What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-08 · 196 added, 164 removed, 847 unchanged (30% of the section changed)

28 unchanged sentences

Less treasury stock, at cost -

at March 31, 2024

at June 30, 2024

and December 31, 2023, respectively

6 unchanged sentences

Consolidated Statements of Earnings

Quarter ended March 31,

Quarter ended June 30,

Six months ended June 30,

(Dollars in thousands, except share and per share data)

7 unchanged sentences

Net interest income

Provision for credit losses

Provision for (reversal of) credit losses

Net interest income after provision for credit

20 unchanged sentences

Consolidated Statements of Comprehensive Income

Quarter ended March 31,

Quarter ended June 30,

Six months ended June 30,

(Dollars in thousands)

Other comprehensive (loss) income, net of tax:

Unrealized net holding (loss) gain on securities net of

tax benefit of $

and tax expense of $

, respectively

Other comprehensive (loss) income

Comprehensive (loss) income

Other comprehensive (loss) gain:

Unrealized (loss) gain on securities

Related tax benefit (expense)

Other comprehensive (loss) gain, net of tax

Comprehensive income (loss)

See accompanying notes to consolidated financial statements

5 unchanged sentences

(Dollars in thousands, except share data)

Quarter ended March 31, 2024

(loss) income

Quarter ended June 30, 2024

Balance, March 31, 2024

Other comprehensive loss

Cash dividends paid ($

Sale of treasury stock

Balance, June 30, 2024

Quarter ended June 30, 2023

Balance, March 31, 2023

Other comprehensive loss

Cash dividends paid ($

Stock repurchases

Sale of treasury stock

Balance, June 30, 2023

Six months ended June 30, 2024

Balance, December 31, 2023

3 unchanged sentences

Sale of treasury stock

Balance, March 31, 2024

Quarter ended March 31, 2023

Balance, June 30, 2024

Six months ended June 30, 2023

Balance, December 31, 2022

4 unchanged sentences

Sale of treasury stock

Balance, March 31, 2023

Balance, June 30, 2023

See accompanying notes to consolidated financial statements

3 unchanged sentences

Consolidated Statements of Cash Flows

Quarter ended March 31,

Six months ended June 30,

(Dollars in thousands)

2 unchanged sentences

operating activities:

Provision for credit losses

Provision for (reversal of) credit losses

Depreciation and amortization

14 unchanged sentences

Decrease in FHLB stock

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Net decrease in noninterest-bearing deposits

Net increase (decrease) in interest-bearing deposits

Net increase (decrease) in federal funds purchased and securities sold

Net increase in interest-bearing deposits

Net decrease in federal funds purchased and securities sold

under agreements to repurchase

52 unchanged sentences

Material estimates that are particularly susceptible to significant change in the near term

include the determination of allowance for credit losses on loans and investment

securities, fair value of financial

include the determination of allowance for credit losses on loans and investment securities,

fair value of financial

instruments, and the valuation of deferred tax assets and other real estate owned (“OREO”).

1 unchanged sentence

The Company’s sources of income that

fall within the scope of ASC 606 include service charges on deposits, interchange

fees and gains and losses on sales of other real estate, all of which are presented as components of

noninterest income.

following is a summary of the revenue streams that fall within the scope of ASC 606:

fall within the scope of ASC 606 include service charges on deposits,

interchange fees and gains and losses on sales of other real estate, all of which are presented

as components of noninterest

The following is a summary of the revenue streams that fall within the scope

Service charges on deposits, investment services, ATM

16 unchanged sentences

the purchaser with financing, the analysis

is based on various other factors, including the credit quality of the purchaser,

is based on various other factors,

including the credit quality of the purchaser,

the structure of the loan, and any

3 unchanged sentences

the date of this filing that have occurred

subsequent to March 31, 2024.

The Company does not believe there were any material subsequent events during

period that would have required further recognition or disclosure in the unaudited

consolidated financial statements

included in this report.

subsequent to June 30, 2024.

The Company does not believe there were any material subsequent events during this

that would have required further recognition or disclosure in the unaudited

consolidated financial statements included in

Correction of Error

20 unchanged sentences

the Proportional Amortization Method

The amendments in this

Update permit reporting entities to elect to account for their equity investments made primarily

to receive income tax

credits and other income tax benefits,

regardless of the program from which the income tax credits or

benefits are received,

using the proportional amortization method if certain conditions are met.

The new standard

is effective for fiscal years, and

interim periods within those fiscal years, beginning after December 15,

The Company adopted ASU 2023-02

effective January 1, 2024 and recorded a cumulative effect of change

in accounting standard adjustment which reduced

beginning retained earnings by $0.3 million.

