Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-27702 | |
Entity Registrant Name | Bank of South Carolina Corporation | |
Entity Central Index Key | 0001007273 | |
Entity Tax Identification Number | 57-1021355 | |
Entity Incorporation, State or Country Code | SC | |
Entity Address, Address Line One | 256 Meeting Street | |
Entity Address, City or Town | Charleston | |
Entity Address, State or Province | SC | |
Entity Address, Postal Zip Code | 29401 | |
City Area Code | (843) | |
Local Phone Number | 724-1500 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | BKSC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,552,351 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and due from banks | $ 7,099,250 | $ 14,772,564 |
Interest-bearing deposits at the Federal Reserve | 14,885,733 | 12,999,135 |
Investment securities available for sale | 267,439,924 | 271,172,226 |
Mortgage loans to be sold | 1,278,158 | 866,594 |
Loans | 333,789,455 | 330,981,782 |
Less: Allowance for credit losses | (3,688,503) | (4,291,221) |
Net loans | 330,100,952 | 326,690,561 |
Premises, equipment and leasehold improvements, net | 4,005,565 | 3,988,607 |
Right of use asset | 13,275,236 | 13,433,692 |
Accrued interest receivable | 1,842,995 | 2,145,522 |
Other assets | 7,433,816 | 7,276,708 |
Total assets | 647,361,629 | 653,345,609 |
Deposits: | ||
Non-interest bearing demand | 211,238,078 | 223,117,903 |
Interest bearing demand | 149,605,230 | 195,143,514 |
Money market accounts | 102,387,646 | 100,014,125 |
Time deposits $250,000 and over | 52,635,553 | 5,303,509 |
Other time deposits | 11,919,031 | 11,266,099 |
Other savings deposits | 59,806,921 | 63,825,108 |
Total deposits | 587,592,459 | 598,670,258 |
Accrued interest payable and other liabilities | 2,986,116 | 2,430,272 |
Lease liability | 13,275,236 | 13,433,692 |
Total liabilities | 603,853,811 | 614,534,222 |
Shareholders' equity | ||
Common stock - no par 12,000,000 shares authorized; Issued 5,852,325 shares at both March 31, 2023 and December 31, 2022. Shares outstanding 5,552,351 at both March 31, 2023 and December 31, 2022. | ||
Additional paid in capital | 48,058,836 | 48,028,689 |
Retained earnings | 14,647,449 | 14,002,571 |
Treasury stock: 299,974 shares at March 31, 2023 and December 31, 2022 | (2,817,392) | (2,817,392) |
Accumulated other comprehensive loss, net of income taxes | (16,381,075) | (20,402,481) |
Total shareholders' equity | 43,507,818 | 38,811,387 |
Total liabilities and shareholders' equity | $ 647,361,629 | $ 653,345,609 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized | 12,000,000 | 12,000,000 |
Common stock, issued | 5,852,325 | 5,852,325 |
Common stock, outstanding | 5,552,351 | 5,552,351 |
Treasury stock, shares | 299,974 | 299,974 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Interest and fee income | ||
Loans, including fees | $ 4,668,099 | $ 3,551,875 |
Taxable securities | 690,324 | 559,670 |
Tax-exempt securities | 161,444 | 109,129 |
Other | 111,967 | 34,286 |
Total interest and fee income | 5,631,834 | 4,254,960 |
Interest expense | ||
Deposits | 931,101 | 36,797 |
Total interest expense | 931,101 | 36,797 |
Net interest income | 4,700,733 | 4,218,163 |
Provision for credit losses | 45,000 | (75,000) |
Net interest income after provision for credit losses | 4,655,733 | 4,293,163 |
Other income | ||
Service charges and fees | 327,073 | 307,593 |
Mortgage banking income | 112,160 | 258,896 |
Gain on sales of securities | 61,780 | |
Other non-interest income | 9,968 | 6,285 |
Total other income | 449,201 | 634,554 |
Other expense | ||
Salaries and employee benefits | 1,966,523 | 1,812,155 |
Net occupancy expense | 654,062 | 620,942 |
Other operating expenses | 305,181 | 294,733 |
Professional fees | 167,777 | 139,642 |
Data processing fees | 156,818 | 149,090 |
Total other expense | 3,250,361 | 3,016,562 |
Income before income tax expense | 1,854,573 | 1,911,155 |
Income tax expense | 265,794 | 447,049 |
Net income | $ 1,588,779 | $ 1,464,106 |
Weighted average shares outstanding | ||
Basic | 5,552,351 | 5,544,546 |
Diluted | 5,640,313 | 5,688,619 |
Basic income per common share | $ 0.29 | $ 0.26 |
Diluted income per common share | $ 0.28 | $ 0.26 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net income | $ 1,588,779 | $ 1,464,106 |
Other comprehensive income | ||
Unrealized gain (loss) on securities arising during the period | 3,928,218 | (12,152,716) |
Reclassification adjustment for securities gains realized in net income | (61,780) | |
Other comprehensive income (loss) before tax | 3,928,218 | (12,214,496) |
Income tax effect related to items of other comprehensive income before tax | 93,188 | 2,565,043 |
Other comprehensive income (loss) after tax | 4,021,406 | (9,649,453) |
Total comprehensive income (loss) | $ 5,610,185 | $ (8,185,347) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock, Common [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 47,745,285 | $ 11,122,710 | $ (2,817,392) | $ (2,132,970) | $ 53,917,633 | |
Beginning balance (in shares) at Dec. 31, 2021 | 5,541,266 | |||||
Net income | 1,464,106 | 1,464,106 | ||||
Other comprehensive income (loss) | (9,649,453) | (9,649,453) | ||||
Stock option exercises, net of surrenders | 141,618 | 141,618 | ||||
Stock option exercises, net of surrenders (in shares) | 9,210 | |||||
Stock-based compensation expense | 27,989 | 27,989 | ||||
Cash dividends ($0.17 per common share) | (943,580) | (943,580) | ||||
Ending balance, value at Mar. 31, 2022 | 47,914,892 | 11,643,236 | (2,817,392) | (11,782,423) | 44,958,313 | |
Ending balance (in shares) at Mar. 31, 2022 | 5,550,476 | |||||
Beginning balance, value at Dec. 31, 2022 | 48,028,689 | 14,002,571 | (2,817,392) | (20,402,481) | $ 38,811,387 | |
Beginning balance (in shares) at Dec. 31, 2022 | 5,552,351 | 5,552,351 | ||||
Adoption of ASU 2016-13 | ||||||
Net income | 1,588,779 | 1,588,779 | ||||
Other comprehensive income (loss) | 4,021,406 | 4,021,406 | ||||
Stock-based compensation expense | 30,147 | 30,147 | ||||
Cash dividends ($0.17 per common share) | (943,901) | (943,901) | ||||
Ending balance, value at Mar. 31, 2023 | $ 48,058,836 | $ 14,647,449 | $ (2,817,392) | $ (16,381,075) | $ 43,507,818 | |
Ending balance (in shares) at Mar. 31, 2023 | 5,552,351 | 5,552,351 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends (per share) | $ 0.17 | $ 0.17 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 1,588,779 | $ 1,464,106 |
Adjustments to reconcile net income net cash provided by operating activities: | ||
Depreciation expense | 85,157 | 97,694 |
Gain on sale of investment securities | (61,780) | |
Provision for credit losses | 45,000 | (75,000) |
Stock-based compensation expense | 30,147 | 27,989 |
Deferred income taxes and other assets | (63,922) | (344,938) |
Net amortization of unearned discounts on investment securities available for sale | 198,522 | 214,931 |
Origination of mortgage loans held for sale | (8,412,515) | (17,582,370) |
Proceeds from sale of mortgage loans held for sale | 8,000,951 | 17,729,759 |
Decrease (increase) in accrued interest receivable | 302,527 | (68,881) |
(Decrease) increase in accrued interest payable and other liabilities | (44,156) | 302,580 |
Net cash provided by operating activities | 1,730,490 | 1,704,090 |
Cash flows from investing activities: | ||
Proceeds from calls and maturities of investment securities available for sale | 7,462,000 | 2,718,000 |
Proceeds from sale of investment securities available for sale | 15,120,000 | |
Purchase of investment securities available for sale | (75,764,462) | |
Net increase in loans | (2,855,391) | (8,271,231) |
Purchase of premises, equipment, and leasehold improvements, net | (102,115) | (31,563) |
Net cash provided by (used in) investing activities | 4,504,494 | (66,229,256) |
Cash flows from financing activities: | ||
Net decrease in deposit accounts | (11,077,799) | (5,420,096) |
Dividends paid | (943,901) | (942,015) |
Stock options exercised, net of surrenders | 141,618 | |
Net cash used in financing activities | (12,021,700) | (6,220,493) |
Net decrease in cash and cash equivalents | (5,786,716) | (70,745,659) |
Cash and cash equivalents at the beginning of the period | 27,771,699 | 140,111,988 |
Cash and cash equivalents at the end of the period | 21,984,983 | 69,366,329 |
Cash paid during the period for: | ||
Interest | 578,256 | 37,340 |
Income taxes, net | 616,245 | |
Supplemental disclosures for non-cash investing and financing activity: | ||
Change in unrealized gain (loss) on securities available for sale, net of income taxes | 4,021,406 | (9,649,453) |
Change in dividends payable | $ 1,565 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Or anization The Bank of South Carolina (the “Bank”) was organized on October 22, 1986 and opened for business as a state-chartered financial institution on February 26, 1987, in Charleston, South Carolina. The Bank was reorganized into a wholly owned subsidiary of Bank of South Carolina Corporation (the “Company”), effective April 17, 1995. At the time of the reorganization, each outstanding share of the Bank was exchanged for two shares of Bank of South Carolina Corporation stock. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank. In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we”, “us”, “our”, “the Bank”, or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or (“GAAP”), for the interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 2, 2023. In the opinion of management, these interim financial statements present fairly, in all material respects, the Company’s consolidated financial position and results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. Accounting Estimates and Assumptions The consolidated financial statements are prepared in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for credit losses, impaired loans, other real estate owned, deferred tax assets, and the fair value of financial instruments. Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Dilutive income per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. Recent Accounting Pronouncements The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities, and other receivables at the time the financial asset is originated or acquired. It also applies to off-balance sheet credit exposures such as unfunded commitments to extend credit. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For available-for-sale securities where fair value is less than cost, credit-related impairment, if any, is recognized through an allowance for credit losses and adjusted each period for changes in credit risk. On January 1, 2023, the Company adopted the guidance prospectively. Results for reporting periods beginning after January 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with the previously applicable incurred loss accounting methodology. The adoption of CECL resulted in an increase in the allowance for unfunded commitments of $ 600,000 600,000 Significant Accounting Policy Changes Upon adoption of ASC 326, the Company revised the accounting policy for the Allowance for Credit Losses as detailed below. Allowance for Credit Losses - Securities Available for Sale For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or if it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income with the establishment of an allowance under CECL compared to a direct write down of the security under Incurred Loss. For debt securities available for sale that do not meet the aforementioned criteria, the Company evaluates whether any decline in fair value is due to credit loss factors. In making this assessment, management considers any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses under CECL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. At March 31, 2023, there was no allowance for credit losses related to the available-for-sale portfolio. Accrued interest receivable on available for sale debt securities totaled $ 436,000 Allowance for Credit Losses - Loans Under the current expected credit loss model, the allowance for credit losses on loans is a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management assesses the adequacy of the allowance on a quarterly basis. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. Management believes the level of the allowance for credit losses is adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off, or negative provisions, when appropriate. The allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. The Company uses the Loss Rate Approach to estimate the current expected credit losses. The Bank calculates the annual loss rate by dividing the annual net charge-offs by the average balance of loans. The Bank used the simple average of the prior year and current year balance to get the average balance by segment and is adjusted by the estimated prepayment rate to get the lifetime historical loss rate, which is further adjusted by qualitative and forecast adjustments to get the estimated lifetime loss rate. The forecast adjustments (House Price Index, Vacancy Rate, and Unemployment Rate) are discussed by the Management Asset Liability Committee (ALCO) on a periodic basis. Upon ALCO’s recommendation, the calculation can be adjusted accordingly to reflect the current market and economic conditions. The Company uses the loan purpose codes to segment loans based on similar purpose and risk characteristics. The Bank manages these loans on a collective basis. This segmentation is used for call report purposes and the Bank believes it is appropriate for the CECL calculations. Due to the size of the Bank’s loan portfolio, further segmentation would be granular and segments would be statistically insignificant. Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated loan pools. Individual loan evaluations are generally performed for impaired loans, which includes nonaccrual loans. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral. The Company has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, which considers selling costs in the event of the sale of the collateral. While the Company’s policies and procedures used to estimate the allowance for credit losses, as well as the resultant provision for credit losses charged to income, are considered adequate by management and are reviewed periodically by regulators, model validators and internal audit, they are necessarily approximate and imprecise. There are factors beyond the Company’s control, such as changes in projected economic conditions, real estate markets or particular industry conditions which may materially impact asset quality and the adequacy of the allowance for credit losses and thus the resulting provision for credit losses. Allowance for Credit Losses - Accrued Interest Receivable Accrued interest receivable related to loans totaled $ 1.8 Allowance for Credit Loss - Unfunded Commitments Effective with the adoption of CECL, the Company estimates expected credit losses on commitments to extend credit over the contractual period in which the Company is exposed to credit risk on the underlying commitments, unless the obligation is unconditionally cancelable by the Company. The allowance for off-balance sheet credit exposures, which is reflected within accrued interest payable and other liabilities on the consolidated balance sheet, is adjusted for as an increase or decrease to the provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of loans at the portfolio level applied to the amount of commitments expected to fund. The Company’s CECL allowances will fluctuate over time due to macroeconomic conditions and forecasts as well as the size and composition of the loan portfolios. In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. In December 2022, the FASB extended the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. The Company does not expect these amendments to have a material effect on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations or cash flows. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 2: Investment Securities The amortized cost and fair value of investment securities available for sale are summarized as follows: March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury Notes $ 180,171,098 $ — $ (9,934,568 ) $ 170,236,530 Government-Sponsored Enterprises 67,332,674 — (9,254,200 ) 58,078,474 Municipal Securities 41,833,858 2,679 (2,711,617 ) 39,124,920 Total $ 289,337,630 $ 2,679 $ (21,900,385 ) $ 267,439,924 There is no allowance for credit losses on available for sale securities at March 31, 2023. December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury Notes $ 180,298,301 $ — $ (12,110,986 ) $ 168,187,315 Government-Sponsored Enterprises 67,384,808 — (10,310,084 ) 57,074,724 Municipal Securities 49,315,041 2,510 (3,407,364 ) 45,910,187 Total $ 296,998,150 $ 2,510 $ (25,828,434 ) $ 271,172,226 The amortized cost and estimated fair value of investment securities available for sale as of March 31, 2023 and December 31, 2022, by contractual maturity are in the following table. March 31, 2023 December 31, 2022 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 63,661,723 $ 61,990,046 $ 42,722,655 $ 41,698,011 Due in one year to five years 174,605,470 162,191,737 190,569,869 176,217,530 Due in five years to ten years 41,765,078 35,399,509 53,995,700 45,386,818 Due in ten years and over 9,305,359 7,858,632 9,709,926 7,869,867 Total $ 289,337,630 $ 267,439,924 $ 296,998,150 $ 271,172,226 Securities pledged to secure deposits at March 31, 2023 and December 31, 2022, had a fair value of $ 30.6 million and $ 30.1 million, respectively. During the first quarter of 2023, the Federal Reserve established the Bank Term Funding Program in order to make available additional funding to eligible depository institutions so as to help assure banks have the ability to meet the needs of all their depositors. Securities pledged to secure funding made available by this program were $ 25 The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time March 31, 2023 Less Than 12 Months 12 Months or Longer Total # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss U.S. Treasury Notes 2 $ 9,711,525 $ (186,791 ) 23 $ 160,525,005 $ (9,747,777 ) 25 $ 170,236,530 $ (9,934,568 ) Government-Sponsored Enterprises 1 1,294,810 (3,283 ) 10 56,783,664 (9,250,917 ) 11 58,078,474 (9,254,200 ) Municipal Securities 5 9,004,486 (88,018 ) 66 29,583,232 (2,623,599 ) 71 38,587,718 (2,711,617 ) Total 8 $ 20,010,821 $ (278,092 ) 99 $ 246,891,901 $ (21,622,293 ) 107 $ 266,902,722 $ (21,900,385 ) December 31, 2022 Less Than 12 Months 12 Months or Longer Total # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss U.S. Treasury Notes 7 $ 38,181,255 $ (1,790,134 ) 18 $ 130,006,060 $ (10,320,852 ) 25 $ 168,187,315 $ (12,110,986 ) Government-Sponsored Enterprises 2 6,212,285 (84,170 ) 9 50,862,439 (10,225,914 ) 11 57,074,724 (10,310,084 ) Municipal Securities 46 26,068,218 (932,565 ) 31 14,859,459 (2,474,799 ) 77 40,927,677 (3,407,364 ) Total 55 $ 70,461,758 $ (2,806,869 ) 58 $ 195,727,958 $ (23,021,565 ) 113 $ 266,189,716 $ (25,828,434 ) The tables below show the proceeds from sales of securities available for sale and gross realized gains and losses. Three Months Ended March 31, 2023 2022 Gross proceeds $ — $ 15,120,000 Gross realized gains — 61,780 Gross realized losses — — There was a tax provision of $ 12,974 |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Loans and Allowance for Credit Losses | Note 3: Loans and Allowance for Credit Losses Major classifications of loans 144,055 159,434 March 31, 2023 December 31, 2022 Commercial $ 46,212,003 $ 45,072,059 Commercial real estate: Construction 20,146,368 17,524,260 Other 174,860,808 172,897,387 Consumer: Real estate 88,962,556 91,636,538 Other 3,607,720 3,851,538 333,789,455 330,981,782 Allowance for credit losses (3,688,503 ) (4,291,221 ) Loans, net $ 330,100,952 $ 326,690,561 We had $ 107.9 93.1 Our portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Our internal credit risk grading system is based on experience with similarly graded loans, industry best practices, and regulatory guidance. Our portfolio is graded in its entirety. Our internally assigned grades pursuant to the Board-approved lending policy are as follows: ● Excellent ● Good ● Satisfactory ● Watch ● OAEM ● Substandard ● Doubtful ● Loss The following table illustrates credit quality by class indicators Term Loans by Year of Origination 2023 2022 2021 2020 2019 Prior Revolving Total Commercial Pass $ 6,126,737 $ 15,777,976 $ 5,724,744 $ 5,283,844 $ 954,143 $ 436,185 $ 9,651,873 $ 43,955,503 Watch 193,968 517,215 38,787 101,971 — — 183,423 1,035,364 OAEM — 824 15,845 — — — 130,000 146,670 Substandard — 939,656 — 134,810 — — — 1,074,466 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 6,320,705 $ 17,235,671 $ 5,779,376 $ 5,520,626 $ 954,143 $ 436,185 $ 9,965,297 $ 46,212,003 Current period gross charge-offs $ — $ — $ — $ — $ — $ 46,341 $ — $ 46,341 Commercial Real Estate Construction Pass $ 2,717,256 $ 9,691,545 $ 3,159,648 $ 4,577,919 $ — $ — $ — $ 20,146,368 Watch — — — — — — — — OAEM — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total $ 2,717,256 $ 9,691,545 $ 3,159,648 $ 4,577,919 $ — $ — $ — $ 20,146,368 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial Real Estate Other Pass $ 6,648,022 $ 56,736,163 $ 52,765,365 $ 25,416,225 $ 10,612,328 $ 8,085,081 $ 5,573,442 $ 165,836,625 Watch 3,621,749 442,699 779,071 933,712 — — 248,029 6,025,260 OAEM 863,683 — 648,343 14,244 — — 297,909 1,824,180 Substandard — — 863,493 — — 311,249 — 1,174,743 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 11,133,454 $ 57,178,862 $ 55,056,273 $ 26,364,181 $ 10,612,328 $ 8,396,330 $ 6,119,380 $ 174,860,808 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Real Estate Pass $ 4,439,050 $ 29,475,217 $ 8,479,952 $ 9,320,267 $ 291,943 $ 29,311 $ 34,899,380 $ 86,935,121 Watch — — — — — — 1,503,232 1,503,232 OAEM — — — — — — 274,445 274,445 Substandard — — — — — — 249,758 249,758 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 4,439,050 $ 29,475,217 $ 8,479,952 $ 9,320,267 $ 291,943 $ 29,311 $ 36,926,815 $ 88,962,556 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Other Pass $ 633,324 $ 1,204,254 $ 626,934 $ 359,183 $ 116,129 $ 51,352 $ 389,933 $ 3,381,110 Watch 4,055 87,544 21,822 40,864 — — 28,469 182,755 OAEM — — — 6,324 — — — 6,324 Substandard 37,530 — — — — — — 37,530 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 674,909 $ 1,291,799 $ 648,757 $ 406,372 $ 116,129 $ 51,352 $ 418,402 $ 3,607,720 Current period gross charge-offs $ — $ — $ 1,977 $ — $ — $ — $ — $ 1,977 The following table illustrates credit quality by class and internally assigned grades at December 31, 2022. "Pass" includes loans internally graded as excellent, good and satisfactory. December 31, 2022 Commercial Commercial Commercial Consumer Consumer Total Pass $ 42,724,289 $ 17,524,260 $ 167,518,577 $ 86,183,899 $ 3,597,886 $ 317,548,911 Watch 976,966 — 3,223,532 4,928,437 208,417 9,337,352 OAEM 94,803 — 968,611 274,445 7,345 1,345,204 Substandard 1,276,001 — 1,186,667 249,757 37,890 2,750,315 Doubtful — — — — — — Loss — — — — — — Total $ 45,072,059 $ 17,524,260 $ 172,897,387 $ 91,636,538 $ 3,851,538 $ 330,981,782 The following tables include an aging analysis of the recorded investment in loans segregated by class. March 31, 2023 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ Commercial $ — $ — $ — $ — $ 46,212,003 $ 46,212,003 $ — Commercial Real Estate Construction — — — — 20,146,368 20,146,368 — Commercial Real Estate Other 360,029 — 627,927 987,956 173,872,852 174,860,808 — Consumer Real Estate — 274,444 — 274,444 88,688,112 88,962,556 — Consumer Other — — — — 3,607,720 3,607,720 — Total $ 360,029 $ 274,444 $ 627,927 $ 1,262,400 $ 332,527,055 $ 333,789,455 $ — December 31, 2022 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ Commercial $ 16,451 $ 178,975 $ — $ 195,426 $ 44,876,633 $ 45,072,059 $ — Commercial Real Estate Construction — — — — 17,524,260 17,524,260 — Commercial Real Estate Other 45,425 — 631,453 676,878 172,220,509 172,897,387 — Consumer Real Estate 274,445 — — 274,445 91,362,093 91,636,538 — Consumer Other — — — — 3,851,538 3,851,538 — Total $ 336,321 $ 178,975 $ 631,453 $ 1,146,749 $ 329,835,033 $ 330,981,782 $ — There were no loans over 90 days past due and still accruing as of March 31, 2023 and December 31, 2022. The following table summarizes the balances of non-accrual loans: CECL Incurred Loss March 31, 2023 December 31, 2022 Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans Nonaccrual Loans Commercial $ — $ — $ — $ — Commercial Real Estate Construction — — — — Commercial Real Estate Other 627,927 — 627,927 631,453 Consumer Real Estate — — — — Consumer Other — — — — Total $ 627,927 $ — $ 627,927 $ 631,453 We designate individually evaluated loans on nonaccrual status as collateral dependent loans, as well other loans that management designates as having higher risk. Collateral dependent loans are loans for which repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral dependent loans, we adopted the practical expedient to measure the allowance for credit losses based on the fair value of the collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The following table details the amortized cost of collateral dependent loans: March 31, 2023 Commercial $ — Commercial Real Estate Construction — Commercial Real Estate Other 1,188,986 Consumer Real Estate 249,758 Consumer Other — Total $ 1,438,744 The following table set forth the changes in the allowance for credit losses and an allocation of the allowance for credit losses by class Three Months Ended March 31, 2023 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Credit