|
|
| 161,740 |
|
Farm loans |
|
| 742 |
|
|
| 855 |
|
Consumer loans |
|
| 6,519 |
|
|
| 7,113 |
|
All other loans |
|
| 3,557 |
|
|
| 3,748 |
|
|
|
|
|
|
|
|
|
|
Total loans |
|
| 888,360 |
|
|
| 948,639 |
|
|
|
|
|
|
|
|
|
|
Less allowance for loan losses |
|
| (9,287 | ) |
|
| (9,908 | ) |
|
|
|
|
|
|
|
|
|
Total net loans |
| $ | 879,073 |
|
|
| 938,731 |
|
The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake, Durham and Rowan counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below:
(Dollars in thousands) |
|
|
|
|
|
| ||
|
| September 30, 2021 |
|
| December 31, 2020 |
| ||
Real estate loans: |
|
|
|
|
|
| ||
Construction and land development |
| $ | 80,009 |
|
|
| 94,124 |
|
Single-family residential |
|
| 258,403 |
|
|
| 272,325 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 24,043 |
|
|
| 26,883 |
|
Commercial |
|
| 363,174 |
|
|
| 332,971 |
|
Multifamily and farmland |
|
| 58,856 |
|
|
| 48,880 |
|
Total real estate loans |
|
| 784,485 |
|
|
| 775,183 |
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
Commercial loans |
|
| 94,376 |
|
|
| 161,740 |
|
Farm loans |
|
| 633 |
|
|
| 855 |
|
Consumer loans |
|
| 6,321 |
|
|
| 7,113 |
|
All other loans |
|
| 5,190 |
|
|
| 3,748 |
|
|
|
|
|
|
|
|
|
|
Total loans |
|
| 891,005 |
|
|
| 948,639 |
|
|
|
|
|
|
|
|
|
|
Less allowance for loan losses |
|
| (8,963 | ) |
|
| (9,908 | ) |
|
|
|
|
|
|
|
|
|
Total net loans |
| $ | 882,042 |
|
|
| 938,731 |
|
The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake, Durham and Rowan counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below: | ||
| · | Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral. As of |
15 |
Table of Contents |
| · | Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans. As of |
|
|
|
| · | Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over a loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property. As of |
|
|
|
| · | Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid or fluctuate in value based on the success of the business. As of |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following tables present an age analysis of past due loans, by loan type, as of September 30, 2021 and December 31, 2020: |
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Loans 30-89 Days Past Due |
|
| Loans 90 or More Days Past Due |
|
| Total Past Due Loans |
|
| Total Current Loans |
|
| Total Loans |
|
| Accruing Loans 90 or More Days Past Due |
| ||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Construction and land development |
| $ | 6 |
|
|
| 0 |
|
|
| 6 |
|
|
| 80,003 |
|
|
| 80,009 |
|
|
| 0 |
|
Single-family residential |
|
| 850 |
|
|
| 230 |
|
|
| 1,080 |
|
|
| 257,323 |
|
|
| 258,403 |
|
|
| 0 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 450 |
|
|
| 39 |
|
|
| 489 |
|
|
| 23,554 |
|
|
| 24,043 |
|
|
| 0 |
|
Commercial |
|
| 28 |
|
|
| 37 |
|
|
| 65 |
|
|
| 363,109 |
|
|
| 363,174 |
|
|
| 0 |
|
Multifamily and farmland |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 58,856 |
|
|
| 58,856 |
|
|
| 0 |
|
Total real estate loans |
|
| 1,334 |
|
|
| 306 |
|
|
| 1,640 |
|
|
| 782,845 |
|
|
| 784,485 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
| 176 |
|
|
| 0 |
|
|
| 176 |
|
|
| 94,200 |
|
|
| 94,376 |
|
|
| 0 |
|
Farm loans |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 633 |
|
|
| 633 |
|
|
| 0 |
|
Consumer loans |
|
| 66 |
|
|
| 1 |
|
|
| 67 |
|
|
| 6,254 |
|
|
| 6,321 |
|
|
| 0 |
|
All other loans |
|
| 8 |
|
|
| 0 |
|
|
| 8 |
|
|
| 5,182 |
|
|
| 5,190 |
|
|
| 0 |
|
Total loans |
| $ | 1,584 |
|
|
| 307 |
|
|
| 1,891 |
|
|
| 889,114 |
|
|
| 891,005 |
|
|
| 0 |
|
16 |
Table of Contents |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
The following tables present an age analysis of past due loans, by loan type, as of June 30, 2021 and December 31, 2020:
June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Loans 30-89 Days Past Due |
|
| Loans 90 or More Days Past Due |
|
| Total Past Due Loans |
|
| Total Current Loans |
|
| Total Loans |
|
| Accruing Loans 90 or More Days Past Due |
| ||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Construction and land development |
| $ | 49 |
|
|
| 0 |
|
|
| 49 |
|
|
| 90,530 |
|
|
| 90,579 |
|
|
| 0 |
|
Single-family residential |
|
| 1,114 |
|
|
| 44 |
|
|
| 1,158 |
|
|
| 256,743 |
|
|
| 257,901 |
|
|
| 0 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 306 |
|
|
| 41 |
|
|
| 347 |
|
|
| 24,851 |
|
|
| 25,198 |
|
|
| 0 |
|
Commercial |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 340,216 |
|
|
| 340,216 |
|
|
| 0 |
|
Multifamily and farmland |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 59,142 |
|
|
| 59,142 |
|
|
| 0 |
|
Total real estate loans |
|
| 1,469 |
|
|
| 85 |
|
|
| 1,554 |
|
|
| 771,482 |
|
|
| 773,036 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
| 110 |
