Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 08, 2023 | |
Cover | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-24047 | |
Entity Registrant Name | GLEN BURNIE BANCORP | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1782444 | |
Entity Address, Address Line One | 101 Crain Highway, S.E. | |
Entity Address, City or Town | Glen Burnie | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21061 | |
City Area Code | 410 | |
Local Phone Number | 766-3300 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | GLBZ | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 2,877,084 | |
Entity Central Index Key | 0000890066 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and due from banks | $ 1,965 | $ 2,035 |
Interest-bearing deposits in other financial institutions | 9,783 | 28,057 |
Cash and Cash Equivalents | 11,748 | 30,092 |
Investment securities available for sale, at fair value | 150,820 | 144,133 |
Restricted equity securities, at cost | 403 | 221 |
Loans, net of deferred fees and costs | 180,551 | 186,440 |
Less: Allowance for credit losses | (2,222) | (2,162) |
Loans, net | 178,329 | 184,278 |
Premises and equipment, net | 3,276 | 3,277 |
Bank owned life insurance | 8,572 | 8,493 |
Deferred tax assets, net | 8,520 | 8,902 |
Accrued interest receivable | 1,139 | 1,159 |
Accrued taxes receivable | 70 | |
Prepaid expenses | 382 | 493 |
Other assets | 348 | 388 |
Total Assets | 363,607 | 381,436 |
LIABILITIES | ||
Noninterest-bearing deposits | 130,430 | 143,262 |
Interest-bearing deposits | 198,794 | 219,685 |
Total Deposits | 329,224 | 362,947 |
Short-term borrowings | 15,000 | |
Defined pension liability | 320 | 317 |
Accrued Taxes Payable | 151 | |
Accrued expenses and other liabilities | 1,804 | 1,967 |
Total Liabilities | 346,348 | 365,382 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,872,834 and 2,865,046 shares as of June 30, 2023 and December 31, 2022, respectively. | 2,873 | 2,865 |
Additional paid-in capital | 10,914 | 10,862 |
Retained earnings | 23,716 | 23,579 |
Accumulated other comprehensive loss | (20,244) | (21,252) |
Total Stockholders' Equity | 17,259 | 16,054 |
Total Liabilities and Stockholders' Equity | $ 363,607 | $ 381,436 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 2,872,834 | 2,865,046 |
Common stock, shares outstanding | 2,872,834 | 2,865,046 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INTEREST INCOME | ||||
Interest and fees on loans | $ 2,135 | $ 2,089 | $ 4,223 | $ 4,256 |
Interest and dividends on securities | 999 | 794 | 1,964 | 1,492 |
Interest on deposits with banks and federal funds sold | 133 | 147 | 365 | 197 |
Total Interest Income | 3,267 | 3,030 | 6,552 | 5,945 |
INTEREST EXPENSE | ||||
Interest on deposits | 115 | 120 | 222 | 244 |
Interest on short-term borrowings | 38 | 88 | 38 | 191 |
Interest on long-term borrowings | 19 | 26 | ||
Total Interest Expense | 153 | 227 | 260 | 461 |
Net Interest Income | 3,114 | 2,803 | 6,292 | 5,484 |
Provision (release) for credit losses | 127 | (116) | 85 | (217) |
Net interest income after provision (release) | 2,987 | 2,919 | 6,207 | 5,701 |
NONINTEREST INCOME | ||||
Gain on securities sold/redeemed | 1 | 1 | ||
Income on life insurance | 40 | 39 | 79 | 76 |
Total Noninterest Income | 239 | 260 | 485 | 514 |
NONINTEREST EXPENSE | ||||
Salary and benefits | 1,701 | 1,516 | 3,398 | 3,136 |
Occupancy and equipment expenses | 299 | 316 | 627 | 647 |
Legal, accounting and other professional fees | 235 | 260 | 498 | 585 |
Data processing and item processing services | 281 | 235 | 549 | 461 |
FDIC insurance costs | 37 | 29 | 82 | 54 |
Advertising and marketing related expenses | 23 | 21 | 45 | 43 |
Loan collection costs | 2 | 20 | 3 | (55) |
Telephone costs | 34 | 41 | 75 | 85 |
Other expenses | 313 | 397 | 593 | 663 |
Total Noninterest Expenses | 2,925 | 2,835 | 5,870 | 5,619 |
Income before income taxes | 301 | 344 | 822 | 596 |
Income tax expense | 25 | 35 | 112 | 56 |
NET INCOME | $ 276 | $ 309 | $ 710 | $ 540 |
Basic net income per share of common stock (in dollars per share) | $ 0.10 | $ 0.11 | $ 0.25 | $ 0.19 |
Diluted net income per share of common stock (in dollars per share) | $ 0.10 | $ 0.11 | $ 0.25 | $ 0.19 |
Service charges on deposit accounts | ||||
NONINTEREST INCOME | ||||
Service charges on deposit accounts | $ 38 | $ 40 | $ 80 | $ 82 |
Other fees and commissions | ||||
NONINTEREST INCOME | ||||
Other fees and commissions | $ 161 | $ 180 | $ 326 | $ 355 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 276 | $ 309 | $ 710 | $ 540 |
Net unrealized income (loss) on securities available for sale: | ||||
Net unrealized (loss) income on securities during the period | (1,372) | (8,556) | 1,392 | (20,493) |
Income tax benefit (expense) relating to item above | 378 | 2,355 | (384) | 5,640 |
Reclassification adjustment for gain on sales of securities included in net income | (1) | (1) | ||
Net effect on other comprehensive (loss) income | (994) | (6,202) | 1,008 | (14,854) |
Net unrealized gain on interest rate swaps: | ||||
Net unrealized gain on interest rate swap during the period | 185 | 522 | ||
Income tax expense relating to item above | (51) | (144) | ||
Net effect on other comprehensive loss | 134 | 378 | ||
Other comprehensive (loss) income | (994) | (6,068) | 1,008 | (14,476) |
Comprehensive (loss) income | $ (718) | $ (5,759) | $ 1,718 | $ (13,936) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balances at Dec. 31, 2021 | $ 2,854 | $ 10,759 | $ 22,977 | $ (874) | $ 35,716 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 540 | 540 | |||
Cash dividends, $0.10 per share | (571) | (571) | |||
Dividends reinvested under dividend reinvestment plan | 5 | 51 | 56 | ||
Other comprehensive income | (14,476) | (14,476) | |||
Balances at Jun. 30, 2022 | 2,859 | 10,810 | 22,946 | (15,350) | 21,265 |
Balances at Dec. 31, 2022 | 2,865 | 10,862 | 23,579 | (21,252) | 16,054 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 710 | 710 | |||
Cash dividends, $0.10 per share | (573) | (573) | |||
Dividends reinvested under dividend reinvestment plan | 8 | 52 | 60 | ||
Other comprehensive income | 1,008 | 1,008 | |||
Balances at Jun. 30, 2023 | $ 2,873 | $ 10,914 | $ 23,716 | $ (20,244) | $ 17,259 |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Cash dividends, per share | $ 0.20 | $ 0.20 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 710 | $ 540 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization, and accretion of premises and equipment | 216 | 215 |
Amortization, and accretion of investment securities available for sale | 71 | 481 |
Provision (release) for credit losses | 85 | (217) |
Increase in cash surrender value of bank owned life insurance | (79) | (76) |
Loss on write-down of Maryland Financial Bank stock | 2 | |
Decrease in ground rents | 3 | |
Decrease (increase) in accrued interest receivable | 20 | (60) |
Net decrease (increase) in other assets | 76 | (106) |
Net decrease in accrued expenses and other liabilities | (251) | (245) |
Net cash provided by operating activities | 851 | 534 |
Cash flows from investing activities: | ||
Redemptions and maturities of investment securities available for sale | 4,381 | 8,671 |
Sales of available for sale debt securities | 1 | |
Purchases of investment securities available for sale | (9,747) | (31,540) |
Net purchase of Federal Home Loan Bank stock | (182) | (11) |
Net decrease in loans | 5,864 | 9,679 |
Purchases of premises and equipment | (275) | (152) |
Net cash provided by investing activities | 41 | (13,352) |
Cash flows from financing activities: | ||
Net (decrease) increase in deposits | (33,723) | 2,518 |
Cash dividends paid | (573) | (571) |
Common stock dividends reinvested | 60 | 56 |
Net cash (used in) provided by financing activities | (19,236) | 2,003 |
Decrease in short term borrowings | 15,000 | |
Net (decrease) increase in cash and cash equivalents | (18,344) | (10,815) |
Cash and cash equivalents at beginning of period | 30,092 | 62,181 |
Cash and cash equivalents at end of period | 11,748 | 51,366 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest paid on deposits and borrowings | 224 | 440 |
Net income taxes paid | 330 | |
Net decrease (increase) in unrealized depreciation on available for sale securities | $ 1,392 | (20,493) |
Net decrease in unrealized depreciation on swaps | $ 521 |
ORGANIZATIONAL
ORGANIZATIONAL | 6 Months Ended |
Jun. 30, 2023 | |
ORGANIZATIONAL. | |
ORGANIZATIONAL | NOTE 1 – ORGANIZATIONAL Nature of Business Glen Burnie Bancorp (the “Company”) is a bank holding company organized in 1990 under the laws of the State of Maryland. The Company owns all the outstanding shares of capital stock of The Bank of Glen Burnie (the “Bank”), a commercial bank in 1949 under the laws of the State of Maryland (the “State”). The Bank provides financial services to individuals and corporate customers located in Anne Arundel County and surrounding areas of Central Maryland, and is subject to competition from other financial institutions. The Bank is also subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2023 and December 31, 2022, the results of operations for the three- and six-month periods ended June 30, 2023 and 2022, and the statements of cash flows for the six-month period ended June 30, 2023 and 2022. The operating results for the three- and six-month period ended June 30, 2023, are not necessarily indicative of the results that may be expected for the full year ended December 31, 2023, or any future interim period. The consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2023. The unaudited consolidated financial statements for June 30, 2023 and 2022, the consolidated balance sheet at December 31, 2022, and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Summary of Significant Accounting Policies The significant accounting policies used in preparation of the Company's consolidated financial statements are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022. There have not been any significant changes in the Company's significant accounting policies. Allowance for Credit Losses – Loans Receivable Effective January 1, 2021, the Company applied ASU 2016-13, Financial Instruments - Credit Losses ("ASC 326"), such that the allowance calculation is based on the current expected credit loss (“CECL”) methodology. Prior to January 1, 2021, the calculation was based on incurred loss methodology. The Company maintains an allowance for credit losses (“ACL”) for the expected credit losses of the loan portfolio as well as unfunded loan commitments. The amount of ACL is based on ongoing, quarterly assessments by management. The CECL methodology requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures) and replaces the incurred loss methodology’s threshold that delayed the recognition of a credit loss until it was probable a loss event was incurred. The ACL consists of the allowance for credit losses and the reserve for unfunded commitments. The estimate of expected credit losses under the CECL methodology is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. We then consider whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period that historical experience was based for each loan type. Finally, we consider forecasts about future economic conditions or changes in collateral values that are reasonable and supportable. Portfolio segment is defined as the level at which the Company develops and documents a systematic methodology to determine its ACL. The Company has designated three loan portfolio segments: loans secured by real estate, commercial and industrial loans, and consumer loans. These loan portfolio segments are further disaggregated into classes, which represent loans of similar type, risk characteristics, and methods for monitoring and assessing credit risk. The loans secured by the real estate portfolio segment is disaggregated into five classes: construction and land, farmland, single-family residential, multi-family, and commercial. The commercial and industrial loan portfolio segment is disaggregated into two classes: commercial and industrial, and SBA guaranty. The risk of loss for the commercial and industrial loan portfolio segment is generally most indicated by the credit risk rating assigned to each borrower. Commercial and industrial loan risk ratings are determined by experienced senior credit officers based on specific facts and circumstances and are subject to periodic review by an independent internal team of credit specialists. The consumer loan portfolio segment is disaggregated into two classes: consumer and automobile. The risk of loss for the consumer loan portfolio segment is generally most indicated by delinquency status and general economic factors. Each of the three loan portfolio segments may also be further segmented based on risk characteristics. For most of our loan portfolio classes, the historical loss experience is determined using the Average Charge-Off Method. This method pools loans into groups (“cohorts”) sharing similar risk characteristics and tracks each cohort’s net charge-offs over the lives of the loans. The Average Charge-Off Method uses historical values by period (20-year look-back) to calculate losses and then applies the historical average to future balances over the life of the account. The historical loss rates for each cohort are then averaged to calculate an overall historical loss rate which is applied to the current loan balance to arrive at the quantitative baseline portion of the allowance for credit losses for the respective loan portfolio class. For certain loan portfolio classes, the Company determined there was not sufficient historical loss information to calculate a meaningful historical loss rate using the average charge-off methodology. For any such loan portfolio class, peer group history contributes to the Company’s weighted average loss history. The peer group data is included in the weighted average loss history that is developed for each loan pool. The Company also considers qualitative adjustments to the historical loss rate for each loan portfolio class. The qualitative adjustments for each loan class consider the conditions over the 20-year look-back period from which historical loss experience was based and are split into two components: 1) asset or class specific risk characteristics or current conditions at the reporting date related to portfolio credit quality, remaining payments, volume and nature, credit culture and management, business environment or other management factors; and 2) reasonable and supportable forecast of future economic conditions and collateral values. The