The Company will prospectively account for its investments in New Market

ASU 2023-02 now

permits reporting entities to elect to account for their equity investments made primarily to

receive income tax credits and

other income tax benefits,

regardless of the program from which the income tax credits or benefits are received,

proportional amortization method if certain conditions are met.

new standard is effective for fiscal years, and interim

periods within those fiscal years, beginning after December 15,

The Company adopted ASU 2023-02 effective

January 1, 2024 and recorded a cumulative effect of change in accounting

standard adjustment which reduced beginning

retained earnings by $0.3 million.

The Company, beginning

January 1, 2024, accounts

for its investments in New Markets

Tax Credits (“NMTCs”)

6 unchanged sentences

common shares outstanding for

the quarters ended March 31, 2024 and 2023, respectively.

Diluted net earnings per share reflect the potential dilution that

could occur upon exercise of securities or other rights for,

or convertible into, shares of the Company’s common

March 31, 2024 and 2023, respectively,

the Company had no such securities or rights issued or outstanding, and

no dilutive effect to consider for the diluted net earnings per share calculation.

The basic and diluted net earnings per share computations for the respective periods

are presented below

Quarter ended March 31,

the respective period.

Diluted net earnings per share reflect the potential dilution that could occur

upon exercise of

securities or other rights for, or convertible into, shares of the

Company’s common stock.

At June 30, 2024 and 2023,

respectively, the Company

had no such securities or rights issued or outstanding, and therefore, no dilutive

consider for the diluted net earnings per share calculation.

The basic and diluted net earnings per share computations for the respective periods are

presented below

Quarter ended June 30,

Six months ended June 30,

(Dollars in thousands, except share and per share data)

9 unchanged sentences

resources for the entity to support its activities.

At March 31, 2024, the Company did not have any consolidated VIEs but did have one nonconsolidated

At June 30, 2024, the Company did not have any consolidated VIEs but did have one nonconsolidated

VIE, discussed

1 unchanged sentence

Credit Investment

available to investors over seven years and are subject to

recapture if certain events occur during such period.

available to investors

years and are

subject to recapture

if certain events

respectively,

30 unchanged sentences

New Markets Tax Credit investment

At March 31, 2024 and December 31, 2023, respectively,

At June 30, 2024 and December 31, 2023, respectively,

all securities within the scope of ASC 320,

Investments – Debt

and Equity Securities,

Investments – Debt and

Equity Securities,

were classified as available-for-sale.

The fair value and amortized cost for securities available-for-

sale by contractual maturity at March 31, 2024 and December 31, 2023,

respectively, are presented below.

The fair value and amortized cost for securities available-for-sale

by contractual maturity at June 30, 2024 and December 31, 2023, respectively,

are presented below.

Gross Unrealized

(Dollars in thousands)

March 31, 2024

June 30, 2024

Agency obligations (a)

17 unchanged sentences

million and $

at March 31, 2024 and December 31, 2023, respectively,

at June 30, 2024 and December 31, 2023, respectively,

were pledged to secure public deposits, securities sold under agreements to repurchase,

5 unchanged sentences

carrying amounts of non-marketable equity investments were $

million at March 31, 2024 and December 31, 2023,

million at June 30, 2024 and December 31, 2023,

respectively.

3 unchanged sentences

Gross Unrealized Losses and Fair Value

The fair values and gross unrealized losses on securities at March 31, 2024

and December 31, 2023, respectively,

segregated by those securities that have been in an unrealized loss position for

less than 12 months and 12 months or

longer, are presented below.

The fair values and gross unrealized losses on securities at June 30, 2024

and December 31, 2023, respectively, segregated

by those securities that have been in an unrealized loss position for less than 12

months and 12 months or longer, are

presented below.

Less than 12 Months

1 unchanged sentence

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Agency obligations

4 unchanged sentences

For the securities in the previous table, the Company considers the severity of the unrealized

loss as well the Company’s

loss as well as the Company’s

intent to hold the securities to maturity or the recovery of the cost basis.

3 unchanged sentences

For the securities

in the previous table as of March 31, 2024, management does not intend to sell and it is likely that

management will not be

required to sell the securities prior to their recovery.

held as of June 30, 2024 in the table immediately above, management does not intend to sell

and it is likely that

management will not be required to sell the securities prior to their recovery.

Agency Obligations

Investments in agency obligations are guaranteed of full and timely payments

by the issuing agency.

management's analysis and judgement, there were no credit losses attributable

to the Company’s investments in agency

obligations at March 31, 2024.

Investments in agency mortgage backed securities (“MBS”) are issued by Ginnie Mae,

Fannie Mae, and Freddie Mac.

Each of these agencies provide a guarantee of full and timely payments of principal and

interest by the issuing agency.