|
|
| 0 |
|
|
| 110 |
|
|
| 104,396 |
|
|
| 104,506 |
|
|
| 0 |
|
Farm loans |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 742 |
|
|
| 742 |
|
|
| 0 |
|
Consumer loans |
|
| 61 |
|
|
| 1 |
|
|
| 62 |
|
|
| 6,457 |
|
|
| 6,519 |
|
|
| 0 |
|
All other loans |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,557 |
|
|
| 3,557 |
|
|
| 0 |
|
Total loans |
| $ | 1,640 |
|
|
| 86 |
|
|
| 1,726 |
|
|
| 886,634 |
|
|
| 888,360 |
|
|
| 0 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| Loans 30-89 Days Past Due |
|
| Loans 90 or More Days Past Due |
|
| Total Past Due Loans |
|
| Total Current Loans |
|
| Total Loans |
|
| Accruing Loans 90 or More Days Past Due |
|
| Loans 30-89 Days Past Due |
|
| Loans 90 or More Days Past Due |
|
| Total Past Due Loans |
|
| Total Current Loans |
|
| Total Loans |
|
| Accruing Loans 90 or More Days Past Due |
| ||||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Construction and land development |
| $ | 298 |
| 0 |
| 298 |
| 93,826 |
| 94,124 |
| 0 |
|
| $ | 298 |
| 0 |
| 298 |
| 93,826 |
| 94,124 |
| 0 |
| ||||||||||||||||||||
Single-family residential |
| 3,660 |
| 270 |
| 3,930 |
| 268,395 |
| �� |
| 272,325 |
| 0 |
|
| 3,660 |
| 270 |
| 3,930 |
| 268,395 |
| 272,325 |
| 0 |
| ||||||||||||||||||||
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Banco de la Gente non-traditional |
| 3,566 |
| 105 |
| 3,671 |
| 23,212 |
| 26,883 |
| 0 |
|
| 3,566 |
| 105 |
| 3,671 |
| 23,212 |
| 26,883 |
| 0 |
| ||||||||||||||||||||||
Commercial |
| 36 |
| 0 |
| 36 |
| 332,935 |
| 332,971 |
| 0 |
|
| 36 |
| 0 |
| 36 |
| 332,935 |
| 332,971 |
| 0 |
| ||||||||||||||||||||||
Multifamily and farmland |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 48,880 |
|
|
| 48,880 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 48,880 |
|
|
| 48,880 |
|
|
| 0 |
|
Total real estate loans |
| 7,560 |
| 375 |
| 7,935 |
| 767,248 |
| 775,183 |
| 0 |
|
| 7,560 |
| 375 |
| 7,935 |
| 767,248 |
| 775,183 |
| 0 |
| ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Commercial loans |
| 0 |
| 0 |
| 0 |
| 161,740 |
| 161,740 |
| 0 |
|
| 0 |
| 0 |
| 0 |
| 161,740 |
| 161,740 |
| 0 |
| ||||||||||||||||||||||
Farm loans |
| 0 |
| 0 |
| 0 |
| 855 |
| 855 |
| 0 |
|
| 0 |
| 0 |
| 0 |
| 855 |
| 855 |
| 0 |
| ||||||||||||||||||||||
Consumer loans |
| 45 |
| 2 |
| 47 |
| 7,066 |
| 7,113 |
| 0 |
|
| 45 |
| 2 |
| 47 |
| 7,066 |
| 7,113 |
| 0 |
| ||||||||||||||||||||||
All other loans |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,748 |
|
|
| 3,748 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,748 |
|
|
| 3,748 |
|
|
| 0 |
|
Total loans |
| $ | 7,605 |
|
|
| 377 |
|
|
| 7,982 |
|
|
| 940,657 |
|
|
| 948,639 |
|
|
| 0 |
|
| $ | 7,605 |
|
|
| 377 |
|
|
| 7,982 |
|
|
| 940,657 |
|
|
| 948,639 |
|
|
| 0 |
|
The following table presents non-accrual loans as of September 30, 2021 and December 31, 2020: |
(Dollars in thousands) |
|
|
|
|
|
| ||
|
| September 30, 2021 |
|
| December 31, 2020 |
| ||
Real estate loans: |
|
|
|
|
|
| ||
Single-family residential |
| $ | 1,020 |
|
|
| 1,266 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 1,244 |
|
|
| 1,709 |
|
Commercial |
|
| 271 |
|
|
| 440 |
|
Multifamily and farmland |
|
| 109 |
|
|
| 117 |
|
Total real estate loans |
|
| 2,644 |
|
|
| 3,532 |
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
Commercial loans | �� |
| 54 |
|
|
| 212 |
|
Consumer loans |
|
| 6 |
|
|
| 14 |
|
Total |
| $ | 2,704 |
|
|
| 3,758 |
|
At each reporting period, the Bank determines which loans are impaired. Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis. An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral. The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank. REAS is staffed by certified appraisers that also perform appraisals for other companies. Factors, including the assumptions and techniques utilized by the appraiser, are considered by management. If the recorded investment in the impaired loan exceeds the measure of fair value of the collateral, a valuation allowance is recorded as a component of the allowance for loan losses. An allowance for each impaired loan that is not collateral dependent is calculated based on the present value of projected cash flows. If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses. Impaired loans under $250,000 are not individually evaluated for impairment with the exception of the Bank’s troubled debt restructured (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment. Accruing impaired loans were $18.2 million, $21.3 million and $21.0 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively. Interest income recognized on accruing impaired loans was $754,000, $1.2 million, and $934,000 for the nine months ended September 30, 2021, the year ended December 31, 2020 and the nine months ended September 30, 2020, respectively. Interest income recognized on accruing impaired loans was $217,000 and $299,000 for the three months ended September 30, 2021 and 2020, respectively. No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual. |