Company performs a quarterly asset quality review which includes a review of forecasted gross charge-offs and recoveries, nonperforming assets, criticized loans, risk rating migration, delinquencies, etc. The asset quality review is performed by management and the results are used to consider a qualitative overlay to the quantitative baseline. When management deems it to be appropriate, the Company establishes a specific reserve for individually evaluated loans that do not share similar risk characteristics with the loans included in each respective loan pool. These individually evaluated loans are removed from their respective pools and typically represent collateral dependent loans but may also include other non-performing loans or troubled debt restructurings (“TDRs”). Allowance for Credit Losses – Held-to-Maturity Debt Securities For held-to-maturity (“HTM”) debt securities, the Company is required to utilize a CECL methodology to estimate expected credit losses. The Company does not own any HTM debt securities. Therefore, the Company did not record an allowance for credit losses for these types of securities. Allowance for Credit Losses – Available-for-Sale Debt Securities The impairment model for available-for-sale (“AFS”) debt securities differs from the CECL methodology applied for HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Under the new guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses. Losses are charged against the allowance when management believes the collectability of an AFS security is considered below the amortized cost basis of the security. As of December 31, 2022 and June 30, 2023, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. Off-Balance-Sheet Credit Exposures The only material off-balance-sheet credit exposures are unfunded loan commitments, which had a combined balance of $30.7 million on June 30, 2023. The reserve for unfunded commitments is recognized as a liability (accrued expenses and other liabilities in the consolidated statements of financial condition), with adjustments to the reserve recognized through provision for credit losses in the consolidated statements of income. The reserve for unfunded commitments represents the expected lifetime credit losses on off-balance sheet obligations such as commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments that are unconditionally cancellable by the Company. The reserve for unfunded commitments is determined by estimating future draws, including the effects of risk mitigation actions, and applying the expected loss rates on those draws. Loss rates are estimated by utilizing the same loss rates calculated for the allowance for credit losses related to the respective loan portfolio class. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, The Bank of Glen Burnie. Consolidation resulted in the elimination of all intercompany accounts and transactions. Cash Flow Presentation In the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, Federal Home Loan Bank of Atlanta (“FHLB Atlanta”) overnight deposits, and federal funds sold. Generally, federal funds are sold for one-day periods. Reclassifications Certain items in the fiscal year 2022 consolidated financial statements have been reclassified to conform to the fiscal year 2023 classifications. The reclassifications had no effect on previously reported results of operations or retained earnings. Use of Estimates The preparation of financial statements 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 materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the ACL; the fair value of financial instruments, such as loans and investment securities; benefit plan obligations and expenses; and the valuation of deferred tax assets and liabilities. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 3 – EARNINGS PER SHARE Basic earnings per common share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average common shares outstanding, plus the effect of common stock equivalents (for example, stock options computed using the treasury stock method). Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Basic and diluted earnings per share: Net income $ 275,360 $ 309,532 $ 710,381 $ 540,264 Weighted average common shares outstanding 2,871,026 2,857,616 2,867,039 2,856,441 Basic and dilutive net income per share $ 0.10 $ 0.11 $ 0.25 $ 0.19 Diluted earnings per share calculations were not required for the three- and six-month periods ended June 30, 2023 and 2022, as there were no stock options outstanding. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2023 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | NOTE 4 – INVESTMENT SECURITIES Investment securities are accounted for according to their purpose and holding period. Trading securities are those that are bought and held principally for the purpose of selling them in the near term. The Company held trading securities at June 30, 2023 or December 31, 2022. Available-for-sale investment securities, comprised of debt and mortgage-backed securities, are those that may be sold before maturity due to changes in the Company's interest rate risk profile or funding needs, and are reported at fair value with unrealized gains and losses, net of taxes, reported as a component of other comprehensive income. Held-to-maturity investment securities are those that management has the positive intent and ability to hold to maturity and are reported at amortized cost. The Company held Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method. Interest and dividends on investment securities are recognized in interest income on an accrual basis. Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities. The following table summarizes the amortized cost and estimated fair value of the Company’s investment securities portfolio at June 30, 2023 and December 31, 2022: At June 30, 2023 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 16,689 $ 10 $ (2,416) $ 14,283 Agency mortgage-backed securities 55,320 — (6,704) 48,616 Municipal securities 43,042 5 (9,949) 33,098 Corporate Securities 1,500 — (245) 1,255 U.S. Government agency securities 45,453 — (8,468) 36,985 U.S. Treasury securities 16,745 2 (164) 16,583 Total securities available for sale $ 178,749 $ 17 $ (27,946) $ 150,820 At December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 17,596 $ 7 $ (2,348) $ 15,255 Agency mortgage-backed securities 58,801 — (6,908) 51,893 Municipal securities 43,092 1 (10,796) 32,297 Corporate Securities 1,500 — (175) 1,325 U.S. Government agency securities 45,471 — (8,891) 36,580 U.S. Treasury securities 6,993 — (210) 6,783 Total securities available for sale $ 173,453 $ 8 $ (29,328) $ 144,133 The gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2023 and December 31, 2022 are as follows: June 30, 2023 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 2,169 $ (31) $ 10,378 $ (2,385) $ 12,547 $ (2,416) Agency mortgage-backed securities 9,526 (418) 39,090 (6,286) 48,616 (6,704) Municipal securities 4,435 (92) 27,048 (9,857) 31,483 (9,949) Corporate Securities — — 1,255 (245) 1,255 (245) U.S. Government agency securities 269 — 36,716 (8,468) 36,985 (8,468) U.S. Treasury securities — — 6,832 (164) 6,832 (164) $ 16,399 $ (541) $ 121,319 $ (27,405) $ 137,718 $ (27,946) December 31, 2022 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 8,315 $ (364) $ 6,127 $ (1,984) $ 14,442 $ (2,348) Agency mortgage-backed securities 20,029 (1,308) 31,865 (5,600) 51,894 (6,908) Municipal securities 18,456 (5,438) 13,340 (5,358) 31,796 (10,796) Corporate Securities — — 1,325 (175) 1,325 (175) U.S. Government agency securities 13,526 (474) 22,767 (8,417) 36,293 (8,891) U.S. Treasury securities 6,783 (210) — — 6,783 (210) $ 67,109 $ (7,794) $ 75,424 $ (21,534) $ 142,533 $ (29,328) The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position have any credit loss impairment upon adoption of ASC 326 on January 1, 2021 or as of June 30, 2023. As of June 30, 2023, the Company did not intend to sell the investment securities that were in an unrealized loss position. It is more likely than not that the Company will not be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. Available-for-sale debt securities issued by U.S. government agencies or U.S. government sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Municipal bonds are considered to have issuer(s) of high credit quality (rated A or higher) and the decline in fair value is due to changes in interest rates and other market conditions. Corporate securities are non-rated investments that are booked as a debt security where rating agencies do not provide a rating. The absence of a rating does not imply substandard quality. Non-rated corporate securities may be purchased from issuers operating in and around the Company’s operating footprint. The issuer(s) continues to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bond(s) approach maturity. At June 30, 2023, the Company recorded unrealized losses in its portfolio of debt securities totaling $27,946,000 related to 257 securities, which resulted from decreases in market value, spread volatility, and other factors that management deems to be temporary. Management does not believe the securities are impaired due to reasons of credit quality. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to have a credit loss impairment. At December 31, 2022, the Company recorded unrealized losses in its portfolio of debt securities totaling $29,328,000 related to 256 securities, which resulted from decreases in market interest rates, spread volatility, and other factors that management deems to be temporary. Management does not believe the securities are impaired due to reasons of credit quality. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to have a credit loss impairment. Shown below are contractual maturities of debt securities at June 30, 2023. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2023 Amortized Fair Yield (dollars in thousands) Cost Value (1), (2) Available for sale securities maturing: Within one year $ 25,751 $ 25,357 3.50 % Over one to five years 11,645 10,872 2.14 % Over five to ten years 33,584 29,699 2.11 % Over ten years 107,769 84,892 2.39 % Total debt securities $ 178,749 $ 150,820 _____________________ (1) Yields are stated as book yields which are adjusted for amortization and accretion of purchase premiums and discounts, respectively. (2) Yields on tax-exempt obligations are computed on a tax-equivalent basis. |
LOANS RECEIVABLE AND ALLOWANCE
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | 6 Months Ended |
Jun. 30, 2023 | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | NOTE 5 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The fundamental lending business of the Company is based on understanding, measuring, and controlling the credit risk inherent in the loan portfolio. The Company's loan portfolio is subject to varying degrees of credit risk. These risks entail both general risks, which are inherent in the lending process, and risks specific to individual borrowers. The Company's credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry, or collateral type. The Company currently manages its credit products and the respective exposure to credit losses by specific portfolio segments and classes, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for credit losses. The Company believes each portfolio segment has unique risk characteristics. The Company's loans held for investment is divided into three portfolio segments: loans secured by real estate, commercial and industrial loans, and consumer loans. Each of these segments is further divided into loan classes for purposes of estimating the allowance for credit losses. The following table is a summary of loans receivable by loan portfolio segment and class. June 30, December 31, 2023 2022 (dollars in thousands) Amount % Amount % Loans Secured by Real Estate Construction and land $ 5,116 3 $ 4,499 2 Farmland 328 — 333 — Single-family residential 82,337 45 80,251 43 Multi-family 5,236 3 5,304 3 Commercial 42,557 24 42,936 23 Total loans secured by real estate 135,574 133,323 Commercial and Industrial Commercial and industrial 10,250 6 8,990 5 SBA guaranty 6,023 3 6,158 3 Total commercial and industrial loans 16,273 15,148 Consumer Loans Consumer 1,430 1 1,521 1 Automobile 27,274 15 36,448 20 Total consumer loans 28,704 37,969 Loans, net of deferred fees and costs 180,551 100 186,440 100 Less: Allowance for credit losses (2,222) (2,162) Loans, net $ 178,329 $ 184,278 The Bank’s net loans totaled . Construction and land loans increased from . Farmland loans were million at June 30, 2023 and December 31, 2022. Single-family residential loans increased from . Multi-family residential loans were %. Commercial real estate loans decreased $ million on December 31, 2022. Commercial and industrial loans increased by $ 10.2 million on December 31, 2022. SBA guaranty loans were $ million at December 31, 2022. Consumer loans decreased by $ million on December 31, 2022. Automobile loans decreased from Credit Risk and Allowance for Credit Losses . Credit risk is the risk of loss arising from the inability of a borrower to meet his or her obligations and entails both general risks, which are inherent in the process of lending, and risks specific to individual borrowers. Credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry, or collateral type. Residential mortgage and home equity loans and lines generally have the lowest credit loss experience. Loans secured by personal property, such as auto loans, generally experience medium credit losses. Unsecured loan products, such as personal revolving credit, have the highest credit loss experience and for that reason, the Bank has chosen not to engage in a significant amount of this type of lending. Credit risk in commercial lending can vary significantly, as losses as a percentage of outstanding loans can shift widely during economic cycles and are particularly sensitive to changing economic conditions. Generally, improving economic conditions result in improved operating results on the part of commercial customers, enhancing their ability to meet their particular debt service requirements. Improvements, if any, in operating cash flows can be offset by the impact of rising interest rates that may occur during improved economic times. Inconsistent economic conditions may have an adverse effect on the operating results of commercial customers, reducing their ability to meet debt service obligations. On January 1, 2021, the Company early adopted ASU 2016-13, Financial Instruments - Credit Losses (“ASC 326”) which replaces the “incurred loss approach” for estimating credit losses with an expected loss methodology. The incurred loss model delayed the recognition of credit losses until it was probable that a loss had occurred, while the CECL model requires the immediate recognition of expected credit losses over the contractual term for financial instruments that fall within the scope of CECL at the date of origination or purchase of the financial instrument. The CECL model, which is applicable to the measurement of credit losses on financial assets measured at amortized cost and certain off-balance sheet credit exposures, affects the Company’s estimates of the allowance for credit losses for our loan portfolio and the reserve for our off-balance sheet credit exposures related to loan commitments. The allowance for credit losses is established through a provision for credit losses charged to expense. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. The allowance, based on all available information from internal and external sources, relevant to assessing the collectability of loans over their contractual terms, adjusted for expected prepayments when appropriate, is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The evaluations are performed for each class of loans and take into consideration factors such as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, value of collateral securing the loans and current economic conditions and trends that may affect the borrowers’ ability to pay. For example, delinquencies in unsecured loans and indirect automobile installment loans will be reserved for at significantly higher ratios than loans secured by real estate. Finally, the Company considers forecasts about future economic conditions or changes in collateral values that are reasonable and supportable. Based on that analysis, the Bank deems its allowance for credit losses in proportion to the total nonaccrual loans and past due loans to be sufficient. Transactions in the allowance for credit losses for the six months ended June 30, 2023 and the year ended December 31, 2022 were as follows: Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans June 30, 2023 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Balance, beginning of year $ 44 $ 20 $ 1,230 $ 103 $ 221 $ 174 $ 22 $ 23 $ 325 $ 2,162 Charge-offs — — — — — — — — (88) (88) Recoveries — — — — — — — — 63 63 Release (provision) for credit losses 2 (1) 26 (4) (2) 143 — (3) (76) 85 Balance, end of quarter $ 46 $ 19 $ 1,256 $ 99 $ 219 $ 317 $ 22 $ 20 $ 224 $ 2,222 Individually evaluated for impairment: Balance in allowance $ — $ — $ 21 $ — $ 149 $ — $ — $ — $ — $ 170 Related loan balance — — 32 — 299 — — — — 331 Collectively evaluated for impairment: Balance in allowance $ 46 $ 19 $ 1,235 $ 99 $ 70 $ 317 $ 22 $ 20 $ 224 $ 2,052 Related loan balance 5,116 328 82,305 5,236 42,258 10,250 6,023 1,430 27,274 180,220 Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans December 31, 2022 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Balance, beginning of year $ 5 $ 11 $ 1,357 $ 105 $ 278 $ 115 $ 30 $ 36 $ 533 $ 2,470 Charge-offs — — — — — (200) (9) (14) (169) (392) Recoveries — — — — — — — 8 188 196 Release (provision) for credit losses 39 9 (127) (2) (57) 259 1 (7) (227) (112) Balance, end of the year $ 44 $ 20 $ 1,230 $ 103 $ 221 $ 174 $ 22 $ 23 $ 325 $ 2,162 Individually evaluated for impairment: Balance in allowance $ — $ — $ 20 $ — $ — $ 59 $ — $ — $ — $ 79 Related loan balance — — 34 — — 300 — — — 334 Collectively evaluated for impairment: Balance in allowance $ 44 $ 20 $ 1,210 $ 103 $ 221 $ 115 $ 22 $ 23 $ 325 $ 2,083 Related loan balance 4,499 333 80,217 5,304 42,936 8,690 6,158 1,521 36,448 186,106 June 30, June 30, (dollars in thousands) 2023 2022 Average loans $ 183,240 $ 204,477 Net charge offs to average loans (annualized) 0.03 % 0.01 % During the six-month period ended June 30, 2023, loans to 5 borrowers and related entities totaling approximately $88,000 were determined to be uncollectible and were charged off. During the six-month period ended June 30, 2022, loans to Reserve for Unfunded Commitments . Loan commitments and unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. The Bank generally requires collateral to support financial instruments with credit risk on the same basis as it does for on-balance sheet instruments. The collateral requirement is based on management's credit evaluation of the counter party. 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 amount does not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of June 30, 2023, and 2022, the Bank had outstanding commitments totaling $30.7 million and $30.2 million, respectively. The reserve for unfunded commitments represents the expected lifetime credit losses on off-balance sheet obligations such as commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments that are unconditionally cancellable by the Company. The allowance for credit losses on unfunded commitments is determined by estimating future draws, including the effects of risk mitigation actions, and applying the expected loss rates on those draws. Loss rates are estimated by utilizing the same loss rates calculated for the allowance for credit losses related to the respective loan portfolio class. The following table shows the Bank’s reserve for unfunded commitments arising from these transactions: Six Months Ended Ended June 30, (dollars in thousands) 2023 2022 Beginning balance $ 477 $ 371 Reduction of unfunded reserve (4) (17) Provisions charged to operations 23 59 Ending balance $ 496 $ 413 Contractual Obligations and Commitments. No material changes, outside the normal course of business, have been made during the first quarter of 2023. Asset Quality . The following tables set forth the amount of the Bank’s current, past due, and non-accrual loans by categories of loans and restructured loans, at the dates indicated. At June 30, 2023 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Loans Secured by Real Estate Construction and land $ 5,116 $ — $ — $ — $ 5,116 Farmland 328 — — — 328 Single-family residential 82,121 — — 216 82,337 Multi-family 5,236 — — — 5,236 Commercial 42,557 — — — 42,557 Total loans secured by real estate 135,358 — — 216 135,574 Commercial and Industrial Commercial and industrial 9,954 — — 296 10,250 SBA guaranty 6,023 — — — 6,023 Total commercial and industrial loans 15,977 — — 296 16,273 Consumer Loans Consumer 1,430 — — — 1,430 Automobile 26,912 298 — 64 27,274 Total consumer loans 28,342 298 — 64 28,704 $ 179,677 $ 298 $ — $ 576 $ 180,551 At December 31, 2022 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Loans Secured by Real Estate Construction and land $ 4,499 $ — $ — $ — $ 4,499 Farmland 333 — — — 333 Single-family residential 79,952 185 10 104 80,251 Multi-family 5,304 — — — 5,304 Commercial 42,936 — — — 42,936 Total loans secured by real estate 133,024 185 10 104 133,323 Commercial and Industrial — Commercial and industrial 8,691 — — 299 8,990 SBA guaranty 6,158 — — — 6,158 Total commercial and industrial loans 14,849 — — 299 15,148 Consumer Loans Consumer 1,521 — — — 1,521 Automobile 36,037 326 — 85 36,448 Total consumer loans 37,558 326 — 85 37,969 $ 185,431 $ 511 $ 10 $ 488 $ 186,440 The balances in the above charts have not been reduced by the allowance for credit losses. For the period ended June 30, 2023, the allowance for credit loss is $ million. For the period ended December 31, 2022, the allowance for credit loss is Non-accrual loans with specific reserves at June 30, 2023 are comprised of: Single–family residential established for the loan. This loan was also a troubled debt restructured loan. Commercial and industrial Below is a summary of the recorded investment amount and related allowance for losses of the Bank’s impaired loans at June 30, 2023 and December 31, 2022. June 30, 2023 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Loans Secured by Real Estate Construction and land $ — $ — $ — $ — $ — Farmland — — — — — Single-family residential 11 32 2 21 48 Multi-family — — — — — Commercial — — — — — Total loans secured by real estate 11 32 2 21 48 Commercial and Industrial Commercial and industrial 150 299 — 149 499 SBA guaranty — — — — — Total commercial and industrial loans 150 299 — 149 499 Consumer Loans Consumer — — — — — Automobile — — — — — Total consumer loans — — — — — Total impaired loans with specific reserves $ 161 $ 331 $ 2 $ 170 $ 547 Impaired loans with no specific reserve: Loans Secured by Real Estate Construction and land $ — $ — $ — $ n/a $ — Farmland — — — n/a — Single-family residential 184 184 2 n/a 195 Multi-family — — — n/a — Commercial — — — n/a — Total loans secured by real estate 184 184 2 — 195 Commercial and Industrial Commercial and industrial — — — n/a — SBA guaranty — — — n/a — Total commercial and industrial loans — — — — — Consumer Loans Consumer — — — n/a — Automobile 167 167 2 n/a 72 Total consumer loans 167 167 2 n/a 72 Total impaired loans with no specific reserve $ 351 $ 351 $ 4 $ — $ 267 December 31, 2022 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Loans Secured by Real Estate Construction and land $ — $ — $ — $ — $ — Farmland — — — — — Single-family residential 14 34 2 20 48 Multi-family — — — — — Commercial — — — — — Total loans secured by real estate 14 34 2 20 48 Commercial and Industrial Commercial and industrial 240 299 19 59 499 SBA guaranty — — — — — Total commercial and industrial loans 240 299 19 59 499 Consumer Loans Consumer — — — — — Automobile — — — — — Total consumer loans — — — — — Total impaired loans with specific reserves $ 254 $ 333 $ 21 $ 79 $ 547 Impaired loans with no specific reserve: Loans Secured by Real Estate Construction and land $ — $ — $ — $ n/a $ — Farmland — — — n/a — Single-family residential 70 70 2 n/a 79 Multi-family — — — n/a — Commercial — — — n/a — Total loans secured by real estate 70 70 2 — 79 Commercial and Industrial Commercial and industrial — — — n/a — SBA guaranty — — — n/a — Total commercial and industrial loans — — — — — Consumer Loans Consumer — — — n/a — Automobile 85 85 6 n/a 107 Total consumer loans 85 85 6 n/a 107 Total impaired loans with no specific reserve $ 155 $ 155 $ 8 $ — $ 186 June 30, December 31, (dollars in thousands) 2023 2022 Troubled debt restructured loans $ 41 $ 34 Non-accrual and 90+ days past due and still accruing loans to average loans 0.31 % 0.25 % Allowance for credit losses to nonaccrual & 90+ days past due and still accruing loans 385.8 % 433.9 % At June 30, 2023, there were two troubled debt restructured loans consisting of single-family residential loans in the amount of $40,876 . These loans are in a nonaccrual status. The following table shows the activity for non-accrual loans for the six months ended June 30, 2023 and 2022. Commercial and Loans Secured By Real Estate Industrial Loans Consumer Loans Single-family Commercial (dollars in thousands) Residential Commercial and Industrial SBA Guaranty Consumer Automobile Total December 31, 2021 $ 123 $ — $ — $ 71 $ — $ 144 $ 338 Transfers into nonaccrual 31 — — — 11 131 173 Loans paid down/payoffs (44) — — (61) (11) (63) (179) Loans returned to accrual status — — — — — (29) (29) Loans charged off — — — (10) — (73) (83) June 30, 2022 $ 110 $ — $ — $ — $ — $ 110 $ 220 December 31, 2022 $ 104 $ — $ 299 $ — $ — $ 85 $ 488 Transfers into nonaccrual 307 — — — — 3 310 Loans paid down/payoffs (195) — — — — (19) (214) Loans returned to accrual status — — — — — — — Loans charged off — — (3) — — (5) (8) June 30, 2023 $ 216 $ — $ 296 $ — $ — $ 64 $ 576 Other Real Estate Owned. The Company had no real estate acquired in partial or total satisfaction of debt at June 30, 2023, and December 31, 2022. All such properties are initially recorded at the lower of cost or fair value (net realizable value) at the date acquired and carried on the balance sheet as other real estate owned. Losses arising at the date of acquisition are charged against the allowance for credit losses. Subsequent write-downs that may be required and expense of operation are included in noninterest expense. Gains and losses realized from the sale of other real estate owned were included in noninterest income. Credit Quality Information In addition to monitoring the performance status of the loan portfolio, the Company utilizes a risk rating scale (1-8) to evaluate loan asset quality for all loans. Loans that are rated 1-4 are classified as pass credits. For the pass-rated loans, management believes there is a low risk of loss related to these loans and, as necessary, credit may be strengthened through improved borrower performance and/or additional collateral. The Bank’s internal risk ratings are as follows: 1 – 4 (Pass) - Pass credits are loans in grades “superior” through “acceptable”. These are at least considered to be credits with acceptable risks and would be granted in the normal course of lending operations. 5 (Special Mention) - Special mention credits have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credits or in the Bank’s credit position at some future date. If weaknesses cannot be identified, classification as special mention is not appropriate. Special mention credits are not adversely classified and do not expose the Bank to sufficient risk to warrant an adverse classification. No apparent loss of principal or interest is expected. 6 (Substandard) - Substandard credits are inadequately protected by the current worth and paying capacity of the obligor or by the collateral pledged. Financial statements normally reveal some or all of the following: poor trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Credits so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. 7 (Doubtful) - A doubtful credit has all the weaknesses inherent in a substandard asset with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. Doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded Substandard. The following tables provides information with respect to the Company's credit quality indicators by loan portfolio segment on June 30, 2023, and December 31, 2022: Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans June 30, 2023 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Pass $ 5,116 $ 328 $ 82,121 $ 5,236 $ 42,557 $ 9,951 $ 6,023 $ 1,430 $ 27,107 $ 179,869 Special mention — — — — — — — — — — Substandard — — 216 — — 299 — — 167 682 Doubtful — — — — — — — — — — Loss — — — — — — — — — — $ 5,116 $ 328 $ 82,337 $ 5,236 $ 42,557 $ 10,250 $ 6,023 $ 1,430 $ 27,274 $ 180,551 Nonaccrual $ — $ — $ 216 $ — $ — $ 296 $ — $ — $ 64 $ 576 Troubled debt restructures $ — $ — $ 41 $ — $ — $ — $ — $ — $ — $ 41 Number of TDRs accounts — — 2 — — — — — — 2 Non-performing TDRs $ — $ — $ 41 $ — $ — $ — $ — $ — $ — $ 41 Number of non-performing TDR accounts — — 2 — — — — — — 2 Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans December 31, 2022 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Pass $ 4,499 $ 333 $ 80,147 $ 5,304 $ 42,936 $ 8,691 $ 6,158 $ 1,521 $ 36,363 $ 185,982 Special mention — — — — — — — — — — Substandard — — 104 — — 299 — — 80 483 Doubtful — — — — — — — — 5 5 Loss — — — — — — — — — — $ 4,499 $ 333 $ 80,251 $ 5,304 $ 42,936 $ 8,990 $ 6,158 $ 1,521 $ 36,448 $ 186,440 Nonaccrual $ — $ — $ 104 $ — $ — $ 299 $ — $ — $ 85 $ 488 Troubled debt restructures $ — $ — $ 34 $ — $ — $ — $ — $ — $ — $ 34 Number of TDRs accounts — — 1 — — — — — — 1 Non-performing TDRs $ — $ — $ 34 $ — $ — $ — $ — $ — $ — $ 34 Number of non-performing TDR accounts — — 1 — — — — — — 1 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE | |
FAIR VALUE | NOTE 6 – FAIR VALUE ASC Topic 820 provides a framework for measuring and disclosing fair value under GAAP. ASC 820 requires disclosures about the fair value of assets and liabilities recognized in the balance sheet in periods subsequent to initial recognition, whether the measurements are made on a recurring basis (for example, available-for-sale investment securities) or a nonrecurring basis (for example, impaired loans). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Fair Value Hierarchy ASC 820- 10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. ● Level 2 – Other significant observable inputs (including quoted prices in active markets for similar securities). ● Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). The following is a description of valuation methodologies used for assets and liabilities recorded at fair value: Investment Securities Available-for-Sale and Interest Rate Swaps. Investment securities available-for-sale and interest rate swap contracts are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, Treasury securities that are traded by dealers or brokers in active over-the-counter markets, and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities, and interest rate swap contracts. Securities classified as Level 3 include asset-backed securities in illiquid markets. The Bank may be required, from time to time, to measure certain other financial and non-financial assets and liabilities at fair value on a non-recurring basis in accordance with GAAP. Loans. Impaired loans totaled of specific reserves as of June 30, 2023. These assets included single-family residential, commercial and industrial, and automobile loans. They have been classified as impaired and include nonaccrual, past due 90 days or more and still accruing, and a homogeneous pool of indirect loans all considered to be impaired loans, which are valued under Level 3 inputs. Foreclosed real estate assets are primarily valued on a nonrecurring basis at the fair values of the underlying real estate collateral. The Company is predominantly a cash flow lender with real estate serving as collateral on a majority of loans. On a quarterly basis, the Company determines such fair values through a variety of data points and mostly relies on appraisals from independent appraisers. We obtain an appraisal on properties when they become impaired and conduct new appraisals at least every year. Typically, these appraisals do not include an inside inspection of the property as our loan documents do not require the borrower to allow access to the property. Therefore, the most significant unobservable inputs are the details of the amenities included within the property and the condition of the property. Further, we cannot always accurately assess the amount of time it takes to gain ownership of our collateral through the foreclosure process and the damage, as well as potential looting, of the property further decreasing our value. Thus, in determining the fair values we discount the current independent appraisals, within a range of , based on individual circumstances. The changes in the assets subject to fair value measurements are summarized below by level: Fair (dollars in thousands) Level 1 Level 2 Level 3 Value June 30, 2023 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 14,283 $ — $ 14,283 Agency mortgage-backed securities — 48,616 — 48,616 Municipal securities — 33,098 — 33,098 Corporate securities — 1,255 — 1,255 U.S. Government agency securities — 36,985 — 36,985 U.S. Treasury securities — 16,583 — 16,583 Non-recurring: Impaired loans — — 512 512 $ — $ 150,820 $ 512 $ 151,332 December 31, 2022 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 15,255 $ — $ 15,255 Agency mortgage-backed securities — 51,893 — 51,893 Municipal securities — 32,297 — 32,297 Corporate securities — 1,325 — 1,325 U.S. Government agency securities — 36,580 — 36,580 U.S. Treasury securities — 6,783 — 6,783 Non-recurring: Impaired loans — — 330 330 $ — $ 144,133 $ 330 $ 144,463 The estimated fair values of the Company’s financial instruments at June 30, 2023 and December 31, 2022 are summarized in the following table. The fair values of a significant portion of these financial instruments are estimates derived using present value techniques and may not be indicative of the net realizable or liquidation values. Also, the calculation of estimated fair values is based on market conditions at a specific point in time and may not reflect current or future fair values. June 30, 2023 December 31, 2022 (dollars in thousands) Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Cash and due from banks $ 1,965 $ 1,965 $ 2,035 $ 2,035 Interest-bearing deposits in other financial institutions 9,458 9,458 22,680 22,680 Federal funds sold 325 325 5,377 5,377 Investment securities available for sale 150,820 150,820 144,133 144,133 Investments in restricted stock 403 403 221 221 Ground rents 128 128 131 131 Loans, less allowance for credit losses 178,329 167,999 184,278 177,254 Accrued interest receivable 1,139 1,139 1,159 1,159 Cash value of life insurance 8,572 8,572 8,493 8,493 Financial liabilities: Deposits 329,224 272,655 362,947 299,773 Short-term borrowings 15,000 15,000 — — Accrued interest payable 17 17 9 9 Unrecognized financial instruments: Commitments to extend credit 30,610 30,610 30,718 30,718 Standby letters of credit 45 45 45 45 The following table presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments that were estimated using an exit pricing notion. (dollars in thousands) Carrying Fair June 30, 2023 Amount Value Level 1 Level 2 Level 3 Financial instruments - Assets Cash and cash equivalents $ 11,748 $ 11,748 $ 11,748 $ — $ — Loans receivable, net 178,329 167,999 — — 167,999 Cash value of life insurance 8,572 8,572 — 8,572 — Financial instruments - Liabilities Deposits 329,224 272,655 — 272,655 — Short-term debt 15,000 15,000 — 15,000 — Fair values are based on quoted market prices for similar instruments or estimated using discounted cash flows. The discounts used are estimated using comparable market rates for similar types of instruments adjusted to be commensurate with the credit risk, overhead costs, and optionality of such instruments. The fair value of cash and due from banks, federal funds sold, investments in restricted stocks and accrued interest receivable are equal to the carrying amounts. The fair values of investment securities are determined using market quotations, if available, or measured using pricing models or other model-based valuation techniques such as present value and future value cash flows. The fair value of loans receivable is estimated using discounted cash flow analysis. For cash surrender value of life insurance, the carrying value is a reasonable estimate of fair value. Cash surrender value of life insurance is reported in the Level 2 fair value category. The fair value of the Bank Term Funding Program loans is equal to the carrying amounts. The fair value of FHLB borrowings is estimated based upon discounted future cash flows using a discounted rate comparable to the current market rate for such borrowings. FHLB borrowings are reported in the Level 2 fair value category. The fair value of noninterest-bearing deposits, interest-bearing checking, savings, and money market deposit accounts, securities sold under agreements to repurchase, and accrued interest payable are equal to the carrying amounts. The fair value of fixed-maturity time deposits is estimated using discounted cash flow analysis. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2023 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 7 – RECENT ACCOUNTING PRONOUNCEMENTS New accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") with required effective dates. The following accounting pronouncements should be read in conjunction with "Critical Accounting Policies" of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2022 Form 10-K. ASU No. 2022-01, “Derivative and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method.” The ASU clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets. The ASU amends the guidance in ASU 2017-12 (released on August 28, 2017) that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. The ASU renames that method the “portfolio layer” method and addresses feedback from stakeholders regarding its application. The objective of the ASU is to better align the Company’s financial reporting with the results of its risk management strategy, and to improve the hedge accounting model by simplifying it. The ASU is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact upon the Company’s financial position and results of operations. ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.” The ASU eliminates the accounting guidance for troubled debt restructurings ("TDRs") in ASC 310-40, "Receivables - Troubled Debt Restructurings by Creditors" for entities that have adopted the current expected credit loss ("CECL") model introduced by ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. It also requires that public business entities disclose current-period gross charge-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, "Financial Instruments—Credit Losses—Measured at Amortized Cost". The ASU is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance did not have a material impact upon the Company’s financial position and results of operations. ASU No. 2023-01. Leases (Topic 842), “Common Control Arrangements.” The ASU is an amendment to Topic 842. The amendments in this Update clarify the accounting for leasehold improvements associated with common control leases. This Update has been issued in order to address current diversity in practice associated with the accounting for leasehold improvements associated with a lease between entities under common control. The amendments in this Update apply to all lessees that are a party to a lease between entities under common control in which there are leasehold improvements. The amendments in this Update are effective for interim and annual periods beginning after December 15, 2023. The Company is evaluating the impact of adopting the new guidance on the consolidated financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS None. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Allowance for Credit Losses - Loans Receivable | Allowance for Credit Losses – Loans Receivable Effective January 1, 2021, the Company applied ASU 2016-13, Financial Instruments - Credit Losses ("ASC 326"), such that the allowance calculation is based on the current expected credit loss (“CECL”) methodology. Prior to January 1, 2021, the calculation was based on incurred loss methodology. The Company maintains an allowance for credit losses (“ACL”) for the expected credit losses of the loan portfolio as well as unfunded loan commitments. The amount of ACL is based on ongoing, quarterly assessments by management. The CECL methodology requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures) and replaces the incurred loss methodology’s threshold that delayed the recognition of a credit loss until it was probable a loss event was incurred. The ACL consists of the allowance for credit losses and the reserve for unfunded commitments. The estimate of expected credit losses under the CECL methodology is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. We then consider whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period that historical experience was based for each loan type. Finally, we consider forecasts about future economic conditions or changes in collateral values that are reasonable and supportable. Portfolio segment is defined as the level at which the Company develops and documents a systematic methodology to determine its ACL. The Company has designated three loan portfolio segments: loans secured by real estate, commercial and industrial loans, and consumer loans. These loan portfolio segments are further disaggregated into classes, which represent loans of similar type, risk characteristics, and methods for monitoring and assessing credit risk. The loans secured by the real estate portfolio segment is disaggregated into five classes: construction and land, farmland, single-family residential, multi-family, and commercial. The commercial and industrial loan portfolio segment is disaggregated into two classes: commercial and industrial, and SBA guaranty. The risk of loss for the commercial and industrial loan portfolio segment is generally most indicated by the credit risk rating assigned to each borrower. Commercial and industrial loan risk ratings are determined by experienced senior credit officers based on specific facts and circumstances and are subject to periodic review by an independent internal team of credit specialists. The consumer loan portfolio segment is disaggregated into two classes: consumer and automobile. The risk of loss for the consumer loan portfolio segment is generally most indicated by delinquency status and general economic factors. Each of the three loan portfolio segments may also be further segmented based on risk characteristics. For most of our loan portfolio classes, the historical loss experience is determined using the Average Charge-Off Method. This method pools loans into groups (“cohorts”) sharing similar risk characteristics and tracks each cohort’s net charge-offs over the lives of the loans. The Average Charge-Off Method uses historical values by period (20-year look-back) to calculate losses and then applies the historical average to future balances over the life of the account. The historical loss rates for each cohort are then averaged to calculate an overall historical loss rate which is applied to the current loan balance to arrive at the quantitative baseline portion of the allowance for credit losses for the respective loan portfolio class. For certain loan portfolio classes, the Company determined there was not sufficient historical loss information to calculate a meaningful historical loss rate using the average charge-off methodology. For any such loan portfolio class, peer group history contributes to the Company’s weighted average loss history. The peer group data is included in the weighted average loss history that is developed for each loan pool. The Company also considers qualitative adjustments to the historical loss rate for each loan portfolio class. The qualitative adjustments for each loan class consider the conditions over the 20-year look-back period from which historical loss experience was based and are split into two components: 1) asset or class specific risk characteristics or current conditions at the reporting date related to portfolio credit quality, remaining payments, volume and nature, credit culture and management, business environment or other management factors; and 2) reasonable and supportable forecast of future economic conditions and collateral values. The Company performs a quarterly asset quality review which includes a review of forecasted gross charge-offs and recoveries, nonperforming assets, criticized loans, risk rating migration, delinquencies, etc. The asset quality review is performed by management and the results are used to consider a qualitative overlay to the quantitative baseline. When management deems it to be appropriate, the Company establishes a specific reserve for individually evaluated loans that do not share similar risk characteristics with the loans included in each respective loan pool. These individually evaluated loans are removed from their respective pools and typically represent collateral dependent loans but may also include other non-performing loans or troubled debt restructurings (“TDRs”). Allowance for Credit Losses – Held-to-Maturity Debt Securities For held-to-maturity (“HTM”) debt securities, the Company is required to utilize a CECL methodology to estimate expected credit losses. The Company does not own any HTM debt securities. Therefore, the Company did not record an allowance for credit losses for these types of securities. Allowance for Credit Losses – Available-for-Sale Debt Securities The impairment model for available-for-sale (“AFS”) debt securities differs from the CECL methodology applied for HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Under the new guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses. Losses are charged against the allowance when management believes the collectability of an AFS security is considered below the amortized cost basis of the security. As of December 31, 2022 and June 30, 2023, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded. |
Off-Balance-Sheet Credit Exposures | Off-Balance-Sheet Credit Exposures The only material off-balance-sheet credit exposures are unfunded loan commitments, which had a combined balance of $30.7 million on June 30, 2023. The reserve for unfunded commitments is recognized as a liability (accrued expenses and other liabilities in the consolidated statements of financial condition), with adjustments to the reserve recognized through provision for credit losses in the consolidated statements of income. The reserve for unfunded commitments represents the expected lifetime credit losses on off-balance sheet obligations such as commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments that are unconditionally cancellable by the Company. The reserve for unfunded commitments is determined by estimating future draws, including the effects of risk mitigation actions, and applying the expected loss rates on those draws. Loss rates are estimated by utilizing the same loss rates calculated for the allowance for credit losses related to the respective loan portfolio class. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, The Bank of Glen Burnie. Consolidation resulted in the elimination of all intercompany accounts and transactions. |
Cash Flow Presentation | Cash Flow Presentation In the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, Federal Home Loan Bank of Atlanta (“FHLB Atlanta”) overnight deposits, and federal funds sold. Generally, federal funds are sold for one-day periods. |
Reclassifications | Reclassifications Certain items in the fiscal year 2022 consolidated financial statements have been reclassified to conform to the fiscal year 2023 classifications. The reclassifications had no effect on previously reported results of operations or retained earnings. |
Use of Estimates | Use of Estimates The preparation of financial statements 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 materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the ACL; the fair value of financial instruments, such as loans and investment securities; benefit plan obligations and expenses; and the valuation of deferred tax assets and liabilities. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of earnings per common share | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Basic and diluted earnings per share: Net income $ 275,360 $ 309,532 $ 710,381 $ 540,264 Weighted average common shares outstanding 2,871,026 2,857,616 2,867,039 2,856,441 Basic and dilutive net income per share $ 0.10 $ 0.11 $ 0.25 $ 0.19 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INVESTMENT SECURITIES | |
Schedule of summary of investment securities | At June 30, 2023 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 16,689 $ 10 $ (2,416) $ 14,283 Agency mortgage-backed securities 55,320 — (6,704) 48,616 Municipal securities 43,042 5 (9,949) 33,098 Corporate Securities 1,500 — (245) 1,255 U.S. Government agency securities 45,453 — (8,468) 36,985 U.S. Treasury securities 16,745 2 (164) 16,583 Total securities available for sale $ 178,749 $ 17 $ (27,946) $ 150,820 At December 31, 2022 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 17,596 $ 7 $ (2,348) $ 15,255 Agency mortgage-backed securities 58,801 — (6,908) 51,893 Municipal securities 43,092 1 (10,796) 32,297 Corporate Securities 1,500 — (175) 1,325 U.S. Government agency securities 45,471 — (8,891) 36,580 U.S. Treasury securities 6,993 — (210) 6,783 Total securities available for sale $ 173,453 $ 8 $ (29,328) $ 144,133 |
Schedule of gross unrealized losses and fair value, aggregated by investment category and length of time in continuous unrealized loss position | The gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2023 and December 31, 2022 are as follows: June 30, 2023 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 2,169 $ (31) $ 10,378 $ (2,385) $ 12,547 $ (2,416) Agency mortgage-backed securities 9,526 (418) 39,090 (6,286) 48,616 (6,704) Municipal securities 4,435 (92) 27,048 (9,857) 31,483 (9,949) Corporate Securities — — 1,255 (245) 1,255 (245) U.S. Government agency securities 269 — 36,716 (8,468) 36,985 (8,468) U.S. Treasury securities — — 6,832 (164) 6,832 (164) $ 16,399 $ (541) $ 121,319 $ (27,405) $ 137,718 $ (27,946) December 31, 2022 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 8,315 $ (364) $ 6,127 $ (1,984) $ 14,442 $ (2,348) Agency mortgage-backed securities 20,029 (1,308) 31,865 (5,600) 51,894 (6,908) Municipal securities 18,456 (5,438) 13,340 (5,358) 31,796 (10,796) Corporate Securities — — 1,325 (175) 1,325 (175) U.S. Government agency securities 13,526 (474) 22,767 (8,417) 36,293 (8,891) U.S. Treasury securities 6,783 (210) — — 6,783 (210) $ 67,109 $ (7,794) $ 75,424 $ (21,534) $ 142,533 $ (29,328) |
Schedule of contractual maturities of investment securities | Shown below are contractual maturities of debt securities at June 30, 2023. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2023 Amortized Fair Yield (dollars in thousands) Cost Value (1), (2) Available for sale securities maturing: Within one year $ 25,751 $ 25,357 3.50 % Over one to five years 11,645 10,872 2.14 % Over five to ten years 33,584 29,699 2.11 % Over ten years 107,769 84,892 2.39 % Total debt securities $ 178,749 $ 150,820 _____________________ (1) Yields are stated as book yields which are adjusted for amortization and accretion of purchase premiums and discounts, respectively. (2) Yields on tax-exempt obligations are computed on a tax-equivalent basis. |
LOANS RECEIVABLE AND ALLOWANC_2
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |
Schedule of major categories of loans | June 30, December 31, 2023 2022 (dollars in thousands) Amount % Amount % Loans Secured by Real Estate Construction and land $ 5,116 3 $ 4,499 2 Farmland 328 — 333 — Single-family residential 82,337 45 80,251 43 Multi-family 5,236 3 5,304 3 Commercial 42,557 24 42,936 23 Total loans secured by real estate 135,574 133,323 Commercial and Industrial Commercial and industrial 10,250 6 8,990 5 SBA guaranty 6,023 3 6,158 3 Total commercial and industrial loans 16,273 15,148 Consumer Loans Consumer 1,430 1 1,521 1 Automobile 27,274 15 36,448 20 Total consumer loans 28,704 37,969 Loans, net of deferred fees and costs 180,551 100 186,440 100 Less: Allowance for credit losses (2,222) (2,162) Loans, net $ 178,329 $ 184,278 |
Schedule of total allowance by loan segment | Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans June 30, 2023 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Balance, beginning of year $ 44 $ 20 $ 1,230 $ 103 $ 221 $ 174 $ 22 $ 23 $ 325 $ 2,162 Charge-offs — — — — — — — — (88) (88) Recoveries — — — — — — — — 63 63 Release (provision) for credit losses 2 (1) 26 (4) (2) 143 — (3) (76) 85 Balance, end of quarter $ 46 $ 19 $ 1,256 $ 99 $ 219 $ 317 $ 22 $ 20 $ 224 $ 2,222 Individually evaluated for impairment: Balance in allowance $ — $ — $ 21 $ — $ 149 $ — $ — $ — $ — $ 170 Related loan balance — — 32 — 299 — — — — 331 Collectively evaluated for impairment: Balance in allowance $ 46 $ 19 $ 1,235 $ 99 $ 70 $ 317 $ 22 $ 20 $ 224 $ 2,052 Related loan balance 5,116 328 82,305 5,236 42,258 10,250 6,023 1,430 27,274 180,220 Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans December 31, 2022 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Balance, beginning of year $ 5 $ 11 $ 1,357 $ 105 $ 278 $ 115 $ 30 $ 36 $ 533 $ 2,470 Charge-offs — — — — — (200) (9) (14) (169) (392) Recoveries — — — — — — — 8 188 196 Release (provision) for credit losses 39 9 (127) (2) (57) 259 1 (7) (227) (112) Balance, end of the year $ 44 $ 20 $ 1,230 $ 103 $ 221 $ 174 $ 22 $ 23 $ 325 $ 2,162 Individually evaluated for impairment: Balance in allowance $ — $ — $ 20 $ — $ — $ 59 $ — $ — $ — $ 79 Related loan balance — — 34 — — 300 — — — 334 Collectively evaluated for impairment: Balance in allowance $ 44 $ 20 $ 1,210 $ 103 $ 221 $ 115 $ 22 $ 23 $ 325 $ 2,083 Related loan balance 4,499 333 80,217 5,304 42,936 8,690 6,158 1,521 36,448 186,106 |
Schedule of allowances for credit losses | June 30, June 30, (dollars in thousands) 2023 2022 Average loans $ 183,240 $ 204,477 Net charge offs to average loans (annualized) 0.03 % 0.01 % |
Schedule of reserve for unfunded commitments | Six Months Ended Ended June 30, (dollars in thousands) 2023 2022 Beginning balance $ 477 $ 371 Reduction of unfunded reserve (4) (17) Provisions charged to operations 23 59 Ending balance $ 496 $ 413 |
Schedule of current, past due, and non-accrual loans by categories of loans and restructured loans | At June 30, 2023 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Loans Secured by Real Estate Construction and land $ 5,116 $ — $ — $ — $ 5,116 Farmland 328 — — — 328 Single-family residential 82,121 — — 216 82,337 Multi-family 5,236 — — — 5,236 Commercial 42,557 — — — 42,557 Total loans secured by real estate 135,358 — — 216 135,574 Commercial and Industrial Commercial and industrial 9,954 — — 296 10,250 SBA guaranty 6,023 — — — 6,023 Total commercial and industrial loans 15,977 — — 296 16,273 Consumer Loans Consumer 1,430 — — — 1,430 Automobile 26,912 298 — 64 27,274 Total consumer loans 28,342 298 — 64 28,704 $ 179,677 $ 298 $ — $ 576 $ 180,551 At December 31, 2022 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Loans Secured by Real Estate Construction and land $ 4,499 $ — $ — $ — $ 4,499 Farmland 333 — — — 333 Single-family residential 79,952 185 10 104 80,251 Multi-family 5,304 — — — 5,304 Commercial 42,936 — — — 42,936 Total loans secured by real estate 133,024 185 10 104 133,323 Commercial and Industrial — Commercial and industrial 8,691 — — 299 8,990 SBA guaranty 6,158 — — — 6,158 Total commercial and industrial loans 14,849 — — 299 15,148 Consumer Loans Consumer 1,521 — — — 1,521 Automobile 36,037 326 — 85 36,448 Total consumer loans 37,558 326 — 85 37,969 $ 185,431 $ 511 $ 10 $ 488 $ 186,440 |
Schedule of impaired financing receivables | June 30, 2023 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Loans Secured by Real Estate Construction and land $ — $ — $ — $ — $ — Farmland — — — — — Single-family residential 11 32 2 21 48 Multi-family — — — — — Commercial — — — — — Total loans secured by real estate 11 32 2 21 48 Commercial and Industrial Commercial and industrial 150 299 — 149 499 SBA guaranty — — — — — Total commercial and industrial loans 150 299 — 149 499 Consumer Loans Consumer — — — — — Automobile — — — — — Total consumer loans — — — — — Total impaired loans with specific reserves $ 161 $ 331 $ 2 $ 170 $ 547 Impaired loans with no specific reserve: Loans Secured by Real Estate Construction and land $ — $ — $ — $ n/a $ — Farmland — — — n/a — Single-family residential 184 184 2 n/a 195 Multi-family — — — n/a — Commercial — — — n/a — Total loans secured by real estate 184 184 2 — 195 Commercial and Industrial Commercial and industrial — — — n/a — SBA guaranty — — — n/a — Total commercial and industrial loans — — — — — Consumer Loans Consumer — — — n/a — Automobile 167 167 2 n/a 72 Total consumer loans 167 167 2 n/a 72 Total impaired loans with no specific reserve $ 351 $ 351 $ 4 $ — $ 267 December 31, 2022 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Loans Secured by Real Estate Construction and land $ — $ — $ — $ — $ — Farmland — — — — — Single-family residential 14 34 2 20 48 Multi-family — — — — — Commercial — — — — — Total loans secured by real estate 14 34 2 20 48 Commercial and Industrial Commercial and industrial 240 299 19 59 499 SBA guaranty — — — — — Total commercial and industrial loans 240 299 19 59 499 Consumer Loans Consumer — — — — — Automobile — — — — — Total consumer loans — — — — — Total impaired loans with specific reserves $ 254 $ 333 $ 21 $ 79 $ 547 Impaired loans with no specific reserve: Loans Secured by Real Estate Construction and land $ — $ — $ — $ n/a $ — Farmland — — — n/a — Single-family residential 70 70 2 n/a 79 Multi-family — — — n/a — Commercial — — — n/a — Total loans secured by real estate 70 70 2 — 79 Commercial and Industrial Commercial and industrial — — — n/a — SBA guaranty — — — n/a — Total commercial and industrial loans — — — — — Consumer Loans Consumer — — — n/a — Automobile 85 85 6 n/a 107 Total consumer loans 85 85 6 n/a 107 Total impaired loans with no specific reserve $ 155 $ 155 $ 8 $ — $ 186 |