Losses: Beginning balance $ 735,759 $ 230,625 $ 2,216,484 $ 1,014,777 $ 93,576 $ 4,291,221 Adoption of ASU 2016-13 (82,001 ) (36,509 ) (314,522 ) (160,802 ) (6,166 ) (600,000 ) Charge-offs (46,341 ) — — — (1,977 ) (48,318 ) Recoveries 600 — — — — 600 Provisions (93,936 ) 42,873 98,558 6,524 (9,019 ) 45,000 Ending balance $ 514,081 $ 236,989 $ 2,000,520 $ 860,498 $ 76,415 $ 3,688,503 Prior to the adoption of ASC 326 on January 1, 2023, we calculated the allowance for loan losses under the incurred loss methodology. The following table sets forth the changes in the allowance for loan losses for the three months ended March 31, 2022. Three Months Ended March 31, 2022 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Paycheck Protection Program Total Allowance for Loan Losses: Beginning balance $ 795,689 $ 175,493 $ 2,376,306 $ 924,784 $ 104,715 $ — $ 4,376,987 Charge-offs — — — (2,035 ) — (10 ) (2,045 ) Recoveries — — — — 4,200 360 4,560 Provisions (7,596 ) 28,075 (82,296 ) (2,777 ) (10,056 ) (350 ) (75,000 ) Ending balance $ 788,093 $ 203,568 $ 2,294,010 $ 919,972 $ 98,859 $ — $ 4,304,502 Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The tables are are disclosures related to the allowance for loan losses in prior periods. December 31, 2022 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 179,230 $ — $ — $ — $ 37,889 $ 217,119 Collectively evaluated for impairment 556,529 230,625 2,216,484 1,014,777 55,687 4,074,102 Total Allowance for Loan Losses $ 735,759 $ 230,625 $ 2,216,484 $ 1,014,777 $ 93,576 $ 4,291,221 Loans Receivable Individually evaluated for impairment $ 1,276,001 $ — $ 1,202,412 $ 249,758 $ 37,889 $ 2,766,060 Collectively evaluated for impairment 43,796,058 17,524,260 171,694,975 91,386,780 3,813,649 328,215,722 Total Loans Receivable $ 45,072,059 $ 17,524,260 $ 172,897,387 $ 91,636,538 $ 3,851,538 $ 330,981,782 As of December 31, 2022, loans individually evaluated and considered impaired are presented in the following table. Impaired Loans as of December 31, 2022 Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Commercial $ 317,553 $ 317,553 $ — Commercial Real Estate Construction — — — Commercial Real Estate Other 1,202,412 1,202,412 — Consumer Real Estate 249,758 249,758 — Consumer Other — — — Total 1,769,723 1,769,723 — With an allowance recorded: Commercial 958,448 958,448 179,230 Commercial Real Estate Construction — — — Commercial Real Estate Other — — — Consumer Real Estate — — — Consumer Other 37,889 37,889 37,889 Total 996,337 996,337 217,119 Commercial 1,276,001 1,276,001 179,230 Commercial Real Estate Construction — — — Commercial Real Estate Other 1,202,412 1,202,412 — Consumer Real Estate 249,758 249,758 — Consumer Other 37,889 37,889 37,889 Total $ 2,766,060 $ 2,766,060 $ 217,119 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. Three Months Ended March 31, 2022 Average Interest With no related allowance recorded: Commercial $ 181,347 $ 2,720 Commercial Real Estate Construction — — Commercial Real Estate Other 1,226,665 7,706 Consumer Real Estate 249,758 2,617 Consumer Other — — 1,657,770 13,043 With an allowance recorded: Commercial 1,186,718 19,382 Commercial Real Estate Construction — — Commercial Real Estate Other — — Consumer Real Estate — — Consumer Other 39,822 638 1,226,540 20,020 Total Commercial 1,368,065 22,102 Commercial Real Estate Construction — — Commercial Real Estate Other 1,226,665 7,706 Consumer Real Estate 249,758 2,617 Consumer Other 39,822 638 $ 2,884,310 $ 33,063 The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. We use the loss rate approach to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Occasionally, we modify loans by providing principal forgiveness on certain real estate loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. In some cases, we will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. There were no loans modified during the first quarter of 2023. As of March 31, 2023, there were five 1 two One The following table shows the amortized cost basis as of March 31, 2023 of the loans modified for borrowers experiencing financial difficulty Term Extension Amortized Cost Basis % of Total Financial Effect Commercial $ 303,143 0.7 % Reduced monthly payment Commercial Real Estate Other 613,682 0.4 % Forbearance agreement signed for one loan and provided eleven months deferral to second borrower and added to the end of the original term loan Consumer Other 37,529 1.0 % Reduced monthly payment Total $ 954,354 We maintain an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e., commitment cannot be canceled at any time). The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans. The allowance for credit losses for unfunded loan commitments of $ 644,912 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | Note 4: Leases As of March 31, 2023 and December 31, 2022, the Company had operating right of use (“ROU”) assets of $ 13.3 13.4 13.3 13.4 20 As of March 31, 2023, the weighted average remaining lease term was 15.3 4.18 The table below shows lease expense components for the three months ended March 31, 2023 and 2022. March 31, 2023 2022 Operating lease expense $ 302,645 $ 299,571 Short-term lease expense — — Total lease expense $ 302,645 $ 299,571 Total rental expense was $ 302,645 299,571 As of March 31, 2023 and December 31, 2022, we did not maintain any finance leases, and we determined that the number and dollar amount of equipment leases was immaterial. As of March 31, 2023, we had no operating leases that had not yet commenced. |
Disclosures Regarding Fair Valu
Disclosures Regarding Fair Value of Financial Statements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Disclosures Regarding Fair Value of Financial Statements | Note 5: Disclosures Regarding Fair Value of Financial Statements Fair value measurements apply whenever GAAP requires or permits assets or liabilities to be measured at fair value either on a recurring or nonrecurring basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs, which are developed based on market data we have obtained from independent sources, are ones that market participants would use in pricing an asset or liability. Unobservable inputs, which are developed based on the best information available in the circumstances, reflect our estimate of assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets. ● Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data. ● Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value. Fair value estimates are made at a specific point of time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale our entire holdings of a particular financial instrument. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based on judgements regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value also would also significantly affect the estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The following paragraphs describe the valuation methodologies used for assets recorded at fair value on a recurring basis. Investment Securities Available for Sale Investment securities are recorded at fair value on a recurring basis and are based upon quoted prices if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, or by dealers or brokers in active over-the counter markets. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include municipal securities in less liquid markets. Derivative Instruments Derivative instruments include interest rate lock commitments and forward sale commitments. These instruments are valued based on the change in the value of the underlying loan between the commitment date and the end of the period. We classify these instruments as Level 3. We had no embedded derivative instruments requiring separate accounting treatment as of March 31, 2023 and December 31, 2022. We had freestanding derivative instruments consisting of fixed rate conforming loan commitments with interest rate locks and commitments to sell fixed rate conforming loans on a best efforts basis. We do not currently engage in hedging activities. Based on the short-term nature of mortgage loans to be sold (derivative contracts), our derivative instruments were immaterial to our consolidated financial statements as of March 31, 2023 and December 31, 2022. The following table presents information about assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 Total U.S. Treasury Notes $ 170,236,530 $ — $ — $ 170,236,530 Government-Sponsored Enterprises — 58,078,474 — 58,078,474 Municipal Securities — 16,575,620 22,549,300 39,124,920 Total $ 170,236,530 $ 74,654,094 $ 22,549,300 $ 267,439,924 December 31, 2022 Level 1 Level 2 Level 3 Total U.S. Treasury Notes $ 168,187,315 $ — $ — $ 168,187,315 Government-Sponsored Enterprises — 57,074,724 — 57,074,724 Municipal Securities — 16,448,375 29,461,812 45,910,187 Total $ 168,187,315 $ 73,523,099 $ 29,461,812 $ 271,172,226 There were no liabilities recorded at fair value on a recurring basis as of March 31, 2023 or December 31, 2022. The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Beginning balance $ 29,461,812 $ 24,484,047 Total gains or (losses) (realized/unrealized) Included in other comprehensive income (loss) 549,488 (1,444,393 ) Purchases, issuances, and settlements net of maturities (7,462,000 ) (2,413,000 ) Ending balance $ 22,549,300 $ 20,626,654 There were no transfers between fair value levels during the three months ended March 31, 2023 or 2022. The following paragraphs describe the valuation methodologies used for assets and liabilities recorded at fair value on a nonrecurring basis. Individually Assessed Loans Individually assessed loans are carried at the lower of recorded investment or fair value. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, we review the most recent appraisal and if it is over 12 to 18 months old, we may request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, we may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically, as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of our primary market area, we would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where we are familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, we may perform an internal analysis whereby the previous appraisal value would be reviewed considering recent current conditions, and known recent sales or listings of similar properties in the area, and any other relevant economic trends. This analysis may result in the call for a new appraisal. These valuations are reviewed and updated on a quarterly basis. In accordance with ASC 820, Fair Value Measurement Mor age Loans to be Sold Mortgage loans to be sold are carried at the lower of cost or market value. The fair values of mortgage loans to be sold are based on current market rates from investors within the secondary market for loans with similar characteristics. Carrying value approximates fair value. These loans are classified as Level 2. Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following tables present information about certain assets measured at fair value on a nonrecurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 Total Individually assessed loans $ — $ — $ 1,438,744 $ 1,438,744 Mortgage loans to be sold — 1,278,158 — 1,278,158 Total $ — $ 1,278,158 $ 1,438,744 $ 2,716,902 December 31, 2022 Level 1 Level 2 Level 3 Total Impaired loans $ — $ — $ 1,452,170 $ 1,452,170 Mortgage loans to be sold — 866,594 — 866,594 Total $ — $ 866,594 $ 1,452,170 $ 2,318,764 There were no liabilities measured at fair value on a nonrecurring basis as of March 31, 2023 or December 31, 2022. The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at March 31, 2023 and December 31, 2022: Inputs Valuation Technique Unobservable Input General Range of Inputs Individually Assessed Loans Appraisal Value/Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10 20 Accounting standards require disclosure of fair value information for all of our assets and liabilities that are considered financial instruments, whether or not recognized on the balance sheet, for which it is practicable to estimate fair value. Under the accounting standard, fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of the assets and liabilities that are not financial instruments. Accordingly, the aggregate fair value amounts of existing financial instruments do not represent the underlying value of those instruments on our books. The following paragraphs describe the methods and assumptions we use in estimating the fair values of financial instruments: a. Cash and due from banks and interest-bearing deposits at the Federal Reserve Bank The carrying value approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. b. Investment securities available for sale Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. c. Loans The fair value of the Company’s loan portfolio includes a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, individually assessed loans and all other loans. The results are then adjusted to account for credit risk as described above. However, under the new guidance, the Company believes a further credit risk discount must be applied through the use of a discounted cash flow model to compensate for illiquidity risk, based on certain assumptions included within the discounted cash flow model, primarily the use of discount rates that better capture inherent credit risk over the lifetime of a loan. Additionally, in accordance with ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for individually assessed loans are estimated based on the fair value of the underlying collateral. Individually assessed loans measured using discounted future cash flows are not deemed to be measured at fair value. d. Deposits The estimated fair value of deposits with no stated maturity is equal to the carrying amount. The fair value of time deposits is estimated by discounting contractual cash flows, using interest rates currently being offered on the deposit products. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities as compared to the cost of alternative forms of funding (deposit base intangibles). e. Accrued interest receivable and payable Since these financial instruments will typically be received or paid within three months, the carrying amounts of such instruments are deemed to be a reasonable estimate of fair value. f. Loan commitments Estimates of the fair value of these off-balance sheet items are not made because of the short-term nature of these arrangements and the credit standing of the counterparties. The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of March 31, 2023 and December 31, 2022, respectively. March 31, 2023 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and due from banks $ 7,099,250 $ 7,099,250 $ — $ — $ 7,099,250 Interest-bearing deposits at the Federal Reserve 14,885,733 14,885,733 — — 14,885,733 Investment securities available for sale 267,439,924 170,236,530 74,654,094 22,549,300 267,439,924 Mortgage loans to be sold 1,278,158 — 1,278,158 — 1,278,158 Loans, net 330,100,952 — — 305,598,199 305,598,199 Accrued interest receivable 1,842,995 — 1,842,995 — 1,842,995 Financial Liabilities: Demand deposits 523,037,875 — 523,037,875 — 523,037,875 Time deposits 64,554,584 — 65,658,921 — 65,658,921 Accrued interest payable 393,852 — 393,852 — 393,852 December 31, 2022 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and due from banks $ 14,772,564 $ 14,772,564 $ — $ — $ 14,772,564 Interest-bearing deposits at the Federal Reserve 12,999,135 12,999,135 — — 12,999,135 Investment securities available for sale 271,172,226 168,187,315 73,523,099 29,461,812 271,172,226 Mortgage loans to be sold 866,594 — 866,594 — 866,594 Loans, net 326,690,561 — — 304,249,626 304,249,626 Accrued interest receivable 2,145,522 — 2,145,522 2,145,522 Financial Liabilities: Demand deposits 582,100,650 — 582,100,650 — 582,100,650 Time deposits 16,569,608 — 16,933,818 — 16,933,818 Accrued interest payable 41,007 — 41,007 41,007 |
Income Per Common Share
Income Per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Income Per Common Share | Note 6: Income Per Common Share The following table is a summary of the reconciliation of weighted average shares outstanding: Three Months Ended March 31, 2023 2022 Net income $ 1,588,779 $ 1,464,106 Weighted average shares outstanding 5,552,351 5,544,546 Effect of dilutive shares 87,962 144,073 Weighted average shares outstanding - diluted 5,640,313 5,688,619 Earnings per share - basic $ 0.29 $ 0.26 Earnings per share - diluted $ 0.28 $ 0.26 |
NATURE OF BUSINESS AND BASIS _2
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank. In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we”, “us”, “our”, “the Bank”, or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or (“GAAP”), for the interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, our interim consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 2, 2023. In the opinion of management, these interim financial statements present fairly, in all material respects, the Company’s consolidated financial position and results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. |
Accounting Estimates and Assumptions | Accounting Estimates and Assumptions The consolidated financial statements are prepared in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for credit losses, impaired loans, other real estate owned, deferred tax assets, and the fair value of financial instruments. |
Income Per Common Share | Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Dilutive income per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. |
Subsequent Events | Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities, and other receivables at the time the financial asset is originated or acquired. It also applies to off-balance sheet credit exposures such as unfunded commitments to extend credit. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For available-for-sale securities where fair value is less than cost, credit-related impairment, if any, is recognized through an allowance for credit losses and adjusted each period for changes in credit risk. On January 1, 2023, the Company adopted the guidance prospectively. Results for reporting periods beginning after January 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with the previously applicable incurred loss accounting methodology. The adoption of CECL resulted in an increase in the allowance for unfunded commitments of $ 600,000 600,000 Significant Accounting Policy Changes Upon adoption of ASC 326, the Company revised the accounting policy for the Allowance for Credit Losses as detailed below. Allowance for Credit Losses - Securities Available for Sale For available for sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or if it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income with the establishment of an allowance under CECL compared to a direct write down of the security under Incurred Loss. For debt securities available for sale that do not meet the aforementioned criteria, the Company evaluates whether any decline in fair value is due to credit loss factors. In making this assessment, management considers any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses under CECL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. At March 31, 2023, there was no allowance for credit losses related to the available-for-sale portfolio. Accrued interest receivable on available for sale debt securities totaled $ 436,000 Allowance for Credit Losses - Loans Under the current expected credit loss model, the allowance for credit losses on loans is a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management assesses the adequacy of the allowance on a quarterly basis. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. Management believes the level of the allowance for credit losses is adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off, or negative provisions, when appropriate. The allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. The Company uses the Loss Rate Approach to estimate the current expected credit losses. The Bank calculates the annual loss rate by dividing the annual net charge-offs by the average balance of loans. The Bank used the simple average of the prior year and current year balance to get the average balance by segment and is adjusted by the estimated prepayment rate to get the lifetime historical loss rate, which is further adjusted by qualitative and forecast adjustments to get the estimated lifetime loss rate. The forecast adjustments (House Price Index, Vacancy Rate, and Unemployment Rate) are discussed by the Management Asset Liability Committee (ALCO) on a periodic basis. Upon ALCO’s recommendation, the calculation can be adjusted accordingly to reflect the current market and economic conditions. The Company uses the loan purpose codes to segment loans based on similar purpose and risk characteristics. The Bank manages these loans on a collective basis. This segmentation is used for call report purposes and the Bank believes it is appropriate for the CECL calculations. Due to the size of the Bank’s loan portfolio, further segmentation would be granular and segments would be statistically insignificant. Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated loan pools. Individual loan evaluations are generally performed for impaired loans, which includes nonaccrual loans. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral. The Company has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, which considers selling costs in the event of the sale of the collateral. While the Company’s policies and procedures used to estimate the allowance for credit losses, as well as the resultant provision for credit losses charged to income, are considered adequate by management and are reviewed periodically by regulators, model validators and internal audit, they are necessarily approximate and imprecise. There are factors beyond the Company’s control, such as changes in projected economic conditions, real estate markets or particular industry conditions which may materially impact asset quality and the adequacy of the allowance for credit losses and thus the resulting provision for credit losses. Allowance for Credit Losses - Accrued Interest Receivable Accrued interest receivable related to loans totaled $ 1.8 Allowance for Credit Loss - Unfunded Commitments Effective with the adoption of CECL, the Company estimates expected credit losses on commitments to extend credit over the contractual period in which the Company is exposed to credit risk on the underlying commitments, unless the obligation is unconditionally cancelable by the Company. The allowance for off-balance sheet credit exposures, which is reflected within accrued interest payable and other liabilities on the consolidated balance sheet, is adjusted for as an increase or decrease to the provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of loans at the portfolio level applied to the amount of commitments expected to fund. The Company’s CECL allowances will fluctuate over time due to macroeconomic conditions and forecasts as well as the size and composition of the loan portfolios. In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. In December 2022, the FASB extended the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. The Company does not expect these amendments to have a material effect on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations or cash flows. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
The amortized cost and fair value of investment securities available for sale are summarized as follows: | The amortized cost and fair value of investment securities available for sale are summarized as follows: March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury Notes $ 180,171,098 $ — $ (9,934,568 ) $ 170,236,530 Government-Sponsored Enterprises 67,332,674 — (9,254,200 ) 58,078,474 Municipal Securities 41,833,858 2,679 (2,711,617 ) 39,124,920 Total $ 289,337,630 $ 2,679 $ (21,900,385 ) $ 267,439,924 There is no allowance for credit losses on available for sale securities at March 31, 2023. December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury Notes $ 180,298,301 $ — $ (12,110,986 ) $ 168,187,315 Government-Sponsored Enterprises 67,384,808 — (10,310,084 ) 57,074,724 Municipal Securities 49,315,041 2,510 (3,407,364 ) 45,910,187 Total $ 296,998,150 $ 2,510 $ (25,828,434 ) $ 271,172,226 |
The amortized cost and estimated fair value of investment securities available for sale as of March 31, 2023 and December 31, 2022, by contractual maturity are in the following table. | The amortized cost and estimated fair value of investment securities available for sale as of March 31, 2023 and December 31, 2022, by contractual maturity are in the following table. March 31, 2023 December 31, 2022 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 63,661,723 $ 61,990,046 $ 42,722,655 $ 41,698,011 Due in one year to five years 174,605,470 162,191,737 190,569,869 176,217,530 Due in five years to ten years 41,765,078 35,399,509 53,995,700 45,386,818 Due in ten years and over 9,305,359 7,858,632 9,709,926 7,869,867 Total $ 289,337,630 $ 267,439,924 $ 296,998,150 $ 271,172,226 |