17 |
Table of Contents |
The following table presents non-accrual loans as of June 30, 2021 and December 31, 2020:
The following table presents impaired loans as of September 30, 2021: |
(Dollars in thousands) |
|
|
|
|
|
| ||
|
| June 30, 2021 |
|
| December 31, 2020 |
| ||
Real estate loans: |
|
|
|
|
|
| ||
Single-family residential |
|
| 1,273 |
|
|
| 1,266 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 1,516 |
|
|
| 1,709 |
|
Commercial |
|
| 412 |
|
|
| 440 |
|
Multifamily and farmland |
|
| 111 |
|
|
| 117 |
|
Total real estate loans |
|
| 3,312 |
|
|
| 3,532 |
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
Commercial loans |
|
| 59 |
|
|
| 212 |
|
Consumer loans |
|
| 7 |
|
|
| 14 |
|
Total |
| $ | 3,378 |
|
|
| 3,758 |
|
At each reporting period, the Bank determines which loans are impaired. Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis. An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral. The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank. REAS is staffed by certified appraisers that also perform appraisals for other companies. Factors, including the assumptions and techniques utilized by the appraiser, are considered by management. If the recorded investment in the impaired loan exceeds the measure of fair value of the collateral, a valuation allowance is recorded as a component of the allowance for loan losses. An allowance for each impaired loan that is not collateral dependent is calculated based on the present value of projected cash flows. If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses. Impaired loans under $250,000 are not individually evaluated for impairment with the exception of the Bank’s troubled debt restructured (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment. Accruing impaired loans were $19.7 million, $21.3 million and $22.5 million at June 30, 2021, December 31, 2020 and June 30, 2020, respectively. Interest income recognized on accruing impaired loans was $536,000, $1.2 million, and $635,000 for the six months ended June 30, 2021, the year ended December 31, 2020 and the six months ended June 30, 2020, respectively. Interest income recognized on accruing impaired loans was $253,000 and $306,000 for the three months ended June 30, 2021 and 2020, respectively. No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual.
The following table presents impaired loans as of June 30, 2021:
June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
| Unpaid Contractual Principal Balance |
|
| Recorded Investment With No Allowance |
|
| Recorded Investment With Allowance |
|
| Recorded Investment in Impaired Loans |
|
| Related Allowance |
|
| Unpaid Contractual Principal Balance |
|
| Recorded Investment With No Allowance |
|
| Recorded Investment With Allowance |
|
| Recorded Investment in Impaired Loans |
|
| Related Allowance |
| ||||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Construction and land development |
| $ | 78 |
| 0 |
| 78 |
| 78 |
| 3 |
|
| $ | 75 |
| 0 |
| 75 |
| 75 |
| 3 |
| ||||||||||||||||
Single-family residential |
| 4,886 |
| 277 |
| 4,417 |
| 4,694 |
| 31 |
|
| 4,506 |
| 275 |
| 4,021 |
| 4,296 |
| 80 |
| ||||||||||||||||||
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Banco de la Gente non-traditional |
| 12,692 |
| 0 |
| 12,075 |
| 12,075 |
| 806 |
|
| 12,269 |
| 0 |
| 11,383 |
| 11,383 |
| 724 |
| ||||||||||||||||||
Commercial |
| 2,466 |
| 441 |
| 1,987 |
| 2,428 |
| 15 |
|
| 2,229 |
| 439 |
| 1,692 |
| 2,131 |
| 12 |
| ||||||||||||||||||
Multifamily and farmland |
|
| 116 |
|
|
| 0 |
|
|
| 111 |
|
|
| 111 |
|
|
| 0 |
|
|
| 115 |
|
|
| 0 |
|
|
| 109 |
|
|
| 109 |
|
|
| 0 |
|
Total impaired real estate loans |
| 20,238 |
| 718 |
| 18,668 |
| 19,386 |
| 855 |
|
| 19,194 |
| 714 |
| 17,280 |
| 17,994 |
| 819 |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Commercial loans |
| 319 |
| 59 |
| 199 |
| 258 |
| 3 |
|
| 299 |
| 54 |
| 183 |
| 237 |
| 3 |
| ||||||||||||||||||
Consumer loans |
|
| 15 |
|
|
| 0 |
|
|
| 11 |
|
|
| 11 |
|
|
| 0 |
|
|
| 12 |
|
|
| 0 |
|
|
| 8 |
|
|
| 8 |
|
|
| 0 |
|
Total impaired loans |
| $ | 20,572 |
|
|
| 777 |
|
|
| 18,878 |
|
|
| 19,655 |
|
|
| 858 |
|
| $ | 19,505 |
|
|
| 768 |
|
|
| 17,471 |
|
|
| 18,239 |
|
|
| 822 |
|
The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2021 and 2020. |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| Three months ended |
|
| Nine months ended |
| ||||||||||||||||||||||||||
|
| September 30, 2021 |
|
| September 30, 2020 |
|
| September 30, 2021 |
|
| September 30, 2020 |
| ||||||||||||||||||||
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