Schedule of allowance for loan loss and the unearned income on loans | June 30, December 31, (dollars in thousands) 2023 2022 Troubled debt restructured loans $ 41 $ 34 Non-accrual and 90+ days past due and still accruing loans to average loans 0.31 % 0.25 % Allowance for credit losses to nonaccrual & 90+ days past due and still accruing loans 385.8 % 433.9 % |
Schedule of non accrual loans | Commercial and Loans Secured By Real Estate Industrial Loans Consumer Loans Single-family Commercial (dollars in thousands) Residential Commercial and Industrial SBA Guaranty Consumer Automobile Total December 31, 2021 $ 123 $ — $ — $ 71 $ — $ 144 $ 338 Transfers into nonaccrual 31 — — — 11 131 173 Loans paid down/payoffs (44) — — (61) (11) (63) (179) Loans returned to accrual status — — — — — (29) (29) Loans charged off — — — (10) — (73) (83) June 30, 2022 $ 110 $ — $ — $ — $ — $ 110 $ 220 December 31, 2022 $ 104 $ — $ 299 $ — $ — $ 85 $ 488 Transfers into nonaccrual 307 — — — — 3 310 Loans paid down/payoffs (195) — — — — (19) (214) Loans returned to accrual status — — — — — — — Loans charged off — — (3) — — (5) (8) June 30, 2023 $ 216 $ — $ 296 $ — $ — $ 64 $ 576 |
Schedule of risk ratings of loans by categories of loans | Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans June 30, 2023 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Pass $ 5,116 $ 328 $ 82,121 $ 5,236 $ 42,557 $ 9,951 $ 6,023 $ 1,430 $ 27,107 $ 179,869 Special mention — — — — — — — — — — Substandard — — 216 — — 299 — — 167 682 Doubtful — — — — — — — — — — Loss — — — — — — — — — — $ 5,116 $ 328 $ 82,337 $ 5,236 $ 42,557 $ 10,250 $ 6,023 $ 1,430 $ 27,274 $ 180,551 Nonaccrual $ — $ — $ 216 $ — $ — $ 296 $ — $ — $ 64 $ 576 Troubled debt restructures $ — $ — $ 41 $ — $ — $ — $ — $ — $ — $ 41 Number of TDRs accounts — — 2 — — — — — — 2 Non-performing TDRs $ — $ — $ 41 $ — $ — $ — $ — $ — $ — $ 41 Number of non-performing TDR accounts — — 2 — — — — — — 2 Loans Secured By Real Estate Commercial and Industrial Loans Consumer Loans December 31, 2022 Construction Single-family Commercial (dollars in thousands) and Land Farmland Residential Multi-family Commercial and Industrial SBA Guaranty Consumer Automobile Total Pass $ 4,499 $ 333 $ 80,147 $ 5,304 $ 42,936 $ 8,691 $ 6,158 $ 1,521 $ 36,363 $ 185,982 Special mention — — — — — — — — — — Substandard — — 104 — — 299 — — 80 483 Doubtful — — — — — — — — 5 5 Loss — — — — — — — — — — $ 4,499 $ 333 $ 80,251 $ 5,304 $ 42,936 $ 8,990 $ 6,158 $ 1,521 $ 36,448 $ 186,440 Nonaccrual $ — $ — $ 104 $ — $ — $ 299 $ — $ — $ 85 $ 488 Troubled debt restructures $ — $ — $ 34 $ — $ — $ — $ — $ — $ — $ 34 Number of TDRs accounts — — 1 — — — — — — 1 Non-performing TDRs $ — $ — $ 34 $ — $ — $ — $ — $ — $ — $ 34 Number of non-performing TDR accounts — — 1 — — — — — — 1 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Values of Financial Instruments | |
Schedule of changes in asset subject to fair value measurement by Level | Fair (dollars in thousands) Level 1 Level 2 Level 3 Value June 30, 2023 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 14,283 $ — $ 14,283 Agency mortgage-backed securities — 48,616 — 48,616 Municipal securities — 33,098 — 33,098 Corporate securities — 1,255 — 1,255 U.S. Government agency securities — 36,985 — 36,985 U.S. Treasury securities — 16,583 — 16,583 Non-recurring: Impaired loans — — 512 512 $ — $ 150,820 $ 512 $ 151,332 December 31, 2022 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 15,255 $ — $ 15,255 Agency mortgage-backed securities — 51,893 — 51,893 Municipal securities — 32,297 — 32,297 Corporate securities — 1,325 — 1,325 U.S. Government agency securities — 36,580 — 36,580 U.S. Treasury securities — 6,783 — 6,783 Non-recurring: Impaired loans — — 330 330 $ — $ 144,133 $ 330 $ 144,463 |
Schedule of estimated fair values of financial instruments | June 30, 2023 December 31, 2022 (dollars in thousands) Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Cash and due from banks $ 1,965 $ 1,965 $ 2,035 $ 2,035 Interest-bearing deposits in other financial institutions 9,458 9,458 22,680 22,680 Federal funds sold 325 325 5,377 5,377 Investment securities available for sale 150,820 150,820 144,133 144,133 Investments in restricted stock 403 403 221 221 Ground rents 128 128 131 131 Loans, less allowance for credit losses 178,329 167,999 184,278 177,254 Accrued interest receivable 1,139 1,139 1,159 1,159 Cash value of life insurance 8,572 8,572 8,493 8,493 Financial liabilities: Deposits 329,224 272,655 362,947 299,773 Short-term borrowings 15,000 15,000 — — Accrued interest payable 17 17 9 9 Unrecognized financial instruments: Commitments to extend credit 30,610 30,610 30,718 30,718 Standby letters of credit 45 45 45 45 |
Schedule of fair value hierarchy of financial instruments | (dollars in thousands) Carrying Fair June 30, 2023 Amount Value Level 1 Level 2 Level 3 Financial instruments - Assets Cash and cash equivalents $ 11,748 $ 11,748 $ 11,748 $ — $ — Loans receivable, net 178,329 167,999 — — 167,999 Cash value of life insurance 8,572 8,572 — 8,572 — Financial instruments - Liabilities Deposits 329,224 272,655 — 272,655 — Short-term debt 15,000 15,000 — 15,000 — |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Millions | Jun. 30, 2023 USD ($) |
BASIS OF PRESENTATION | |
Off-balance-sheet credit exposures | $ 30.7 |
EARNINGS PER SHARE - Basic earn
EARNINGS PER SHARE - Basic earnings per share of common stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Basic earnings per share: | ||||
Net income | $ 276 | $ 309 | $ 710 | $ 540 |
Weighted average common shares outstanding, basic | 2,871,026 | 2,857,616 | 2,867,039 | 2,856,441 |
Weighted average common shares outstanding, diluted | 2,867,082 | 2,855,253 | ||
Net income per share (basic) | $ 0.10 | $ 0.11 | $ 0.25 | $ 0.19 |
Net income per share (diluted) | $ 0.10 | $ 0.11 | $ 0.25 | $ 0.19 |
Options outstanding | 0 | 0 | 0 | 0 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Market Value of Securities Available for Sale (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Amortized Cost | $ 178,749,000 | $ 173,453,000 |
Gross Unrealized Gains | 17,000 | 8,000 |
Gross Unrealized Losses | (27,946,000) | (29,328,000) |
Fair Value | 150,820,000 | 144,133,000 |
Trading securities | 0 | 0 |
Held to maturity | 0 | 0 |
Collateralized mortgage obligations | ||
Investment Securities | ||
Amortized Cost | 16,689,000 | 17,596,000 |
Gross Unrealized Gains | 10,000 | 7,000 |
Gross Unrealized Losses | (2,416,000) | (2,348,000) |
Fair Value | 14,283,000 | 15,255,000 |
Agency mortgage-backed securities | ||
Investment Securities | ||
Amortized Cost | 55,320,000 | 58,801,000 |
Gross Unrealized Losses | (6,704,000) | (6,908,000) |
Fair Value | 48,616,000 | 51,893,000 |
Municipal securities | ||
Investment Securities | ||
Amortized Cost | 43,042,000 | 43,092,000 |
Gross Unrealized Gains | 5,000 | 1,000 |
Gross Unrealized Losses | (9,949,000) | (10,796,000) |
Fair Value | 33,098,000 | 32,297,000 |
U.S. Government agency securities | ||
Investment Securities | ||
Amortized Cost | 45,453,000 | 45,471,000 |
Gross Unrealized Losses | (8,468,000) | (8,891,000) |
Fair Value | 36,985,000 | 36,580,000 |
Corporate securities | ||
Investment Securities | ||
Amortized Cost | 1,500,000 | 1,500,000 |
Gross Unrealized Losses | (245,000) | (175,000) |
Fair Value | 1,255,000 | 1,325,000 |
U.S. Treasury securities | ||
Investment Securities | ||
Amortized Cost | 16,745,000 | 6,993,000 |
Gross Unrealized Gains | 2,000 | |
Gross Unrealized Losses | (164,000) | (210,000) |
Fair Value | $ 16,583,000 | $ 6,783,000 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Value Aggregated by Investment Category and Length of Time in Continuous Unrealized Loss Position (Details) | Jun. 30, 2023 USD ($) security | Dec. 31, 2022 USD ($) security |
Investment Securities | ||
Less than 12 months Fair Value | $ 16,399,000 | $ 67,109,000 |
Less than 12 months Unrealized Loss | (541,000) | (7,794,000) |
12 months or more Fair Value | 121,319,000 | 75,424,000 |
12 months or more Unrealized Loss | (27,405,000) | (21,534,000) |
Total Fair Value | 137,718,000 | 142,533,000 |
Total Unrealized Loss | $ (27,946,000) | $ (29,328,000) |
Number of securities continuous unrealized loss position more than twelve months | security | 257 | 256 |
Collateralized mortgage obligations | ||
Investment Securities | ||
Less than 12 months Fair Value | $ 2,169,000 | $ 8,315,000 |
Less than 12 months Unrealized Loss | (31,000) | (364,000) |
12 months or more Fair Value | 10,378,000 | 6,127,000 |
12 months or more Unrealized Loss | (2,385,000) | (1,984,000) |
Total Fair Value | 12,547,000 | 14,442,000 |
Total Unrealized Loss | (2,416,000) | (2,348,000) |
Agency mortgage-backed securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 9,526,000 | 20,029,000 |
Less than 12 months Unrealized Loss | (418,000) | (1,308,000) |
12 months or more Fair Value | 39,090,000 | 31,865,000 |
12 months or more Unrealized Loss | (6,286,000) | (5,600,000) |
Total Fair Value | 48,616,000 | 51,894,000 |
Total Unrealized Loss | (6,704,000) | (6,908,000) |
Municipal securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 4,435,000 | 18,456,000 |
Less than 12 months Unrealized Loss | (92,000) | (5,438,000) |
12 months or more Fair Value | 27,048,000 | 13,340,000 |
12 months or more Unrealized Loss | (9,857,000) | (5,358,000) |
Total Fair Value | 31,483,000 | 31,796,000 |
Total Unrealized Loss | (9,949,000) | (10,796,000) |
Corporate securities | ||
Investment Securities | ||
12 months or more Fair Value | 1,255,000 | 1,325,000 |
12 months or more Unrealized Loss | (245,000) | (175,000) |
Total Fair Value | 1,255,000 | 1,325,000 |
Total Unrealized Loss | (245,000) | (175,000) |
U.S. Government agency securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 269,000 | 13,526,000 |
Less than 12 months Unrealized Loss | (474,000) | |
12 months or more Fair Value | 36,716,000 | 22,767,000 |
12 months or more Unrealized Loss | (8,468,000) | (8,417,000) |
Total Fair Value | 36,985,000 | 36,293,000 |
Total Unrealized Loss | (8,468,000) | (8,891,000) |
U.S. Treasury securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 6,783,000 | |
Less than 12 months Unrealized Loss | (210,000) | |
12 months or more Fair Value | 6,832,000 | |
12 months or more Unrealized Loss | (164,000) | |
Total Fair Value | 6,832,000 | 6,783,000 |
Total Unrealized Loss | $ (164,000) | $ (210,000) |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Investment Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Available for Sale Amortized Cost | ||
Due within one year | $ 25,751 | |
Due over one to five years | 11,645 | |
Due over five to ten years | 33,584 | |
Due over ten years | 107,769 | |
Amortized Cost | 178,749 | $ 173,453 |
Available for Sale Fair Value | ||
Due within one year | 25,357 | |
Due over one to five years | 10,872 | |
Due over five to ten years | 29,699 | |
Due over ten years | 84,892 | |
Fair Value | $ 150,820 | $ 144,133 |
Available for Sale, Yield | ||
Within one year | 3.50% | |
Over one to five years | 2.14% | |
Over five to ten years | 2.11% | |
Over ten years | 2.39% |
LOANS RECEIVABLE AND ALLOWANC_3
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 180,551 | $ 186,440 | |
Less: Allowance for credit losses | (2,222) | (2,162) | $ (2,470) |
Loans, net | $ 178,329 | $ 184,278 | |
Loans and lease receivable allowances, percentage | 100% | 100% | |
Increase (decrease) in loans and leases receivable | $ (5,900) | ||
Percentage of increase (decrease) in loans and leases receivable | (3.23%) | ||
Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 135,574 | $ 133,323 | |
Commercial and Industrial | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | 16,273 | 15,148 | |
Consumer Loans | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | 28,704 | 37,969 | |
Construction and Land | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | 5,116 | 4,499 | |
Less: Allowance for credit losses | $ (46) | $ (44) | (5) |
Loans and lease receivable allowances, percentage | 3% | 2% | |
Increase (decrease) in loans and leases receivable | $ (600) | ||
Percentage of increase (decrease) in loans and leases receivable | (13.72%) | ||
Farmland | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 328 | $ 333 | |
Less: Allowance for credit losses | (19) | (20) | (11) |
Single-family Residential | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | 82,337 | 80,251 | |
Less: Allowance for credit losses | $ (1,256) | $ (1,230) | (1,357) |
Loans and lease receivable allowances, percentage | 45% | 43% | |
Increase (decrease) in loans and leases receivable | $ 2,100 | $ 80,300 | |
Percentage of increase (decrease) in loans and leases receivable | 2.60% | ||
Multi-family | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 5,236 | 5,304 | |
Less: Allowance for credit losses | $ (99) | $ (103) | (105) |
Loans and lease receivable allowances, percentage | 3% | 3% | |
Increase (decrease) in loans and leases receivable | $ (100) | ||
Percentage of increase (decrease) in loans and leases receivable | (1.27%) | ||
Commercial | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 42,557 | $ 42,936 | |
Less: Allowance for credit losses | $ (219) | $ (221) | (278) |
Loans and lease receivable allowances, percentage | 24% | 23% | |
Increase (decrease) in loans and leases receivable | $ (400) | ||
Percentage of increase (decrease) in loans and leases receivable | (0.88%) | ||
Commercial and industrial | Commercial and Industrial | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 10,250 | $ 8,990 | |
Less: Allowance for credit losses | $ (317) | $ (174) | (115) |
Loans and lease receivable allowances, percentage | 6% | 5% | |
Increase (decrease) in loans and leases receivable | $ 1,300 | ||
Percentage of increase (decrease) in loans and leases receivable | (14.01%) | ||
SBA Guaranty | Commercial and Industrial | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 6,023 | $ 6,158 | |
Less: Allowance for credit losses | $ (22) | $ (22) | (30) |
Loans and lease receivable allowances, percentage | 3% | 3% | |
Increase (decrease) in loans and leases receivable | $ (200) | ||
Percentage of increase (decrease) in loans and leases receivable | (2.20%) | ||
Consumer | Consumer Loans | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 1,430 | $ 1,521 | |
Less: Allowance for credit losses | $ (20) | $ (23) | (36) |
Loans and lease receivable allowances, percentage | 1% | 1% | |
Increase (decrease) in loans and leases receivable | $ (100) | ||
Percentage of increase (decrease) in loans and leases receivable | (5.96%) | ||
Automobile | Consumer Loans | |||
Loans and Allowance for Credit Losses - Loans | |||
Loans, net of deferred fees and costs | $ 27,274 | $ 36,448 | |
Less: Allowance for credit losses | $ (224) | $ (325) | $ (533) |
Loans and lease receivable allowances, percentage | 15% | 20% | |
Increase (decrease) in loans and leases receivable | $ (9,200) | ||
Percentage of increase (decrease) in loans and leases receivable | (25.17%) |
LOANS RECEIVABLE AND ALLOWANC_4
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Allowance by Loan Segment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | $ 2,162,000 | $ 2,470,000 | $ 2,470,000 |
Charged off | (88,000) | (107,000) | (392,000) |
Recoveries | 63,000 | 196,000 | |
Release (provision) for credit losses | 85,000 | (112,000) | |
Balance, end of year | 2,222,000 | 2,162,000 | |
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 170,000 | 79,000 | |
Individually evaluated for impairment, Related loan balance | 331,000 | 334,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 2,052,000 | 2,083,000 | |
Collectively evaluated for impairment, Related loan balance | 180,220,000 | 186,106,000 | |
Real Estate Loan | |||
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 21,000 | 20,000 | |
Commercial and Industrial | |||
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 149,000 | 59,000 | |
Construction and Land | Real Estate Loan | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 44,000 | 5,000 | 5,000 |
Release (provision) for credit losses | 2,000 | 39,000 | |
Balance, end of year | 46,000 | 44,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 46,000 | 44,000 | |
Collectively evaluated for impairment, Related loan balance | 5,116,000 | 4,499,000 | |
Farmland | Real Estate Loan | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 20,000 | 11,000 | 11,000 |
Release (provision) for credit losses | (1,000) | 9,000 | |
Balance, end of year | 19,000 | 20,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 19,000 | 20,000 | |
Collectively evaluated for impairment, Related loan balance | 328,000 | 333,000 | |
Single-family Residential | Real Estate Loan | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 1,230,000 | 1,357,000 | 1,357,000 |
Release (provision) for credit losses | 26,000 | (127,000) | |
Balance, end of year | 1,256,000 | 1,230,000 | |
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 21,000 | 20,000 | |
Individually evaluated for impairment, Related loan balance | 32,000 | 34,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 1,235,000 | 1,210,000 | |
Collectively evaluated for impairment, Related loan balance | 82,305,000 | 80,217,000 | |
Multi-family | Real Estate Loan | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 103,000 | 105,000 | 105,000 |
Release (provision) for credit losses | (4,000) | (2,000) | |
Balance, end of year | 99,000 | 103,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 99,000 | 103,000 | |
Collectively evaluated for impairment, Related loan balance | 5,236,000 | 5,304,000 | |
Commercial and Industrial | Commercial and Industrial | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 174,000 | 115,000 | 115,000 |
Charged off | (200,000) | ||
Release (provision) for credit losses | 143,000 | 259,000 | |
Balance, end of year | 317,000 | 174,000 | |
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 149,000 | 59,000 | |
Individually evaluated for impairment, Related loan balance | 300,000 | ||
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 317,000 | 115,000 | |
Collectively evaluated for impairment, Related loan balance | 10,250,000 | 8,690,000 | |
Commercial | Real Estate Loan | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 221,000 | 278,000 | 278,000 |
Release (provision) for credit losses | (2,000) | (57,000) | |
Balance, end of year | 219,000 | 221,000 | |
Individually evaluated for impairment: | |||
Individually evaluated for impairment, Balance in allowance | 149,000 | ||
Individually evaluated for impairment, Related loan balance | 299,000 | ||
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 70,000 | 221,000 | |
Collectively evaluated for impairment, Related loan balance | 42,258,000 | 42,936,000 | |
SBA Guaranty | Commercial and Industrial | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 22,000 | 30,000 | 30,000 |
Charged off | (9,000) | ||
Release (provision) for credit losses | 1,000 | ||
Balance, end of year | 22,000 | 22,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 22,000 | 22,000 | |
Collectively evaluated for impairment, Related loan balance | 6,023,000 | 6,158,000 | |
Consumer | Consumer Loans | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 23,000 | 36,000 | 36,000 |
Charged off | (14,000) | ||
Recoveries | 8,000 | ||
Release (provision) for credit losses | (3,000) | (7,000) | |
Balance, end of year | 20,000 | 23,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 20,000 | 23,000 | |
Collectively evaluated for impairment, Related loan balance | 1,430,000 | 1,521,000 | |
Automobile | Consumer Loans | |||
Financing Receivable, Allowance for Credit Losses | |||
Balance, beginning of year | 325,000 | $ 533,000 | 533,000 |
Charged off | (88,000) | (169,000) | |
Recoveries | 63,000 | 188,000 | |
Release (provision) for credit losses | (76,000) | (227,000) | |
Balance, end of year | 224,000 | 325,000 | |
Collectively evaluated for impairment: | |||
Collectively evaluated for impairment, Balance in allowance | 224,000 | 325,000 | |
Collectively evaluated for impairment, Related loan balance | $ 27,274,000 | $ 36,448,000 |
LOANS RECEIVABLE AND ALLOWANC_5
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) borrower | Jun. 30, 2022 USD ($) borrower | Dec. 31, 2022 USD ($) | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |||
Average loans | $ 183,240,000 | $ 204,477,000 | |
Net charge-offs to average loans (annualized) | 0.03% | 0.01% | |
Number of borrowers | borrower | 5 | 8 | |
Loans charged off | $ 88,000 | $ 107,000 | $ 392,000 |
Outstanding commitments | 30,700,000 | 30,200,000 | |
Unfunded commitments | |||
Beginning balance | 477,000 | 371,000 | 371,000 |
Reduction of unfunded reserve | (4,000) | (17,000) | |
Provisions charged to operations | 23,000 | 59,000 | |
Ending balance | $ 496,000 | $ 413,000 | $ 477,000 |
LOANS RECEIVABLE AND ALLOWANC_6
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Current, Past Due, and Non-Accrual Loans by Categories of loans and Restructured Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | $ 576 | $ 488 | $ 220 | $ 338 |
Allowance for loan loss | 2,200 | 2,200 | ||
Total | 180,551 | 186,440 | ||
Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 179,677 | 185,431 | ||
30 To 89 Days Past Due | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 298 | 511 | ||
90 Days or More and Still Accuring | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 10 | |||
Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 216 | 104 | ||
Total | 135,574 | 133,323 | ||
Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 135,358 | 133,024 | ||
Real Estate Loan | 30 To 89 Days Past Due | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 185 | |||
Real Estate Loan | 90 Days or More and Still Accuring | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 10 | |||
Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 296 | 299 | ||
Total | 16,273 | 15,148 | ||
Commercial and Industrial | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 15,977 | 14,849 | ||
Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 72 | 85 | ||
Total | 28,704 | 37,969 | ||
Consumer Loans | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 28,342 | 37,558 | ||
Consumer Loans | 30 To 89 Days Past Due | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 298 | 326 | ||
Construction and Land | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 5,116 | 4,499 | ||
Construction and Land | Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 5,116 | 4,499 | ||
Farmland | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 328 | 333 | ||
Farmland | Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 328 | 333 | ||
Single-family Residential | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 216 | 104 | 110 | 123 |
Total | 82,337 | 80,251 | ||
Single-family Residential | Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 82,121 | 79,952 | ||
Single-family Residential | Real Estate Loan | 30 To 89 Days Past Due | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 185 | |||
Single-family Residential | Real Estate Loan | 90 Days or More and Still Accuring | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 10 | |||
Multi-family | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 5,236 | 5,304 | ||
Multi-family | Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 5,236 | 5,304 | ||
Commercial | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 42,557 | 42,936 | ||
Commercial | Real Estate Loan | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 42,557 | 42,936 | ||
Commercial and Industrial | Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 296 | 299 | ||
Total | 10,250 | 8,990 | ||
Commercial and Industrial | Commercial and Industrial | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 9,954 | 8,691 | ||
SBA Guaranty | Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 71 | |||
Total | 6,023 | 6,158 | ||
SBA Guaranty | Commercial and Industrial | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 6,023 | 6,158 | ||
Consumer | Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 1,430 | 1,521 | ||
Consumer | Consumer Loans | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 1,430 | 1,521 | ||
Automobile | Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 64 | 85 | $ 110 | $ 144 |
Total | 27,274 | 36,448 | ||
Automobile | Consumer Loans | Current | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | 26,912 | 36,037 | ||
Automobile | Consumer Loans | 30 To 89 Days Past Due | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Total | $ 298 | $ 326 |
LOANS RECEIVABLE AND ALLOWANC_7
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Impaired Financing Receivables (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | $ 161,000 | $ 254,000 |
Unpaid Principal Balance with specific reserves | 331,000 | 333,000 |
Interest Income Recognized with specific reserves | 2,000 | 21,000 |
Specific Reserve with specific reserves | 170,000 | 79,000 |
Average Recorded Investment | 547,000 | 547,000 |
Recorded Investment with no specific reserve | 351,000 | 155,000 |
Unpaid Principal Balance with no specific reserve | 351,000 | 155,000 |
Interest Income Recognized with no specific reserve | 4,000 | 8,000 |
Average Recorded Investment with no specific reserve | 267,000 | 186,000 |
Real Estate Loan | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 11,000 | 14,000 |
Unpaid Principal Balance with specific reserves | 32,000 | 34,000 |
Interest Income Recognized with specific reserves | 2,000 | 2,000 |
Specific Reserve with specific reserves | 21,000 | 20,000 |
Average Recorded Investment | 48,000 | 48,000 |
Recorded Investment with no specific reserve | 184,000 | 70,000 |
Unpaid Principal Balance with no specific reserve | 184,000 | 70,000 |
Interest Income Recognized with no specific reserve | 2,000 | 2,000 |
Average Recorded Investment with no specific reserve | 195,000 | 79,000 |
Commercial and Industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 150,000 | 240,000 |
Unpaid Principal Balance with specific reserves | 299,000 | 299,000 |
Interest Income Recognized with specific reserves | 19,000 | |
Specific Reserve with specific reserves | 149,000 | 59,000 |
Average Recorded Investment | 499,000 | 499,000 |
Consumer Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with no specific reserve | 167,000 | 85,000 |
Unpaid Principal Balance with no specific reserve | 167,000 | 85,000 |
Interest Income Recognized with no specific reserve | 2,000 | 6,000 |
Average Recorded Investment with no specific reserve | 72,000 | 107,000 |
Single-family Residential | Real Estate Loan | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 11,000 | 14,000 |
Unpaid Principal Balance with specific reserves | 32,046 | 34,000 |
Interest Income Recognized with specific reserves | 2,000 | 2,000 |
Specific Reserve with specific reserves | 21,000 | 20,000 |
Average Recorded Investment | 48,000 | 48,000 |
Recorded Investment with no specific reserve | 184,000 | 70,000 |
Unpaid Principal Balance with no specific reserve | 184,000 | 70,000 |
Interest Income Recognized with no specific reserve | 2,000 | 2,000 |
Specific Reserve loan | 21,337 | |
Average Recorded Investment with no specific reserve | 195,000 | 79,000 |
Commercial | Real Estate Loan | ||
Financing Receivable, Impaired [Line Items] | ||
Specific Reserve with specific reserves | 149,000 | |
Commercial and Industrial | Commercial and Industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 150,000 | 240,000 |
Unpaid Principal Balance with specific reserves | 299,453 | 299,000 |
Interest Income Recognized with specific reserves | 19,000 | |
Specific Reserve with specific reserves | 149,000 | 59,000 |
Average Recorded Investment | 499,000 | 499,000 |
Specific Reserve loan | 149,453 | |
Automobile | Consumer Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with no specific reserve | 167,000 | 85,000 |
Unpaid Principal Balance with no specific reserve | 167,000 | 85,000 |
Interest Income Recognized with no specific reserve | 2,000 | 6,000 |
Average Recorded Investment with no specific reserve | $ 72,000 | $ 107,000 |
LOANS RECEIVABLE AND ALLOWANC_8
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 USD ($) loan borrower | Jun. 30, 2022 borrower | Dec. 31, 2022 USD ($) loan | |
Loans and Allowance for Credit Losses - Loans | |||
Number of TDRs accounts | loan | 2 | 1 | |
Amount of recorded investment in new troubled debt restructurings, totaled | $ 41,000 | $ 34,000 | |
Number of borrowers | borrower | 5 | 8 | |
Unpaid Principal Balance with specific reserves | $ 331,000 | 333,000 | |
Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Unpaid Principal Balance with specific reserves | 32,000 | 34,000 | |
