Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 25, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | F&M BANK CORP | ||
Entity Central Index Key | 0000740806 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 3,415,235 | ||
Entity Public Float | $ 85,667,846 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-13273 | ||
Entity Incorporation State Country Code | VA | ||
Entity Tax Identification Number | 54-1280811 | ||
Entity Address Address Line 1 | P.O. Box 1111 | ||
Entity Address City Or Town | Timberville | ||
Entity Address State Or Province | VA | ||
Entity Address Postal Zip Code | 22853 | ||
City Area Code | 540 | ||
Local Phone Number | 896-8941 | ||
Security 12g Title | Common Stock - $5 Par value per share | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | Yount, Hyde & Barbour, P.C. | ||
Auditor Location | Roanoke, Virginia | ||
Auditor Firm Id | 613 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and due from banks | $ 8,516,000 | $ 11,181,000 |
Money market funds and interest-bearing deposits in other banks | 2,938,000 | 1,244,000 |
Federal funds sold | 76,667,000 | 65,983,000 |
Cash and cash equivalents | 88,121,000 | 78,408,000 |
Securities: | ||
Held to maturity, at amortized cost - fair value of $125 in 2021 and 2020, respectively | 125,000 | 125,000 |
Available for sale, at fair value | 403,882,000 | 106,899,000 |
Other investments | 9,210,000 | 10,874,000 |
Loans held for sale, at fair value | 4,887,000 | 14,307,000 |
Loans held for sale, participations | 0 | 44,372,000 |
Loans held for investment, net of deferred fees and costs | 662,421,000 | 661,329,000 |
Less: allowance for loan losses | (7,748,000) | (10,475,000) |
Net loans held for investment | 654,673,000 | 650,854,000 |
Bank premises and equipment, net | 17,063,000 | 17,909,000 |
Bank premises held for sale | 300,000 | 520,000 |
Interest receivable | 3,117,000 | 2,727,000 |
Goodwill | 3,082,000 | 2,884,000 |
Bank owned life insurance | 22,878,000 | 22,647,000 |
Other assets | 12,004,000 | 14,404,000 |
Total Assets | 1,219,342,000 | 966,930,000 |
Deposits: | ||
Noninterest bearing | 280,993,000 | 236,915,000 |
Interest bearing | 799,302,000 | 581,667,000 |
Total deposits | 1,080,295,000 | 818,582,000 |
Long-term debt | 21,772,000 | 33,202,000 |
Other liabilities | 16,819,000 | 19,517,000 |
Total Liabilities | 1,118,886,000 | 871,301,000 |
Stockholders' Equity | ||
Series A Preferred Stock, $25 liquidation preference, 400,000 shares authorized, 0 shares issued and outstanding at December 31, 2021 and 205,327 shares issued and outstanding at December 31, 2020 | 0 | 4,558,000 |
Common stock $5 par value, 6,000,000 shares authorized, 200,000 designated, 3,414,306 and 3,203,372 shares issued and outstanding at December 31, 2021 and 2020, respectively | 17,071,000 | 16,017,000 |
Additional paid in capital - common stock | 10,127,000 | 6,866,000 |
Retained earnings | 78,350,000 | 71,205,000 |
Accumulated other comprehensive loss | (5,092,000) | (3,017,000) |
Total Stockholders' Equity | 100,456,000 | 95,629,000 |
Total Liabilities and Stockholders' Equity | $ 1,219,342,000 | $ 966,930,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Held to maturity - fair value | $ 125,000 | $ 125,000 |
Stockholders' Equity | ||
Common stock, shares par value | $ 5 | $ 5 |
Common stock, shares designated | 200,000 | 2,000,000 |
Common stock, shares authorized | 6,000,000 | 6,000,000 |
Common stock, shares issued | 3,414,306 | 3,203,372 |
Common stock, shares outstanding | 3,414,306 | 3,203,372 |
Preferred stock, shares par value | $ 25 | $ 25 |
Preferred stock, shares authorized | 400,000 | 400,000 |
Preferred stock, shares issued | 0 | 205,327 |
Preferred stock, shares outstanding | 0 | 205,327 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest and Dividend Income | ||
Interest and fees on loans held for investment | $ 32,374 | $ 34,113 |
Interest from loans held for sale | 186 | 1,298 |
Interest from money market funds and federal funds sold | 142 | 349 |
Interest from debt securities | 2,874 | 1,032 |
Total interest and dividend income | 35,576 | 36,792 |
Interest Expense | ||
Total interest on deposits | 3,336 | 4,615 |
Interest from short-term debt | 0 | 41 |
Interest from long-term debt | 966 | 1,072 |
Total interest expense | 4,302 | 5,728 |
Net interest income | 31,274 | 31,064 |
(Recovery of) Provision for Loan Losses | (2,821) | 3,300 |
Net Interest Income After (Recovery of) Provision for Loan Losses | 34,095 | 27,764 |
Noninterest Income | ||
Service charges on deposit accounts | 1,133 | 1,191 |
Investment services and insurance income, net | 944 | 669 |
Mortgage banking income, net | 4,646 | 6,154 |
Title insurance income | 2,074 | 1,978 |
Income on bank owned life insurance | 671 | 614 |
Low income housing partnership losses | (861) | (893) |
ATM and check card fees | 2,311 | 1,900 |
Net investment securities gains (losses) | (525) | 0 |
Other operating income | 913 | 597 |
Total noninterest income | 11,306 | 12,210 |
Noninterest Expenses | ||
Salaries | 14,102 | 12,738 |
Employee benefits | 4,385 | 3,746 |
Occupancy expense | 1,262 | 1,167 |
Equipment expense | 1,200 | 1,180 |
FDIC insurance assessment | 414 | 378 |
Other real estate owned, net | 0 | 346 |
Marketing expense | 748 | 604 |
Legal and professional expense | 1,068 | 662 |
ATM and check card fees | 1,113 | 1,047 |
Telecommunication and data processing expense | 2,672 | 2,266 |
Directors fees | 493 | 428 |
Bank franchise tax | 711 | 733 |
Impairment of long-lived assets | 171 | 19 |
Other operating expenses | 5,001 | 4,625 |
Total noninterest expenses | 33,340 | 29,939 |
Income before income taxes | 12,061 | 10,035 |
Income tax expense | 1,323 | 1,142 |
Net Income | 10,738 | 8,893 |
Net income attributable to non-controlling interest | 0 | (105) |
Net Income attributable to F & M Bank Corp. | 10,738 | 8,788 |
Dividends paid/accumulated on preferred stock | (196) | (263) |
Net income available to common stockholders | $ 10,542 | $ 8,525 |
Per Common Share Data | ||
Net income - basic | $ 3.25 | $ 2.66 |
Net income - diluted | 3.12 | 2.56 |
Cash dividends on common stock | $ 1.04 | $ 1.04 |
Weighted average common shares outstanding - basic | 3,245,086 | 3,199,883 |
Weighted average common shares outstanding - diluted | 3,442,173 | 3,428,765 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Income | ||
Net Income attributable to F & M Bank Corp. | $ 10,738,000 | $ 8,788,000 |
Other comprehensive income (loss): | ||
Pension plan adjustment | 671,000 | (781,000) |
Tax effect | 141,000 | 164,000 |
Pension plan adjustment, net of tax | 530,000 | (617,000) |
Unrealized holding (losses) gains on available-for-sale securities | (3,823,000) | 1,027,000 |
Tax effect | 803,000 | (216,000) |
Unrealized holding (losses) gains, net of tax | (3,020,000) | 811,000 |
Less: | ||
Reclassifications adjustment for losses included in net income | 525,000 | 0 |
Tax effect | 110,000 | 0 |
Realized losses on sale of available-for-sale securities, net | 415,000 | 0 |
Total other comprehensive (loss) income | (2,075,000) | 194,000 |
Comprehensive income attributable to F&M Bank Corp. | 8,663,000 | 8,982,000 |
Comprehensive income attributable to noncontrolling interests | 0 | 105,000 |
Total comprehensive income | $ 8,663,000 | $ 9,087,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Noncontrolling Interest | Accumulated Other Comprehensive Loss |
Balance, amount at Dec. 31, 2019 | $ 91,575,000 | $ 4,592,000 | $ 16,042,000 | $ 7,510,000 | $ 66,008,000 | $ 634,000 | $ (3,211,000) |
Net income | 8,893,000 | 0 | 0 | 0 | 8,788,000 | 105,000 | 0 |
Other comprehensive income | 194,000 | 0 | 0 | 0 | 0 | 0 | 194,000 |
Distributions to noncontrolling interest | (177,000) | 0 | 0 | 0 | 0 | (177,000) | 0 |
Dividends on preferred stock ($1.27 per share) | (263,000) | 0 | 0 | 0 | (263,000) | 0 | 0 |
Dividends on common stock ($1.04 per share) | (3,328,000) | 0 | 0 | 0 | (3,328,000) | 0 | 0 |
Common stock repurchased (18,472 shares) | (473,000) | 0 | (92,000) | (381,000) | 0 | 0 | 0 |
Common stock issued (11,866 shares) | 258,000 | 0 | 59,000 | 199,000 | 0 | 0 | 0 |
Preferred stock converted to common (1,333 shares) | 0 | (34,000) | 8,000 | 26,000 | 0 | 0 | 0 |
Purchase of Minority Interest | (1,050,000) | 0 | 0 | (488,000) | 0 | 0 | 0 |
Balance, amount at Dec. 31, 2020 | 95,629,000 | 4,558,000 | 16,017,000 | 6,866,000 | 71,205,000 | 0 | (3,017,000) |
Net income | 10,738,000 | 0 | 0 | 0 | 10,738,000 | 0 | 0 |
Other comprehensive income | (2,075,000) | 0 | 0 | 0 | 0 | 0 | (2,075,000) |
Dividends on common stock ($1.04 per share) | (3,397,000) | 0 | 0 | 0 | (3,397,000) | 0 | 0 |
Common stock issued (11,866 shares) | 263,000 | 0 | 47,000 | 216,000 | 0 | 0 | 0 |
Preferred stock converted to common (1,333 shares) | 0 | (3,931,000) | 1,001,000 | 2,930,000 | 0 | 0 | 0 |
Dividends on preferred stock ($0.96 per share) | (196,000) | 0 | 0 | 0 | (196,000) | 0 | 0 |
Preferred stock redeemed (25,066 shares) | (627,000) | (627,000) | 0 | 0 | 0 | 0 | 0 |
Common stock issued for Stock-based Compensation (1,332 shares) | 35,000 | 0 | 6,000 | 29,000 | 0 | 0 | 0 |
Stock-based compensation expense | 86,000 | 0 | 0 | 86,000 | 0 | 0 | 0 |
Balance, amount at Dec. 31, 2021 | $ 100,456,000 | $ 0 | $ 17,071,000 | $ 10,127,000 | $ 78,350,000 | $ 0 | $ 5,092,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 10,738,000 | $ 8,893,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,164,000 | 1,241,000 |
Amortization of intangibles | 71,000 | 59,000 |
Amortization of securities | (1,004,000) | (284,000) |
Proceeds from sale of loans held for sale originated | 203,681,000 | 212,180,000 |
Gain on sale of loans held for sale originated | (4,679,000) | (5,576,000) |
Loans held for sale originated | (189,582,000) | (217,937,000) |
(Recovery of) Provision for loan losses | (2,821,000) | 3,300,000 |
Deferred tax expense (benefit) | 476,000 | (670,000) |
(Increase) in interest receivable | (390,000) | (683,000) |
Decrease (increase) in other assets | 2,560,000 | (670,000) |
(Decrease) increase in accrued liabilities | (2,076,000) | 836,000 |
Loss on sale of investments | 525,000 | 0 |
Amortization of limited partnership investments | 861,000 | 893,000 |
Loss (gain) on sale of fixed assets, net | 114,000 | (14,000) |
Loss on sale and valuation adjustments of other real estate owned | 0 | 326,000 |
Income from life insurance investment | (671,000) | (614,000) |
Share based compensation expense | 86,000 | 0 |
Loss on sale of assets held for sale | (220,000) | 0 |
Net Cash Provided by Operating Activities | 21,281,000 | 1,848,000 |
Cash Flows from Investing Activities | ||
Proceeds from maturities of securities available for sale | 19,130,000 | 24,513,000 |
Proceeds from sales of securities available for sale | 25,917,000 | 0 |
Purchases of securities available for sale and other investments | (346,857,000) | (126,304,000) |
Proceeds from the redemption of restricted stock, net | 790,000 | 1,758,000 |
Proceeds from maturities of securities held to maturity | 0 | 125,000 |
Purchases of securities held to maturity | 0 | (125,000) |
Net (increase) in loans held for investment | (998,000) | (59,119,000) |
Net decrease in loans held for sale participations | 44,372,000 | 19,452,000 |
Net purchase of property and equipment | (563,000) | (742,000) |
Purchase of bank owned life insurance | 0 | (2,000,000) |
Purchase of minority interest | 0 | (856,000) |
Proceeds from sale of other real estate owned | 0 | 1,163,000 |
Proceeds from life insurance benefits | 421,000 | 0 |
Proceeds from the sale of property and equipment | 142,000 | 0 |
Cash received in branch acquisition (net of cash paid) | 13,946,000 | 0 |
Net cash (used) in investing activities | (243,700,000) | (142,135,000) |
Cash Flows from Financing Activities | ||
Net change in deposits | 247,484,000 | 176,873,000 |
Net change in short-term debt | 0 | (10,000,000) |
Dividends paid in cash | (3,593,000) | (3,591,000) |
Proceeds from long-term debt | 0 | 71,903,000 |
Distributions to non-controlling interest | 0 | (177,000) |
Proceeds from sale of common stock | 263,000 | 0 |
Proceeds from issuance of common stock | 35,000 | 258,000 |
Repurchase of preferred stock | (627,000) | 0 |
Repurchase of common stock | 0 | (473,000) |
Repayments of long-term debt | (11,430,000) | (91,902,000) |
Net cash provided by financing activities | 232,132,000 | 142,891,000 |
Net increase in Cash and Cash Equivalents | 9,713,000 | 2,604,000 |
Cash and Cash Equivalents, Beginning of Year | 78,408,000 | 75,804,000 |
Cash and Cash Equivalents, End of Year | 88,121,000 | 78,408,000 |
Cash paid for: | ||
Interest | 4,071,000 | 5,816,000 |
Income taxes | 2,012,000 | 595,000 |
Supplemental non-cash disclosures: | ||
Change in unrealized (loss) gain on securities available for sale, net | (3,298,000) | 811,000 |
Minimum pension liability adjustment, net | 530,000 | (617,000) |
Conversion of preferred stock to common stock | (3,931,000) | 34,000 |
Assets held for sale: | ||
Bank premises and equipment transferred to held for sale | 0 | 537,000 |
Donation of assets held for sale | 161,000 | 0 |
Write down of assets held for sale | 59,000 | 0 |
Branch purchase: | ||
Tangible assets acquired (net of cash received) | 61,000 | 0 |
Identifiable intangible assets acquired | 73,000 | 0 |
Liabilities assumed | $ 14,044,000 | $ 0 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
NATURE OF OPERATIONS | |
NOTE 1. NATURE OF OPERATIONS | NOTE 1 NATURE OF OPERATIONS: F & M Bank Corp. (the “Company”), through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state-chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers located primarily in the counties of Rockingham, Shenandoah, and Augusta, and the cities of Harrisonburg, Staunton, Waynesboro and Winchester in Virginia. Services are provided at thirteen branch offices and a Dealer Finance Division loan production office. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc, (“FMFS”) VBS Mortgage, LLC (dba F&M Mortgage) and VSTitle, LLC (“VST”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The accounting and reporting policies of the Company and its subsidiaries conform to generally accepted accounting principles and to accepted practice within the banking industry. The following is a summary of the more significant policies: Principles of Consolidation The consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., F&M Mortgage, and VSTitle, LLC. Significant inter-company accounts and transactions have been eliminated. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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, fair value, and pension accounting. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, money market funds whose initial maturity is ninety days or less and Federal funds sold. Securities At the time of purchase, debt securities are classified into the following categories: held to maturity, available for sale or trading. Debt securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity. Held to maturity securities are stated at amortized cost adjusted for amortization of premiums and accretion of discounts on purchase using a method that approximates the effective interest method. Investments classified as trading or available for sale are stated at fair value. Changes in fair value of trading investments are included in current earnings while changes in fair value of available for sale investments are excluded from current earnings and reported, net of taxes, as a separate component of other comprehensive income. Presently, the Company does not maintain a portfolio of trading securities. The fair value of investment securities available for sale is estimated based on quoted prices for similar assets determined by bid quotations received from independent pricing services. Declines in the fair value of securities below their amortized cost that are other than temporary are reflected in earnings or other comprehensive income, as appropriate. For those debt securities whose fair value is less than their amortized cost basis, we consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and if we do not expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. Securities, continued Interest income is recognized when earned. Realized gains and losses for securities classified as available-for-sale are included in earnings and are derived using the specific identification method for determining the cost of securities sold. For held-to-maturity debt securities, the amount of other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment is amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security. For available-for-sale securities, when the Company has decided to sell an impaired available-for-sale security and the Company does not expect the fair value of the security to fully recover before the expected time of sale, the security is deemed other-than-temporarily impaired in the period in which the decision to sell is made. The Company recognizes an impairment loss when the impairment is deemed other than temporary even if a decision to sell has not been made. The Company had no other than temporary impairment in 2021 or 2020. Other Investments The Company periodically invests in low-income housing partnerships whose primary benefit is the distribution of federal income tax credits to partners. The Company recognizes these benefits and the cost of the investments over the life of the partnership. In addition, state and federal historic rehabilitation credits are generated from some of the partnerships. Amortization of these investments is prorated based on the amount of benefits received in each year to the total estimated benefits over the life of the projects. Due to the nature and restrictions placed on the Company’s investment in common stock of the Federal Home Loan Bank of Atlanta (“FHLB”) and the Federal Reserve Bank of Richmond, these securities are considered restricted and carried at cost. Income Taxes Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties, if any, on income taxes as a component of income tax expense. Loans Held for Investment The Company, through its banking subsidiary, provides mortgage, commercial, and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans, particularly commercial and residential mortgages. The ability of the Company’s debtors to honor their contracts is largely dependent upon the real estate and general economic conditions in the Company’s market area. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off, generally are reported at their outstanding unpaid principal balance adjusted for the allowance for loan losses, and any unearned income. Interest income is accrued on the unpaid principal balance. The accrual of interest on loans is generally discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Loans are typically charged off when the loan is 120 days past due, unless secured and in process of collection. Loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. The Company’s loans are grouped into eleven segments: construction/land development, farmland, real estate, multi-family, commercial real estate, home equity – closed end, home equity – open end, commercial & industrial – non-real estate, consumer, credit cards and dealer finance. Each segment is subject to certain risks that influence the establishment of pricing, loan structures, approval requirements, reserves, and ongoing credit management. The Company does not segregate the portfolio further. Construction and land development loans are subject to general risks from changing commercial building and housing market trends and economic conditions that may impact demand for completed properties and the costs of completion. Completed properties that do not sell or become leased within originally expected timeframes may impact the borrower’s ability to service the debt. These risks are measured by market-area unemployment rates, bankruptcy rates, housing and commercial building market trends, and interest rates. Risks specific to the borrower are also evaluated, including previous repayment history, debt service ability, and current and projected loan-to value ratios for the collateral. Farmland loans are loans secured by agricultural property. These loans are subject to risks associated with the value of the underlying farmland and the cash flows of the borrower’s farming operations. Multifamily loans are loans secured by multi-unit residential property. These loans are subject to risks associated with the value of the underlying property as well as the successful operation and management of the property. Real estate loans are for consumer residential real estate where the credit quality is subject to risks associated with the borrower’s repayment ability and collateral value, measured generally by analyzing local unemployment and bankruptcy trends, and local housing market trends and interest rates. Risks specific to a borrower are determined by previous repayment history, loan-to-value ratios, and debt-to-income ratios. The commercial real estate segment includes loans secured by commercial real estate occupied by the owner/borrower, and commercial real estate leased to non-owners. Loans in the commercial real estate segment are impacted by economic risks from changing commercial real estate markets, rental markets for commercial buildings, business bankruptcy rates, local unemployment rates and interest rate trends that would impact the businesses housed by the commercial real estate. The Company’s home-equity loan portfolios (closed end and open end) carry risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value at origination, experienced underwriting, and requiring standards for appraisers. Commercial and industrial non-real estate loans are secured by collateral other than real estate or are unsecured. During 2020 and 2021, the bank participated in the Payroll Protection Program (“PPP”) sponsored by the SBA. These loans are unsecured at a fixed interest rate of 1% and 100% guaranteed by the SBA. Credit risk for commercial non-real estate loans is subject to economic conditions, generally monitored by local business bankruptcy trends, interest rates, and borrower repayment ability and collateral value (if secured). Consumer non-real estate includes non-dealer financed automobile loans and other consumer loans. Certain consumer loans are unsecured, while collateral is obtained for automobile loans and other consumer loans. Credit risk stems primarily from the borrower’s ability to repay. If the loan is secured, the Company analyzes loan-to-value ratios. All consumer non-real estate loans are analyzed for debt-to-income ratios and previous credit history, as well as for general risks for the portfolio, including local unemployment rates, personal bankruptcy rates and interest rates. Credit card loan portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Dealer finance lending generally carries certain risks associated with the values of the collateral and borrower’s ability to repay the loan. The Company focuses its dealer finance lending on used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. Interest accrued but not collected for loans that are placed on nonaccrual status or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is considered past due when a payment of principal or interest or both is due but not paid. Management closely monitors past due loans in timeframes of 30-59 days, 60-89 days, and 90 or more days past due. These policies apply to all loan portfolio segments. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Troubled debt restructurings, regardless of type, are considered impaired loans. Loans Held for Sale These loans consist of fixed rate loans made through the Company’s subsidiary, F&M Mortgage, and loans held for sale participations with Northpointe Bank, Grand Rapids, Michigan. F&M Mortgage originates conforming mortgage loans for sale in the secondary market. These loans consist primarily of fixed-rate, single-family residential mortgage loans which meet the underwriting characteristics of the investors. F&M Mortgage enters into mortgage loan commitments whereby the interest rate on the loan is determined prior to funding (rate lock commitments). Loans Held for Sale, continued The period of time between issuance of a loan commitment and sale of the loan generally ranges from two to three weeks. F&M Mortgage protects itself from changes in interest rates through the use of best efforts forward delivery contracts, by committing to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed the interest rate risk on the loan. As a result, the Company is not generally exposed to significant losses nor will it realize significant gains related to its rate lock commitments due to changes in interest rates. The correlation between the rate lock commitments and the best efforts contracts is very high due to their similarity. F&M Mortgage determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the estimated value of the underlying assets while taking into consideration the probability that the loan will be funded. These loans are pre-sold with servicing released and no interest is retained after the loans are sold. The Company uses fair value accounting for its portfolio of loans held for sale (LHFS) originated by F&M Mortgage in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value is based on observable market prices for the identical instruments traded in the secondary mortgage loan markets in which the Company conducts business total $4,887 as of December 31, 2021 of which $4,920 is related to unpaid principal. The Company’s portfolio of LHFS is classified as Level 2. The Bank participates in a Mortgage Purchase Program with Northpointe Bank (Northpointe), a Michigan banking corporation. Pursuant to the terms of a participation agreement, the Bank purchases participation interests in loans made by Northpointe related to fully underwritten and pre-sold mortgage loans originated by various prescreened mortgage loan originators located throughout the United States. A takeout commitment is in place at the time the loans are purchased. The Bank has participated in similar arrangements since 2003 as a higher yielding alternative to federal funds sold or investment securities. These loans are short-term, residential real estate loans that have an average life in our portfolio of approximately two weeks. The Bank holds these loans during the period of time between loan closing and when the loan is paid off by the ultimate secondary market purchaser. As of December 31, 2021, and 2020, there were $0 and $44,372 of these loans included in loans held for sale on the Company’s consolidated balance sheet. Troubled Debt Restructuring In situations where, for economic or legal reasons related to a borrower’s financial condition, management may grant a concession to the borrower that it would not otherwise consider, the related loan is classified as a troubled debt restructuring (“TDR”). Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. The Company has $4,999 and $5,748 in loans classified as TDRs that are current and performing as of December 31, 2021 and December 31, 2020. Allowance for Loan and Losses The allowance for loan losses represents management’s estimate of probable losses inherent in the Company’s loan portfolio. A provision for estimated losses is charged to earnings to establish and maintain the allowance for loan losses at a level reflective of the estimated credit risk. When management determines that a loan balance or portion of a loan balance is not collectible, the loss is charged against the allowance. Subsequent recoveries, if any, are credited to the allowance. Management’s determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management evaluates the allowance each quarter through a methodology that estimates losses on individual impaired loans and evaluates the effect of numerous factors on the credit risk of each segment of loans. Allowance for Loan and Losses, continued The Company’s allowance for loan losses has two basic components: the general allowance and the specific allowance. Each of these components is determined based upon estimates and judgments. The general allowance uses historical loss experience as an indicator of future losses, along with various qualitative factors, including levels and trends in delinquencies, nonaccrual loans, charge-offs and recoveries, trends in volume and terms of loans, effects of changes in underwriting standards, experience of lending staff, economic conditions, and portfolio concentrations. Except for credit cards and dealer finance, all loans are assigned an internal risk rating based on certain credit quality indicators. The period-end balances for each loan segment are multiplied by the adjusted loss factor. Specific allowances are established for individually evaluated impaired loans based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the loan balance. On March 27, 2020, the CARES Act allowed banks to elect to suspend requirements under GAAP for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a TDR. During the pandemic, the bank executed modifications of principal and interest deferrals in connection with COVID-19 relief to our customers. Of those modifications, one loan with a balance of $2,486 was in deferral as of December 31, 2021 and returned to active status on January 18, 2022. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Assets Held for Sale Assets held for sale at December 31, 2021 included one branch building that was closed during 2020. The Company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. Other Real Estate Owned (OREO) OREO is held for sale and represents real estate acquired through or in lieu of foreclosure. OREO is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The Company’s policy is to carry OREO on its balance sheet at the lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Bank Premises and Equipment Land is carried at cost and bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to income over the estimated useful lives of the assets on a combination of the straight-line and accelerated methods. The ranges of the useful lives of the premises and equipment are as follows: Premises and Improvements 10 ‑ 40 years Furniture and Equipment 5 ‑ 20 years Maintenance, repairs, and minor improvements are charged to operations as incurred. Gains and losses on dispositions are reflected in other income or expense. Goodwill and Intangible Assets The Company accounts for goodwill and intangible assets under ASC 805, “Business Combinations” and ASC 350, “Intangibles”, respectively. Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. Additionally, acquired intangible assets are separately recognized if the benefit of the assets can be sold, transferred, licensed, rented, or exchanged, and amortized over their useful lives. The Company recorded goodwill and intangible assets in 2021 related to the Waynesboro branch acquisition; see Note 29. The Company records as goodwill the excess of purchase price over the fair value of the identifiable net assets acquired. Impairment testing is performed annually, as well as when an event triggering impairment may have occurred. The Company performs its annual analysis as of December 31 each fiscal year. Accounting guidance states an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company performed an internal evaluation of goodwill for December 31, 2021. Based on the results of this review, no impairment was deemed necessary. Pension Plans The Bank has a qualified noncontributory defined benefit pension plan which covers all full-time employees hired prior to April 1, 2012. The benefits are primarily based on years of service and earnings. The Company complies with ASC 325-960 “Defined Benefit Pension Plans” which requires recognition of the over-funded or under‑funded status of pension and other postretirement benefit plans on the balance sheet. Under ASC 325-960, gains and losses, prior service costs and credits, and any remaining transition amounts that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost. Advertising Costs The Company follows the policy of charging the cost of advertising to expense as incurred. Total advertising costs included in other operating expenses for 2021 and 2020 were $748 and $604, respectively. Bank Owned Life Insurance The Company has purchased life insurance policies on certain employees. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. 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 – 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 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. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the consolidated financial statements. Fair Value Measurements Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involved uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets of particular items. Changes in assumptions or in market conditions could significantly affect these estimates. Risk and Uncertainties The coronavirus (“COVID-19”) pandemic spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March 2020 with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. Branches reopened on April 12, 2021 for regular business hours and staff returned to their normal office locations. Due to high transmission rates in our area, branches reverted to drive-thru services with lobby hours by appointment from January 18, 2022 to March 7, 2022. COVID-19 continues to effect our operations, although the long-term extent and significance remain unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic may adversely affect our future earnings, cash flows and financial condition, including among others, credit losses resulting from financial stress on borrowers, decreased demand for products and operational failures. In addition, significant assumptions, judgments, and estimates used in the preparation of our financial statements, including those associated with evaluations of goodwill for impairment, and allowance for loan losses, may be subject to adjustments in future periods due to the rapidly changing, uncertain and unprecedented nature of the pandemic. Reclassifications Certain reclassifications have been made in prior years’ financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income or earnings per share. Earnings per Share Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per common share calculation. All of the Company’s outstanding preferred stock was redeemed by the Company for cash or converted to common stock during the fourth quarter of 2021. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: For the year ended December 31, 2021 December 31, 2020 Earnings Available to Common Stockholders: Net Income $ 10,738 $ 8,893 Non-controlling interest income - 105 Preferred stock dividends 196 263 Net Income Available to Common Stockholders $ 10,542 $ 8,525 The following table shows the effect of dilutive preferred stock conversion on the Company’s earnings per share for the periods indicated: For the year ended December 31, 2021 December 31, 2020 Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Basic EPS $ 10,542 3,245,086 $ 3.25 $ 8,525 3,199,883 $ 2.66 Effect of Dilutive Securities: Convertible Preferred Stock 196 197,087 (0.13 ) 263 228,882 (0.10 ) Diluted EPS $ 10,738 3,442,173 $ 3.12 $ 8,788 3,428,765 $ 2.56 Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendment |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2021 | |
CASH AND DUE FROM BANKS | |
NOTE 3. CASH AND DUE FROM BANKS | NOTE 3 CASH AND DUE FROM BANKS: The Bank may be required to maintain average reserve balances based on a percentage of deposits. Due to the deposit reclassification procedures implemented by the Bank, there is no Federal Reserve Bank reserve requirement for the years ended December 31, 2021 and 2020. |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
SECURITIES | |
NOTE 4. SECURITIES | NOTE 4 SECURITIES: The amortized cost and fair value, with unrealized gains and losses, of securities held to maturity were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2021 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 The amortized cost and fair value of securities available for sale are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2021 U. S. Treasuries $ 29,847 $ - $ 365 $ 29,482 U. S. Government sponsored enterprises 134,466 - 752 133,714 Securities issued by States and political subdivisions of the U.S. 34,078 406 147 34,337 Mortgage-backed obligations of federal agencies 185,216 522 2,091 183,647 Corporate debt securities 22,555 372 225 22,702 Total Securities Available for Sale $ 406,162 $ 1,300 $ 3,580 $ 403,882 December 31, 2020 U. S. Government sponsored enterprises $ 6,000 $ 47 $ - $ 6,047 Securities issued by States and political subdivisions of the U.S. 17,177 515 - 17,692 Mortgage-backed obligations of federal agencies 73,422 502 153 73,771 Corporate debt securities 9,282 121 14 9,389 Total Securities Available for Sale $ 105,881 $ 1,185 $ 167 $ 106,899 The amortized cost and fair value of securities at December 31, 2021, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities Held to Maturity Securities Available for Sale Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 125 $ 125 $ 4,011 $ 4,018 Due after one year through five years - - 147,321 146,688 Due after five years through ten years - - 88,489 87,585 Due after ten years - - 166,341 165,591 Total $ 125 $ 125 $ 406,162 $ 403,882 The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the years ended December 31, 2021 and 2020: 2021 2020 Realized gains (losses): Gross realized gains $ - $ - Gross realized losses (525 ) - Net realized (losses) $ (525 ) $ - Proceeds from sales of securities $ 25,917 $ - There were no pledged securities at December 31, 2021 or 2020. As of December 31, 2021, other investments consist of investments in twelve low-income housing and historic equity partnerships (carrying basis of $6,762), stock in the Federal Home Loan Bank (carrying basis of $859), and various other investments (carrying basis of $1,589). The interests in the low-income housing and historic equity partnerships have limited transferability and the interests in the other stocks are restricted as to sales. The market values of these securities are estimated to approximate their carrying values as of December 31, 2021. At December 31, 2021, the Company was committed to invest an additional $961 in four low-income housing limited partnerships. These funds will be paid as requested by the general partner to complete the projects. This additional investment has been reflected in the above carrying basis and in accrued liabilities on the consolidated balance sheet. The primary purpose of the investment portfolio is to generate income and meet liquidity needs of the Company through readily saleable financial instruments. The portfolio includes fixed rate bonds, whose prices move inversely with rates and variable rate bonds. At the end of any accounting period, the investment portfolio has unrealized gains and losses. The Company monitors the portfolio, which is subject to liquidity needs, market rate changes and credit risk changes for other than temporary impairment. The primary concern in a loss situation is the credit quality of the issuer behind the instrument. Bonds deteriorate in value due to credit quality of the individual issuer and changes in market conditions. A summary of unrealized losses and the length of time in a continuous loss position, by security type of December 31, 2021 and 2020 were as follows: Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2021 U. S. Government treasuries $ 29,481 $ 365 $ - $ - $ 29,481 $ 365 U. S. Government sponsored enterprises 93,714 752 - - 93,714 752 Securities issued by State and political subdivisions in the U.S. 13,308 147 - - 13,308 147 Mortgage-backed obligations of federal agencies 126,501 1,871 10,074 220 136,575 2,091 Corporate debt securities 8,825 225 - - 8,825 225 Total $ 271,829 $ 3,360 $ 10,074 $ 220 $ 281,903 $ 3,580 Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2020 Mortgage-backed obligations of federal agencies $ 73,771 $ 153 $ - $ - $ 73,771 $ 153 Corporate debt securities 9,389 14 - - 9,389 14 Total $ 83,160 $ 167 $ - $ - $ 83,160 $ 167 At December 31, 2021 there were $10.0 million or 4 instances of individual available for sale securities that had been in a continuous loss position for more than 12 months and had an aggregate unrealized loss of $220 thousand. At December 31, 2020 there were no securities in a loss position for more than 12 months. The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at December 31, 2021 and 2020 and concluded no impairment existed based on several factors which included: (1) the majority of these securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the cost basis of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis. Additionally, the majority of the Company’s mortgage-backed securities are issued by FNMA, FHLMC, and GNMA and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2021 | |
LOANS | |
NOTE 5. LOANS | NOTE 5 LOANS: During the pandemic, modifications allowing principal and interest deferrals were granted in connection with COVID-19 relief. These modifications and deferrals were not considered troubled debt restructurings pursuant to interagency guidance issued in March 2020 and the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. As of December 31, 2021, one loan with a balance of $2,486 was in deferral; it returned to active status on January 18, 2022. Loans held for investment as of December 31, 2021, and 2020 were as follows: 2021 2020 Construction/Land Development $ 75,236 $ 71,467 Farmland 66,344 53,728 Real Estate 139,552 163,018 Multi-Family 4,887 5,918 Commercial Real Estate 163,564 142,516 Home Equity – closed end 6,262 8,476 Home Equity – open end 44,247 46,613 Commercial & Industrial – Non-Real Estate 44,224 65,470 Consumer 8,036 9,405 Dealer Finance 107,346 91,861 Credit Cards 3,000 2,857 Gross loans 662,698 661,329 Less: Deferred loan fees, net of costs 277 ) - Total $ 662,421 $ 661,329 The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $163,326 and $173,029 as of December 31, 2021 and 2020, respectively. The Company maintains a blanket lien on its entire residential real estate portfolio and certain commercial and home equity loans. Loans held for sale consists of loans originated by F&M Mortgage for sale in the secondary market, and the Bank’s commitment to purchase residential mortgage loan participations from Northpointe Bank. The volume of loans purchased from Northpointe fluctuates due to a number of factors including changes in secondary market rates, which affects demand for mortgage loans; the number of participating banks involved in the program; the number of mortgage loan originators selling loans to the lead bank and the funding capabilities of the lead bank. Loans held for sale as of December 31, 2021 and 2020 were $4,887 and $58,679, respectively. The following is a summary of information pertaining to impaired loans: December 31, 2021 December 31, 2020 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 645 $ 645 $ - $ 1,693 $ 1,693 $ - Farmland 2,286 2,286 - - - - Real Estate 2,748 2,748 - 6,648 6,648 - Multi-Family - - - - - - Commercial Real Estate 8,494 8,494 - 8,592 8,656 - Home Equity – closed end 147 147 - 687 687 - Home Equity – open end - - - 151 151 - Commercial & Industrial – Non-Real Estate - - - 8 8 - Consumer 5 5 - - - - Credit cards - - - - - - Dealer Finance 12 12 - 8 8 - 14,337 14,337 - 17,787 17,851 - Impaired loans with a valuation allowance Construction/Land Development - - - - - - Farmland - - - 1,737 1,737 370 Real Estate 1,172 1,172 119 7,143 7,143 365 Multi-Family - - - - - - Commercial Real Estate 6,004 6,004 603 7,464 7,464 1,833 Home Equity – closed end - - - - - - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - 1 1 1 Credit cards - - - - - - Dealer Finance 95 95 14 147 147 15 7,271 7,271 736 16,492 16,492 2,584 Total impaired loans $ 21,608 $ 21,608 $ 736 $ 34,279 $ 34,343 $ 2,584 The Recorded Investment is defined as the principal balance less principal payments and charge-offs. The following is a summary of the average investment and interest income recognized for impaired loans: December 31, 2021 December 31, 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 984 $ 29 $ 1,598 $ 103 Farmland 1,760 126 - - Real Estate 4,575 155 5,520 356 Multi-Family - - - - Commercial Real Estate 9,225 253 3,296 229 Home Equity – closed end 414 18 522 34 Home Equity – open end - - 38 7 Commercial & Industrial – Non-Real Estate 2 - 55 1 Consumer 1 - - - Credit cards - - - - Dealer Finance 14 1 24 1 16,975 582 11,053 731 Impaired loans with a valuation allowance Construction/Land Development - - 243 - Farmland 420 - 1,797 233 Real Estate 1,399 45 8,956 413 Multi-Family - - - - Commercial Real Estate 6,201 172 4,108 237 Home Equity – closed end - - 177 - Home Equity – open end - - 113 - Commercial & Industrial – Non-Real Estate - - 17 - Consumer - - 2 - Credit cards - - - - Dealer Finance 112 9 146 13 8,132 226 15,559 896 Total impaired loans $ 25,107 $ 808 $ 26,612 $ 1,627 The following table presents the aging of the recorded investment of past due loans as of December 31, 2021 and 2020: 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2021 Construction/Land Development $ 360 $ 41 $ 38 $ 439 $ 74,797 $ 75,236 $ 302 $ - Farmland - - - - 66,344 66,344 1,320 - Real Estate 1,254 89 395 1,738 137,814 139,552 827 - Multi-Family - - - - 4,887 4,887 - - Commercial Real Estate - - 108 108 163,456 163,564 2,975 - Home Equity – closed end 53 - - 53 6,209 6,262 - - Home Equity – open end 471 216 - 687 43,560 44,247 - - Commercial & Industrial – Non- Real Estate 35 1 43 79 44,145 44,224 - 43 Consumer 9 67 - 76 7,960 8,036 1 - Dealer Finance 694 91 16 801 106,545 107,346 40 - Credit Cards 16 - - 16 2,984 3,000 - - Less: Deferred loan fees, net of costs - - - - (277 ) (277 ) - - Total $ 2,892 $ 505 $ 600 $ 3,997 $ 658,424 $ 662,421 $ 5,465 $ 43 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2020 Construction/Land Development $ 2,557 $ - $ - $ 2,557 $ 68,910 $ 71,467 $ 251 $ - Farmland - - - - 53,728 53,728 1,737 - Real Estate 1,724 512 304 2,540 160,478 163,018 368 102 Multi-Family - - - - 5,918 5,918 - - Commercial Real Estate 554 - 920 1,474 141,042 142,516 3,820 - Home Equity – closed end 3 30 - 33 8,443 8,476 - - Home Equity – open end 716 - 212 928 45,685 46,613 212 - Commercial & Industrial – Non- Real Estate 95 44 - 139 65,331 65,470 3 - Consumer 39 - - 39 9,366 9,405 - - Dealer Finance 694 157 - 851 91,010 91,861 44 - Credit Cards 45 - - 45 2,812 2,857 - - Total $ 6,427 $ 743 $ 1,436 $ 8,606 $ 652,723 $ 661,329 $ 6,435 $ 102 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2021 | |
ALLOWANCE FOR LOAN LOSSES | |
NOTE 6. ALLOWANCE FOR LOAN LOSSES | NOTE 6 ALLOWANCE FOR LOAN LOSSES: A summary of changes in the allowance for loan losses for the years ended December 31, 2021 and 2020 is as follows: December 31, 2021 Beginning Balance Charge-offs Recoveries Provision for Loan Losses Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,249 $ - $ 307 $ (579 ) $ 977 $ - $ 977 Farmland 731 - - (283 ) 448 - 448 Real Estate 1,624 - 76 (538 ) 1,162 119 1,043 Multi-Family 54 - - (25 ) 29 - 29 Commercial Real Estate 3,662 - 19 (1,476 ) 2,205 603 1,602 Home Equity – closed end 55 - - (14 ) 41 - 41 Home Equity – open end 463 - 13 (69 ) 407 - 407 Commercial & Industrial – Non- Real Estate 363 40 37 (72 ) 288 - 288 Consumer 521 33 24 8 520 - 520 Dealer Finance 1,674 1,038 754 211 1,601 14 1,587 Credit Cards 79 54 29 16 70 - 70 Total $ 10,475 $ 1,165 $ 1,259 $ (2,821 ) $ 7,748 $ 736 $ 7,012 December 31, 2020 Beginning Balance Charge-offs Recoveries Provision for Loan Losses Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 66 $ 1,249 $ - $ 1,249 Farmland 668 - - 63 731 370 361 Real Estate 1,573 158 7 202 1,624 365 1,259 Multi-Family 20 - - 34 54 - 54 Commercial Real Estate 1,815 64 11 1,900 3,662 1,833 1,829 Home Equity – closed end 42 - - 13 55 - 55 Home Equity – open end 457 34 3 37 463 - 463 Commercial & Industrial – Non-Real Estate 585 138 19 (103 ) 363 - 363 Consumer 186 89 50 374 521 1 520 Dealer Finance 1,786 1,551 784 655 1,674 15 1,659 Credit Cards 68 123 75 59 79 - 79 Total $ 8,390 $ 2,164 $ 949 $ 3,300 $ 10,475 $ 2,584 $ 7,891 The following table presents the recorded investment in loans based on impairment method as of December 31, 2021 and 2020: December 31, 2021 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 75,236 $ 645 $ 74,591 Farmland 66,344 2,286 64,058 Real Estate 139,552 3,920 135,632 Multi-Family 4,887 - 4,887 Commercial Real Estate 163,564 14,498 149,066 Home Equity – closed end 6,262 147 6,115 Home Equity –open end 44,247 - 44,247 Commercial & Industrial – Non-Real Estate 44,224 - 44,224 Consumer 8,036 5 8,031 Dealer Finance 107,346 107 107,239 Credit Cards 3,000 - 3,000 Gross Loans 662,698 21,608 641,090 Less: Deferred loan fees, net of costs (277 ) - (277 ) Total $ 662,421 $ 21,608 $ 640,813 December 31, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 71,467 $ 1,693 $ 69,774 Farmland 53,728 1,737 51,991 Real Estate 163,018 13,791 149,227 Multi-Family 5,918 - 5,918 Commercial Real Estate 142,516 16,056 126,460 Home Equity – closed end 8,476 687 7,789 Home Equity –open end 46,613 151 46,462 Commercial & Industrial – Non-Real Estate 65,470 8 65,462 Consumer 9,405 1 9,404 Dealer Finance 91,861 155 91,706 Credit Cards 2,857 - 2,857 Total $ 661,329 $ 34,279 $ 627,050 During the third quarter of 2021, Management changed the historical net charge off lookback period from two years to three years for all segments given recent asset quality trends and the impact of government programs in response to the COVID-19 pandemic on charge off experience. Management believes the three-year lookback period is more indicative of the risk remaining in the loan portfolio. This change and the effect on provision expense for the twelve months ended December 31, 2021 and the allowance for loan losses at December 31, 2021 was as follows: Calculated Provision Based on Current Methodology Current Provision Based on Prior Methodology Difference Construction/Land Development $ (579 ) $ (1,099 ) $ 520 Farmland (283 ) (283 ) - Real Estate (538 ) (532 ) (6 ) Multi-Family (25 ) (25 ) - Commercial Real Estate (1,476 ) (1,701 ) 225 Home Equity – closed end (14 ) (14 ) - Home Equity – open end (69 ) (105 ) 36 Commercial & Industrial – Non-Real Estate (72 ) (75 ) 3 Consumer 8 (368 ) 376 Dealer Finance 211 52 159 Credit Cards 16 1 15 $ (2,821 ) $ (4,149 ) $ 1,328 The following table shows the Company’s loan portfolio broken down by internal loan grade as of December 31, 2021 and 2020: December 31, 2021 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 6 $ 9,952 $ 43,861 $ 19,457 $ 1,658 $ 302 $ - $ 75,236 Farmland 56 291 6,804 42,615 13,620 1,638 1,320 - 66,344 Real Estate - 1,128 30,268 61,940 28,895 12,462 4,859 - 139,552 Multi-Family - - 1,021 2,586 1,154 126 - - 4,887 Commercial Real Estate - 2,124 36,308 72,414 35,444 4,428 12,846 - 163,564 Home Equity – closed end - 61 1,268 3,103 762 1,068 - - 6,262 Home Equity – open end - 1,293 17,333 21,296 2,477 1,632 216 - 44,247 Commercial & Industrial (Non-Real Estate) - 1,001 7,562 21,527 13,538 533 63 - 44,224 Consumer (excluding dealer) 10 522 2,919 3,526 980 79 - - 8,036 Gross loans $ 66 $ 6,426 $ 113,435 $ 272,868 $ 116,327 $ 23,624 $ 19,606 $ - $ 552,352 Less: Deferred loan fees, net of costs 277 ) Total $ 552,075 Credit Cards Dealer Finance Performing $ 3,000 $ 107,330 Nonperforming - 16 Total $ 3,000 $ 107,346 December 31, 2020 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 142 $ 8,448 $ 40,126 $ 18,226 $ 4,274 $ 251 $ - $ 71,467 Farmland 58 459 11,707 26,899 11,846 1,022 1,737 - 53,728 Real Estate - 2,283 39,223 66,698 32,302 6,977 15,535 - 163,018 Multi-Family - - 1,075 3,509 1,334 - - - 5,918 Commercial Real Estate - 4,114 31,205 47,477 26,677 18,637 14,406 - 142,516 Home Equity – closed end - 124 2,479 3,289 759 1,795 30 - 8,476 Home Equity – open end - 1,705 17,716 22,014 3,171 1,477 530 - 46,613 Commercial & Industrial Non-Real Estate 90 1,524 7,601 17,050 38,290 913 2 - 65,470 Consumer (excluding dealer) - 173 3,461 3,975 1,790 6 - - 9,405 Total $ 148 $ 10,524 $ 122,915 $ 231,037 $ 134,395 $ 35,101 $ 32,491 $ - $ 566,611 Credit Cards Dealer Finance Performing $ 2,857 $ 91,817 Nonperforming - 44 Total $ 2,857 $ 91,861 Description of internal loan grades: Grade 1 – Minimal Risk Grade 2 – Modest Risk Grade 3 – Average Risk Grade 4 – Acceptable Risk Grade 5 – Marginally acceptable s Grade 6 – Watch Grade 7 – Substandard Grade 8 – Doubtful Credit card and dealer finance loans are classified as performing or nonperforming. A loan is nonperforming when payments of principal and interest are past due 90 days or more. |
TROUBLED DEBT RESTRUCTURING
TROUBLED DEBT RESTRUCTURING | 12 Months Ended |
Dec. 31, 2021 | |
TROUBLED DEBT RESTRUCTURING | |
NOTE 7. TROUBLED DEBT RESTRUCTURING | NOTE 7 TROUBLED DEBT RESTRUCTURING: In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which are considered in the qualitative factors within the allowance for loan loss methodology. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on troubled debt restructured loans which are evaluated individually for impairment. Loans modified under the regulatory guidance and CARES Act due to the pandemic were not considered troubled debt restructurings. During the twelve months ended December 31, 2021, the Bank modified 3 loans that were considered to be troubled debt restructurings. These modifications included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. December 31, 2021 Pre-Modification Post-Modification Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Farmland 1 $ 966 $ 966 Real Estate 1 109 109 Consumer 1 5 5 Total 3 $ 1,080 $ 1,080 As of December 31, 2021, there were no loans restructured in the previous twelve months, in default. A restructured loan is considered in default when it becomes 90 days past due. During the twelve months ended December 31, 2020, the Bank modified 6 loans that were considered to be troubled debt restructurings. These modifications included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. December 31, 2020 Pre-Modification Post-Modification Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Real Estate 1 $ 186 $ 186 Consumer 5 37 37 Total 6 $ 222 $ 222 As of December 31, 2020, there were no loans restructured in the previous twelve months, in default. A restructured loan is considered in default when it becomes 90 days past due. |
BANK PREMISES AND EQUIPMENT
BANK PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
BANK PREMISES AND EQUIPMENT | |
NOTE 8. BANK PREMISES AND EQUIPMENT | NOTE 8 BANK PREMISES AND EQUIPMENT: Bank premises and equipment as of December 31 are summarized as follows: 2021 2020 Land $ 4,115 $ 4,369 Buildings and improvements 15,956 16,192 Furniture and equipment 10,052 10,086 30,123 30,647 Less ‑ accumulated depreciation (13,060 ) (12,738 ) Net $ 17,063 $ 17,909 Depreciation of $1,169 in 2021 and $1,232 in 2020 were charged to operations. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2021 | |
OTHER REAL ESTATE OWNED | |
NOTE 9. OTHER REAL ESTATE OWNED | NOTE 9 OTHER REAL ESTATE OWNED: The table below reflects other real estate owned (OREO) activity for 2021 and 2020: 2021 2020 Balance as of January 1 $ - $ 1,489 Loans transferred to OREO - - Sale of OREO - (1,163 ) Write down of OREO and losses on sale - (326 ) Balance as of December 31 $ - $ - Activity in the valuation allowance was as follows: 2021 2020 Balance as of January 1 $ - $ 1,181 Provision charged to expense - 116 Reductions from sales of real estate owned - (1,297 ) Balance as of December 31 $ - $ - (Income) expenses related to foreclosed assets include: 2021 2020 Net loss on sales $ - $ 205 Gain on foreclosure - - Provision for unrealized losses - 116 Operating expenses, net of rental income - 25 (Income) expenses related to foreclosed assets $ - $ 346 There were no real estate owned properties at December 31, 2021 and 2020. At December 31, 2021, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process is $589. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2021 | |
DEPOSITS | |
NOTE 10. DEPOSITS | NOTE 10 DEPOSITS: Time deposits that meet or exceed the FDIC insurance limit of $250 at year end 2021 and 2020 were $12,373 and $12,283. At December 31, 2021, the scheduled maturities of all time deposits are as follows: 2022 $ 43,411 2023 44,720 2024 20,347 2025 9,580 2026 5,799 Thereafter - Total $ 123,857 |
SHORT-TERM DEBT
SHORT-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT | |
NOTE 11. SHORT-TERM DEBT | NOTE 11 SHORT‑TERM DEBT: Short-term debt, all maturing within 12 months, as of December 31, 2021 and 2020 is summarized as follows: Maximum Outstanding at any Month End Outstanding At Year End Average Balance Outstanding Yield 2021 Federal funds purchased $ - $ - $ - - % FHLB short term - - - - % Totals $ - $ - - % 2020 Federal funds purchased $ - $ - $ - - % FHLB short term 10,000 - 1,776 2.31 % Totals $ - $ 1,776 2.31 % The Company utilizes short-term debt such as Federal funds purchased and FHLB short term borrowings to support the loans held for sale participation program and provide liquidity. Federal funds purchased are unsecured overnight borrowings from other financial institutions. FHLB short term debt, which is secured by the loan portfolio, can be a daily rate variable loan that acts as a line of credit or a fixed rate advance, depending on the needs of the Company. With the growth in deposits, excess liquidity, and decrease in loans held for sale participation program, the Company did not utilize the short-term debt facilities after the first quarter of 2020. As of December 31, 2021, the Company had unsecured lines of credit with correspondent banks totaling $50,000 which may be used in the management of short-term liquidity, on which none was outstanding. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT | |
NOTE 12. LONG-TERM DEBT | NOTE 12 LONG-TERM DEBT: The Company utilizes the FHLB advance program to fund loan growth and provide liquidity. The interest rates on long-term debt are fixed at the time of the advance; the weighted average interest rate was 0.81% and 1.47% at December 31, 2021 and December 31, 2020, respectively. The balance of these obligations at December 31, 2021 and 2020 were $10,000 and $21,268 respectively. FHLB advances include a $10,000 letter of credit at FHLB that is pledged to the Commonwealth of Virginia to secure public funds. The maturities of long-term Federal Home Loan Bank long term debt as of December 31, 2021, were as follows: 2022 $ - 2023 - 2024 - 2025 - 2026 - Thereafter 10,000 Total $ 10,000 On July 29, 2020, the Company sold and issued to certain institutional accredited investors $5,000 in aggregate principal amount of 5.75% fixed rated subordinated notes due July 31, 2027 (the “2027 Notes”) and $7,000 in aggregate principal amount of 6.00% fixed to floating rate subordinated notes due July 31, 2030 (the “2030 Notes”). The 2027 Notes bear interest at 5.75% per annum, payable semi-annually in arrears. Beginning on July 31, 2022 through maturity, the 2027 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2027 Notes will mature on July 31, 2027. The 2030 Notes will initially accrue interest at 6.00% per annum, beginning July 29, 2020 to but excluding July 31, 2025, payable semi-annually in arrears. From and including July 31, 2025 through July 30, 2030, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 593 basis points, payable quarterly in arrears. Beginning on July 31, 2025 through maturity, the 2030 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2030 Notes will mature on July 31, 2030. The subordinated notes, net of issuance costs totaled $11,772 and $11,740 at December 31, 2021 and December 31, 2020, respectively. |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX EXPENSE | |
NOTE 13. INCOME TAX EXPENSE | NOTE 13 INCOME TAX EXPENSE: The components of income tax expense were as follows: 2021 2020 Current expense $ 847 $ 1,812 Deferred expense (benefit) 476 (670 ) Total Income Tax Expense $ 1,323 $ 1,142 The components of deferred taxes as of December 31, were as follows: 2021 2020 Deferred Tax Assets: Allowance for loan losses $ 1,627 $ 2,195 Split Dollar Life Insurance 3 3 Nonqualified deferred compensation 757 847 Low-income housing partnerships losses 326 293 Core deposit amortization 29 24 SBA fees 47 198 Lease Liability 172 140 Unfunded pension benefit obligation 875 1,016 VSTitle income 2 - Assets available for sale 32 - Net unrealized loss on securities available for sale 479 - Total Assets $ 4,349 $ 4,716 2021 2020 Deferred Tax Liabilities: Unearned low-income housing credits $ 63 $ 93 Depreciation 567 584 Prepaid pension 114 294 Goodwill tax amortization 576 571 Right of Use Asset 149 156 Net unrealized gain on securities available for sale - 214 Total Liabilities 1,469 1,912 Net Deferred Tax Asset (included in Other Assets on Balance Sheet) $ 2,880 $ 2,804 The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates: 2021 2020 Tax expense at federal statutory rates $ 2,533 $ 2,107 Increases (decreases) in taxes resulting from: Partially tax-exempt income (38 ) (36 ) Tax-exempt income (172 ) (176 ) LIH and historic credits (913 ) (892 ) Other (87 ) 139 Total Income Tax Expense $ 1,323 $ 1,142 The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with accounting guidance related to income taxes. The Company and its subsidiaries file federal income tax returns and state income tax returns. With few exceptions, the Company is no longer subject to federal or state income tax examinations by tax authorities for years before 2018. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFITS | |
NOTE 14. EMPLOYEE BENEFITS | NOTE 14 EMPLOYEE BENEFITS: Defined Benefit Pension Plan The Company has a qualified noncontributory defined benefit pension plan which covers substantially all of its employees hired before April 1, 2012. The benefits are primarily based on years of service and earnings. The Company uses December 31 st The following table provides a reconciliation of the changes in the benefit obligations and fair value of plan assets for 2021 and 2020: 2021 2020 Change in Benefit Obligation Benefit obligation, beginning $ 15,456 $ 13,313 Service cost 862 808 Interest cost 379 419 Actuarial loss - 1,554 Benefits paid (1,140 ) (638 ) Benefit obligation, ending $ 15,557 $ 15,456 Change in Plan Assets Fair value of plan assets, beginning $ 11,201 $ 10,543 Actual return on plan assets 1,174 1,296 Benefits paid 1,140 ) 638 ) Fair value of plan assets, ending $ 11,235 $ 11,201 Funded status at the end of the year $ (4,322 ) $ (4,255 ) The fair value of plan assets is measured based on the fair value hierarchy as discussed in Note 20, “Fair Value Measurements” to the Consolidated Financial Statements. The valuations are based on third party data received as of the balance sheet date. All plan assets are considered Level 1 assets, as quoted prices exist in active markets for identical assets. 2021 2020 Amount recognized in the Consolidated Balance Sheet (Accrued) prepaid benefit cost $ (156 ) $ 583 Unfunded pension benefit obligation under ASC 325-960 (4,166 ) (4,837 ) Deferred taxes 875 1,016 Amount recognized in accumulated other comprehensive income (loss) Net loss $ (4,166 ) $ (4,837 ) Prior service cost - - Amount recognized (4,166 ) (4,837 ) Deferred taxes 875 1,016 Amount recognized in accumulated comprehensive (loss) $ (3,291 ) $ (3,821 ) (Accrued)/Prepaid benefit detail Benefit obligation $ (15,557 ) $ (15,455 ) Fair value of assets 11,235 11,201 Unrecognized net actuarial loss 4,166 4,837 (Accrued) Prepaid benefits $ (156 ) $ 583 Components of net periodic benefit cost Service cost $ 862 $ 808 Interest cost 379 419 Expected return on plan assets (791 ) (734 ) Amortization of prior service cost - (11 ) Recognized net actuarial loss 289 221 Net periodic benefit cost $ 739 $ 703 Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss Net (gain) loss $ (671 ) $ 770 Amortization of prior service cost - 11 Total recognized in other comprehensive (income) loss $ (671 ) $ 781 Total recognized in net periodic benefit cost and other comprehensive income $ 67 $ 1,484 Additional disclosure information Accumulated benefit obligation $ 11,473 $ 11,784 Vested benefit obligation $ 11,473 $ 11,784 Discount rate used for net pension cost 2.50 % 3.25 % Discount rate used for disclosure 2.75 % 2.50 % Expected return on plan assets 7.25 % 7.25 % Rate of compensation increase 3.00 % 3.00 % Average remaining service (years) 11.26 11.40 Funding Policy Due to the current funding status of the plan, the Company did not make a contribution in 2021 or 2020. The net periodic pension cost of the plan for 2022 will be approximately $624. The Company was not subject to settlement accounting in 2021 and does not anticipate being subject to settlement accounting in 2022. Long-Term Rate of Return The Company, as plan sponsor, selects the expected long-term rate of return on assets assumption in consultation with investment advisors and the plan actuary. This rate is intended to reflect the average rate of earnings expected to be earned on the funds invested or to be invested to provide plan benefits. Historical performance is reviewed, especially with respect to real rates of return (net of inflation) for the major asset classes held or anticipated to be held by the trust. Undue weight is not given to recent experience, which may not continue over the measurement period, with higher significance placed on current forecasts of future long-term economic conditions. Because assets are held in a qualified trust, anticipated returns are not reduced for taxes. Further, and solely for this purpose, the plan is assumed to continue in force and not terminate during the period during which the assets are invested. However, consideration is given to the potential impact of current and future investment policy, cash flow into and out of the trust, and expenses (both investment and non-investment) typically paid from plan assets (to the extent such expenses are not explicitly estimated within periodic cost). Asset Allocation The trust fund is sufficiently diversified to maintain a reasonable level of risk without imprudently sacrificing return, with a targeted asset allocation of 39% fixed income and 61% equity. The Investment Manager selects investment fund managers with demonstrated experience and expertise, and funds with demonstrated historical performance, for the implementation of the Plan’s investment strategy. The Investment Manager will consider both actively and passively managed investment strategies and will allocate funds across the asset classes to develop an efficient investment structure. The pension plan’s allocations as of December 31, 2021 and 2020 were 62% equity and 38% fixed and 63% equity and 37% fixed, respectively. Estimated Future Benefit Payments, which reflect expected future service, as appropriate, as of December 31, 2021, are as follows: 2022 $ 938 2023 833 2024 84 2025 853 2023 1,533 2026-2031 5,530 $ 9,771 Employee Stock Ownership Plan (ESOP) The Company sponsors an ESOP which provides stock ownership to substantially all employees of the Company. The Plan provides total vesting upon the attainment of five years of service. Contributions to the plan are made at the discretion of the Board of Directors and are allocated based on the compensation of each employee relative to total compensation paid by the Company. All shares issued and held by the Plan are considered outstanding in the computation of earnings per share. Dividends on Company stock are allocated and paid to participants at least annually. Shares of Company stock, when distributed, have restrictions on transferability. The Company contributed $472 in 2021 and $447 in 2020 to the Plan and charged this expense to operations. The shares held by the ESOP totaled 158,905 and 183,659 at December 31, 2021 and 2020, respectively. 401(k) Plan The Company sponsors a 401(k) savings plan under which eligible employees may choose to save up to 20 percent of their salary on a pretax basis, subject to certain IRS limits. Under the Federal Safe Harbor rules employees are automatically enrolled at 3% (this increases by 1% per year up to 6%) of their salary unless elected otherwise. The Company matches one hundred percent of the first 1% contributed by the employee and fifty percent from 2% to 6% of employee contributions. Vesting in the contributions made by the Company is 100% after two years of service. Contributions under the plan amounted to $444 and $295 in 2021 and 2020, respectively. Deferred Compensation Plan The Company has a nonqualified deferred compensation plan for several of its key employees and directors. The Company may make annual contributions to the plan, and the employee or director has the option to defer a portion of their salary or bonus based on qualifying annual elections. Contributions to the plan totaled $125 in 2021 and $125 in 2020. A liability is accrued for the obligation under the plan and totaled $3,928 and $3,683 at December 31, 2021 and 2020, respectively. Investments in Life Insurance Contracts The Bank currently offers a variety of benefit plans to all full-time employees. While the costs of these plans are generally tax deductible to the Bank, the cost has been escalating greatly in recent years. To help offset escalating benefit costs and to attract and retain qualified employees, the Bank purchased Bank Owned Life Insurance (BOLI) contracts that will provide benefits to employees during their lifetime. Dividends received on these policies are tax-deferred and the death benefits under the policies are tax exempt. Rates of return on a tax-equivalent basis are very favorable when compared to other long-term investments which the Bank might make. The accrued liability related to the BOLI contracts was $669 and $488 for December 31, 2021 and 2020, respectively. Stock Incentive Plan The Company maintains the F & M Bank Corp. 2020 Stock Incentive Plan, which was designed to further the long-term stability and financial success of the Company by attracting and retaining personnel, including employees, directors, and consultants, through the use of stock and stock-based incentives. It was adopted by the Company’s Board, effective upon shareholder approval on May 2, 2020 and will expire on March 18, 2030. The plan provides for the granting of an option, restricted stock, restricted stock unit, stock appreciation right, or stock award to employees, directors, and consultants. It authorizes the issuance of up to 200,000 shares of the Company’s common stock. The Company’s Stock Plan Committee administers the plan, identifies which participants will be granted awards, and determines the terms and conditions applicable to the awards. No shares were awarded during 2020. On March 5, 2021 the Company’s Stock Plan Committee awarded 16,140 shares with a fair value of $431,745 from this plan to selected employees. These shares vest 25% over each of the next four years. The Committee also awarded 1,332 shares with a fair value of $35,631 to directors. These shares vested upon issuance. On August 17, 2021, 200 shares were awarded with a fair value of $5,750 from this plan to select employees that will vest 25% over the next four years. As of December 31, 2021 the total unrecognized compensation cost related to the nonvested restricted stock awards was $338. The following table summarizes the status of the Company’s nonvested awards for the year ended December 31, 2021: Shares Weighted-Average Grant Date Fair Value Per Share Nonvested at December 31, 2020 - $ - Granted 17,672 26.77 Vested (1,332 ) 26.75 Forfeited (471 ) 26.75 Nonvested at December 31, 2021 15,869 26.78 |
CONCENTRATIONS OF CREDIT
CONCENTRATIONS OF CREDIT | 12 Months Ended |
Dec. 31, 2021 | |
CONCENTRATIONS OF CREDIT | |
NOTE 15. CONCENTRATIONS OF CREDIT | NOTE 15 CONCENTRATIONS OF CREDIT: The Company had cash deposits in other commercial banks in excess of FDIC insurance limits totaling $3,880 and $4,714 at December 31, 2021 and 2020, respectively. The Company grants commercial, residential real estate and consumer loans to customers located primarily in the northwestern portion of the State of Virginia. There were no loan concentration areas greater than 25% of capital. Collateral required by the Company is determined on an individual basis depending on the purpose of the loan and the financial condition of the borrower. As of December 31, 2021, approximately 75% of the loan portfolio was secured by real estate. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS | |
NOTE 16. COMMITMENTS | NOTE 16 COMMITMENTS: The Company makes commitments to extend credit in the normal course of business and issues standby letters of credit to meet the financing needs of its customers. The amount of the commitments represents the Company’s exposure to credit loss that is not included in the consolidated balance sheet. As of the December 31, 2021 and 2020, the Company had the following commitments outstanding: 2021 2020 Commitments to extend credit $ 257,229 $ 233,182 Standby letters of credit 2,818 1,689 The Company uses the same credit policies in making commitments to extend credit and issue standby letters of credit as it does for the loans reflected in the consolidated balance sheet. 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. Collateral required, if any, upon extension of credit is based on management’s credit evaluation of the borrower’s ability to pay. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
NOTE 17. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 17 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: Mortgage Banking Derivatives Loans Held for Sale The Company, through the Bank’s mortgage banking subsidiary, F&M Mortgage Company, originates residential mortgage loans for sale in the secondary market. Residential mortgage loans held for sale are sold to the permanent investor with the mortgage servicing rights released. During the second quarter of 2020, the Company elected to begin using fair value accounting for its entire portfolio of loans held for sale (LHFS) in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s LHFS is based on observable market prices for the identical instruments traded in the secondary mortgage loan markets in which the Company conducts business total $4,887 as of December 30, 2021 of which $4,920 is related to unpaid principal. The Company’s portfolio of LHFS is classified as Level 2. Interest Rate Lock Commitments and Forward Sales Commitments The Company, through F&M Mortgage Company, enters into commitments to originate residential mortgage loans in which the interest rate on the loan is determined prior to funding, termed interest rate lock commitments (IRLCs). Such rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. Upon entering into a commitment to originate a loan, the Company protects itself from changes in interest rates during the period prior to sale by requiring a firm purchase agreement from a permanent investor before a loan can be closed (forward sales commitment). The Company locks in the loan and rate with an investor and commits to deliver the loan if settlement occurs on a best efforts basis, thus limiting interest rate risk. Certain additional risks exist if the investor fails to meet its purchase obligation; however, based on historical performance and the size and nature of the investors the Company does not expect them to fail to meet their obligation. The Company determines the fair value of the IRLCs based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate loan commitments will close. The fair value of these derivative instruments is reported in “Other Assets” in the Consolidated Balance Sheet at December 31, 2021, and totaled $258, with a notional amount of $18,801 and total positions of 70. The fair value of the IRLCs at December 31, 2020 totaled $816, with a notional amount of $31,000 and total positions of 134. Changes in fair value are recorded as a component of “Mortgage banking income, net” in the Consolidated Income Statement for the period ended December 31, 2021. The Company’s IRLCs are classified as Level 2. At December 31, 2021 and 2020, each IRLC and all LHFS were subject to a forward sales commitment on a best efforts basis. The Company uses fair value accounting for its forward sales commitments related to IRLCs and LHFS under ASC 825-10-15-4(b). The fair value of forward sales commitments was reported in “Other Assets” in the Consolidated Balance Sheet at December 31, 2021 totaled $112, with a notional amount of $23,721 and total positions of 91. The fair value of forward sales commitments is reported in “Other Liabilities” in the Consolidated Balance Sheet at December 31, 2020, and totaled $60, with a notional amount of $46,000 and total positions of 205. Derivative Financial Instruments The Company has stand-alone derivative financial instruments in the form of forward option contracts. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instruments, is reflected on the Company’s consolidated balance sheet as derivative assets and derivative liabilities. The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to these agreements. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. The Company deals only with primary dealers. Derivative instruments are generally either negotiated Over-the-Counter (OTC) contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity. The Company issues to customer’s certificates of deposit with an interest rate that is derived from the rate of return on the stock of the companies that comprise The Dow Jones Industrial Average. In order to manage the interest rate risk associated with this deposit product, the Company has purchased a series of forward option contracts. These contracts provide the Company with a rate of return commensurate with the return of The Dow Jones Industrial Average from the time of the contract until maturity of the related certificates of deposit. These contracts are accounted for as fair value hedges. Because the certificates of deposit can be redeemed by the customer at any time and the related forward options contracts cannot be cancelled by the Company, the hedge is not considered effective. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized currently in earnings. There was no ineffective portion included in the consolidated income statement for the years ended December 31, 2021 and 2020. At December 31, the information pertaining to the forward option contracts, included in other assets and other liabilities on the balance sheet, is as follows: 2021 2020 Notional amount $ 7 $ 7 Fair value of contracts, included in other assets 3 2 |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2021 | |
TRANSACTIONS WITH RELATED PARTIES | |
NOTE 18. TRANSACTIONS WITH RELATED PARTIES | NOTE 18 TRANSACTIONS WITH RELATED PARTIES: During the year, executive officers and directors (and companies controlled by them) were customers of and had transactions with the Company in the normal course of business. Management believes these transactions were made on substantially the same terms as those prevailing for other customers and did not involve any abnormal risk. Loan transactions with related parties are shown in the following schedule: 2021 2020 Total loans, beginning of year $ 22,685 $ 21,722 New loans 6,506 5,634 Relationship change (98 ) (3 ) Repayments (5,714 ) (4,668 ) Total loans, end of year $ 23,379 $ 22,685 Deposits of executive officers and directors and their affiliates were $8,799 and $6,033 on December 31, 2021 and 2020, respectively. Management believes these deposits were made under the same terms available to other customers of the bank. |
DIVIDEND LIMITATIONS ON SUBSIDI
DIVIDEND LIMITATIONS ON SUBSIDIARY BANK | 12 Months Ended |
Dec. 31, 2021 | |
DIVIDEND LIMITATIONS ON SUBSIDIARY BANK | |
NOTE 19. DIVIDEND LIMITATIONS ON SUBSIDIARY BANK | NOTE 19 DIVIDEND LIMITATIONS ON SUBSIDIARY BANK: The principal source of funds of F & M Bank Corp. is dividends paid by the Farmers & Merchants Bank. The Federal Reserve Act restricts the amount of dividends the Bank may pay. Approval by the Board of Governors of the Federal Reserve System is required if the dividends declared by a state member bank, in any year, exceed the sum of (1) net income of the current year and (2) income net of dividends for the preceding two years. As of January 1, 2022, approximately $14,492 was available for dividend distribution without permission of the Board of Governors. Dividends paid by the Bank to the Company totaled $2,232 in 2021 and $1,500 in 2020. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
NOTE 20. FAIR VALUE MEASUREMENTS | NOTE 20 FAIR VALUE MEASUREMENTS: Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: 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 Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. The carrying value of restricted Federal Reserve Bank and Federal Home Loan Bank stock approximates fair value based upon the redemption provisions of each entity and is therefore excluded from the following table. Loans Held for Sale The Company uses the fair value accounting for its entire portfolio of originated loans held for sale in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s originated loans held for sale through F&M Mortgage is based on observable market prices for similar instruments traded in the secondary mortgage loan markets in which the Company conducts business. The Company’s portfolio of loans held for sale through F&M Mortgage is classified as Level 2. Gains and losses on the sale of loans are recorded within mortgage banking income, net on the Consolidated Statements of Income. Derivative assets – IRLCs The Company recognizes IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best-efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 2. Derivative Asset/Liability – Forward Sale Commitments The Company uses the fair value accounting for its forward sales commitments related to IRLCs and LHFS. Best efforts sales commitments are entered into for loans intended for sale in the secondary market at the time the borrower commitment is made. The best efforts commitments are valued using the committed price to the counter-party against the current market price of the interest rate lock commitment or mortgage loan held for sale. All the Company’s forward sale commitments are classified Level 2. Derivative Asset/Liability – Indexed Certificate of Deposit The Company’s derivatives, which are associated with the Indexed Certificate of Deposit (ICD) product once offered, are recorded at fair value based on third party vendor supplied information using discounted cash flow analysis from observable-market based inputs, which are considered Level 2 inputs. This product is no longer offered, however there are a few certificates of deposits that have not matured. The following tables present the balances of financial assets measured at fair value on a recurring basis as of December 31, 2021, and 2020: December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Loans held for sale, F&M Mortgage $ 4,887 $ - $ 4,887 $ - IRLC 258 - 258 - U. S. Treasury securities 29,482 - 29,482 - U.S. Government sponsored enterprises 133,714 - 133,714 - Securities issued by States and political subdivisions of the US 34,337 - 34,337 - Mortgage-backed obligations of federal agencies 183,647 - 183,647 - Corporate debt securities 22,702 - 22,702 - Forward sales commitments 112 - 112 - Assets at Fair Value $ 409,139 $ - $ 409,139 $ - Liabilities: Derivatives – ICD $ 3 $ - $ 3 $ - Liabilities at Fair Value $ 3 $ - $ 3 $ - December 31, 2020 Total Level 1 Level 2 Level 3 Loans held for sale, F&M Mortgage $ 14,307 $ - $ 14,307 $ - IRLC 816 - 816 - U.S. Government sponsored enterprises 6,047 - 6,047 - Securities issued by States and political subdivisions of the US 17,692 - 17,692 - Mortgage-backed obligations of federal agencies 73,771 - 73,771 - Corporate debt securities 9,389 - 9,389 - Assets at Fair Value $ 122,022 $ - $ 122,022 $ - Liabilities: Derivatives – ICD $ 2 $ - $ 2 $ - Forward Sales Commitments 60 - 60 - Liabilities at Fair Value $ 62 $ - $ 62 $ - 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 write-downs 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 financial statements: Assets Held for Sale Assets held for sale were transferred from bank premises at the lower of cost less accumulated depreciation or fair value at the date of transfer. The Company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the assets held for sale as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the asset held for sale as nonrecurring Level 3. 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 will not be collected according to the contractual terms of the loan agreement. Troubled debt restructurings are impaired loans. Impaired loans are measured at fair value on a nonrecurring basis. If an individually-evaluated impaired loan’s balance exceeds fair value, the amount is allocated to the allowance for loan losses. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income. The fair value of an impaired loan and measurement of associated loss is based on one of three methods: the observable market price of the loan, the present value of projected cash flows, or the fair value of the collateral. The observable market price of a loan is categorized as a Level 1 input. The present value of projected cash flows method results in a Level 3 categorization because the calculation relies on the Company’s judgment to determine projected cash flows, which are then discounted at the current rate of the loan, or the rate prior to modification if the loan is a troubled debt restructure. Loans measured using the fair value of collateral method are categorized in Level 3. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. Most collateral is real estate. The Company bases collateral method fair valuation upon the “as-is” value of independent appraisals or evaluations. The value of real estate collateral is determined by an independent appraisal utilizing an income or market valuation approach. The Company discounts appraised value by estimated selling costs to arrive at net fair value. Appraisals conducted by an independent, licensed appraiser outside of the Company using observable market data is categorized as Level 3. The value of business equipment is based upon an outside appraisal (Level 3) if deemed significant, or the net book value on the applicable business’ financial statements (Level 3) if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). As of December 31, 2021 and 2020, the fair value measurements for impaired loans with specific allocations were primarily based upon the fair value of the collateral. The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis during the period: December 31, 2021 Total Level 1 Level 2 Level 3 Real Estate $ 1,053 $ - $ - $ 1,053 Commercial Real Estate 5,401 - - 5,401 Dealer Finance 81 - - 81 Impaired loans $ 6,535 $ - $ - $ 6,535 Bank premises held for sale $ 300 $ - $ - $ 300 December 31, 2020 Total Level 1 Level 2 Level 3 Farmland $ 1,367 $ - $ - $ 1,367 Real Estate 6,778 - - 6,778 Commercial Real Estate 5,631 - - 5,631 Dealer Finance 132 - - 132 Impaired loans $ 13,908 $ - $ - $ 13,908 Bank premises held for sale $ 520 $ - $ - $ 520 The following table presents information about Level 3 Fair Value Measurements for December 31, 2021 and 2020: Fair Value at December 31, 2021 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 6,535 Discounted appraised value Discount for selling costs and marketability 11.76%-28.00% (Average 17.31%) Fair Value at December 31, 2020 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 13,908 Discounted appraised value Discount for selling costs and marketability 9.25%-62.00% (Average 24.39%) Other Real Estate Owned Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. Valuation of other real estate owned is determined using current appraisals from independent parties, a level three input. If current appraisals cannot be obtained prior to reporting dates, or if declines in value are identified after a recent appraisal is received, appraisal values are discounted, resulting in Level 3 estimates. If the Company markets the property with a realtor, estimated selling costs reduce the fair value, resulting in a valuation based on Level 3 inputs. The Company markets other real estate owned both independently and with local realtors. Properties marketed by realtors are discounted by selling costs. Properties that the Company markets independently are not discounted by selling costs. The Company did not have any OREO at December 31, 2021 and 2020. The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments as of December 31, 2021 and 2020. Fair values for December 31, 2021 and 2020 are estimated under the exit price notion in accordance with the adoption of ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities. The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows: Fair Value Measurements at December 31, 2021 Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2021 Assets: Cash and cash equivalents $ 88,121 $ 88,121 $ - $ - $ 88,121 Securities 404,007 - 404,007 - 404,007 Loans held for sale 4,887 - 4,887 - 4,887 IRLC 258 - 258 - 258 Loans held for investment, net 662,421 - - 652,096 652,096 Interest receivable 3,117 - 3,117 - 3,117 Bank owned life insurance 22,878 - 22,878 - 22,878 Forward sales commitments 112 - 112 - 112 Total $ 1,185,801 $ 88,121 $ 435,259 $ 652,096 $ 1,175,476 Liabilities: Deposits $ 1,080,295 $ - $ 968,604 $ 123,718 $ 1,092,322 Long-term debt 21,772 - - 22,443 22,443 Interest payable 491 - 491 - 491 Total $ 1,102,558 $ - $ 969,095 $ 146,161 $ 1,115,256 Fair Value Measurements at December 31, 2020 Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2020 Assets: Cash and cash equivalents $ 78,408 $ 78,408 $ - $ - $ 78,408 Securities 107,024 - 107,024 - 107,024 Loans held for sale 58,679 - 58,679 - 58,679 IRLC 816 - 816 - 816 Loans held for investment, net 650,854 - - 639,472 639,472 Interest receivable 2,727 - 2,727 - 2,727 Bank owned life insurance 22,647 - 22,647 - 22,647 Total $ 921,155 $ 78,408 $ 191,896 $ 639,472 $ 909,773 Liabilities: Deposits $ 818,582 $ - $ 702,940 $ 131,917 $ 834,857 Forward sales commitments 60 - 60 - 60 Long-term debt 33,202 - - 33,834 33,834 Interest payable 261 - 261 - 261 Total $ 852,105 $ - $ 703,261 $ 165,751 $ 869,012 |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2021 | |
REGULATORY MATTERS | |
NOTE 21. REGULATORY MATTERS | NOTE 21 REGULATORY MATTERS: The Company meets the eligibility criteria of a small bank holding company in accordance with the Federal Reserve’s Small Bank Holding Company Policy Statement issued in February 2015 and is not obligated to report consolidated regulatory capital. 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer requirement is 2.50%. The Company’s capital conservation buffer for 2021 was 7.00% and for 2020 was 6.81%. The net unrealized gain on securities available for sale and the unfunded pension liability are not included in computing regulatory capital. Quantitative measures established by regulation, to ensure capital adequacy, require the Bank to maintain minimum amounts and ratios. These ratios are defined in the regulations and the amounts are set forth in the table below. Management believes, as of December 31, 2021 and 2020, that the Bank meets all capital adequacy requirements to which they are subject. The actual capital ratios for the Bank are presented in the following table: Actual Minimum Capital Requirement Minimum to be Well Capitalized Under Prompt Corrective Action Provisions December 31, 2021 Amount Ratio Amount Ratio Amount Ratio Total risk-based ratio $ 111,389 15.00 % $ 59,425 8.00 % $ 74,282 10.00 % Tier 1 risk-based ratio 103,641 13.95 % 44,569 6.00 % 59,425 8.00 % Common equity tier 1 103,641 13.95 % 33,427 4.50 % 48,283 6.50 % Tier 1 leverage ratio 103,641 8.62 % 48,100 4.00 % 60,125 5.00 % Actual Minimum Capital Requirement Minimum to be Well Capitalized Under Prompt Corrective Action Provisions December 31, 2020 Amount Ratio Amount Ratio Amount Ratio Total risk-based ratio $ 103,838 14.81 % $ 56,104 8.00 % $ 70,131 10.00 % Tier 1 risk-based ratio 95,051 13.55 % 42,078 6.00 % 56,104 8.00 % Common equity tier 1 95,051 13.55 % 31,559 4.50 % 45,585 6.50 % Tier 1 leverage ratio 95,051 9.93 % 38,275 4.00 % 47,844 5.00 % |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2021 | |
BUSINESS SEGMENTS | |
NOTE 22. BUSINESS SEGMENTS | NOTE 22 BUSINESS SEGMENTS: December 31, 2021 F&M Bank F&M Mortgage TEB Life/FMFS VSTitle Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 35,414 $ 198 $ 107 $ - $ 1 $ (144 ) $ 35,576 Service charges on deposits 1,133 - - - - - 1,133 Investment services and insurance income - - 953 - - (9 ) 944 Mortgage banking income, net - 4,646 - - - - 4,646 Title insurance income - - - 2,074 - - 2,074 Other operating income 2,499 134 - - (124 ) - 2,509 Total income 39,046 4,978 1,060 2,074 (123 ) (153 ) 46,882 Expenses: Interest Expense 3,591 123 - - 732 (144 ) 4,302 (Recovery of) Provision for loan losses (2,800 ) - (21 ) - - - (2,821 ) Salaries and benefits 14,392 2,501 369 1,225 - - 18,487 Other operating expenses 13,510 893 51 327 81 (9 ) 14,853 Total expense 28,693 3,517 399 1,552 813 (153 ) 34,821 Income before income taxes 10,353 1,461 661 522 (936 ) - 12,061 Income tax expense (benefit) 1,266 - 134 - (77 ) - 1,323 Net Income attributable to F & M Bank Corp. $ 9,087 $ 1,461 $ 527 $ 522 $ (859 ) $ - $ 10,738 Total Assets $ 1,227,059 $ 10,334 $ 8,803 $ 3,135 $ 112,586 $ (142,575 ) $ 1,219,342 Goodwill $ 2,868 $ 47 $ - $ 3 $ 164 $ - $ 3,082 December 31, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VSTitle Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 36,702 $ 332 $ 146 $ - $ - $ (388 ) $ 36,792 Service charges on deposits 1,191 - - - - - 1,191 Investment services and insurance income 1 - 709 - - (41 ) 669 Mortgage banking income, net - 6,154 - - - - 6,154 Title insurance income - - - 1,978 - - 1,978 Other operating income 2,189 182 - - (153 ) - 2,218 Total income 40,083 6,668 855 1,978 (153 ) (429 ) 49,002 Expenses: Interest Expense 5,483 357 - - 276 (388 ) 5,728 Provision for loan losses 3,300 - - - - - 3,300 Salaries and benefits 12,923 2,236 298 1,027 - - 16,484 Other operating expenses 12,182 920 73 270 51 (41 ) 13,455 Total expense 33,888 3,513 371 1,297 327 (429 ) 38,967 Income before income taxes 6,195 3,155 484 681 (480 ) - 10,035 Income tax expense (benefit) 925 - 98 - 119 - 1,142 Net income $ 5,270 $ 3,155 $ 386 $ 681 $ (599 ) $ - $ 8,893 Net income attributable to noncontrolling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 5,270 $ 3,050 $ 386 $ 681 $ (599 ) $ - $ 8,788 Total Assets $ 972,129 $ 20,157 $ 8,023 $ 2,992 $ 107,726 $ (144,108 ) $ 966,930 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 |
PARENT COMPANY ONLY FINANCIAL S
PARENT COMPANY ONLY FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
PARENT COMPANY ONLY FINANCIAL STATEMENTS | |
NOTE 23. PARENT COMPANY ONLY FINANCIAL STATEMENTS | NOTE 23 PARENT COMPANY ONLY FINANCIAL STATEMENTS: Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Cash and cash equivalents $ 8,824 $ 11,555 Investment in subsidiaries 102,808 95,643 Other investments 135 135 Income tax receivable (including due from subsidiary) 463 156 Goodwill and intangibles 190 237 Receivable from subsidiary bank 149 - Total Assets $ 112,569 $ 107,726 Liabilities Deferred income taxes 47 81 Accrued expenses - - Accrued interest 294 276 Long-term liability 11,772 11,740 Total Liabilities $ 12,113 $ 12,097 Stockholders’ Equity Series A Preferred stock, $25 liquidation preference, 400,000 shares authorized, 0 shares issued and outstanding at December 31, 2021 and 205,327 issued and outstanding at December 31, 2020 $ - $ 4,558 Common stock par value $5 par value, 6,000,000 shares authorized, 200,000 designated, 3,414,306 and 3,203,372 shares issued and outstanding at December 31, 2021 and 2020, respectively 17,071 16,017 Additional paid in capital 10,127 6,866 Retained earnings 78,350 71,205 Accumulated other comprehensive loss (5,092 ) (3,017 ) Total Stockholders’ Equity 100,456 95,629 Total Liabilities and Stockholders’ Equity $ 112,569 $ 107,726 Statements of Income For the years ended December 31, 2021 and 2020 2021 2020 Income Dividends from affiliate $ 2,232 $ 1,500 Other income 1 11 Total Income 2,233 1,511 Expenses Total Expenses 812 328 Net income before income tax expense and undistributed subsidiary net income 1,421 1,183 Income Tax (Benefit) Expense (77 ) 119 Income before undistributed subsidiary net income 1,498 1,064 Undistributed subsidiary net income 9,240 7,724 Net Income F&M Bank Corp. $ 10,738 $ 8,788 2021 2020 Cash Flows from Operating Activities Net income $ 10,738 $ 8,788 Adjustments to reconcile net income to net cash provided by operating activities: Undistributed (distributed) subsidiary income (9,240 ) (7,724 ) Deferred tax (benefit) expense (35 ) 478 (Increase) decrease in other assets (409 ) 1,785 Increase in other liabilities 19 610 Share based compensation expense 86 - Net Cash Provided by Operating Activities 1,159 3,937 Cash Flows from Investing Activities Purchase of minority interest - (856 ) Net Cash Used in Investing Activities - (856 ) Cash Flows from Financing Activities Proceeds from long-term debt - 11,740 Long-term debt fee amortization 32 - Repurchase of preferred stock (627 ) - Repurchase of common stock - (473 ) Proceeds from the sale of common stock 263 - Proceeds from issuance of common stock 35 258 Dividends paid in cash (3,593 ) (3,591 ) Net Cash Provided by (Used in) Financing Activities (3,890 ) 7,934 Net increase (decrease) in Cash and Cash Equivalents (2,731 ) 11,015 Cash and Cash Equivalents, Beginning of Year 11,555 540 Cash and Cash Equivalents, End of Year $ 8,824 $ 11,555 |
INVESTMENT IN FM MORTGAGE, LLC
INVESTMENT IN FM MORTGAGE, LLC | 12 Months Ended |
Dec. 31, 2021 | |
INVESTMENT IN FM MORTGAGE, LLC | |
NOTE 24. INVESTMENT IN F&M MORTGAGE, LLC | NOTE 24 INVESTMENT IN F&M MORTGAGE, LLC On November 3, 2008, the Bank acquired a 70% ownership interest in VBS Mortgage, LLC (DBA F&M Mortgage). On April 30, 2020, the bank acquired the remaining 30% interest to have 100% ownership of F&M Mortgage. F&M Mortgage originates both conventional and government sponsored mortgages for sale in the secondary market. The Company consolidated the assets, liabilities, revenues and expenses of F&M Mortgage in its consolidated financial statements as of December 31, 2021 and 2020. |
INVESTMENT IN VS TITLE, LLC
INVESTMENT IN VS TITLE, LLC | 12 Months Ended |
Dec. 31, 2021 | |
INVESTMENT IN FM MORTGAGE, LLC | |
NOTE 25. INVESTMENT IN VS TITLE, LLC | NOTE 25 INVESTMENT IN VSTITLE, LLC: On January 1, 2017, the Company acquired a 76% ownership interest in VSTitle, LLC (VST). VST provides title insurance services to the customers in our market area, including F&M Mortgage and the Bank. F&M Mortgage is the minority owner in VST and accordingly, the Company consolidated the assets, liabilities, revenues and expenses of VST as of December 31, 2021 and 2020. On January 3, 2022, the Company purchased F&M Mortgage’s minority interest in VST. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
NOTE 26. ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 26 ACCUMULATED OTHER COMPREHENSIVE LOSS: The balances in accumulated other comprehensive loss are shown in the following table: Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Losses Realized in Net Income Accumulated Other Comprehensive Loss Balance at December, 31, 2019 $ (7 ) $ (3,204 ) $ - $ (3,211 ) Change in unrealized securities gains (losses), net of tax 811 - - 811 Change in unfunded pension liability, net of tax - (617 ) - (617 ) Balance at December, 31, 2020 $ 804 $ (3,821 ) $ - $ (3,017 ) Change in unrealized securities gains (losses), net of tax (2,190 ) - - (2,190 ) Change in unfunded pension liability, net of tax - 530 - 530 Losses realized in income, net of tax - - (415 ) (415 ) Balance at December, 31, 2021 $ (1,386 ) $ (3,291 ) $ (415 ) $ (5,092 ) There were no reclassification adjustments reported on the consolidated statements of income during 2020. During 2021 there were security losses of $525, net of tax of $110, that were reclassified out of unrealized gains on available for sale securities and reclassified into net investment security losses on the consolidated statements of income. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE RECOGNITION | |
NOTE 27. REVENUE RECOGNITION | NOTE 27 REVENUE RECOGNITION: Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Investment Services and Insurance Income Investment services and insurance income primarily consists of commissions received on mutual funds and other investment sales. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. Title Insurance Income VSTitle provides title insurance and real estate settlement services. Revenue is recognized at the time the real estate transaction is completed. ATM and Check Card Fees ATM and Check Card Fees are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other Other noninterest income consists of other recurring revenue streams such as safe deposit box rental fees, and other service charges. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Other service charges include revenue from processing wire transfers, online payment fees, cashier’s checks, mobile banking fees and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Gains/Losses on sale of OREO The Company records a gain or loss from the sale of OREO when the control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. The Company recorded no losses on the sales of OREO property in 2021 and $205 in 2020, which is presented on the consolidated income statement as a noninterest expense and therefore not reflected in the table below. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for December 31, 2021 and 2020. Twelve Months Ended December 31, 2021 2020 Noninterest Income In-scope of Topic 606: Service Charges on Deposits $ 1,133 $ 1,191 Investment Services and Insurance Income 944 669 Title Insurance Income 2,074 1,978 ATM and check card fees 2,311 1,900 Other 807 547 Noninterest Income (in-scope of Topic 606) 7,269 6,285 Noninterest Income (out-of-scope of Topic 606) 4,037 5,925 Total $ 11,306 $ 12,210 Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2021 and 2020, the Company did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
NOTE 28. LEASES | NOTE 28 LEASES: The Company adopted ASU No. 2016-02 “Leases (Topic 842)” Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. 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. The following tables present information about the Company’s leases: December 31, 2021 December 31, 2020 Lease Liabilities (included in other liabilities) $ 957 $ 859 Right-of-use assets (included in other assets) $ 937 $ 840 Weighted average remaining lease term 3.37 years 4.12 years Weighted average discount rate 3.01 % 3.48 % 2021 2020 Lease cost Operating lease cost $ 121 $ 112 Total lease cost $ 121 $ 112 Cash paid for amounts included in the measurement of lease liabilities $ 145 $ 130 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows: Lease payments due As of December 31, 2021 Twelve months ending December 31, 2022 $ 185 Twelve months ending December 31, 2023 135 Twelve months ending December 31, 2024 136 Twelve months ending December 31, 2025 98 Twelve months ending December 31, 2026 70 Thereafter 518 Total undiscounted cash flows $ 1,142 Discount (185 ) Lease liabilities $ 957 |
WAYNESBORO BRANCH ACQUISITION
WAYNESBORO BRANCH ACQUISITION | 12 Months Ended |
Dec. 31, 2021 | |
WAYNESBORO BRANCH ACQUISITION | |
NOTE 29. WAYNESBORO BRANCH ACQUISITION | NOTE 29 WAYNESBORO BRANCH ACQUISITION On April 23, 2021, the Bank acquired a branch from Carter Bank & Trust located in Waynesboro, VA. Pursuant to the transaction, the Bank acquired $14,229 in deposits. In connection with its purchase of the branch, the Bank received a cash payment from Carter Bank & Trust. of $13,758, which was net of a premium paid on deposits of $135 thousand. This acquisition provides the Bank with the opportunity to enhance its footprint in Augusta County market. The Company has accounted for the branch purchases under the acquisition method of accounting in accordance with FASB ASC topic 805, “Business Combinations,” whereby the acquired assets and liabilities were recorded by the Bank at their estimated fair values as of their acquisition date. The acquired assets and assumed liabilities of the Waynesboro branch were measured at estimated fair value. Management made significant estimates and exercised significant judgement in accounting for the acquisition of the Waynesboro branch. Deposits were valued based upon interest rates, original and remaining terms and maturities, as well as current rates for similar funds in the same markets. Equipment was acquired based on the remaining book value from Carter Bank & Trust, which approximated fair value. The statement of net assets acquired and the resulting goodwill recorded is presented in the following tables (dollars in thousands). As explained in the notes that accompany the following table, the purchased assets, assumed liabilities and identifiable assets were recorded at the acquisition date fair value. Acquired Balances as Recorded by Carter Bank & Trust Fair Value Adjustments Acquired Balances as Recorded by Farmers & Merchants Bank Cash and due from banks $ 188 $ - $ 188 Premises and equipment, net 11 - 11 Right-of-use asset 50 - 50 Core deposit intangible - 73 73 Total assets $ 249 $ 73 $ 322 Deposits: Noninterest-bearing $ 1,693 $ - $ 1,693 Interest-bearing 12,401 135 12,536 Total deposits 14,094 135 14,229 Lease Liability 50 - 50 Total liabilities $ 14,144 $ 135 $ 14,279 Net assets acquired $ (13,895 ) $ (62 ) $ (13,957 ) The following table summarizes the acquired assets and assumed liabilities in the purchase as of the acquisition date, and the resulting goodwill of $199 thousand resulting from the transaction (in thousands): Assets acquired at fair value: Cash and cash equivalents $ 188 Premises and equipment, net 11 Right-of-use asset 50 Core deposit intangible 73 Total fair value of assets acquired $ 322 Liabilities assumed at fair value: Deposits $ 14,229 Lease liability 50 Total fair value of liabilities assumed $ 14,279 Net assets acquired at fair value $ (13,957 ) Transaction consideration received from Carter Bank & Trust $ (13,758 ) Amount of goodwill resulting from acquisition $ 199 The total amount of goodwill arising from this transaction of $199 thousand is expected to be deductible for tax purposes, pursuant to section 197 of the Internal Revenue Code. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 30. SUBSEQUENT EVENTS | NOTE 30 SUBSEQUENT EVENTS: On January 3, 2022 the Company purchased the minority interest in VST from F&M Mortgage. On February 2, 2022 the F&M Bank purchased property in the City of Winchester for a potential future branch location. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | The consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., F&M Mortgage, and VSTitle, LLC. Significant inter-company accounts and transactions have been eliminated. |
Use of Estimates in the Preparation of Financial Statements | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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, fair value, and pension accounting. |
Cash and Cash Equivalents | Cash and cash equivalents include cash on hand, money market funds whose initial maturity is ninety days or less and Federal funds sold. |
Securities | At the time of purchase, debt securities are classified into the following categories: held to maturity, available for sale or trading. Debt securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity. Held to maturity securities are stated at amortized cost adjusted for amortization of premiums and accretion of discounts on purchase using a method that approximates the effective interest method. Investments classified as trading or available for sale are stated at fair value. Changes in fair value of trading investments are included in current earnings while changes in fair value of available for sale investments are excluded from current earnings and reported, net of taxes, as a separate component of other comprehensive income. Presently, the Company does not maintain a portfolio of trading securities. The fair value of investment securities available for sale is estimated based on quoted prices for similar assets determined by bid quotations received from independent pricing services. Declines in the fair value of securities below their amortized cost that are other than temporary are reflected in earnings or other comprehensive income, as appropriate. For those debt securities whose fair value is less than their amortized cost basis, we consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and if we do not expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. Interest income is recognized when earned. Realized gains and losses for securities classified as available-for-sale are included in earnings and are derived using the specific identification method for determining the cost of securities sold. For held-to-maturity debt securities, the amount of other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment is amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security. For available-for-sale securities, when the Company has decided to sell an impaired available-for-sale security and the Company does not expect the fair value of the security to fully recover before the expected time of sale, the security is deemed other-than-temporarily impaired in the period in which the decision to sell is made. The Company recognizes an impairment loss when the impairment is deemed other than temporary even if a decision to sell has not been made. The Company had no other than temporary impairment in 2021 or 2020. |
Other Investments | The Company periodically invests in low-income housing partnerships whose primary benefit is the distribution of federal income tax credits to partners. The Company recognizes these benefits and the cost of the investments over the life of the partnership. In addition, state and federal historic rehabilitation credits are generated from some of the partnerships. Amortization of these investments is prorated based on the amount of benefits received in each year to the total estimated benefits over the life of the projects. Due to the nature and restrictions placed on the Company’s investment in common stock of the Federal Home Loan Bank of Atlanta (“FHLB”) and the Federal Reserve Bank of Richmond, these securities are considered restricted and carried at cost. |
Income Taxes | Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties, if any, on income taxes as a component of income tax expense. |
Loans Held for Investment | The Company, through its banking subsidiary, provides mortgage, commercial, and consumer loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans, particularly commercial and residential mortgages. The ability of the Company’s debtors to honor their contracts is largely dependent upon the real estate and general economic conditions in the Company’s market area. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off, generally are reported at their outstanding unpaid principal balance adjusted for the allowance for loan losses, and any unearned income. Interest income is accrued on the unpaid principal balance. The accrual of interest on loans is generally discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Loans are typically charged off when the loan is 120 days past due, unless secured and in process of collection. Loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. The Company’s loans are grouped into eleven segments: construction/land development, farmland, real estate, multi-family, commercial real estate, home equity – closed end, home equity – open end, commercial & industrial – non-real estate, consumer, credit cards and dealer finance. Each segment is subject to certain risks that influence the establishment of pricing, loan structures, approval requirements, reserves, and ongoing credit management. The Company does not segregate the portfolio further. Construction and land development loans are subject to general risks from changing commercial building and housing market trends and economic conditions that may impact demand for completed properties and the costs of completion. Completed properties that do not sell or become leased within originally expected timeframes may impact the borrower’s ability to service the debt. These risks are measured by market-area unemployment rates, bankruptcy rates, housing and commercial building market trends, and interest rates. Risks specific to the borrower are also evaluated, including previous repayment history, debt service ability, and current and projected loan-to value ratios for the collateral. Farmland loans are loans secured by agricultural property. These loans are subject to risks associated with the value of the underlying farmland and the cash flows of the borrower’s farming operations. Multifamily loans are loans secured by multi-unit residential property. These loans are subject to risks associated with the value of the underlying property as well as the successful operation and management of the property. Real estate loans are for consumer residential real estate where the credit quality is subject to risks associated with the borrower’s repayment ability and collateral value, measured generally by analyzing local unemployment and bankruptcy trends, and local housing market trends and interest rates. Risks specific to a borrower are determined by previous repayment history, loan-to-value ratios, and debt-to-income ratios. The commercial real estate segment includes loans secured by commercial real estate occupied by the owner/borrower, and commercial real estate leased to non-owners. Loans in the commercial real estate segment are impacted by economic risks from changing commercial real estate markets, rental markets for commercial buildings, business bankruptcy rates, local unemployment rates and interest rate trends that would impact the businesses housed by the commercial real estate. The Company’s home-equity loan portfolios (closed end and open end) carry risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value at origination, experienced underwriting, and requiring standards for appraisers. Commercial and industrial non-real estate loans are secured by collateral other than real estate or are unsecured. During 2020 and 2021, the bank participated in the Payroll Protection Program (“PPP”) sponsored by the SBA. These loans are unsecured at a fixed interest rate of 1% and 100% guaranteed by the SBA. Credit risk for commercial non-real estate loans is subject to economic conditions, generally monitored by local business bankruptcy trends, interest rates, and borrower repayment ability and collateral value (if secured). Consumer non-real estate includes non-dealer financed automobile loans and other consumer loans. Certain consumer loans are unsecured, while collateral is obtained for automobile loans and other consumer loans. Credit risk stems primarily from the borrower’s ability to repay. If the loan is secured, the Company analyzes loan-to-value ratios. All consumer non-real estate loans are analyzed for debt-to-income ratios and previous credit history, as well as for general risks for the portfolio, including local unemployment rates, personal bankruptcy rates and interest rates. Credit card loan portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Dealer finance lending generally carries certain risks associated with the values of the collateral and borrower’s ability to repay the loan. The Company focuses its dealer finance lending on used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. Interest accrued but not collected for loans that are placed on nonaccrual status or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is considered past due when a payment of principal or interest or both is due but not paid. Management closely monitors past due loans in timeframes of 30-59 days, 60-89 days, and 90 or more days past due. These policies apply to all loan portfolio segments. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Troubled debt restructurings, regardless of type, are considered impaired loans. |
Loans Held for Sale | These loans consist of fixed rate loans made through the Company’s subsidiary, F&M Mortgage, and loans held for sale participations with Northpointe Bank, Grand Rapids, Michigan. F&M Mortgage originates conforming mortgage loans for sale in the secondary market. These loans consist primarily of fixed-rate, single-family residential mortgage loans which meet the underwriting characteristics of the investors. F&M Mortgage enters into mortgage loan commitments whereby the interest rate on the loan is determined prior to funding (rate lock commitments). The period of time between issuance of a loan commitment and sale of the loan generally ranges from two to three weeks. F&M Mortgage protects itself from changes in interest rates through the use of best efforts forward delivery contracts, by committing to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed the interest rate risk on the loan. As a result, the Company is not generally exposed to significant losses nor will it realize significant gains related to its rate lock commitments due to changes in interest rates. The correlation between the rate lock commitments and the best efforts contracts is very high due to their similarity. F&M Mortgage determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the estimated value of the underlying assets while taking into consideration the probability that the loan will be funded. These loans are pre-sold with servicing released and no interest is retained after the loans are sold. The Company uses fair value accounting for its portfolio of loans held for sale (LHFS) originated by F&M Mortgage in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value is based on observable market prices for the identical instruments traded in the secondary mortgage loan markets in which the Company conducts business total $4,887 as of December 31, 2021 of which $4,920 is related to unpaid principal. The Company’s portfolio of LHFS is classified as Level 2. The Bank participates in a Mortgage Purchase Program with Northpointe Bank (Northpointe), a Michigan banking corporation. Pursuant to the terms of a participation agreement, the Bank purchases participation interests in loans made by Northpointe related to fully underwritten and pre-sold mortgage loans originated by various prescreened mortgage loan originators located throughout the United States. A takeout commitment is in place at the time the loans are purchased. The Bank has participated in similar arrangements since 2003 as a higher yielding alternative to federal funds sold or investment securities. These loans are short-term, residential real estate loans that have an average life in our portfolio of approximately two weeks. The Bank holds these loans during the period of time between loan closing and when the loan is paid off by the ultimate secondary market purchaser. As of December 31, 2021, and 2020, there were $0 and $44,372 of these loans included in loans held for sale on the Company’s consolidated balance sheet. |