| ||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Construction and land development |
| $ | 76 |
|
|
| 1 |
|
|
| 153 |
|
|
| 0 |
|
|
| 91 |
|
|
| 5 |
|
|
| 123 |
|
|
| 7 |
|
Single-family residential |
|
| 5,875 |
|
|
| 49 |
|
|
| 5,107 |
|
|
| 63 |
|
|
| 5,683 |
|
|
| 166 |
|
|
| 4,451 |
|
|
| 181 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco de la Gente stated income |
|
| 10,349 |
|
|
| 140 |
|
|
| 13,402 |
|
|
| 197 |
|
|
| 11,090 |
|
|
| 477 |
|
|
| 13,785 |
|
|
| 617 |
|
Commercial |
|
| 2,280 |
|
|
| 20 |
|
|
| 2,665 |
|
|
| 31 |
|
|
| 2,617 |
|
|
| 85 |
|
|
| 2,772 |
|
|
| 103 |
|
Multifamily and farmland |
|
| 110 |
|
|
| 2 |
|
|
| 0 |
|
|
| 0 |
|
|
| 113 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
Total impaired real estate loans |
|
| 18,690 |
|
|
| 212 |
|
|
| 21,327 |
|
|
| 291 |
|
|
| 19,594 |
|
|
| 737 |
|
|
| 21,131 |
|
|
| 908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
| 248 |
|
|
| 5 |
|
|
| 494 |
|
|
| 7 |
|
|
| 330 |
|
|
| 16 |
|
|
| 553 |
|
|
| 22 |
|
Consumer loans |
|
| 9 |
|
|
| 0 |
|
|
| 74 |
|
|
| 1 |
|
|
| 19 |
|
|
| 1 |
|
|
| 57 |
|
|
| 4 |
|
Total impaired loans |
| $ | 18,947 |
|
|
| 217 |
|
|
| 21,895 |
|
|
| 299 |
|
|
| 19,943 |
|
|
| 754 |
|
|
| 21,741 |
|
|
| 934 |
|
18 |
Table of Contents |
The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2021 and 2020.
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| Three months ended |
|
| Six months ended |
| ||||||||||||||||||||||||||
|
| June 30, 2021 |
|
| June 30, 2020 |
|
| June 30, 2021 |
|
| June 30, 2020 |
| ||||||||||||||||||||
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
|
| Average Balance |
|
| Interest Income Recognized |
| ||||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Construction and land development |
| $ | 91 |
|
|
| 1 |
|
|
| 157 |
|
|
| 4 |
|
|
| 97 |
|
|
| 3 |
|
|
| 166 |
|
|
| 7 |
|
Single-family residential |
|
| 6,100 |
|
|
| 57 |
|
|
| 4,778 |
|
|
| 59 |
|
|
| 5,731 |
|
|
| 118 |
|
|
| 4,734 |
|
|
| 118 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco de la Gente stated income |
|
| 10,835 |
|
|
| 160 |
|
|
| 13,856 |
|
|
| 193 |
|
|
| 11,407 |
|
|
| 337 |
|
|
| 14,028 |
|
|
| 421 |
|
Commercial |
|
| 2,682 |
|
|
| 29 |
|
|
| 3,115 |
|
|
| 43 |
|
|
| 2,779 |
|
|
| 64 |
|
|
| 2,700 |
|
|
| 72 |
|
Multifamily and farmland |
|
| 113 |
|
|
| 1 |
|
|
| 0 |
|
|
| 0 |
|
|
| 114 |
|
|
| 2 |
|
|
| 0 |
|
|
| 0 |
|
Total impaired real estate loans |
|
| 19,821 |
|
|
| 248 |
|
|
| 21,906 |
|
|
| 299 |
|
|
| 20,128 |
|
|
| 524 |
|
|
| 21,628 |
|
|
| 618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
| 315 |
|
|
| 5 |
|
|
| 643 |
|
|
| 6 |
|
|
| 362 |
|
|
| 11 |
|
|
| 487 |
|
|
| 15 |
|
Farm loans (non RE) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
Consumer loans |
|
| 15 |
|
|
| 0 |
|
|
| 77 |
|
|
| 1 |
|
|
| 22 |
|
|
| 1 |
|
|
| 83 |
|
|
| 2 |
|
Total impaired loans |
| $ | 20,151 |
|
|
| 253 |
|
|
| 22,626 |
|
|
| 306 |
|
|
| 20,512 |
|
|
| 536 |
|
|
| 22,198 |
|
|
| 635 |
|
| The following table presents impaired loans as of and for the year ended December 31, 2020: |
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
| Unpaid Contractual Principal Balance |
|
| Recorded Investment With No Allowance |
|
| Recorded Investment With Allowance |
|
| Recorded Investment in Impaired Loans |
|
| Related Allowance |
|
| Average Outstanding Impaired Loans |
|
| Interest Income Recognized |
| |||||||
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Construction and land development |
| $ | 108 |
|
|
| 0 |
|
|
| 108 |
|
|
| 108 |
|
|
| 4 |
|
|
| 134 |
|
|
| 8 |
|
Single-family residential |
|
| 5,302 |
|
|
| 379 |
|
|
| 4,466 |
|
|
| 4,845 |
|
|
| 33 |
|
|
| 4,741 |
|
|
| 262 |
|
Single-family residential - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco de la Gente non-traditional |
|
| 13,417 |
|
|
| 0 |
|
|
| 12,753 |
|
|
| 12,753 |
|
|
| 862 |
|
|
| 13,380 |
|
|
| 798 |
|
Commercial |
|
| 2,999 |
|
|
| 1,082 |
|
|
| 1,891 |
|
|
| 2,973 |
|
|
| 14 |
|
|
| 2,940 |
|
|
| 139 |
|
Multifamily and farmland |
|
| 119 |
|
|
| 0 |
|
|
| 117 |
|
|
| 117 |
|
|
| 0 |
|
|
| 29 |
|
|
| 6 |
|
Total impaired real estate loans |
|
| 21,945 |
|
|
| 1,461 |
|
|
| 19,335 |
|
|
| 20,796 |
|
|
| 913 |
|
|
| 21,224 |
|
|
| 1,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans not secured by real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
| 515 |
|
|
| 211 |
|
|
| 244 |
|
|
| 455 |
|
|
| 5 |
|
|
| 564 |
|
|
| 32 |
|
Consumer loans |
|
| 41 |
|
|
| 0 |
|
|
| 37 |
|
|
| 37 |
|
|
| 1 |
|
|
| 60 |
|
|
| 5 |
|
Total impaired loans |
| $ | 22,501 |
|
|
| 1,672 |
|
|
| 19,616 |
|
|
| 21,288 |
|
|
| 919 |
|
|
| 21,848 |
|
|
| 1,250 |
|
Impaired loans collectively evaluated for impairment totaled $5.7 million and $6.2 million at June 30, 2021 and 2020, respectively and are included in the tables above.