The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time | The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time March 31, 2023 Less Than 12 Months 12 Months or Longer Total # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss U.S. Treasury Notes 2 $ 9,711,525 $ (186,791 ) 23 $ 160,525,005 $ (9,747,777 ) 25 $ 170,236,530 $ (9,934,568 ) Government-Sponsored Enterprises 1 1,294,810 (3,283 ) 10 56,783,664 (9,250,917 ) 11 58,078,474 (9,254,200 ) Municipal Securities 5 9,004,486 (88,018 ) 66 29,583,232 (2,623,599 ) 71 38,587,718 (2,711,617 ) Total 8 $ 20,010,821 $ (278,092 ) 99 $ 246,891,901 $ (21,622,293 ) 107 $ 266,902,722 $ (21,900,385 ) December 31, 2022 Less Than 12 Months 12 Months or Longer Total # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss # Fair Value Gross Unrealized Loss U.S. Treasury Notes 7 $ 38,181,255 $ (1,790,134 ) 18 $ 130,006,060 $ (10,320,852 ) 25 $ 168,187,315 $ (12,110,986 ) Government-Sponsored Enterprises 2 6,212,285 (84,170 ) 9 50,862,439 (10,225,914 ) 11 57,074,724 (10,310,084 ) Municipal Securities 46 26,068,218 (932,565 ) 31 14,859,459 (2,474,799 ) 77 40,927,677 (3,407,364 ) Total 55 $ 70,461,758 $ (2,806,869 ) 58 $ 195,727,958 $ (23,021,565 ) 113 $ 266,189,716 $ (25,828,434 ) |
The tables below show the proceeds from sales of securities available for sale and gross realized gains and losses. | The tables below show the proceeds from sales of securities available for sale and gross realized gains and losses. Three Months Ended March 31, 2023 2022 Gross proceeds $ — $ 15,120,000 Gross realized gains — 61,780 Gross realized losses — — |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Major classifications of loans | Major classifications of loans 144,055 159,434 March 31, 2023 December 31, 2022 Commercial $ 46,212,003 $ 45,072,059 Commercial real estate: Construction 20,146,368 17,524,260 Other 174,860,808 172,897,387 Consumer: Real estate 88,962,556 91,636,538 Other 3,607,720 3,851,538 333,789,455 330,981,782 Allowance for credit losses (3,688,503 ) (4,291,221 ) Loans, net $ 330,100,952 $ 326,690,561 |
The following table illustrates credit quality by class indicators | The following table illustrates credit quality by class indicators Term Loans by Year of Origination 2023 2022 2021 2020 2019 Prior Revolving Total Commercial Pass $ 6,126,737 $ 15,777,976 $ 5,724,744 $ 5,283,844 $ 954,143 $ 436,185 $ 9,651,873 $ 43,955,503 Watch 193,968 517,215 38,787 101,971 — — 183,423 1,035,364 OAEM — 824 15,845 — — — 130,000 146,670 Substandard — 939,656 — 134,810 — — — 1,074,466 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 6,320,705 $ 17,235,671 $ 5,779,376 $ 5,520,626 $ 954,143 $ 436,185 $ 9,965,297 $ 46,212,003 Current period gross charge-offs $ — $ — $ — $ — $ — $ 46,341 $ — $ 46,341 Commercial Real Estate Construction Pass $ 2,717,256 $ 9,691,545 $ 3,159,648 $ 4,577,919 $ — $ — $ — $ 20,146,368 Watch — — — — — — — — OAEM — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Loss — — — — — — — — Total $ 2,717,256 $ 9,691,545 $ 3,159,648 $ 4,577,919 $ — $ — $ — $ 20,146,368 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial Real Estate Other Pass $ 6,648,022 $ 56,736,163 $ 52,765,365 $ 25,416,225 $ 10,612,328 $ 8,085,081 $ 5,573,442 $ 165,836,625 Watch 3,621,749 442,699 779,071 933,712 — — 248,029 6,025,260 OAEM 863,683 — 648,343 14,244 — — 297,909 1,824,180 Substandard — — 863,493 — — 311,249 — 1,174,743 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 11,133,454 $ 57,178,862 $ 55,056,273 $ 26,364,181 $ 10,612,328 $ 8,396,330 $ 6,119,380 $ 174,860,808 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Real Estate Pass $ 4,439,050 $ 29,475,217 $ 8,479,952 $ 9,320,267 $ 291,943 $ 29,311 $ 34,899,380 $ 86,935,121 Watch — — — — — — 1,503,232 1,503,232 OAEM — — — — — — 274,445 274,445 Substandard — — — — — — 249,758 249,758 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 4,439,050 $ 29,475,217 $ 8,479,952 $ 9,320,267 $ 291,943 $ 29,311 $ 36,926,815 $ 88,962,556 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Other Pass $ 633,324 $ 1,204,254 $ 626,934 $ 359,183 $ 116,129 $ 51,352 $ 389,933 $ 3,381,110 Watch 4,055 87,544 21,822 40,864 — — 28,469 182,755 OAEM — — — 6,324 — — — 6,324 Substandard 37,530 — — — — — — 37,530 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 674,909 $ 1,291,799 $ 648,757 $ 406,372 $ 116,129 $ 51,352 $ 418,402 $ 3,607,720 Current period gross charge-offs $ — $ — $ 1,977 $ — $ — $ — $ — $ 1,977 The following table illustrates credit quality by class and internally assigned grades at December 31, 2022. "Pass" includes loans internally graded as excellent, good and satisfactory. December 31, 2022 Commercial Commercial Commercial Consumer Consumer Total Pass $ 42,724,289 $ 17,524,260 $ 167,518,577 $ 86,183,899 $ 3,597,886 $ 317,548,911 Watch 976,966 — 3,223,532 4,928,437 208,417 9,337,352 OAEM 94,803 — 968,611 274,445 7,345 1,345,204 Substandard 1,276,001 — 1,186,667 249,757 37,890 2,750,315 Doubtful — — — — — — Loss — — — — — — Total $ 45,072,059 $ 17,524,260 $ 172,897,387 $ 91,636,538 $ 3,851,538 $ 330,981,782 |
The following tables include an aging analysis of the recorded investment in loans segregated by class. | The following tables include an aging analysis of the recorded investment in loans segregated by class. March 31, 2023 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ Commercial $ — $ — $ — $ — $ 46,212,003 $ 46,212,003 $ — Commercial Real Estate Construction — — — — 20,146,368 20,146,368 — Commercial Real Estate Other 360,029 — 627,927 987,956 173,872,852 174,860,808 — Consumer Real Estate — 274,444 — 274,444 88,688,112 88,962,556 — Consumer Other — — — — 3,607,720 3,607,720 — Total $ 360,029 $ 274,444 $ 627,927 $ 1,262,400 $ 332,527,055 $ 333,789,455 $ — December 31, 2022 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ Commercial $ 16,451 $ 178,975 $ — $ 195,426 $ 44,876,633 $ 45,072,059 $ — Commercial Real Estate Construction — — — — 17,524,260 17,524,260 — Commercial Real Estate Other 45,425 — 631,453 676,878 172,220,509 172,897,387 — Consumer Real Estate 274,445 — — 274,445 91,362,093 91,636,538 — Consumer Other — — — — 3,851,538 3,851,538 — Total $ 336,321 $ 178,975 $ 631,453 $ 1,146,749 $ 329,835,033 $ 330,981,782 $ — |
The following table summarizes the balances of non-accrual loans: | The following table summarizes the balances of non-accrual loans: CECL Incurred Loss March 31, 2023 December 31, 2022 Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans Nonaccrual Loans Commercial $ — $ — $ — $ — Commercial Real Estate Construction — — — — Commercial Real Estate Other 627,927 — 627,927 631,453 Consumer Real Estate — — — — Consumer Other — — — — Total $ 627,927 $ — $ 627,927 $ 631,453 |
The following table details the amortized cost of collateral dependent loans: | The following table details the amortized cost of collateral dependent loans: March 31, 2023 Commercial $ — Commercial Real Estate Construction — Commercial Real Estate Other 1,188,986 Consumer Real Estate 249,758 Consumer Other — Total $ 1,438,744 |
The following table set forth the changes in the allowance for credit losses and an allocation of the allowance for credit losses by class | The following table set forth the changes in the allowance for credit losses and an allocation of the allowance for credit losses by class Three Months Ended March 31, 2023 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Credit Losses: Beginning balance $ 735,759 $ 230,625 $ 2,216,484 $ 1,014,777 $ 93,576 $ 4,291,221 Adoption of ASU 2016-13 (82,001 ) (36,509 ) (314,522 ) (160,802 ) (6,166 ) (600,000 ) Charge-offs (46,341 ) — — — (1,977 ) (48,318 ) Recoveries 600 — — — — 600 Provisions (93,936 ) 42,873 98,558 6,524 (9,019 ) 45,000 Ending balance $ 514,081 $ 236,989 $ 2,000,520 $ 860,498 $ 76,415 $ 3,688,503 Prior to the adoption of ASC 326 on January 1, 2023, we calculated the allowance for loan losses under the incurred loss methodology. The following table sets forth the changes in the allowance for loan losses for the three months ended March 31, 2022. Three Months Ended March 31, 2022 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Paycheck Protection Program Total Allowance for Loan Losses: Beginning balance $ 795,689 $ 175,493 $ 2,376,306 $ 924,784 $ 104,715 $ — $ 4,376,987 Charge-offs — — — (2,035 ) — (10 ) (2,045 ) Recoveries — — — — 4,200 360 4,560 Provisions (7,596 ) 28,075 (82,296 ) (2,777 ) (10,056 ) (350 ) (75,000 ) Ending balance $ 788,093 $ 203,568 $ 2,294,010 $ 919,972 $ 98,859 $ — $ 4,304,502 |
Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The tables are are disclosures related to the allowance for loan losses in prior periods. | Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The tables are are disclosures related to the allowance for loan losses in prior periods. December 31, 2022 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 179,230 $ — $ — $ — $ 37,889 $ 217,119 Collectively evaluated for impairment 556,529 230,625 2,216,484 1,014,777 55,687 4,074,102 Total Allowance for Loan Losses $ 735,759 $ 230,625 $ 2,216,484 $ 1,014,777 $ 93,576 $ 4,291,221 Loans Receivable Individually evaluated for impairment $ 1,276,001 $ — $ 1,202,412 $ 249,758 $ 37,889 $ 2,766,060 Collectively evaluated for impairment 43,796,058 17,524,260 171,694,975 91,386,780 3,813,649 328,215,722 Total Loans Receivable $ 45,072,059 $ 17,524,260 $ 172,897,387 $ 91,636,538 $ 3,851,538 $ 330,981,782 |
As of December 31, 2022, loans individually evaluated and considered impaired are presented in the following table. | As of December 31, 2022, loans individually evaluated and considered impaired are presented in the following table. Impaired Loans as of December 31, 2022 Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Commercial $ 317,553 $ 317,553 $ — Commercial Real Estate Construction — — — Commercial Real Estate Other 1,202,412 1,202,412 — Consumer Real Estate 249,758 249,758 — Consumer Other — — — Total 1,769,723 1,769,723 — With an allowance recorded: Commercial 958,448 958,448 179,230 Commercial Real Estate Construction — — — Commercial Real Estate Other — — — Consumer Real Estate — — — Consumer Other 37,889 37,889 37,889 Total 996,337 996,337 217,119 Commercial 1,276,001 1,276,001 179,230 Commercial Real Estate Construction — — — Commercial Real Estate Other 1,202,412 1,202,412 — Consumer Real Estate 249,758 249,758 — Consumer Other 37,889 37,889 37,889 Total $ 2,766,060 $ 2,766,060 $ 217,119 |
The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. | The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. Three Months Ended March 31, 2022 Average Interest With no related allowance recorded: Commercial $ 181,347 $ 2,720 Commercial Real Estate Construction — — Commercial Real Estate Other 1,226,665 7,706 Consumer Real Estate 249,758 2,617 Consumer Other — — 1,657,770 13,043 With an allowance recorded: Commercial 1,186,718 19,382 Commercial Real Estate Construction — — Commercial Real Estate Other — — Consumer Real Estate — — Consumer Other 39,822 638 1,226,540 20,020 Total Commercial 1,368,065 22,102 Commercial Real Estate Construction — — Commercial Real Estate Other 1,226,665 7,706 Consumer Real Estate 249,758 2,617 Consumer Other 39,822 638 $ 2,884,310 $ 33,063 |
The following table shows the amortized cost basis as of March 31, 2023 of the loans modified for borrowers experiencing financial difficulty | The following table shows the amortized cost basis as of March 31, 2023 of the loans modified for borrowers experiencing financial difficulty Term Extension Amortized Cost Basis % of Total Financial Effect Commercial $ 303,143 0.7 % Reduced monthly payment Commercial Real Estate Other 613,682 0.4 % Forbearance agreement signed for one loan and provided eleven months deferral to second borrower and added to the end of the original term loan Consumer Other 37,529 1.0 % Reduced monthly payment Total $ 954,354 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
The table below shows lease expense components for the three months ended March 31, 2023 and 2022. | The table below shows lease expense components for the three months ended March 31, 2023 and 2022. March 31, 2023 2022 Operating lease expense $ 302,645 $ 299,571 Short-term lease expense — — Total lease expense $ 302,645 $ 299,571 |
Disclosures Regarding Fair Va_2
Disclosures Regarding Fair Value of Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
The following table presents information about assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: | The following table presents information about assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 Total U.S. Treasury Notes $ 170,236,530 $ — $ — $ 170,236,530 Government-Sponsored Enterprises — 58,078,474 — 58,078,474 Municipal Securities — 16,575,620 22,549,300 39,124,920 Total $ 170,236,530 $ 74,654,094 $ 22,549,300 $ 267,439,924 December 31, 2022 Level 1 Level 2 Level 3 Total U.S. Treasury Notes $ 168,187,315 $ — $ — $ 168,187,315 Government-Sponsored Enterprises — 57,074,724 — 57,074,724 Municipal Securities — 16,448,375 29,461,812 45,910,187 Total $ 168,187,315 $ 73,523,099 $ 29,461,812 $ 271,172,226 |
The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022: | The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Beginning balance $ 29,461,812 $ 24,484,047 Total gains or (losses) (realized/unrealized) Included in other comprehensive income (loss) 549,488 (1,444,393 ) Purchases, issuances, and settlements net of maturities (7,462,000 ) (2,413,000 ) Ending balance $ 22,549,300 $ 20,626,654 |
