Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 24, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Registrant Name | VIRGINIA NATIONAL BANKSHARES CORP | ||
Entity Central Index Key | 0001572334 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 5,326,871 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity File Number | 001-40305 | ||
Entity Incorporation, State or Country Code | VA | ||
Entity Tax Identification Number | 46-2331578 | ||
Entity Address, Address Line One | 404 People Place | ||
Entity Address, City or Town | Charlottesville | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 22911 | ||
City Area Code | 434 | ||
Local Phone Number | 817-8621 | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | VABK | ||
Security Exchange Name | NASDAQ | ||
Entity Public Float | $ 183.8 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement to be used in conjunction with the registrant’s 2022 Annual Meeting of Shareholders are incorporated into Part III of this Form 10-K. | ||
Auditor Firm ID | 613 | ||
Auditor Name | Yount, Hyde & Barbour, P.C. | ||
Auditor Location | Richmond, Virginia |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and due from banks | $ 20,345 | $ 8,116 |
Interest-bearing deposits in other banks | 336,032 | |
Federal funds sold | 152,463 | 26,579 |
Securities: | ||
Available for sale, at fair value | 303,817 | 174,086 |
Restricted securities, at cost | 4,950 | 3,010 |
Total securities | 308,767 | 177,096 |
Loans | 1,061,211 | 609,406 |
Allowance for loan losses | (5,984) | (5,455) |
Loans, net | 1,055,227 | 603,951 |
Premises and equipment, net | 25,093 | 5,238 |
Bank owned life insurance | 31,234 | 16,849 |
Goodwill | 8,140 | 372 |
Other real estate owned, net | 611 | |
Right of use asset, net | 7,583 | 3,527 |
Accrued interest receivable and other assets | 18,144 | 6,341 |
Total assets | 1,972,184 | 848,410 |
Demand deposits: | ||
Noninterest-bearing | 522,281 | 209,772 |
Interest-bearing | 446,314 | 148,910 |
Money market and savings deposit accounts | 665,530 | 272,980 |
Certificates of deposit and other time deposits | 162,045 | 99,102 |
Total deposits | 1,796,170 | 730,764 |
Advances from the FHLB | 0 | 30,000 |
Junior subordinated debt | 3,367 | |
Lease liability | 7,108 | 3,589 |
Accrued interest payable and other liabilities | 3,552 | 1,459 |
Total liabilities | 1,810,197 | 765,812 |
Commitments and contingent liabilities | ||
Shareholders' equity: | ||
Preferred stock, $2.50 par value | ||
Common stock, $2.50 par value | 13,178 | 6,722 |
Capital surplus | 104,584 | 32,457 |
Retained earnings | 46,436 | 41,959 |
Accumulated other comprehensive income (loss) | (2,211) | 1,460 |
Total shareholders' equity | 161,987 | 82,598 |
Total liabilities and shareholders' equity | $ 1,972,184 | $ 848,410 |
Common stock, shares outstanding | 5,308,335 | 2,714,273 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Core Deposit [Member] | ||
Securities: | ||
Intangible assets, net | $ 8,271 | |
Other Intangible Assets [Member] | ||
Securities: | ||
Intangible assets, net | $ 274 | $ 341 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 2.50 | $ 2.50 |
Common stock, par value per share | $ 2.50 | $ 2.50 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest and dividend income: | ||
Loans, including fees | $ 43,899 | $ 24,945 |
Federal funds sold | 139 | 104 |
Other interest-bearing deposits | 233 | |
Investment securities: | ||
Taxable | 2,810 | 1,602 |
Tax exempt | 1,021 | 475 |
Dividends | 170 | 104 |
Total interest and dividend income | 48,272 | 27,230 |
Interest expense: | ||
Demand and savings deposits | 2,308 | 1,824 |
Certificates and other time deposits | 1,108 | 1,454 |
Borrowings | (132) | 73 |
Total interest expense | 3,284 | 3,351 |
Net interest income | 44,988 | 23,879 |
Provision for loan losses | 1,014 | 1,622 |
Net interest income after provision for loan losses | 43,974 | 22,257 |
Noninterest income: | ||
Wealth management fees | 3,508 | 1,133 |
Advisory and brokerage income | 1,154 | 700 |
Deposit account fees | 1,459 | 651 |
Debit/credit card and ATM fees | 2,070 | 612 |
Bank owned life insurance income | 708 | 437 |
Gains on sales of securities | 743 | |
Loan swap fee income | 81 | 1,313 |
Other | 1,485 | 976 |
Total noninterest income | 10,465 | 6,565 |
Noninterest expense: | ||
Salaries and employee benefits | 16,129 | 9,466 |
Net occupancy | 3,575 | 1,908 |
Equipment | 966 | 463 |
Bank franchise tax | 1,136 | 649 |
Computer software | 1,020 | 579 |
Data processing | 2,793 | 1,106 |
FDIC deposit insurance assessment | 858 | 187 |
Marketing, advertising and promotion | 922 | 409 |
Merger and merger-related expenses | 7,423 | 988 |
Plastics expense | 978 | 180 |
Professional fees | 1,117 | 723 |
Core deposit intangible amortization | 1,389 | |
Other | 4,216 | 2,121 |
Total noninterest expense | 42,522 | 18,779 |
Income before income taxes | 11,917 | 10,043 |
Provision for income taxes | 1,846 | 2,065 |
Net income | $ 10,071 | $ 7,978 |
Net income per common share, basic | $ 2.16 | $ 2.95 |
Net income per common share, diluted | $ 2.14 | $ 2.95 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 10,071 | $ 7,978 |
Other comprehensive income (loss) | ||
Unrealized gains (losses) on securities, net of (benefit) tax of ($959) and $555 for the years ended December 31, 2021 and 2020 | (3,607) | 2,090 |
Reclassification adjustment for realized gains on sales and calls of securities, net of tax of $0 and ($156) for the years ended December 31, 2021 and 2020 | (587) | |
Unrealized losses on interest rate swaps, net of tax of ($17) and $0 for the years ended December 31, 2021 and 2020 | (64) | |
Total other comprehensive income (loss) | (3,671) | 1,503 |
Total comprehensive income | $ 6,400 | $ 9,481 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Change in unrealized gains (losses) on available-for-sale securities, (benefit) tax | $ (959) | $ 555 |
Reclassification adjustment, tax | 0 | (156) |
Unrealized losses on interest rate swaps, tax | $ (17) | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2019 | $ 76,107 | $ 6,720 | $ 32,195 | $ 37,235 | $ (43) |
Stock option expense | 124 | 124 | |||
Restricted stock grant expense | 140 | 140 | |||
Vested stock grants | 2 | (2) | |||
Cash dividends declared | (3,254) | (3,254) | |||
Net income | 7,978 | 7,978 | |||
Other comprehensive income (loss) | 1,503 | 1,503 | |||
Balance at Dec. 31, 2020 | 82,598 | 6,722 | 32,457 | 41,959 | 1,460 |
Common stock issued in acquisition of Fauquier Bankshares, Inc. | 78,036 | 6,428 | 71,608 | ||
Cash in lieu of fractional shares | (4) | (4) | |||
Exercise of stock options | 30 | 3 | 27 | ||
Stock option expense | 145 | 145 | |||
Restricted stock grant expense | 376 | 376 | |||
Vested stock grants | 25 | (25) | |||
Cash dividends declared | (5,594) | (5,594) | |||
Net income | 10,071 | 10,071 | |||
Other comprehensive income (loss) | (3,671) | (3,671) | |||
Balance at Dec. 31, 2021 | $ 161,987 | $ 13,178 | $ 104,584 | $ 46,436 | $ (2,211) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared, per share | $ 1.20 | $ 1.20 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,071 | $ 7,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 1,014 | 1,622 |
Net accretion of certain acquisition-related adjustments | (3,381) | |
Amortization of intangible assets | 1,456 | 90 |
Net amortization and accretion of securities | 1,542 | 724 |
Net gains on sales and calls of securities | (743) | |
Net gains on sales other assets | (65) | |
Bank owned life insurance income | (708) | (437) |
Depreciation and other amortization | 2,944 | 1,866 |
Deferred tax expense (benefit) | 702 | (214) |
Stock option expense | 145 | 124 |
Stock grant expense | 376 | 140 |
Net change in: | ||
Accrued interest receivable and other assets | (2,605) | (946) |
Accrued interest payable and other liabilities | 1,574 | (951) |
Net cash provided by operating activities | 13,065 | 9,253 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of Fauquier Bankshares | 153,278 | |
Purchases of available for sale securities | (74,427) | (167,357) |
Net increase in restricted investments | (320) | (1,327) |
Proceeds from maturities, calls and principal payments of available for sale securities | 31,720 | 39,740 |
Proceeds from sale of available for sale securities | 69,494 | |
Net decrease (increase) in loans | 146,945 | (70,249) |
Proceeds from sale of loans | 6,251 | |
Proceeds from sale of premises and equipment | 34 | |
Cash payment for wealth management book of business | (50) | |
Purchase of bank premises and equipment, net | (1,293) | (199) |
Net cash provided by (used in) investing activities | 262,188 | (129,948) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase in demand deposits, NOW accounts, and money market accounts | 254,564 | 119,729 |
Net decrease in certificates of deposit and other time deposits | (6,712) | (10,176) |
Net (decrease) increase in other borrowings | (42,582) | 30,000 |
Proceeds from stock options exercised | 30 | |
Cash dividends paid | (6,408) | (3,248) |
Net cash provided by financing activities | 198,892 | 136,305 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 474,145 | 15,610 |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 34,695 | 19,085 |
End of period | 508,840 | 34,695 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest | 3,269 | 3,487 |
Taxes | 1,217 | 2,750 |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES | ||
Unrealized (losses) gains on available for sale securities | (4,566) | 1,902 |
Unrealized (losses) gains on interest rate swaps | (81) | |
Initial right-of-use assets obtained in exchange for new operating lease liabilities | $ 711 | |
Assets acquired in business combination | 910,494 | |
Liabilities assumed in business combination | 840,226 | |
Change in goodwill | $ 7,768 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies The Company - Headquartered in Charlottesville, Virginia, Virginia National Bankshares Corporation (the Company) (NASDAQ: VABK) is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Company is authorized to issue (a) 10,000,000 shares of common stock with a par value of $ 2.50 per share and (b) 2,000,000 shares of preferred stock at a par value $ 2.50 per share. There is currently no preferred stock outstanding. The Company is regulated under the Bank Holding Company Act of 1956, as amended and is subject to inspection, examination, and supervision by the Federal Reserve Board. Virginia National Bank (the Bank) is a wholly-owned subsidiary of the Company and was organized in 1998 under federal law as a national banking association to engage in a general commercial and retail banking business. The Bank is also headquartered in Charlottesville, Virginia and primarily serves the Virginia communities in and around the cities of Charlottesville, Winchester, Manassas and Richmond, and the counties of Albemarle, Fauquier, Frederick and Prince William. As a national bank, the Bank is subject to the supervision, examination and regulation of the OCC. The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. The Bank also offers, through its networking agreements with third parties, investment advisory and other investment services under Sturman Wealth Advisors. Investment management services are offered through Masonry Capital Management, LLC, a registered investment adviser and wholly-owned subsidiary of the Company. The Bank, through its financial subsidiary Fauquier Bank Services, Inc., has equity ownership interests in Bankers Insurance, LLC, a Virginia independent insurance company, and Bankers Title Shenandoah, LLC, a title insurance company, both of which are owned by a consortium of Virginia community banks. The Bank has another subsidiary, Special Properties Acquisition - VA, LLC, which was originally formed by Fauquier to hold other real estate owned; however, there are no assets currently held by this subsidiary. In addition, the Company owns Fauquier Statutory Trust II (“Trust II”), which is an unconsolidated subsidiary. The subordinated debt owed to Trust II is reported as a liability of the Company. On April 1, 2021 , the Company completed the Merger with Fauquier with and into the Company for total consideration paid of $ 78.0 million. In connection with the transaction, TFB, Fauquier's wholly-owned bank subsidiary, was merged with and into the Bank. Additional information about this transaction is presented in Note 2 – Business Combinations. Basis of Financial Information - The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to the reporting guidelines prescribed by regulatory authorities. The following is a description of the more significant of those policies and practices. Principles of consolidation – The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, the Bank and Masonry Capital. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses (including impaired loans), acquisition accounting, other-than-temporary impairment of securities, intangible assets, income taxes, and fair value measurements. Cash flow reporting – For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand, funds due from banks, interest bearing deposits in other banks and federal funds sold. Securities – Unrestricted investments are classified in two categories as described below. • Securities held to maturity – Securities classified as held to maturity are those debt securities the Company has both the positive intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. Currently the Company has no securities classified as held to maturity because of Management’s desire to have more flexibility in managing the investment portfolio. • Securities available for sale – Securities classified as AFS are those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. AFS securities are carried at fair value. Unrealized gains or losses are reported as a separate component of other comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities or to “call” dates, whichever occurs first. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Impairment of securities occurs when the fair value of a security is less than its amortized cost. For debt securities, impairment is considered other-than-temporary and recognized in its entirety in net income if either (1) the Company intends to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-than-likely that the Company will be required to sell the security before recovery, the Company must determine what portion of the impairment is attributable to a credit loss, which occurs when the amortized cost of the security exceeds the present value of the cash flows expected to be collected from the security. If there is no credit loss, there is no other-than-temporary impairment. If there is a credit loss, other-than-temporary impairment exists, and the credit loss must be recognized in net income and the remaining portion of impairment must be recognized in other comprehensive income. Restricted securities – As members of the FRB and the FHLB, the Company is required to maintain certain minimum investments in the common stock of the FRB and FHLB. Required levels of investments are based upon the Bank’s capital and a percentage of qualifying assets. Additionally, the Company has purchased common stock in CBB Financial Corp. (“CBBFC”), the holding company for Community Bankers’ Bank and an investment in an SBA loan fund. These restricted securities are carried at cost. Loans – Loans are reported at the principal balance outstanding net of unearned discounts and of the allowance for loan losses. Interest income on loans is reported on the level-yield method and includes amortization of deferred loan fees and costs over the loan term. Acquired Loans were recorded at fair value at the Merger date without carryover of Fauquier's allowance for loan losses or net deferred fee/costs. The fair value of the Acquired Loans was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected on the loans and then discounting those cash flows based on a discount rate that would be required by a market participant. Acquired Loans are classified as either (i) purchased credit-impaired loans or (ii) purchased performing loans. PCI loans are not classified as nonperforming loans by the Company at the time they are acquired, regardless of whether they had been classified as nonperforming by the previous holder of such loans, and they will not be classified as nonperforming so long as, at semi-annual re-estimation periods, we believe we will full collect the new carrying value of the pools of loans. Purchased performing loans are accounted for using the contractual cash flows method of recognizing discount accretion based on the Acquired Loans' contractual cash flows. Further information regarding the Company’s accounting policies related to past due loans, non-accrual loans, impaired loans and troubled-debt restructurings is presented in Note 4 - Loans. Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the loan portfolio. The allowance for loan losses includes allowance allocations calculated in accordance with FASB ASC Topic 310, “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.” Further information regarding the Company’s policies and methodology used to estimate the allowance for loan losses is presented in Note 5 – Allowance for Loan Losses. Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company or its subsidiaries – put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company or its subsidiaries does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Premises and equipment – Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method based on the estimated useful lives of assets, which range from 3 to 40 years. Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon disposition, the asset and related accumulated depreciation are removed from the books and any resulting gain or loss is charged to income. More information regarding premises and equipment is presented in Note 6 – Premises and Equipment. Leases - The Company recognizes a lease liability and a right-of-use asset in connection with leases in which it is a lessee, except for leases with a term of twelve months or less. A lease liability represents the Company’s obligation to make future payments under lease contracts, and a right-of-use asset represents the Company’s right to control the use of the underlying property during the lease term. Lease liabilities and right-of-use assets are recognized upon commencement of a lease and measured as the present value of lease payments over the lease term, discounted at the incremental borrowing rate of the lessee. Further information regarding leases is presented in Note 7 – Leases. Intangible assets – Goodwill is determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually, or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company performs the test as of December 31 of each year whereby the estimated fair value is compared to the carrying value. Intangible assets with definite useful lives are amortized over their estimated useful lives, which range from 3 to 10 years , to their estimated residual values. Goodwill is the only intangible asset with an indefinite life included on the Company’s Consolidated Balance Sheets. Management has concluded that no impairment of these assets existed as of the balance sheet date. More information regarding intangible assets is presented in Note 8 – Goodwill and Other Intangible Assets. BOLI – The Company has purchased life insurance on certain key employees and acquired BOLI policies as part of the Merger. These policies are recorded at their cash surrender value on the Consolidated Balance Sheets. Income generated from polices is recorded as noninterest income. Other Real Estate Owned - Assets acquired through or in lieu of loan foreclosures are held for sale and are initially recorded at fair value less selling costs at the date of foreclosure, establishing a new cost basis. When the carrying amount exceeds the acquisition date fair value less selling costs, the excess is charged off against the ALLL. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell, and any valuation adjustments occurring from post-acquisition reviews are charged to expense as incurred. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses on the Company’s Consolidated Statements of Income. Fair value measurements – ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon internally developed models that primarily use, as inputs, observable market-based parameters. Any such valuation adjustments are applied consistently over time. Additional information on fair value measurements is presented in Note 17 – Fair Value Measurements. Stock-based compensation – The Company accounts for all plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and unrestricted or restricted stock grants. For stock options, compensation is estimated at the date of grant, using the Black-Scholes option valuation model for determining fair value. The model employs the following assumptions: • Dividend yield - calculated as the ratio of historical cash dividends paid per share of common stock to the stock price on the date of grant; • Expected life (term of the option) - based on the average of the contractual life and vesting schedule for the respective option; • Expected volatility - based on the monthly historical volatility of the Company’s stock price over the expected life of the options; • Risk-free interest rate - based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant. The Company has elected to estimate forfeitures when recognizing compensation expense, and this estimate of forfeitures is adjusted over the requisite service period or vesting schedule based on the extent to which actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also will impact the amount of estimated unamortized compensation expense to be recognized in future periods. Further information on stock-based compensation is presented in Note 19 – Stock Incentive Plans. Net income per common share – Basic net income per share, commonly referred to as earnings per share, represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period, including restricted shares that have not yet vested as these are considered participating securities during the vesting period. Diluted net income per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Additional information on net income per share is presented i n Note 20 – Net Income per Share. Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on AFS securities and interest rate swaps, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Further information on the Company’s other comprehensive income is presented in Note 21 – Other Comprehensive Income. Derivative Financial Instruments - The Company recognizes derivative financial instruments in the consolidated balance sheets at fair value. The fair value of a derivative is determined by quoted market prices and mathematical models using current and historical data. If certain hedging criteria are met, including testing for hedge effectiveness, special hedge accounting may be applied. The Company assesses each hedge, both at inception and on an ongoing basis, to determine whether the derivative used in a hedging transaction is effective in offsetting changes in the fair value or cash flows of the hedged item and whether the derivative is expected to remain effective during subsequent periods. The Company discontinues hedge accounting when (i) it determines that a derivative is no longer effective in offsetting changes in fair value or cash flows of a hedged item; (ii) the derivative expires or is sold, terminated or exercised; (iii) probability exists that the forecasted transaction will no longer occur or; (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued and a derivative remains outstanding, the Company recognizes the derivative in the balance sheet at its fair value and changes in the fair value are recognized in net income. At inception, the Company designates a derivative as (i) a fair value hedge of recognized assets or liabilities or of unrecognized firm commitments (fair value hedge) or (ii) a hedge of forecasted transactions or variable cash flows to be received or paid in conjunction with recognized assets or liabilities (cash flow hedge). For a derivative treated as a fair value hedge, a change in fair value is recorded as an adjustment to the hedged item and recognized in net income. For a derivative treated as a cash flow hedge, the effective portion of a change in fair value is recorded as an adjustment to the hedged item and recognized as a component of accumulated other comprehensive income (loss) within shareholders’ equity. For a derivative treated as a cash flow hedge, the ineffective portion of a change in fair value is recorded as an adjustment to the hedged item and recognized in net income. Further information on the Company's derivative financial instruments is presented in Note 23 -Derivatives Instruments and Hedging Activities. Advertising costs – The Company follows the policy of charging the costs of advertising to expense as they are incurred. Income taxes – Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carry forwards, and tax credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as additional income taxes in the statements of income. For the years ended December 31, 2021 and 2020 , there were no such interest or penalties recognized. Further information on the Company’s accounting policies for income taxes is presented in Note 11 – Income Taxes. Securities and other property held in a fiduciary capacity – Securities and other property held by VNB Trust and Estate Services, Sturman Wealth Advisors or Masonry Capital in a fiduciary or agency capacity are not assets of the Company and are not included in the accompanying consolidated financial statements. Revenue Recognition - ASU 2014-09, “Revenue from Contracts with Customers”, and all subsequent amendments to the ASU (collectively “Topic 606”), (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as OREO. The majority of the Company’s revenue is from interest income, including loans and securities, which are outside the scope of the standard. The services that fall within the scope of the standard are presented within noninterest income on the consolidated statement of income and are recognized as revenue as the Company satisfies its obligations to the customer. The revenue that falls within the scope of Topic 606 is primarily related to service charges on deposit accounts, debit/credit card and ATM fees, asset management fees and sales of other real estate owned, when applicable. Reclassifications – Certain reclassifications have been made to the prior year financial statements to conform to current year presentation. The results of the reclassifications are not considered material. Recent Accounting Pronouncements Financial Instruments – Credit Losses - In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU’s have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The amendments of Topic 326, upon adoption, will be applied on a modified retrospective basis, with the cumulative effect of adopting the new standard being recorded as an adjustment to opening retained earnings in the period of adoption. The Company is currently assessing the impact that Topic 326 will have on its consolidated financial statements. Early in 2017, the Company formed a cross-functional steering committee, including some members of senior management, to provide governance and guidance over the project plan. The steering committee has gathered historical loan loss data for purposes of evaluating the appropriate portfolio segmentation and modeling methods under the standard and has performed procedures to validate the historical loan loss data to ensure its suitability and reliability for purposes of developing an estimate of expected credit losses under Topic 326. The Company has engaged a vendor to assist in modeling expected lifetime losses under Topic 326 and is continuing to develop and refine an approach to estimate the ACL. The adoption of Topic 326 will result in significant changes to the Company's consolidated financial statements, which may include changes in the level of the ACL that will be considered adequate, a reduction in total equity and regulatory capital of the Bank, differences in the timing of recognizing changes to the ACL and expanded disclosures about the ACL. The Company has not yet determined an estimate of the effect of these changes, as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time. The adoption of the standard will also result in significant changes in the Company's internal control over financial reporting related to the ACL. Effective November 25, 2019, the SEC adopted SAB 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB ASC 326. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. LIBOR and Other Reference Rates - In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance provides temporary, optional guidance to ease the potential burden in accounting for reference rate reform associated with the LIBOR transition. LIBOR and other interbank offered rates are widely used benchmark or reference rates that have been used in the valuation of loans, derivatives, and other financial contracts. Global capital markets are going to be required to move away from LIBOR and other interbank offered rates and toward rates that are more observable or transaction based and less susceptible to manipulation. Topic 848 provides optional expedients and exceptions, subject to meeting certain criteria, for applying current GAAP to contract modifications and hedging relationships, for contracts that reference LIBOR or another reference rate expected to be discontinued. Topic 848 is intended to help stakeholders during the global market-wide reference rate transition period. The amendments are effective as of March 12, 2020 through December 31, 2022 and can be adopted at an instrument level. To facilitate an orderly transition from LIBOR and other benchmark rates to alternative reference rates, the Company has established a focus committee, which includes members of senior management, including the Chief Credit Officer and Chief Financial Officer, among others. The task of this committee is to identify, assess and monitor risks associated with the expected discontinuation or unavailability of benchmarks, including LIBOR, achieve operational readiness and engage impacted clients in connection with the transition to alternative reference rates. A complete inventory of instruments tied to LIBOR has been developed, and the focus committee is working through each of the instruments to determine ultimate resolution. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Note 2 - Business Combinations On April 1, 2021 , the Company completed the Merger with Fauquier with and into the Company, with the Company surviving, pursuant to the terms of the Agreement and Plan of Reorganization, dated October 1, 2020, between the Company and Fauquier. Pursuant to the Merger Agreement, holders of shares of Fauquier common stock received 0.675 shares of the Company’s common stock for each share of Fauquier common stock held immediately prior to the Effective Date of the Merger, plus cash in lieu of fractional shares. In connection with the transaction, the Company issued 2,571,213 shares of its common stock to the shareholders of Fauquier and paid $ 4 thousand in cash in lieu of fractional shares. Each share of the Company’s common stock outstanding immediately prior to the Merger remained outstanding and was unaffected by the Merger. Shortly after the Effective Date of the Merger, TFB, Fauquier’s wholly-owned bank subsidiary, was merged with and into Virginia National Bank, the Company’s wholly-owned bank subsidiary, with Virginia National Bank surviving. The Company accounted for the Merger using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the Merger and the common stock of the Company issued as consideration were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities, particularly related to the loan portfolio, is inherently subjective and involves significant judgment regarding the methods and assumptions used to estimate fair value. Under ASC 805, during the measurement period of up to one year, the acquirer shall adjust the amounts recognized at the acquisition date and may recognize additional assets or liabilities to reflect new information obtained from facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Measurement period adjustments are recognized in the reporting period in which they are determined. The measurement period may not exceed one year from the acquisition date. The following table presents as of April 1, 2021 the total consideration paid by the Company in connection with the Merger, the fair values of the assets acquired and liabilities assumed, and the resulting goodwill: (Dollars in thousands) As Recorded Fair Value As Recorded by Fauquier Adjustment by the Company Assets: Cash and cash equivalents $ 153,282 $ - $ 153,282 Securities available for sale 93,133 - 93,133 Restricted securities 1,619 - 1,619 Loans, net 615,766 ( 13,123 ) 602,643 Premises and equipment 16,276 3,872 20,148 Other real estate owned 1,356 ( 745 ) 611 Bank-owned life insurance 13,677 - 13,677 Right-of-use assets 4,355 1,077 5,432 Core deposit intangible - 9,660 9,660 Other assets 11,298 ( 1,009 ) 10,289 Total assets acquired $ 910,762 $ ( 268 ) $ 910,494 Liabilities: Deposits 817,499 191 817,690 Short-term borrowings 12,582 473 13,055 Junior subordinated debt 4,124 ( 790 ) 3,334 Lease liability 4,440 352 4,792 Other liabilities 1,355 - 1,355 Total liabilities assumed $ 840,000 $ 226 $ 840,226 Net assets acquired $ 70,268 Total consideration paid 78,036 Goodwill resulting from merger $ 7,768 In connection with the M erger, the Company recorded approximately $ 7.8 million of goodwill and $ 9.7 million of other intangible assets related to the core deposits of Fauquier. The goodwill arising from the Merger with Fauquier is not deductible for income taxes. The core deposit intangible asset will be amortized over a period of seven years using the sum of years digits method. Loans acquired from Fauquier had aggregate outstanding principal of $ 622.9 million and an estimated fair value of $ 602.6 million. The discount between the outstanding principal balance and fair value of $ 20.3 million represents expected credit losses and adjustments for market interest rates of $ 21.3 million, offset by elimination of net deferred fees/costs of $ 979 thousand. Under the acquisition method (ASC 805), the allowance for loan losses recorded in the books of Fauquier in the amount of $ 7.2 million was not carried over into the books of the Company. As of the Effective Date, the fair value of the performing loans was $ 513.8 million, which was 1.7 % less than the book value of the loans. The total fair value discount on performing loans of $ 9.0 million consisted of a credit discount of $ 8.4 million and an other fair value discount of $ 647 thousand. Loans that have evidence of deterioration in credit quality since origination are categorized as purchased credit impaired. As of the Effective Date, the fair value of PCI loans was $ 87.3 million, which was 12.3 % below the book value of the loans. The total fair value mark on PCI loans of $ 12.3 million consisted of a credit discount of $ 11.2 million and an other fair value discount of $ 1.1 million. Information about PCI l oans acquired from Fauquier as of April 1, 2021 is as follows: (Dollars in thousands) April 1, 2021 Contractual principal and interest at acquisition $ 136,476 Nonaccretable difference ( 33,712 ) Expected cash flows at acquisition 102,764 Accretable yield ( 15,499 ) Basis in PCI loans at acquisition, estimated fair value $ 87,265 Fair values of the major categories of assets acquired and liabilities assumed as part of the Merger were determined as follows: Cash and due from banks: The carrying amount of cash and due from banks was used as a reasonable estimate of fair value. Securities available for sale: The estimated fair value of AFS investment securities was based on quoted pricing from a third party portfolio accounting service vendor for the valuation of those securities. Loans: The Acquired Loans were recorded at fair value at the Merger date without carryover of Fauquier's allowance for loan losses or net deferred fee/costs. The fair value of the Acquired Loans was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected on the loans and then discounting those cash flows based on a discount rate that would be required by a market participant. In this regard, the Acquired Loans were segregated into pools based on loan type and credit risk. Loan type was determined based on collateral type, loan purpose and loan structure. Credit risk characteristics included risk rating groups (pass rated loans and adversely classified loans), updated loan-to-value ratios and lien position, and past loan performance. For valuation purposes, these pools were further disaggregated by maturity and pricing characteristics (e.g., fixed-rate, adjustable-rate, balloon maturities). Premises and equipment: The land and buildings acquired were recorded at fair value as determined by current appraisals by independent third parties and tax assessments at the Effective Date. Other real estate owned: OREO was recorded at fair value based on an existing purchase contract, less estimated selling costs. Bank owned life insurance: The carrying amount of bank owned life insurance was used as a reasonable estimate of fair value. Right of use assets and lease liabilities: Lease liabilities were measured at the present value of the remaining lease payments, as if the acquired lease were a new lease of the Company at the Effective Date. Right-of-use assets were measured at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. Core deposit intangible: The fair value of the CDI was determined based on a discounted cash flow analysis using a discount rate based on the estimated cost of equity capital for a market participant. To calculate cash flows, deposit account servicing costs (net of deposit fee income) and interest expense on deposits were compared to the cost of alternative funding sources available through the FHLB. The life of the deposit base and projected deposit attrition rates were determined using Fauquier’s historical deposit data. The CDI was estimated at $ 9.7 m illion or 1.3 % of non-maturity deposits. Deposits: The fair value adjustment of deposits represents a premium over the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar term certificates of deposit, using a discounted cash flow method. The resulting estimated fair value adjustment of certificates of deposit ranging in maturity from one month to three years is a $ 191 thousand premium and is being amortized into income over a period of thirty-six months . Short-term borrowings: The fair value of borrowings was determined by comparison to current interest rates for similar borrowings. The resulting fair value adjustment to short-term borrowings is a $ 473 thousand premium which will be amortized into interest expense over the remaining life of the debt on a straight-line basis. (Note that such borrowings were repaid in the third quarter of 2021, and therefore, the premium was fully amortized during 2021.) Junior subordinated debt: The fair value of the junior subordinated debt was determined by forecasting the cash flows at the stated coupon rate and discount at a prevailing market rate. The prevailing market rate was based on implied market yields for recently issued debt with similar duration, credit quality, seniority and structure, issued by institutions of similar asset size. The resulting estimated fair value adjustment of junior subordinated debt is a $ 790 thousand discount and is being accreted to interest expense over the remaining life of the debt on a straight-line basis. The revenue and earnings amounts specific to Fauquier since the Effective Date that are included in the consolidated results for 2021 are not readily determinable. The disclosures of these amounts are impracticable due to the merging of certain processes and systems at the Effective Date. Merger and merger-related expenses were $ 7.4 million ($ 5.5 million after taxes) for 2021 and $ 1.0 million ($ 704 thousand after taxes) for 2020. These costs included investment banker fees, expenses related to the integration of systems and operations, change of control payments, severance and stay-put bonuses and legal and consulting expenses, which have been expensed as incurred. The following amounts were accreted to income during 2021 : $ 2.8 million increase to interest income (accretable yield from purchased performing loans), $ 473 thousand fair value adjustment as a result of early payoff of FHLB advances and $ 136 thousand reduction to interest expense related to the time deposit fair value discount. During 2021 , the Company incurred $ 1.4 million in amortization expense related to the core deposit intangible, $ 33 thousand in amortization expense related to the junior subordinated debt and $ 6 thousand reduction of interest income related to the PCI loans. |
Securities
Securities | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Note 3 – Securities The amortized cost and fair values of securities available for sale as of December 31, 2021 and December 31, 2020 are as follows: December 31, 2021 Amortized Gross Gross Fair (Dollars in thousands) Cost Gains (Losses) Value U.S. Government agencies $ 32,424 $ 24 $ ( 867 ) $ 31,581 Mortgage-backed securities/CMOs 172,975 248 ( 2,259 ) 170,964 Municipal bonds 101,136 1,162 ( 1,026 ) 101,272 Total Securities Available for Sale $ 306,535 $ 1,434 $ ( 4,152 ) $ 303,817 December 31, 2020 Amortized Gross Gross Fair (Dollars in thousands) Cost Gains (Losses) Value U.S. Government agencies $ 25,496 $ 7 $ ( 198 ) $ 25,305 Mortgage-backed securities/CMOs 77,438 844 ( 182 ) 78,100 Municipal bonds 69,303 1,499 ( 121 ) 70,681 Total Securities Available for Sale $ 172,237 $ 2,350 $ ( 501 ) $ 174,086 All mortgage-backed securities included in the above tables were issued by U.S. government agencies and corporations. At December 31, 2021 , the securities issued by political subdivisions or agencies were highly rated with 100 % of the municipal bonds having AA or higher ratings. Approximately 65 % of the municipal bonds are general obligation bonds with issuers that are geographically diverse. Marketable equity securities consist of nominal investments made by the Company in equity positions of various community banks and bank holding companies and are reported in other assets at fair value on the Consolidated Balance Sheets. Unrealized gains and losses are recorded in the Consolidated Statements of Income. There were no unrestricted securities classified as held to maturity as of December 31, 2021 or December 31, 2020. Restricted securities are securities with limited marketability and consist of stock in the FRB, FHLB, CBBFC and an investment in an SBA loan fund. These restricted securities, totaling $ 5.0 million and $ 3.0 million as of December 31, 2021 and December 31, 2020, respectively, are carried at cost. During the year ended December 31, 2021 , there were no sales of securities. For the year ended December 31, 2020 , proceeds from the sales of securities amounted to $ 69.5 million, and gross realized gain on these securities were $ 742 thousand. (An additional $ 1 thousand gain was realized from a call of a security during 2020.) Securities pledged to secure deposits and for other purposes and to facilitate borrowing from the FRB , had carrying values of $ 12.7 million at December 31, 2021 and $ 6.0 million at December 31, 2020. Year-end securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, were as follows: December 31, 2021 (Dollars in thousands) Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 14,443 $ ( 340 ) $ 15,220 $ ( 527 ) $ 29,663 $ ( 867 ) Mortgage-backed/CMOs 131,876 ( 1,735 ) 15,192 ( 524 ) 147,068 ( 2,259 ) Municipal bonds 40,352 ( 722 ) 10,409 ( 304 ) 50,761 ( 1,026 ) $ 186,671 $ ( 2,797 ) $ 40,821 $ ( 1,355 ) $ 227,492 $ ( 4,152 ) December 31, 2020 (Dollars in thousands) Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 19,298 $ ( 198 ) $ - $ - $ 19,298 $ ( 198 ) Mortgage-backed/CMOs 24,523 ( 182 ) - - 24,523 ( 182 ) Municipal bonds 21,501 ( 121 ) - - 21,501 ( 121 ) $ 65,322 $ ( 501 ) $ - $ - $ 65,322 $ ( 501 ) As of December 31, 2021 , there were $ 227.5 million, or 143 issues, of individual securities in a loss position. These securities had an unrealized loss of $ 4.2 million and consisted of 84 mortgage-backed/CMOs, 41 municipal bonds, and 18 Agency notes. The Company’s securities portfolio is primarily made up of fixed rate bonds, whose prices move inversely with interest rates. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses. Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality and does not intend to sell or believe it will be required to sell any of the securities before recovery of the amortized cost basis. Accordingly, as of December 31, 2021, management believes the impairments detailed in the table above are temporary, and no impairment loss has been realized in the Company’s consolidated income statements. The amortized cost and fair value of AFS debt securities at December 31, 2021 are presented below based upon contractual maturities, by major investment categories. Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations. (Dollars in thousands) Amortized Cost Fair Value U.S. Government agencies After five years to ten years $ 26,424 $ 25,804 Ten years or more 6,000 5,777 $ 32,424 $ 31,581 Mortgage-backed securities/CMOs After one year to five years $ 8,427 $ 8,344 After five years to ten years 4,811 4,786 Ten years or more 159,737 157,834 $ 172,975 $ 170,964 Municipal bonds One year or less $ 507 $ 515 After one year to five years 611 616 After five years to ten years 12,245 12,448 Ten years or more $ 87,773 $ 87,693 $ 101,136 $ 101,272 Total Debt Securities Available for Sale $ 306,535 $ 303,817 |
Loans
Loans | 12 Months Ended |
Dec. 31, 2021 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans | Note 4 – Loans The composition of the loan portfolio by major loan classification appears below. Note that all loan balances are presented net of credit and other fair value discounts, when applicable. (Dollars in thousands) December 31, December 31, 2021 2020 Commercial $ 96,696 $ 118,688 Real estate construction and land 79,331 22,509 1-4 family residential mortgages 358,148 132,966 Commercial mortgages 473,632 277,109 Consumer 53,404 58,134 Total loans 1,061,211 609,406 Less: Allowance for loan losses ( 5,984 ) ( 5,455 ) Net loans $ 1,055,227 $ 603,951 Primarily within the second quarter of 2020 and the first quarter of 2021, the Company and Fauquier prior to the Merger assisted nonprofit organizations and local businesses by funding a combin ed total of $ 207.5 million of Small Business Administration Paycheck Protection Program loans, which were designed to provide economic relief to small businesses adversely impacted by COVID-19. As of December 31, 2021 , the Company had PPP loans of $ 20.7 million outstanding on its balance sheet, with the remainder having been forgiven by the SBA. As of December 31, 2020 , PPP loans totaled $ 54.2 million. The balances in the table above include unamortized premiums and net deferred loan costs and fees. Unamortized premiums on loans purchased were $ 1.1 million and $ 1.8 million as of December 31, 2021 and December 31, 2020 , respectively. Net deferred loan fees totaled $ 865 thousand and $ 931 thousand as of December 31, 2021 and December 31, 2020 , respectively. The deferred fees include $ 491 thousand in remaining fees collected from the SBA for the PPP loans that are being amortized over the contractual life of the remaining loans, most of which are over a 24 -month period. As loans are forgiven by the SBA, accounting principles allow for the accelerated recognition of unamortized fees at that time. Commercial loans reported above include (i) organic loans originated by the Bank’s commercial lenders, (ii) PPP loans through the SBA as discussed above, (iii) the government guaranteed portion of loans which the Company purchased that are 100 % guaranteed by either the United States Department of Agriculture (USDA) or the SBA; and (iv) syndicated loans, also referred to as shared national credits, purchased from national lending correspondents. The government guaranteed loans and the shared national credits are typically purchased at a premium. In the event of early prepayment, the Bank may need to write off any unamortized premium. Real estate construction and land loans consist primarily of loans for the purchase or refinance of unimproved lots or raw land. Additionally, the Company finances the construction of real estate projects typically where the permanent mortgage will remain with the Company. 1-4 family residential mortgages include consumer purpose 1-4 family residential properties and home equity loans, as well as investor-owned residential real estate. The Company typically originates residential mortgages with the intention of retaining in its portfolio adjustable-rate mortgages and shorter-term, fixed-rate loans. The Company originates residential mortgage loans. A third party is utilized for loans which the Company does not wish to retain for its own loan portfolio due to the interest rate risks that are inherent with long-term fixed rate loans. In addition, residential mortgages includes packages of 1-4 family residential mortgages that have been purchased, with each purchased loan individually underwritten by the Company prior to the closing of the sale. As of December 31, 2021 , the balance in these purchased loan packages totaled approximately $ 10.6 million. Commercial mortgages are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Consumer loans are generally small loans spread across many borrowers and are underwritten after determining the ability of the consumer borrower to repay their obligations as agreed. Consumer loans may be secured or unsecured and are comprised of revolving lines, installment loans and other consumer loans. Included in consumer loans are private student loan packages that were purchased beginning in 2015. As of December 31, 2021 , the balance in these purchased student loan packages totaled approximately $ 30.7 million compared to $ 37.4 million at December 31, 2020 . Deposit account overdrafts are included in the consumer loan balances and totaled $ 205 thousand and $ 169 thousand at December 31, 2021 and December 31, 2020, respectively. Acquired Loans. Loans acquired in business combinations are recorded in the Consolidated Balance Sheets at fair value at the acquisition date under the acquisition method of accounting. The table above includes a net fair value mark of $ 12.2 million on the purchased impaired loans and $ 6.2 million on the purchased performing loans as of December 31, 2021 on the Acquired Loans. See Note 2 – Business Combinations for more information on fair value of loan balances acquired in the Merger. The outstanding principal balance and the carrying amount at December 31, 2021 on these Acquired Loans were as follows: (Dollars in thousands) December 31, 2021 Acquired Loans - Acquired Loans - Purchased Performing Acquired Outstanding principal balance $ 76,608 $ 372,172 $ 448,780 Carrying amount: Commercial $ 994 $ 28,065 $ 29,059 Real estate construction and land 18,576 14,297 32,873 1-4 family residential mortgages 16,020 194,708 210,728 Commercial mortgages 28,675 126,638 155,313 Consumer 118 2,224 2,342 Total acquired loans $ 64,383 $ 365,932 $ 430,315 The following table presents a summary of the changes in the accretable yield of loans classified as purchased credit impaired: (Dollars in thousands) Twelve Months Ended December 31, Accretable yield, beginning of period $ — Additions 15,499 Accretion ( 1,757 ) Reclassification from (to) nonaccretable difference — Accretable yield, end of period $ 13,742 Loan origination/risk management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and the Board of Directors approves lending policies on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies, and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. Independent loan review on a portion of the loan portfolio is performed by an independent loan review firm that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management and the Audit and Compliance Committee of the Board. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures. Concentrations of credit. Most of the Company’s lending activity occurs within the Commonwealth of Virginia, predominantly in the Company’s primary markets and surrounding areas. The majority of the Company’s loan portfolio consists of commercial real estate loans. The Company manages this risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry. Related party loans. In the ordinary course of business, the Company has granted loans to certain directors, principal officers and their affiliates (collectively referred to as “related party loans”). Activity in related party loans during 2021 and 2020 is presented in the following table. (Dollars in thousands) 2021 2020 Balance outstanding at beginning of year $ 19,070 $ 20,300 Principal additions 4,527 9,308 Principal reductions ( 7,005 ) ( 10,538 ) Balance outstanding at end of year $ 16,592 $ 19,070 Past due, non-accrual and charged-off loans . Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, the Company considers the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to the Company’s collateral position. Regulatory provisions generally require a loan to be placed on non-accrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on non-accrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower. Loans are charged off when 120 days past due. Smaller, unsecured consumer loans, including the student loan portfolio, are typically charged-off when management judges such loans to be uncollectible or the borrowers file for bankruptcy; these loans are generally not placed in non-accrual status prior to charge-off. The Company has contracted with a third party to proactively manage the collections of past due student loans; this third party has extensive experience and specializes in this type of asset management. Non-accrual loans are shown below by class: (Dollars in thousands) December 31, 2021 December 31, 2020 Land and land development $ — $ 8 1-4 family residential mortgages 495 - Total nonaccrual loans $ 495 $ 8 The following tables show the aging of past due loans as of December 31, 2021 and December 31, 2020. Past Due Aging as of 30-59 60-89 90 Days Total PCI Current Total 90 Days (Dollars in thousands) Commercial $ 385 $ 355 $ 718 $ 1,458 $ 994 $ 94,244 $ 96,696 $ 718 Real estate construction and land 873 1,283 - 2,156 18,576 58,599 79,331 - 1-4 family residential mortgages 1,508 100 495 2,103 16,020 340,025 358,148 - Commercial mortgages - - - - 28,675 444,957 473,632 - Consumer loans 345 196 83 624 118 52,662 53,404 83 Total Loans $ 3,111 $ 1,934 $ 1,296 $ 6,341 $ 64,383 $ 990,487 $ 1,061,211 $ 801 Past Due Aging as of 30-59 60-89 90 Days Total Current Total 90 Days (Dollars in thousands) Commercial $ 1,130 $ 470 $ - $ 1,600 $ 117,088 $ 118,688 $ - Real estate construction and land - - - - 22,509 22,509 - 1-4 family residential mortgages 501 - - 501 132,465 132,966 - Commercial mortgages 46 - - 46 277,063 277,109 - Consumer loans 298 66 137 501 57,633 58,134 137 Total Loans $ 1,975 $ 536 $ 137 $ 2,648 $ 606,758 $ 609,406 $ 137 Impaired loans. Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts when due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated on an individual loan basis. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net of the impairment, using either the present value of estimated future cash flows at the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Regulatory guidelines require the Company to re-evaluate the fair value of collateral supporting impaired collateral dependent loans on at least an annual basis. The following tables provide a breakdown by class of the loans classified as impaired loans as of December 31, 2021 and December 31, 2020. These loans are reported at their recorded investment, which is the carrying amount of the loan as reflected on the Company’s balance sheet, net of charge-offs and other amounts applied to reduce the net book balance. Average recorded investment in impaired loans is computed using an average of month-end balances for these loans for the twelve months ended December 31, 2021 and December 31, 2020. Interest income recognized is for the years ended December 31, 2021 and December 31, 2020. (Dollars in thousands) December 31, 2021 Recorded Unpaid Associated Average Interest Impaired loans without a valuation allowance: Real estate construction and land $ - $ 37 $ - $ 2 $ - 1-4 family residential mortgages 594 600 - 269 24 Total impaired loans without a valuation 594 637 - 271 24 Impaired loans with a valuation allowance Consumer 935 935 6 974 54 Total impaired loans with a valuation 935 935 6 974 54 Total impaired loans $ 1,529 $ 1,572 $ 6 $ 1,245 $ 78 (Dollars in thousands) December 31, 2020 Recorded Unpaid Associated Average Interest Impaired loans without a valuation allowance: Real estate construction and land $ 8 $ 55 $ - $ 97 $ - 1-4 family residential mortgages 109 109 - 113 6 Commercial real estate - - - 781 48 Total impaired loans without a valuation 117 164 - 991 54 Impaired loans with a valuation allowance Consumer 1,156 1,156 4 1,145 70 Total impaired loans with a valuation 1,156 1,156 4 1,145 70 Total impaired loans $ 1,273 $ 1,320 $ 4 $ 2,136 $ 124 Troubled debt restructurings are also considered impaired loans. TDRs occur when the Bank agrees to modify the original terms of a loan by granting a concession that it would not otherwise consider due to the deterioration in the financial condition of the borrower. These concessions are done in an attempt to improve the paying capacity of the borrower, and in some cases to avoid foreclosure, and are made with the intent to restore the loan to a performing status once sufficient payment history can be demonstrated. These concessions could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. In accordance with regulatory guidance and the CARES Act, the Bank has approved for certain customers who have been adversely affected by the COVID-19 pandemic to defer principal-only, or principal and interest, payments for a 90 - to 180 -day period. Such short-term modifications, which were made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. While interest will continue to accrue to income, in accordance with GAAP, if the Bank ultimately incurs a credit loss on these deferred payments, interest income would need to be reversed and therefore, interest income in future periods could be negatively impacted. As of December 31, 2021 , $ 1.2 million of loan balances are in deferment. Based on regulatory guidance on Student Lending, the Company classified 58 of its student loans purchased as TDRs for a total of $ 935 thousand as of December 31, 2021 . The Company classified 75 of its student loans purchased as TDRs for a total of $ 1.2 million as of December 31, 2020 . These borrowers, who should have been in repayment, requested and were granted payment extensions exceeding the maximum lifetime allowable payment forbearance of twelve months ( 36 months lifetime allowance for military service), as permitted under the regulatory guidance, and are therefore considered restructurings. Student loan borrowers are allowed in-school deferments, plus an automatic six month grace period post in-school status, before repayment is scheduled to begin, and these deferments do not count toward the maximum allowable forbearance. Initially, all student loans were fully insured by a surety bond, and the Company did not expect to experience a loss on these loans. Based on the termination of the surety bond on July 27, 2018 due to the insolvency of the insurer, management has evaluated these loans individually for impairment and included any potential loss in the allowance for loan losses; interest continues to accrue on these TDRs during any deferment and forbearance periods. The following provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in non-accrual status, which are considered to be nonperforming. Troubled debt restructurings December 31, 2021 December 31, 2020 (Dollars in thousands) No. of Recorded No. of Recorded Performing TDRs 1-4 family residential mortgages 1 $ 99 1 $ 109 Consumer 58 935 75 1,156 Total performing TDRs 59 $ 1,034 76 $ 1,265 Nonperforming TDRs Real estate construction and land development 0 $ - 1 $ 8 1-4 family residential mortgages 1 495 0 — Total nonperforming TDRs 1 $ 495 1 $ 8 Total TDRs 60 $ 1,529 77 $ 1,273 A summary of loans shown above that were modified as TDRs during the years ended December 31, 2021 and December 31, 2020 is shown below by class. Loans modified as TDRs that were fully paid down, charged-off, or foreclosed upon by period end are not reported. The Post-Modification Recorded Balance reflects any interest or fees from the original loan which may have been added to the principal balance on the new note as a condition of the TDR. Additionally, the Post-Modification Recorded Balance is reported below at the period end balances, inclusive of all partial principal pay downs and principal charge-offs since the modification date. During year ended During year ended (Dollars in thousands) December 31, 2021 December 31, 2020 Number Pre- Post- Number Pre- Post- Consumer loans 12 $ 145 $ 145 17 $ 180 $ 180 Total loans modified during the period 12 $ 145 $ 145 17 $ 180 $ 180 During the year ended December 31, 2021 , there were five loans modified as TDRs that subsequently defaulted which had been modified as TDRs during the twelve months prior to default. These student loans had balances totaling $ 56 thousand prior to being charged off. There were five loans modified as a TDR that subsequently defaulted during the year ended December 31, 2020 and were modified as a TDR during the twelve months prior to default. These student loans had balances of $ 48 thousand prior to being charged off. There were no loans secured by 1-4 family residential property that were in the process of foreclosure at either December 31, 2021 or December 31, 2020 . |