The following tables present changes in the allowance for loan losses for the three and six months ended June
Impaired loans collectively evaluated for impairment totaled $5.1 million and $5.8 million at September 30, 2021 and December 31, 2020, respectively and are included in the tables above. Allowance on impaired loans collectively evaluated for impairment totaled $45,000 and $61,000 at September 30, 2021 and December 31, 2020, respectively. The following tables present changes in the allowance for loan losses for the three and nine months ended September 30, 2021 and 2020. Unallocated balances in the following tables include allowance for loan losses based on qualitative factors such as economic outlook, concentrations of credit, interest rate risk and loan volume trends. PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the SBA. PPP loans are classified as risk grade 3. |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Real Estate Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| Construction and Land Development |
|
| Single-Family Residential |
|
| Single-Family Residential - Banco de la Gente Non-traditional |
|
| Commercial |
|
| Multifamily and Farmland |
|
| Commercial |
|
| Farm |
|
| Consumer and All Other |
|
| Unallocated |
|
| Total |
| ||||||||||
Nine months ended September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Beginning balance |
| $ | 1,196 |
|
|
| 1,843 |
|
|
| 1,052 |
|
|
| 2,212 |
|
|
| 122 |
|
|
| 1,345 |
|
|
| 0 |
|
|
| 128 |
|
|
| 2,010 |
|
|
| 9,908 |
|
Charge-offs |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (293 | ) |
|
| 0 |
|
|
| (249 | ) |
|
| 0 |
|
|
| (542 | ) |
Recoveries |
|
| 121 |
|
|
| 165 |
|
|
| 0 |
|
|
| 50 |
|
|
| 3 |
|
|
| 7 |
|
|
| 0 |
|
|
| 114 |
|
|
| 0 |
|
|
| 460 |
|
Provision |
|
| (421 | ) |
|
| (306 | ) |
|
| (162 | ) |
|
| 46 |
|
|
| 22 |
|
|
| (153 | ) |
|
| 0 |
|
|
| 98 |
|
|
| 13 |
|
|
| (863 | ) |
Ending balance |
| $ | 896 |
|
|
| 1,702 |
|
|
| 890 |
|
|
| 2,308 |
|
|
| 147 |
|
|
| 906 |
|
|
| 0 |
|
|
| 91 |
|
|
| 2,023 |
|
|
| 8,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 1,038 |
|
|
| 1,723 |
|
|
| 980 |
|
|
| 2,180 |
|
|
| 148 |
|
|
| 996 |
|
|
| 0 |
|
|
| 89 |
|
|
| 2,133 |
|
|
| 9,287 |
|
Charge-offs |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (215 | ) |
|
| 0 |
|
|
| (91 | ) |
|
| 0 |
|
|
| (306 | ) |
Recoveries |
|
| 31 |
|
|
| 86 |
|
|
| 0 |
|
|
| 2 |
|
|
| 4 |
|
|
| 1 |
|
|
| - |
|
|
| 40 |
|
|
| 0 |
|
|
| 164 |
|
Provision |
|
| (173 | ) |
|
| (107 | ) |
|
| (90 | ) |
|
| 126 |
|
|
| (5 | ) |
|
| 124 |
|
|
| 0 |
|
|
| 53 |
|
|
| (110 | ) |
|
| (182 | ) |
Ending balance |
| $ | 896 |
|
|
| 1,702 |
|
|
| 890 |
|
|
| 2,308 |
|
|
| 147 |
|
|
| 906 |
|
|
| 0 |
|
|
| 91 |
|
|
| 2,023 |
|
|
| 8,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 1 |
|
|
| 58 |
|
|
| 710 |
|
|
| 7 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 776 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
|
| 895 |
|
|
| 1,644 |
|
|
| 180 |
|
|
| 2,301 |
|
|
| 147 |
|
|
| 906 |
|
|
| 0 |
|
|
| 91 |
|
|
| 2,023 |
|
|
| 8,187 |
|
Ending balance |
| $ | 896 |
|
|
| 1,702 |
|
|
| 890 |
|
|
| 2,308 |
|
|
| 147 |
|
|
| 906 |
|
|
| 0 |
|
|
| 91 |
|
|
| 2,023 |
|
|
| 8,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans at September 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
| $ | 80,009 |
|
|
| 258,403 |
|
|
| 24,043 |
|
|
| 363,174 |
|
|
| 58,856 |
|
|
| 94,376 |
|
|
| 633 |
|
|
| 11,511 |
|
|
| 0 |
|
|
| 891,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 6 |
|
|
| 1,398 |
|
|
| 10,236 |
|
|
| 1,450 |
|
|
| 0 |
|
|
| 54 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 13,144 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 80,003 |
|
|
| 257,005 |
|
|
| 13,807 |
|
|
| 361,724 |
|
|
| 58,856 |
|
|
| 94,322 |
|
|
| 633 |
|
|
| 11,511 |
|
|
| 0 |
|
|
| 877,861 |
|
19 |
Table of Contents |
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
|
| Real Estate Loans |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
|
| Construction and Land Development |
|
| Single-Family Residential |
|
| Single-Family Residential - Banco de la Gente Non-traditional |
|
| Commercial |
|
| Multifamily and Farmland |
|
| Commercial |
|
| Farm |
|
| Consumer and All Other |