Based on management's analysis and judgement, there were no credit losses attributable

to the Company’s investments

agency MBS at March 31, 2024.

Investments in agency obligations are guaranteed as to full and timely payment of principal

and interest by the issuing

Based on management's analysis and judgement, there

were no credit losses attributable to the Company’s

investments in agency obligations at June 30, 2024.

Investments in agency mortgage-backed securities (“MBS”) are MBS

issued by Ginnie Mae, Fannie Mae, and Freddie

Each of these agencies provide a guarantee of full and timely payments of principal and interest

on their respective

MBS by the issuing agency.

Based on management's analysis and judgement, there were no credit

losses attributable to the

Company’s investments in agency MBS at June

State and Political Subdivisions

1 unchanged sentence

municipalities in the United States.

majority of the portfolio was rated AA or higher,

with no securities rated below investment grade at March 31, 2024.

majority of these securities were rated AA or higher,

with no securities rated below investment grade at June 30, 2024.

Based on management's analysis and judgement, there were no credit losses attributable

to the Company’s investments

state and political subdivisions at March 31, 2024.

state and political subdivisions at June 30, 2024.

Realized Gains and Losses

The Company had no realized gains or losses on sale of securities during the quarters ended

March 31, 2024 and 2023,

respectively.

The Company had no realized gains or losses on sale of securities during the quarters and six

months ended June 30, 2024

and 2023, respectively.

LOANS AND ALLOWANCE

12 unchanged sentences

Loans secured by real estate were approximately 84.8% of the Company’s

total loan portfolio at March 31, 2024.

total loan portfolio at June 30, 2024.

2024, the Company’s geographic

loan distribution was concentrated primarily in Lee County,

surrounding areas.

Alabama, and surrounding

The loan portfolio segment is defined as the level at which an entity develops and documents a

69 unchanged sentences

consumers that are secured by a primary residence or second home.

These loans are underwritten

in accordance

These loans are underwritten in

with the Bank’s general loan policies and

3 unchanged sentences

Investment property

– primarily includes loans

to finance income-producing 1-4 family residential properties.

– primarily includes loans to finance income-producing 1-4 family residential properties.

the primary source of repayment is dependent upon income generated

14 unchanged sentences

The following is a summary of current, accruing past due, and nonaccrual loans by portfolio

segment and class as of March

segment and class as of June

30, 2024 and December 31, 2023.

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Commercial and industrial

35 unchanged sentences

These loans are not adversely classified and do

not expose an institution to sufficient risk to warrant an adverse

classification.

Substandard Accruing – loans that exhibit a well-defined weakness which presently jeopardizes

debt repayment,

not expose an institution to sufficient risk to warrant an adverse classification.

Substandard Accruing – loans that exhibit a well-defined weakness which presently

jeopardizes debt repayment,

even though they are currently performing.

6 unchanged sentences

classes by year of origination as

of March 31, 2024 and December 31, 2023.

of June 30, 2024 and December 31, 2023.

The December 31, 2023 table has been revised to correct revolving loans and

3 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Commercial and industrial

16 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Special mention

61 unchanged sentences

Allowance for Credit Losses

The Company adopted ASC 326 on January 1, 2023, which introduced the CECL

methodology for estimating all expected

The Company adopted ASC 326 on January 1, 2023, which introduced

the CECL methodology for estimating all expected

losses over the life of a financial asset.

4 unchanged sentences

with the collectively evaluated pools, evaluations are performed on an individual

The composition of the provision for credit losses for the respective periods

The composition of the provision for (reversal of) credit losses for the respective periods

is presented below.

Quarter ended March 31,

Quarter ended June 30,

Six months ended June 30,

(Dollars in thousands)

1 unchanged sentence

Reserve for unfunded commitments

Total provision for credit

Total provision for (reversal of)

credit losses

The following table details the changes in the allowance for credit losses for loans, by portfolio

3 unchanged sentences

Quarter ended:

March 31, 2024

June 30, 2024

Beginning balance

Net (charge-offs) recoveries

Provision for (reversal of) credit losses

Ending balance

Six months ended:

June 30, 2024

Beginning balance

Net recoveries (charge-offs)

Provision for credit losses

Provision for (reversal of) credit losses

Ending balance

(Dollars in thousands)

Commercial and

Quarter ended:

March 31, 2023

June 30, 2023

Beginning balance

Net recoveries (charge-offs)

Provision for (reversal of) credit losses

Ending balance

Six months ended:

June 30, 2023

Beginning balance

Impact of adopting ASC 326

Net recoveries (charge-offs)

Provision for credit losses

Provision for (reversal of) credit losses

Ending balance

3 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Commercial real estate

10 unchanged sentences

Nonaccrual Loans

March 31, 2024

June 30, 2024

Commercial real estate

7 unchanged sentences

corresponding mortgage loans are sold.