Allowance for Loan Losses
Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2021 | |
Allowance For Loan Losses [Abstract] | |
Allowance for Loan Losses | Note 5 – Allowance for Loan Losses A summary of the transactions in the allowance for loan losses for the years ended December 31, 2021 and 2020 appears below: (Dollars in thousands) 2021 2020 Balance, beginning of period $ 5,455 $ 4,209 Loans charged off ( 835 ) ( 805 ) Recoveries 350 429 Net charge-offs ( 485 ) ( 376 ) Provision for loan losses 1,014 1,622 Balance, December 31 $ 5,984 $ 5,455 The allowance for loan losses is maintained at a level which, in management’s judgment, is adequate to absorb probable credit losses inherent in the loan portfolio. The amount of the allowance is based on management’s quarterly evaluation of the collectability of the loan portfolio, credit concentrations, historical loss experience, specific impaired loans, and economic conditions. To determine the total allowance for loan losses, the Company estimates the reserves needed for each segment of the portfolio, including loans analyzed individually and loans analyzed on a pooled basis. Allowances for impaired loans are generally determined based on collateral values or the present value of estimated cash flows. For purposes of determining the allowance for loan losses on the outstanding loans that were not Acquired Loans, the Company has segmented certain loans in the portfolio by product type. Within these segments, the Company has sub-segmented its portfolio by classes, based on the associated risks within these classes. Note that under the acquisition method of accounting (ASC 805), the allowance for loan losses recorded in the books of Fauquier was not carried over into the books of the Company. However, subsequent decreases to the expected cash flows of PCI loans or deterioration of purchased performing loans in a future period may result in a provision for loan losses resulting in an increase to the ALLL. Management utilizes a loss migration model for determining the quantitative risk assigned to unimpaired loans in order to capture historical loss information at the loan level, track loss migration through risk grade deterioration, and increase efficiencies related to performing the calculations. The quantitative risk factor for each loan class primarily utilizes a migration analysis loss method based on loss history for the prior twelve quarters. The migration analysis loss method is used for all loan classes except for the following: • Student loans purchased (excluding Acquired Student Loans) - On June 27, 2018, the Company was notified that ReliaMax Surety Company (“ReliaMax Surety”), the South Dakota insurance company which issued surety bonds for the student loan pools, was placed into liquidation due to insolvency. As such, the historical charge-off rate on this portfolio is determined by using the Company’s own losses/charge-offs since July 1, 2018 together with prior insurance claim history. For reporting periods prior to June 30, 2018, the Company did not charge off student loans as the insurance covered the past due loans, but the Company did apply qualitative factors to calculate a reserve on these loans, net of the deposit reserve accounts held by the Company for this group of loans. • Commercial government guaranteed loans and PPP loans - These loans require no reserve as these are 100% guaranteed by either the SBA or the USDA. Under the migration analysis method, average loss rates are calculated at the risk grade and class levels by dividing the twelve-quarter average net charge-off amount by the twelve-quarter average loan balances. Qualitative factors are combined with these quantitative factors to arrive at the overall general allowances. The Company’s internal creditworthiness grading system is based on experiences with similarly graded loans. The Company performs regular credit reviews of the loan portfolio to review the credit quality and adherence to its underwriting standards. Additionally, an independent loan review of a portion of the Company’s loan portfolio is performed periodically. Loans that trend upward toward more positive risk ratings generally have a lower risk factor associated. Conversely, loans that migrate toward more negative ratings generally will result in a higher risk factor being applied to those related loan balances. Risk Ratings and Historical Loss Factor Assigned Excellent A 0% historical loss factor is applied, as these loans are secured by cash or fully guaranteed by a U.S. government agency and represent a minimal risk. The Company has never experienced a loss within this category. Good A 0% historical loss factor is applied, as these loans represent a low risk and are secured by marketable collateral within margin. In an abundance of caution, a nominal loss reserve is applied to these loans. The Company has never experienced a loss within this category. Pass A historical loss factor for loans rated “Pass” is applied to current balances of like-rated loans, pooled by class. Loans with the following risk ratings are pooled by class and considered together as “Pass”: Satisfactory - modest risk loans where the borrower has strong and liquid financial statements and more than adequate cash flow Average – average risk loans where the borrower has reasonable debt service capacity Marginal – acceptable risk loans where the borrower has acceptable financial statements but is leveraged Watch These loans have an acceptable risk but require more attention than normal servicing. A historical loss factor for loans rated “Watch” is applied to current balances of like-rated loans pooled by class. Special Mention These potential problem loans are currently protected but are potentially weak. A historical loss factor for loans rated “Special Mention” is applied to current balances of like-rated loans pooled by class. Substandard These problem loans are inadequately protected by the sound worth and paying capacity of the borrower and/or the value of any collateral pledged. These loans may be considered impaired and evaluated on an individual basis. Otherwise, a historical loss factor for loans rated “Substandard” is applied to current balances of all other “Substandard” loans pooled by class. Doubtful Loans with this rating have significant deterioration in the sound worth and paying capacity of the borrower and/or the value of any collateral pledged, making collection or liquidation of the loan in full highly questionable. These loans would be considered impaired and are evaluated on an individual basis. The following represents the loan portfolio designated by the internal risk ratings assigned to each credit at December 31, 2021 and 2020. There were no loans rated “Doubtful” as of either period. December 31, 2021 Excellent Good Pass Watch Special Sub- TOTAL (Dollars in thousands) Commercial $ 45,862 $ 13,920 $ 32,460 $ 732 $ 1,645 $ 2,077 $ 96,696 Real estate construction and - - 51,098 7,360 2,849 18,024 79,331 1-4 family residential - 2,030 334,300 5,013 1,520 15,285 358,148 Commercial mortgages - - 382,108 61,563 8,530 21,431 473,632 Consumer 524 18,535 32,821 1,225 179 120 53,404 Total Loans $ 46,386 $ 34,485 $ 832,787 $ 75,893 $ 14,723 $ 56,937 $ 1,061,211 December 31, 2020 Excellent Good Pass Watch Special Sub- TOTAL (Dollars in thousands) Commercial $ 87,014 $ 14,336 $ 16,126 $ 485 $ - $ 727 $ 118,688 Real estate construction and - - 22,305 - - 204 22,509 1-4 family residential - - 126,910 3,634 1,357 1,065 132,966 Commercial mortgages - - 261,663 5,854 - 9,592 277,109 Consumer 1,012 18,929 36,573 1,373 64 183 58,134 Total Loans $ 88,026 $ 33,265 $ 463,577 $ 11,346 $ 1,421 $ 11,771 $ 609,406 In addition to the historical factors, the adequacy of the Company’s allowance for loan losses is evaluated through reference to eight qualitative factors, listed below and ranked in order of importance: 1) Changes in national and local economic conditions, including the condition of various market segments; 2) Changes in the value of underlying collateral; 3) Changes in volume of classified assets, measured as a percentage of capital; 4) Changes in volume of delinquent loans; 5) The existence and effect of any concentrations of credit and changes in the level of such concentrations; 6) Changes in lending policies and procedures, including underwriting standards; 7) Changes in the experience, ability and depth of lending management and staff; and 8) Changes in the level of policy exceptions. It has been the Company’s experience that the first five factors drive losses to a much greater extent than the last three factors; therefore, the first five factors are weighted more heavily. Qualitative factors are not assessed against loans rated “Excellent” or “Good,” as the Company has never experienced a loss within these categories. During 2020, the Company downgraded the economic qualitative factors within its ALLL model in light of the effects of COVID-19 on the economy. During 2021, the Company upgraded the economic qualitative factors, resulting in a release of a portion of the reserves for loan losses related to the pandemic, as credit deterioration since the onset of COVID-19 has so far not been experienced to the extent anticipated. If economic conditions improve or worsen, the Company could experience changes in the required ALLL. It is possible that asset quality metrics could decline in the future if there is a resurgence of COVID-19 cases that disrupts economic activity. For each segment and class of loans, management must exercise significant judgment to determine the estimation method that fits the credit risk characteristics of the various segments. Although this evaluation is inherently subjective, qualified management utilizes its significant knowledge and experience related to both the market and history of the Company’s loan losses. During these evaluations, particular characteristics associated with a segment of the loan portfolio are also considered. These characteristics are detailed below: • Commercial loans not secured by real estate carry risks associated with the successful operation of a business, and the repayments of these loans depend on the profitability and cash flows of the business. Additional risk relates to the value of collateral where depreciation occurs and the valuation is less precise. • Commercial loans purchased from the syndicated loan market generally represent shared national credits, which are participations in loans or loan commitments that are shared by three or more banks. Included in the Company’s shared national credit portfolio are purchased participations and assignments in leveraged lending transactions. Leveraged lending transactions are generally used to support a merger- or acquisition-related transaction, to back a recapitalization of a company's balance sheet or to refinance debt. When considering a participation in the leveraged lending market, the Company participates only in first lien senior secured term loans. To further minimize risk, the Company has developed policies to limit overall credit exposure to the syndicated market as a whole, as well as limits by industry and borrower. • Loans secured by commercial real estate also carry risks associated with the success of the business and the ability to generate a positive cash flow sufficient to service debts. Real estate security diminishes risks only to the extent that a market exists for the subject collateral. • Consumer loans carry risks associated with the continued creditworthiness of the borrower and the value of the collateral, such as automobiles which may depreciate more rapidly than other assets. In addition, these loans may be unsecured. Consumer loans are more likely than real estate loans to be immediately affected in an adverse manner by job loss, divorce, illness or personal bankruptcy. Consumer loans are further segmented into consumer revolving lines, all other consumer loans and student loans purchased. • Real estate secured construction loans carry risks that a project will not be completed as scheduled and budgeted and that the value of the collateral may, at any point, be less than the principal amount of the loan. Additional risks may occur if the general contractor, who may not be a loan customer, is unable to finish the project as planned due to financial pressures unrelated to the project. • Residential real estate loans carry risks associated with the continued creditworthiness of the borrower and changes in the value of the collateral. In addition, for investor-owned residential real estate, the repayment may be volatile as leases are generally shorter term in nature. Impaired loans are individually evaluated and, if deemed appropriate, a specific allocation is made for these loans. In reviewing the loans classified as impaired totaling $ 1.5 million at December 31, 2021 , there was $ 6 thousand in valuation allowance on these loans after consideration was given for each borrowing as to the fair value of the collateral on the loan or the present value of expected future cash flows from the customer. Allowance for Loan Losses Rollforward by Portfolio Segment As of and for the year ended December 31, 2021 (Dollars in thousands) Commercial Real Estate Real Consumer Total Allowance for Loan Losses: Balance as of beginning of year $ 209 $ 160 $ 3,897 $ 1,189 $ 5,455 Charge-offs ( 147 ) - - ( 688 ) ( 835 ) Recoveries 191 12 6 141 350 Provision for (recovery of) loan losses ( 1 ) 227 575 213 1,014 Ending Balance $ 252 $ 399 $ 4,478 $ 855 $ 5,984 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 6 $ 6 Collectively evaluated for impairment 252 399 4,478 849 5,978 Acquired loans - purchased credit - - - - - Loans: Individually evaluated for impairment $ - $ - $ 594 $ 935 $ 1,529 Collectively evaluated for impairment 95,702 60,755 786,491 52,351 995,299 Acquired loans - purchased credit 994 18,576 44,695 118 64,383 Ending Balance $ 96,696 $ 79,331 $ 831,780 $ 53,404 $ 1,061,211 As of and for the year ended December 31, 2020 (Dollars in thousands) Commercial Real Estate Real Consumer Total Allowance for Loan Losses: Balance as of beginning of year $ 302 $ 109 $ 2,684 $ 1,114 $ 4,209 Charge-offs - - - ( 805 ) ( 805 ) Recoveries 28 - 1 400 429 Provision for (recovery of) loan losses ( 121 ) 51 1,212 480 1,622 Ending Balance $ 209 $ 160 $ 3,897 $ 1,189 $ 5,455 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 4 $ 4 Collectively evaluated for impairment 209 160 3,897 1,185 5,451 Loans: Individually evaluated for impairment $ - $ 8 $ 109 $ 1,156 $ 1,273 Collectively evaluated for impairment 118,688 22,501 409,966 56,978 608,133 Ending Balance $ 118,688 $ 22,509 $ 410,075 $ 58,134 $ 609,406 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 6 – Premises and Equipment Premises and equipment are summarized as follows: (Dollars in thousands) December 31, 2021 December 31, 2020 Leasehold improvements $ 15,455 $ 14,715 Building and land 20,775 1,215 Construction and fixed assets in progress 49 70 Furniture and equipment 7,866 6,831 Computer software 2,936 2,618 $ 47,081 $ 25,449 Less: accumulated depreciation and amortization 21,988 20,211 $ 25,093 $ 5,238 Depreciation and amortization on these premises and equipment totaled $ 2.9 million and $ 1.9 million for the years ended December 31, 2021 and December 31, 2020 . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 7 – Leases At December 31, 2021 , the Company had leased certain of its banking and operations offices, or the land on which such offices were built, under operating lease agreements on terms ranging from 1 to 20 years, most with renewal options. Each of the Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. Refer to Note 14 – Related Party Transactions for information regarding leasing transactions with related parties. The following tables present information about the Company’s leases: (Dollars in thousands) December 31, 2021 December 31, 2020 Lease liability $ 7,108 $ 3,589 Right-of-use asset $ 7,583 $ 3,527 Weighted average remaining lease term 6.02 years 5.16 years Weighted average discount rate 1.97 % 2.54 % (Dollars in thousands) 2021 2020 Operating lease expense $ 1,491 $ 857 Short-term lease expense 234 114 Total lease expense $ 1,725 $ 971 Cash paid for amounts included in lease liabilities $ 1,390 $ 824 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows: (Dollars in thousands) December 31, 2021 Twelve months ending December 31, 2022 1,534 Twelve months ending December 31, 2023 1,462 Twelve months ending December 31, 2024 1,172 Twelve months ending December 31, 2025 967 Twelve months ending December 31, 2026 622 Thereafter 1,771 Total undiscounted cash flows $ 7,528 Less: Discount ( 420 ) Lease liability $ 7,108 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 8 – Goodwill and Other Intangible Assets The carrying amount of goodwill was $ 8.1 million and $ 372 thousand at December 31, 2021 and December 31, 2020 , respectively. The following table presents the changes in goodwill during the twelve months ended December 31, 2021 . There were no changes in the recorded balance of goodwill during the twelve months ended December 31, 2020: (Dollars in thousands) Sturman Wealth Advisors Fauquier Total Balance as of January 1, 2021 $ 372 $ - $ 372 Acquisition of Fauquier Bankshares, Inc. - 7,768 7,768 Balance at December 31, 2021 $ 372 $ 7,768 $ 8,140 The Company had $ 8.5 million and $ 341 thousand of other intangible assets as of December 31, 2021 and December 31, 2020 , respectively. Other intangible assets were recognized in connection with (i) the book of business, including interest in the client relationships of an officer, acquired by VNB Wealth in 2016, now referred to as Sturman Wealth Advisors, and (ii) the core deposits acquired from Fauquier in 2021. The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets: (Dollars in thousands) December 31, December 31, Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets: Core deposit intangible $ 9,660 $ ( 1,389 ) $ - $ - Customer relationships intangible 773 ( 499 ) 773 ( 432 ) Total $ 10,433 $ ( 1,888 ) $ 773 $ ( 432 ) The Company recognized $ 1.5 million and $ 90 thousand during the year ending December 31, 2021 and 2020 , respectively, in amortization expense from these identified intangible assets with a finite life. Estimated future amortization expense by year as of December 31, 2021 is as follows: Core Customer Deposit Relationships (Dollars in thousands) Intangible Intangible 2022 1,685 67 2023 1,493 67 2024 1,301 67 2025 1,110 67 2026 918 6 Thereafter 1,764 - Total $ 8,271 $ 274 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2021 | |
Deposits [Abstract] | |
Deposits | Note 9 – Deposits At December 31, 2021, the scheduled maturities of time deposits are as follows: 2022 $ 138,616 2023 10,211 2024 8,704 2025 1,512 2026 3,002 $ 162,045 The aggregate amount of time deposits with a minimum balance of $250 thousand was $ 45.3 million at December 31, 2021 and $ 34.7 million at December 31, 2020. Included in the time deposits reported above are Certificate of Deposit Account Registry Service CDs, whereby depositors can obtain FDIC deposit insurance on account balances of up to $50 million. CDARS TM deposits totaled $ 6.1 million as of December 31, 2021 and $ 8.5 million as of December 31, 2020, all of which were reciprocal balances for the Bank’s customers. In May 2018, the EGRRCPA was enacted, which excluded reciprocal CDARS deposits for certain banks from brokered deposit treatment up to the lesser of $5 billion or 20% of a bank’s total liabilities. Therefore, the Company’s CDARS reciprocal deposits as of December 31, 2021 and December 31, 2020 were not treated as brokered deposits. The Company implemented an Insured Cash Sweep ® product during 2018. At December 31, 2021, ICS ® balances, included in demand deposit and money market account balances, were $ 39.2 million and $ 225.9 million, respectively. At December 31, 2020, ICS ® balances, included in demand deposit and money market account balances, were $ 28.0 million and $ 81.1 million, respectively. Such balances were not treated as brokered deposits. The Company had no deposits to report as brokered deposits as of December 31, 2021 or December 31, 2020. Deposit account overdrafts reported as loans totaled $ 205 thousand and $ 169 thousand at December 31, 2021 and December 31, 2020, respectively. The Company has entered into deposit transactions with certain directors, principal officers and their affiliates (collectively referred to as “related party deposits”), all of which are under the same terms as other customers. The aggregate amount of these related party deposits was $ 9.1 million and $ 8.1 million as of December 31, 2021 and December 31, 2020 , respectively. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 10 – Borrowings The Company uses both short-term and long-term borrowings to supplement deposits when they are available at a lower overall cost to the Company or they can be invested at a positive rate of return. Each FHLB credit program has its own interest rate, which may be fixed or variable, and carries a range of maturities. The FHLB may prescribe the acceptable uses to which the advances may be put, as well as on the size of the advances and repayment provisions. The Company has pledged commercial real estate loans as collateral for FHLB borrowings. The Company had no outstanding FHLB advances as of December 31, 2021 and $ 30.0 million outstanding as of December 31, 2020. As of December 31, 2021 , the Company had a letter of credit for $ 60.0 million issued in favor of the Commonwealth of Virginia Department of the Treasury to secure public fund depository accounts and collateralized against these pledged commercial mortgages. In addition to access to short-term borrowings from FHLB, the Company uses federal funds purchased for short-term borrowing needs. Available borrowing arrangements maintained by the Bank include formal federal funds lines with five major correspondent banks. There were no borrowings against the lines at December 31, 2021 or December 31, 2020. The Company’s unused lines of credit for future borrowings total approximately $ 109.2 million at December 31, 2021 , which consists of $ 14.2 million available from the FHLB and $ 95.0 million from third party financial institutions. Additional loans and securities are available that can be pledged as collateral for future borrowings from the FRB or the FHLB above the current lendable collateral value. Information related to borrowings as of December 31, 2021 and 2020 is as follows: (Dollars in thousands) 2021 2020 FHLB advances $ - $ 30,000 Total borrowings $ - $ 30,000 Maximum amount at any month-end during the year $ 42,575 $ 40,000 Annual average balance outstanding $ 23,385 $ 15,419 Annual average interest rate paid 0.83 % 0.47 % Annual interest rate at end of period 0.00 % 0.48 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 – Income Taxes The Company files tax returns in the U.S. federal jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal tax examinations by tax authorities for years prior to 2018. The Commonwealth of Virginia assesses a Bank Franchise Tax on banks instead of a state income tax. The Bank Franchise Tax expense is reported in noninterest expense, and the calculation of that tax is unrelated to taxable income. Net deferred tax assets consist of the following components as of year-end: (Dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan losses $ 1,257 $ 1,146 Acquisition accounting 3,921 - Other real estate owned 156 - Investments in pass-throughs 44 - Federal net operating loss carrryforwards 468 - Nonaccrual loan interest 55 2 Stock option/grant expense 51 52 Home equity closing costs 48 24 Deferred compensation expense 70 9 Deferred loan fees 182 Goodwill and other intangible assets - 50 Lease accounting standard - 13 Securities available for sale unrealized loss 588 - Depreciation - 571 Total deferred tax assets $ 6,840 $ 1,867 Deferred tax liabilities: Securities available for sale unrealized gain - 388 Goodwill and other intangible assets 1,683 - Depreciation 217 - Lease accounting standard 100 - Deferred loan costs - 196 Total deferred tax liabilities 2,000 584 Net deferred tax assets $ 4,840 $ 1,283 The provision for income taxes charged to operations for years ended December 31, 2021 and December 31, 2020 consists of the following: (Dollars in thousands) 2021 2020 Current tax expense $ 1,144 $ 2,279 Deferred tax expense (benefit) 702 ( 214 ) Provision for income taxes $ 1,846 $ 2,065 The Company’s income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended December 31, 2021 and December 31, 2020 due to the following: (Dollars in thousands) 2021 2020 Federal statutory rate 21 % 21 % Computed statutory tax expense $ 2,502 $ 2,109 Increase (decrease) in tax resulting from: Tax-exempt interest income ( 199 ) ( 100 ) Tax-exempt income from BOLI ( 149 ) ( 92 ) Stock option/stock grant expense 9 18 Merger expenses 118 117 Investment in qualified housing projects ( 450 ) - Other expenses 15 13 Provision for income taxes $ 1,846 $ 2,065 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Note 12 – Commitments and Contingent Liabilities In the normal course of business, there are various outstanding commitments and contingent liabilities, which are not reflected in the accompanying consolidated financial statements. The Company does not anticipate any material loss as a result of these transactions. The Bank is typically required to maintain cash reserve balances on hand or with the Federal Reserve Bank (FRB). At December 31, 2021 and December 31, 2020 , there was no minimum reserve requirement as a result of a rule adopted by the FRB in March 2020 eliminating the reserve requirement. |
Financial Instruments With Off-
Financial Instruments With Off-Balance Sheet Risk and Credit Risk | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Financial Instruments With Off-Balance Sheet Risk and Credit Risk | Note 13 – Financial Instruments with Off-Balance Sheet Risk and Credit Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit, such as unfunded lines of credit and standby letters of credit. The Company also treats authorization limits for originating ACH transactions as commitments. In addition to the amounts shown below, the Company has extended commitment letters at December 31, 2021 in the amount of $ 18.7 million to various borrowers. At December 31, 2020 , commitment letters totaled $ 4.0 million. Commitment letters are done in the normal course of business and typically expire after 120 days. All of these off-balance-sheet instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet, although material losses are not anticipated. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The totals for financial instruments whose contract amount represents credit risk are shown below: Notional Amount (Dollars in thousands) December 31, 2021 December 31, 2020 Unfunded lines-of-credit $ 154,471 $ 101,389 ACH 43,288 21,137 Letters of credit 11,200 5,586 Total $ 208,959 $ 128,112 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral normally consists of real property. Standby letters of credit are conditional commitments by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds real estate and bank deposits as collateral supporting those commitments for which collateral is deemed necessary. The Company has approximately $ 35.5 million in deposits in other financial institutions in excess of amounts insured by the FDIC at December 31, 2021 . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14 – Related Party Transactions From time to time, the Company and its subsidiaries have business dealings with companies owned by directors and beneficial shareholders of the Company. Payments made to these companies that exceeded the disclosure threshold of $120 thousand in 2021 are reported below. In 2021 and 2020 , leasing/rental expenditures of $ 520 thousand and $ 511 thousand respectively, (including reimbursements for taxes, insurance, and other expenses) were paid to an entity indirectly owned by a director of the Company. |
Capital Requirements
Capital Requirements | 12 Months Ended |
Dec. 31, 2021 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital Requirements | Note 15 – Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for PCA, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Federal banking regulations also impose regulatory capital requirements on bank holding companies. However, in August 2018, the Federal Reserve Board issued an interim final rule, which was effective August 30, 2018, that expanded its small bank holding company policy statement (the “SBHC Policy Statement”) to bank holding companies with total consolidated assets of less than $ 3 billion (up from the prior $ 1 billion threshold). Under the SBHC Policy Statement, qualifying bank holding companies have additional flexibility in the amount of debt they can issue and are also exempt from the Basel III Capital Rules (subsidiary depository institutions of qualifying bank holding companies are still subject to capital requirements). The Company currently has less than $ 3 billion in total consolidated assets and would likely qualify under the revised SBHC Policy Statement. However, the Company does not currently intend to issue a material amount of debt or take any other action that would cause its capital ratios to fall below the minimum ratios required by the Basel III Capital Rules. The Basel III Capital Rules require banks and bank holding companies to comply with the following minimum capital ratios: (i) a ratio of common equity Tier 1 capital to risk-weighted assets of at least 4.5 %, plus a 2.5 % “capital conservation buffer” (effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7 %); (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.0 %, plus the 2.5 % capital conservation buffer (effectively resulting in a minimum Tier 1 capital ratio of 8.5 %); (iii) a ratio of total capital to risk-weighted assets of at least 8.0 %, plus the 2.5 % capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.5 %); and (iv) a leverage ratio of 4 %, calculated as the ratio of Tier 1 capital to balance sheet exposures plus certain off-balance sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter). With respect to the Bank, the PCA regulations, to be “well capitalized” under the revised regulations, a bank must have the following minimum capital ratios: (i) a common equity Tier 1 capital ratio of at least 6.5 %; (ii) a Tier 1 capital to risk-weighted assets ratio of at least 8.0 %; (iii) a total capital to risk-weighted assets ratio of at least 10.0 %; and (iv) a leverage ratio of at least 5.0 %. The Bank’s capital ratios remained well above the levels designated by bank regulators as “well capitalized” at December 31, 2021 and 2020. There are no conditions or events since that management believes have changed the institution’s category. On September 17, 2019 the FDIC finalized a rule that introduced an optional simplified measure of capital adequacy for qualifying community banking organizations, referred to as, the CBLR framework, as required by the EGRRCPA. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9 percent, less than $ 10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the PCA regulations and will not be required to report or calculate risk-based capital. The CBLR framework was available for banks to use in their March 31, 2020 Call Report and going forward. The Bank decided not to opt into the CBLR framework. The Bank calculates its regulatory capital under the Basel III regulatory capital framework. The table below summarizes the Bank’s regulatory capital and related ratios for the periods presented: December 31, 2021 Minimum (Dollars in thousands) To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Bank $ 155,092 14.72 % $ 84,312 8.00 % $ 105,390 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Bank $ 149,078 14.15 % $ 47,425 4.50 % $ 68,503 6.50 % Tier 1 Capital (To Risk Weighted Assets) Bank $ 149,078 14.15 % $ 63,234 6.00 % $ 84,312 8.00 % Tier 1 Capital (To Average Assets) Bank $ 149,078 7.69 % $ 77,549 4.00 % $ 96,936 5.00 % December 31, 2020 Minimum (Dollars in thousands) To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Bank $ 85,235 15.22 % $ 44,801 8.00 % $ 56,002 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Bank $ 79,750 14.24 % $ 25,201 4.50 % $ 36,401 6.50 % Tier 1 Capital (To Risk Weighted Assets) Bank $ 79,750 14.24 % $ 33,601 6.00 % $ 44,801 8.00 % Tier 1 Capital (To Average Assets) Bank $ 79,750 9.46 % $ 33,725 4.00 % $ 42,157 5.00 % |
Dividend Restrictions
Dividend Restrictions | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
Dividend Restrictions | Note 16 – Dividend Restrictions The primary source of funds for the dividends paid by the Company to shareholders is dividends received from the Bank. Federal regulations limit the amount of dividends which the Bank can pay to the Company without obtaining prior approval. The amount of cash dividends that the Bank may pay is limited to current year earnings plus retained net profits for the two preceding years. In addition, dividends paid by the Bank would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. In addition to the regulatory limits, the Company’s Board of Directors, under current policies, will generally only consider a cash dividend payment to shareholders that does not exceed 50% of the Bank’s core net income annually. Core net income excludes nonrecurring income and expense items in calculating the payout ratio. Quarterly dividend payments may be in excess of this range if the annual payout is anticipated to be within the range. At December 31, 2021 , the maximum amount of retained earnings available to the Bank for cash dividends to the Company was $ 13.1 million. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 17 – Fair Value Measurements Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the “Fair Value Measurements and Disclosures” topic of FASB ASC 825, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 - Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 - Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 - Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements: Securities available for sale Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). Interest rate swaps The Company recognizes interest rate swaps at fair value. The Company has contracted with a third-party to provide valuations for interest rate swaps using standard valuation techniques. The Company’s interest rate swaps are classified as Level 2. Additional information on interest rate swaps is presented in Note 23 – Derivative Instruments and Hedging Activities. The following tables present the balances measured at fair value on a recurring basis: Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices in Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 31,581 $ - $ 31,581 $ - Mortgage-backed securities/CMOs 170,964 - 170,964 - Municipal bonds 101,272 - 101,272 - Total securities available for sale $ 303,817 $ - $ 303,817 $ - Liabilities: Interest rate swaps $ 641 $ 641 Total liabilities at fair value $ 641 $ - $ 641 $ - Fair Value Measurements at December 31, 2020 Using: (Dollars in thousands) Quoted Prices in Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 25,305 $ - $ 25,305 $ - Corporate bonds 78,100 - 78,100 - Mortgage-backed securities/CMOs 70,681 - 70,681 - Municipal bonds $ 174,086 $ - $ 174,086 $ - Total securities available for sale $ 348,172 $ - $ 348,172 $ - Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or writedowns of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the consolidated financial statements: Other real estate owned Other real estate owned is measured at fair value less costs to sell, based on an existing contract (Level 3). OREO is measured at fair value on a nonrecurring basis. Any initial fair value adjustment is charged against the Allowance for Loan Losses. Subsequent fair value adjustments are recorded in the period incurred and included in other noninterest expense on the Consolidated Statements of Income. The Company had OREO of $ 611 thousand at December 31, 2021 and none as of December 31, 2020. Impaired loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected when due. The measurement of loss associated with impaired loans can be based on either (a) the observable market price of the loan or the fair value of the collateral, or (b) using the present value of expected future cash flows discounted at the loan’s effective interest rate, which is not a fair value measurement. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral value is significantly adjusted due to differences in the comparable properties, or is discounted by the Company because of marketability, then the fair value is considered Level 3. Impaired loans that are measured based on expected future cash flows discounted at the loan’s effective interest rate rather than the market rate of interest are not recorded at fair value, and are therefore excluded from fair value disclosure requirements. The value of business equipment is based upon an outside appraisal if deemed significant (Level 2) or the net book value on the applicable business’ financial statements if not considered significant (Level 3). Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the Allowance for Loan Losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses in the Consolidated Statements of Income. The Company had $ 1.5 million and $ 1.3 million in impaired loans as of December 31, 2021 and December 31, 2020, respectively. All impaired loans were measured based on expected cash flows discounted at the loan’s effective interest rate, or fair value of collateral, as noted above . The following table presents the Company’s assets that were measured at fair value on a nonrecurring basis as of December 31, 2021 . There were no such assets to report as of December 31, 2020. Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: Other Real Estate Owned $ 611 $ — $ — $ 611 For the assets measured at fair value on a nonrecurring basis as of December 31, 2021, the following table displays quantitative information about Level 3 Fair Value Measurements: (Dollars in thousands) Description Fair Value Valuation Technique Unobservable Inputs Weighted Average Assets: Other Real Estate Owned $ 611 Bonafide offer Discount applied to bonafide offer * 6.0 % * A discount percentage is applied based on estimated costs to sell. ASC 825, “Financial Instruments,” requires disclosures about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The Company uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis. The carrying values and estimated fair values of the Company’s financial instruments are as follows: Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices in Significant Significant Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 508,840 $ 508,840 $ - $ - $ 508,840 Available for sale securities 303,817 - 303,817 - 303,817 Loans, net 1,055,227 - - 1,059,650 1,059,650 Bank owned life insurance 31,234 - 31,234 - 31,234 Accrued interest receivable 3,778 - 1,252 2,526 3,778 Liabilities Demand deposits and interest-bearing $ 1,634,125 $ - $ 1,634,125 $ - $ 1,634,125 Certificates of deposit 162,045 - 161,850 - 161,850 Junior subordinated debt 3,367 - 3,367 - 3,367 Accrued interest payable 174 - 174 - 174 Interest rate swaps 641 - 641 - 641 Fair Value Measurements at December 31, 2020 Using: (Dollars in thousands) Quoted Prices in Significant Significant Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 34,695 $ 34,695 $ - $ - $ 34,695 Available for sale securities 174,086 - 174,086 - 174,086 Loans, net 603,951 - - 602,859 602,859 Bank owned life insurance 16,849 - 16,849 - 16,849 Accrued interest receivable 2,904 - 729 2,175 2,904 Liabilities Demand deposits and interest-bearing $ 631,662 $ - $ 631,662 $ - $ 631,662 Certificates of deposit 99,102 - 99,580 - 99,580 Advances from FHLB 30,000 - 30,000 - 30,000 Accrued interest payable 159 - 159 - 159 The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change, and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk; however, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 18 – Employee Benefit Plans The Company has a 401(k) plan available to all employees who are at least 18 years of age. Employees are able to elect the amount to contribute, not to exceed a maximum amount as determined by Internal Revenue Service regulation. The Company matches 100 % of the first 6 % of employee contributions. “Vesting” refers to the rights of ownership to the assets in the 401(k) accounts. Matching contributions as well as employee contributions are fully vested immediately. The Company contributed $ 665 thousand and $ 398 thousand to the 401(k) plan in 2021 and 2020, respectively. These expenses represent the matching contribution by the Company. The Company, as a result of the Merger, provides a post-retirement benefit for one retired employee. The liability associated with this benefit of $ 171 thousand as of December 31, 2021 is included in Accrued interest payable and other liabilities on the Consolidated Balance Sheet. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Note 19 – Stock Incentive Plans At the Annual Shareholders Meeting on May 21, 2014, shareholders approved the Virginia National Bankshares Corporation 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan makes available up to 275,625 shares of the Company’s common stock, as adjusted by prior issued stock dividends, to be issued to plan participants. The 2014 Plan provides for granting of both incentive and nonqualified stock options, as well as restricted stock, unrestricted stock and other stock based awards. No new grants will be issued under the 2005 Stock Incentive Plan ("2005 Plan") as this plan has expired. For the 2014 Plan and the 2005 Plan (the “Plans”), the option price of incentive options will not be less than the fair value of the stock at the time an option is granted. Nonqualified options may be granted at prices established by the Board of Directors, including prices less than the fair value on the date of grant. Outstanding options generally expire in ten years from the grant date. Stock options generally vest by the fourth or fifth anniversary of the date of the grant. A summary of the shares issued and available under each of the Plans is shown below as of December 31, 2021 . Share data and exercise price range per share have been adjusted to reflect prior stock dividends. Although the 2005 Plan has expired and no new grants will be issued under this plan, there were shares issued before the plan expired which are still outstanding as shown below. 2014 Plan 2005 Plan Aggregate shares issuable 275,625 253,575 Options issued, net of forfeited and expired options ( 170,106 ) ( 59,831 ) Unrestricted stock issued ( 11,535 ) - Restricted stock grants issued ( 48,017 ) - Cancelled due to Plan expiration - ( 193,744 ) Remaining available for grant 45,967 - Stock grants issued and outstanding: Total vested and unvested shares 59,552 - Fully vested shares 22,541 - Option grants issued and outstanding: Total vested and unvested shares 167,901 1,379 Fully vested shares 57,694 1,379 Exercise price range $ 23.75 to $ 42.62 $ 13.69 The Company accounts for all of its stock incentive plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements for 2021 and prior years include stock options, unrestricted stock and restricted stock. All stock-based payments to employees are required to be valued using a fair value method on the date of grant and expensed based on that fair value over the applicable vesting period. Stock Options Changes in the stock options outstanding related to all of the Plans are summarized below. December 31, 2021 (Dollars in thousands except weighted average data) Number of Weighted Aggregate Outstanding at January 1, 2021 146,783 $ 33.51 $ 184 Issued 23,600 35.94 Exercised ( 1,103 ) 27.39 Expired - - Outstanding at December 31, 2021 169,280 $ 33.89 $ 962 Options exercisable at December 31, 2021 59,072 $ 37.21 $ 211 For the 1,103 options exercised during the year ended December 31, 2021 , there was no intrinsic value for options exercised. For the years ended December 31, 2021 and 2020 , the Company recognized $ 145 thousand and $ 124 thousand, respectively, in compensation expense for stock options. As of December 31, 2021 , there was $ 851 thousand in unrecognized compensation expense for stock options remaining to be recognized in future reporting periods through 2026 . The fair value of any option grant is estimated at the grant date using the Black-Scholes pricing model. There were stock option grants of 23,600 and 66 thousand shares issued during the years ended December 31, 2021 and 2020, respectively and the fair value on each option granted was estimated based on the assumptions noted in the following table: For the year ended For the year ended December 31, 2021 December 31, 2020 Expected volatility 1 25.16 % 22.97 % Expected dividends 2 3.00 % 5.00 % Expected term (in years) 3 5.5 - 6.3 6.50 Risk-free rate 4 1.19 % 0.68 % 1 Based on the monthly historical volatility of the Company’s stock price over the expected life of the options. 2 Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant. 3 Based on the average of the contractual life and vesting period for the respective option. 4 Based upon an interpolated US Treasury yield curve interest rate that corresponds to the contractual life of the option, in effect at the time of the grant. Summary information pertaining to options outstanding at December 31, 2021, as adjusted for Stock Dividends, is as follows: Options Outstanding Options Exercisable Exercise Price Number of Weighted- Weighted- Number of Weighted- $ 13.69 to $ 20.00 1,379 1.1 Years $ 13.69 1,379 $ 13.69 $ 20.01 to $ 30.00 66,000 8.5 Years 24.64 13,200 24.64 $ 30.01 to $ 40.00 44,420 8.6 Years 36.97 10,008 38.38 $ 40.01 to $ 42.62 57,481 6.4 Years 42.62 34,485 42.62 Total 169,280 7.8 Years $ 33.89 59,072 $ 37.21 Stock Grants Restricted stock grants – During 2021, 21,749 shares of restricted stock were granted to employees and non-employee directors, vesting over a four - or five-year period. During 2020 , 22,268 shares of restricted stock were granted. In 2021 and 2020 , restricted stock grants resulted in an associated expense of $ 376 thousand and $ 140 thousand, respectively. As of December 31, 2021 , there was $ 387 thousand in unrecognized compensation expense for restricted stock grants remaining to be recognized in future reporting periods through 2026 . December 31, 2021 (Dollars in thousands except weighted average data) Number of Weighted Aggregate Outstanding at January 1, 2021 25,268 $ 26.60 $ 957 Issued 21,749 30.84 824 Vested ( 10,006 ) 27.01 ( 379 ) Nonvested at December 31, 2021 37,011 $ 28.98 $ 1,402 The weighted average period over which nonvested restricted stock grants are expected to be recognized is 1.6 years. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 20 – Net Income per Share The table below shows the weighted average number of shares used in computing net income per common share and the effect on the weighted average number of shares of potential dilutive common stock for the years ended December 31, 2021 and 2020 . Potential dilutive common stock equivalents have no effect on net income available to the Company’s shareholders. Diluted net income per share is computed based on the weighted average number of shares of common stock equivalents outstanding, to the extent dilutive. The Company’s common stock equivalents relate to outstanding common stock options. Nonvested restricted stock is included in the calculation of basic and diluted net income per share. The weighted average shares below as of December 31, 2021 and December 31, 2020 include 37,011 and 25,268 shares, respectively, of such restricted stock that have not yet vested. The recipients of nonvested restricted shares have full voting and dividend rights. (Dollars in thousands) Net Income Weighted Per Share December 31, 2021 Basic net income per share $ 10,071 4,668,761 $ 2.16 Effect of dilutive stock options 26,644 ( 0.02 ) Diluted net income per share $ 10,071 4,695,405 $ 2.14 December 31, 2020 Basic net income per share $ 7,978 2,707,877 $ 2.95 Effect of dilutive stock options 690 - Diluted net income per share $ 7,978 2,708,567 $ 2.95 In 2021 and 2020 , stock options representing 101,901 and 145,404 average shares, respectively, were not included in the calculation of net income per share, as their effect would have been antidilutive. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2021 | |
Other Comprehensive Income (Loss), Tax [Abstract] | |
Other Comprehensive Income | Note 21 – Other Comprehensive Income Amounts reclassified out of accumulated other comprehensive income (loss) are presented below: (Dollars in thousands) December 31, December 31, Available-for-sale securities: Realized gains on sales and calls of securities $ - $ 743 Tax effect - ( 156 ) Realized gains, net of tax $ - $ 587 |
Junior Subordinated Debt
Junior Subordinated Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Junior Subordinated Debt | Note 22 - Junior Subordinated Debt On September 21, 2006, Fauquier’s wholly-owned Connecticut statutory business trust, Fauquier Statutory Trust II, privately issued $ 4.0 million face amount of the trust’s Floating Rate Capital Securities in a pooled capital securities offering. Simultaneously, the trust used the proceeds of that sale to purchase $ 4.0 million principal amount of the Fauquier’s Floating Rate Junior Subordinated Deferrable Interest Debentures due 2036 . The interest rate on the capital security resets every three months at 1.70 % above the then current three-month LIBOR . Interest is paid quarterly . Total capital securities at December 31, 2021 were $ 3.4 million, as adjusted to fair value as of the date of the Merger. The Trust II issuance of capital securities and the respective subordinated debentures are callable at any time. The subordinated debentures are an unsecured obligation of the Company and are junior in right of payment to all present and future senior indebtedness of the Company. The capital securities are guaranteed by the Company on a subordinated basis. |
Derivatives Instruments and Hed
Derivatives Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 23 - Derivative Instruments and Hedging Activities The Company uses derivative financial instruments primarily to manage risks to the Company associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain interest rate swaps as hedging instruments in qualifying cash flow hedges. The changes in fair value of these designated hedging instruments is reported as a component of other comprehensive income. Customer accommodation loan swaps are derivative contracts that are not designated in a qualifying hedging relationship. Cash flow hedges . The Company designates interest rate swaps as cash flow hedges when they are used to manage exposure to variability in cash flows on variable rate borrowings such as the Company’s junior subordinated debt. These interest rate swaps are derivative financial instruments that manage the risk of variability in cash flows by exchanging variable-rate interest payments on a notional amount of the Company’s borrowings for fixed-rate interest payments. Interest rate swaps designated as cash flow hedges are expected to be highly effective in offsetting the effect of changes in interest rates on the amount of variable-rate interest payments, and the Company assesses the effectiveness of each hedging relationship quarterly. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. As of December 31, 2021, the Company has designated cash flow hedges to manage its exposure to variability in cash flows on certain variable rate borrowings through 2036. Unrealized gains or losses recorded in other comprehensive income (loss) related to cash flow hedges are reclassified into earnings in the same period(s) during which the hedged interest payments affect earnings. When a designated hedging instrument is terminated and the hedged interest payments remain probable of occurring, any remaining unrecognized gain or loss in other comprehensive income is reclassified into earnings in the period(s) during which the forecasted interest payments affect earnings. Amounts reclassified into earnings and interest receivable or payable under designated interest rate swaps are reported in interest expense. The Company does not expect any unrealized losses related to cash flow hedges to be reclassified into earnings in the next twelve months. Cash collateral held at other banks for these swaps was $ 570 thousand at December 31, 2021. Collateral is dependent on the market valuation of the underlying hedges. Loan swaps . The Bank also enters into interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Bank simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and offsetting terms. The net result of these interest rate swaps is that the customer pays a fixed rate of interest and the Company receives a floating rate. These back-to-back loan swaps are derivative financial instruments and are reported at fair value in “other assets” and “other liabilities” in the Consolidated Balance Sheets. These swaps are designated as fair value hedges and changes in fair value are recorded in current earnings. Note that the Company also offers loan swap agreements to commercial loan customers who are eligible contract participants as expanded under the Dodd-Frank Act, whereby a contracted third party accepts the interest rate risk as part of a separate agreement with the customer. For these arrangements, the Company underwrites the credit risk, books a floating rate loan and does not carry the derivative on its Consolidated Balance Sheets. The follow table summarizes the Company’s derivative instruments as of December 31, 2021: (Dollars in thousands) Derivatives designated as hedging instruments Notional/ Contract Amount Fair Value Fair Value Balance Sheet Location Expiration Date Interest rate forward swap - cash flow $ 4,000 $ ( 633 ) Junior subordinated debt 6/15/2031 Interest rate swap - fair value $ 3,940 $ ( 8 ) Other Liabilities 2/12/2022 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 24 – Segment Reporting Virginia National Bankshares Corporation has four reportable segments. Each reportable segment is a strategic business unit that offers different products and services. They are managed separately, because each segment appeals to different markets and, accordingly, require different technology and marketing strategies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report. The four reportable segments are: • Bank - The commercial banking segment involves making loans and generating deposits from individuals, businesses and charitable organizations. Loan fee income, service charges from deposit accounts, and other non-interest-related fees, such as fees for debit cards and ATM usage and fees for treasury management services, generate additional income for the Bank segment. • Sturman Wealth Advisors – Sturman Wealth Advisors, formerly known as VNB Investment Services, offers wealth management and investment advisory services. Revenue for this segment is generated primarily from investment advisory and financial planning fees, with a small and decreasing portion attributable to brokerage commissions. • VNB Trust and Estate Services – VNB Trust and Estate Services offers corporate trustee services, trust and estate administration, IRA administration and custody services. Revenue for this segment is generated from administration, service and custody fees, as well as management fees which are derived from Assets Under Management. Investment management services currently are offered through in-house and third-party managers. In addition, royalty income, in the form of fixed and incentive fees, from the sale of Swift Run Capital Management, LLC in 2013 is reported as income of VNB Trust and Estate Services. More information on royalty income and the related sale can be found under Note 1 - Summary of Significant Accounting Policies. • Masonry Capital - Masonry Capital offers investment management services for separately managed accounts and a private investment fund employing a value-based, catalyst-driven investment strategy. Revenue for this segment is generated from management fees which are derived from Assets Under Management and incentive income which is based on the investment returns generated on performance-based Assets Under Management. A management fee for administrative and technology support services provided by the Bank is allocated to the non-bank segments. For both the years ended December 31, 2021 and 2020 , management fees of $ 100 thousand were charged to the non-bank segments and eliminated in consolidated totals. Segment information for the years ended December 31, 2021 and 2020 is shown in the following tables. Note that asset information is not reported below, as the assets of Sturman Wealth Advisors and VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker. 2021 (Dollars in thousands) Bank Sturman VNB Trust & Masonry Consolidated Net interest income $ 44,988 $ - $ - $ - $ 44,988 Provision for loan losses 1,014 - - - 1,014 Noninterest income 5,704 1,213 1,969 1,579 10,465 Noninterest expense 39,164 725 1,764 869 42,522 Income before income taxes 10,514 488 205 710 11,917 Provision for income taxes 1,550 104 43 149 1,846 Net income $ 8,964 $ 384 $ 162 $ 561 $ 10,071 2020 (Dollars in thousands) Bank Sturman VNB Trust & Masonry Consolidated Net interest income $ 23,879 $ - $ - $ - $ 23,879 Provision for loan losses 1,622 - - - 1,622 Noninterest income 4,629 700 825 411 6,565 Noninterest expense 16,492 639 891 757 18,779 Income before income taxes 10,394 61 ( 66 ) ( 346 ) 10,043 Provision for income taxes 2,138 13 ( 14 ) ( 72 ) 2,065 Net income (loss) $ 8,256 $ 48 $ ( 52 ) $ ( 274 ) $ 7,978 |
Condensed Parent Company Financ
Condensed Parent Company Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Parent Company Financial Statements | Note 25 – Condensed Parent Company Financial Statements Condensed financial statements pertaining only to the Parent Company are presented below. The investment in subsidiary is accounted for using the equity method of accounting. Cash dividend payments authorized by the Bank’s Board of Directors were paid to the Parent Company in 2021 and 2020 , totaling $ 7.6 million and $ 4.4 million, respectively. The payment of dividends by the Bank is restricted by various regulatory limitations. Banking regulations also prohibit extensions of credit to the parent company unless appropriately secured by assets. For more detail on dividends, see Note 16 – Dividend Restrictions. Condensed Parent Company Only BALANCE SHEETS (Dollars in thousands) December 31, 2021 December 31, 2020 ASSETS Cash and due from banks $ 1,417 $ 1,691 Investment securities 64 64 Investments in subsidiaries 163,712 81,455 Other assets 603 249 Total assets $ 165,796 $ 83,459 LIABILITIES & SHAREHOLDERS' EQUITY Junior subordinated debt $ 3,367 $ - Other liabilities 442 861 Stockholders' equity 161,987 82,598 Total liabilities and stockholders' equity $ 165,796 $ 83,459 STATEMENTS OF INCOME (Dollars in thousands) For the years ended December 31, 2021 December 31, 2020 Dividends from subsidiary $ 7,600 $ 4,400 Net interest income ( 148 ) - Noninterest expense 2,325 1,171 Income before income taxes $ 5,127 $ 3,229 Income tax (benefit) ( 353 ) ( 164 ) Income before equity in undistributed earnings of $ 5,480 $ 3,393 Equity in undistributed earnings of subsidiaries 4,591 4,585 Net income $ 10,071 $ 7,978 Condensed Parent Company Only (Continued) STATEMENTS OF CASH FLOWS (Dollars in thousands) For the years ended December 31, 2021 December 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 10,071 $ 7,978 Adjustments to reconcile net income to net cash Equity in undistributed earnings of subsidiaries ( 4,591 ) ( 4,585 ) Net accretion of certain acquisition-related adjustments 33 - Deferred tax expense 28 28 Stock option & restricted stock grant expense 521 264 Increase in other assets ( 365 ) ( 16 ) Decrease in other liabilities 411 14 Net cash provided by operating activities 6,108 3,683 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock options exercised 30 - Cash paid in lieu for fractional shares at acquisition ( 4 ) - Dividends paid ( 6,408 ) ( 3,248 ) Net cash used in financing activities ( 6,382 ) ( 3,248 ) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 274 ) 435 CASH AND CASH EQUIVALENTS Beginning of period 1,691 1,256 End of period $ 1,417 $ 1,691 |
Investment in Affordable Housin
Investment in Affordable Housing Projects | 12 Months Ended |
Dec. 31, 2021 | |
Federal Home Loan Banks [Abstract] | |
Investment in Affordable Housing Projects | Note 26 – Investment in Affordable Housing Projects The Company acquired as a result of the Merger certain limited partnership investments in affordable housing projects located in the Commonwealth of Virginia. These partnerships exist to develop and preserve affordable housing for low income families through residential rental property projects. The Company exerts no control over the operating or financial policies of the partnerships. Return on these investments is through receipt of tax credits and other tax benefits which are subject to recapture by taxing authorities based on compliance features at the project level. The investments are due to expire by 2036 . The Company accounts for the affordable housing investments using the equity method and has recorded $ 2.9 million in other assets at December 31, 2021 . There are currently no unfunded capital commitments. The related federal tax credits for the year ended December 31, 2021 was $ 450 thousand, and were included in income tax expense in the Consolidated Statements of Income. There were $ 145 thousand in flow-through losses recognized by the Company during the year ended December 31, 2021 that were included in noninterest income. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 27 – Subsequent Event In February 2022, the Company received a one-time payment of $ 2.4 million to resolve a commercial dispute. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization | The Company - Headquartered in Charlottesville, Virginia, Virginia National Bankshares Corporation (the Company) (NASDAQ: VABK) is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Company is authorized to issue (a) 10,000,000 shares of common stock with a par value of $ 2.50 per share and (b) 2,000,000 shares of preferred stock at a par value $ 2.50 per share. There is currently no preferred stock outstanding. The Company is regulated under the Bank Holding Company Act of 1956, as amended and is subject to inspection, examination, and supervision by the Federal Reserve Board. Virginia National Bank (the Bank) is a wholly-owned subsidiary of the Company and was organized in 1998 under federal law as a national banking association to engage in a general commercial and retail banking business. The Bank is also headquartered in Charlottesville, Virginia and primarily serves the Virginia communities in and around the cities of Charlottesville, Winchester, Manassas and Richmond, and the counties of Albemarle, Fauquier, Frederick and Prince William. As a national bank, the Bank is subject to the supervision, examination and regulation of the OCC. The Bank offers a full range of banking and related financial services to meet the needs of individuals, businesses and charitable organizations, including the fiduciary services of VNB Trust and Estate Services. The Bank also offers, through its networking agreements with third parties, investment advisory and other investment services under Sturman Wealth Advisors. Investment management services are offered through Masonry Capital Management, LLC, a registered investment adviser and wholly-owned subsidiary of the Company. The Bank, through its financial subsidiary Fauquier Bank Services, Inc., has equity ownership interests in Bankers Insurance, LLC, a Virginia independent insurance company, and Bankers Title Shenandoah, LLC, a title insurance company, both of which are owned by a consortium of Virginia community banks. The Bank has another subsidiary, Special Properties Acquisition - VA, LLC, which was originally formed by Fauquier to hold other real estate owned; however, there are no assets currently held by this subsidiary. In addition, the Company owns Fauquier Statutory Trust II (“Trust II”), which is an unconsolidated subsidiary. The subordinated debt owed to Trust II is reported as a liability of the Company. On April 1, 2021 , the Company completed the Merger with Fauquier with and into the Company for total consideration paid of $ 78.0 million. In connection with the transaction, TFB, Fauquier's wholly-owned bank subsidiary, was merged with and into the Bank. Additional information about this transaction is presented in Note 2 – Business Combinations. |
Basis of Presentation | Basis of Financial Information - The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to the reporting guidelines prescribed by regulatory authorities. The following is a description of the more significant of those policies and practices. |
Principles of consolidation | Principles of consolidation – The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, the Bank and Masonry Capital. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses (including impaired loans), acquisition accounting, other-than-temporary impairment of securities, intangible assets, income taxes, and fair value measurements. |
Cash flow reporting | Cash flow reporting – For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand, funds due from banks, interest bearing deposits in other banks and federal funds sold. |
Securities | Securities – Unrestricted investments are classified in two categories as described below. • Securities held to maturity – Securities classified as held to maturity are those debt securities the Company has both the positive intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. Currently the Company has no securities classified as held to maturity because of Management’s desire to have more flexibility in managing the investment portfolio. • Securities available for sale – Securities classified as AFS are those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. AFS securities are carried at fair value. Unrealized gains or losses are reported as a separate component of other comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities or to “call” dates, whichever occurs first. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Impairment of securities occurs when the fair value of a security is less than its amortized cost. For debt securities, impairment is considered other-than-temporary and recognized in its entirety in net income if either (1) the Company intends to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-than-likely that the Company will be required to sell the security before recovery, the Company must determine what portion of the impairment is attributable to a credit loss, which occurs when the amortized cost of the security exceeds the present value of the cash flows expected to be collected from the security. If there is no credit loss, there is no other-than-temporary impairment. If there is a credit loss, other-than-temporary impairment exists, and the credit loss must be recognized in net income and the remaining portion of impairment must be recognized in other comprehensive income. |
Restricted securities | Restricted securities – As members of the FRB and the FHLB, the Company is required to maintain certain minimum investments in the common stock of the FRB and FHLB. Required levels of investments are based upon the Bank’s capital and a percentage of qualifying assets. Additionally, the Company has purchased common stock in CBB Financial Corp. (“CBBFC”), the holding company for Community Bankers’ Bank and an investment in an SBA loan fund. These restricted securities are carried at cost. |
Loans | Loans – Loans are reported at the principal balance outstanding net of unearned discounts and of the allowance for loan losses. Interest income on loans is reported on the level-yield method and includes amortization of deferred loan fees and costs over the loan term. Acquired Loans were recorded at fair value at the Merger date without carryover of Fauquier's allowance for loan losses or net deferred fee/costs. The fair value of the Acquired Loans was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected on the loans and then discounting those cash flows based on a discount rate that would be required by a market participant. Acquired Loans are classified as either (i) purchased credit-impaired loans or (ii) purchased performing loans. PCI loans are not classified as nonperforming loans by the Company at the time they are acquired, regardless of whether they had been classified as nonperforming by the previous holder of such loans, and they will not be classified as nonperforming so long as, at semi-annual re-estimation periods, we believe we will full collect the new carrying value of the pools of loans. Purchased performing loans are accounted for using the contractual cash flows method of recognizing discount accretion based on the Acquired Loans' contractual cash flows. Further information regarding the Company’s accounting policies related to past due loans, non-accrual loans, impaired loans and troubled-debt restructurings is presented in Note 4 - Loans. |
Allowance for loan losses | Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the loan portfolio. The allowance for loan losses includes allowance allocations calculated in accordance with FASB ASC Topic 310, “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.” Further information regarding the Company’s policies and methodology used to estimate the allowance for loan losses is presented in Note 5 – Allowance for Loan Losses. |
Transfers of financial assets | Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company or its subsidiaries – put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company or its subsidiaries does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
Premises and equipment | Premises and equipment – Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method based on the estimated useful lives of assets, which range from 3 to 40 years. Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon disposition, the asset and related accumulated depreciation are removed from the books and any resulting gain or loss is charged to income. More information regarding premises and equipment is presented in Note 6 – Premises and Equipment. |
Leases | Leases - The Company recognizes a lease liability and a right-of-use asset in connection with leases in which it is a lessee, except for leases with a term of twelve months or less. A lease liability represents the Company’s obligation to make future payments under lease contracts, and a right-of-use asset represents the Company’s right to control the use of the underlying property during the lease term. Lease liabilities and right-of-use assets are recognized upon commencement of a lease and measured as the present value of lease payments over the lease term, discounted at the incremental borrowing rate of the lessee. Further information regarding leases is presented in Note 7 – Leases. |
Intangible assets | Intangible assets – Goodwill is determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually, or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company performs the test as of December 31 of each year whereby the estimated fair value is compared to the carrying value. Intangible assets with definite useful lives are amortized over their estimated useful lives, which range from 3 to 10 years , to their estimated residual values. Goodwill is the only intangible asset with an indefinite life included on the Company’s Consolidated Balance Sheets. Management has concluded that no impairment of these assets existed as of the balance sheet date. More information regarding intangible assets is presented in Note 8 – Goodwill and Other Intangible Assets. |
Bank owned life insurance | BOLI – The Company has purchased life insurance on certain key employees and acquired BOLI policies as part of the Merger. These policies are recorded at their cash surrender value on the Consolidated Balance Sheets. Income generated from polices is recorded as noninterest income. |
Other Real Estate Owned | Other Real Estate Owned - Assets acquired through or in lieu of loan foreclosures are held for sale and are initially recorded at fair value less selling costs at the date of foreclosure, establishing a new cost basis. When the carrying amount exceeds the acquisition date fair value less selling costs, the excess is charged off against the ALLL. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell, and any valuation adjustments occurring from post-acquisition reviews are charged to expense as incurred. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses on the Company’s Consolidated Statements of Income. |
Fair value measurements | Fair value measurements – ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon internally developed models that primarily use, as inputs, observable market-based parameters. Any such valuation adjustments are applied consistently over time. Additional information on fair value measurements is presented in Note 17 – Fair Value Measurements. |
Stock-based compensation | Stock-based compensation – The Company accounts for all plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and unrestricted or restricted stock grants. For stock options, compensation is estimated at the date of grant, using the Black-Scholes option valuation model for determining fair value. The model employs the following assumptions: • Dividend yield - calculated as the ratio of historical cash dividends paid per share of common stock to the stock price on the date of grant; • Expected life (term of the option) - based on the average of the contractual life and vesting schedule for the respective option; • Expected volatility - based on the monthly historical volatility of the Company’s stock price over the expected life of the options; • Risk-free interest rate - based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant. The Company has elected to estimate forfeitures when recognizing compensation expense, and this estimate of forfeitures is adjusted over the requisite service period or vesting schedule based on the extent to which actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also will impact the amount of estimated unamortized compensation expense to be recognized in future periods. Further information on stock-based compensation is presented in Note 19 – Stock Incentive Plans. |
Net income per common share | Net income per common share – Basic net income per share, commonly referred to as earnings per share, represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period, including restricted shares that have not yet vested as these are considered participating securities during the vesting period. Diluted net income per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Additional information on net income per share is presented i n Note 20 – Net Income per Share. |
Comprehensive income | Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on AFS securities and interest rate swaps, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Further information on the Company’s other comprehensive income is presented in Note 21 – Other Comprehensive Income. |
Derivative Financial Instruments | Derivative Financial Instruments - The Company recognizes derivative financial instruments in the consolidated balance sheets at fair value. The fair value of a derivative is determined by quoted market prices and mathematical models using current and historical data. If certain hedging criteria are met, including testing for hedge effectiveness, special hedge accounting may be applied. The Company assesses each hedge, both at inception and on an ongoing basis, to determine whether the derivative used in a hedging transaction is effective in offsetting changes in the fair value or cash flows of the hedged item and whether the derivative is expected to remain effective during subsequent periods. The Company discontinues hedge accounting when (i) it determines that a derivative is no longer effective in offsetting changes in fair value or cash flows of a hedged item; (ii) the derivative expires or is sold, terminated or exercised; (iii) probability exists that the forecasted transaction will no longer occur or; (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued and a derivative remains outstanding, the Company recognizes the derivative in the balance sheet at its fair value and changes in the fair value are recognized in net income. At inception, the Company designates a derivative as (i) a fair value hedge of recognized assets or liabilities or of unrecognized firm commitments (fair value hedge) or (ii) a hedge of forecasted transactions or variable cash flows to be received or paid in conjunction with recognized assets or liabilities (cash flow hedge). For a derivative treated as a fair value hedge, a change in fair value is recorded as an adjustment to the hedged item and recognized in net income. For a derivative treated as a cash flow hedge, the effective portion of a change in fair value is recorded as an adjustment to the hedged item and recognized as a component of accumulated other comprehensive income (loss) within shareholders’ equity. For a derivative treated as a cash flow hedge, the ineffective portion of a change in fair value is recorded as an adjustment to the hedged item and recognized in net income. Further information on the Company's derivative financial instruments is presented in Note 23 -Derivatives Instruments and Hedging Activities. |
Advertising costs | Advertising costs – The Company follows the policy of charging the costs of advertising to expense as they are incurred. |
Income taxes | Income taxes – Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carry forwards, and tax credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as additional income taxes in the statements of income. For the years ended December 31, 2021 and 2020 , there were no such interest or penalties recognized. Further information on the Company’s accounting policies for income taxes is presented in Note 11 – Income Taxes. |
Securities and other property held in a fiduciary capacity | Securities and other property held in a fiduciary capacity – Securities and other property held by VNB Trust and Estate Services, Sturman Wealth Advisors or Masonry Capital in a fiduciary or agency capacity are not assets of the Company and are not included in the accompanying consolidated financial statements. |
Revenue Recognition | Revenue Recognition - ASU 2014-09, “Revenue from Contracts with Customers”, and all subsequent amendments to the ASU (collectively “Topic 606”), (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as OREO. The majority of the Company’s revenue is from interest income, including loans and securities, which are outside the scope of the standard. The services that fall within the scope of the standard are presented within noninterest income on the consolidated statement of income and are recognized as revenue as the Company satisfies its obligations to the customer. The revenue that falls within the scope of Topic 606 is primarily related to service charges on deposit accounts, debit/credit card and ATM fees, asset management fees and sales of other real estate owned, when applicable. |
Reclassifications | Reclassifications – Certain reclassifications have been made to the prior year financial statements to conform to current year presentation. The results of the reclassifications are not considered material. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments – Credit Losses - In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU’s have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The amendments of Topic 326, upon adoption, will be applied on a modified retrospective basis, with the cumulative effect of adopting the new standard being recorded as an adjustment to opening retained earnings in the period of adoption. The Company is currently assessing the impact that Topic 326 will have on its consolidated financial statements. Early in 2017, the Company formed a cross-functional steering committee, including some members of senior management, to provide governance and guidance over the project plan. The steering committee has gathered historical loan loss data for purposes of evaluating the appropriate portfolio segmentation and modeling methods under the standard and has performed procedures to validate the historical loan loss data to ensure its suitability and reliability for purposes of developing an estimate of expected credit losses under Topic 326. The Company has engaged a vendor to assist in modeling expected lifetime losses under Topic 326 and is continuing to develop and refine an approach to estimate the ACL. The adoption of Topic 326 will result in significant changes to the Company's consolidated financial statements, which may include changes in the level of the ACL that will be considered adequate, a reduction in total equity and regulatory capital of the Bank, differences in the timing of recognizing changes to the ACL and expanded disclosures about the ACL. The Company has not yet determined an estimate of the effect of these changes, as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time. The adoption of the standard will also result in significant changes in the Company's internal control over financial reporting related to the ACL. Effective November 25, 2019, the SEC adopted SAB 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB ASC 326. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. LIBOR and Other Reference Rates - In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance provides temporary, optional guidance to ease the potential burden in accounting for reference rate reform associated with the LIBOR transition. LIBOR and other interbank offered rates are widely used benchmark or reference rates that have been used in the valuation of loans, derivatives, and other financial contracts. Global capital markets are going to be required to move away from LIBOR and other interbank offered rates and toward rates that are more observable or transaction based and less susceptible to manipulation. Topic 848 provides optional expedients and exceptions, subject to meeting certain criteria, for applying current GAAP to contract modifications and hedging relationships, for contracts that reference LIBOR or another reference rate expected to be discontinued. Topic 848 is intended to help stakeholders during the global market-wide reference rate transition period. The amendments are effective as of March 12, 2020 through December 31, 2022 and can be adopted at an instrument level. To facilitate an orderly transition from LIBOR and other benchmark rates to alternative reference rates, the Company has established a focus committee, which includes members of senior management, including the Chief Credit Officer and Chief Financial Officer, among others. The task of this committee is to identify, assess and monitor risks associated with the expected discontinuation or unavailability of benchmarks, including LIBOR, achieve operational readiness and engage impacted clients in connection with the transition to alternative reference rates. A complete inventory of instruments tied to LIBOR has been developed, and the focus committee is working through each of the instruments to determine ultimate resolution. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of Total Consideration Paid in Connection with Merger | The following table presents as of April 1, 2021 the total consideration paid by the Company in connection with the Merger, the fair values of the assets acquired and liabilities assumed, and the resulting goodwill: (Dollars in thousands) As Recorded Fair Value As Recorded by Fauquier Adjustment by the Company Assets: Cash and cash equivalents $ 153,282 $ - $ 153,282 Securities available for sale 93,133 - 93,133 Restricted securities 1,619 - 1,619 Loans, net 615,766 ( 13,123 ) 602,643 Premises and equipment 16,276 3,872 20,148 Other real estate owned 1,356 ( 745 ) 611 Bank-owned life insurance 13,677 - 13,677 Right-of-use assets 4,355 1,077 5,432 Core deposit intangible - 9,660 9,660 Other assets 11,298 ( 1,009 ) 10,289 Total assets acquired $ 910,762 $ ( 268 ) $ 910,494 Liabilities: Deposits 817,499 191 817,690 Short-term borrowings 12,582 473 13,055 Junior subordinated debt 4,124 ( 790 ) 3,334 Lease liability 4,440 352 4,792 Other liabilities 1,355 - 1,355 Total liabilities assumed $ 840,000 $ 226 $ 840,226 Net assets acquired $ 70,268 Total consideration paid 78,036 Goodwill resulting from merger $ 7,768 |
Summary of Information About Purchased Credit Impaired (PCI) Loans | Information about PCI l oans acquired from Fauquier as of April 1, 2021 is as follows: (Dollars in thousands) April 1, 2021 Contractual principal and interest at acquisition $ 136,476 Nonaccretable difference ( 33,712 ) Expected cash flows at acquisition 102,764 Accretable yield ( 15,499 ) Basis in PCI loans at acquisition, estimated fair value $ 87,265 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Fair Values of Securities Available For Sale | The amortized cost and fair values of securities available for sale as of December 31, 2021 and December 31, 2020 are as follows: December 31, 2021 Amortized Gross Gross Fair (Dollars in thousands) Cost Gains (Losses) Value U.S. Government agencies $ 32,424 $ 24 $ ( 867 ) $ 31,581 Mortgage-backed securities/CMOs 172,975 248 ( 2,259 ) 170,964 Municipal bonds 101,136 1,162 ( 1,026 ) 101,272 Total Securities Available for Sale $ 306,535 $ 1,434 $ ( 4,152 ) $ 303,817 December 31, 2020 Amortized Gross Gross Fair (Dollars in thousands) Cost Gains (Losses) Value U.S. Government agencies $ 25,496 $ 7 $ ( 198 ) $ 25,305 Mortgage-backed securities/CMOs 77,438 844 ( 182 ) 78,100 Municipal bonds 69,303 1,499 ( 121 ) 70,681 Total Securities Available for Sale $ 172,237 $ 2,350 $ ( 501 ) $ 174,086 |
Schedule of Unrealized Losses in the Bank's Securities Portfolio | Year-end securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, were as follows: December 31, 2021 (Dollars in thousands) Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 14,443 $ ( 340 ) $ 15,220 $ ( 527 ) $ 29,663 $ ( 867 ) Mortgage-backed/CMOs 131,876 ( 1,735 ) 15,192 ( 524 ) 147,068 ( 2,259 ) Municipal bonds 40,352 ( 722 ) 10,409 ( 304 ) 50,761 ( 1,026 ) $ 186,671 $ ( 2,797 ) $ 40,821 $ ( 1,355 ) $ 227,492 $ ( 4,152 ) December 31, 2020 (Dollars in thousands) Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 19,298 $ ( 198 ) $ - $ - $ 19,298 $ ( 198 ) Mortgage-backed/CMOs 24,523 ( 182 ) - - 24,523 ( 182 ) Municipal bonds 21,501 ( 121 ) - - 21,501 ( 121 ) $ 65,322 $ ( 501 ) $ - $ - $ 65,322 $ ( 501 ) |
Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories | The amortized cost and fair value of AFS debt securities at December 31, 2021 are presented below based upon contractual maturities, by major investment categories. Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations. (Dollars in thousands) Amortized Cost Fair Value U.S. Government agencies After five years to ten years $ 26,424 $ 25,804 Ten years or more 6,000 5,777 $ 32,424 $ 31,581 Mortgage-backed securities/CMOs After one year to five years $ 8,427 $ 8,344 After five years to ten years 4,811 4,786 Ten years or more 159,737 157,834 $ 172,975 $ 170,964 Municipal bonds One year or less $ 507 $ 515 After one year to five years 611 616 After five years to ten years 12,245 12,448 Ten years or more $ 87,773 $ 87,693 $ 101,136 $ 101,272 Total Debt Securities Available for Sale $ 306,535 $ 303,817 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of Composition of Loan Portfolio by Major Loan Classification | The composition of the loan portfolio by major loan classification appears below. Note that all loan balances are presented net of credit and other fair value discounts, when applicable. (Dollars in thousands) December 31, December 31, 2021 2020 Commercial $ 96,696 $ 118,688 Real estate construction and land 79,331 22,509 1-4 family residential mortgages 358,148 132,966 Commercial mortgages 473,632 277,109 Consumer 53,404 58,134 Total loans 1,061,211 609,406 Less: Allowance for loan losses ( 5,984 ) ( 5,455 ) Net loans $ 1,055,227 $ 603,951 |
Summary of Outstanding Principal Balance and Carrying Amount of Loans Acquired in Business Combination | The outstanding principal balance and the carrying amount at December 31, 2021 on these Acquired Loans were as follows: (Dollars in thousands) December 31, 2021 Acquired Loans - Acquired Loans - Purchased Performing Acquired Outstanding principal balance $ 76,608 $ 372,172 $ 448,780 Carrying amount: Commercial $ 994 $ 28,065 $ 29,059 Real estate construction and land 18,576 14,297 32,873 1-4 family residential mortgages 16,020 194,708 210,728 Commercial mortgages 28,675 126,638 155,313 Consumer 118 2,224 2,342 Total acquired loans $ 64,383 $ 365,932 $ 430,315 |
Summary of Changes in Accretable Yield of Loans Classified as Purchased Credit Impaired | The following table presents a summary of the changes in the accretable yield of loans classified as purchased credit impaired: (Dollars in thousands) Twelve Months Ended December 31, Accretable yield, beginning of period $ — Additions 15,499 Accretion ( 1,757 ) Reclassification from (to) nonaccretable difference — Accretable yield, end of period $ 13,742 |
Schedule of Activity In Related Party Loans | Activity in related party loans during 2021 and 2020 is presented in the following table. (Dollars in thousands) 2021 2020 Balance outstanding at beginning of year $ 19,070 $ 20,300 Principal additions 4,527 9,308 Principal reductions ( 7,005 ) ( 10,538 ) Balance outstanding at end of year $ 16,592 $ 19,070 |
Schedule of Impaired Loans Classified as Non-Accruals by Class | Non-accrual loans are shown below by class: (Dollars in thousands) December 31, 2021 December 31, 2020 Land and land development $ — $ 8 1-4 family residential mortgages 495 - Total nonaccrual loans $ 495 $ 8 |
Schedule of Aging of Past Due Loans | The following tables show the aging of past due loans as of December 31, 2021 and December 31, 2020. Past Due Aging as of 30-59 60-89 90 Days Total PCI Current Total 90 Days (Dollars in thousands) Commercial $ 385 $ 355 $ 718 $ 1,458 $ 994 $ 94,244 $ 96,696 $ 718 Real estate construction and land 873 1,283 - 2,156 18,576 58,599 79,331 - 1-4 family residential mortgages 1,508 100 495 2,103 16,020 340,025 358,148 - Commercial mortgages - - - - 28,675 444,957 473,632 - Consumer loans 345 196 83 624 118 52,662 53,404 83 Total Loans $ 3,111 $ 1,934 $ 1,296 $ 6,341 $ 64,383 $ 990,487 $ 1,061,211 $ 801 Past Due Aging as of 30-59 60-89 90 Days Total Current Total 90 Days (Dollars in thousands) Commercial $ 1,130 $ 470 $ - $ 1,600 $ 117,088 $ 118,688 $ - Real estate construction and land - - - - 22,509 22,509 - 1-4 family residential mortgages 501 - - 501 132,465 132,966 - Commercial mortgages 46 - - 46 277,063 277,109 - Consumer loans 298 66 137 501 57,633 58,134 137 Total Loans $ 1,975 $ 536 $ 137 $ 2,648 $ 606,758 $ 609,406 $ 137 |
Schedule of Loans Classified as Impaired Loans | The following tables provide a breakdown by class of the loans classified as impaired loans as of December 31, 2021 and December 31, 2020. These loans are reported at their recorded investment, which is the carrying amount of the loan as reflected on the Company’s balance sheet, net of charge-offs and other amounts applied to reduce the net book balance. Average recorded investment in impaired loans is computed using an average of month-end balances for these loans for the twelve months ended December 31, 2021 and December 31, 2020. Interest income recognized is for the years ended December 31, 2021 and December 31, 2020. (Dollars in thousands) December 31, 2021 Recorded Unpaid Associated Average Interest Impaired loans without a valuation allowance: Real estate construction and land $ - $ 37 $ - $ 2 $ - 1-4 family residential mortgages 594 600 - 269 24 Total impaired loans without a valuation 594 637 - 271 24 Impaired loans with a valuation allowance Consumer 935 935 6 974 54 Total impaired loans with a valuation 935 935 6 974 54 Total impaired loans $ 1,529 $ 1,572 $ 6 $ 1,245 $ 78 (Dollars in thousands) December 31, 2020 Recorded Unpaid Associated Average Interest Impaired loans without a valuation allowance: Real estate construction and land $ 8 $ 55 $ - $ 97 $ - 1-4 family residential mortgages 109 109 - 113 6 Commercial real estate - - - 781 48 Total impaired loans without a valuation 117 164 - 991 54 Impaired loans with a valuation allowance Consumer 1,156 1,156 4 1,145 70 Total impaired loans with a valuation 1,156 1,156 4 1,145 70 Total impaired loans $ 1,273 $ 1,320 $ 4 $ 2,136 $ 124 |
Schedule of Loans Modified Under Terms of a TDR | The following provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in non-accrual status, which are considered to be nonperforming. Troubled debt restructurings December 31, 2021 December 31, 2020 (Dollars in thousands) No. of Recorded No. of Recorded Performing TDRs 1-4 family residential mortgages 1 $ 99 1 $ 109 Consumer 58 935 75 1,156 Total performing TDRs 59 $ 1,034 76 $ 1,265 Nonperforming TDRs Real estate construction and land development 0 $ - 1 $ 8 1-4 family residential mortgages 1 495 0 — Total nonperforming TDRs 1 $ 495 1 $ 8 Total TDRs 60 $ 1,529 77 $ 1,273 |
Summary of Modified Loans | A summary of loans shown above that were modified as TDRs during the years ended December 31, 2021 and December 31, 2020 is shown below by class. Loans modified as TDRs that were fully paid down, charged-off, or foreclosed upon by period end are not reported. The Post-Modification Recorded Balance reflects any interest or fees from the original loan which may have been added to the principal balance on the new note as a condition of the TDR. Additionally, the Post-Modification Recorded Balance is reported below at the period end balances, inclusive of all partial principal pay downs and principal charge-offs since the modification date. During year ended During year ended (Dollars in thousands) December 31, 2021 December 31, 2020 Number Pre- Post- Number Pre- Post- Consumer loans 12 $ 145 $ 145 17 $ 180 $ 180 Total loans modified during the period 12 $ 145 $ 145 17 $ 180 $ 180 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Allowance For Loan Losses [Abstract] | |
Summary of Transactions in Allowance for Loan Losses | A summary of the transactions in the allowance for loan losses for the years ended December 31, 2021 and 2020 appears below: (Dollars in thousands) 2021 2020 Balance, beginning of period $ 5,455 $ 4,209 Loans charged off ( 835 ) ( 805 ) Recoveries 350 429 Net charge-offs ( 485 ) ( 376 ) Provision for loan losses 1,014 1,622 Balance, December 31 $ 5,984 $ 5,455 |
Internal Risk Rating Grades | The following represents the loan portfolio designated by the internal risk ratings assigned to each credit at December 31, 2021 and 2020. There were no loans rated “Doubtful” as of either period. December 31, 2021 Excellent Good Pass Watch Special Sub- TOTAL (Dollars in thousands) Commercial $ 45,862 $ 13,920 $ 32,460 $ 732 $ 1,645 $ 2,077 $ 96,696 Real estate construction and - - 51,098 7,360 2,849 18,024 79,331 1-4 family residential - 2,030 334,300 5,013 1,520 15,285 358,148 Commercial mortgages - - 382,108 61,563 8,530 21,431 473,632 Consumer 524 18,535 32,821 1,225 179 120 53,404 Total Loans $ 46,386 $ 34,485 $ 832,787 $ 75,893 $ 14,723 $ 56,937 $ 1,061,211 December 31, 2020 Excellent Good Pass Watch Special Sub- TOTAL (Dollars in thousands) Commercial $ 87,014 $ 14,336 $ 16,126 $ 485 $ - $ 727 $ 118,688 Real estate construction and - - 22,305 - - 204 22,509 1-4 family residential - - 126,910 3,634 1,357 1,065 132,966 Commercial mortgages - - 261,663 5,854 - 9,592 277,109 Consumer 1,012 18,929 36,573 1,373 64 183 58,134 Total Loans $ 88,026 $ 33,265 $ 463,577 $ 11,346 $ 1,421 $ 11,771 $ 609,406 |
Summary of Transactions in Allowance for Loan Losses by Major Loan Portfolio Segment | Allowance for Loan Losses Rollforward by Portfolio Segment As of and for the year ended December 31, 2021 (Dollars in thousands) Commercial Real Estate Real Consumer Total Allowance for Loan Losses: Balance as of beginning of year $ 209 $ 160 $ 3,897 $ 1,189 $ 5,455 Charge-offs ( 147 ) - - ( 688 ) ( 835 ) Recoveries 191 12 6 141 350 Provision for (recovery of) loan losses ( 1 ) 227 575 213 1,014 Ending Balance $ 252 $ 399 $ 4,478 $ 855 $ 5,984 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 6 $ 6 Collectively evaluated for impairment 252 399 4,478 849 5,978 Acquired loans - purchased credit - - - - - Loans: Individually evaluated for impairment $ - $ - $ 594 $ 935 $ 1,529 Collectively evaluated for impairment 95,702 60,755 786,491 52,351 995,299 Acquired loans - purchased credit 994 18,576 44,695 118 64,383 Ending Balance $ 96,696 $ 79,331 $ 831,780 $ 53,404 $ 1,061,211 As of and for the year ended December 31, 2020 (Dollars in thousands) Commercial Real Estate Real Consumer Total Allowance for Loan Losses: Balance as of beginning of year $ 302 $ 109 $ 2,684 $ 1,114 $ 4,209 Charge-offs - - - ( 805 ) ( 805 ) Recoveries 28 - 1 400 429 Provision for (recovery of) loan losses ( 121 ) 51 1,212 480 1,622 Ending Balance $ 209 $ 160 $ 3,897 $ 1,189 $ 5,455 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 4 $ 4 Collectively evaluated for impairment 209 160 3,897 1,185 5,451 Loans: Individually evaluated for impairment $ - $ 8 $ 109 $ 1,156 $ 1,273 Collectively evaluated for impairment 118,688 22,501 409,966 56,978 608,133 Ending Balance $ 118,688 $ 22,509 $ 410,075 $ 58,134 $ 609,406 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Premises and Equipment | Premises and equipment are summarized as follows: (Dollars in thousands) December 31, 2021 December 31, 2020 Leasehold improvements $ 15,455 $ 14,715 Building and land 20,775 1,215 Construction and fixed assets in progress 49 70 Furniture and equipment 7,866 6,831 Computer software 2,936 2,618 $ 47,081 $ 25,449 Less: accumulated depreciation and amortization 21,988 20,211 $ 25,093 $ 5,238 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Liability, Right-of-use Asset, Weighted Average Remaining Lease Term and Discount Rate | The following tables present information about the Company’s leases: (Dollars in thousands) December 31, 2021 December 31, 2020 Lease liability $ 7,108 $ 3,589 Right-of-use asset $ 7,583 $ 3,527 Weighted average remaining lease term 6.02 years 5.16 years Weighted average discount rate 1.97 % 2.54 % |
Schedule of Operating Lease Expense | (Dollars in thousands) 2021 2020 Operating lease expense $ 1,491 $ 857 Short-term lease expense 234 114 Total lease expense $ 1,725 $ 971 Cash paid for amounts included in lease liabilities $ 1,390 $ 824 |
Schedule of Operating Lease Liabilities And Reconciliation of Undiscounted Cash Flows | A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows: (Dollars in thousands) December 31, 2021 Twelve months ending December 31, 2022 1,534 Twelve months ending December 31, 2023 1,462 Twelve months ending December 31, 2024 1,172 Twelve months ending December 31, 2025 967 Twelve months ending December 31, 2026 622 Thereafter 1,771 Total undiscounted cash flows $ 7,528 Less: Discount ( 420 ) Lease liability $ 7,108 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table presents the changes in goodwill during the twelve months ended December 31, 2021 . There were no changes in the recorded balance of goodwill during the twelve months ended December 31, 2020: (Dollars in thousands) Sturman Wealth Advisors Fauquier Total Balance as of January 1, 2021 $ 372 $ - $ 372 Acquisition of Fauquier Bankshares, Inc. - 7,768 7,768 Balance at December 31, 2021 $ 372 $ 7,768 $ 8,140 |
Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets | The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets: (Dollars in thousands) December 31, December 31, Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets: Core deposit intangible $ 9,660 $ ( 1,389 ) $ - $ - Customer relationships intangible 773 ( 499 ) 773 ( 432 ) Total $ 10,433 $ ( 1,888 ) $ 773 $ ( 432 ) |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense by year as of December 31, 2021 is as follows: Core Customer Deposit Relationships (Dollars in thousands) Intangible Intangible 2022 1,685 67 2023 1,493 67 2024 1,301 67 2025 1,110 67 2026 918 6 Thereafter 1,764 - Total $ 8,271 $ 274 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deposits [Abstract] | |
Schedule of Maturities of Time Deposits | At December 31, 2021, the scheduled maturities of time deposits are as follows: 2022 $ 138,616 2023 10,211 2024 8,704 2025 1,512 2026 3,002 $ 162,045 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Information Related to Borrowings | Information related to borrowings as of December 31, 2021 and 2020 is as follows: (Dollars in thousands) 2021 2020 FHLB advances $ - $ 30,000 Total borrowings $ - $ 30,000 Maximum amount at any month-end during the year $ 42,575 $ 40,000 Annual average balance outstanding $ 23,385 $ 15,419 Annual average interest rate paid 0.83 % 0.47 % Annual interest rate at end of period 0.00 % 0.48 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Net Deferred Tax Assets | Net deferred tax assets consist of the following components as of year-end: (Dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan losses $ 1,257 $ 1,146 Acquisition accounting 3,921 - Other real estate owned 156 - Investments in pass-throughs 44 - Federal net operating loss carrryforwards 468 - Nonaccrual loan interest 55 2 Stock option/grant expense 51 52 Home equity closing costs 48 24 Deferred compensation expense 70 9 Deferred loan fees 182 Goodwill and other intangible assets - 50 Lease accounting standard - 13 Securities available for sale unrealized loss 588 - Depreciation - 571 Total deferred tax assets $ 6,840 $ 1,867 Deferred tax liabilities: Securities available for sale unrealized gain - 388 Goodwill and other intangible assets 1,683 - Depreciation 217 - Lease accounting standard 100 - Deferred loan costs - 196 Total deferred tax liabilities 2,000 584 Net deferred tax assets $ 4,840 $ 1,283 |
Schedule of Provision for Income Taxes | The provision for income taxes charged to operations for years ended December 31, 2021 and December 31, 2020 consists of the following: (Dollars in thousands) 2021 2020 Current tax expense $ 1,144 $ 2,279 Deferred tax expense (benefit) 702 ( 214 ) Provision for income taxes $ 1,846 $ 2,065 |
Schedule of Effective Income Tax Rate Reconciliation, Amount | The Company’s income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended December 31, 2021 and December 31, 2020 due to the following: (Dollars in thousands) 2021 2020 Federal statutory rate 21 % 21 % Computed statutory tax expense $ 2,502 $ 2,109 Increase (decrease) in tax resulting from: Tax-exempt interest income ( 199 ) ( 100 ) Tax-exempt income from BOLI ( 149 ) ( 92 ) Stock option/stock grant expense 9 18 Merger expenses 118 117 Investment in qualified housing projects ( 450 ) - Other expenses 15 13 Provision for income taxes $ 1,846 $ 2,065 |
Financial Instruments With Of_2
Financial Instruments With Off-Balance Sheet Risk and Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Schedule of Financial Instruments with Credit Risk | The totals for financial instruments whose contract amount represents credit risk are shown below: Notional Amount (Dollars in thousands) December 31, 2021 December 31, 2020 Unfunded lines-of-credit $ 154,471 $ 101,389 ACH 43,288 21,137 Letters of credit 11,200 5,586 Total $ 208,959 $ 128,112 |
Capital Requirements (Tables)
Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of Bank's Actual Capital Amounts and Ratios | The Bank calculates its regulatory capital under the Basel III regulatory capital framework. The table below summarizes the Bank’s regulatory capital and related ratios for the periods presented: December 31, 2021 Minimum (Dollars in thousands) To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Bank $ 155,092 14.72 % $ 84,312 8.00 % $ 105,390 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Bank $ 149,078 14.15 % $ 47,425 4.50 % $ 68,503 6.50 % Tier 1 Capital (To Risk Weighted Assets) Bank $ 149,078 14.15 % $ 63,234 6.00 % $ 84,312 8.00 % Tier 1 Capital (To Average Assets) Bank $ 149,078 7.69 % $ 77,549 4.00 % $ 96,936 5.00 % December 31, 2020 Minimum (Dollars in thousands) To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Bank $ 85,235 15.22 % $ 44,801 8.00 % $ 56,002 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Bank $ 79,750 14.24 % $ 25,201 4.50 % $ 36,401 6.50 % Tier 1 Capital (To Risk Weighted Assets) Bank $ 79,750 14.24 % $ 33,601 6.00 % $ 44,801 8.00 % Tier 1 Capital (To Average Assets) Bank $ 79,750 9.46 % $ 33,725 4.00 % $ 42,157 5.00 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Measured at Fair Value on a Recurring Basis | The following tables present the balances measured at fair value on a recurring basis: Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices in Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 31,581 $ - $ 31,581 $ - Mortgage-backed securities/CMOs 170,964 - 170,964 - Municipal bonds 101,272 - 101,272 - Total securities available for sale $ 303,817 $ - $ 303,817 $ - Liabilities: Interest rate swaps $ 641 $ 641 Total liabilities at fair value $ 641 $ - $ 641 $ - Fair Value Measurements at December 31, 2020 Using: (Dollars in thousands) Quoted Prices in Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 25,305 $ - $ 25,305 $ - Corporate bonds 78,100 - 78,100 - Mortgage-backed securities/CMOs 70,681 - 70,681 - Municipal bonds $ 174,086 $ - $ 174,086 $ - Total securities available for sale $ 348,172 $ - $ 348,172 $ - |
Summary of Assets Measured at Fair Value on a Nonrecurring Basis | The following table presents the Company’s assets that were measured at fair value on a nonrecurring basis as of December 31, 2021 . There were no such assets to report as of December 31, 2020. Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices Significant Significant Description Balance (Level 1) (Level 2) (Level 3) Assets: Other Real Estate Owned $ 611 $ — $ — $ 611 |
Summary of Quantitative Information About Level 3 Fair Value Measurements | For the assets measured at fair value on a nonrecurring basis as of December 31, 2021, the following table displays quantitative information about Level 3 Fair Value Measurements: (Dollars in thousands) Description Fair Value Valuation Technique Unobservable Inputs Weighted Average Assets: Other Real Estate Owned $ 611 Bonafide offer Discount applied to bonafide offer * 6.0 % * A discount percentage is applied based on estimated costs to sell. |
Schedule of the Carrying Values and Estimated Fair Values of the Bank's Financial Instruments | The carrying values and estimated fair values of the Company’s financial instruments are as follows: Fair Value Measurements at December 31, 2021 Using: (Dollars in thousands) Quoted Prices in Significant Significant Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 508,840 $ 508,840 $ - $ - $ 508,840 Available for sale securities 303,817 - 303,817 - 303,817 Loans, net 1,055,227 - - 1,059,650 1,059,650 Bank owned life insurance 31,234 - 31,234 - 31,234 Accrued interest receivable 3,778 - 1,252 2,526 3,778 Liabilities Demand deposits and interest-bearing $ 1,634,125 $ - $ 1,634,125 $ - $ 1,634,125 Certificates of deposit 162,045 - 161,850 - 161,850 Junior subordinated debt 3,367 - 3,367 - 3,367 Accrued interest payable 174 - 174 - 174 Interest rate swaps 641 - 641 - 641 Fair Value Measurements at December 31, 2020 Using: (Dollars in thousands) Quoted Prices in Significant Significant Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 34,695 $ 34,695 $ - $ - $ 34,695 Available for sale securities 174,086 - 174,086 - 174,086 Loans, net 603,951 - - 602,859 602,859 Bank owned life insurance 16,849 - 16,849 - 16,849 Accrued interest receivable 2,904 - 729 2,175 2,904 Liabilities Demand deposits and interest-bearing $ 631,662 $ - $ 631,662 $ - $ 631,662 Certificates of deposit 99,102 - 99,580 - 99,580 Advances from FHLB 30,000 - 30,000 - 30,000 Accrued interest payable 159 - 159 - 159 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Shares Issued and Available Under Each Plans | A summary of the shares issued and available under each of the Plans is shown below as of December 31, 2021 . Share data and exercise price range per share have been adjusted to reflect prior stock dividends. Although the 2005 Plan has expired and no new grants will be issued under this plan, there were shares issued before the plan expired which are still outstanding as shown below. 2014 Plan 2005 Plan Aggregate shares issuable 275,625 253,575 Options issued, net of forfeited and expired options ( 170,106 ) ( 59,831 ) Unrestricted stock issued ( 11,535 ) - Restricted stock grants issued ( 48,017 ) - Cancelled due to Plan expiration - ( 193,744 ) Remaining available for grant 45,967 - Stock grants issued and outstanding: Total vested and unvested shares 59,552 - Fully vested shares 22,541 - Option grants issued and outstanding: Total vested and unvested shares 167,901 1,379 Fully vested shares 57,694 1,379 Exercise price range $ 23.75 to $ 42.62 $ 13.69 |
Summary of Stock Option Activity | Changes in the stock options outstanding related to all of the Plans are summarized below. December 31, 2021 (Dollars in thousands except weighted average data) Number of Weighted Aggregate Outstanding at January 1, 2021 146,783 $ 33.51 $ 184 Issued 23,600 35.94 Exercised ( 1,103 ) 27.39 Expired - - Outstanding at December 31, 2021 169,280 $ 33.89 $ 962 Options exercisable at December 31, 2021 59,072 $ 37.21 $ 211 |
Schedule of Fair Value Assumptions | For the years ended December 31, 2021 and 2020 , the Company recognized $ 145 thousand and $ 124 thousand, respectively, in compensation expense for stock options. As of December 31, 2021 , there was $ 851 thousand in unrecognized compensation expense for stock options remaining to be recognized in future reporting periods through 2026 . The fair value of any option grant is estimated at the grant date using the Black-Scholes pricing model. There were stock option grants of 23,600 and 66 thousand shares issued during the years ended December 31, 2021 and 2020, respectively and the fair value on each option granted was estimated based on the assumptions noted in the following table: For the year ended For the year ended December 31, 2021 December 31, 2020 Expected volatility 1 25.16 % 22.97 % Expected dividends 2 3.00 % 5.00 % Expected term (in years) 3 5.5 - 6.3 6.50 Risk-free rate 4 1.19 % 0.68 % 1 Based on the monthly historical volatility of the Company’s stock price over the expected life of the options. 2 Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant. 3 Based on the average of the contractual life and vesting period for the respective option. 4 Based upon an interpolated US Treasury yield curve interest rate that corresponds to the contractual life of the option, in effect at the time of the grant. |
Schedule of Options Outstanding and Exercisable, by Exercise Price Range | Summary information pertaining to options outstanding at December 31, 2021, as adjusted for Stock Dividends, is as follows: Options Outstanding Options Exercisable Exercise Price Number of Weighted- Weighted- Number of Weighted- $ 13.69 to $ 20.00 1,379 1.1 Years $ 13.69 1,379 $ 13.69 $ 20.01 to $ 30.00 66,000 8.5 Years 24.64 13,200 24.64 $ 30.01 to $ 40.00 44,420 8.6 Years 36.97 10,008 38.38 $ 40.01 to $ 42.62 57,481 6.4 Years 42.62 34,485 42.62 Total 169,280 7.8 Years $ 33.89 59,072 $ 37.21 |
Summary of Changes in the Restricted Stock Grants Outstanding | Restricted stock grants – During 2021, 21,749 shares of restricted stock were granted to employees and non-employee directors, vesting over a four - or five-year period. During 2020 , 22,268 shares of restricted stock were granted. In 2021 and 2020 , restricted stock grants resulted in an associated expense of $ 376 thousand and $ 140 thousand, respectively. As of December 31, 2021 , there was $ 387 thousand in unrecognized compensation expense for restricted stock grants remaining to be recognized in future reporting periods through 2026 . December 31, 2021 (Dollars in thousands except weighted average data) Number of Weighted Aggregate Outstanding at January 1, 2021 25,268 $ 26.60 $ 957 Issued 21,749 30.84 824 Vested ( 10,006 ) 27.01 ( 379 ) Nonvested at December 31, 2021 37,011 $ 28.98 $ 1,402 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares used in computing earnings per share | The table below shows the weighted average number of shares used in computing net income per common share and the effect on the weighted average number of shares of potential dilutive common stock for the years ended December 31, 2021 and 2020 . Potential dilutive common stock equivalents have no effect on net income available to the Company’s shareholders. (Dollars in thousands) Net Income Weighted Per Share December 31, 2021 Basic net income per share $ 10,071 4,668,761 $ 2.16 Effect of dilutive stock options 26,644 ( 0.02 ) Diluted net income per share $ 10,071 4,695,405 $ 2.14 December 31, 2020 Basic net income per share $ 7,978 2,707,877 $ 2.95 Effect of dilutive stock options 690 - Diluted net income per share $ 7,978 2,708,567 $ 2.95 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Comprehensive Income (Loss), Tax [Abstract] | |
Schedule of Comprehensive Income | Amounts reclassified out of accumulated other comprehensive income (loss) are presented below: (Dollars in thousands) December 31, December 31, Available-for-sale securities: Realized gains on sales and calls of securities $ - $ 743 Tax effect - ( 156 ) Realized gains, net of tax $ - $ 587 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Instruments | The follow table summarizes the Company’s derivative instruments as of December 31, 2021: (Dollars in thousands) Derivatives designated as hedging instruments Notional/ Contract Amount Fair Value Fair Value Balance Sheet Location Expiration Date Interest rate forward swap - cash flow $ 4,000 $ ( 633 ) Junior subordinated debt 6/15/2031 Interest rate swap - fair value $ 3,940 $ ( 8 ) Other Liabilities 2/12/2022 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Segment information for the years ended December 31, 2021 and 2020 is shown in the following tables. Note that asset information is not reported below, as the assets of Sturman Wealth Advisors and VNB Trust & Estate Services are reported at the Bank level; also, assets specifically allocated to the lines of business other than the Bank are insignificant and are no longer provided to the chief operating decision maker. 2021 (Dollars in thousands) Bank Sturman VNB Trust & Masonry Consolidated Net interest income $ 44,988 $ - $ - $ - $ 44,988 Provision for loan losses 1,014 - - - 1,014 Noninterest income 5,704 1,213 1,969 1,579 10,465 Noninterest expense 39,164 725 1,764 869 42,522 Income before income taxes 10,514 488 205 710 11,917 Provision for income taxes 1,550 104 43 149 1,846 Net income $ 8,964 $ 384 $ 162 $ 561 $ 10,071 2020 (Dollars in thousands) Bank Sturman VNB Trust & Masonry Consolidated Net interest income $ 23,879 $ - $ - $ - $ 23,879 Provision for loan losses 1,622 - - - 1,622 Noninterest income 4,629 700 825 411 6,565 Noninterest expense 16,492 639 891 757 18,779 Income before income taxes 10,394 61 ( 66 ) ( 346 ) 10,043 Provision for income taxes 2,138 13 ( 14 ) ( 72 ) 2,065 Net income (loss) $ 8,256 $ 48 $ ( 52 ) $ ( 274 ) $ 7,978 |
Condensed Parent Company Fina_2
Condensed Parent Company Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Balance sheet | BALANCE SHEETS (Dollars in thousands) December 31, 2021 December 31, 2020 ASSETS Cash and due from banks $ 1,417 $ 1,691 Investment securities 64 64 Investments in subsidiaries 163,712 81,455 Other assets 603 249 Total assets $ 165,796 $ 83,459 LIABILITIES & SHAREHOLDERS' EQUITY Junior subordinated debt $ 3,367 $ - Other liabilities 442 861 Stockholders' equity 161,987 82,598 Total liabilities and stockholders' equity $ 165,796 $ 83,459 |
Statement of income | STATEMENTS OF INCOME (Dollars in thousands) For the years ended December 31, 2021 December 31, 2020 Dividends from subsidiary $ 7,600 $ 4,400 Net interest income ( 148 ) - Noninterest expense 2,325 1,171 Income before income taxes $ 5,127 $ 3,229 Income tax (benefit) ( 353 ) ( 164 ) Income before equity in undistributed earnings of $ 5,480 $ 3,393 Equity in undistributed earnings of subsidiaries 4,591 4,585 Net income $ 10,071 $ 7,978 |
Statement of cash flow | STATEMENTS OF CASH FLOWS (Dollars in thousands) For the years ended December 31, 2021 December 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 10,071 $ 7,978 Adjustments to reconcile net income to net cash Equity in undistributed earnings of subsidiaries ( 4,591 ) ( 4,585 ) Net accretion of certain acquisition-related adjustments 33 - Deferred tax expense 28 28 Stock option & restricted stock grant expense 521 264 Increase in other assets ( 365 ) ( 16 ) Decrease in other liabilities 411 14 Net cash provided by operating activities 6,108 3,683 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock options exercised 30 - Cash paid in lieu for fractional shares at acquisition ( 4 ) - Dividends paid ( 6,408 ) ( 3,248 ) Net cash used in financing activities ( 6,382 ) ( 3,248 ) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 274 ) 435 CASH AND CASH EQUIVALENTS Beginning of period 1,691 1,256 End of period $ 1,417 $ 1,691 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Apr. 01, 2021 | Apr. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Organization and Significant Accounting Policies [Line Items] | ||||
Shares of common stock authorized | 10,000,000 | 10,000,000 | ||
Shares of common stock, par value per share | $ 2.50 | $ 2.50 | ||
Other real estate owned, net | $ 611,000 | |||
Preferred stock authorized | 2,000,000 | 2,000,000 | ||
Preferred stock, par value per share | $ 2.50 | $ 2.50 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Unrecognized tax benefits, interest or penalties recognized | $ 0 | $ 0 | ||
Minimum [Member] | ||||
Organization and Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of assets | 3 years | |||
Estimated useful lives of intangible assets | 3 years | |||
Maximum [Member] | ||||
Organization and Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of assets | 40 years | |||
Estimated useful lives of intangible assets | 10 years | |||
Fauquier Bankshares, Inc [Member] | ||||
Organization and Significant Accounting Policies [Line Items] | ||||
Acquisition date | Apr. 1, 2021 | |||
Business acquisition, Total consideration paid | $ 78,000,000 | |||
Special Properties Acquisition - VA, LLC [Member] | ||||
Organization and Significant Accounting Policies [Line Items] | ||||
Other real estate owned, net | $ 0 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | Apr. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 7,768 | $ 8,140 | $ 372 |
Other intangible assets | 8,500 | 341 | |
Short-term borrowings | 13,055 | ||
Junior subordinated debt | $ (3,334) | ||
Fair value adjustment as result of early payoff of FHLB advances | 473 | ||
Reduction to interest expense related to time deposit fair value discount | (136) | ||
Amortization of intangible assets | 1,456 | 90 | |
Junior Subordinated Debt [Member] | |||
Business Acquisition [Line Items] | |||
Amortization expense related to debt | 33 | ||
Purchased Performing Loans [Member] | |||
Business Acquisition [Line Items] | |||
Increase (decrease) in interest income | 2,800 | ||
Core Deposit [Member] | |||
Business Acquisition [Line Items] | |||
Amortization of intangible assets | 1,400 | ||
PCI Loans [Member] | |||
Business Acquisition [Line Items] | |||
Increase (decrease) in interest income | $ (6) | ||
Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Core deposit intangible asset, amortization period | 3 years | ||
Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Core deposit intangible asset, amortization period | 10 years | ||
Fauquier Bankshares, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition date | Apr. 1, 2021 | ||
Equity interest issued or issuable share ratio | 0.675 | ||
Business combination consideration issued in shares | 2,571,213 | ||
Business combination consideration paid in cash | $ 4 | ||
Goodwill | 7,800 | $ 7,768 | |
Other intangible assets | 9,700 | ||
Loan aggregate outstanding principal | 622,900 | ||
Estimated fair value of loan | 602,600 | 611 | 0 |
Allowance for loan losses | 20,300 | ||
Adjustment for market interest rates, net of deferred costs | 21,300 | ||
Deferred fees/costs | 979 | ||
Short-term borrowings | 12,582 | ||
Junior subordinated debt | (4,124) | ||
Merger and merger related expenses | 7,400 | 1,000 | |
Merger and merger related expenses, after taxes | 5,500 | $ 704 | |
Allowance for loan losses | $ 7,200 | ||
Fauquier Bankshares, Inc [Member] | Purchased Performing Loans [Member] | |||
Business Acquisition [Line Items] | |||
Estimated fair value of loan | $ 6,200 | ||
Fauquier Bankshares, Inc [Member] | Core Deposit [Member] | |||
Business Acquisition [Line Items] | |||
Core deposit intangible asset, amortization period | 7 years | ||
Estimated core deposit intangibles | $ 9,700 | ||
Percentage of core deposits intangibles estimated | 1.30% | ||
Fauquier Bankshares, Inc [Member] | Performing Loans [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of loans | $ 513,800 | ||
Percentage of loans less than book value of loans | 1.70% | ||
Total fair value discount on performing loans | $ 9,000 | ||
Credit discount | 8,400 | ||
Other fair value discount | 647 | ||
Fauquier Bankshares, Inc [Member] | PCI Loans [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of loans | $ 87,300 | ||
Percentage of loans less than book value of loans | 12.30% | ||
Credit discount | $ 11,200 | ||
Other fair value discount | 1,100 | ||
Total fair value on PCI loans | 12,300 | ||
Fauquier Bankshares, Inc [Member] | Certificates of Deposit [Member] | |||
Business Acquisition [Line Items] | |||
Estimated fair value adjustment of certificates of deposit | $ 191 | ||
Certificates of Deposit Amortization Period | 36 months | ||
Fauquier Bankshares, Inc [Member] | Certificates of Deposit [Member] | Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Certificates of deposit maturity | 1 month | ||
Fauquier Bankshares, Inc [Member] | Certificates of Deposit [Member] | Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Certificates of deposit maturity | 3 years | ||
Fauquier Bankshares, Inc [Member] | Fair Value Adjustment [Member] | |||
Business Acquisition [Line Items] | |||
Short-term borrowings | $ 473 | ||
Junior subordinated debt | $ 790 |
Business Combinations - Summary
Business Combinations - Summary of Total Consideration Paid in Connection with Merger (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 01, 2021 | Dec. 31, 2020 |
Assets: | |||
Cash and cash equivalents | $ 153,282 | ||
Securities available for sale | 93,133 | ||
Restricted securities | 1,619 | ||
Loans, net | 602,643 | ||
Premises and equipment | 20,148 | ||
Other real estate owned | 611 | ||
Bank-owned life insurance | 13,677 | ||
Right-of-use assets | 5,432 | ||
Core deposit intangible | 9,660 | ||
Other assets | 10,289 | ||
Total assets acquired | 910,494 | ||
Liabilities: | |||
Deposits | 817,690 | ||
Short-term borrowings | 13,055 | ||
Junior subordinated debt | 3,334 | ||
Lease liability | 4,792 | ||
Other liabilities | 1,355 | ||
Total liabilities assumed | 840,226 | ||
Net assets acquired | 70,268 | ||
Total consideration paid | 78,036 | ||
Goodwill resulting from merger | $ 8,140 | 7,768 | $ 372 |
Fauquier Bankshares, Inc [Member] | |||
Assets: | |||
Cash and cash equivalents | 153,282 | ||
Securities available for sale | 93,133 | ||
Restricted securities | 1,619 | ||
Loans, net | 615,766 | ||
Premises and equipment | 16,276 | ||
Other real estate owned | 1,356 | ||
Bank-owned life insurance | 13,677 | ||
Right-of-use assets | 4,355 | ||
Other assets | 11,298 | ||
Total assets acquired | 910,762 | ||
Liabilities: | |||
Deposits | 817,499 | ||
Short-term borrowings | 12,582 | ||
Junior subordinated debt | 4,124 | ||
Lease liability | 4,440 | ||
Other liabilities | 1,355 | ||
Total liabilities assumed | 840,000 | ||
Goodwill resulting from merger | $ 7,768 | 7,800 | |
Fauquier Bankshares, Inc [Member] | Fair Value Adjustment [Member] | |||
Assets: | |||
Loans, net | (13,123) | ||
Premises and equipment | 3,872 | ||
Other real estate owned | (745) | ||
Right-of-use assets | 1,077 | ||
Core deposit intangible | 9,660 | ||
Other assets | (1,009) | ||
Total assets acquired | (268) | ||
Liabilities: | |||
Deposits | 191 | ||
Short-term borrowings | 473 | ||
Junior subordinated debt | (790) | ||
Lease liability | 352 | ||
Total liabilities assumed | $ 226 |
Business Combinations - Summa_2
Business Combinations - Summary of Information About Purchased Credit Impaired (PCI) Loans (Details) - Fauquier Bankshares, Inc [Member] - USD ($) $ in Thousands | Apr. 01, 2021 | Dec. 31, 2021 |
Schedule Of Information About Purchased Credit Impaired Loans [Line Items] | ||
Contractual principal and interest at acquisition | $ 136,476 | $ 448,780 |
Nonaccretable difference | (33,712) | |
Expected cash flows at acquisition | 102,764 | |
Accretable yield | (15,499) | $ (15,499) |
Basis in PCI loans at acquisition, estimated fair value | $ 87,265 |
Securities (Amortized Cost and
Securities (Amortized Cost and Fair Values of Securities Available for Sale) (Details)) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 306,535 | $ 172,237 |
Gross Unrealized Gains | 1,434 | 2,350 |
Gross Unrealized (Losses) | (4,152) | (501) |
Available for Sale, Fair Value | 303,817 | 174,086 |
Municipal bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 101,136 | 69,303 |
Gross Unrealized Gains | 1,162 | 1,499 |
Gross Unrealized (Losses) | (1,026) | (121) |
Available for Sale, Fair Value | 101,272 | 70,681 |
U.S. Government agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 32,424 | 25,496 |
Gross Unrealized Gains | 24 | 7 |
Gross Unrealized (Losses) | (867) | (198) |
Available for Sale, Fair Value | 31,581 | 25,305 |
Mortgage-backed securities/CMOs [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 172,975 | 77,438 |
Gross Unrealized Gains | 248 | 844 |
Gross Unrealized (Losses) | (2,259) | (182) |
Available for Sale, Fair Value | $ 170,964 | $ 78,100 |
Securities (Narrative) (Details
Securities (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)Item | Dec. 31, 2020USD ($) | |
Schedule of Investments [Line Items] | ||
Held to maturity | $ 0 | $ 0 |
Restricted securities, at cost | 4,950,000 | 3,010,000 |
Proceeds from the sales of securities | 0 | 69,500,000 |
Gross realized gains on sale of securities | 742,000 | |
Securities pledged to secure deposits and for other purposes required by law | 12,700,000 | 6,000,000 |
Available-for-sale securities, continuous unrealized loss position, fair value | 227,492,000 | 65,322,000 |
Unrealized loss of available for sale securities | $ 4,152,000 | 501,000 |
Number of securities designated as available for sale securities having unrealized loss | Item | 143 | |
Municipal bonds [Member] | ||
Schedule of Investments [Line Items] | ||
Percentage of securities rated with AA or higher ratings | 100.00% | |
Percentage of securities as general obligation bonds with issuers that are geographically diverse | 65.00% | |
Available-for-sale securities, continuous unrealized loss position, fair value | $ 50,761,000 | 21,501,000 |
Unrealized loss of available for sale securities | $ 1,026,000 | 121,000 |
Number of securities designated as available for sale securities having unrealized loss | Item | 41 | |
Call option [Member] | ||
Schedule of Investments [Line Items] | ||
Gross realized gains on sale of securities | 1,000 | |
Mortgage-backed securities/CMOs [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 147,068,000 | 24,523,000 |
Unrealized loss of available for sale securities | $ 2,259,000 | 182,000 |
Number of securities designated as available for sale securities having unrealized loss | Item | 84 | |
U.S. Government agencies [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, fair value | $ 29,663,000 | 19,298,000 |
Unrealized loss of available for sale securities | $ 867,000 | $ 198,000 |
Number of securities designated as available for sale securities having unrealized loss | Item | 18 |
Securities (Schedule of Unreali
Securities (Schedule of Unrealized Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | $ 186,671 | $ 65,322 |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 40,821 | |
Total, Estimated Fair value | 227,492 | 65,322 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (2,797) | (501) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (1,355) | |
Total, Unrealized losses | (4,152) | (501) |
Municipal bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | 40,352 | 21,501 |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 10,409 | |
Total, Estimated Fair value | 50,761 | 21,501 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (722) | (121) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (304) | |
Total, Unrealized losses | (1,026) | (121) |
U.S. Government agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | 14,443 | 19,298 |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 15,220 | |
Total, Estimated Fair value | 29,663 | 19,298 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (340) | (198) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (527) | |
Total, Unrealized losses | (867) | (198) |
Mortgage-backed securities/CMOs [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Estimated Fair value | 131,876 | 24,523 |
Continuous Unrealized Loss Position of 12 Months or More, Estimated Fair value | 15,192 | |
Total, Estimated Fair value | 147,068 | 24,523 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (1,735) | (182) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (524) | |
Total, Unrealized losses | $ (2,259) | $ (182) |
Securities (Schedule of Amortiz
Securities (Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Amortized Cost | $ 306,535 | $ 172,237 |
Fair Value | ||
Total Securities Available for Sale | 303,817 | |
Municipal bonds [Member] | ||
Amortized Cost | ||
One year or less | 507 | |
After one year to five years | 611 | |
After five years to ten years | 12,245 | |
Ten years or more | 87,773 | |
Amortized Cost | 101,136 | 69,303 |
Fair Value | ||
One year or less | 515 | |
After one year to five years | 616 | |
After five years to ten years | 12,448 | |
Ten years or more | 87,693 | |
Total Securities Available for Sale | 101,272 | |
U.S. Government agencies [Member] | ||
Amortized Cost | ||
After five years to ten years | 26,424 | |
Ten years or more | 6,000 | |
Amortized Cost | 32,424 | 25,496 |
Fair Value | ||
After five years to ten years | 25,804 | |
Ten years or more | 5,777 | |
Total Securities Available for Sale | 31,581 | |
Mortgage-backed securities/CMOs [Member] | ||
Amortized Cost | ||
After one year to five years | 8,427 | |
After five years to ten years | 4,811 | |
Ten years or more | 159,737 | |
Amortized Cost | 172,975 | $ 77,438 |
Fair Value | ||
After one year to five years | 8,344 | |
After five years to ten years | 4,786 | |
Ten years or more | 157,834 | |
Total Securities Available for Sale | $ 170,964 |
Loans (Schedule of Composition
Loans (Schedule of Composition of Loan Portfolio by Major Loan Classification) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | $ 1,061,211 | $ 609,406 |
Less: Allowance for loan losses | (5,984) | (5,455) |
Loans, net | 1,055,227 | 603,951 |
Commercial [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 96,696 | 118,688 |
Real Estate Construction and Land [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 79,331 | 22,509 |
1-4 family residential mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 358,148 | 132,966 |
Commercial mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | 473,632 | 277,109 |
Consumer [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans | $ 53,404 | $ 58,134 |
Loans (Narrative) (Details)
Loans (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)ItemLoan | Dec. 31, 2020USD ($)ItemLoan | Apr. 01, 2021USD ($) | |
Loans And Leases Receivable Disclosure [Line Items] | ||||
Unamortized premium | $ 1,100 | $ 1,800 | ||
Net deferred loan fees | $ 865 | 931 | ||
Commercial loan guarantee by SBA and USDA | 100.00% | |||
Loans | $ 1,061,211 | 609,406 | ||
Deposit account overdrafts | 205 | 169 | ||
Charged off | 835 | 805 | ||
Fauquier Bankshares, Inc [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable at fair value net | 611 | 0 | $ 602,600 | |
1-4 family residential-purchased [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loans | $ 358,148 | $ 132,966 | ||
Number of secured loans | Loan | 0 | 0 | ||
1-4 family residential-purchased [Member] | Residential Mortgages [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loans | $ 10,600 | |||
Student Loans Purchased [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loans | $ 30,700 | $ 37,400 | ||
Extended period for repayment | 12 months | |||
Lifetime allowance period for military service | 36 months | |||
Grace period for repayment | 6 months | |||
Number of loans modified as TDRs | Item | 5 | 5 | ||
Charged off | $ 56 | $ 48 | ||
Student Loans Purchased [Member] | Performing Loans [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Number of Loans classified as troubled debt restructuring | Item | 58 | 75 | ||
Total Troubled Debt Restructurings | $ 935 | $ 1,200 | ||
Purchased Impaired Loan [Member] | Fauquier Bankshares, Inc [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable at fair value net | 12,200 | |||
Purchased Performing Loans [Member] | Fauquier Bankshares, Inc [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan receivable at fair value net | 6,200 | |||
Paycheck Protection Program (PPP) Loans [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Bank funded loan amount outstanding | 20,700 | |||
Bank funded loan amount | $ 54,200 | |||
COVID-19 [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan deferment balances | $ 1,200 | |||
COVID-19 [Member] | Minimum [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan payment deferred period | 90 days | |||
COVID-19 [Member] | Maximum [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Loan payment deferred period | 180 days | |||
Small Business Administration [Member] | Paycheck Protection Program (PPP) Loans [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Deferred fees increase | $ 491 | |||
Amortization period of deferred fees | 24 months | |||
Small Business Administration [Member] | COVID-19 [Member] | Paycheck Protection Program (PPP) Loans [Member] | ||||
Loans And Leases Receivable Disclosure [Line Items] | ||||
Bank assisted nonprofit organizations and local businesses funded loans | $ 207,500 |
Loans (Summary of Outstanding P
Loans (Summary of Outstanding Principal Balance and Carrying Amount of Loans Acquired in Business Combination) (Details) - Fauquier Bankshares, Inc [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 01, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contractual principal and interest at acquisition | $ 448,780 | $ 136,476 |
Total acquired loans | 430,315 | |
Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contractual principal and interest at acquisition | 76,608 | |
Total acquired loans | 64,383 | |
Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contractual principal and interest at acquisition | 372,172 | |
Total acquired loans | 365,932 | |
Commercial [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 29,059 | |
Commercial [Member] | Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 994 | |
Commercial [Member] | Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 28,065 | |
Real Estate Construction and Land [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 32,873 | |
Real Estate Construction and Land [Member] | Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 18,576 | |
Real Estate Construction and Land [Member] | Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 14,297 | |
1-4 Family Residential Mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 210,728 | |
1-4 Family Residential Mortgages [Member] | Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 16,020 | |
1-4 Family Residential Mortgages [Member] | Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 194,708 | |
Commercial Mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 155,313 | |
Commercial Mortgages [Member] | Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 28,675 | |
Commercial Mortgages [Member] | Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 126,638 | |
Consumer [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 2,342 | |
Consumer [Member] | Acquired Loans - Purchased Credit Impaired [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | 118 | |
Consumer [Member] | Acquired Loans - Purchased Performing [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total acquired loans | $ 2,224 |
Loans (Summary of Changes in Ac
Loans (Summary of Changes in Accretable Yield of Loans Classified as Purchased Credit Impaired) (Details) - Fauquier Bankshares, Inc [Member] - USD ($) $ in Thousands | Apr. 01, 2021 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Additions | $ 15,499 | $ 15,499 |
Accretion | (1,757) | |
Reclassification from (to) nonaccretable difference | $ (33,712) | |
Accretable yield, end of period | $ 13,742 |
Loans (Schedule of Activity in
Loans (Schedule of Activity in Related Party Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Balance outstanding at beginning of year | $ 19,070 | $ 20,300 |
Principal additions | 4,527 | 9,308 |
Principal reductions | (7,005) | (10,538) |
Balance outstanding at end of year | $ 16,592 | $ 19,070 |
Loans (Non-Accrual Loans by Loa
Loans (Non-Accrual Loans by Loan Classification) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total non-accrual loans | $ 495 | $ 8 |
Land and land development [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total non-accrual loans | $ 8 | |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total non-accrual loans | $ 495 |
Loans (Schedule of Aging of Pas
Loans (Schedule of Aging of Past Due Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
PCI | $ 64,383 | |
Total Loans | 1,061,211 | $ 609,406 |
90 Days Past Due and Accruing | 801 | 137 |
30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 3,111 | 1,975 |
60-89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,934 | 536 |
90 Days or More Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,296 | 137 |
Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 6,341 | 2,648 |
Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 990,487 | 606,758 |
Commercial [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
PCI | 994 | |
Total Loans | 96,696 | 118,688 |
90 Days Past Due and Accruing | 718 | |
Commercial [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 385 | 1,130 |
Commercial [Member] | 60-89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 355 | 470 |
Commercial [Member] | 90 Days or More Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 718 | |
Commercial [Member] | Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,458 | 1,600 |
Commercial [Member] | Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 94,244 | 117,088 |
Real Estate Construction and Land Development [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
PCI | 18,576 | |
Total Loans | 79,331 | 22,509 |
Real Estate Construction and Land Development [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 873 | |
Real Estate Construction and Land Development [Member] | 60-89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,283 | |
Real Estate Construction and Land Development [Member] | Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 2,156 | |
Real Estate Construction and Land Development [Member] | Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 58,599 | 22,509 |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
PCI | 16,020 | |
Total Loans | 358,148 | 132,966 |
1-4 Family Residential Mortgages [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1,508 | 501 |
1-4 Family Residential Mortgages [Member] | 60-89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 100 | |
1-4 Family Residential Mortgages [Member] | 90 Days or More Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 495 | |
1-4 Family Residential Mortgages [Member] | Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 2,103 | 501 |
1-4 Family Residential Mortgages [Member] | Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 340,025 | 132,465 |
Commercial Mortgages [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
PCI | 28,675 | |
Total Loans | 473,632 | 277,109 |
Commercial Mortgages [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 46 | |
Commercial Mortgages [Member] | Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 46 | |
Commercial Mortgages [Member] | Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 444,957 | 277,063 |
Consumer Loans [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
PCI | 118 | |
Total Loans | 53,404 | 58,134 |
90 Days Past Due and Accruing | 83 | 137 |
Consumer Loans [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 345 | 298 |
Consumer Loans [Member] | 60-89 Days Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 196 | 66 |
Consumer Loans [Member] | 90 Days or More Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 83 | 137 |
Consumer Loans [Member] | Total Past Due [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 624 | 501 |
Consumer Loans [Member] | Current [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | $ 52,662 | $ 57,633 |
Loans (Impaired Loans by Loan C
Loans (Impaired Loans by Loan Classification) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | $ 594 | $ 117 |
Unpaid Principal Balance, without a valuation allowance | 637 | 164 |
Average Recorded Investment, without a valuation allowance | 271 | 991 |
Interest Income Recognized, without a valuation allowance | 24 | 54 |
Recorded Investment, with a valuation allowance | 935 | 1,156 |
Unpaid Principal Balance, with a valuation allowance | 935 | 1,156 |
Associated Allowance, with a valuation allowance | 6 | 4 |
Average Recorded Investment, with a valuation allowance | 974 | 1,145 |
Interest Income Recognized, with a valuation allowance | 54 | 70 |
Recorded Investment, total | 1,529 | 1,273 |
Unpaid Principal Balance, total | 1,572 | 1,320 |
Associated Allowance, total | 6 | 4 |
Average Recorded Investment, total | 1,245 | 2,136 |
Interest Income Recognized, total | 78 | 124 |
Real Estate Construction and Land [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 8 | |
Unpaid Principal Balance, without a valuation allowance | 37 | 55 |
Average Recorded Investment, without a valuation allowance | 2 | 97 |
1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 594 | 109 |
Unpaid Principal Balance, without a valuation allowance | 600 | 109 |
Average Recorded Investment, without a valuation allowance | 269 | 113 |
Interest Income Recognized, without a valuation allowance | 24 | 6 |
Commercial Real Estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Average Recorded Investment, without a valuation allowance | 781 | |
Interest Income Recognized, without a valuation allowance | 48 | |
Consumer [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, with a valuation allowance | 935 | 1,156 |
Unpaid Principal Balance, with a valuation allowance | 935 | 1,156 |
Associated Allowance, with a valuation allowance | 6 | 4 |
Average Recorded Investment, with a valuation allowance | 974 | 1,145 |
Interest Income Recognized, with a valuation allowance | $ 54 | $ 70 |
Loans (Schedule of Troubled Deb
Loans (Schedule of Troubled Debt Restructurings) (Details) $ in Thousands | Dec. 31, 2021USD ($)Item | Dec. 31, 2020USD ($)Item |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 60 | 77 |
Total Troubled Debt Restructurings | $ | $ 1,529 | $ 1,273 |
Performing [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 59 | 76 |
Total Troubled Debt Restructurings | $ | $ 1,034 | $ 1,265 |
Performing [Member] | 1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 1 | 1 |
Total Troubled Debt Restructurings | $ | $ 99 | $ 109 |
Performing [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 58 | 75 |
Total Troubled Debt Restructurings | $ | $ 935 | $ 1,156 |
Nonperforming [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 1 | 1 |
Total Troubled Debt Restructurings | $ | $ 495 | $ 8 |
Nonperforming [Member] | Real Estate Construction and Land Development [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 0 | 1 |
Total Troubled Debt Restructurings | $ | $ 8 | |
Nonperforming [Member] | 1-4 Family Residential Mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Number of loans | Item | 1 | 0 |
Total Troubled Debt Restructurings | $ | $ 495 |
Loans (Schedule of Loans Modifi
Loans (Schedule of Loans Modified Under the Terms of a TDR) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)Item | Dec. 31, 2020USD ($)Item | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | Item | 12 | 17 |
Pre-Modification Recorded Balance | $ 145 | $ 180 |
Post-Modification Recorded Balance | $ 145 | $ 180 |
Consumer Loans [Member] | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Loans | Item | 12 | 17 |
Pre-Modification Recorded Balance | $ 145 | $ 180 |
Post-Modification Recorded Balance | $ 145 | $ 180 |
Allowance for Loan Losses (Past
Allowance for Loan Losses (Past Due Aging by Loan Classification) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | $ 5,455 | $ 4,209 |
Loans charged off | (835) | (805) |
Recoveries | 350 | 429 |
Net charge-offs | (485) | (376) |
Provision for loan losses | 1,014 | 1,622 |
Ending Balance | $ 5,984 | $ 5,455 |
Allowance for Loan Losses (Loan
Allowance for Loan Losses (Loan Portfolio Designated by the Internal Risk Ratings Assigned to Each Credit) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 1,061,211 | $ 609,406 |
Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 96,696 | 118,688 |
Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 79,331 | 22,509 |
1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 358,148 | 132,966 |
Commercial mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 473,632 | 277,109 |
Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 53,404 | 58,134 |
Excellent [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 46,386 | 88,026 |
Excellent [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 45,862 | 87,014 |
Excellent [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 524 | 1,012 |
Good [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 34,485 | 33,265 |
Good [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 13,920 | 14,336 |
Good [Member] | 1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,030 | |
Good [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 18,535 | 18,929 |
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 832,787 | 463,577 |
Pass [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 32,460 | 16,126 |
Pass [Member] | Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 51,098 | 22,305 |
Pass [Member] | 1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 334,300 | 126,910 |
Pass [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 382,108 | 261,663 |
Pass [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 32,821 | 36,573 |
Watch [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 75,893 | 11,346 |
Watch [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 732 | 485 |
Watch [Member] | Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 7,360 | |
Watch [Member] | 1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 5,013 | 3,634 |
Watch [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 61,563 | 5,854 |
Watch [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,225 | 1,373 |
Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 14,723 | 1,421 |
Special Mention [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,645 | |
Special Mention [Member] | Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,849 | |
Special Mention [Member] | 1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 1,520 | 1,357 |
Special Mention [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 8,530 | |
Special Mention [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 179 | 64 |
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 56,937 | 11,771 |
Substandard [Member] | Commercial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 2,077 | 727 |
Substandard [Member] | Real Estate Construction and Land [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 18,024 | 204 |
Substandard [Member] | 1-4 family residential mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 15,285 | 1,065 |
Substandard [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | 21,431 | 9,592 |
Substandard [Member] | Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans | $ 120 | $ 183 |
Allowance for Loan Losses (Narr
Allowance for Loan Losses (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance For Loan Losses [Abstract] | ||
Impaired loans | $ 1,529 | $ 1,273 |
Individually evaluated for impairment | $ 6 | $ 4 |
Allowance for Loan Losses (Summ
Allowance for Loan Losses (Summary of Transactions in Allowance for Loan Losses by Major Loan Portfolio Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for Loan Losses: | ||
Beginning Balance | $ 5,455 | $ 4,209 |
Charge-offs | (835) | (805) |
Recoveries | 350 | 429 |
Provision for (recovery of) loan losses | 1,014 | 1,622 |
Ending Balance | 5,984 | 5,455 |
Ending balance: Individually evaluated for impairment | 6 | 4 |
Ending balance: Collectively evaluated for impairment | 5,978 | 5,451 |
Loans: | ||
Individually evaluated for impairment | 1,529 | 1,273 |
Collectively evaluated for impairment | 995,299 | 608,133 |
Acquired loans - purchased credit impaired | 64,383 | |
Ending Balance | 1,061,211 | 609,406 |
Commercial Loans [Member] | ||
Allowance for Loan Losses: | ||
Beginning Balance | 209 | 302 |
Charge-offs | (147) | |
Recoveries | 191 | 28 |
Provision for (recovery of) loan losses | (1) | (121) |
Ending Balance | 252 | 209 |
Ending balance: Collectively evaluated for impairment | 252 | 209 |
Loans: | ||
Collectively evaluated for impairment | 95,702 | 118,688 |
Acquired loans - purchased credit impaired | 994 | |
Ending Balance | 96,696 | 118,688 |
Real Estate Construction and Land [Member] | ||
Allowance for Loan Losses: | ||
Beginning Balance | 160 | 109 |
Recoveries | 12 | |
Provision for (recovery of) loan losses | 227 | 51 |
Ending Balance | 399 | 160 |
Ending balance: Collectively evaluated for impairment | 399 | 160 |
Loans: | ||
Individually evaluated for impairment | 8 | |
Collectively evaluated for impairment | 60,755 | 22,501 |
Acquired loans - purchased credit impaired | 18,576 | |
Ending Balance | 79,331 | 22,509 |
Real Estate Mortgages [Member] | ||
Allowance for Loan Losses: | ||
Beginning Balance | 3,897 | 2,684 |
Recoveries | 6 | 1 |
Provision for (recovery of) loan losses | 575 | 1,212 |
Ending Balance | 4,478 | 3,897 |
Ending balance: Collectively evaluated for impairment | 4,478 | 3,897 |
Loans: | ||
Individually evaluated for impairment | 594 | 109 |
Collectively evaluated for impairment | 786,491 | 409,966 |
Acquired loans - purchased credit impaired | 44,695 | |
Ending Balance | 831,780 | 410,075 |
Consumer Loans [Member] | ||
Allowance for Loan Losses: | ||
Beginning Balance | 1,189 | 1,114 |
Charge-offs | (688) | (805) |
Recoveries | 141 | 400 |
Provision for (recovery of) loan losses | 213 | 480 |
Ending Balance | 855 | 1,189 |
Ending balance: Individually evaluated for impairment | 6 | 4 |
Ending balance: Collectively evaluated for impairment | 849 | 1,185 |
Loans: | ||
Individually evaluated for impairment | 935 | 1,156 |
Collectively evaluated for impairment | 52,351 | 56,978 |
Acquired loans - purchased credit impaired | 118 | |
Ending Balance | $ 53,404 | $ 58,134 |
Premises and Equipment (Summary
Premises and Equipment (Summary of Premises and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 47,081 | $ 25,449 |
Less: accumulated depreciation and amortization | 21,988 | 20,211 |
Premises and equipment, net | 25,093 | 5,238 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 15,455 | 14,715 |
Building and land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 20,775 | 1,215 |
Construction and fixed assets in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 49 | 70 |
Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 7,866 | 6,831 |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 2,936 | $ 2,618 |
Premises and Equipment (Narrati
Premises and Equipment (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 2.9 | $ 1.9 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Lessee Lease Description [Line Items] | |
Lessee, operating lease, existence of option to extend | true |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Lease term | 1 year |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Lease term | 20 years |
Leases (Schedule of Lease Liabi
Leases (Schedule of Lease Liability, Right-of-use Asset, Weighted Average Remaining Lease Term and Discount Rate) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Lease liability | $ 7,108 | $ 3,589 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Right-of-use asset | $ 7,583 | $ 3,527 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Accrued interest receivable and other assets | Accrued interest receivable and other assets |
Weighted average remaining lease term | 6 years 7 days | 5 years 1 month 28 days |
Weighted average discount rate | 1.97% | 2.54% |
Leases (Schedule of Operating L
Leases (Schedule of Operating Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease expense | $ 1,491 | $ 857 |
Short-term lease expense | 234 | 114 |
Total lease expense | 1,725 | 971 |
Cash paid for amounts included in lease liabilities | $ 1,390 | $ 824 |
Leases (Schedule of Operating_2
Leases (Schedule of Operating Lease Liabilities And Reconciliation of Undiscounted Cash Flows) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Twelve months ending December 31, 2022 | $ 1,534 | |
Twelve months ending December 31, 2023 | 1,462 | |
Twelve months ending December 31, 2024 | 1,172 | |
Twelve months ending December 31, 2025 | 967 | |
Twelve months ending December 31, 2026 | 622 | |
Thereafter | 1,771 | |
Total undiscounted cash flows | 7,528 | |
Less: Discount | (420) | |
Lease liability | $ 7,108 | $ 3,589 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 8,140,000 | $ 372,000 | $ 7,768,000 |
Changes in goodwill | 0 | ||
Other intangible assets | 8,500,000 | 341,000 | |
Amortization of intangible assets | $ 1,456,000 | $ 90,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill [Line Items] | |
Balance | $ 372 |
Change in goodwill | 7,768 |
Balance | 8,140 |
Sturman Wealth Advisors [Member] | |
Goodwill [Line Items] | |
Balance | 372 |
Balance | 372 |
Fauquier Bankshares, Inc [Member] | |
Goodwill [Line Items] | |
Change in goodwill | 7,768 |
Balance | $ 7,768 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 10,433 | $ 773 |
Accumulated Amortization | (1,888) | (432) |
Core Deposit [Member] | ||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,660 | |
Accumulated Amortization | (1,389) | |
Customer Relationships Intangible [Member] | ||
Schedule Of Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 773 | 773 |
Accumulated Amortization | $ (499) | $ (432) |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Core Deposit Intangible [Member] | |
Schedule Of Estimated Future Amortization Expense [Line Items] | |
2022 | $ 1,685 |
2023 | 1,493 |
2024 | 1,301 |
2025 | 1,110 |
2026 | 918 |
Thereafter | 1,764 |
Finite-Lived Intangible Assets, Net, Total | 8,271 |
Customer Relationships Intangible [Member] | |
Schedule Of Estimated Future Amortization Expense [Line Items] | |
2022 | 67 |
2023 | 67 |
2024 | 67 |
2025 | 67 |
2026 | 6 |
Finite-Lived Intangible Assets, Net, Total | $ 274 |
Deposits (Schedule of Maturitie
Deposits (Schedule of Maturities of Time Deposits) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deposits [Abstract] | ||
2022 | $ 138,616 | |
2023 | 10,211 | |
2024 | 8,704 | |
2025 | 1,512 | |
2026 | 3,002 | |
Total | $ 162,045 | $ 99,102 |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deposits [Line Items] | ||
Time Deposits, $250,000 or More | $ 45,300,000 | $ 34,700,000 |
Reciprocal deposits | 6,100,000 | 8,500,000 |
Brokered deposits | 0 | 0 |
Deposit account overdrafts | 205,000 | 169,000 |
Aggregate amount of related party deposits | 9,100,000 | 8,100,000 |
ICS [Member] | ||
Deposits [Line Items] | ||
Demand deposit account | 39,200,000 | 28,000,000 |
Money market account | $ 225,900,000 | $ 81,100,000 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
FHLB advances | $ 0 | $ 30,000,000 |
Letter of credit | 60,000,000 | |
Unused Lines of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Future borrowings | 109,200,000 | |
Federal Funds Lines [Member] | ||
Debt Instrument [Line Items] | ||
Borrowings | 0 | $ 0 |
FHLB [Member] | Unused Lines of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Future borrowings | 14,200,000 | |
Third Party Financial Institutions [Member] | Unused Lines of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Future borrowings | $ 95,000,000 |
Borrowings - Summary of Informa
Borrowings - Summary of Information Related to Borrowings (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
FHLB advances | $ 0 | $ 30,000,000 |
Total borrowings | 30,000,000 | |
Maximum amount at any month-end during the year | 42,575,000 | 40,000,000 |
Annual average balance outstanding | $ 23,385,000 | $ 15,419,000 |
Annual average interest rate paid | 0.83% | 0.47% |
Annual interest rate at end of period | 0.00% | 0.48% |
Income Taxes (Schedule of Net D
Income Taxes (Schedule of Net Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Allowance for loan losses | $ 1,257 | $ 1,146 |
Acquisition accounting | 3,921 | |
Other real estate owned | 156 | |
Investments in pass-throughs | 44 | |
Federal net operating loss carryforwards | 468 | |
Nonaccrual loan interest | 55 | 2 |
Stock option/grant expense | 51 | 52 |
Home equity closing costs | 48 | 24 |
Deferred compensation expense | 70 | 9 |
Deferred loan fees | 182 | |
Goodwill and other intangible assets | 50 | |
Lease accounting standard | 13 | |
Securities available for sale unrealized loss | 588 | |
Depreciation | 571 | |
Total deferred tax assets | 6,840 | 1,867 |
Deferred tax liabilities: | ||
Securities available for sale unrealized gain | 388 | |
Goodwill and other intangible assets | 1,683 | |
Depreciation | 217 | |
Lease accounting standard | 100 | |
Deferred loan costs | 196 | |
Total deferred tax liabilities | 2,000 | 584 |
Net deferred tax assets | $ 4,840 | $ 1,283 |
Income Taxes (Schedule of Provi
Income Taxes (Schedule of Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Provision for income taxes | ||
Current tax expense | $ 1,144 | $ 2,279 |
Deferred tax expense (benefit) | 702 | (214) |
Provision for income taxes | $ 1,846 | $ 2,065 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation, Amount) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
Computed statutory tax expense | $ 2,502 | $ 2,109 |
Increase (decrease) in tax resulting from: | ||
Tax-exempt interest income | (199) | (100) |
Tax-exempt income from Bank Owned Life Insurance (BOLI) | (149) | (92) |
Stock option/stock grant expense | 9 | 18 |
Merger expenses | 118 | 117 |
Investment in qualified housing projects | (450) | |
Other expenses | 15 | 13 |
Provision for income taxes | $ 1,846 | $ 2,065 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Narrative) (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum federal reserve requirement amount | $ 0 | $ 0 |
Financial Instruments With Of_3
Financial Instruments With Off-Balance Sheet Risk and Credit Risk (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | ||
Commitment letters | $ 18.7 | $ 4 |
Commitment letters expiration period | 120 days | |
Deposits in other financial institutions in excess of amounts insured by the FDIC | $ 35.5 |
Financial Instruments with Of_4
Financial Instruments with Off-Balance Sheet Risk and Credit Risk - Schedule of Financial Instruments with Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 208,959 | $ 128,112 |
Unfunded Lines-of-Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | 154,471 | 101,389 |
ACH [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | 43,288 | 21,137 |
Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 11,200 | $ 5,586 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Leasing/rental expenditures (including reimbursements for taxes, insurance, and other expenses) | $ 520 | $ 511 |
Capital Requirements (Narrative
Capital Requirements (Narrative) (Details) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 17, 2019USD ($) | Aug. 30, 2018USD ($) |
Assets | $ 1,972,184,000 | $ 848,410,000 | ||
Common equity Tier 1 capital, minimum capital requirement, ratio | 4.50% | |||
Minimum capital conservation buffer percentage | 2.50% | |||
Common equity tier one capital ratio of risk-weighted assets | 7.00% | |||
Tier 1 capital, minimum capital requirement, ratio | 6 | |||
Tier 1 capital ratio of risk-weighted assets | 8.50% | |||
Total capital, minimum capital requirement, ratio | 8 | |||
Capital conservation buffer to risk weighted assets | 10.50% | |||
Total capital, minimum capital requirement, ratio | 4 | |||
Minimum [Member] | ||||
Tier 1 leverage ratio | 9 | |||
Maximum [Member] | ||||
Tier 1 leverage capital | $ 10,000,000,000 | |||
Well Capitalized [Member] | Minimum [Member] | ||||
Common equity Tier 1 capital, minimum capital requirement, ratio | 6.50% | |||
Tier 1 capital, minimum capital requirement, ratio | 8 | |||
Capital conservation buffer to risk weighted assets | 10.00% | |||
Total capital, minimum capital requirement, ratio | 5 | |||
SBHC Policy Statement [Member] | ||||
Assets | $ 3,000,000,000 | |||
Threshold [Member] | ||||
Assets | $ 1,000,000,000 |
Capital Requirements (Schedule
Capital Requirements (Schedule of Bank Actual Capital Amounts and Ratios) (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Total Capital, Ratio | ||
Total Capital, Minimum Capital Requirement, Ratio | 8 | |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 6 | |
Common Equity Tier 1 Capital, Ratio | ||
Common Equity Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.50% | |
Tier 1 Capital, Ratio | ||
Tier 1 Capital, Minimum Capital Requirement, Ratio | 4 | |
Bank [Member] | ||
Total Capital, Amount | ||
Total Capital, Actual, Amount | $ 155,092 | $ 85,235 |
Total Capital, Minimum Capital Requirement, Amount | 84,312 | 44,801 |
Total Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | 105,390 | 56,002 |
Common Equity Tier 1 Capital, Amount | ||
Common Equity Tier 1 Capital, Actual, Amount | 149,078 | 79,750 |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Amount | 47,425 | 25,201 |
Common Equity Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | 68,503 | 36,401 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 149,078 | 79,750 |
Tier 1 Capital, Minimum Capital Requirement, Amount | 63,234 | 33,601 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | 84,312 | 44,801 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 149,078 | 79,750 |
Tier 1 Capital, Minimum Capital Requirement, Amount | 77,549 | 33,725 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | $ 96,936 | $ 42,157 |
Total Capital, Ratio | ||
Total Capital (To Risk Weighted Assets), Ratio | 0.1472 | 0.1522 |
Total Capital, Minimum Capital Requirement, Ratio | 0.0800 | 0.0800 |
Total Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 0.1000 | 0.1000 |
Tier 1 Capital (To Risk Weighted Assets), Ratio | 0.1415 | 0.1424 |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 0.0600 | 0.0600 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 0.0800 | 0.0800 |
Common Equity Tier 1 Capital, Ratio | ||
Common Equity Tier 1 Capital (To Risk Weighted Assets), Ratio | 14.15% | 14.24% |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital ,Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
Tier 1 Capital, Ratio | ||
Tier 1 Capital (To Average Assets), Ratio | 0.0769 | 0.0946 |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 0.0400 | 0.0400 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 0.0500 | 0.0500 |
Dividend Restrictions (Narrativ
Dividend Restrictions (Narrative) (Details) $ in Millions | Dec. 31, 2021USD ($) |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
Amount available for cash dividends | $ 13.1 |
Fair Value Measurements (Measur
Fair Value Measurements (Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 303,817 | $ 348,172 |
Liabilities measured at fair value | 641 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 303,817 | 348,172 |
Liabilities measured at fair value | 641 | |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 641 | |
Interest Rate Swap [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 641 | |
Corporate bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 78,100 | |
Corporate bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 78,100 | |
Municipal bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 101,272 | 174,086 |
Municipal bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 101,272 | 174,086 |
U.S. Government agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 31,581 | 25,305 |
U.S. Government agencies [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 31,581 | 25,305 |
Mortgage-backed securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 170,964 | 70,681 |
Mortgage-backed securities/CMOs [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 170,964 | $ 70,681 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 01, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Recorded Investment, total | $ 1,529 | $ 1,273 | |
Fair Value, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | ||
Fauquier Bankshares, Inc [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of loan | $ 611 | $ 602,600 | $ 0 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 0 | |
Other Real Estate Owned [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 611 | |
Other Real Estate Owned [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 611 |
Fair Value Measurements (Quanti
Fair Value Measurements (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Fair Value, Nonrecurring [Member] - Significant Unobservable Inputs (Level 3) [Member] - Other Real Estate Owned [Member] - Bonafide Offer [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value | $ 611 |
Unobservable Inputs | Discount applied to bonafide offer |
Weighted Average | 0.060 |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Values and Estimated Fair Values of Financial Instruments) (Details) - Fair Value, Nonrecurring [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying Value [Member] | ||
Assets | ||
Cash and cash equivalent | $ 508,840 | $ 34,695 |
Available for sale securities | 303,817 | 174,086 |
Loans, net | 1,055,227 | 603,951 |
Bank owned life insurance | 31,234 | 16,849 |
Accrued interest receivable | 3,778 | 2,904 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 1,634,125 | 631,662 |
Certificates of deposit | 162,045 | 99,102 |
Advances from FHLB | 30,000 | |
Junior subordinated debt | 3,367 | |
Accrued interest payable | 174 | 159 |
Interest rate swaps | 641 | |
Fair Value [Member] | ||
Assets | ||
Cash and cash equivalent | 508,840 | 34,695 |
Available for sale securities | 303,817 | 174,086 |
Loans, net | 1,059,650 | 602,859 |
Bank owned life insurance | 31,234 | 16,849 |
Accrued interest receivable | 3,778 | 2,904 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 1,634,125 | 631,662 |
Certificates of deposit | 161,850 | 99,580 |
Advances from FHLB | 30,000 | |
Junior subordinated debt | 3,367 | |
Accrued interest payable | 174 | 159 |
Interest rate swaps | 641 | |
Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and cash equivalent | 508,840 | 34,695 |
Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Available for sale securities | 303,817 | 174,086 |
Bank owned life insurance | 31,234 | 16,849 |
Accrued interest receivable | 1,252 | 729 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 1,634,125 | 631,662 |
Certificates of deposit | 161,850 | 99,580 |
Advances from FHLB | 30,000 | |
Junior subordinated debt | 3,367 | |
Accrued interest payable | 174 | 159 |
Interest rate swaps | 641 | |
Fair Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Loans, net | 1,059,650 | 602,859 |
Accrued interest receivable | $ 2,526 | $ 2,175 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)Employee | Dec. 31, 2020USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||
Minimum age of employees for benefit plans | 18 years | |
Percentage of contribution matched | 100.00% | |
Percentage of employee contribution | 6.00% | |
Amount of contributed to the plan | $ 665 | $ 398 |
Number of retired employee for whom post-retirement benefit provided | Employee | 1 | |
Post-retirement benefit [Member] | Accrued Interest Payable and Other Liabilities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, liability associated | $ 171 |
Stock Incentive Plans (Plan dur
Stock Incentive Plans (Plan duration - Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | May 21, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock grant expense | $ 376 | $ 140 | |
Nonvested restricted stock grants are expected to be recognized | 1 year 7 months 6 days | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 145 | $ 124 | |
Unrecognized compensation expense related to the non-vested awards | $ 851 | ||
Unrecognized compensation expense related to the non-vested awards, final year of recognition | 2026 | ||
Option Issued | 23,600 | 66,000 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense related to the non-vested awards | $ 387 | ||
Unrecognized compensation expense related to the non-vested awards, final year of recognition | 2026 | ||
Stock grants awarded | 21,749 | ||
Stock grants outstanding | 37,011 | 25,268 | |
Stock grant expense | $ 376 | ||
Restricted Stock [Member] | Employees and Non-employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock grants awarded | 21,749 | 22,268 | |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Plan duration | 10 years | ||
Maximum [Member] | Restricted Stock [Member] | Employees and Non-employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Minimum [Member] | Restricted Stock [Member] | Employees and Non-employee Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
2014 Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance | 275,625 | 275,625 | |
Common stock available for grant | 45,967 | ||
2005 Stock Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized for issuance | 253,575 | ||
Common stock available for grant | 0 | 0 |
Stock Incentive Plans (Summary
Stock Incentive Plans (Summary of Shares Issued and Available Under Each Plans) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | May 21, 2014 | |
2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate shares issuable | 275,625 | 275,625 |
Options issued, net of forfeited and expired options | (170,106) | |
Cancelled due to Plan expiration | 0 | |
Remaining available for grant | 45,967 | |
Total vested and unvested shares | 59,552 | |
Fully vested shares | 22,541 | |
2014 Stock Plan [Member] | Unrestricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | (11,535) | |
2014 Stock Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | (48,017) | |
2014 Stock Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total vested and unvested shares | 167,901 | |
Fully vested shares | 57,694 | |
2005 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate shares issuable | 253,575 | |
Options issued, net of forfeited and expired options | (59,831) | |
Cancelled due to Plan expiration | (193,744) | |
Remaining available for grant | 0 | 0 |
Fully vested shares | 0 | |
Exercise price range | $ 13.69 | |
2005 Stock Plan [Member] | Unrestricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | 0 | |
2005 Stock Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock grants issued | 0 | |
2005 Stock Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total vested and unvested shares | 1,379 | |
Fully vested shares | 1,379 | |
Minimum [Member] | 2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 23.75 | |
Maximum [Member] | 2014 Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price range | $ 42.62 |
Stock Incentive Plans (Changes
Stock Incentive Plans (Changes in the Stock Options Outstanding) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Options | ||
Exercised | (1,103) | |
Employee Stock Option [Member] | ||
Number of Options | ||
Outstanding, at the beginning | 146,783 | |
Issued | 23,600 | 66,000 |
Exercised | (1,103) | |
Outstanding, at the end | 169,280 | 146,783 |
Options Exercisable | 59,072 | |
Weighted Average Exercise Price | ||
Outstanding, at the beginning | $ 33.51 | |
Issued | 35.94 | |
Exercised | 27.39 | |
Outstanding, at the end | 33.89 | $ 33.51 |
Exercisable | $ 37.21 | |
Aggregate Intrinsic Value | ||
Outstanding, Aggregate Intrinsic Value | $ 962 | $ 184 |
Exercisable | $ 211 |
Stock Incentive Plans (Options
Stock Incentive Plans (Options and Restricted stock - Narrative) (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Share-based Payment Arrangement [Abstract] | |
Intrinsic value of options exercised | $ | $ 0 |
Stock options exercised | shares | 1,103 |
Stock Incentive Plans (Summar_2
Stock Incentive Plans (Summary Information Pertaining to Options Outstanding) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Expected volatility | 25.16% | 22.97% |
Expected dividends | 3.00% | 5.00% |
Expected term (in years) | 6 years 6 months | |
Risk-free rate | 1.19% | 0.68% |
Options Outstanding | 169,280 | |
Weighted-Average Remaining Contractual Life | 7 years 9 months 18 days | |
Weighted Average Exercise Price | $ 33.89 | |
Options Exercisable | 59,072 | |
Weighted-Average Exercise Price | $ 37.21 | |
Minimum [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Expected term (in years) | 5 years 6 months | |
Maximum [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Expected term (in years) | 6 years 3 months 18 days | |
$13.69 to 20.00 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Minimum | $ 13.69 | |
Exercise Price, Maximum | $ 20 | |
Options Outstanding | 1,379 | |
Weighted-Average Remaining Contractual Life | 1 year 1 month 6 days | |
Weighted Average Exercise Price | $ 13.69 | |
Options Exercisable | 1,379 | |
Weighted-Average Exercise Price | $ 13.69 | |
$20.01 to $30.00 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Minimum | 20.01 | |
Exercise Price, Maximum | $ 30 | |
Options Outstanding | 66,000 | |
Weighted-Average Remaining Contractual Life | 8 years 6 months | |
Weighted Average Exercise Price | $ 24.64 | |
Options Exercisable | 13,200 | |
Weighted-Average Exercise Price | $ 24.64 | |
$30.01 to 40.00 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Minimum | 30.01 | |
Exercise Price, Maximum | $ 40 | |
Options Outstanding | 44,420 | |
Weighted-Average Remaining Contractual Life | 8 years 7 months 6 days | |
Weighted Average Exercise Price | $ 36.97 | |
Options Exercisable | 10,008 | |
Weighted-Average Exercise Price | $ 38.38 | |
$40.01 to 42.62 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Minimum | 40.01 | |
Exercise Price, Maximum | $ 42.62 | |
Options Outstanding | 57,481 | |
Weighted-Average Remaining Contractual Life | 6 years 4 months 24 days | |
Weighted Average Exercise Price | $ 42.62 | |
Options Exercisable | 34,485 | |
Weighted-Average Exercise Price | $ 42.62 |
Stock Incentive Plans (Change_2
Stock Incentive Plans (Changes in the Restricted Stock Grants Outstanding) (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Number of Shares/Options | |
Non-vested Outstanding, at the beginning | shares | 25,268 |
Issued | shares | 21,749 |
Vested | shares | (10,006) |
Non-vested Outstanding, at the end | shares | 37,011 |
Weighted Average Grant Date Fair Value Per Share/Exercise Price | |
Non-vested Outstanding, at the beginning | $ / shares | $ 26.60 |
Issued | $ / shares | 30.84 |
Vested | $ / shares | 27.01 |
Non-vested Outstanding, at the end | $ / shares | $ 28.98 |
Aggregate Intrinsic Value | |
Non-vested Outstanding, at the beginning | $ | $ 957 |
Issued | $ | 824 |
Vested | $ | (379) |
Non-vested Outstanding, Aggregate Intrinsic Value | $ | $ 1,402 |
Net Income Per Share (Narrative
Net Income Per Share (Narrative) (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity Option [Member] | ||
Earnings Per Share [Line Items] | ||
Securities considered to be anti-dilutive and excluded from earnings per share calculation | 101,901 | 145,404 |
Restricted Stock [Member] | ||
Earnings Per Share [Line Items] | ||
Common stock, nonvested shares issued | 37,011 | 25,268 |
Net Income Per Share (Schedule
Net Income Per Share (Schedule of Weighted Average Number of Shares) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Basic net income per share | ||
Net income | $ 10,071 | $ 7,978 |
Weighted Average Shares | 4,668,761 | 2,707,877 |
Per Share Amount | $ 2.16 | $ 2.95 |
Effect of dilutive stock options | 26,644 | 690 |
Effect of dilutive stock options, Per Share Amount | $ (0.02) | |
Diluted net income per share | ||
Net income | $ 10,071 | $ 7,978 |
Weighted Average Shares | 4,695,405 | 2,708,567 |
Per Share Amount | $ 2.14 | $ 2.95 |
Other Comprehensive Income (Sch
Other Comprehensive Income (Schedule of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Available-for-sale securities: | |
Realized gains on sales and calls of securities | $ 743 |
Tax effect | (156) |
Realized gains, net of tax | $ 587 |
Junior Subordinated Debt (Narra
Junior Subordinated Debt (Narrative) (Details) - USD ($) $ in Thousands | Sep. 21, 2006 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Capital securities | $ 3,367 | |
Floating Rate Capital Securities [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate description | The interest rate on the capital security resets every three months at 1.70% above the then current three-month LIBOR. Interest is paid quarterly. | |
Frequency of repricing | 3 months | |
Frequency of interest payment | quarterly | |
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2036 [Member] | ||
Debt Instrument [Line Items] | ||
Face amount | $ 4,000 | |
Maturity year | 2036 | |
LIBOR [Member] | Floating Rate Capital Securities [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate over three-month LIBOR | 1.70% | |
Description of variable rate basis | three-month LIBOR | |
Wholly-Owned Connecticut Statutory Business Trust [Member] | Floating Rate Capital Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face amount | $ 4,000 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Cash collateral held at other banks | $ 570 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Summary of Derivative Instruments) (Details) - Derivatives Designated as Hedging Instruments [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Junior Subordinated Debt [Member] | Interest Rate Forward Swap - Cash Flow [Member] | |
Derivative [Line Items] | |
Notional/contract amount | $ 4,000 |
Fair value | $ (633) |
Expiration Date | Jun. 15, 2031 |
Other Liabilities [Member] | Interest Rate Swap - Fair Value [Member] | |
Derivative [Line Items] | |
Notional/contract amount | $ 3,940 |
Fair value | $ (8) |
Expiration Date | Feb. 12, 2022 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)Item | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Item | 4 | |
Non-bank Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Management fees | $ | $ 100 | $ 100 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Segment Reporting Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net interest income | $ 44,988 | $ 23,879 |
Provision for loan losses | 1,014 | 1,622 |
Noninterest income | 10,465 | 6,565 |
Noninterest expense | 42,522 | 18,779 |
Income before income taxes | 11,917 | 10,043 |
Provision for income taxes | 1,846 | 2,065 |
Net Income (loss) | 10,071 | 7,978 |
Bank [Member] | ||
Segment Reporting Information [Line Items] | ||
Net interest income | 44,988 | 23,879 |
Provision for loan losses | 1,014 | 1,622 |
Noninterest income | 5,704 | 4,629 |
Noninterest expense | 39,164 | 16,492 |
Income before income taxes | 10,514 | 10,394 |
Provision for income taxes | 1,550 | 2,138 |
Net Income (loss) | 8,964 | 8,256 |
Sturman Wealth Advisors [Member] | ||
Segment Reporting Information [Line Items] | ||
Noninterest income | 1,213 | 700 |
Noninterest expense | 725 | 639 |
Income before income taxes | 488 | 61 |
Provision for income taxes | 104 | 13 |
Net Income (loss) | 384 | 48 |
VNB Trust & Estate Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Noninterest income | 1,969 | 825 |
Noninterest expense | 1,764 | 891 |
Income before income taxes | 205 | (66) |
Provision for income taxes | 43 | (14) |
Net Income (loss) | 162 | (52) |
Masonry Capital [Member] | ||
Segment Reporting Information [Line Items] | ||
Noninterest income | 1,579 | 411 |
Noninterest expense | 869 | 757 |
Income before income taxes | 710 | (346) |
Provision for income taxes | 149 | (72) |
Net Income (loss) | $ 561 | $ (274) |
Condensed Parent Company Fina_3
Condensed Parent Company Financial Statements (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | ||
Cash dividend paid | $ 7.6 | $ 4.4 |
Condensed Parent Company Fina_4
Condensed Parent Company Financial Statements (Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | |||
Cash and due from banks | $ 20,345 | $ 8,116 | |
Investment securities | 308,767 | 177,096 | |
Other assets | 18,144 | 6,341 | |
Total assets | 1,972,184 | 848,410 | |
LIABILITIES & SHAREHOLDERS' EQUITY | |||
Junior subordinated debt | 3,367 | ||
Stockholders' equity | 161,987 | 82,598 | $ 76,107 |
Total liabilities and shareholders' equity | 1,972,184 | 848,410 | |
Parent Company [Member] | |||
ASSETS | |||
Cash and due from banks | 1,417 | 1,691 | |
Investment securities | 64 | 64 | |
Investments in subsidiaries | 163,712 | 81,455 | |
Other assets | 603 | 249 | |
Total assets | 165,796 | 83,459 | |
LIABILITIES & SHAREHOLDERS' EQUITY | |||
Junior subordinated debt | 3,367 | ||
Other liabilities | 442 | 861 | |
Stockholders' equity | 161,987 | 82,598 | |
Total liabilities and shareholders' equity | $ 165,796 | $ 83,459 |
Condensed Parent Company Fina_5
Condensed Parent Company Financial Statements (Statement of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Income Statements Captions [Line Items] | ||
Net interest income | $ (44,988) | $ (23,879) |
Noninterest expense | 42,522 | 18,779 |
Income before income taxes | 11,917 | 10,043 |
Income tax (benefit) | 1,846 | 2,065 |
Net income | 10,071 | 7,978 |
Parent Company [Member] | ||
Condensed Income Statements Captions [Line Items] | ||
Dividends from subsidiary | 7,600 | 4,400 |
Net interest income | (148) | |
Noninterest expense | 2,325 | 1,171 |
Income before income taxes | 5,127 | 3,229 |
Income tax (benefit) | (353) | (164) |
Income before equity in undistributed earnings of subsidiaries | 5,480 | 3,393 |
Equity in undistributed earnings of subsidiaries | 4,591 | 4,585 |
Net income | $ 10,071 | $ 7,978 |
Condensed Parent Company Fina_6
Condensed Parent Company Financial Statements (Statement of Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 10,071 | $ 7,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net accretion of certain acquisition-related adjustments | (3,381) | |
Deferred tax expense | 702 | (214) |
Net cash provided by operating activities | 13,065 | 9,253 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from stock options exercised | 30 | |
Dividends paid | (6,408) | (3,248) |
Net cash provided by financing activities | 198,892 | 136,305 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 474,145 | 15,610 |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 34,695 | 19,085 |
End of period | 508,840 | 34,695 |
Parent Company [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 10,071 | 7,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed earnings of subsidiaries | (4,591) | (4,585) |
Net accretion of certain acquisition-related adjustments | 33 | |
Deferred tax expense | 28 | 28 |
Stock option & restricted stock grant expense | 521 | 264 |
Increase in other assets | (365) | (16) |
Decrease in other liabilities | 411 | 14 |
Net cash provided by operating activities | 6,108 | 3,683 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from stock options exercised | 30 | |
Cash paid in lieu for fractional shares at acquisition | (4) | |
Dividends paid | (6,408) | (3,248) |
Net cash provided by financing activities | (6,382) | (3,248) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | (274) | 435 |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 1,691 | 1,256 |
End of period | $ 1,417 | $ 1,691 |
Investment in Affordable Hous_2
Investment in Affordable Housing Projects (Narrative) (Details) - Affordable Housing Projects [Member] - VIRGINIA [Member] | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Investments, expiration year | 2036 |
Affordable housing projects unfunded capital commitments | $ 0 |
Other Assets [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Affordable housing investments | 2,900,000 |
Noninterest Income [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Flow-through losses recognized | (145,000) |
Income Tax Expense [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Federal tax credits | $ 450,000 |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) $ in Millions | 1 Months Ended |
Feb. 28, 2022USD ($) | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Proceeds from commercial dispute settlement | $ 2.4 |