|
| Unallocated |
|
| Total |
| ||||||||||
Six months ended June 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Beginning balance |
| $ | 1,196 |
|
|
| 1,843 |
|
|
| 1,052 |
|
|
| 2,212 |
|
|
| 122 |
|
|
| 1,345 |
|
|
| 0 |
|
|
| 128 |
|
|
| 2,010 |
|
|
| 9,908 |
|
Charge-offs |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (78 | ) |
|
| 0 |
|
|
| (158 | ) |
|
| 0 |
|
|
| (236 | ) |
Recoveries |
|
| 90 |
|
|
| 78 |
|
|
| 0 |
|
|
| 48 |
|
|
| 0 |
|
|
| 6 |
|
|
| 0 |
|
|
| 74 |
|
|
| 0 |
|
|
| 296 |
|
Provision |
|
| (248 | ) |
|
| (198 | ) |
|
| (72 | ) |
|
| (80 | ) |
|
| 26 |
|
|
| (277 | ) |
|
| 0 |
|
|
| 45 |
|
|
| 123 |
|
|
| (681 | ) |
Ending balance |
| $ | 1,038 |
|
|
| 1,723 |
|
|
| 980 |
|
|
| 2,180 |
|
|
| 148 |
|
|
| 996 |
|
|
| 0 |
|
|
| 89 |
|
|
| 2,133 |
|
|
| 9,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 1,061 |
|
|
| 1,850 |
|
|
| 1,033 |
|
|
| 2,252 |
|
|
| 145 |
|
|
| 1,244 |
|
|
| 0 |
|
|
| 91 |
|
|
| 1,856 |
|
|
| 9,532 |
|
Charge-offs |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (78 | ) |
|
| 0 |
|
|
| (73 | ) |
|
| 0 |
|
|
| (151 | ) |
Recoveries |
|
| 40 |
|
|
| 18 |
|
|
| 0 |
|
|
| 36 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 38 |
|
|
| 0 |
|
|
| 132 |
|
Provision |
|
| (63 | ) |
|
| (145 | ) |
|
| (53 | ) |
|
| (108 | ) |
|
| 3 |
|
|
| (170 | ) |
|
| 0 |
|
|
| 33 |
|
|
| 277 |
|
|
| (226 | ) |
Ending balance |
| $ | 1,038 |
|
|
| 1,723 |
|
|
| 980 |
|
|
| 2,180 |
|
|
| 148 |
|
|
| 996 |
|
|
| 0 |
|
|
| 89 |
|
|
| 2,133 |
|
|
| 9,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at June 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 1 |
|
|
| 5 |
|
|
| 790 |
|
|
| 10 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 806 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
|
| 1,037 |
|
|
| 1,718 |
|
|
| 190 |
|
|
| 2,170 |
|
|
| 148 |
|
|
| 996 |
|
|
| 0 |
|
|
| 89 |
|
|
| 2,133 |
|
|
| 8,481 |
|
Ending balance |
| $ | 1,038 |
|
|
| 1,723 |
|
|
| 980 |
|
|
| 2,180 |
|
|
| 148 |
|
|
| 996 |
|
|
| 0 |
|
|
| 89 |
|
|
| 2,133 |
|
|
| 9,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans at June 30, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
| $ | 90,579 |
|
|
| 257,901 |
|
|
| 25,198 |
|
|
| 340,216 |
|
|
| 59,142 |
|
|
| 104,506 |
|
|
| 742 |
|
|
| 10,076 |
|
|
| 0 |
|
|
| 888,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually evaluated for impairment |
| $ | 6 |
|
|
| 1,426 |
|
|
| 10,722 |
|
|
| 1,741 |
|
|
| 0 |
|
|
| 59 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 13,954 |
|
Ending balance: collectively evaluated for impairment |
| $ | 90,573 |
|
|
| 256,475 |
|
|
| 14,476 |
|
|
| 338,475 |
|
|
| 59,142 |
|
|
| 104,447 |
|
|
| 742 |
|
|
| 10,076 |
|
|
| 0 |
|
|
| 874,406 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
|
| Real Estate Loans |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
|
| Construction and Land Development |
|
| Single-Family Residential |
|
| Single-Family Residential - Banco de la Gente Non-traditional |
|
| Commercial |
|
| Multifamily and Farmland |
|
| Commercial |
|
| Farm |
|
| Consumer and All Other |
|
| Unallocated |
|
| Total |
| ||||||||||
Six months ended June 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Beginning balance |
| $ | 694 |
|
|
| 1,274 |
|
|
| 1,073 |
|
|
| 1,305 |
|
|
| 120 |
|
|
| 688 |
|
|
| 0 |
|
|
| 138 |
|
|
| 1,388 |
|
|
| 6,680 |
|
Charge-offs |
|
| (5 | ) |
|
| 0 |
|
|
| 0 |
|
|
| (7 | ) |
|
| 0 |
|
|
| (109 | ) |
|
| 0 |
|
|
| (257 | ) |
|
| 0 |
|
|
| (378 | ) |
Recoveries |
|
| 2 |
|
|
| 25 |
|
|
| 0 |
|
|
| 34 |
|
|
| 0 |
|
|
| 26 |
|
|
| 0 |
|
|
| 106 |
|
|
| 0 |
|
|
| 193 |
|
Provision |
|
| 840 |
|
|
| 514 |
|
|
| 41 |
|
|
| 719 |
|
|
| (5 | ) |
|
| 375 |
|
|
| 0 |
|
|
| 175 |
|
|
| 279 |
|
|
| 2,938 |
|
Ending balance |
| $ | 1,531 |
|
|
| 1,813 |
|
|
| 1,114 |
|
|
| 2,051 |
|
|
| 115 |
|
|
| 980 |
|
|
| 0 |
|
|
| 162 |
|
|
| 1,667 |
|
|
| 9,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 1,293 |
|
|
| 1,713 |
|
|
| 1,084 |
|
|
| 1,799 |
|
|
| 118 |
|
|
| 1,017 |
|
|
| 0 |
|
|
| 180 |
|
|
| 908 |
|
|
| 8,112 |
|
Charge-offs |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (78 | ) |
|
| 0 |
|
|
| (90 | ) |
|
| 0 |
|
|
| (168 | ) |
Recoveries |
|
| 0 |
|
|
| 9 |
|
|
| 0 |
|
|
| 11 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 52 |
|
|
| 0 |
|
|
| 72 |
|
Provision |
|
| 238 |
|
|
| 91 |
|
|
| 30 |
|
|
| 241 |
|
|
| (3 | ) |
|
| 41 |
|
|
| 0 |
|
|
| 20 |
|
|
| 759 |
|
|
| 1,417 |
|
Ending balance |
| $ | 1,531 |
|
|
| 1,813 |
|
|
| 1,114 |
|
|
| 2,051 |
|
|
| 115 |
|
|
| 980 |
|
|
| 0 |
|
|
| 162 |
|
|
| 1,667 |
|
|
| 9,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at June 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 2 |
|
|
| 5 |
|
|
| 894 |
|
|
| 11 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 912 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
|
| 1,529 |
|
|
| 1,808 |
|
|
| 220 |
|
|
| 2,040 |
|
|
| 115 |
|
|
| 980 |
|
|
| 0 |
|
|
| 162 |
|
|
| 1,667 |
|
|
| 8,521 |
|
Ending balance |
| $ | 1,531 |
|
|
| 1,813 |
|
|
| 1,114 |
|
|
| 2,051 |
|
|
| 115 |
|
|
| 980 |
|
|
| 0 |
|
|
| 162 |
|
|
| 1,667 |
|
|
| 9,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans at June 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
| $ | 110,077 |
|
|
| 268,174 |
|
|
| 29,325 |
|
|
| 303,828 |
|
|
| 49,465 |
|
|
| 188,398 |
|
|
| 887 |
|
|
| 16,389 |
|
|
| 0 |
|
|
| 966,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 8 |
|
|
| 1,657 |
|
|
| 12,297 |
|
|
| 2,084 |
|
|
| 0 |
|
|
| 275 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 16,321 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 110,069 |
|
|
| 266,517 |
|
|
| 17,028 |
|
|
| 301,744 |
|
|
| 49,465 |
|
|
| 188,123 |
|
|
| 887 |
|
|
| 16,389 |
|
|
| 0 |
|
|
| 950,222 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Real Estate Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| Construction and Land Development |
|
| Single-Family Residential |
|
| Single-Family Residential - Banco de la Gente Non-traditional |
|
| Commercial |
|
| Multifamily and Farmland |
|
| Commercial |
|
| Farm |
|
| Consumer and All Other |
|
| Unallocated |
|
| Total |
| ||||||||||
Nine months ended September 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Beginning balance |
| $ | 694 |
|
|
| 1,274 |
|
|
| 1,073 |
|
|
| 1,305 |
|
|
| 120 |
|
|
| 688 |
|
|
| 0 |
|
|
| 138 |
|
|
| 1,388 |
|
|
| 6,680 |
|
Charge-offs |
|
| (5 | ) |
|
| (65 | ) |
|
| 0 |
|
|
| (7 | ) |
|
| 0 |
|
|
| (109 | ) |
|
| 0 |
|
|
| (343 | ) |
|
| 0 |
|
|
| (529 | ) |
Recoveries |
|
| 2 |
|
|
| 59 |
|
|
| 0 |
|
|
| 45 |
|
|
| 0 |
|
|
| 27 |
|
|
| 0 |
|
|
| 148 |
|
|
| - |
|
|
| 281 |
|
Provision |
|
| 573 |
|
|
| 482 |
|
|
| (11 | ) |
|
| 751 |
|
|
| (4 | ) |
|
| 355 |
|
|
| 0 |
|
|
| 254 |
|
|
| 1,060 |
|
|
| 3,460 |
|
Ending balance |
| $ | 1,264 |
|
|
| 1,750 |
|
|
| 1,062 |
|
|
| 2,094 |
|
|
| 116 |
|
|
| 961 |
|
|
| 0 |
|
|
| 197 |
|
|
| 2,448 |
|
|
| 9,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 1,531 |
|
|
| 1,813 |
|
|
| 1,114 |
|
|
| 2,051 |
|
|
| 115 |
|
|
| 980 |
|
|
| 0 |
|
|
| 162 |
|
|
| 1,667 |
|
|
| 9,433 |
|
Charge-offs |
|
| 0 |
|
|
| (65 | ) |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (87 | ) |
|
| 0 |
|
|
| (152 | ) |
Recoveries |
|
| 0 |
|
|
| 34 |
|
|
| 0 |
|
|
| 11 |
|
|
| 0 |
|
|
| 2 |
|
|
| 0 |
|
|
| 42 |
|
|
| 0 |
|
|
| 89 |
|
Provision |
|
| (267 | ) |
|
| (32 | ) |
|
| (52 | ) |
|
| 32 |
|
|
| 1 |
|
|
| (21 | ) |
|
| 0 |
|
|
| 80 |
|
|
| 781 |
|
|
| 522 |
|
Ending balance |
| $ | 1,264 |
|
|
| 1,750 |
|
|
| 1,062 |
|
|
| 2,094 |
|
|
| 116 |
|
|
| 961 |
|
|
| 0 |
|
|
| 197 |
|
|
| 2,448 |
|
|
| 9,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses at September 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 2 |
|
|
| 4 |
|
|
| 859 |
|
|
| 11 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 876 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
|
| 1,262 |
|
|
| 1,746 |
|
|
| 203 |
|
|
| 2,083 |
|
|
| 116 |
|
|
| 961 |
|
|
| 0 |
|
|
| 197 |
|
|
| 2,448 |
|
|
| 9,016 |
|
Ending balance |
| $ | 1,264 |
|
|
| 1,750 |
|
|
| 1,062 |
|
|
| 2,094 |
|
|
| 116 |
|
|
| 961 |
|
|
| 0 |
|
|
| 197 |
|
|
| 2,448 |
|
|
| 9,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans at September 30, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
| $ | 96,866 |
|
|
| 272,246 |
|
|
| 28,099 |
|
|
| 318,596 |
|
|
| 49,584 |
|
|
| 182,862 |
|
|
| 851 |
|
|
| 21,128 |
|
|
| 0 |
|
|