Commercial and Industrial | |||
Loans and Allowance for Credit Losses - Loans | |||
Unpaid Principal Balance with specific reserves | $ 299,000 | $ 299,000 | |
Single-family Residential | Real Estate Loan | |||
Loans and Allowance for Credit Losses - Loans | |||
Number of TDRs accounts | loan | 2 | 1 | |
Amount of recorded investment in new troubled debt restructurings, totaled | $ 41,000 | $ 34,000 | |
Number of loans | loan | 1 | ||
Number of borrowers | borrower | 1 | ||
Unpaid Principal Balance with specific reserves | $ 32,046 | 34,000 | |
Specific Reserve loan | $ 21,337 | ||
Commercial and Industrial | Commercial and Industrial | |||
Loans and Allowance for Credit Losses - Loans | |||
Number of loans | loan | 1 | ||
Number of borrowers | 1 | ||
Unpaid Principal Balance with specific reserves | $ 299,453 | $ 299,000 | |
Specific Reserve loan | $ 149,453 |
LOANS RECEIVABLE AND ALLOWANC_9
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Troubled debt restructured loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Impaired [Line Items] | ||
Troubled debt restructured loans | $ 41 | $ 34 |
Non-accrual and 90+ days past due and still accruing loans to average loans | 0.31% | 0.25% |
Allowance for credit losses to non-accrual and 90 days or more and still accruing loans | 385.80% | 433.90% |
LOANS RECEIVABLE AND ALLOWAN_10
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Non-accrual loans (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Financing Receivable Nonaccrual Status | ||
Balance | $ 488 | $ 338 |
Transfer into non-accrual | 310 | 173 |
Loans paid down/payoffs | (214) | (179) |
Loans returned to accrual status | (29) | |
Loans charged off | (8) | (83) |
Balance | 576 | 220 |
Real Estate Loan | ||
Financing Receivable Nonaccrual Status | ||
Balance | 104 | |
Balance | 216 | |
Commercial and Industrial | ||
Financing Receivable Nonaccrual Status | ||
Balance | 299 | |
Balance | 296 | |
Consumer Loans | ||
Financing Receivable Nonaccrual Status | ||
Balance | 85 | |
Balance | 72 | |
Single-family Residential | Real Estate Loan | ||
Financing Receivable Nonaccrual Status | ||
Balance | 104 | 123 |
Transfer into non-accrual | 307 | 31 |
Loans paid down/payoffs | (195) | (44) |
Balance | 216 | 110 |
Commercial and Industrial | Commercial and Industrial | ||
Financing Receivable Nonaccrual Status | ||
Balance | 299 | |
Loans charged off | (3) | |
Balance | 296 | |
SBA Guaranty | Commercial and Industrial | ||
Financing Receivable Nonaccrual Status | ||
Balance | 71 | |
Loans paid down/payoffs | (61) | |
Loans charged off | (10) | |
Consumer | ||
Financing Receivable Nonaccrual Status | ||
Transfer into non-accrual | 11 | |
Loans paid down/payoffs | (11) | |
Automobile | Consumer Loans | ||
Financing Receivable Nonaccrual Status | ||
Balance | 85 | 144 |
Transfer into non-accrual | 3 | 131 |
Loans paid down/payoffs | (19) | (63) |
Loans returned to accrual status | (29) | |
Loans charged off | (5) | (73) |
Balance | $ 64 | $ 110 |
LOANS RECEIVABLE AND ALLOWAN_11
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - Loans - Credit Quality Information (Details) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | $ 576,000 | $ 488,000 | $ 220,000 | $ 338,000 |
Troubled debt restructured loans | $ 41,000 | $ 34,000 | ||
Number of TDRs accounts | loan | 2 | 1 | ||
Non-performing TDRs | 41,000 | 34,000 | ||
Number of non-performing TDRs accounts | loan | 2 | 1 | ||
Loans and Leases Receivable, Gross | $ 180,551,000 | $ 186,440,000 | ||
Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 179,869,000 | 185,982,000 | ||
Substandard | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 682,000 | 483,000 | ||
Doubtful | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 5,000 | |||
Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 216,000 | 104,000 | ||
Loans and Leases Receivable, Gross | 135,574,000 | 133,323,000 | ||
Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 296,000 | 299,000 | ||
Loans and Leases Receivable, Gross | 16,273,000 | 15,148,000 | ||
Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 72,000 | 85,000 | ||
Loans and Leases Receivable, Gross | 28,704,000 | 37,969,000 | ||
Construction and Land | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 5,116,000 | 4,499,000 | ||
Construction and Land | Real Estate Loan | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 5,116,000 | 4,499,000 | ||
Farmland | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 328,000 | 333,000 | ||
Farmland | Real Estate Loan | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 328,000 | 333,000 | ||
Single-family Residential | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 216,000 | 104,000 | 110,000 | 123,000 |
Troubled debt restructured loans | $ 41,000 | $ 34,000 | ||
Number of TDRs accounts | loan | 2 | 1 | ||
Non-performing TDRs | 41,000 | 34,000 | ||
Number of non-performing TDRs accounts | loan | 2 | 1 | ||
Loans and Leases Receivable, Gross | $ 82,337,000 | $ 80,251,000 | ||
Single-family Residential | Real Estate Loan | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 82,121,000 | 80,147,000 | ||
Single-family Residential | Real Estate Loan | Substandard | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 216,000 | 104,000 | ||
Multi-family | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 5,236,000 | 5,304,000 | ||
Multi-family | Real Estate Loan | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 5,236,000 | 5,304,000 | ||
Commercial | Real Estate Loan | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 42,557,000 | 42,936,000 | ||
Commercial | Real Estate Loan | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 42,557,000 | 42,936,000 | ||
Commercial and Industrial | Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 296,000 | 299,000 | ||
Loans and Leases Receivable, Gross | 10,250,000 | 8,990,000 | ||
Commercial and Industrial | Commercial and Industrial | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 9,951,000 | 8,691,000 | ||
Commercial and Industrial | Commercial and Industrial | Substandard | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 299,000 | 299,000 | ||
SBA Guaranty | Commercial and Industrial | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 71,000 | |||
Loans and Leases Receivable, Gross | 6,023,000 | 6,158,000 | ||
SBA Guaranty | Commercial and Industrial | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 6,023,000 | 6,158,000 | ||
Consumer | Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 1,430,000 | 1,521,000 | ||
Consumer | Consumer Loans | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 1,430,000 | 1,521,000 | ||
Automobile | Consumer Loans | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Non-accrual | 64,000 | 85,000 | $ 110,000 | $ 144,000 |
Loans and Leases Receivable, Gross | 27,274,000 | 36,448,000 | ||
Automobile | Consumer Loans | Pass | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | 27,107,000 | 36,363,000 | ||
Automobile | Consumer Loans | Substandard | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | $ 167,000 | 80,000 | ||
Automobile | Consumer Loans | Doubtful | ||||
Loans and Allowance for Credit Losses - Loans | ||||
Loans and Leases Receivable, Gross | $ 5,000 |
FAIR VALUE (Details)
FAIR VALUE (Details) | Jun. 30, 2023 USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Specific reserve amount | $ 170,790 |
Impaired real estate loans | $ 682,485 |
Minimum | Discount Rate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Fair value of discount rate | 0 |
Maximum | Discount Rate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Fair value of discount rate | 0.16 |
FAIR VALUE - Changes in the ass
FAIR VALUE - Changes in the assets subject to fair value measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Fair Value Measurements | |||
Securities available for sale | $ 150,820 | $ 144,133 | |
Collateralized mortgage obligations | |||
Fair Value Measurements | |||
Securities available for sale | 14,283 | 15,255 | |
Agency mortgage-backed securities | |||
Fair Value Measurements | |||
Securities available for sale | 48,616 | 51,893 | |
Municipal securities | |||
Fair Value Measurements | |||
Securities available for sale | 33,098 | 32,297 | |
Corporate securities | |||
Fair Value Measurements | |||
Securities available for sale | 1,255 | 1,325 | |
U.S. Treasury securities | |||
Fair Value Measurements | |||
Securities available for sale | 16,583 | 6,783 | |
Level 2 | |||
Fair Value Measurements | |||
Assets, fair value disclosure | 150,820 | 144,133 | |
Level 3 | |||
Fair Value Measurements | |||
Assets, fair value disclosure | 512 | 330 | |
Fair Value | |||
Fair Value Measurements | |||
Assets, fair value disclosure | 151,332 | 144,463 | |
Recurring | Level 2 | Collateralized mortgage obligations | |||
Fair Value Measurements | |||
Securities available for sale | 14,283 | 15,255 | |
Recurring | Level 2 | Agency mortgage-backed securities | |||
Fair Value Measurements | |||
Securities available for sale | 48,616 | 51,893 | |
Recurring | Level 2 | Municipal securities | |||
Fair Value Measurements | |||
Securities available for sale | 33,098 | 32,297 | |
Recurring | Level 2 | Corporate securities | |||
Fair Value Measurements | |||
Securities available for sale | 1,255 | 1,325 | |
Recurring | Level 2 | U.S. Government agency securities | |||
Fair Value Measurements | |||
Securities available for sale | 36,985 | 36,580 | |
Recurring | Level 2 | U.S. Treasury securities | |||
Fair Value Measurements | |||
Securities available for sale | 16,583 | $ 6,783 | |
Recurring | Fair Value | Collateralized mortgage obligations | |||
Fair Value Measurements | |||
Securities available for sale | 14,283 | 15,255 | |
Recurring | Fair Value | Agency mortgage-backed securities | |||
Fair Value Measurements | |||
Securities available for sale | 48,616 | 51,893 | |
Recurring | Fair Value | Municipal securities | |||
Fair Value Measurements | |||
Securities available for sale | 33,098 | 32,297 | |
Recurring | Fair Value | Corporate securities | |||
Fair Value Measurements | |||
Securities available for sale | 1,255 | 1,325 | |
Recurring | Fair Value | U.S. Government agency securities | |||
Fair Value Measurements | |||
Securities available for sale | 36,985 | 36,580 | |
Recurring | Fair Value | U.S. Treasury securities | |||
Fair Value Measurements | |||
Securities available for sale | 16,583 | $ 6,783 | |
Nonrecurring | Level 3 | |||
Fair Value Measurements | |||
Impaired loans | 512 | 330 | |
Nonrecurring | Fair Value | |||
Fair Value Measurements | |||
Impaired loans | $ 512 | $ 330 |
FAIR VALUE - Estimated fair val
FAIR VALUE - Estimated fair values of the Company's financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial assets: Carrying Amount | ||
Cash and due from banks | $ 1,965 | $ 2,035 |
Interest-bearing deposits in other financial institutions | 9,458 | 22,680 |
Federal funds sold | 325 | 5,377 |
Investment securities available for sale, at fair value | 150,820 | 144,133 |
Investments in restricted stock | 403 | 221 |
Ground rents | 128 | 131 |
Loans, less allowance for credit losses | 178,329 | 184,278 |
Accrued interest receivable | 1,139 | 1,159 |
Cash value of life insurance | 8,572 | 8,493 |
Financial liabilities: Carrying Amount | ||
Deposits | 329,224 | 362,947 |
Short-term borrowings | 15,000 | |
Accrued interest payable | 17 | 9 |
Unrecognized financial instruments: Carrying Amount | ||
Commitments to extend credit | 30,610 | 30,718 |
Standby letters of credit | 45 | 45 |
Financial assets - Fair Value | ||
Cash and due from banks | 1,965 | 2,035 |
Interest-bearing deposits in other financial institutions | 9,458 | 22,680 |
Federal funds sold | 325 | 5,377 |
Investment securities available for sale, at fair value | 150,820 | 144,133 |
Investments in restricted stock | 403 | 221 |
Ground rents | 128 | 131 |
Loans, less allowance for credit losses | 167,999 | 177,254 |
Accrued interest receivable | 1,139 | 1,159 |
Cash value of life insurance | 8,572 | 8,493 |
Financial liabilities - Fair Value | ||
Deposits | 272,655 | 299,773 |
Short-term borrowings | 15,000 | |
Accrued interest payable | 17 | 9 |
Unrecognized financial instruments: Fair Value | ||
Commitments to extend credit | 30,610 | 30,718 |
Standby letters of credit | $ 45 | $ 45 |
FAIR VALUE - Fair value hierarc
FAIR VALUE - Fair value hierarchy of financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial assets: Carrying Amount | ||
Cash and cash equivalents | $ 11,748 | |
Loans receivable, net | 178,329 | $ 184,278 |
Cash value of life insurance | 8,572 | |
Financial liabilities: Carrying Amount | ||
Deposits | 329,224 | 362,947 |
Short-term debt | 15,000 | |
Financial instruments - Assets: Fair Value | ||
Cash and cash equivalents | 11,748 | |
Loans receivable, net | 167,999 | 177,254 |
Cash value of life insurance | 8,572 | |
Financial instruments - Liabilities: Fair Value | ||
Deposits | 272,655 | $ 299,773 |
Short-term debt | 15,000 | |
Fair Value | Level 1 | ||
Financial instruments - Assets: Fair Value | ||
Cash and cash equivalents | 11,748 | |
Fair Value | Level 2 | ||
Financial instruments - Assets: Fair Value | ||
Cash value of life insurance | 8,572 | |
Financial instruments - Liabilities: Fair Value | ||
Deposits | 272,655 | |
Short-term debt | 15,000 | |
Fair Value | Level 3 | ||
Financial instruments - Assets: Fair Value | ||
Loans receivable, net | $ 167,999 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | $ 2,222 | $ 2,162 | $ 2,470 | |
Reserve for unfunded commitments | 496 | 477 | $ 413 | 371 |
Real Estate Loan | Construction and Land | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 46 | 44 | 5 | |
Real Estate Loan | Farmland | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 19 | 20 | 11 | |
Real Estate Loan | Single-family Residential | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 1,256 | 1,230 | 1,357 | |
Real Estate Loan | Multi-family | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 99 | 103 | 105 | |
Real Estate Loan | Commercial | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 219 | 221 | 278 | |
Commercial and Industrial | Commercial and Industrial | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 317 | 174 | 115 | |
Commercial and Industrial | SBA Guaranty | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 22 | 22 | 30 | |
Consumer Loans | Consumer | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | 20 | 23 | 36 | |
Consumer Loans | Automobile | ||||
RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Allowance for loan losses | $ 224 | $ 325 | $ 533 |