Troubled Debt Restructuring | In situations where, for economic or legal reasons related to a borrower’s financial condition, management may grant a concession to the borrower that it would not otherwise consider, the related loan is classified as a troubled debt restructuring (“TDR”). Management strives to identify borrowers in financial difficulty early and work with them to modify their loan to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. The Company has $4,999 and $5,748 in loans classified as TDRs that are current and performing as of December 31, 2021 and December 31, 2020. |
Allowance for Loan and Losses | The allowance for loan losses represents management’s estimate of probable losses inherent in the Company’s loan portfolio. A provision for estimated losses is charged to earnings to establish and maintain the allowance for loan losses at a level reflective of the estimated credit risk. When management determines that a loan balance or portion of a loan balance is not collectible, the loss is charged against the allowance. Subsequent recoveries, if any, are credited to the allowance. Management’s determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management evaluates the allowance each quarter through a methodology that estimates losses on individual impaired loans and evaluates the effect of numerous factors on the credit risk of each segment of loans. The Company’s allowance for loan losses has two basic components: the general allowance and the specific allowance. Each of these components is determined based upon estimates and judgments. The general allowance uses historical loss experience as an indicator of future losses, along with various qualitative factors, including levels and trends in delinquencies, nonaccrual loans, charge-offs and recoveries, trends in volume and terms of loans, effects of changes in underwriting standards, experience of lending staff, economic conditions, and portfolio concentrations. Except for credit cards and dealer finance, all loans are assigned an internal risk rating based on certain credit quality indicators. The period-end balances for each loan segment are multiplied by the adjusted loss factor. Specific allowances are established for individually evaluated impaired loans based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the loan balance. On March 27, 2020, the CARES Act allowed banks to elect to suspend requirements under GAAP for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a TDR. During the pandemic, the bank executed modifications of principal and interest deferrals in connection with COVID-19 relief to our customers. Of those modifications, one loan with a balance of $2,486 was in deferral as of December 31, 2021 and returned to active status on January 18, 2022. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. |
Assets Held for Sale | Assets held for sale at December 31, 2021 included one branch building that was closed during 2020. The Company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. |
Other Real Estate Owned (OREO) | OREO is held for sale and represents real estate acquired through or in lieu of foreclosure. OREO is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The Company’s policy is to carry OREO on its balance sheet at the lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. |
Bank Premises and Equipment | Land is carried at cost and bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to income over the estimated useful lives of the assets on a combination of the straight-line and accelerated methods. The ranges of the useful lives of the premises and equipment are as follows: Premises and Improvements 10 ‑ 40 years Furniture and Equipment 5 ‑ 20 years Maintenance, repairs, and minor improvements are charged to operations as incurred. Gains and losses on dispositions are reflected in other income or expense. |
Goodwill and Intangible Assets | The Company accounts for goodwill and intangible assets under ASC 805, “Business Combinations” and ASC 350, “Intangibles”, respectively. Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. Additionally, acquired intangible assets are separately recognized if the benefit of the assets can be sold, transferred, licensed, rented, or exchanged, and amortized over their useful lives. The Company recorded goodwill and intangible assets in 2021 related to the Waynesboro branch acquisition; see Note 29. The Company records as goodwill the excess of purchase price over the fair value of the identifiable net assets acquired. Impairment testing is performed annually, as well as when an event triggering impairment may have occurred. The Company performs its annual analysis as of December 31 each fiscal year. Accounting guidance states an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company performed an internal evaluation of goodwill for December 31, 2021. Based on the results of this review, no impairment was deemed necessary. |
Pension Plans | The Bank has a qualified noncontributory defined benefit pension plan which covers all full-time employees hired prior to April 1, 2012. The benefits are primarily based on years of service and earnings. The Company complies with ASC 325-960 “Defined Benefit Pension Plans” which requires recognition of the over-funded or under‑funded status of pension and other postretirement benefit plans on the balance sheet. Under ASC 325-960, gains and losses, prior service costs and credits, and any remaining transition amounts that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost. |
Advertising Costs | The Company follows the policy of charging the cost of advertising to expense as incurred. Total advertising costs included in other operating expenses for 2021 and 2020 were $748 and $604, respectively. |
Bank Owned Life Insurance | The Company has purchased life insurance policies on certain employees. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
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 – 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 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. |
Loss Contingencies | Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the consolidated financial statements. |
Fair Value Measurements | Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involved uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets of particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Risk and Uncertainties | The coronavirus (“COVID-19”) pandemic spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March 2020 with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. Branches reopened on April 12, 2021 for regular business hours and staff returned to their normal office locations. Due to high transmission rates in our area, branches reverted to drive-thru services with lobby hours by appointment from January 18, 2022 to March 7, 2022. COVID-19 continues to effect our operations, although the long-term extent and significance remain unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic may adversely affect our future earnings, cash flows and financial condition, including among others, credit losses resulting from financial stress on borrowers, decreased demand for products and operational failures. In addition, significant assumptions, judgments, and estimates used in the preparation of our financial statements, including those associated with evaluations of goodwill for impairment, and allowance for loan losses, may be subject to adjustments in future periods due to the rapidly changing, uncertain and unprecedented nature of the pandemic. |
Reclassifications | Certain reclassifications have been made in prior years’ financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income or earnings per share. |
Earnings per Share | Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per common share calculation. All of the Company’s outstanding preferred stock was redeemed by the Company for cash or converted to common stock during the fourth quarter of 2021. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: For the year ended December 31, 2021 December 31, 2020 Earnings Available to Common Stockholders: Net Income $ 10,738 $ 8,893 Non-controlling interest income - 105 Preferred stock dividends 196 263 Net Income Available to Common Stockholders $ 10,542 $ 8,525 The following table shows the effect of dilutive preferred stock conversion on the Company’s earnings per share for the periods indicated: For the year ended December 31, 2021 December 31, 2020 Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Basic EPS $ 10,542 3,245,086 $ 3.25 $ 8,525 3,199,883 $ 2.66 Effect of Dilutive Securities: Convertible Preferred Stock 196 197,087 (0.13 ) 263 228,882 (0.10 ) Diluted EPS $ 10,738 3,442,173 $ 3.12 $ 8,788 3,428,765 $ 2.56 |
Recent Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 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), such as the Company, 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 Company is currently assessing the impact that ASU 2016-13 will have on its consolidated financial statements and is implementing a CECL model to begin running parallel in the first quarter 2022. Data has been archived under the current model. Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB ASC 326, “Financial Instruments – Credit Losses.” 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. 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.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the FASB issued ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope.” This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU No. 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU No. 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is preparing to have all loan agreements, other than SWAP loans, transitioned from LIBOR by the end of second quarter 2022. The SWAP loans have amended Rate Protection Agreements executed by the borrower in preparation of transition away from LIBOR by the swap holder. In August 2020, the FASB issued ASU No. 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. In addition, the amendment updates the disclosure requirements for convertible instruments to increase the information transparency. For public business entities, excluding smaller reporting companies, the amendments in the ASU are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity – Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).” The ASU addresses how an issuer should account for modifications or an exchange of freestanding written call options classified as equity that is not within the scope of another Topic. For both public and private companies, the ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Transition is prospective. Early adoption is permitted. The Company does not expect the adoption of ASU 2021-04 to have a material impact on its consolidated financial statements. In August 2021, the FASB issued ASU 2021-06, “‘Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants”. The ASU is effective upon addition to the FASB Codification. The Company does not expect the adoption of ASU 2018-14 to have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The ASU is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022. Entities should apply the amendments prospectively and early adoption is permitted. The Company does not expect the adoption of ASU 2021-08 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in the previous two-step impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard eliminates the prior requirement to calculate a goodwill impairment charge using Step 2, which requires an entity to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount. ASU 2017-04 was effective for the Company on January 1, 2021. The adoption of ASU 2017-04 did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes.” The ASU is expected to reduce cost and complexity related to the accounting for income taxes by removing specific exceptions to general principles in Topic 740 (eliminating the need for an organization to analyze whether certain exceptions apply in a given period) and improving financial statement preparers’ application of certain income tax-related guidance. This ASU is part of the FASB’s simplification initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. ASU 2019-12 was effective for the Company on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2020-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. ASU 2020-01 was effective for the Company on January 1, 2021. The adoption of ASU 2020-01 did not have a material impact on the Company’s consolidated financial statements. In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable fees and Other Costs.” This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. ASU 2020-08 was effective for the Company on January 1, 2021. The adoption of ASU 2020-08 did not have a material impact on the Company’s consolidated financial statements. In December 2020, the Consolidated Appropriates Act of 2021 (“CAA”) was passed. Under Section 541 of the CAA, Congress extended or modified many of the relief programs first created by the CARES Act, including the PPP loan program and treatment of certain loan modifications related to the COVID-19 pandemic. The COVID-19 discussion following the Critical Accounting Policies at the beginning of the Management’s Discussion and Analysis and note 5 provide more details on what the Company is doing to prepare for the impact. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Bank premises and equipment | Premises and Improvements 10 ‑ 40 years Furniture and Equipment 5 ‑ 20 years |
Earnings per share | For the year ended December 31, 2021 December 31, 2020 Earnings Available to Common Stockholders: Net Income $ 10,738 $ 8,893 Non-controlling interest income - 105 Preferred stock dividends 196 263 Net Income Available to Common Stockholders $ 10,542 $ 8,525 |
Schedule of reconciliation of net income | For the year ended December 31, 2021 December 31, 2020 Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Net Income Available to Common Stockholders Weighted Average Shares Per Share Amounts Basic EPS $ 10,542 3,245,086 $ 3.25 $ 8,525 3,199,883 $ 2.66 Effect of Dilutive Securities: Convertible Preferred Stock 196 197,087 (0.13 ) 263 228,882 (0.10 ) Diluted EPS $ 10,738 3,442,173 $ 3.12 $ 8,788 3,428,765 $ 2.56 |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SECURITIES | |
Schedule of securities with unrealized losses | Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2021 U. S. Government treasuries $ 29,481 $ 365 $ - $ - $ 29,481 $ 365 U. S. Government sponsored enterprises 93,714 752 - - 93,714 752 Securities issued by State and political subdivisions in the U.S. 13,308 147 - - 13,308 147 Mortgage-backed obligations of federal agencies 126,501 1,871 10,074 220 136,575 2,091 Corporate debt securities 8,825 225 - - 8,825 225 Total $ 271,829 $ 3,360 $ 10,074 $ 220 $ 281,903 $ 3,580 Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2020 Mortgage-backed obligations of federal agencies $ 73,771 $ 153 $ - $ - $ 73,771 $ 153 Corporate debt securities 9,389 14 - - 9,389 14 Total $ 83,160 $ 167 $ - $ - $ 83,160 $ 167 |
Schedule amortized cost and fair value for securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2021 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2021 U. S. Treasuries $ 29,847 $ - $ 365 $ 29,482 U. S. Government sponsored enterprises 134,466 - 752 133,714 Securities issued by States and political subdivisions of the U.S. 34,078 406 147 34,337 Mortgage-backed obligations of federal agencies 185,216 522 2,091 183,647 Corporate debt securities 22,555 372 225 22,702 Total Securities Available for Sale $ 406,162 $ 1,300 $ 3,580 $ 403,882 December 31, 2020 U. S. Government sponsored enterprises $ 6,000 $ 47 $ - $ 6,047 Securities issued by States and political subdivisions of the U.S. 17,177 515 - 17,692 Mortgage-backed obligations of federal agencies 73,422 502 153 73,771 Corporate debt securities 9,282 121 14 9,389 Total Securities Available for Sale $ 105,881 $ 1,185 $ 167 $ 106,899 Securities Held to Maturity Securities Available for Sale Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 125 $ 125 $ 4,011 $ 4,018 Due after one year through five years - - 147,321 146,688 Due after five years through ten years - - 88,489 87,585 Due after ten years - - 166,341 165,591 Total $ 125 $ 125 $ 406,162 $ 403,882 |
Schedule of gain and losses on sales of debt and equity securities | 2021 2020 Realized gains (losses): Gross realized gains $ - $ - Gross realized losses (525 ) - Net realized (losses) $ (525 ) $ - Proceeds from sales of securities $ 25,917 $ - |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LOANS | |
Schedule of loans held for investment | 2021 2020 Construction/Land Development $ 75,236 $ 71,467 Farmland 66,344 53,728 Real Estate 139,552 163,018 Multi-Family 4,887 5,918 Commercial Real Estate 163,564 142,516 Home Equity – closed end 6,262 8,476 Home Equity – open end 44,247 46,613 Commercial & Industrial – Non-Real Estate 44,224 65,470 Consumer 8,036 9,405 Dealer Finance 107,346 91,861 Credit Cards 3,000 2,857 Gross loans 662,698 661,329 Less: Deferred loan fees, net of costs 277 ) - Total $ 662,421 $ 661,329 |
Schedule impaired loans | December 31, 2021 December 31, 2020 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 645 $ 645 $ - $ 1,693 $ 1,693 $ - Farmland 2,286 2,286 - - - - Real Estate 2,748 2,748 - 6,648 6,648 - Multi-Family - - - - - - Commercial Real Estate 8,494 8,494 - 8,592 8,656 - Home Equity – closed end 147 147 - 687 687 - Home Equity – open end - - - 151 151 - Commercial & Industrial – Non-Real Estate - - - 8 8 - Consumer 5 5 - - - - Credit cards - - - - - - Dealer Finance 12 12 - 8 8 - 14,337 14,337 - 17,787 17,851 - Impaired loans with a valuation allowance Construction/Land Development - - - - - - Farmland - - - 1,737 1,737 370 Real Estate 1,172 1,172 119 7,143 7,143 365 Multi-Family - - - - - - Commercial Real Estate 6,004 6,004 603 7,464 7,464 1,833 Home Equity – closed end - - - - - - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate - - - - - - Consumer - - - 1 1 1 Credit cards - - - - - - Dealer Finance 95 95 14 147 147 15 7,271 7,271 736 16,492 16,492 2,584 Total impaired loans $ 21,608 $ 21,608 $ 736 $ 34,279 $ 34,343 $ 2,584 December 31, 2021 December 31, 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 984 $ 29 $ 1,598 $ 103 Farmland 1,760 126 - - Real Estate 4,575 155 5,520 356 Multi-Family - - - - Commercial Real Estate 9,225 253 3,296 229 Home Equity – closed end 414 18 522 34 Home Equity – open end - - 38 7 Commercial & Industrial – Non-Real Estate 2 - 55 1 Consumer 1 - - - Credit cards - - - - Dealer Finance 14 1 24 1 16,975 582 11,053 731 Impaired loans with a valuation allowance Construction/Land Development - - 243 - Farmland 420 - 1,797 233 Real Estate 1,399 45 8,956 413 Multi-Family - - - - Commercial Real Estate 6,201 172 4,108 237 Home Equity – closed end - - 177 - Home Equity – open end - - 113 - Commercial & Industrial – Non-Real Estate - - 17 - Consumer - - 2 - Credit cards - - - - Dealer Finance 112 9 146 13 8,132 226 15,559 896 Total impaired loans $ 25,107 $ 808 $ 26,612 $ 1,627 |
Schedule of aging of the recorded investment of past due loans | 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2021 Construction/Land Development $ 360 $ 41 $ 38 $ 439 $ 74,797 $ 75,236 $ 302 $ - Farmland - - - - 66,344 66,344 1,320 - Real Estate 1,254 89 395 1,738 137,814 139,552 827 - Multi-Family - - - - 4,887 4,887 - - Commercial Real Estate - - 108 108 163,456 163,564 2,975 - Home Equity – closed end 53 - - 53 6,209 6,262 - - Home Equity – open end 471 216 - 687 43,560 44,247 - - Commercial & Industrial – Non- Real Estate 35 1 43 79 44,145 44,224 - 43 Consumer 9 67 - 76 7,960 8,036 1 - Dealer Finance 694 91 16 801 106,545 107,346 40 - Credit Cards 16 - - 16 2,984 3,000 - - Less: Deferred loan fees, net of costs - - - - (277 ) (277 ) - - Total $ 2,892 $ 505 $ 600 $ 3,997 $ 658,424 $ 662,421 $ 5,465 $ 43 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2020 Construction/Land Development $ 2,557 $ - $ - $ 2,557 $ 68,910 $ 71,467 $ 251 $ - Farmland - - - - 53,728 53,728 1,737 - Real Estate 1,724 512 304 2,540 160,478 163,018 368 102 Multi-Family - - - - 5,918 5,918 - - Commercial Real Estate 554 - 920 1,474 141,042 142,516 3,820 - Home Equity – closed end 3 30 - 33 8,443 8,476 - - Home Equity – open end 716 - 212 928 45,685 46,613 212 - Commercial & Industrial – Non- Real Estate 95 44 - 139 65,331 65,470 3 - Consumer 39 - - 39 9,366 9,405 - - Dealer Finance 694 157 - 851 91,010 91,861 44 - Credit Cards 45 - - 45 2,812 2,857 - - Total $ 6,427 $ 743 $ 1,436 $ 8,606 $ 652,723 $ 661,329 $ 6,435 $ 102 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ALLOWANCE FOR LOAN LOSSES | |
Schdule of allowance for loan losses | December 31, 2021 Beginning Balance Charge-offs Recoveries Provision for Loan Losses Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,249 $ - $ 307 $ (579 ) $ 977 $ - $ 977 Farmland 731 - - (283 ) 448 - 448 Real Estate 1,624 - 76 (538 ) 1,162 119 1,043 Multi-Family 54 - - (25 ) 29 - 29 Commercial Real Estate 3,662 - 19 (1,476 ) 2,205 603 1,602 Home Equity – closed end 55 - - (14 ) 41 - 41 Home Equity – open end 463 - 13 (69 ) 407 - 407 Commercial & Industrial – Non- Real Estate 363 40 37 (72 ) 288 - 288 Consumer 521 33 24 8 520 - 520 Dealer Finance 1,674 1,038 754 211 1,601 14 1,587 Credit Cards 79 54 29 16 70 - 70 Total $ 10,475 $ 1,165 $ 1,259 $ (2,821 ) $ 7,748 $ 736 $ 7,012 December 31, 2020 Beginning Balance Charge-offs Recoveries Provision for Loan Losses Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 66 $ 1,249 $ - $ 1,249 Farmland 668 - - 63 731 370 361 Real Estate 1,573 158 7 202 1,624 365 1,259 Multi-Family 20 - - 34 54 - 54 Commercial Real Estate 1,815 64 11 1,900 3,662 1,833 1,829 Home Equity – closed end 42 - - 13 55 - 55 Home Equity – open end 457 34 3 37 463 - 463 Commercial & Industrial – Non-Real Estate 585 138 19 (103 ) 363 - 363 Consumer 186 89 50 374 521 1 520 Dealer Finance 1,786 1,551 784 655 1,674 15 1,659 Credit Cards 68 123 75 59 79 - 79 Total $ 8,390 $ 2,164 $ 949 $ 3,300 $ 10,475 $ 2,584 $ 7,891 |
Investment in loans based on impairment method | December 31, 2021 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 75,236 $ 645 $ 74,591 Farmland 66,344 2,286 64,058 Real Estate 139,552 3,920 135,632 Multi-Family 4,887 - 4,887 Commercial Real Estate 163,564 14,498 149,066 Home Equity – closed end 6,262 147 6,115 Home Equity –open end 44,247 - 44,247 Commercial & Industrial – Non-Real Estate 44,224 - 44,224 Consumer 8,036 5 8,031 Dealer Finance 107,346 107 107,239 Credit Cards 3,000 - 3,000 Gross Loans 662,698 21,608 641,090 Less: Deferred loan fees, net of costs (277 ) - (277 ) Total $ 662,421 $ 21,608 $ 640,813 December 31, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 71,467 $ 1,693 $ 69,774 Farmland 53,728 1,737 51,991 Real Estate 163,018 13,791 149,227 Multi-Family 5,918 - 5,918 Commercial Real Estate 142,516 16,056 126,460 Home Equity – closed end 8,476 687 7,789 Home Equity –open end 46,613 151 46,462 Commercial & Industrial – Non-Real Estate 65,470 8 65,462 Consumer 9,405 1 9,404 Dealer Finance 91,861 155 91,706 Credit Cards 2,857 - 2,857 Total $ 661,329 $ 34,279 $ 627,050 |
Schedule of loan portfolio by internal loan grade | Calculated Provision Based on Current Methodology Current Provision Based on Prior Methodology Difference Construction/Land Development $ (579 ) $ (1,099 ) $ 520 Farmland (283 ) (283 ) - Real Estate (538 ) (532 ) (6 ) Multi-Family (25 ) (25 ) - Commercial Real Estate (1,476 ) (1,701 ) 225 Home Equity – closed end (14 ) (14 ) - Home Equity – open end (69 ) (105 ) 36 Commercial & Industrial – Non-Real Estate (72 ) (75 ) 3 Consumer 8 (368 ) 376 Dealer Finance 211 52 159 Credit Cards 16 1 15 $ (2,821 ) $ (4,149 ) $ 1,328 December 31, 2021 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 6 $ 9,952 $ 43,861 $ 19,457 $ 1,658 $ 302 $ - $ 75,236 Farmland 56 291 6,804 42,615 13,620 1,638 1,320 - 66,344 Real Estate - 1,128 30,268 61,940 28,895 12,462 4,859 - 139,552 Multi-Family - - 1,021 2,586 1,154 126 - - 4,887 Commercial Real Estate - 2,124 36,308 72,414 35,444 4,428 12,846 - 163,564 Home Equity – closed end - 61 1,268 3,103 762 1,068 - - 6,262 Home Equity – open end - 1,293 17,333 21,296 2,477 1,632 216 - 44,247 Commercial & Industrial (Non-Real Estate) - 1,001 7,562 21,527 13,538 533 63 - 44,224 Consumer (excluding dealer) 10 522 2,919 3,526 980 79 - - 8,036 Gross loans $ 66 $ 6,426 $ 113,435 $ 272,868 $ 116,327 $ 23,624 $ 19,606 $ - $ 552,352 Less: Deferred loan fees, net of costs 277 ) Total $ 552,075 Credit Cards Dealer Finance Performing $ 3,000 $ 107,330 Nonperforming - 16 Total $ 3,000 $ 107,346 December 31, 2020 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 142 $ 8,448 $ 40,126 $ 18,226 $ 4,274 $ 251 $ - $ 71,467 Farmland 58 459 11,707 26,899 11,846 1,022 1,737 - 53,728 Real Estate - 2,283 39,223 66,698 32,302 6,977 15,535 - 163,018 Multi-Family - - 1,075 3,509 1,334 - - - 5,918 Commercial Real Estate - 4,114 31,205 47,477 26,677 18,637 14,406 - 142,516 Home Equity – closed end - 124 2,479 3,289 759 1,795 30 - 8,476 Home Equity – open end - 1,705 17,716 22,014 3,171 1,477 530 - 46,613 Commercial & Industrial Non-Real Estate 90 1,524 7,601 17,050 38,290 913 2 - 65,470 Consumer (excluding dealer) - 173 3,461 3,975 1,790 6 - - 9,405 Total $ 148 $ 10,524 $ 122,915 $ 231,037 $ 134,395 $ 35,101 $ 32,491 $ - $ 566,611 Credit Cards Dealer Finance Performing $ 2,857 $ 91,817 Nonperforming - 44 Total $ 2,857 $ 91,861 |
TROUBLED DEBT RESTRUCTURING (Ta
TROUBLED DEBT RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TROUBLED DEBT RESTRUCTURING | |
Troubled debt restructurings | December 31, 2021 Pre-Modification Post-Modification Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Farmland 1 $ 966 $ 966 Real Estate 1 109 109 Consumer 1 5 5 Total 3 $ 1,080 $ 1,080 December 31, 2020 Pre-Modification Post-Modification Outstanding Outstanding Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Real Estate 1 $ 186 $ 186 Consumer 5 37 37 Total 6 $ 222 $ 222 |
BANK PREMISES AND EQUIPMENT (Ta
BANK PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BANK PREMISES AND EQUIPMENT | |
Bank premises and equipment | 2021 2020 Land $ 4,115 $ 4,369 Buildings and improvements 15,956 16,192 Furniture and equipment 10,052 10,086 30,123 30,647 Less ‑ accumulated depreciation (13,060 ) (12,738 ) Net $ 17,063 $ 17,909 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER REAL ESTATE OWNED | |
Other real estate owned activity | 2021 2020 Balance as of January 1 $ - $ 1,489 Loans transferred to OREO - - Sale of OREO - (1,163 ) Write down of OREO and losses on sale - (326 ) Balance as of December 31 $ - $ - |
Other real estate owned valuation activity | 2021 2020 Balance as of January 1 $ - $ 1,181 Provision charged to expense - 116 Reductions from sales of real estate owned - (1,297 ) Balance as of December 31 $ - $ - |
(Income) expenses related to foreclosed assets | 2021 2020 Net loss on sales $ - $ 205 Gain on foreclosure - - Provision for unrealized losses - 116 Operating expenses, net of rental income - 25 (Income) expenses related to foreclosed assets $ - $ 346 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DEPOSITS | |
Maturity of deposits | 2022 $ 43,411 2023 44,720 2024 20,347 2025 9,580 2026 5,799 Thereafter - Total $ 123,857 |
SHORT-TERM DEBT (Tables)
SHORT-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT | |
Short-term debt | Maximum Outstanding at any Month End Outstanding At Year End Average Balance Outstanding Yield 2021 Federal funds purchased $ - $ - $ - - % FHLB short term - - - - % Totals $ - $ - - % 2020 Federal funds purchased $ - $ - $ - - % FHLB short term 10,000 - 1,776 2.31 % Totals $ - $ 1,776 2.31 % |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT | |
Maturities of long-term debt | 2022 $ - 2023 - 2024 - 2025 - 2026 - Thereafter 10,000 Total $ 10,000 |
INCOME TAX EXPENSE (Tables)
INCOME TAX EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX EXPENSE | |
Components of the income tax expense | 2021 2020 Current expense $ 847 $ 1,812 Deferred expense (benefit) 476 (670 ) Total Income Tax Expense $ 1,323 $ 1,142 |
Components of the deferred taxes | 2021 2020 Deferred Tax Assets: Allowance for loan losses $ 1,627 $ 2,195 Split Dollar Life Insurance 3 3 Nonqualified deferred compensation 757 847 Low-income housing partnerships losses 326 293 Core deposit amortization 29 24 SBA fees 47 198 Lease Liability 172 140 Unfunded pension benefit obligation 875 1,016 VSTitle income 2 - Assets available for sale 32 - Net unrealized loss on securities available for sale 479 - Total Assets $ 4,349 $ 4,716 2021 2020 Deferred Tax Liabilities: Unearned low-income housing credits $ 63 $ 93 Depreciation 567 584 Prepaid pension 114 294 Goodwill tax amortization 576 571 Right of Use Asset 149 156 Net unrealized gain on securities available for sale - 214 Total Liabilities 1,469 1,912 Net Deferred Tax Asset (included in Other Assets on Balance Sheet) $ 2,880 $ 2,804 |
Differences in actual income tax expense and the amounts computed using the federal statutory tax rates | 2021 2020 Tax expense at federal statutory rates $ 2,533 $ 2,107 Increases (decreases) in taxes resulting from: Partially tax-exempt income (38 ) (36 ) Tax-exempt income (172 ) (176 ) LIH and historic credits (913 ) (892 ) Other (87 ) 139 Total Income Tax Expense $ 1,323 $ 1,142 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFITS | |
Reconciliation of the changes in the benefit obligations and fair value of plan assets | 2021 2020 Change in Benefit Obligation Benefit obligation, beginning $ 15,456 $ 13,313 Service cost 862 808 Interest cost 379 419 Actuarial loss - 1,554 Benefits paid (1,140 ) (638 ) Benefit obligation, ending $ 15,557 $ 15,456 Change in Plan Assets Fair value of plan assets, beginning $ 11,201 $ 10,543 Actual return on plan assets 1,174 1,296 Benefits paid 1,140 ) 638 ) Fair value of plan assets, ending $ 11,235 $ 11,201 Funded status at the end of the year $ (4,322 ) $ (4,255 ) |