| 970,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance: individually |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 8 |
|
|
| 1,582 |
|
|
| 11,630 |
|
|
| 1,685 |
|
|
| 0 |
|
|
| 255 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 15,160 |
|
Ending balance: collectively |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment |
| $ | 96,858 |
|
|
| 270,664 |
|
|
| 16,469 |
|
|
| 316,911 |
|
|
| 49,584 |
|
|
| 182,607 |
|
|
| 851 |
|
|
| 21,128 |
|
|
| 0 |
|
|
| 955,072 |
|
The provision for loan losses for the three months ended September 30, 2021 was a recovery of $182,000, compared to a provision of $522,000 for the three months ended September 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves in the general reserve pool. At September 30, 2021, there were no loans with existing modifications as a result of the COVID-19 pandemic. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. The Company continues to track all loans that are currently modified or have been modified as a result of the COVID-19 pandemic. The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Company’s Allowance for Loan and Lease Losses (“ALLL”) model as they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool. All loans modified as a result of the COVID-19 pandemic, totaling $100.9 million at September 30, 2021, have returned to their original terms; however, the effects of stimulus in the current environment are still unknown, and additional losses may be present in loans that were once modified. At December 31, 2020, the balance for all loans that were then currently modified or previously modified but returned to their original terms was $119.6 million. The $18.7 million decrease from December 31, 2020 to September 30, 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the nine months ended September 30, 2021. Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP. The provision for loan losses for the nine months ended September 30, 2021 was a recovery of $863,000, compared to a provision of $3.5 million for the nine months ended September 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool. |
20 |
Table of Contents |
The provision for loan losses for the three months ended June 30, 2021 was a recovery of $226,000, compared to a provision of $1.4 million for the three months ended June 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool. At June 30, 2021, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $283,000. At December 31, 2020, the balance of loans with existing modifications as a result of the COVID-19 pandemic was $18.3 million. The Company continues to track all loans that are currently modified or have been modified as a result of the COVID-19 pandemic. The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Company’s Allowance for Loan and Lease Losses (“ALLL”) model as they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool. Of all loans modified as a result of the COVID-19 pandemic, $108.2 million have returned to their original terms; however, the effects of stimulus in the current environment are still unknown, and additional losses may be present in loans that are currently modified and/or loans that were once modified. At December 31, 2020, the balance for all loans that were then currently modified or previously modified but returned to their original terms was $119.6 million. The $11.4 million decrease from December 31, 2020 to June 30, 2021 in the balance of currently or previously modified loans that had returned to their original terms is primarily due to loans paid off during the six months ended June 30, 2021. Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP.
The provision for loan losses for the six months ended June 30, 2021 was a recovery of $681,000, compared to a provision of $2.9 million for the six months ended June 30, 2020. The decrease in the provision for loan losses is primarily attributable to a decrease in reserves on loans with payment modifications made as a result of the COVID-19 pandemic and a decrease in reserves due to a net decrease in the volume of loans in the general reserve pool.
The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the eight risk grades is as follows:
The carrying amount and estimated fair value of financial instruments at
|