The following tables present information about certain assets measured at fair value on a nonrecurring basis as of March 31, 2023 and December 31, 2022: | Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following tables present information about certain assets measured at fair value on a nonrecurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 Total Individually assessed loans $ — $ — $ 1,438,744 $ 1,438,744 Mortgage loans to be sold — 1,278,158 — 1,278,158 Total $ — $ 1,278,158 $ 1,438,744 $ 2,716,902 December 31, 2022 Level 1 Level 2 Level 3 Total Impaired loans $ — $ — $ 1,452,170 $ 1,452,170 Mortgage loans to be sold — 866,594 — 866,594 Total $ — $ 866,594 $ 1,452,170 $ 2,318,764 |
The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at March 31, 2023 and December 31, 2022: | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at March 31, 2023 and December 31, 2022: Inputs Valuation Technique Unobservable Input General Range of Inputs Individually Assessed Loans Appraisal Value/Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10 20 |
The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of March 31, 2023 and December 31, 2022, respectively. | The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of March 31, 2023 and December 31, 2022, respectively. March 31, 2023 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and due from banks $ 7,099,250 $ 7,099,250 $ — $ — $ 7,099,250 Interest-bearing deposits at the Federal Reserve 14,885,733 14,885,733 — — 14,885,733 Investment securities available for sale 267,439,924 170,236,530 74,654,094 22,549,300 267,439,924 Mortgage loans to be sold 1,278,158 — 1,278,158 — 1,278,158 Loans, net 330,100,952 — — 305,598,199 305,598,199 Accrued interest receivable 1,842,995 — 1,842,995 — 1,842,995 Financial Liabilities: Demand deposits 523,037,875 — 523,037,875 — 523,037,875 Time deposits 64,554,584 — 65,658,921 — 65,658,921 Accrued interest payable 393,852 — 393,852 — 393,852 December 31, 2022 Estimated Fair Value Carrying Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and due from banks $ 14,772,564 $ 14,772,564 $ — $ — $ 14,772,564 Interest-bearing deposits at the Federal Reserve 12,999,135 12,999,135 — — 12,999,135 Investment securities available for sale 271,172,226 168,187,315 73,523,099 29,461,812 271,172,226 Mortgage loans to be sold 866,594 — 866,594 — 866,594 Loans, net 326,690,561 — — 304,249,626 304,249,626 Accrued interest receivable 2,145,522 — 2,145,522 2,145,522 Financial Liabilities: Demand deposits 582,100,650 — 582,100,650 — 582,100,650 Time deposits 16,569,608 — 16,933,818 — 16,933,818 Accrued interest payable 41,007 — 41,007 41,007 |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
The following table is a summary of the reconciliation of weighted average shares outstanding: | The following table is a summary of the reconciliation of weighted average shares outstanding: Three Months Ended March 31, 2023 2022 Net income $ 1,588,779 $ 1,464,106 Weighted average shares outstanding 5,552,351 5,544,546 Effect of dilutive shares 87,962 144,073 Weighted average shares outstanding - diluted 5,640,313 5,688,619 Earnings per share - basic $ 0.29 $ 0.26 Earnings per share - diluted $ 0.28 $ 0.26 |
NATURE OF BUSINESS AND BASIS _3
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | |
Adopt ASU 2016-13 | us-gaap:AccountingStandardsUpdate201613Member | |||
Allowance for unfunded commitments | $ 644,912 | |||
Allowance for credit losses | $ (4,291,221) | (3,688,503) | $ (4,304,502) | $ (4,376,987) |
Accrued interest receivable on available for sale debt securities | 436,000 | |||
Accrued interest receivable related to loans | $ 1,800,000 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Allowance for unfunded commitments | 600,000 | |||
Allowance for credit losses | $ 600,000 |
The amortized cost and fair val
The amortized cost and fair value of investment securities available for sale are summarized as follows: (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 289,337,630 | $ 296,998,150 |
Gross Unrealized Gains | 2,679 | 2,510 |
Gross Unrealized Losses | (21,900,385) | (25,828,434) |
Estimated Fair Value | 267,439,924 | 271,172,226 |
US Treasury Securities [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 180,171,098 | 180,298,301 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (9,934,568) | (12,110,986) |
Estimated Fair Value | 170,236,530 | 168,187,315 |
US Government Corporations and Agencies Securities [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 67,332,674 | 67,384,808 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (9,254,200) | (10,310,084) |
Estimated Fair Value | 58,078,474 | 57,074,724 |
US States and Political Subdivisions Debt Securities [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 41,833,858 | 49,315,041 |
Gross Unrealized Gains | 2,679 | 2,510 |
Gross Unrealized Losses | (2,711,617) | (3,407,364) |
Estimated Fair Value | $ 39,124,920 | $ 45,910,187 |
The amortized cost and estimate
The amortized cost and estimated fair value of investment securities available for sale as of March 31, 2023 and December 31, 2022, by contractual maturity are in the following table. (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Due in one year or less, amortized cost | $ 63,661,723 | $ 42,722,655 |
Due in one year or less, estimated fair value | 61,990,046 | 41,698,011 |
Due in one year to five years, amortized cost | 174,605,470 | 190,569,869 |
Due in one year to five years, estimated fair value | 162,191,737 | 176,217,530 |
Due in five years to ten years, amortized cost | 41,765,078 | 53,995,700 |
Due in five years to ten years, estimated fair value | 35,399,509 | 45,386,818 |
Due in ten years and over, amortized cost | 9,305,359 | 9,709,926 |
Due in ten years and over, estimated fair value | 7,858,632 | 7,869,867 |
Total, amortized cost | 289,337,630 | 296,998,150 |
Total, estimated fair value | $ 267,439,924 | $ 271,172,226 |
Investment Securities (Details
Investment Securities (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Marketable Securities [Line Items] | |||
Investment securities, fair value | $ 267,439,924 | $ 271,172,226 | |
Gross realized gains (losses) on sale of investments, tax | $ 12,974 | ||
Asset Pledged as Collateral [Member] | |||
Marketable Securities [Line Items] | |||
Investment securities, fair value | 30,600,000 | $ 30,100,000 | |
Asset Pledged as Collateral [Member] | Federal Reserve Bank Term Funding Program [Member] | |||
Marketable Securities [Line Items] | |||
Investment securities, fair value | $ 25,000,000 |
The tables below summarize gros
The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time (Details) | Mar. 31, 2023 USD ($) Number | Dec. 31, 2022 USD ($) Number |
Marketable Securities [Line Items] | ||
Number of positions, less than 12 months | Number | 8 | 55 |
Fair Value, less than 12 months | $ 20,010,821 | $ 70,461,758 |
Gross Unrealized Losses, less than 12 months | $ (278,092) | $ (2,806,869) |
Number of positions, 12 months or longer | Number | 99 | 58 |
Fair Value, 12 months or longer | $ 246,891,901 | $ 195,727,958 |
Gross Unrealized Losses, 12 months or longer | $ (21,622,293) | $ (23,021,565) |
Number of positions | Number | 107 | 113 |
Fair value | $ 266,902,722 | $ 266,189,716 |
Gross Unrealized Losses | $ (21,900,385) | $ (25,828,434) |
US Treasury Securities [Member] | ||
Marketable Securities [Line Items] | ||
Number of positions, less than 12 months | Number | 2 | 7 |
Fair Value, less than 12 months | $ 9,711,525 | $ 38,181,255 |
Gross Unrealized Losses, less than 12 months | $ (186,791) | $ (1,790,134) |
Number of positions, 12 months or longer | Number | 23 | 18 |
Fair Value, 12 months or longer | $ 160,525,005 | $ 130,006,060 |
Gross Unrealized Losses, 12 months or longer | $ (9,747,777) | $ (10,320,852) |
Number of positions | Number | 25 | 25 |
Fair value | $ 170,236,530 | $ 168,187,315 |
Gross Unrealized Losses | $ (9,934,568) | $ (12,110,986) |
US Government Corporations and Agencies Securities [Member] | ||
Marketable Securities [Line Items] | ||
Number of positions, less than 12 months | Number | 1 | 2 |
Fair Value, less than 12 months | $ 1,294,810 | $ 6,212,285 |
Gross Unrealized Losses, less than 12 months | $ (3,283) | $ (84,170) |
Number of positions, 12 months or longer | Number | 10 | 9 |
Fair Value, 12 months or longer | $ 56,783,664 | $ 50,862,439 |
Gross Unrealized Losses, 12 months or longer | $ (9,250,917) | $ (10,225,914) |
Number of positions | Number | 11 | 11 |
Fair value | $ 58,078,474 | $ 57,074,724 |
Gross Unrealized Losses | $ (9,254,200) | $ (10,310,084) |
US States and Political Subdivisions Debt Securities [Member] | ||
Marketable Securities [Line Items] | ||
Number of positions, less than 12 months | Number | 5 | 46 |
Fair Value, less than 12 months | $ 9,004,486 | $ 26,068,218 |
Gross Unrealized Losses, less than 12 months | $ (88,018) | $ (932,565) |
Number of positions, 12 months or longer | Number | 66 | 31 |
Fair Value, 12 months or longer | $ 29,583,232 | $ 14,859,459 |
Gross Unrealized Losses, 12 months or longer | $ (2,623,599) | $ (2,474,799) |
Number of positions | Number | 71 | 77 |
Fair value | $ 38,587,718 | $ 40,927,677 |
Gross Unrealized Losses | $ (2,711,617) | $ (3,407,364) |
The tables below show the proce
The tables below show the proceeds from sales of securities available for sale and gross realized gains and losses. (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross proceeds | $ 15,120,000 | |
Gross realized gains | 61,780 | |
Gross realized losses |
Major classifications of loans
Major classifications of loans (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | $ 333,789,455 | $ 330,981,782 | ||
Allowance for credit losses | (3,688,503) | (4,291,221) | $ (4,304,502) | $ (4,376,987) |
Loans, net | 330,100,952 | 326,690,561 | ||
Commercial Loan [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | 46,212,003 | 45,072,059 | ||
Allowance for credit losses | (514,081) | (735,759) | (788,093) | (795,689) |
Commercial Real Estate Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | 20,146,368 | 17,524,260 | ||
Allowance for credit losses | (236,989) | (230,625) | (203,568) | (175,493) |
Commercial Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | 174,860,808 | 172,897,387 | ||
Allowance for credit losses | (2,000,520) | (2,216,484) | (2,294,010) | (2,376,306) |
Residential Mortgage [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | 88,962,556 | 91,636,538 | ||
Allowance for credit losses | (860,498) | (1,014,777) | (919,972) | (924,784) |
Consumer Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans | 3,607,720 | 3,851,538 | ||
Allowance for credit losses | $ (76,415) | $ (93,576) | $ (98,859) | $ (104,715) |
The following table illustrates
The following table illustrates credit quality by class indicators (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total | $ 333,789,455 | $ 330,981,782 | |
Current period gross charge-offs | 48,318 | $ 2,045 | |
Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total | 317,548,911 | ||
Watch [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total | 9,337,352 | ||
Special Mention [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total | 1,345,204 | ||
Substandard [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Total | 2,750,315 | ||
Commercial Loan [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 6,320,705 | ||
2022 | 17,235,671 | ||
2021 | 5,779,376 | ||
2020 | 5,520,626 | ||
2019 | 954,143 | ||
Prior | 436,185 | ||
Revolving | 9,965,297 | ||
Total | 46,212,003 | 45,072,059 | |
Current period gross charge-offs, Prior | 46,341 | ||
Current period gross charge-offs | 46,341 | ||
Commercial Loan [Member] | Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 6,126,737 | ||
2022 | 15,777,976 | ||
2021 | 5,724,744 | ||
2020 | 5,283,844 | ||
2019 | 954,143 | ||
Prior | 436,185 | ||
Revolving | 9,651,873 | ||
Total | 43,955,503 | 42,724,289 | |
Commercial Loan [Member] | Watch [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 193,968 | ||
2022 | 517,215 | ||
2021 | 38,787 | ||
2020 | 101,971 | ||
2019 | |||
Prior | |||
Revolving | 183,423 | ||
Total | 1,035,364 | 976,966 | |
Commercial Loan [Member] | Special Mention [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | 824 | ||
2021 | 15,845 | ||
2020 | |||
2019 | |||
Prior | |||
Revolving | 130,000 | ||
Total | 146,670 | 94,803 | |
Commercial Loan [Member] | Substandard [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | 939,656 | ||
2021 | |||
2020 | 134,810 | ||
2019 | |||
Prior | |||
Revolving | |||
Total | 1,074,466 | 1,276,001 | |
Commercial Real Estate Construction [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 2,717,256 | ||
2022 | 9,691,545 | ||
2021 | 3,159,648 | ||
2020 | 4,577,919 | ||
2019 | |||
Prior | |||
Revolving | |||
Total | 20,146,368 | 17,524,260 | |
Commercial Real Estate Construction [Member] | Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 2,717,256 | ||
2022 | 9,691,545 | ||
2021 | 3,159,648 | ||
2020 | 4,577,919 | ||
2019 | |||
Prior | |||
Revolving | |||
Total | 20,146,368 | 17,524,260 | |
Commercial Real Estate Other [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 11,133,454 | ||
2022 | 57,178,862 | ||
2021 | 55,056,273 | ||
2020 | 26,364,181 | ||
2019 | 10,612,328 | ||
Prior | 8,396,330 | ||
Revolving | 6,119,380 | ||
Total | 174,860,808 | 172,897,387 | |
Commercial Real Estate Other [Member] | Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 6,648,022 | ||
2022 | 56,736,163 | ||
2021 | 52,765,365 | ||
2020 | 25,416,225 | ||
2019 | 10,612,328 | ||
Prior | 8,085,081 | ||
Revolving | 5,573,442 | ||
Total | 165,836,625 | 167,518,577 | |
Commercial Real Estate Other [Member] | Watch [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 3,621,749 | ||
2022 | 442,699 | ||
2021 | 779,071 | ||
2020 | 933,712 | ||
2019 | |||
Prior | |||
Revolving | 248,029 | ||
Total | 6,025,260 | 3,223,532 | |
Commercial Real Estate Other [Member] | Special Mention [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 863,683 | ||
2022 | |||
2021 | 648,343 | ||
2020 | 14,244 | ||
2019 | |||
Prior | |||
Revolving | 297,909 | ||
Total | 1,824,180 | 968,611 | |
Commercial Real Estate Other [Member] | Substandard [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | |||
2021 | 863,493 | ||
2020 | |||
2019 | |||
Prior | 311,249 | ||
Revolving | |||
Total | 1,174,743 | 1,186,667 | |
Residential Mortgage [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 4,439,050 | ||
2022 | 29,475,217 | ||
2021 | 8,479,952 | ||
2020 | 9,320,267 | ||
2019 | 291,943 | ||
Prior | 29,311 | ||
Revolving | 36,926,815 | ||
Total | 88,962,556 | 91,636,538 | |
Current period gross charge-offs | $ 2,035 | ||
Residential Mortgage [Member] | Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 4,439,050 | ||
2022 | 29,475,217 | ||
2021 | 8,479,952 | ||
2020 | 9,320,267 | ||
2019 | 291,943 | ||
Prior | 29,311 | ||
Revolving | 34,899,380 | ||
Total | 86,935,121 | 86,183,899 | |
Residential Mortgage [Member] | Watch [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | |||
2021 | |||
2020 | |||
2019 | |||
Prior | |||
Revolving | 1,503,232 | ||
Total | 1,503,232 | 4,928,437 | |
Residential Mortgage [Member] | Special Mention [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | |||
2021 | |||
2020 | |||
2019 | |||
Prior | |||
Revolving | 274,445 | ||
Total | 274,445 | 274,445 | |
Residential Mortgage [Member] | Substandard [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | |||
2021 | |||
2020 | |||
2019 | |||
Prior | |||
Revolving | 249,758 | ||
Total | 249,758 | 249,757 | |
Consumer Other [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 674,909 | ||
2022 | 1,291,799 | ||
2021 | 648,757 | ||
2020 | 406,372 | ||
2019 | 116,129 | ||
Prior | 51,352 | ||
Revolving | 418,402 | ||
Total | 3,607,720 | 3,851,538 | |
Current period gross charge-offs, 2021 | 1,977 | ||
Current period gross charge-offs | 1,977 | ||
Consumer Other [Member] | Pass [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 633,324 | ||
2022 | 1,204,254 | ||
2021 | 626,934 | ||
2020 | 359,183 | ||
2019 | 116,129 | ||
Prior | 51,352 | ||
Revolving | 389,933 | ||
Total | 3,381,110 | 3,597,886 | |
Consumer Other [Member] | Watch [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 4,055 | ||
2022 | 87,544 | ||
2021 | 21,822 | ||
2020 | 40,864 | ||
2019 | |||
Prior | |||
Revolving | 28,469 | ||
Total | 182,755 | 208,417 | |
Consumer Other [Member] | Special Mention [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | |||
2022 | |||
2021 | |||
2020 | 6,324 | ||
2019 | |||
Prior | |||
Revolving | |||
Total | 6,324 | 7,345 | |
Consumer Other [Member] | Substandard [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
2023 | 37,530 | ||
2022 | |||
2021 | |||
2020 | |||
2019 | |||
Prior | |||
Revolving | |||
Total | $ 37,530 | $ 37,890 |
The following tables include an
The following tables include an aging analysis of the recorded investment in loans segregated by class. (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | $ 333,789,455 | $ 330,981,782 |
Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 332,527,055 | 329,835,033 |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 360,029 | 336,321 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 627,927 | 631,453 |
Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 1,262,400 | 1,146,749 |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 274,444 | 178,975 |
Commercial Loan [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 46,212,003 | 45,072,059 |
Commercial Loan [Member] | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 46,212,003 | 44,876,633 |
Commercial Loan [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 16,451 | |
Commercial Loan [Member] | Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 195,426 | |
Commercial Loan [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 178,975 | |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 20,146,368 | 17,524,260 |
Commercial Real Estate Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 20,146,368 | 17,524,260 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 174,860,808 | 172,897,387 |
Commercial Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 173,872,852 | 172,220,509 |
Commercial Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 360,029 | 45,425 |
Commercial Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 627,927 | 631,453 |
Commercial Portfolio Segment [Member] | Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 987,956 | |
Residential Mortgage [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 88,962,556 | 91,636,538 |
Residential Mortgage [Member] | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 88,688,112 | 91,362,093 |
Residential Mortgage [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 274,445 | |
Residential Mortgage [Member] | Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 274,444 | 676,878 |
Residential Mortgage [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 274,444 | |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | 3,607,720 | 3,851,538 |
Consumer Portfolio Segment [Member] | Financial Asset, Not Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | $ 3,607,720 | 3,851,538 |
Consumer Portfolio Segment [Member] | Financial Asset, Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans receivable | $ 274,445 |
The following table summarizes
The following table summarizes the balances of non-accrual loans: (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | $ 627,927 | |
Total Nonaccrual Loans | 627,927 | $ 631,453 |
Commercial Loan [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | ||
Total Nonaccrual Loans | ||
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | ||
Total Nonaccrual Loans | ||
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | 627,927 | |
Total Nonaccrual Loans | 627,927 | 631,453 |
Residential Mortgage [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | ||
Total Nonaccrual Loans | ||
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual Loans with No Allowance | ||
Total Nonaccrual Loans |
The following table details the
The following table details the amortized cost of collateral dependent loans: (Details) | Mar. 31, 2023 USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortized cost of collateral dependent loans | $ 1,438,744 |
Commercial Real Estate Other [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortized cost of collateral dependent loans | 1,188,986 |
Residential Mortgage [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Amortized cost of collateral dependent loans | $ 249,758 |
The following table set forth t
The following table set forth the changes in the allowance for credit losses and an allocation of the allowance for credit losses by class (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allowance for Loan Losses: | ||
Beginning balance | $ 4,291,221 | $ 4,376,987 |
Charge-offs | (48,318) | (2,045) |
Recoveries | 600 | 4,560 |
Provisions | 45,000 | (75,000) |
Ending balance | 3,688,503 | 4,304,502 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | (600,000) | |
Commercial Loan [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | 735,759 | 795,689 |
Charge-offs | (46,341) | |
Recoveries | 600 | |
Provisions | (93,936) | (7,596) |
Ending balance | 514,081 | 788,093 |
Commercial Loan [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | (82,001) | |
Commercial Real Estate Portfolio Segment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | 230,625 | 175,493 |
Charge-offs | ||
Recoveries | ||
Provisions | 42,873 | 28,075 |
Ending balance | 236,989 | 203,568 |
Commercial Real Estate Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | (36,509) | |
Commercial Portfolio Segment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | 2,216,484 | 2,376,306 |
Charge-offs | ||
Recoveries | ||
Provisions | 98,558 | (82,296) |
Ending balance | 2,000,520 | 2,294,010 |
Commercial Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | (314,522) | |
Residential Mortgage [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | 1,014,777 | 924,784 |
Charge-offs | (2,035) | |
Recoveries | ||
Provisions | 6,524 | (2,777) |
Ending balance | 860,498 | 919,972 |
Residential Mortgage [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | (160,802) | |
Consumer Portfolio Segment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | 93,576 | 104,715 |
Charge-offs | (1,977) | |
Recoveries | 4,200 | |
Provisions | (9,019) | (10,056) |
Ending balance | 76,415 | 98,859 |
Consumer Portfolio Segment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | $ (6,166) | |
Paycheck Protection Program [Member] | ||
Allowance for Loan Losses: | ||
Beginning balance | ||
Charge-offs | (10) | |
Recoveries | 360 | |
Provisions | (350) | |
Ending balance |
Prior to the adoption of ASC 32
Prior to the adoption of ASC 326 on January 1, 2023, the Company calculated the allowance for loan losses under the incurred loss methodology. The tables are are disclosures related to the allowance for loan losses in prior periods. (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Allowance for Loan Losses | ||||
Individually evaluated for impairment | $ 217,119 | |||
Collectively evaluated for impairment | 4,074,102 | |||
Total Allowance for Loan Losses | $ 3,688,503 | 4,291,221 | $ 4,304,502 | $ 4,376,987 |
Loans Receivable | ||||
Individually evaluated for impairment | 2,766,060 | |||
Collectively evaluated for impairment | 328,215,722 | |||
Total Loans Receivable | 333,789,455 | 330,981,782 | ||
Commercial Loan [Member] | ||||
Allowance for Loan Losses | ||||
Individually evaluated for impairment | 179,230 | |||
Collectively evaluated for impairment | 556,529 | |||
Total Allowance for Loan Losses | 514,081 | 735,759 | 788,093 | 795,689 |
Loans Receivable | ||||
Individually evaluated for impairment | 1,276,001 | |||
Collectively evaluated for impairment | 43,796,058 | |||
Total Loans Receivable | 46,212,003 | 45,072,059 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Allowance for Loan Losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 230,625 | |||
Total Allowance for Loan Losses | 236,989 | 230,625 | 203,568 | 175,493 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 17,524,260 | |||
Total Loans Receivable | 20,146,368 | 17,524,260 | ||
Commercial Portfolio Segment [Member] | ||||
Allowance for Loan Losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 2,216,484 | |||
Total Allowance for Loan Losses | 2,000,520 | 2,216,484 | 2,294,010 | 2,376,306 |
Loans Receivable | ||||
Individually evaluated for impairment | 1,202,412 | |||
Collectively evaluated for impairment | 171,694,975 | |||
Total Loans Receivable | 174,860,808 | 172,897,387 | ||
Residential Mortgage [Member] | ||||
Allowance for Loan Losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 1,014,777 | |||
Total Allowance for Loan Losses | 860,498 | 1,014,777 | 919,972 | 924,784 |
Loans Receivable | ||||
Individually evaluated for impairment | 249,758 | |||
Collectively evaluated for impairment | 91,386,780 | |||
Total Loans Receivable | 88,962,556 | 91,636,538 | ||
Consumer Portfolio Segment [Member] | ||||
Allowance for Loan Losses | ||||
Individually evaluated for impairment | 37,889 | |||
Collectively evaluated for impairment | 55,687 | |||
Total Allowance for Loan Losses | 76,415 | 93,576 | $ 98,859 | $ 104,715 |
Loans Receivable | ||||
Individually evaluated for impairment | 37,889 | |||
Collectively evaluated for impairment | 3,813,649 | |||
Total Loans Receivable | $ 3,607,720 | $ 3,851,538 |
As of December 31, 2022, loans
As of December 31, 2022, loans individually evaluated and considered impaired are presented in the following table. (Details) | Dec. 31, 2022 USD ($) |
Financing Receivable, Past Due [Line Items] | |
Unpaid principal balance with no related allowance recorded | $ 1,769,723 |
Recorded investment with no related allowance recorded | 1,769,723 |
Unpaid principal balance with an allowance recorded | 996,337 |
Recorded investment with an allowance recorded | 996,337 |
Related allowance | 217,119 |
Unpaid Principal Balance | 2,766,060 |
Recorded Investment | 2,766,060 |
Related Allowance | 217,119 |
Commercial Loan [Member] | |
Financing Receivable, Past Due [Line Items] | |
Unpaid principal balance with no related allowance recorded | 317,553 |
Recorded investment with no related allowance recorded | 317,553 |
Unpaid principal balance with an allowance recorded | 958,448 |
Recorded investment with an allowance recorded | 958,448 |
Related allowance | 179,230 |
Unpaid Principal Balance | 1,276,001 |
Recorded Investment | 1,276,001 |
Related Allowance | 179,230 |
Commercial Portfolio Segment [Member] | |
Financing Receivable, Past Due [Line Items] | |
Unpaid principal balance with no related allowance recorded | 1,202,412 |
Recorded investment with no related allowance recorded | 1,202,412 |
Unpaid Principal Balance | 1,202,412 |
Recorded Investment | 1,202,412 |
Residential Mortgage [Member] | |
Financing Receivable, Past Due [Line Items] | |
Unpaid principal balance with no related allowance recorded | 249,758 |
Recorded investment with no related allowance recorded | 249,758 |
Unpaid Principal Balance | 249,758 |
Recorded Investment | 249,758 |
Consumer Portfolio Segment [Member] | |
Financing Receivable, Past Due [Line Items] | |
Unpaid principal balance with an allowance recorded | 37,889 |
Recorded investment with an allowance recorded | 37,889 |
Related allowance | 37,889 |
Unpaid Principal Balance | 37,889 |
Recorded Investment | 37,889 |
Related Allowance | $ 37,889 |
The following table presents av
The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. (Details) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
With no related allowance recorded: | |
Average recorded investment with no related allowance recorded | $ 1,657,770 |
Interest income recognized with no related allowance recorded | 13,043 |
With an allowance recorded: | |
Average recorded investment with an allowance recorded | 1,226,540 |
Interest income recognized with an allowance recorded | 20,020 |
Total | |
Average recorded investment | 2,884,310 |
Interest Income Recognized | 33,063 |
Commercial Loan [Member] | |
With no related allowance recorded: | |
Average recorded investment with no related allowance recorded | 181,347 |
Interest income recognized with no related allowance recorded | 2,720 |
With an allowance recorded: | |
Average recorded investment with an allowance recorded | 1,186,718 |
Interest income recognized with an allowance recorded | 19,382 |
Total | |
Average recorded investment | 1,368,065 |
Interest Income Recognized | 22,102 |
Commercial Portfolio Segment [Member] | |
With no related allowance recorded: | |
Average recorded investment with no related allowance recorded | 1,226,665 |
Interest income recognized with no related allowance recorded | 7,706 |
Total | |
Average recorded investment | 1,226,665 |
Interest Income Recognized | 7,706 |
Residential Mortgage [Member] | |
With no related allowance recorded: | |
Average recorded investment with no related allowance recorded | 249,758 |
Interest income recognized with no related allowance recorded | 2,617 |
Total | |
Average recorded investment | 249,758 |
Interest Income Recognized | 2,617 |
Consumer Portfolio Segment [Member] | |
With an allowance recorded: | |
Average recorded investment with an allowance recorded | 39,822 |
Interest income recognized with an allowance recorded | 638 |
Total | |
Average recorded investment | 39,822 |
Interest Income Recognized | $ 638 |
The following table shows the a
The following table shows the amortized cost basis as of March 31, 2023 of the loans modified for borrowers experiencing financial difficulty (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | $ 954,354 |
Commercial Loan [Member] | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | $ 303,143 |
% of Total Loan Type | 0.70% |
Financial Effect | Reduced monthly payment |
Commercial Real Estate Portfolio Segment [Member] | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | $ 613,682 |
% of Total Loan Type | 0.40% |
Financial Effect | Forbearance agreement signed for one loan and provided eleven months deferral to second borrower and added to the end of the original term loan |
Consumer Other [Member] | |
Financing Receivable, Modified [Line Items] | |
Amortized Cost Basis | $ 37,529 |
% of Total Loan Type | 1% |
Financial Effect | Reduced monthly payment |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses (Details Narrative) | Mar. 31, 2023 USD ($) Number | Dec. 31, 2022 USD ($) |
Financing Receivable, Modified [Line Items] | ||
Deferred loan fees | $ 144,055 | $ 159,434 |
Loans | 333,789,455 | 330,981,782 |
Restructured loans amount | 954,354 | |
Allowance for unfunded commitments | $ 644,912 | |
Extended Maturity [Member] | ||
Financing Receivable, Modified [Line Items] | ||
Restructured loans number | Number | 5 | |
Restructured loans amount | $ 1,000,000 | |
Interest Only Loans [Member] | ||
Financing Receivable, Modified [Line Items] | ||
Restructured loans number | Number | 2 | |
Interest Only Loans [Member] | Performing Financial Instruments [Member] | ||
Financing Receivable, Modified [Line Items] | ||
Restructured loans number | Number | 1 | |
Asset Pledged as Collateral [Member] | ||
Financing Receivable, Modified [Line Items] | ||
Loans | $ 107,900,000 | $ 93,100,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating lease right of use asset | $ 13,275,236 | $ 13,433,692 | |
Operating lease right of use asset | $ 13,275,236 | $ 13,433,692 | |
Renewal terms | 20 years | ||
Weighted average remaining lease term | 15 years 3 months 18 days | ||
Weighted average rate | 4.18% | ||
Total rental expense | $ 302,645 | $ 299,571 |
The table below shows lease exp
The table below shows lease expense components for the three months ended March 31, 2023 and 2022. (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases | ||
Operating lease expense | $ 302,645 | $ 299,571 |
Short-term lease expense | ||
Total lease expense | $ 302,645 | $ 299,571 |
The following table presents in
The following table presents information about assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 267,439,924 | $ 271,172,226 |
US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 170,236,530 | 168,187,315 |
US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 39,124,920 | 45,910,187 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 267,439,924 | 271,172,226 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 170,236,530 | 168,187,315 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 74,654,094 | 73,523,099 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 22,549,300 | 29,461,812 |
Fair Value, Recurring [Member] | US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 170,236,530 | 168,187,315 |
Fair Value, Recurring [Member] | US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 170,236,530 | 168,187,315 |
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 58,078,474 | 57,074,724 |
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 58,078,474 | 57,074,724 |
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 39,124,920 | 45,910,187 |
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 16,575,620 | 16,448,375 |
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 22,549,300 | $ 29,461,812 |
The following table reconciles
The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2023 and 2022: (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Beginning balance | $ 29,461,812 | $ 24,484,047 |
Total gains or (losses) (realized/unrealized) | ||
Included in other comprehensive income (loss) | 549,488 | (1,444,393) |
Purchases, issuances, and settlements net of maturities | (7,462,000) | (2,413,000) |
Ending balance | $ 22,549,300 | $ 20,626,654 |
The following tables present in
The following tables present information about certain assets measured at fair value on a nonrecurring basis as of March 31, 2023 and December 31, 2022: (Details) - Fair Value, Nonrecurring [Member] - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually assessed loans | $ 1,438,744 | |
Impaired loans | $ 1,452,170 | |
Mortgage loans to be sold | 1,278,158 | 866,594 |
Total | 2,716,902 | 2,318,764 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually assessed loans | ||
Impaired loans | ||
Mortgage loans to be sold | ||
Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually assessed loans | ||
Impaired loans | ||
Mortgage loans to be sold | 1,278,158 | 866,594 |
Total | 1,278,158 | 866,594 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually assessed loans | 1,438,744 | |
Impaired loans | 1,452,170 | |
Mortgage loans to be sold | ||
Total | $ 1,438,744 | $ 1,452,170 |
The following table provides in
The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at March 31, 2023 and December 31, 2022: (Details) - Valuation, Market Approach [Member] - Measurement Input, Discount Rate [Member] | Mar. 31, 2023 | Dec. 31, 2022 |
Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 10% | 10% |
Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 20% | 20% |
The following tables present th
The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of March 31, 2023 and December 31, 2022, respectively. (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Financial Assets: | ||
Investment securities available for sale | $ 267,439,924 | $ 271,172,226 |
Reported Value Measurement [Member] | ||
Financial Assets: | ||
Cash and due from banks | 7,099,250 | 14,772,564 |
Interest-bearing deposits at the Federal Reserve | 14,885,733 | 12,999,135 |
Investment securities available for sale | 267,439,924 | 271,172,226 |
Mortgage loans to be sold | 1,278,158 | 866,594 |
Loans, net | 330,100,952 | 326,690,561 |
Accrued interest receivable | 1,842,995 | 2,145,522 |
Financial Liabilities: | ||
Demand deposits | 523,037,875 | 582,100,650 |
Time deposits | 64,554,584 | 16,569,608 |
Accrued interest payable | 393,852 | 41,007 |
Estimate of Fair Value Measurement [Member] | ||
Financial Assets: | ||
Cash and due from banks | 7,099,250 | 14,772,564 |
Interest-bearing deposits at the Federal Reserve | 14,885,733 | 12,999,135 |
Investment securities available for sale | 267,439,924 | 271,172,226 |
Mortgage loans to be sold | 1,278,158 | 866,594 |
Loans, net | 305,598,199 | 304,249,626 |
Accrued interest receivable | 1,842,995 | 2,145,522 |
Financial Liabilities: | ||
Demand deposits | 523,037,875 | 582,100,650 |
Time deposits | 65,658,921 | 16,933,818 |
Accrued interest payable | 393,852 | 41,007 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Financial Assets: | ||
Cash and due from banks | 7,099,250 | 14,772,564 |
Interest-bearing deposits at the Federal Reserve | 14,885,733 | 12,999,135 |
Investment securities available for sale | 170,236,530 | 168,187,315 |
Mortgage loans to be sold | ||
Loans, net | ||
Accrued interest receivable | ||
Financial Liabilities: | ||
Demand deposits | ||
Time deposits | ||
Accrued interest payable | ||
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Financial Assets: | ||
Cash and due from banks | ||
Interest-bearing deposits at the Federal Reserve | ||
Investment securities available for sale | 74,654,094 | 73,523,099 |
Mortgage loans to be sold | 1,278,158 | 866,594 |
Loans, net | ||
Accrued interest receivable | 1,842,995 | 2,145,522 |
Financial Liabilities: | ||
Demand deposits | 523,037,875 | 582,100,650 |
Time deposits | 65,658,921 | 16,933,818 |
Accrued interest payable | 393,852 | 41,007 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Financial Assets: | ||
Cash and due from banks | ||
Interest-bearing deposits at the Federal Reserve | ||
Investment securities available for sale | 22,549,300 | 29,461,812 |
Mortgage loans to be sold | ||
Loans, net | 305,598,199 | 304,249,626 |
Accrued interest receivable | ||
Financial Liabilities: | ||
Demand deposits | ||
Time deposits | ||
Accrued interest payable |
The following table is a summar
The following table is a summary of the reconciliation of weighted average shares outstanding: (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 1,588,779 | $ 1,464,106 |
Weighted average shares outstanding | 5,552,351 | 5,544,546 |
Effect of dilutive shares | 87,962 | 144,073 |
Weighted average shares outstanding - diluted | 5,640,313 | 5,688,619 |
Earnings per share - basic | $ 0.29 | $ 0.26 |
Earnings per share - diluted | $ 0.28 | $ 0.26 |