Pension plan's asset allocation | 2021 2020 Amount recognized in the Consolidated Balance Sheet (Accrued) prepaid benefit cost $ (156 ) $ 583 Unfunded pension benefit obligation under ASC 325-960 (4,166 ) (4,837 ) Deferred taxes 875 1,016 Amount recognized in accumulated other comprehensive income (loss) Net loss $ (4,166 ) $ (4,837 ) Prior service cost - - Amount recognized (4,166 ) (4,837 ) Deferred taxes 875 1,016 Amount recognized in accumulated comprehensive (loss) $ (3,291 ) $ (3,821 ) (Accrued)/Prepaid benefit detail Benefit obligation $ (15,557 ) $ (15,455 ) Fair value of assets 11,235 11,201 Unrecognized net actuarial loss 4,166 4,837 (Accrued) Prepaid benefits $ (156 ) $ 583 Components of net periodic benefit cost Service cost $ 862 $ 808 Interest cost 379 419 Expected return on plan assets (791 ) (734 ) Amortization of prior service cost - (11 ) Recognized net actuarial loss 289 221 Net periodic benefit cost $ 739 $ 703 Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss Net (gain) loss $ (671 ) $ 770 Amortization of prior service cost - 11 Total recognized in other comprehensive (income) loss $ (671 ) $ 781 Total recognized in net periodic benefit cost and other comprehensive income $ 67 $ 1,484 Additional disclosure information Accumulated benefit obligation $ 11,473 $ 11,784 Vested benefit obligation $ 11,473 $ 11,784 Discount rate used for net pension cost 2.50 % 3.25 % Discount rate used for disclosure 2.75 % 2.50 % Expected return on plan assets 7.25 % 7.25 % Rate of compensation increase 3.00 % 3.00 % Average remaining service (years) 11.26 11.40 |
Estimated future benefit payments | 2022 $ 938 2023 833 2024 84 2025 853 2023 1,533 2026-2031 5,530 $ 9,771 |
Schedule of nonvested awards | Shares Weighted-Average Grant Date Fair Value Per Share Nonvested at December 31, 2020 - $ - Granted 17,672 26.77 Vested (1,332 ) 26.75 Forfeited (471 ) 26.75 Nonvested at December 31, 2021 15,869 26.78 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS | |
Commitments outstanding | 2021 2020 Commitments to extend credit $ 257,229 $ 233,182 Standby letters of credit 2,818 1,689 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | |
Forward option contracts | 2021 2020 Notional amount $ 7 $ 7 Fair value of contracts, included in other assets 3 2 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TRANSACTIONS WITH RELATED PARTIES | |
Loan transactions with related parties | 2021 2020 Total loans, beginning of year $ 22,685 $ 21,722 New loans 6,506 5,634 Relationship change (98 ) (3 ) Repayments (5,714 ) (4,668 ) Total loans, end of year $ 23,379 $ 22,685 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Fair value on a recurring basis | December 31, 2021 Total Level 1 Level 2 Level 3 Assets: Loans held for sale, F&M Mortgage $ 4,887 $ - $ 4,887 $ - IRLC 258 - 258 - U. S. Treasury securities 29,482 - 29,482 - U.S. Government sponsored enterprises 133,714 - 133,714 - Securities issued by States and political subdivisions of the US 34,337 - 34,337 - Mortgage-backed obligations of federal agencies 183,647 - 183,647 - Corporate debt securities 22,702 - 22,702 - Forward sales commitments 112 - 112 - Assets at Fair Value $ 409,139 $ - $ 409,139 $ - Liabilities: Derivatives – ICD $ 3 $ - $ 3 $ - Liabilities at Fair Value $ 3 $ - $ 3 $ - December 31, 2020 Total Level 1 Level 2 Level 3 Loans held for sale, F&M Mortgage $ 14,307 $ - $ 14,307 $ - IRLC 816 - 816 - U.S. Government sponsored enterprises 6,047 - 6,047 - Securities issued by States and political subdivisions of the US 17,692 - 17,692 - Mortgage-backed obligations of federal agencies 73,771 - 73,771 - Corporate debt securities 9,389 - 9,389 - Assets at Fair Value $ 122,022 $ - $ 122,022 $ - Liabilities: Derivatives – ICD $ 2 $ - $ 2 $ - Forward Sales Commitments 60 - 60 - Liabilities at Fair Value $ 62 $ - $ 62 $ - |
Financial assets measured at fair value on nonrecurring basis | December 31, 2021 Total Level 1 Level 2 Level 3 Real Estate $ 1,053 $ - $ - $ 1,053 Commercial Real Estate 5,401 - - 5,401 Dealer Finance 81 - - 81 Impaired loans $ 6,535 $ - $ - $ 6,535 Bank premises held for sale $ 300 $ - $ - $ 300 December 31, 2020 Total Level 1 Level 2 Level 3 Farmland $ 1,367 $ - $ - $ 1,367 Real Estate 6,778 - - 6,778 Commercial Real Estate 5,631 - - 5,631 Dealer Finance 132 - - 132 Impaired loans $ 13,908 $ - $ - $ 13,908 Bank premises held for sale $ 520 $ - $ - $ 520 |
Fair value measurements | Fair Value at December 31, 2021 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 6,535 Discounted appraised value Discount for selling costs and marketability 11.76%-28.00% (Average 17.31%) Fair Value at December 31, 2020 Valuation Technique Significant Unobservable Inputs Range Impaired Loans $ 13,908 Discounted appraised value Discount for selling costs and marketability 9.25%-62.00% (Average 24.39%) |
Carrying value and estimated fair value for financial instruments | Fair Value Measurements at December 31, 2021 Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2021 Assets: Cash and cash equivalents $ 88,121 $ 88,121 $ - $ - $ 88,121 Securities 404,007 - 404,007 - 404,007 Loans held for sale 4,887 - 4,887 - 4,887 IRLC 258 - 258 - 258 Loans held for investment, net 662,421 - - 652,096 652,096 Interest receivable 3,117 - 3,117 - 3,117 Bank owned life insurance 22,878 - 22,878 - 22,878 Forward sales commitments 112 - 112 - 112 Total $ 1,185,801 $ 88,121 $ 435,259 $ 652,096 $ 1,175,476 Liabilities: Deposits $ 1,080,295 $ - $ 968,604 $ 123,718 $ 1,092,322 Long-term debt 21,772 - - 22,443 22,443 Interest payable 491 - 491 - 491 Total $ 1,102,558 $ - $ 969,095 $ 146,161 $ 1,115,256 Fair Value Measurements at December 31, 2020 Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2020 Assets: Cash and cash equivalents $ 78,408 $ 78,408 $ - $ - $ 78,408 Securities 107,024 - 107,024 - 107,024 Loans held for sale 58,679 - 58,679 - 58,679 IRLC 816 - 816 - 816 Loans held for investment, net 650,854 - - 639,472 639,472 Interest receivable 2,727 - 2,727 - 2,727 Bank owned life insurance 22,647 - 22,647 - 22,647 Total $ 921,155 $ 78,408 $ 191,896 $ 639,472 $ 909,773 Liabilities: Deposits $ 818,582 $ - $ 702,940 $ 131,917 $ 834,857 Forward sales commitments 60 - 60 - 60 Long-term debt 33,202 - - 33,834 33,834 Interest payable 261 - 261 - 261 Total $ 852,105 $ - $ 703,261 $ 165,751 $ 869,012 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PARENT COMPANY ONLY FINANCIAL STATEMENTS | |
Actual capital ratios for the bank | Actual Minimum Capital Requirement Minimum to be Well Capitalized Under Prompt Corrective Action Provisions December 31, 2021 Amount Ratio Amount Ratio Amount Ratio Total risk-based ratio $ 111,389 15.00 % $ 59,425 8.00 % $ 74,282 10.00 % Tier 1 risk-based ratio 103,641 13.95 % 44,569 6.00 % 59,425 8.00 % Common equity tier 1 103,641 13.95 % 33,427 4.50 % 48,283 6.50 % Tier 1 leverage ratio 103,641 8.62 % 48,100 4.00 % 60,125 5.00 % Actual Minimum Capital Requirement Minimum to be Well Capitalized Under Prompt Corrective Action Provisions December 31, 2020 Amount Ratio Amount Ratio Amount Ratio Total risk-based ratio $ 103,838 14.81 % $ 56,104 8.00 % $ 70,131 10.00 % Tier 1 risk-based ratio 95,051 13.55 % 42,078 6.00 % 56,104 8.00 % Common equity tier 1 95,051 13.55 % 31,559 4.50 % 45,585 6.50 % Tier 1 leverage ratio 95,051 9.93 % 38,275 4.00 % 47,844 5.00 % |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BUSINESS SEGMENTS | |
Schedule of business segments | December 31, 2021 F&M Bank F&M Mortgage TEB Life/FMFS VSTitle Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 35,414 $ 198 $ 107 $ - $ 1 $ (144 ) $ 35,576 Service charges on deposits 1,133 - - - - - 1,133 Investment services and insurance income - - 953 - - (9 ) 944 Mortgage banking income, net - 4,646 - - - - 4,646 Title insurance income - - - 2,074 - - 2,074 Other operating income 2,499 134 - - (124 ) - 2,509 Total income 39,046 4,978 1,060 2,074 (123 ) (153 ) 46,882 Expenses: Interest Expense 3,591 123 - - 732 (144 ) 4,302 (Recovery of) Provision for loan losses (2,800 ) - (21 ) - - - (2,821 ) Salaries and benefits 14,392 2,501 369 1,225 - - 18,487 Other operating expenses 13,510 893 51 327 81 (9 ) 14,853 Total expense 28,693 3,517 399 1,552 813 (153 ) 34,821 Income before income taxes 10,353 1,461 661 522 (936 ) - 12,061 Income tax expense (benefit) 1,266 - 134 - (77 ) - 1,323 Net Income attributable to F & M Bank Corp. $ 9,087 $ 1,461 $ 527 $ 522 $ (859 ) $ - $ 10,738 Total Assets $ 1,227,059 $ 10,334 $ 8,803 $ 3,135 $ 112,586 $ (142,575 ) $ 1,219,342 Goodwill $ 2,868 $ 47 $ - $ 3 $ 164 $ - $ 3,082 December 31, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VSTitle Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 36,702 $ 332 $ 146 $ - $ - $ (388 ) $ 36,792 Service charges on deposits 1,191 - - - - - 1,191 Investment services and insurance income 1 - 709 - - (41 ) 669 Mortgage banking income, net - 6,154 - - - - 6,154 Title insurance income - - - 1,978 - - 1,978 Other operating income 2,189 182 - - (153 ) - 2,218 Total income 40,083 6,668 855 1,978 (153 ) (429 ) 49,002 Expenses: Interest Expense 5,483 357 - - 276 (388 ) 5,728 Provision for loan losses 3,300 - - - - - 3,300 Salaries and benefits 12,923 2,236 298 1,027 - - 16,484 Other operating expenses 12,182 920 73 270 51 (41 ) 13,455 Total expense 33,888 3,513 371 1,297 327 (429 ) 38,967 Income before income taxes 6,195 3,155 484 681 (480 ) - 10,035 Income tax expense (benefit) 925 - 98 - 119 - 1,142 Net income $ 5,270 $ 3,155 $ 386 $ 681 $ (599 ) $ - $ 8,893 Net income attributable to noncontrolling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 5,270 $ 3,050 $ 386 $ 681 $ (599 ) $ - $ 8,788 Total Assets $ 972,129 $ 20,157 $ 8,023 $ 2,992 $ 107,726 $ (144,108 ) $ 966,930 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 |
PARENT CORPORATION ONLY FINANCI
PARENT CORPORATION ONLY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PARENT CORPORATION ONLY FINANCIAL STATEMENTS (Tables) | |
Schedule of Balance Sheets | 2021 2020 Assets Cash and cash equivalents $ 8,824 $ 11,555 Investment in subsidiaries 102,808 95,643 Other investments 135 135 Income tax receivable (including due from subsidiary) 463 156 Goodwill and intangibles 190 237 Receivable from subsidiary bank 149 - Total Assets $ 112,569 $ 107,726 Liabilities Deferred income taxes 47 81 Accrued expenses - - Accrued interest 294 276 Long-term liability 11,772 11,740 Total Liabilities $ 12,113 $ 12,097 Stockholders’ Equity Series A Preferred stock, $25 liquidation preference, 400,000 shares authorized, 0 shares issued and outstanding at December 31, 2021 and 205,327 issued and outstanding at December 31, 2020 $ - $ 4,558 Common stock par value $5 par value, 6,000,000 shares authorized, 200,000 designated, 3,414,306 and 3,203,372 shares issued and outstanding at December 31, 2021 and 2020, respectively 17,071 16,017 Additional paid in capital 10,127 6,866 Retained earnings 78,350 71,205 Accumulated other comprehensive loss (5,092 ) (3,017 ) Total Stockholders’ Equity 100,456 95,629 Total Liabilities and Stockholders’ Equity $ 112,569 $ 107,726 |
Schedule of Statements of Income | 2021 2020 Income Dividends from affiliate $ 2,232 $ 1,500 Other income 1 11 Total Income 2,233 1,511 Expenses Total Expenses 812 328 Net income before income tax expense and undistributed subsidiary net income 1,421 1,183 Income Tax (Benefit) Expense (77 ) 119 Income before undistributed subsidiary net income 1,498 1,064 Undistributed subsidiary net income 9,240 7,724 Net Income F&M Bank Corp. $ 10,738 $ 8,788 |
Statements of Cash Flows | 2021 2020 Cash Flows from Operating Activities Net income $ 10,738 $ 8,788 Adjustments to reconcile net income to net cash provided by operating activities: Undistributed (distributed) subsidiary income (9,240 ) (7,724 ) Deferred tax (benefit) expense (35 ) 478 (Increase) decrease in other assets (409 ) 1,785 Increase in other liabilities 19 610 Share based compensation expense 86 - Net Cash Provided by Operating Activities 1,159 3,937 Cash Flows from Investing Activities Purchase of minority interest - (856 ) Net Cash Used in Investing Activities - (856 ) Cash Flows from Financing Activities Proceeds from long-term debt - 11,740 Long-term debt fee amortization 32 - Repurchase of preferred stock (627 ) - Repurchase of common stock - (473 ) Proceeds from the sale of common stock 263 - Proceeds from issuance of common stock 35 258 Dividends paid in cash (3,593 ) (3,591 ) Net Cash Provided by (Used in) Financing Activities (3,890 ) 7,934 Net increase (decrease) in Cash and Cash Equivalents (2,731 ) 11,015 Cash and Cash Equivalents, Beginning of Year 11,555 540 Cash and Cash Equivalents, End of Year $ 8,824 $ 11,555 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Accumulated other comprehensive loss | Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Losses Realized in Net Income Accumulated Other Comprehensive Loss Balance at December, 31, 2019 $ (7 ) $ (3,204 ) $ - $ (3,211 ) Change in unrealized securities gains (losses), net of tax 811 - - 811 Change in unfunded pension liability, net of tax - (617 ) - (617 ) Balance at December, 31, 2020 $ 804 $ (3,821 ) $ - $ (3,017 ) Change in unrealized securities gains (losses), net of tax (2,190 ) - - (2,190 ) Change in unfunded pension liability, net of tax - 530 - 530 Losses realized in income, net of tax - - (415 ) (415 ) Balance at December, 31, 2021 $ (1,386 ) $ (3,291 ) $ (415 ) $ (5,092 ) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE RECOGNITION | |
Summary of noninterest income, segregated by revenue streams | Twelve Months Ended December 31, 2021 2020 Noninterest Income In-scope of Topic 606: Service Charges on Deposits $ 1,133 $ 1,191 Investment Services and Insurance Income 944 669 Title Insurance Income 2,074 1,978 ATM and check card fees 2,311 1,900 Other 807 547 Noninterest Income (in-scope of Topic 606) 7,269 6,285 Noninterest Income (out-of-scope of Topic 606) 4,037 5,925 Total $ 11,306 $ 12,210 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Summary of Lease | December 31, 2021 December 31, 2020 Lease Liabilities (included in other liabilities) $ 957 $ 859 Right-of-use assets (included in other assets) $ 937 $ 840 Weighted average remaining lease term 3.37 years 4.12 years Weighted average discount rate 3.01 % 3.48 % 2021 2020 Lease cost Operating lease cost $ 121 $ 112 Total lease cost $ 121 $ 112 Cash paid for amounts included in the measurement of lease liabilities $ 145 $ 130 |
Maturity of lease liability | Lease payments due As of December 31, 2021 Twelve months ending December 31, 2022 $ 185 Twelve months ending December 31, 2023 135 Twelve months ending December 31, 2024 136 Twelve months ending December 31, 2025 98 Twelve months ending December 31, 2026 70 Thereafter 518 Total undiscounted cash flows $ 1,142 Discount (185 ) Lease liabilities $ 957 |
Waynesboro Branch Acquisition (
Waynesboro Branch Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Waynesboro Branch Acquisition (Tables) | |
Schedule of acquisition date | Acquired Balances as Recorded by Carter Bank & Trust Fair Value Adjustments Acquired Balances as Recorded by Farmers & Merchants Bank Cash and due from banks $ 188 $ - $ 188 Premises and equipment, net 11 - 11 Right-of-use asset 50 - 50 Core deposit intangible - 73 73 Total assets $ 249 $ 73 $ 322 Deposits: Noninterest-bearing $ 1,693 $ - $ 1,693 Interest-bearing 12,401 135 12,536 Total deposits 14,094 135 14,229 Lease Liability 50 - 50 Total liabilities $ 14,144 $ 135 $ 14,279 Net assets acquired $ (13,895 ) $ (62 ) $ (13,957 ) |
Schedule of statement of net assets acquired | Assets acquired at fair value: Cash and cash equivalents $ 188 Premises and equipment, net 11 Right-of-use asset 50 Core deposit intangible 73 Total fair value of assets acquired $ 322 Liabilities assumed at fair value: Deposits $ 14,229 Lease liability 50 Total fair value of liabilities assumed $ 14,279 Net assets acquired at fair value $ (13,957 ) Transaction consideration received from Carter Bank & Trust $ (13,758 ) Amount of goodwill resulting from acquisition $ 199 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum [Member] | Premises And Improvements [Member] | |
Estimated useful lives of the assets | 10 years |
Minimum [Member] | Furniture And Equipment [Member] | |
Estimated useful lives of the assets | 5 years |
Maximum [Member] | Premises And Improvements [Member] | |
Estimated useful lives of the assets | 40 years |
Maximum [Member] | Furniture And Equipment [Member] | |
Estimated useful lives of the assets | 20 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Net income | $ 10,738 | $ 8,893 |
Non-controlling interest income | 0 | 105 |
Preferred stock dividends | 196 | 263 |
Net Income Available to Common Stockholders | $ 10,542 | $ 8,525 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basic EPS, income | $ 10,542 | $ 8,525 |
Effect of dilutive securities convertible preferred stock, income | 196 | 263 |
Diluted EPS, income | $ 10,738 | $ 8,788 |
Basic EPS, shares | 3,245,086 | 3,199,883 |
Effect of dilutive securities convertible preferred stock, shares | 197,087 | 228,882 |
Diluted EPS, share | 3,442,173 | 3,428,765 |
Basic EPS, per shares | $ 3.25 | $ 2.66 |
Effect of dilutive securities convertible preferred stock, per shares | (0.13) | (0.10) |
Diluted EPS, per shares | $ 3.12 | $ 2.56 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Marketing expense | $ 748,000 | $ 604,000 |
Incometax description | The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes | |
Loans held for sale, participations | $ 0 | 44,372,000 |
Loans held for sale, at fair value | 4,887,000 | $ 14,307,000 |
CARES Act [Member] | ||
Deferral loan, amount | $ 2,486,000 | |
Payroll Protection Program [Member] | ||
Fixed Interest rate | 1.00% | 1.00% |
Guaranteed of loan by SBA | 100.00% | 100.00% |
Loans held for sale, at fair value | $ 4,887,000 | |
Loans classified as TDRs | 4,999,000 | $ 5,748,000 |
Outstanding loan amount | $ 4,920,000 |
SECURITIES (Details)
SECURITIES (Details) - Treasury and agency obligations - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | $ 125 | $ 125 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Fair value | $ 125 | $ 125 |
SECURITIES (Details 1)
SECURITIES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair value | $ 403,882 | $ 106,899 |
Amortized Cost | 406,162 | 105,881 |
Gross Unrealized gains | 1,300 | 1,185 |
Gross Unrealized losses | 3,580 | 167 |
U S Treasuries [Member] | ||
Fair value | 29,482 | |
Amortized Cost | 29,847 | |
Gross Unrealized gains | 0 | |
Gross Unrealized losses | 365 | |
U. S. Government Sponsored Enterprises [Member] | ||
Fair value | 133,714 | 6,047 |
Amortized Cost | 134,466 | 6,000 |
Gross Unrealized gains | 0 | 47 |
Gross Unrealized losses | 752 | 0 |
Securities issued by States and political subdivisions in the U.S. [Member] | ||
Fair value | 34,337 | 17,692 |
Amortized Cost | 34,078 | 17,177 |
Gross Unrealized gains | 406 | 515 |
Gross Unrealized losses | 147 | 0 |
Mortgage-backed obligations of federal agencies [Member] | ||
Fair value | 183,647 | 73,771 |
Amortized Cost | 185,216 | 73,422 |
Gross Unrealized gains | 522 | 502 |
Gross Unrealized losses | 2,091 | 153 |
Corporate debt security [Member] | ||
Fair value | 22,702 | 9,389 |
Amortized Cost | 22,555 | 9,282 |
Gross Unrealized gains | 372 | 121 |
Gross Unrealized losses | $ 225 | $ 14 |
SECURITIES (Details 2)
SECURITIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Total, amortized cost | $ 125 | $ 125 |
Securities Held to Maturity [Member] | ||
Due in one year or less, amortized cost | 125 | |
Due in one year or less, fair value | 125 | |
Due after one year through five years, amortized cost | 0 | |
Due after one year through five years, fair value | 0 | |
Due after five years through ten years, amortized cost | 0 | |
Due after five years through ten years, fair value | 0 | |
Due after ten years, amortized cost | 0 | |
Due after ten years, fair value | 0 | |
Total, amortized cost | 125 | |
Total fair value | 125 | |
Securities Available for Sale [Member] | ||
Due in one year or less, amortized cost | 4,011 | |
Due in one year or less, fair value | 4,018 | |
Due after one year through five years, amortized cost | 147,321 | |
Due after one year through five years, fair value | 146,688 | |
Due after five years through ten years, amortized cost | 88,489 | |
Due after five years through ten years, fair value | 87,585 | |
Due after ten years, amortized cost | 166,341 | |
Due after ten years, fair value | 165,591 | |
Total, amortized cost | 406,162 | |
Total fair value | $ 403,882 |
SECURITIES (Details 3)
SECURITIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INVESTMENT IN FM MORTGAGE, LLC | ||
Gross realized gains | $ 0 | $ 0 |
Gross realized losses | (525) | 0 |
Net realized (losses) | (525) | 0 |
Proceeds from sale of securities | $ 25,917 | $ 0 |
SECURITIES (Details 4)
SECURITIES (Details 4) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Unrealized losses less than 12 months | $ 3,360,000 | $ 167,000 |
Fair value more than 12 months | 10,074,000 | 0 |
Unrealized losses more than 12 months | 220,000 | 0 |
Fair value total | 281,903,000 | 83,160,000 |
Unrealized losses total | 3,580,000 | 167,000 |
Fair value less than 12 months | 271,829,000 | 83,160,000 |
U S Treasuries [Member] | ||
Unrealized losses less than 12 months | 365,000 | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 29,481,000 | |
Unrealized losses total | 365,000 | |
Fair value less than 12 months | 29,481,000 | |
Securities issued by States and political subdivisions in the U.S. [Member] | ||
Unrealized losses less than 12 months | 147,000 | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 13,308,000 | |
Unrealized losses total | 147,000 | |
Fair value less than 12 months | 13,308,000 | |
U. S. Government Sponsored Enterprises [Member] | ||
Unrealized losses less than 12 months | 752,000 | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 93,714,000 | |
Unrealized losses total | 752,000 | |
Fair value less than 12 months | 93,714,000 | |
Mortgage-backed obligations of federal agencies [Member] | ||
Unrealized losses less than 12 months | 2,091,000 | 153,000 |
Fair value more than 12 months | 1,871,000 | 0 |
Unrealized losses more than 12 months | 10,074,000 | 0 |
Fair value total | 220,000 | 73,771,000 |
Unrealized losses total | 136,575,000 | 153,000 |
Fair value less than 12 months | 126,501,000 | 73,771,000 |
Corporate debt security [Member] | ||
Unrealized losses less than 12 months | 225,000 | 14,000 |
Fair value more than 12 months | 0 | 0 |
Unrealized losses more than 12 months | 0 | 0 |
Fair value total | 8,825,000 | 9,389,000 |
Unrealized losses total | 225,000 | 14,000 |
Fair value less than 12 months | $ 8,825,000 | $ 9,389,000 |
SECURITIES (Details Narrative)
SECURITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair value more than 12 months | $ 10,000,000 | |
Unrealised losses more than 12 months | 220,000 | |
Other investments | 9,210,000 | $ 10,874,000 |
Treasury and agency obligations | ||
Other investments | 220,000 | |
Twelve Low Income Housing [Member] | ||
Other investments | 6,762,000 | |
Four Low Income Housing [Member] | ||
Other investments | 961,000 | |
Fourteen Low-Income housing [Member] | ||
Other investments | 1,589,000 | |
Federal Home Loan Bank [Member] | ||
Other investments | 589,000 | |
Stock | $ 859,000 |
Loans (Details)
Loans (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Gross loans | $ 662,698,000 | $ 661,329,000 |
Less: Deferred loan fess, net of costs | 277,000 | 0 |
Loans outstanding | 662,421,000 | 661,329,000 |
Commercial Real Estate [Member] | ||
Loans outstanding | 163,564,000 | 142,516,000 |
Multi-Family [Member] | ||
Loans outstanding | 4,887,000 | 5,918,000 |
Real Estate [Member] | ||
Loans outstanding | 139,552,000 | 163,018,000 |
Credit Cards [Member] | ||
Loans outstanding | 3,000,000 | 2,857,000 |
Construction/Land Development [Member] | ||
Loans outstanding | 75,236,000 | 71,467,000 |
Farmland [Member] | ||
Loans outstanding | 66,344,000 | 53,728,000 |
Home Equity - Closed End [Member] | ||
Loans outstanding | 6,262,000 | 8,476,000 |
Home Equity - Open End [Member] | ||
Loans outstanding | 44,247,000 | 46,613,000 |
Commercial & Industrial - Non- Real Estate [Member] | ||
Loans outstanding | 44,224,000 | 65,470,000 |
Consumer [Member] | ||
Loans outstanding | 8,036,000 | 9,405,000 |
Dealers Finance [Member] | ||
Loans outstanding | $ 107,346,000 | $ 91,861,000 |
Loans (Details 1)
Loans (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | $ 582 | $ 731 |
Average recorded investment | 16,975 | 11,053 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 14,337 | 17,851 |
Recorded investment | 14,337 | 17,787 |
Impaired loans without a valuation allowance [Member] | Commercial Real Estate [Member] | ||
Interest income recognized | 253 | 229 |
Average recorded investment | 9,225 | 3,296 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 8,494 | 8,656 |
Recorded investment | 8,494 | 8,592 |
Impaired loans without a valuation allowance [Member] | Multi-Family [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Impaired loans without a valuation allowance [Member] | Real Estate [Member] | ||
Interest income recognized | 155 | 356 |
Average recorded investment | 4,575 | 5,520 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 2,748 | 6,648 |
Recorded investment | 2,748 | 6,648 |
Impaired loans without a valuation allowance [Member] | Credit Cards[Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 226 | 896 |
Average recorded investment | 8,132 | 15,559 |
Related Allowance | 736 | 2,584 |
Unpaid principal balance | 7,271 | 16,492 |
Recorded investment | 7,271 | 16,492 |
Impaired loans With a valuation allowance [Member] | Commercial Real Estate [Member] | ||
Interest income recognized | 172 | 237 |
Average recorded investment | 6,201 | 4,108 |
Related Allowance | 603 | 1,833 |
Unpaid principal balance | 6,004 | 7,464 |
Recorded investment | 6,004 | 7,464 |
Impaired loans With a valuation allowance [Member] | Multi-Family [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Impaired loans With a valuation allowance [Member] | Real Estate [Member] | ||
Interest income recognized | 45 | 413 |
Average recorded investment | 1,399 | 8,956 |
Related Allowance | 119 | 365 |
Unpaid principal balance | 1,172 | 7,143 |
Recorded investment | 1,172 | 7,143 |
Impaired loans With a valuation allowance [Member] | Credit Cards[Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Construction/Land Development [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 29 | 103 |
Average recorded investment | 984 | 1,598 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 645 | 1,693 |
Recorded investment | 645 | 1,693 |
Construction/Land Development [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 243 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Farmland [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 126 | 0 |
Average recorded investment | 1,760 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 2,286 | 0 |
Recorded investment | 2,286 | 0 |
Home Equity - Close End [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 18 | 34 |
Average recorded investment | 414 | 522 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 147 | 687 |
Recorded investment | 147 | 687 |
Home Equity - Close End [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 177 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Home Equity Open End [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 0 | 7 |
Average recorded investment | 0 | 38 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 151 |
Recorded investment | 0 | 151 |
Home Equity Open End [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 113 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Commercial & Industrial (Non-Real Estate) | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 0 | 1 |
Average recorded investment | 2 | 55 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 8 |
Recorded investment | 0 | 8 |
Consumer [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 1 | 0 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 5 | 0 |
Recorded investment | 5 | 0 |
Dealers Finance [Member] | Impaired loans without a valuation allowance [Member] | ||
Interest income recognized | 1 | 1 |
Average recorded investment | 14 | 24 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 12 | 8 |
Recorded investment | 12 | 8 |
Dealers Finance [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 9 | 13 |
Average recorded investment | 112 | 146 |
Related Allowance | 14 | 15 |
Unpaid principal balance | 95 | 147 |
Recorded investment | 95 | 147 |
Farmland [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 233 |
Average recorded investment | 420 | 1,797 |
Related Allowance | 0 | 370 |
Unpaid principal balance | 0 | 1,737 |
Recorded investment | 0 | 1,737 |
Commercial & Industrial - Non- Real Estate [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 17 |
Related Allowance | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Recorded investment | 0 | 0 |
Consumer [Member] | Impaired loans With a valuation allowance [Member] | ||
Interest income recognized | 0 | 0 |
Average recorded investment | 0 | 2 |
Related Allowance | 0 | 1 |
Unpaid principal balance | 0 | 1 |
Recorded investment | 0 | 1 |
Total impaired loans [Member] | ||
Interest income recognized | 808 | 1,627 |
Unpaid principal balance | 21,608 | 34,343 |
Recorded investment | 21,608 | 34,279 |
Related allowance | 736 | 2,584 |
Average recorded investment | $ 25,107 | $ 26,612 |
Loans (Details 2)
Loans (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Less: Deferred aoan fees, net of costs, 30-59 days past due | $ 0 | |
Less: Deferred aoan fees, net of costs, 60-89 days past due | 0 | |
Less: Deferred aoan fees, net of costs, greater than 90 days | 0 | |
Less: Deferred aoan fees, net of costs, total past due | 0 | |
Less: Deferred aoan fees, net of costs, non accruel loans | 0 | |
Less: Deferred aoan fees, net of costs, recorded investment greater than 90 days and accruing | 0 | |
30-59 Days Past Due | 2,892,000 | $ 6,427,000 |
60-89 Days Past Due | 505,000 | 743,000 |
Greater than 90 Days | 600,000 | 1,436,000 |
Total Past Due | 3,997,000 | 8,606,000 |
Less: Deferred aoan fees, net of costs, current | (277,000) | |
Current | 658,424,000 | 652,723,000 |
Less: Deferred loan fees, net of costs, total loan receivable | (277,000) | |
Total Loan Receivable | 662,421,000 | 661,329,000 |
Non-Accrual Loans | 5,465,000 | 6,435,000 |
Recorded Investment >90 days & accruing | 43,000 | 102,000 |
Commercial Real Estate [Member] | ||
30-59 Days Past Due | 0 | 554,000 |
60-89 Days Past Due | 0 | 0 |
Greater than 90 Days | 108,000 | 920,000 |
Total Past Due | 108,000 | 1,474,000 |
Current | 163,456,000 | 141,042,000 |
Total Loan Receivable | 163,564,000 | 142,516,000 |
Non-Accrual Loans | 2,975,000 | 3,820,000 |
Recorded Investment >90 days & accruing | 0 | 0 |
Multi-Family [Member] | ||
30-59 Days Past Due | 0 | 0 |
60-89 Days Past Due | 0 | 0 |
Greater than 90 Days | 0 | 0 |
Total Past Due | 0 | 0 |
Current | 4,887,000 | 5,918,000 |
Total Loan Receivable | 4,887,000 | 5,918,000 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Real Estate [Member] | ||
30-59 Days Past Due | 1,254,000 | 1,724,000 |
60-89 Days Past Due | 89,000 | 512,000 |
Greater than 90 Days | 395,000 | 304,000 |
Total Past Due | 1,738,000 | 2,540,000 |
Current | 137,814,000 | 160,478,000 |
Total Loan Receivable | 139,552,000 | 163,018,000 |
Non-Accrual Loans | 827,000 | 368,000 |
Recorded Investment >90 days & accruing | 0 | 102,000 |
Credit Cards[Member] | ||
30-59 Days Past Due | 16,000 | 45,000 |
60-89 Days Past Due | 0 | 0 |
Greater than 90 Days | 0 | 0 |
Total Past Due | 16,000 | 45,000 |
Current | 2,984,000 | 2,812,000 |
Total Loan Receivable | 3,000,000 | 2,857,000 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Construction/Land Development [Member] | ||
30-59 Days Past Due | 360,000 | 2,557,000 |
60-89 Days Past Due | 41,000 | 0 |
Greater than 90 Days | 38,000 | 0 |
Total Past Due | 439,000 | 2,557,000 |
Current | 74,797,000 | 68,910,000 |
Total Loan Receivable | 75,236,000 | 71,467,000 |
Non-Accrual Loans | 302,000 | 251,000 |
Recorded Investment >90 days & accruing | 0 | 0 |
Farmland [Member] | ||
30-59 Days Past Due | 0 | 0 |
60-89 Days Past Due | 0 | 0 |
Greater than 90 Days | 0 | 0 |
Total Past Due | 0 | 0 |
Current | 66,344,000 | 53,728,000 |
Total Loan Receivable | 66,344,000 | 53,728,000 |
Non-Accrual Loans | 1,320,000 | 1,737,000 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity - Close End [Member] | ||
30-59 Days Past Due | 53,000 | 3,000 |
60-89 Days Past Due | 0 | 30,000 |
Greater than 90 Days | 0 | 0 |
Total Past Due | 53,000 | 33,000 |
Current | 6,209,000 | 8,443,000 |
Total Loan Receivable | 6,262,000 | 8,476,000 |
Non-Accrual Loans | 0 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Home Equity Open End [Member] | ||
30-59 Days Past Due | 471,000 | 716,000 |
60-89 Days Past Due | 216,000 | 0 |
Greater than 90 Days | 0 | 212,000 |
Total Past Due | 687,000 | 928,000 |
Current | 43,560,000 | 45,685,000 |
Total Loan Receivable | 44,247,000 | 46,613,000 |
Non-Accrual Loans | 0 | 212,000 |
Recorded Investment >90 days & accruing | 0 | 0 |
Commercial & Industrial - Non- Real Estate [Member] | ||
30-59 Days Past Due | 35,000 | 95,000 |
60-89 Days Past Due | 1,000 | 44,000 |
Greater than 90 Days | 43,000 | 0 |
Total Past Due | 79,000 | 139,000 |
Current | 44,145,000 | 65,331,000 |
Total Loan Receivable | 44,224,000 | 65,470,000 |
Non-Accrual Loans | 0 | 3,000 |
Recorded Investment >90 days & accruing | 43,000 | 0 |
Consumer [Member] | ||
30-59 Days Past Due | 9,000 | 39,000 |
60-89 Days Past Due | 67,000 | 0 |
Greater than 90 Days | 0 | 0 |
Total Past Due | 76,000 | 39,000 |
Current | 7,960,000 | 9,366,000 |
Total Loan Receivable | 8,036,000 | 9,405,000 |
Non-Accrual Loans | 1,000 | 0 |
Recorded Investment >90 days & accruing | 0 | 0 |
Dealers Finance [Member] | ||
30-59 Days Past Due | 694,000 | 694,000 |
60-89 Days Past Due | 91,000 | 157,000 |
Greater than 90 Days | 16,000 | 0 |
Total Past Due | 801,000 | 851,000 |
Current | 106,545,000 | 91,010,000 |
Total Loan Receivable | 107,346,000 | 91,861,000 |
Non-Accrual Loans | 40,000 | 44,000 |
Recorded Investment >90 days & accruing | $ 0 | $ 0 |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Loans held for sale | $ 4,887 | $ 58,679 |
Pledged loans | 163,326 | $ 173,029 |
CARES Act [Member] | ||
Deferral loan, amount | $ 2,486 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Beginning Balance | $ 10,475,000 | $ 8,390,000 |
Charge-offs | 1,165,000 | 2,164,000 |
Recoveries | 1,259,000 | 949,000 |
Provision for Loan Losses | (2,821,000) | 3,300,000 |
Ending Balance | 7,748,000 | 10,475,000 |
Individually Evaluated for Impairment | 736,000 | 2,584,000 |
Collectively Evaluated for Impairment | 7,012,000 | 7,891,000 |
Commercial Real Estate [Member] | ||
Beginning Balance | 3,662,000 | 1,815,000 |
Charge-offs | 0 | 64,000 |
Recoveries | 19,000 | 11,000 |
Provision for Loan Losses | (1,476,000) | 1,900,000 |
Ending Balance | 2,205,000 | 3,662,000 |
Individually Evaluated for Impairment | 603,000 | 1,833,000 |
Collectively Evaluated for Impairment | 1,602,000 | 1,829,000 |
Multi-Family [Member] | ||
Beginning Balance | 54,000 | 20,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | (25,000) | 34,000 |
Ending Balance | 29,000 | 54,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 29,000 | 54,000 |
Real Estate [Member] | ||
Beginning Balance | 1,624,000 | 1,573,000 |
Charge-offs | 0 | 158,000 |
Recoveries | 76,000 | 7,000 |
Provision for Loan Losses | (538,000) | 202,000 |
Ending Balance | 1,162,000 | 1,624,000 |
Individually Evaluated for Impairment | 119,000 | 365,000 |
Collectively Evaluated for Impairment | 1,043,000 | 1,259,000 |
Credit Cards[Member] | ||
Beginning Balance | 79,000 | 68,000 |
Charge-offs | 54,000 | 123,000 |
Recoveries | 29,000 | 75,000 |
Provision for Loan Losses | 16,000 | 59,000 |
Ending Balance | 70,000 | 79,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 70,000 | 79,000 |
Construction/Land Development [Member] | ||
Beginning Balance | 1,249,000 | 1,190,000 |
Charge-offs | 0 | 7,000 |
Recoveries | 307,000 | 0 |
Provision for Loan Losses | (579,000) | 66,000 |
Ending Balance | 977,000 | 1,249,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 977,000 | 1,249,000 |
Farmland [Member] | ||
Beginning Balance | 731,000 | 668,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | (283,000) | 63,000 |
Ending Balance | 448,000 | 731,000 |
Individually Evaluated for Impairment | 0 | 370,000 |
Collectively Evaluated for Impairment | 448,000 | 361,000 |
Home Equity - Close End [Member] | ||
Beginning Balance | 55,000 | 42,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | (14,000) | 13,000 |
Ending Balance | 41,000 | 55,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 41,000 | 55,000 |
Consumer [Member] | ||
Beginning Balance | 521,000 | 186,000 |
Charge-offs | 33,000 | 89,000 |
Recoveries | 24,000 | 50,000 |
Provision for Loan Losses | 8,000 | 374,000 |
Ending Balance | 520,000 | 521,000 |
Individually Evaluated for Impairment | 0 | 1,000 |
Collectively Evaluated for Impairment | 520,000 | 520,000 |
Dealers Finance [Member] | ||
Beginning Balance | 1,674,000 | 1,786,000 |
Charge-offs | 1,038,000 | 1,551,000 |
Recoveries | 754,000 | 784,000 |
Provision for Loan Losses | 211,000 | 655,000 |
Ending Balance | 1,601,000 | 1,674,000 |
Individually Evaluated for Impairment | 14,000 | 15,000 |
Collectively Evaluated for Impairment | 1,587,000 | 1,659,000 |
Home Equity Open End [Member] | ||
Beginning Balance | 463,000 | 457,000 |
Charge-offs | 0 | 34,000 |
Recoveries | 13,000 | 3,000 |
Provision for Loan Losses | (69,000) | 37,000 |
Ending Balance | 407,000 | 463,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 407,000 | 463,000 |
Commercial & Industrial Non-Real Estate | ||
Beginning Balance | 363,000 | 585,000 |
Charge-offs | 40,000 | 138,000 |
Recoveries | 37,000 | 19,000 |
Provision for Loan Losses | (72,000) | (103,000) |
Ending Balance | 288,000 | 363,000 |
Individually Evaluated for Impairment | 0 | 0 |
Collectively Evaluated for Impairment | $ 288,000 | $ 363,000 |
ALLOWANCE FOR LOAN LOSSES (De_2
ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Loan Receivable | $ 662,421,000 | $ 661,329,000 |
Loan Individually Evaluated For Impairment | 21,608,000 | 34,279,000 |
Collectively Evaluated for Impairment | 640,813,000 | 627,050,000 |
Real Estate [Member] | ||
Loan Receivable | 139,552,000 | 163,018,000 |
Loan Individually Evaluated For Impairment | 3,920,000 | 13,791,000 |
Collectively Evaluated for Impairment | 135,632,000 | 149,227,000 |
Credit Cards[Member] | ||
Loan Receivable | 3,000,000 | 2,857,000 |
Loan Individually Evaluated For Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 3,000,000 | 2,857,000 |
Commercial Real Estate [Member] | ||
Loan Receivable | 163,564,000 | 142,516,000 |
Loan Individually Evaluated For Impairment | 14,498,000 | 16,056,000 |
Collectively Evaluated for Impairment | 149,066,000 | 126,460,000 |
Multi-Family [Member] | ||
Loan Receivable | 4,887,000 | 5,918,000 |
Loan Individually Evaluated For Impairment | 0 | 0 |
Collectively Evaluated for Impairment | 4,887,000 | 5,918,000 |
Farmland [Member] | ||
Loan Receivable | 66,344,000 | 53,728,000 |
Loan Individually Evaluated For Impairment | 2,286,000 | 1,737,000 |
Collectively Evaluated for Impairment | 64,058,000 | 51,991,000 |
Gross Loan [Member] | ||
Loan Receivable | 662,698,000 | |
Loan Individually Evaluated For Impairment | 21,608 | |
Collectively Evaluated for Impairment | 641,090,000 | |
Construction/Land Development [Member] | ||
Loan Receivable | 75,236,000 | 71,467,000 |
Loan Individually Evaluated For Impairment | 645,000 | 1,693,000 |
Collectively Evaluated for Impairment | 74,591,000 | 69,774,000 |
Consumer [Member] | ||
Loan Receivable | 8,036,000 | 9,405,000 |
Loan Individually Evaluated For Impairment | 5,000 | 1,000 |
Collectively Evaluated for Impairment | 8,031,000 | 9,404,000 |
Dealers Finance [Member] | ||
Loan Receivable | 107,346,000 | 91,861,000 |
Loan Individually Evaluated For Impairment | 107,000 | 155,000 |
Collectively Evaluated for Impairment | 107,239,000 | 91,706,000 |
Home Equity - Close End [Member] | ||
Loan Receivable | 6,262,000 | 8,476,000 |
Loan Individually Evaluated For Impairment | 147,000 | 687,000 |
Collectively Evaluated for Impairment | 6,115,000 | 7,789,000 |
Home Equity Open End [Member] | ||
Loan Receivable | 44,247,000 | 46,613,000 |
Loan Individually Evaluated For Impairment | 0 | 151,000 |
Collectively Evaluated for Impairment | 44,247,000 | 46,462,000 |
Less: Deferred Loan Fees Net Of Costs [Member] | ||
Loan Receivable | 277,000 | |
Loan Individually Evaluated For Impairment | 0 | |
Collectively Evaluated for Impairment | 277,000 | |
Commercial & Industrial Non-Real Estate | ||
Loan Receivable | 44,224,000 | 65,470,000 |
Loan Individually Evaluated For Impairment | 0 | 8,000 |
Collectively Evaluated for Impairment | $ 44,224,000 | $ 65,462,000 |
ALLOWANCE FOR LOAN LOSSES (De_3
ALLOWANCE FOR LOAN LOSSES (Details 2) | Dec. 31, 2021USD ($) |
Calculated Provision Based on Current Methodology | $ (2,821) |
Current Provision Based on Prior Methodology | (4,149) |
Difference | 1,328 |
Commercial Real Estate [Member] | |
Calculated Provision Based on Current Methodology | (1,476) |
Current Provision Based on Prior Methodology | (1,701) |
Difference | 225 |
Multi-Family [Member] | |
Calculated Provision Based on Current Methodology | (25) |
Current Provision Based on Prior Methodology | (25) |
Difference | 0 |
Real Estate [Member] | |
Calculated Provision Based on Current Methodology | (538) |
Current Provision Based on Prior Methodology | (532) |
Difference | (6) |
Credit Cards[Member] | |
Calculated Provision Based on Current Methodology | 16 |
Current Provision Based on Prior Methodology | 1 |
Difference | 15 |
Construction/Land Development [Member] | |
Calculated Provision Based on Current Methodology | (579) |
Current Provision Based on Prior Methodology | (1,099) |
Difference | 520 |
Farmland [Member] | |
Calculated Provision Based on Current Methodology | (283) |
Current Provision Based on Prior Methodology | (283) |
Difference | 0 |
Home Equity - Close End [Member] | |
Calculated Provision Based on Current Methodology | (14) |
Current Provision Based on Prior Methodology | (14) |
Difference | 0 |
Home Equity Open End [Member] | |
Calculated Provision Based on Current Methodology | (69) |
Current Provision Based on Prior Methodology | (105) |
Difference | 36 |
Commercial & Industrial Non-Real Estate | |
Calculated Provision Based on Current Methodology | (72) |
Current Provision Based on Prior Methodology | (75) |
Difference | 3 |
Consumer [Member] | |
Calculated Provision Based on Current Methodology | 8 |
Current Provision Based on Prior Methodology | (368) |
Difference | 376 |
Dealers Finance [Member] | |
Calculated Provision Based on Current Methodology | 211 |
Current Provision Based on Prior Methodology | 52 |
Difference | $ 159 |
ALLOWANCE FOR LOAN LOSSES (De_4
ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Grade 1 Minimal Risk | $ 148,000 | |
Grade 2 Modest Risk | 10,524,000 | |
Grade 3 Average Risk | 122,915,000 | |
Grade 4 Acceptable Risk | 231,037,000 | |
Grade 5 Marginally Acceptable | 134,395,000 | |
Grade 6 Watch | 35,101,000 | |
Grade 7 Substandard | 32,491,000 | |
Grade 8 Doubtful | 0 | |
Total | 566,611,000 | |
Commercial Real Estate [Member] | ||
Grade 1 Minimal Risk | $ 0 | 0 |
Grade 2 Modest Risk | 2,124,000 | 4,114,000 |
Grade 3 Average Risk | 36,308,000 | 31,205,000 |
Grade 4 Acceptable Risk | 72,414,000 | 47,477,000 |
Grade 5 Marginally Acceptable | 35,444,000 | 26,677,000 |
Grade 6 Watch | 4,428,000 | 18,637,000 |
Grade 7 Substandard | 12,846,000 | 14,406,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 163,564,000 | 142,516,000 |
Multi-Family [Member] | ||
Grade 1 Minimal Risk | 0 | 0 |
Grade 2 Modest Risk | 0 | 0 |
Grade 3 Average Risk | 1,021,000 | 1,075,000 |
Grade 4 Acceptable Risk | 2,586,000 | 3,509,000 |
Grade 5 Marginally Acceptable | 1,154,000 | 1,334,000 |
Grade 6 Watch | 126,000 | 0 |
Grade 7 Substandard | 0 | 0 |
Grade 8 Doubtful | 0 | 0 |
Total | 4,887,000 | 5,918,000 |
Real Estate [Member] | ||
Grade 1 Minimal Risk | 0 | 0 |
Grade 2 Modest Risk | 1,128,000 | 2,283,000 |
Grade 3 Average Risk | 30,268,000 | 39,223,000 |
Grade 4 Acceptable Risk | 61,940,000 | 66,698,000 |
Grade 5 Marginally Acceptable | 28,895,000 | 32,302,000 |
Grade 6 Watch | 12,462,000 | 6,977,000 |
Grade 7 Substandard | 4,859,000 | 15,535,000 |
Total | 139,552,000 | 163,018,000 |
Grade 8 Doubtful | 0 | 0 |
Credit Cards[Member] | ||
Total | 3,000,000 | 2,857,000 |
Non-performing | 0 | 0 |
Performing | 3,000,000 | 2,857,000 |
Farmland [Member] | ||
Grade 1 Minimal Risk | 56,000 | 58,000 |
Grade 2 Modest Risk | 291,000 | 459,000 |
Grade 3 Average Risk | 6,804,000 | 11,707,000 |
Grade 4 Acceptable Risk | 42,615,000 | 26,899,000 |
Grade 5 Marginally Acceptable | 13,620,000 | 11,846,000 |
Grade 6 Watch | 1,638,000 | 1,022,000 |
Grade 7 Substandard | 1,320,000 | 1,737,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 66,344,000 | 53,728,000 |
Construction/Land Development [Member] | ||
Grade 1 Minimal Risk | 0 | 0 |
Grade 2 Modest Risk | 6,000 | 142,000 |
Grade 3 Average Risk | 9,952,000 | 8,448,000 |
Grade 4 Acceptable Risk | 43,861,000 | 40,126,000 |
Grade 5 Marginally Acceptable | 19,457,000 | 18,226,000 |
Grade 6 Watch | 1,658,000 | 4,274,000 |
Grade 7 Substandard | 302,000 | 251,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 75,236,000 | 71,467,000 |
Home Equity - Close End [Member] | ||
Grade 1 Minimal Risk | 0 | 0 |
Grade 2 Modest Risk | 61,000 | 124,000 |
Grade 3 Average Risk | 1,268,000 | 2,479,000 |
Grade 4 Acceptable Risk | 3,103,000 | 3,289,000 |
Grade 5 Marginally Acceptable | 762,000 | 759,000 |
Grade 6 Watch | 1,068,000 | 1,795,000 |
Grade 7 Substandard | 0 | 30,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 6,262,000 | 8,476,000 |
Consumer [Member] | ||
Grade 1 Minimal Risk | 10,000 | 0 |
Grade 2 Modest Risk | 522,000 | 173,000 |
Grade 3 Average Risk | 2,919,000 | 3,461,000 |
Grade 4 Acceptable Risk | 3,526,000 | 3,975,000 |
Grade 5 Marginally Acceptable | 980,000 | 1,790,000 |
Grade 6 Watch | 79,000 | 6,000 |
Grade 7 Substandard | 0 | 0 |
Grade 8 Doubtful | 0 | 0 |
Total | 8,036,000 | 9,405,000 |
Less: Deferred Loan Fees Net Of Costs [Member] | ||
Grade 1 Minimal Risk | 227,000 | |
Total | 552,075,000 | |
Gross Loan [Member] | ||
Grade 1 Minimal Risk | 66,000 | |
Grade 2 Modest Risk | 6,426,000 | |
Grade 3 Average Risk | 113,435,000 | |
Grade 4 Acceptable Risk | 272,868,000 | |
Grade 5 Marginally Acceptable | 116,327,000 | |
Grade 6 Watch | 23,624,000 | |
Grade 7 Substandard | 19,606,000 | |
Grade 8 Doubtful | 0 | |
Total | 552,352,000 | |
Home Equity Open End [Member] | ||
Grade 1 Minimal Risk | 0 | 0 |
Grade 2 Modest Risk | 1,293,000 | 1,705,000 |
Grade 3 Average Risk | 17,333,000 | 17,716,000 |
Grade 4 Acceptable Risk | 21,296,000 | 22,014,000 |
Grade 5 Marginally Acceptable | 2,477,000 | 3,171,000 |
Grade 6 Watch | 1,632,000 | 1,477,000 |
Grade 7 Substandard | 216,000 | 530,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 44,247,000 | 46,613,000 |
Commercial & Industrial Non-Real Estate | ||
Grade 1 Minimal Risk | 0 | 90,000 |
Grade 2 Modest Risk | 1,001,000 | 1,524,000 |
Grade 3 Average Risk | 7,562,000 | 7,601,000 |
Grade 4 Acceptable Risk | 21,527,000 | 17,050,000 |
Grade 5 Marginally Acceptable | 13,538,000 | 38,290,000 |
Grade 6 Watch | 533,000 | 913,000 |
Grade 7 Substandard | 63,000 | 2,000 |
Grade 8 Doubtful | 0 | 0 |
Total | 44,224,000 | 65,470,000 |
Dealers Finance [Member] | ||
Total | 107,346,000 | 91,861,000 |
Non-performing | 16,000 | 44,000 |
Performing | $ 107,330,000 | $ 91,817,000 |
Troubled Debt Restructuring (De
Troubled Debt Restructuring (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)integer | Dec. 31, 2020USD ($)integer | |
Consumers [Member] | ||
Post-modification outstanding recorded investment | $ 5 | $ 37 |
Number of contracts | integer | 1 | 5 |
Pre-modification outstanding recorded investment | $ 5 | $ 37 |
Real Estates [Member] | ||
Post-modification outstanding recorded investment | $ 109 | $ 186 |
Number of contracts | integer | 1 | 1 |
Pre-modification outstanding recorded investment | $ 109 | $ 186 |
Total [Member] | ||
Post-modification outstanding recorded investment | $ 1,080 | $ 222 |
Number of contracts | integer | 3 | 6 |
Pre-modification outstanding recorded investment | $ 1,080 | $ 222 |
Farm Land [Member] | ||
Pre-modification outstanding recorded investment0A | 966 | |
Post-modification outstanding recorded investment | $ 966 | |
Number of contracts | integer | 1 |
BANK PREMISES AND EQUIPMENT (De
BANK PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
BANK PREMISES AND EQUIPMENT | ||
Land | $ 4,115 | $ 4,369 |
Buildings and improvements | 15,956 | 16,192 |
Furniture and equipment | 10,052 | 10,086 |
Gross | 30,123 | 30,647 |
Less - accumulated depreciation | (13,060) | (12,738) |
Net | $ 17,063 | $ 17,909 |
BANK PREMISES AND EQUIPMENT (_2
BANK PREMISES AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
BANK PREMISES AND EQUIPMENT | ||
Provisions for depreciation | $ 1,169 | $ 1,232 |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OTHER REAL ESTATE OWNED | ||
Beginning balance | $ 0 | $ 1,489,000 |
Loans transferred to OREO | 0 | 0 |
Sale of OREO | 0 | (1,163,000) |
Write down of OREO or losses on sale | 0 | (326,000) |
Ending balance | $ 0 | $ 0 |
OTHER REAL ESTATE OWNED (Deta_2
OTHER REAL ESTATE OWNED (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OTHER REAL ESTATE OWNED | ||
Beginning balance | $ 0 | $ 0 |
Beginning balance | 0 | 1,181,000 |
Provision charged to expense | 0 | 116,000 |
Reductions from sales of real estate owned | $ 0 | $ (1,297,000) |
OTHER REAL ESTATE OWNED (Deta_3
OTHER REAL ESTATE OWNED (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OTHER REAL ESTATE OWNED | ||
Net loss (gain) on sales | $ 0 | $ 205,000 |
Gain on foreclosure | 0 | 0 |
Provision/(recoveries) for unrealized losses | 0 | 116,000 |
Operating expenses, net of rental income | 0 | 25,000 |
(Income) expenses related to foreclosed assets | $ 0 | $ 346,000 |
OTHER REAL ESTATE OWNED (Deta_4
OTHER REAL ESTATE OWNED (Details Narrative) $ in Thousands | Dec. 31, 2021USD ($) |
OTHER REAL ESTATE OWNED | |
Foreclosed residential real estate properties | $ 589 |
DEPOSITS (Details)
DEPOSITS (Details) | Dec. 31, 2021USD ($) |
DEPOSITS | |
2022 | $ 43,411,000 |
2023 | 44,720,000 |
2024 | 20,347,000 |
2025 | 9,580,000 |
2026 | 5,799,000 |
Thereafter | 0 |
Total | $ 123,857,000 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
DEPOSITS | ||
Insurance limit | $ 250,000 | $ 250,000,000 |
Time deposits | $ 12,373,000 | $ 12,283,000 |
SHORTTERM DEBT (Details)
SHORTTERM DEBT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Outstanding at year end | $ 0 | $ 0 |
Average balance outstanding | $ 0 | $ 1,776,000 |
Year end interest rate | 0.00% | 2.31% |
Federal funds purchased | ||
Outstanding at year end | $ 0 | $ 0 |
Average balance outstanding | $ 0 | $ 0 |
Year end interest rate | 0.00% | 0.00% |
Maximum outstanding at any month end | $ 0 | $ 0 |
FHLB short term | ||
Outstanding at year end | 0 | 0 |
Average balance outstanding | $ 0 | $ 1,776,000 |
Year end interest rate | 0.00% | 2.31% |
Maximum outstanding at any month end | $ 0 | $ 10,000,000 |
SHORTTERM DEBT (Details Narrati
SHORTTERM DEBT (Details Narrative) | Dec. 31, 2021USD ($) |
SHORT-TERM DEBT | |
Lines of credit with correspondent banks | $ 50,000 |
LONGTERM DEBT (Details)
LONGTERM DEBT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SHORT-TERM DEBT | ||
2022 | $ 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 10,000,000 | |
Total | $ 10,000,000 | $ 21,268,000 |
LONGTERM DEBT (Details Narrativ
LONGTERM DEBT (Details Narrative) - USD ($) | 1 Months Ended | ||
Jul. 29, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Balance of obligations | $ 10,000,000 | $ 21,268,000 | |
Subordinated notes, net of issuance costs | $ 11,772,000 | $ 11,740,000 | |
Weighted average cost | 0.81% | 1.47% | |
letter of credit | $ 10,000 | ||
Principal amount | $ 10,000,000 | 21,268,000 | |
Mortgage | $ 4,887,000 | $ 14,307,000 | |
2027 Notes [Member] | Accredited Investor [Member] | |||
Principal amount | $ 5,000,000 | ||
Interest rate description | The 2027 Notes bear interest at 5.75% per annum, payable semi-annually in arrears | ||
Maturity date | Jul. 31, 2027 | ||
Interest rate | 5.75% | ||
2030 Notes [Member] | Accredited Investor [Member] | |||
Principal amount | $ 7,000,000 | ||
Interest rate description | The 2030 Notes will initially accrue interest at 6.00% per annum, beginning July 29, 2020 to but excluding July 31, 2025, payable semi-annually in arrears. From and including July 31, 2025 through July 30, 2030, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 593 basis points, payable quarterly in arrears. Beginning on July 31, 2025 through maturity, the 2030 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date | ||
Maturity date | Jul. 31, 2030 | ||
Interest rate | 6.00% |
INCOME TAX EXPENSE (Details)
INCOME TAX EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAX EXPENSE | ||
Current expense | $ 847 | $ 1,812 |
Deferred expense (benefit) | 476 | (670) |
Total income tax expense | $ 1,323 | $ 1,142 |
INCOME TAX EXPENSE (Details 1)
INCOME TAX EXPENSE (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Allowance for loan losses | $ 1,627,000 | $ 2,195,000 |
Split dollar life insurance | 3,000 | 3,000 |
Nonqualified deferred compensation | 757,000 | 847,000 |
Low income housing partnerships losses | 326,000 | 293,000 |
Core deposit amortization | 29,000 | 24,000 |
SBA fees | 47 | 198,000 |
Assets available for sale | 32 | 0 |
VSTitle income | 2 | 0 |
Lease Liability | 172,000 | 140,000 |
Net unrealized loss on securities available for sale | 479,000 | 214 |
Unfunded pension benefit obligation | 875,000 | 1,016,000 |
Total Assets | 4,349 | 4,716,000 |
Deferred Tax Liabilities: | ||
Unearned low income housing credits | 63,000 | 93,000 |
Depreciation | 567,000 | 584,000 |
Prepaid pension | 114,000 | 294,000 |
Goodwill tax amortization | 576,000 | 571,000 |
Right of Use Asset | 149,000 | 156,000 |
Net unrealized gain on securities available for sale | 0 | 0 |
Total liabilities | 1,469,000 | 1,912,000 |
Net deferred tax asset (included in other assets on Balance Sheet) | $ 2,880,000 | $ 2,804,000 |
INCOME TAX EXPENSE (Details 2)
INCOME TAX EXPENSE (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAX EXPENSE | ||
Tax expense at federal statutory rates | $ 2,533 | $ 2,107 |
Increases (decreases) in taxes resulting from: | ||
Partially tax-exempt income | (38) | (36) |
Tax-exempt income | (172) | (176) |
LIH and historic credits | (913) | (892) |
Other | (87) | 139 |
Total Income Tax Expense (Benefit) | $ 1,323 | $ 1,142 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Change in Benefit Obligation | ||
Benefit obligation, beginning | $ 15,456,000 | $ 13,313,000 |
Service cost | 862,000 | 808,000 |
Interest cost | 379,000 | 419,000 |
Actuarial (gain) loss | 0 | 1,554,000 |
Benefits paid | (1,140,000) | (638,000) |
Benefit obligation, ending | 15,557,000 | 15,456,000 |
Change in Plan Assets | ||
Fair value of plan assets, beginning | 11,201 | 10,543 |
Actual return on plan assets | 1,174,000 | 1,296,000 |
Benefits paid | (1,140,000) | (638,000) |
Fair value of plan assets, ending | 11,235 | 11,201 |
Funded status at the end of the year | $ (4,322,000) | $ (4,255,000) |
EMPLOYEE BENEFITS (Details 1)
EMPLOYEE BENEFITS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Amount recognized in the Consolidated Balance Sheet | ||
Prepaid benefit cost | $ (156,000) | $ 583,000 |
Unfunded pension benefit obligation under ASC 325-960 | (4,166,000) | (4,837,000) |
Deferred taxes | 875,000 | 1,016,000 |
Amount recognized in accumulated other comprehensive income (loss) | ||
Net loss | (4,166,000) | (4,837,000) |
Prior service cost | 0 | 0 |
Amount recognized | (4,166,000) | (4,837,000) |
Deferred taxes | 875,000 | 1,016,000 |
Amount recognized in accumulated comprehensive income | (3,291,000) | (3,821,000) |
Prepaid benefit detail | ||
Benefit obligation | (15,557,000) | (15,455,000) |
Fair value of assets | 11,235,000 | 11,201,000 |
Unrecognized net actuarial loss | 4,166,000 | 4,837,000 |
Prepaid benefits | (156,000) | 583,000 |
Components of net periodic benefit cost Comprehensive income (loss) | ||
Service cost | 862,000 | 808,000 |
Interest cost | 379,000 | 419,000 |
Expected return on plan assets | (791,000) | (734,000) |
Amortization of prior service cost | 0 | (11,000) |
Recognized net actuarial loss | 289,000 | 221,000 |
Net periodic benefit cost | 739,000 | 703,000 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | ||
Net (gain) loss | (671,000) | 770,000 |
Amortization of prior service cost | 0 | 11,000 |
Total recognized in other comprehensive income | (671,000) | 781,000 |
Total recognized in net periodic benefit cost and other | 67,000 | 1,484,000 |
Additional disclosure information | ||
Accumulated benefit obligation | 11,473,000 | 11,784,000 |
Vested benefit obligation | $ 11,473,000 | $ 11,784,000 |
Discount rate used for net pension cost | 2.50% | 3.25% |
Discount rate used for disclosure | 2.75% | 2.50% |
Expected return on plan assets | 7.25% | 7.25% |
Rate of compensation increase | 3.00% | 3.00% |
Average remaining service (years) | 11 years 3 months 3 days | 11 years 4 months 24 days |
EMPLOYEE BENEFITS (Details 2)
EMPLOYEE BENEFITS (Details 2) $ in Thousands | Dec. 31, 2021USD ($) |
EMPLOYEE BENEFITS | |
2022 | $ 938 |
2023 | 833 |
2024 | 84 |
2025 | 853 |
2023 | 1,533 |
2026-2031 | 5,530 |
Total | $ 9,771 |
EMPLOYEE BENEFITS (Details 3)
EMPLOYEE BENEFITS (Details 3) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
EMPLOYEE BENEFITS (Details 3) | |
Nonvested at December 31, 2020 | shares | 0 |
Granted | shares | 17,672 |
Vested | shares | (1,332) |
Forfeited | shares | (471) |
Nonvested at December 31, 2021 | shares | 15,869 |
Date Fair Value Per Share, Nonvested at December 31, 2020 | $ / shares | $ 0 |
Date Fair Value Per Share, Granted | $ / shares | 26.77 |
Date Fair Value Per Share, Vested | $ / shares | 26.75 |
Date Fair Value Per Share, Forfeited | $ / shares | 26.75 |
Date Fair Value Per Share, Nonvested at December 31, 2021 | $ / shares | $ 26.78 |
EMPLOYEE BENEFITS (Details Narr
EMPLOYEE BENEFITS (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 17, 2021 | Mar. 05, 2021 | |
Accrued liability | $ 3,928 | $ 3,683 | ||
Common stock shares authorized | 200,000 | |||
Fair value shares, amount | $ 5,750 | $ 35,631 | ||
Stock shares | 200 | 1,332 | ||
Settlement charge | $ 624 | |||
Allocation pension plan, percentage equity | 62.00% | 63.00% | ||
Allocation pension plan, percentage fixed | 38.00% | 37.00% | ||
Shares held by ESOP | 158,905 | 183,659 | ||
Contributions under employee benefit plan - 401K Plan | $ 444 | $ 295 | ||
Description of employee benefit plan - 401(K) Plan | The Company sponsors a 401(k) savings plan under which eligible employees may choose to save up to 20 percent of their salary on a pretax basis, subject to certain IRS limits. Under the Federal Safe Harbor rules employees are automatically enrolled at 3% (this increases by 1% per year up to 6%) of their salary unless elected otherwise. The Company matches one hundred percent of the first 1% contributed by the employee and fifty percent from 2% to 6% of employee contributions. Vesting in the contributions made by the Company is 100% after two years of service. | |||
ESOP contributions | $ 472 | 447 | ||
Unrecognized compensation cost | 86 | |||
BOLI [Member] | ||||
Accrued liability | 669 | 488 | ||
Restricted Stock [Member] | ||||
Unrecognized compensation cost | 338 | |||
Deferred Compensation Plan | ||||
Contributions to employee benefit plan - deferred compensation plan | $ 125 | $ 125 | ||
Stock Plan Committee [Member] | ||||
Fair value shares, amount | $ 431,745 | |||
Stock shares | 16,140 |
CONCENTRATIONS OF CREDIT (Detai
CONCENTRATIONS OF CREDIT (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CONCENTRATIONS OF CREDIT | ||
Cash, FDIC Insured Amount | $ 3,880 | $ 4,714 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
COMMITMENTS | ||
Commitments to extend credit | $ 257,229 | $ 233,182 |
Standby letters of credit | $ 2,818 | $ 1,689 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount | $ 7 | $ 7 |
Fair market value of contracts | $ 3 | $ 2 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unpaid principal | $ 4,920 | |
Mortgage loan | 4,887,000 | $ 14,307,000 |
Notional amount | 7,000 | 7,000 |
Interest Rate Lock Commitments [Member] | ||
Fair value of these derivative instruments | $ 816,000 | |
No. of positions | 134 | |
Notional amount | $ 31,000,000 | |
Other Assets [Member] | ||
Fair value of these derivative instruments | $ 258,000 | |
No. of positions | 70 | |
Notional amount | $ 18,801,000 | |
Other Assets [Member] | Forward Sales Commitments [Member] | ||
Fair value of these derivative instruments | $ 112,000 | |
No. of positions | 91 | |
Notional amount | $ 23,721,000 | |
Other Liabilities [Member] | ||
No. of positions | 205 | |
Notional amount | $ 46,000,000 | |
Fair value of forward sales commitments | $ 60,000 |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
TRANSACTIONS WITH RELATED PARTIES | ||
Total loans, beginning of year | $ 22,685 | $ 21,722 |
New loans | 6,506,000 | 5,634,000 |
Relationship change | (98,000) | (3,000) |
Repayments | (5,714,000) | (4,668,000) |
Total loans, end of year | $ 23,379 | $ 22,685 |
TRANSACTIONS WITH RELATED PAR_4
TRANSACTIONS WITH RELATED PARTIES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
TRANSACTIONS WITH RELATED PARTIES | ||
Deposits of executive officers, directors and their affiliates | $ 8,799 | $ 6,033 |
DIVIDEND LIMITATIONS ON SUBSI_2
DIVIDEND LIMITATIONS ON SUBSIDIARY BANK (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends paid | $ 2,232 | $ 1,500 |
January One Two Thousand Twenty Two [Member] | ||
Available for dividend distribution | $ 14,492 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Loans held for sale | $ 4,887,000 | $ 14,307,000 |
IRLC | 258,000 | 816,000 |
U.S Treasury securities | 29,482,000 | |
U. S. Government sponsored enterprises | 133,714,000 | 6,047,000 |
Securities issued by States and political subdivisions in the U. S. | 34,337,000 | 17,692,000 |
Mortgage-backed obligations of federal agencies | 183,647,000 | 73,771,000 |
Corporate debt securities | 22,702,000 | 9,389,000 |
Forward sales commitments | 112,000 | 60,000 |
Assets at Fair Value | 409,139,000 | 122,022,000 |
Derivatives ICD | 3,000 | 2,000 |
Total fair value of liabilities | 3,000 | 62,000 |
Fair Value Inputs Level 1 | ||
Loans held for sale | 0 | |
IRLC | 0 | 0 |
U. S. Government sponsored enterprises | 0 | 0 |
Securities issued by States and political subdivisions in the U. S. | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 |
Corporate debt securities | 0 | |
Forward sales commitments | 0 | 0 |
Assets at Fair Value | 0 | 0 |
Derivatives ICD | 0 | 0 |
Total fair value of liabilities | 0 | 0 |
Other debt securities | 0 | |
Fair Value Inputs Level 2 | ||
Loans held for sale | 4,887,000 | 14,307,000 |
IRLC | 258,000 | 816,000 |
U.S Treasury securities | 29,482,000 | |
U. S. Government sponsored enterprises | 133,714,000 | 6,047,000 |
Securities issued by States and political subdivisions in the U. S. | 34,337,000 | 17,692,000 |
Mortgage-backed obligations of federal agencies | 183,647,000 | 73,771,000 |
Corporate debt securities | 22,702,000 | 9,389,000 |
Forward sales commitments | 112,000 | 60,000 |
Assets at Fair Value | 409,139,000 | 122,022,000 |
Derivatives ICD | 3,000 | 2,000 |
Total fair value of liabilities | 3,000 | 62,000 |
Fair Value Inputs Level 3 | ||
Loans held for sale | 0 | |
IRLC | 0 | 0 |
U. S. Government sponsored enterprises | 0 | 0 |
Securities issued by States and political subdivisions in the U. S. | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 |
Corporate debt securities | 0 | |
Forward sales commitments | 0 | |
Assets at Fair Value | 0 | 0 |
Derivatives ICD | 0 | 0 |
Total fair value of liabilities | 0 | $ 0 |
Other debt securities | $ 0 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details 1) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Impaired loans | $ 6,535 | $ 13,908 |
Commercial Real Estate [Member] | ||
Impaired loans | 5,401 | 5,631 |
Real Estate [Member] | ||
Impaired loans | 1,053 | 6,778 |
Fair Value Inputs Level 1 | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Commercial Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Commercial Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 3 | ||
Impaired loans | 6,535 | 13,908 |
Fair Value Inputs Level 3 | Commercial Real Estate [Member] | ||
Impaired loans | 5,401 | 5,631 |
Fair Value Inputs Level 3 | Real Estate [Member] | ||
Impaired loans | 1,053 | 6,778 |
Farmland [Member] | ||
Impaired loans | 1,367 | |
Farmland [Member] | Fair Value Inputs Level 1 | ||
Impaired loans | 0 | |
Farmland [Member] | Fair Value Inputs Level 2 | ||
Impaired loans | 0 | |
Farmland [Member] | Fair Value Inputs Level 3 | ||
Impaired loans | 1,367 | |
Dealers Finance [Member] | ||
Impaired loans | 81 | 132 |
Dealers Finance [Member] | Fair Value Inputs Level 1 | ||
Impaired loans | 0 | 0 |
Dealers Finance [Member] | Fair Value Inputs Level 2 | ||
Impaired loans | 0 | 0 |
Dealers Finance [Member] | Fair Value Inputs Level 3 | ||
Impaired loans | 81 | 132 |
Bank Premises Held For Sale [Member] | ||
Impaired loans | 300 | 520 |
Bank Premises Held For Sale [Member] | Fair Value Inputs Level 1 | ||
Impaired loans | 0 | 0 |
Bank Premises Held For Sale [Member] | Fair Value Inputs Level 2 | ||
Impaired loans | 0 | 0 |
Bank Premises Held For Sale [Member] | Fair Value Inputs Level 3 | ||
Impaired loans | $ 300 | $ 520 |
FAIR VALUE MEASUREMENTS (Deta_3
FAIR VALUE MEASUREMENTS (Details 2) - Fair Value Inputs Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation technique other real estate owned | Discounted appraised value | Discounted appraised value |
Significant unobservable inputs lmpaired loans | Discount for selling costs and marketability | Discount for selling costs and marketability |
Average impaired loans | 17.31% | 24.39% |
Impaired loans | $ 6,535 | $ 13,908 |
Minimum [Member] | ||
Range impaired loans | 11.76% | 9.25% |
Maximum [Member] | ||
Range impaired loans | 28.00% | 62.00% |
FAIR VALUE MEASUREMENTS (Deta_4
FAIR VALUE MEASUREMENTS (Details 3) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and cash equivalents | $ 88,121,000 | $ 78,408,000 |
Securities | 404,007,000 | 107,024,000 |
Loans held for sale | 4,887,000 | 58,679,000 |
IRLC | 258,000 | 816,000 |
Loans held for investment, net | 3,997,000 | 8,606,000 |
Interest receivable | 3,117,000 | 2,727,000 |
Bank owned life insurance | 22,878,000 | 22,647,000 |
Forward sales commitments | 112,000 | 60,000 |
Total Assets | 1,175,476,000 | 909,773,000 |
Deposits | 1,092,322,000 | 834,857,000 |
Long-term debt | 22,443,000 | 33,834,000 |
Interest payable | 491,000 | 261,000 |
Total liabilities | 1,115,256,000 | 869,012,000 |
Fair Value Inputs Level 1 | ||
Cash and cash equivalents | 88,121,000 | 78,408,000 |
Securities | 0 | 0 |
Loans held for sale | 0 | 0 |
IRLC | 0 | 0 |
Loans held for investment, net | 0 | 0 |
Interest receivable | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Forward sales commitments | 0 | 0 |
Total Assets | 88,121,000 | 78,408,000 |
Deposits | 0 | 0 |
Long-term debt | 0 | 0 |
Interest payable | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value Inputs Level 2 | ||
Cash and cash equivalents | 0 | 0 |
Securities | 404,007,000 | 107,024,000 |
Loans held for sale | 4,887,000 | 58,679,000 |
IRLC | 258,000 | 816,000 |
Loans held for investment, net | 0 | 0 |
Interest receivable | 3,117,000 | 2,727,000 |
Bank owned life insurance | 22,878,000 | 22,647,000 |
Forward sales commitments | 112,000 | 60,000 |
Total Assets | 435,259,000 | 191,896,000 |
Deposits | 968,604,000 | 702,940,000 |
Long-term debt | 0 | 0 |
Interest payable | 491,000 | 261,000 |
Total liabilities | 969,095,000 | 703,261,000 |
Fair Value Inputs Level 3 | ||
Cash and cash equivalents | 0 | 0 |
Securities | 0 | 0 |
Loans held for sale | 0 | 0 |
IRLC | 0 | 0 |
Loans held for investment, net | 652,096,000 | 639,472,000 |
Interest receivable | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Forward sales commitments | 0 | |
Total Assets | 652,096,000 | 639,472,000 |
Deposits | 123,718,000 | 131,917,000 |
Long-term debt | 22,443,000 | 33,834,000 |
Interest payable | 0 | 0 |
Total liabilities | 146,161,000 | 165,751,000 |
Carrying Amount [Member] | ||
Cash and cash equivalents | 88,121,000 | 78,408,000 |
Securities | 404,007,000 | 107,024,000 |
Loans held for sale | 4,887,000 | 58,679,000 |
IRLC | 258,000 | 816,000 |
Loans held for investment, net | 662,421,000 | 650,854,000 |
Interest receivable | 3,117,000 | 2,727,000 |
Bank owned life insurance | 22,878,000 | 22,647,000 |
Forward sales commitments | 112,000 | 60,000 |
Total Assets | 1,185,801,000 | 921,155,000 |
Deposits | 1,080,295,000 | 818,582,000 |
Long-term debt | 21,772,000 | 33,202,000 |
Interest payable | 491,000 | 261,000 |
Total liabilities | $ 1,102,558,000 | $ 852,105,000 |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Total risk-based ratio | ||
Bank actual capital amount | $ 111,389 | $ 103,838 |
Bank actual capital ratio | 15.00% | 14.81% |
Minimum capital requirement amount | $ 59,425 | $ 56,104 |
Minimum capital requirement ratio | 8.00% | 8.00% |
Minimum to be well capitalized under prompt corrective action provisions amount | $ 74,282 | $ 70,131 |
Minimum to be well capitalized under prompt corrective action provisions ratio | 10.00% | 10.00% |
Tier 1 risk-based ratio | ||
Bank actual capital amount | $ 103,641 | $ 95,051 |
Bank actual capital ratio | 13.95% | 13.55% |
Minimum capital requirement amount | $ 44,569 | $ 42,078 |
Minimum capital requirement ratio | 6.00% | 6.00% |
Minimum to be well capitalized under prompt corrective action provisions amount | $ 59,425 | $ 56,104 |
Minimum to be well capitalized under prompt corrective action provisions ratio | 8.00% | 8.00% |
Common equity tier 1 | ||
Bank actual capital amount | $ 103,641 | $ 95,051 |
Bank actual capital ratio | 13.95% | 13.55% |
Minimum capital requirement amount | $ 33,427 | $ 31,559 |
Minimum capital requirement ratio | 4.50% | 4.50% |
Minimum to be well capitalized under prompt corrective action provisions amount | $ 48,283 | $ 45,585 |
Minimum to be well capitalized under prompt corrective action provisions ratio | 6.50% | 6.50% |
Tier 1 leverage ratio | ||
Bank actual capital amount | $ 103,641 | $ 95,051 |
Bank actual capital ratio | 8.62% | 9.93% |
Minimum capital requirement amount | $ 48,100 | $ 38,275 |
Minimum capital requirement ratio | 4.00% | 4.00% |
Minimum to be well capitalized under prompt corrective action provisions amount | $ 60,125 | $ 47,844 |
Minimum to be well capitalized under prompt corrective action provisions ratio | 5.00% | 5.00% |
REGULATORY MATTERS (Details Nar
REGULATORY MATTERS (Details Narrative) | 12 Months Ended |
Dec. 31, 2021 | |
PARENT COMPANY ONLY FINANCIAL STATEMENTS | |
Description of conservation buffers | The capital conservation buffer requirement is 2.50%. The Company’s capital conservation buffer for 2021 was 7.00% and for 2020 was 6.81%. |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest Income | $ 31,274,000 | $ 31,064,000 |
Service charges on deposits | 1,133,000 | 1,191,000 |
Mortgage banking income, net | 4,646,000 | 6,154,000 |
Title insurance income | 2,074,000 | 1,978,000 |
Other operating income | 913,000 | 597,000 |
Interest Expense | 4,302,000 | 5,728,000 |
Salaries and benefits | 14,102,000 | 12,738,000 |
Income tax expense (benefit) | 1,323,000 | 1,142,000 |
Net income | 10,738,000 | 8,893,000 |
Net Income attributable to F & M Bank Corp. | 10,738,000 | 8,788,000 |
Total assets | 1,219,342,000 | 966,930,000 |
Goodwill | 3,082,000 | 2,884,000 |
F&M Bank | ||
Interest Income | 35,414,000 | 36,702,000 |
Service charges on deposits | 1,133,000 | 1,191,000 |
Investment services and insurance income | 0 | 1,000 |
Mortgage banking income, net | 0 | 0 |
Title insurance income | 0 | 0 |
Other operating income | 2,499,000 | 2,189,000 |
Total income | 39,046,000 | 40,083,000 |
Interest Expense | 3,591,000 | 5,483,000 |
Provision for loan losses | 2,800,000 | 3,300,000 |
Salaries and benefits | 14,392,000 | 12,923,000 |
Other operating expenses | 13,510,000 | 12,182,000 |
Total expense | 28,693,000 | 33,888,000 |
Income before income taxes | 10,353,000 | 6,195,000 |
Income tax expense (benefit) | 1,266,000 | 925,000 |
Net income | 5,270,000 | |
Net income attributable to noncontrolling interest | 0 | |
Net Income attributable to F & M Bank Corp. | 9,087,000 | 5,270,000 |
Total assets | 1,227,059,000 | 972,129,000 |
Goodwill | 2,868,000 | 2,670,000 |
F&M Mortgage | ||
Interest Income | 198,000 | 332,000 |
Service charges on deposits | 0 | 0 |
Investment services and insurance income | 0 | 0 |
Mortgage banking income, net | 4,646,000 | 6,154,000 |
Title insurance income | 0 | 0 |
Other operating income | 134,000 | 182,000 |
Total income | 4,978,000 | 6,668,000 |
Interest Expense | 123,000 | 357,000 |
Provision for loan losses | 0 | 0 |
Salaries and benefits | 2,501,000 | 2,236,000 |
Other operating expenses | 893,000 | 920,000 |
Total expense | 3,517,000 | 3,513,000 |
Income before income taxes | 1,461,000 | 3,155,000 |
Income tax expense (benefit) | 0 | 0 |
Net income | 3,155,000 | |
Net income attributable to noncontrolling interest | 105,000 | |
Net Income attributable to F & M Bank Corp. | 1,461,000 | 3,050,000 |
Total assets | 10,334,000 | 20,157,000 |
Goodwill | 47,000 | 47,000 |
TEB Life/FMFS | ||
Interest Income | 107,000 | 146,000 |
Service charges on deposits | 0 | 0 |
Investment services and insurance income | 953,000 | 709,000 |
Mortgage banking income, net | 0 | 0 |
Title insurance income | 0 | 0 |
Other operating income | 0 | 0 |
Total income | 1,060,000 | 855,000 |
Interest Expense | 0 | 0 |
Provision for loan losses | 21 | 0 |
Salaries and benefits | 369,000 | 298,000 |
Other operating expenses | 51,000 | 73,000 |
Total expense | 399,000 | 371,000 |
Income before income taxes | 661,000 | 484,000 |
Income tax expense (benefit) | 134,000 | 98,000 |
Net income | 386,000 | |
Net income attributable to noncontrolling interest | 0 | |
Net Income attributable to F & M Bank Corp. | 527,000 | 386,000 |
Total assets | 8,803,000 | 8,023,000 |
Goodwill | 0 | 0 |
VS Title | ||
Interest Income | 0 | 0 |
Service charges on deposits | 0 | 0 |
Investment services and insurance income | 0 | 0 |
Mortgage banking income, net | 0 | 0 |
Title insurance income | 2,074,000 | 1,978,000 |
Other operating income | 0 | 0 |
Total income | 2,074,000 | 1,978,000 |
Interest Expense | 0 | 0 |
Provision for loan losses | 0 | 0 |
Salaries and benefits | 1,225,000 | 1,027,000 |
Other operating expenses | 327,000 | 270,000 |
Total expense | 1,552,000 | 1,297,000 |
Income before income taxes | 522,000 | 681,000 |
Income tax expense (benefit) | 0 | 0 |
Net income | 681,000 | |
Net income attributable to noncontrolling interest | 0 | |
Net Income attributable to F & M Bank Corp. | 522,000 | 681,000 |
Total assets | 3,135,000 | 2,992,000 |
Goodwill | 3,000 | 3,000 |
Parent Only [Member] | ||
Interest Income | 1 | 0 |
Service charges on deposits | 0 | 0 |
Investment services and insurance income | 0 | 0 |
Mortgage banking income, net | 0 | 0 |
Title insurance income | 0 | 0 |
Other operating income | 124,000 | 153 |
Total income | (123,000) | (153) |
Interest Expense | 732,000 | 276 |
Provision for loan losses | 0 | 0 |
Salaries and benefits | 0 | 0 |
Other operating expenses | 81,000 | 51,000 |
Total expense | 813,000 | 327,000 |
Income before income taxes | (936,000) | (480,000) |
Income tax expense (benefit) | (77,000) | 119,000 |
Net income | (599,000) | |
Net income attributable to noncontrolling interest | 0 | |
Net Income attributable to F & M Bank Corp. | (859,000) | (599,000) |
Total assets | 112,586,000 | 107,726,000 |
Goodwill | 164,000 | 164,000 |
Eliminations | ||
Interest Income | 144,000 | 388,000 |
Service charges on deposits | 0 | 0 |
Investment services and insurance income | (9,000) | (41,000) |
Mortgage banking income, net | 0 | 0 |
Title insurance income | 0 | 0 |
Other operating income | 0 | 0 |
Total income | (153,000) | (429,000) |
Interest Expense | 144,000 | 388,000 |
Provision for loan losses | 0 | 0 |
Salaries and benefits | 0 | 0 |
Other operating expenses | (9,000) | (41,000) |
Total expense | 153,000 | (429,000) |
Income before income taxes | 0 | 0 |
Income tax expense (benefit) | 0 | 0 |
Net income | 0 | |
Net income attributable to noncontrolling interest | 0 | |
Net Income attributable to F & M Bank Corp. | 0 | 0 |
Total assets | 142,575,000 | 144,108,000 |
Goodwill | 0 | 0 |
F&M Bank Corp Consolidated | ||
Interest Income | 35,576,000 | 36,792,000 |
Service charges on deposits | 1,133,000 | 1,191,000 |
Investment services and insurance income | 944,000 | 669,000 |
Mortgage banking income, net | 4,646,000 | 6,154,000 |
Title insurance income | 2,074,000 | 1,978,000 |
Other operating income | 2,509,000 | 2,218,000 |
Total income | 46,882,000 | 49,002,000 |
Interest Expense | 4,302,000 | 5,728,000 |
Provision for loan losses | 2,821,000 | 3,300,000 |
Salaries and benefits | 18,487,000 | 16,484,000 |
Other operating expenses | 14,853,000 | 13,455,000 |
Total expense | 34,821,000 | 38,967,000 |
Income before income taxes | 12,061,000 | 10,035,000 |
Income tax expense (benefit) | 1,323,000 | 1,142,000 |
Net income | 8,893,000 | |
Net income attributable to noncontrolling interest | 105,000 | |
Net Income attributable to F & M Bank Corp. | 10,738,000 | 8,788,000 |
Total assets | 1,219,342,000 | 966,930,000 |
Goodwill | $ 3,082,000 | $ 2,884,000 |
PARENT COMPANY ONLY FINANCIAL_2
PARENT COMPANY ONLY FINANCIAL STATEMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | $ 88,121,000 | $ 78,408,000 | |
Income tax receivable (including due from subsidiary) | 2 | 0 | |
Total Assets | 1,219,342,000 | 966,930,000 | |
Total liabilities | 1,118,886,000 | 871,301,000 | |
Preferred stock par value $25 per share, 400,000 shares authorized, 205,327 and 206,660 issued and outstanding at December 31, 2020 and 2019, respectively. | 0 | 4,558,000 | |
Common stock par value $5 per share, 6,000,000 shares authorized, 3,203,372 and 3,208,498 shares issued and outstanding for 2020 and 2019, respectively | 17,071,000 | 16,017,000 | |
Retained earnings | 78,350,000 | 71,205,000 | |
Accumulated other comprehensive loss | (5,092,000) | (3,017,000) | |
Total Stockholders' Equity | 100,456,000 | 95,629,000 | $ 91,575,000 |
Total Liabilities and Stockholders' Equity | 1,219,342,000 | 966,930,000 | |
Parent Only [Member] | |||
Cash and cash equivalents | 8,824,000 | 11,555,000 | |
Investment in subsidiaries | 102,808,000 | 95,643,000 | |
Other investments | 135,000 | 135,000 | |
Income tax receivable (including due from subsidiary) | 463,000 | 156,000 | |
Goodwill and intangibles | 190,000 | 237,000 | |
Receivable from subsidiary bank | 149 | 0 | |
Total Assets | 112,586,000 | 107,726,000 | |
Deferred income taxes | 47,000 | 81,000 | |
Accrued expenses | 0 | 0 | |
Accrued interest | 294,000 | 276,000 | |
Long-term liability | 11,772,000 | 11,740,000 | |
Total liabilities | 12,113,000 | 12,097,000 | |
Preferred stock par value $25 per share, 400,000 shares authorized, 205,327 and 206,660 issued and outstanding at December 31, 2020 and 2019, respectively. | 0 | 4,558,000 | |
Common stock par value $5 per share, 6,000,000 shares authorized, 3,203,372 and 3,208,498 shares issued and outstanding for 2020 and 2019, respectively | 17,071,000 | 16,017,000 | |
Additional paid in capital | 10,127,000 | 6,866,000 | |
Retained earnings | 78,350,000 | 71,205,000 | |
Accumulated other comprehensive loss | (5,092,000) | (3,017,000) | |
Total Stockholders' Equity | 100,456,000 | 95,629,000 | |
Total Liabilities and Stockholders' Equity | $ 112,569,000 | $ 107,726,000 |
PARENT COMPANY ONLY FINANCIAL_3
PARENT COMPANY ONLY FINANCIAL STATEMENTS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax (Benefit) Expense | $ 1,323,000 | $ 1,142,000 |
Net income attributable to non-controlling interest | 0 | (105,000) |
Net income | 10,738,000 | 8,893,000 |
Parent Only [Member] | ||
Dividends from affiliate | 2,232,000 | 1,500,000 |
Other income | 1 | 11,000 |
Total income | 2,233,000 | 1,511,000 |
Total expenses | 812,000 | 328,000 |
Net income before income tax expense and undistributed subsidiary net income | 1,421,000 | 1,183,000 |
Income Tax (Benefit) Expense | (77,000) | 119,000 |
Income before undistributed subsidiary Net income | 1,498,000 | 1,064,000 |
Net income attributable to non-controlling interest | (9,240,000) | (7,724,000) |
Net income | $ 10,738,000 | $ 8,788,000 |
PARENT COMPANY ONLY FINANCIAL_4
PARENT COMPANY ONLY FINANCIAL STATEMENTS (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net income | $ 10,738,000 | $ 8,893,000 |
Share based compensation expense | 86,000 | |
Net cash provided by operating activities | 21,281,000 | 1,848,000 |
Net Cash Used in Investing Activities | (243,700,000) | (142,135,000) |
Repurchase of preferred stock | 627,000 | 0 |
Proceeds from issuance of common stock | 263,000 | 0 |
Net Cash Provided by (Used in) Financing Activities | 232,132,000 | 142,891,000 |
Cash and Cash Equivalents, Beginning of Year | 78,408,000 | 75,804,000 |
Cash and Cash Equivalents, End of Year | 88,121,000 | 78,408,000 |
Parent Only [Member] | ||
Net income | 10,738,000 | 8,788,000 |
Undistributed (distributed) subsidiary income (loss) | (9,240,000) | (7,724,000) |
Deferred tax expense (benefit) | (35,000) | 478,000 |
Increase (decrease) in other assets | (409,000) | 1,785,000 |
Increase in other liabilities | 19,000 | 610,000 |
Share based compensation expense | 86 | 0 |
Net cash provided by operating activities | 1,159,000 | 3,937,000 |
Purchase of minority interest | 0 | 856,000 |
Net Cash Used in Investing Activities | 0 | (856,000) |
Proceeds from long-term debt | 0 | 11,740,000 |
Long-term debt fee amortization | 32 | 0 |
Repurchase of preferred stock | 627,000 | 0 |
Repurchase of common stock | 0 | 473,000 |
Proceeds from the sale of common stock | 263 | 258 |
Proceeds from issuance of common stock | 35,000 | 0 |
Dividends paid in cash | 3,593,000 | 3,591,000 |
Net Cash Provided by (Used in) Financing Activities | (3,890,000) | 7,934,000 |
Net increase (decrease) in Cash and Cash Equivalents | (2,731,000) | 11,015,000 |
Cash and Cash Equivalents, Beginning of Year | 11,555,000 | 540 |
Cash and Cash Equivalents, End of Year | $ 8,824,000 | $ 11,555,000 |
INVESTMENT IN FM MORTGAGE LLC (
INVESTMENT IN FM MORTGAGE LLC (Details Narrative) | 1 Months Ended | ||
Apr. 30, 2020 | Nov. 03, 2008 | Dec. 31, 2020 | |
INVESTMENT IN FM MORTGAGE, LLC | |||
Bank acquired ownership interest | 30.00% | 70.00% | |
Noncontrolling interest ownership | 100.00% |
INVESTMENT IN VSTITLE LLC (Deta
INVESTMENT IN VSTITLE LLC (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Nov. 03, 2008 | Dec. 31, 2021 | |
Bank acquired ownership interest | 30.00% | 70.00% | |
January 1, 2017 [Member] | |||
Bank acquired ownership interest | 76.00% |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unrealized Securities Gains Losses [Member] | ||
Beginning balance | $ 804,000 | $ (7,000) |
Change in unrealized securities gains (losses), net of tax | (2,190,000) | 811,000 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Losses realized in income, net of tax | 0 | |
Ending balance | (1,386,000) | 804,000 |
Adjustments Related to Pension Plan | ||
Beginning balance | (3,821,000) | (3,204,000) |
Change in unrealized securities gains (losses), net of tax | 0 | 0 |
Change in unfunded pension liability, net of tax | 530,000 | (617,000) |
Losses realized in income, net of tax | 0 | |
Ending balance | 3,291,000 | (3,821,000) |
Accumulated Other comprehensive Income (Loss) | ||
Beginning balance | (3,017,000) | (3,211,000) |
Change in unrealized securities gains (losses), net of tax | (2,190,000) | 811,000 |
Change in unfunded pension liability, net of tax | 530,000 | (617,000) |
Losses realized in income, net of tax | (415,000) | |
Ending balance | (5,092,000) | (3,017,000) |
Losses Realized In Net Income [Member] | ||
Beginning balance | 0 | 0 |
Change in unrealized securities gains (losses), net of tax | 0 | 0 |
Change in unfunded pension liability, net of tax | 0 | 0 |
Losses realized in income, net of tax | (415,000) | |
Ending balance | $ (415,000) | $ 0 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total noninterest income | $ 11,306 | $ 12,210 |
Service Charges on Deposits | ||
Total noninterest income | 1,133 | 1,191 |
Investment Services and Insurance Income | ||
Total noninterest income | 944 | 669 |
Title Insurance Income | ||
Total noninterest income | 2,074 | 1,978 |
ATM and check card fees | ||
Total noninterest income | 2,311 | 1,900 |
Other | ||
Total noninterest income | 807 | 547 |
Noninterest Income (in-scope of Topic 606) | ||
Total noninterest income | 7,269 | 6,285 |
Noninterest Income (out-of-scope of Topic 606) | ||
Total noninterest income | $ 4,037 | $ 5,925 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net loss (gain) on sales | $ 0 | $ 205,000 |
OREO Property [Member] | ||
Net loss (gain) on sales | $ 0 | $ 205,000 |
LEASES (Details)
LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease liabilities | $ 957 | |
Long-Term Lease Agreements [Member] | ||
Lease liabilities | 957,000 | $ 859,000 |
Right-of-use assets | $ 937,000 | $ 840,000 |
Weighted average discount rate | 3.01% | 3.48% |
Weighted average remaining lease term | 3 years 4 months 13 days | 4 years 1 month 13 days |
Operating lease cost | $ 121,000 | $ 112,000 |
Total lease cost | 121,000 | 112,000 |
Cash paid for amounts included in the measurement of lease liabilities | $ 145,000 | $ 130,000 |
LEASES (Details 1)
LEASES (Details 1) | Dec. 31, 2021USD ($) |
LEASES | |
Twelve months ending December 31, 2022 | $ 185,000 |
Twelve months ending December 31, 2023 | 135,000 |
Twelve months ending December 31, 2024 | 136,000 |
Twelve months ending December 31, 2025 | 98,000 |
Twelve months ending December 31, 2026 | 70,000 |
Thereafter | 518,000 |
Total undiscounted cash flows | 1,142,000 |
Discount | (185,000) |
Lease Liabilites | $ 957 |
Waynesboro Branch Acquisition_2
Waynesboro Branch Acquisition (Details) - USD ($) | Dec. 31, 2021 | Apr. 26, 2021 | Apr. 23, 2021 | Dec. 31, 2020 |
Premises and equipment, net | $ 11,000 | $ 11,000 | ||
Right-of-use asset | 50,000 | 50,000 | ||
Cash and due from banks | 188,000 | 188,000 | ||
Core deposit intangible | 73 | 0 | ||
Total assets | 322,000 | 322,000 | ||
Total deposits | 14,229,000 | 14,229,000 | ||
Lease Liability | 50,000 | 50,000 | ||
Total liabilities | 14,279,000 | 14,279,000 | ||
Net assets acquired | $ (13,957,000) | (13,957,000) | ||
Noninterest-bearing | $ 280,993,000 | $ 236,915,000 | ||
Interest-bearing | $ 799,302,000 | $ 581,667,000 | ||
Acquired Balances as Recorded by Carter Bankshares Inc [Member] | ||||
Premises and equipment, net | 11,000 | |||
Right-of-use asset | 50,000 | |||
Cash and due from banks | 188,000 | |||
Core deposit intangible | 0 | |||
Total assets | 249,000 | |||
Total deposits | 14,094,000 | |||
Lease Liability | 50,000 | |||
Total liabilities | 14,144,000 | |||
Net assets acquired | (13,895,000) | |||
Noninterest-bearing | 1,693 | |||
Interest-bearing | 12,401 | |||
Fair Value Adjustments [Member] | ||||
Premises and equipment, net | 0 | |||
Right-of-use asset | 0 | |||
Cash and due from banks | 0 | |||
Core deposit intangible | 73,000 | |||
Total assets | 73,000 | |||
Total deposits | 135,000 | |||
Lease Liability | 0 | |||
Total liabilities | 135,000 | |||
Net assets acquired | (62,000) | |||
Noninterest-bearing | 0 | |||
Interest-bearing | 135 | |||
Acquired Balances as Recorded by Farmers and Merchant Bank [Member] | ||||
Premises and equipment, net | 11,000 | |||
Right-of-use asset | 50,000 | |||
Cash and due from banks | 188,000 | |||
Core deposit intangible | 73,000 | |||
Total assets | 322,000 | |||
Total deposits | 14,229,000 | |||
Lease Liability | 50,000 | |||
Total liabilities | 14,279,000 | |||
Net assets acquired | (13,957,000) | |||
Noninterest-bearing | 1,693 | |||
Interest-bearing | $ 12,536 |
Waynesboro Branch Acquisition_3
Waynesboro Branch Acquisition (Details 1) - USD ($) | Apr. 26, 2021 | Apr. 23, 2021 |
EMPLOYEE BENEFITS (Details) | ||
Cash and cash equivalents | $ 188,000 | $ 188,000 |
Premises and equipment, net | 11,000 | 11,000 |
Right-of-use asset | 50,000 | 50,000 |
Core deposit intangible | 73 | 0 |
Total fair value of assets acquired | 322,000 | 322,000 |
Total deposits | 14,229,000 | 14,229,000 |
Lease Liability | 50,000 | 50,000 |
Total fair value of liabilities assumed | 14,279,000 | 14,279,000 |
Net assets acquired | (13,957,000) | (13,957,000) |
Transaction consideration paid to Carter Bankshares Inc. | (13,758,000) | (13,758,000) |
Amount of goodwill resulting from acquisition | $ 199,000 | $ 199,000 |
Waynesboro Branch Acquisition_4
Waynesboro Branch Acquisition (Details Narrative) - USD ($) $ in Thousands | Apr. 26, 2021 | Apr. 23, 2021 |
EMPLOYEE BENEFITS (Details) | ||
Transaction consideration paid to Carter Bankshares Inc. | $ 13,758 | $ 13,758 |
Premium paid on deposits | 135 | |
Total deposits | 14,229 | 14,229 |
Amount of goodwill resulting from acquisition | $ 199 | $ 199 |