An estimate of the Company’s MSRs is determined

using assumptions that market

participants would use in estimating future net servicing income, including estimates

of prepayment speeds, discount rate,

default rates, cost to service, escrow account earnings, contractual servicing

fee income, ancillary income, and late fees.

An estimate of the fair value of the Company’s MSRs is

determined using

assumptions that market participants would use in estimating future net servicing

income, including estimates of

prepayment speeds, discount rates, default rates, costs to service, escrow account earnings,

contractual servicing fee

income, ancillary income, and late fees.

Subsequent to the date of transfer, the Company

has elected to measure its MSRs under the amortization method.

the amortization method, MSRs are amortized in proportion to, and over the period

has elected to measure its MSRs

under the amortization method.

Under the amortization method, MSRs are amortized in proportion to, and over

of, estimated net servicing income.

Increases in market interest rates generally increase the fair value of MSRs by reducing

prepayments and refinancings and

therefore reducing the prepayment speed.

The Company has recorded MSRs related to loans sold to Fannie Mae.

The Company generally sells conforming, fixed-

rate, closed-end, residential mortgages to Fannie Mae.

MSRs are included in other assets on the accompanying

consolidated balance sheets.

The Company generally sells, without recourse, conforming, fixed-rate, closed-end, residential

mortgages to Fannie Mae,

where the Company services the mortgages sold and records MSRs.

MSRs are included in other assets on the

accompanying consolidated balance sheets.

The Company evaluates MSRs for impairment on a quarterly basis.

5 unchanged sentences

as the fair value changes.

Changes in the valuation allowance are recognized in earnings as a component of

Changes in the valuation allowance are recognized in earnings as a component

lending income.

The change in amortized MSRs and the related valuation allowance for the quarters

ended March 31, 2024 and 2023 are

presented below.

Quarter ended March 31,

The following table details the changes in amortized MSRs and the related valuation allowance for

the respective periods.

Quarter ended June 30,

Six months ended June 30,

(Dollars in thousands)

12 unchanged sentences

, and focuses on the exit price, i.e., the price

that would be received to sell an asset or paid to transfer a liability in an orderly transaction occurring

in the principal

that would be received to sell an asset or paid to transfer a liability in an orderly transaction

occurring in the principal

market (or most advantageous market in the absence of a principal

20 unchanged sentences

transfers between levels have been affected.

The nature of the Company’s financial

assets and liabilities generally is such

The nature of the Company’s financial assets

and liabilities generally is such

that transfers in and out of any level are expected to be infrequent.

For the quarter ended

March 31, 2024, there were no

For the six months

ended June 30, 2024, there were no

transfers between levels and no changes in valuation techniques for the Company’s

24 unchanged sentences

The following table presents the balances of the assets and liabilities measured at fair value

on a recurring basis as of March

on a recurring basis as of June

30, 2024 and December 31, 2023, respectively,

5 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Securities available-for-sale:

50 unchanged sentences

on a nonrecurring basis as of

March 31, 2024 and December 31, 2023, respectively,

June 30, 2024 and December 31, 2023, respectively,

by caption, on the accompanying consolidated balance sheets and by

5 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Loans held for sale

6 unchanged sentences

Quantitative Disclosures for Level 3 Fair Value

At March 31, 2024 and December 31, 2023, the Company had no Level 3 assets measured

At June 30, 2024 and December 31, 2023, the Company had no Level 3 assets measured

at fair value on a recurring basis.

For Level 3 assets measured at fair value on a non-recurring basis at March 31, 2024

and December 31, 2023, the

significant unobservable inputs used in the fair value measurements and

the range of such inputs with respect to such assets

are presented below.

For Level 3 assets measured at fair value on a non-recurring basis at June 30, 2024

and December 31, 2023, the significant

unobservable inputs used in the fair value measurements and the range of such inputs

with respect to such assets are

presented below.

(Dollars in thousands)

1 unchanged sentence

Unobservable Input

March 31, 2024:

June 30, 2024:

Collateral dependent loans

51 unchanged sentences

related estimated fair value, and placement in the fair value hierarchy of the Company’s

instruments at March 31, 2024 and December 31, 2023 are presented below.

instruments at June 30, 2024 and December 31, 2023 are presented below.

This table excludes financial instruments for

which the carrying amount approximates fair value.

Financial assets for which fair value approximates carrying value

assets for which fair value approximates carrying value

included cash and cash equivalents.

11 unchanged sentences

(Dollars in thousands)

March 31, 2024:

June 30, 2024:

Financial Assets:

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements