What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 285 added, 191 removed, 1199 unchanged (28% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2021 (unaudited) and December 31, 2020

June 30, 2021 (unaudited) and December 31, 2020

(derived from audited financial statements)

(in thousands, except share and per share data)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cash and cash equivalents $ 128,440 $ 119,440

28 unchanged sentences

Retained earnings 40,117 32,809

Unearned deferred compensation ( 1,239 ) ( 550 )

Accumulated other comprehensive income 2,060 1,490

4 unchanged sentences

Consolidated Statements of Operations (unaudited)

Three Months Ended March 31, 2021 and 2020

Three and Six Months Ended June 30, 2021 and 2020

(in thousands, except per share data)

Three Months Ended

March 31, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest and dividend income:

18 unchanged sentences

Net gains on investment securities 37 25 272 98

Net gain on sale of acquired business lines — 252 — 252

Settlement proceeds — 131 — 131

Other 216 199 463 484

22 unchanged sentences

Consolidated Statements of Comprehensive Income (unaudited)

Three months ended March 31, 2021 and 2020

Three and Six months ended June 30, 2021 and 2020

(in thousands)

Three Months Ended

March 31, 2021 March 31, 2020

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Net income attributable to common stockholders $ 4,706 $ 3,069 $ 10,212 $ 5,675

Other comprehensive loss, net of tax:

Other comprehensive income, net of tax:

Securities available for sale

Net unrealized losses arising during period ( 486 ) ( 1,191 )

Net unrealized gains arising during period 1,082 1,628 596 603

Reclassification adjustment for net gains included in net income, net of tax ( 26 ) — ( 26 ) ( 113 )

Other comprehensive loss ( 486 ) ( 1,138 )

Other comprehensive income, net of tax 1,056 1,628 570 490

Comprehensive income $ 5,762 $ 4,697 $ 10,782 $ 6,165

2 unchanged sentences

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

(in thousands, except shares and per share data)

Additional Paid-In Capital Retained Earnings Unearned Deferred Compensation Accumulated Other Comprehensive Income (loss) Total Stockholders’ Equity

Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (loss) Total Stockholders’ Equity

Shares Amount

5 unchanged sentences

Restricted common stock awarded under the equity incentive plan 64,399 — — — — —

Common stock repurchased - canceled/retired ( 224,481 ) ( 2 ) ( 2,552 ) ( 21 ) — — ( 2,575 )

Common stock repurchased ( 224,481 ) ( 2 ) ( 2,552 ) ( 21 ) — ( 2,575 )

Stock option expense — — 3 — — 3

3 unchanged sentences

Balance at March 31, 2021 10,893,872 109 123,766 35,783 1,004 160,662

Net income — — — 4,706 — 4,706

Other comprehensive income, net of tax — — — — 1,056 1,056

Surrender of restricted shares of common stock ( 1,149 ) — ( 15 ) — — ( 15 )

Common stock options exercised 2,000 — 17 — — 17

Common stock repurchased ( 198,648 ) ( 2 ) ( 2,260 ) ( 372 ) — ( 2,634 )

Stock option expense — — 2 — — 2

Amortization of restricted stock — — 222 — — 222

Balance at June 30, 2021 10,696,075 $ 107 $ 121,732 $ 40,117 $ 2,060 $ 164,016

See accompanying condensed notes to unaudited consolidated financial statements.

3 unchanged sentences

(in thousands, except shares and per share data)

Additional Paid-In Capital Retained Earnings Unearned Deferred Compensation Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Shares Amount

1 unchanged sentence

Net income — — — 2,606 — 2,606

Other comprehensive income, net of tax — — — — — ( 1,138 ) ( 1,138 )

Other comprehensive loss, net of tax — — — — ( 1,138 ) ( 1,138 )

Surrender of restricted shares of common stock ( 1,746 ) — ( 21 ) — — ( 21 )

22 unchanged sentences

Other comprehensive income, net of tax — — — — 586 586

Unrealized performance-based restricted common stock awards — — ( 92 ) — 92 — —

Surrender of restricted shares of common stock ( 531 ) — ( 4 ) — — ( 4 )

6 unchanged sentences

Consolidated Statements of Cash Flows (unaudited)

Three Months Ended March 31, 2021 and 2020

Six Months Ended June 30, 2021 and 2020

(in thousands)

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

Cash flows from operating activities:

17 unchanged sentences

Net change in loans held for sale 3,083 ( 385 )

Decrease in accrued interest receivable and other assets 322 1,131

Increase (decrease) in other liabilities 6,248 ( 340 )

Decrease (increase) in accrued interest receivable and other assets 662 ( 1,048 )

(Decrease) increase in other liabilities ( 1,998 ) 3,580

Net gain on sale of insurance agency — ( 252 )

Total adjustments 61 4,780

11 unchanged sentences

Proceeds from disposal of office properties and equipment 10 8

Net cash (used in) provided by investing activities ( 8,687 ) 3,604

Net proceeds from sale of insurance agency — 1,127

Net cash used in investing activities ( 57,463 ) ( 92,524 )

Cash flows from financing activities:

2 unchanged sentences

Federal Home Loan Bank advance termination payments ( 8,102 ) —

Federal Home Loan Bank maturities ( 4,000 ) ( 32,000 )

Amortization of debt issuance costs 52 35

2 unchanged sentences

Surrender of restricted shares of common stock ( 25 ) ( 23 )

Common stock options exercised 17 —

Cash dividends paid ( 2,511 ) ( 2,372 )

Net cash provided by (used in) financing activities 71,757 ( 27,356 )

Net cash provided by financing activities 56,190 65,810

Net increase (decrease) in cash and cash equivalents 9,000 ( 16,259 )

29 unchanged sentences

Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the March 31, 2021 balance sheet date and through the date the financial statements were available to be issued for items that should potentially be recognized or disclosed in these consolidated financial statements.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the June 30, 2021 balance sheet date and through the date the financial statements were available to be issued for items that should potentially be recognized or disclosed in these consolidated financial statements.

The accompanying consolidated interim financial statements are unaudited.

21 unchanged sentences

Unrealized losses deemed other-than-temporary due to credit issues are reported in the Company’s net income in the period in which the losses arise.

Realized gains or losses on sales of available for sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net gains on investment securities.

Interest income includes amortization of purchase premium or accretion of purchase discount.

20 unchanged sentences

Based on management’s quarterly evaluation, no impairment has been recorded on these securities.

Other investments totaling $ 15,069 at March 31, 2021 consisted of $ 8,041 of FHLB stock, $ 5,181 of Federal Reserve Bank stock and $ 1,847 of Bankers’ Bank stock.

Other investments totaling $ 14,966 at June 30, 2021 consisted of $ 7,938 of FHLB stock, $ 5,181 of Federal Reserve Bank stock and $ 1,847 of Bankers’ Bank stock.

Other investments totaling $ 14,948 at December 31, 2020 consisted of $ 8,103 of FHLB stock and $ 5,170 of Federal Reserve Bank stock and $ 1,675 of Bankers’ Bank stock.

2 unchanged sentences

Interest income is accrued on the unpaid principal balance of these loans.

Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method with no prepayment assumptions.

Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed.

If the loan is prepaid, any unamortized net fee is recognized at this time.

Late charge fees are recognized into income when collected.

45 unchanged sentences

As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield.

Loans acquired with deteriorated credit quality are accounted for in accordance with Accounting Standards Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30) if, at acquisition, the loans have evidence of credit quality deterioration since origination and it is probable that all contractually required payments will not be collected.

will not be collected.

At acquisition, the Company considers several factors as indicators that an acquired loan has evidence of deterioration in credit quality.

These factors include, but are not limited to:

loans 90 days or more past due, loans with an

internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.

loans 90 days or more past due, loans with an internal risk grade of substandard or below, loans classified as non-accrual by the acquired institution, and loans that have been previously modified in a troubled debt restructuring.

Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow.

26 unchanged sentences

Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing fee income, is recorded for fees earned for servicing loans.

The fee are based on a contractual percentage of outstanding principal;

The fees are based on a contractual percentage of outstanding principal;

or a fixed amount per loan and are recorded as income when earned.

The amortization of mortgage servicing rights is netted against loan servicing fee income.

Goodwill and other intangible assets— The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill.

On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets

may be impaired.

the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill.

On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired.

Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management.

The Company has one reporting unit as of March 31, 2021 which is related to its banking activities.

The Company has one reporting unit as of June 30, 2021 which is related to its banking activities.

The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit.

4 unchanged sentences

The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2020.

The Company performed a goodwill impairment analysis as of March 31, 2021 and determined that goodwill was not impaired.

Foreclosed and Repossessed Assets, net – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis.

16 unchanged sentences

Advertising, Marketing and Public Relations Expense— The Company expenses all advertising, marketing and public relations costs as they are incurred.

Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

3 unchanged sentences

Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets.

In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods,

any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences.

In evaluating this available evidence, management considers, among other things, historical performance, expectations

of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences.

Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences.

12 unchanged sentences

Loss Contingencies— Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable and an amount of loss can be reasonably estimated.

Other Comprehensive Income — Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale and pension liability adjustments, net of tax, and is shown on the accompanying consolidated statements of other comprehensive income.

Operating Segments— While our executive officers monitor the revenue streams of the various banking products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

14 unchanged sentences

The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract, with similar costs to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments.

This guidance became

effective for the Company beginning in the first quarter of 2020.

The accounting for the

service element of a hosting arrangement that is a service contract is not affected by the amendments.

This guidance became effective for the Company beginning in the first quarter of 2020.

Adoption of this ASU had no material impact on its consolidated financial statements.

16 unchanged sentences

NOTE 2 – INVESTMENT SECURITIES

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of March 31, 2021 and December 31, 2020, respectively, were as follows:

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of June 30, 2021 and December 31, 2020, respectively, were as follows:

Available for sale securities Amortized

Losses Estimated

March 31, 2021

June 30, 2021

government agency obligations $ 30,126 $ 612 $ 10 $ 30,728

15 unchanged sentences

Losses Estimated

March 31, 2021

June 30, 2021

government agency obligations $ 3,500 $ 1 $ — $ 3,501

6 unchanged sentences

Total held to maturity securities $ 43,551 $ 267 $ 34 $ 43,784

As of March 31, 2021, the Bank has pledged U.S.

As of June 30, 2021, the Bank has pledged U.S.

Government Agency securities with a carrying value of $ 539 and mortgage-backed securities with a carrying value of $ 3,739 as collateral against specific municipal deposits.

2021, the Bank has pledged mortgage-backed securities with a carrying value of $ 1,121 as collateral against a borrowing line of credit with the Federal Reserve Bank.

However, as of March 31, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit.

As of March 31, 2021, the Bank also has mortgage-backed securities with a carrying value of $ 402 pledged as collateral to the Federal Home Loan Bank of Des Moines.

At June 30, 2021, the Bank has pledged mortgage-backed securities with a carrying value of $ 1,209 as collateral against a borrowing line of credit with the Federal Reserve Bank.

However, as of June 30, 2021, there were no borrowings outstanding on this Federal Reserve Bank line of credit.

As of June 30, 2021, the Bank also has mortgage-backed securities with a carrying value of $ 358 pledged as collateral to the Federal Home Loan Bank of Des Moines.

At December 31, 2020, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $ 1,209 as collateral to secure a line of credit with the Federal Reserve Bank.

1 unchanged sentence

As of December 31, 2020, the Bank has pledged certain of its U.S.

Government Agency securities with a carrying value of $ 576 and mortgage-backed securities with a carrying value of $ 3,028 as collateral against specific municipal deposits.

Government Agency securities with a carrying value of $ 576 and mortgage-backed securities with a carrying value of $ 3,028 as

collateral against specific municipal deposits.

As of December 31, 2020, the Bank also has mortgage-backed securities with a carrying value of $ 468 pledged as collateral to the Federal Home Loan Bank of Des Moines.

For the three month period ended March 31, 2020 gross sales of available for sale securities were $ 10,841 .

There were no sales of available for sale securities for the three month period ended March 31, 2021.

Gross gains on sale of available for sale securities for the three months ended March 31, 2020 were $ 157 .

Gross losses on sale of available for sale securities for the three months ended March 31, 2020 were $ 1 .

The estimated fair value of securities at March 31, 2021 and December 31, 2020, by contractual maturity, is shown below.

For the three and six month periods ended June 30, 2021 gross sales of available for sale securities were $ 1,965 and $ 1,965 , respectively.

Gross gains on sale of available for sale securities for the three and six months ended June 30, 2021 were $ 36 and $ 36 , respectively.

Gross losses on sale of available for sale securities for the three and six months ended June 30, 2021were $ 0 and $ 0 , respectively.

Gross sales of available for sale securities were $ 0 and $ 10,841 for the three and six month periods ended June 30, 2020, respectively.

Gross gains on sale of available for sale securities for the three and six months ended June 30, 2020 were $ 0 and $ 156 , respectively.

Gross losses on sale of available for sale securities for the three and six months ended June 30, 2020 were $ 0 and $ 0 , respectively.

The estimated fair value of securities at June 30, 2021 and December 31, 2020, by contractual maturity, is shown below.

Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Expected maturities may differ from contractual maturities on certain agency and municipal securities due to the call feature.

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Available for sale securities Amortized

9 unchanged sentences

Total available for sale securities $ 240,906 $ 243,746 $ 142,177 $ 144,233

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Held to maturity securities Amortized

8 unchanged sentences

Total held to maturity securities $ 59,582 $ 58,362 $ 43,551 $ 43,784

Securities with unrealized losses at March 31, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

Securities with unrealized losses at June 30, 2021 and December 31, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

Less than 12 Months 12 Months or More Total

3 unchanged sentences

Value Unrealized

March 31, 2021

June 30, 2021

government agency obligations $ — $ — $ 1,503 $ 10 $ 1,503 $ 10

15 unchanged sentences

Value Unrealized

March 31, 2021

government agency obligations $ 3,483 $ 17 $ — $ — $ 3,483 $ 17

June 30, 2021

Obligations of states and political subdivisions $ 594 $ 6 $ — $ — $ 594 $ 6

8 unchanged sentences

the Company’s intent and ability to sell the debt security prior to recovery, that it is more likely than not that the Company will not sell the security prior to recovery, default and delinquency rates of the underlying collateral, remaining credit support, and historical loss severities.

Adjustments to market value of available for sale securities that are considered temporary are recorded as separate components of shareholders’ equity, net of tax.

Adjustments to market value of available for sale securities that are considered temporary are recorded as separate components of stockholders’ equity, net of tax.

If the unrealized loss of a security is identified as other-than-temporary based on information available, such as the decline in the creditworthiness of the issuer, external market ratings, or the anticipated or realized elimination of associated dividends, such impairments are further analyzed to determine if credit loss exists.

20 unchanged sentences

In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized.

Farming operations may be

affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields.

Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields.

SBA PPP loan balances are 100% guaranteed under the Small Business Association’s Paycheck Protection Program and may be forgiven in full, depending on use of funds and eligibility.

32 unchanged sentences

This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.

Below is a summary of originated and acquired loans by type and risk rating as of March 31, 2021:

Below is a summary of originated and acquired loans by type and risk rating as of June 30, 2021:

1 to 5 6 7 8 9 TOTAL

107 unchanged sentences

Loans receivable, net $ 1,220,538

The following table summarizes SBA PPP loans by round at March 31, 2021 and December 31, 2020 and includes additional round 2 activity in April 2021:

The following table summarizes SBA PPP loans at June 30, 2021 and December 31, 2020:

(Dollars in Millions)

Balance Net Deferred Fee Income

SBA PPP Loans - Round 1 $ 124 $ 3.0

SBA PPP Loans - Round 2 — —

Total SBA PPP Loans, December 31, 2020 124 3.0

SBA PPP Loans - Round 1 $ 72 $ 1.3

SBA PPP Loans - Round 2 47 1.7

Total SBA PPP Loans, March 31, 2021 119 3.0

Net deferred fees collected after March 31, 2021 from Q1 SBA PPP loan originations — 0.9

SBA PPP Pipeline Round 2, April 2021 8 0.8

March 31, 2021 plus SBA PPP Pipeline - Round 2, April 2021 $ 127 $ 4.7

2020 Originations 2021 Originations Total

Balance Net Deferred Fee Income Balance Net Deferred Fee Income Balance Net Deferred Fee Income

SBA PPP Loans, December 31, 2020 $ 123,702 $ 2,991 $ — $ — $ 123,702 $ 2,991

2021 SBA PPP Loan Originations — — 55,790 3,485 55,790 3,485

2021 SBA PPP Loan Forgiveness and Fee Accretion ( 102,295 ) ( 2,683 ) ( 2,272 ) ( 376 ) ( 104,567 ) ( 3,059 )

Balance, June 30, 2021 $ 21,407 $ 308 $ 53,518 $ 3,109 $ 74,925 $ 3,417

Allowance for Loan Losses - The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio.

9 unchanged sentences

Commercial/Agriculture Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Unallocated Total

Three months ended March 31, 2021

Three months ended June 30, 2021

Allowance for Loan Losses:

Beginning balance, April 1, 2021 $ 11,109 $ 1,633 $ 941 $ 450 $ 895 $ 15,028

Charge-offs ( 51 ) — — ( 12 ) — ( 63 )

Recoveries 1 30 2 21 — 54

Provision ( 169 ) 519 ( 172 ) ( 97 ) ( 40 ) 41

Allowance allocation adjustment — —

Total Allowance on originated loans 10,890 2,182 771 362 855 15,060

Purchased credit impaired loans — — — — — —

Other acquired loans:

Beginning balance, April 1, 2021 1,301 94 388 49 — 1,832

Charge-offs — ( 7 ) — ( 3 ) — ( 10 )

Recoveries — 3 1 — — 4

Provision 167 ( 9 ) ( 158 ) ( 41 ) — ( 41 )

Allowance allocation adjustment — —

Total Allowance on other acquired loans 1,468 81 231 5 — 1,785

Total Allowance on acquired loans 1,468 81 231 5 — 1,785

Ending balance, June 30, 2021 $ 12,358 $ 2,263 $ 1,002 $ 367 $ 855 $ 16,845

Commercial/Agriculture Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Unallocated Total

Six months ended June 30, 2021

Allowance for Loan Losses:

Beginning balance, January 1, 2021 $ 10,271 $ 2,112 $ 1,041 $ 489 $ 906 $ 14,819

11 unchanged sentences

Total Allowance on acquired loans 1,468 81 231 5 — 1,785

Ending balance, March 31, 2021 $ 12,410 $ 1,727 $ 1,329 $ 499 $ 895 $ 16,860

Allowance for Loan Losses at March 31, 2021:

Ending balance, June 30, 2021 $ 12,358 $ 2,263 $ 1,002 $ 367 $ 855 $ 16,845

Allowance for Loan Losses at June 30, 2021:

Amount of allowance for loan losses arising from loans individually evaluated for impairment $ 796 $ 527 $ 144 $ — $ — $ 1,467

Amount of allowance for loan losses arising from loans collectively evaluated for impairment $ 11,562 $ 1,736 $ 858 $ 367 $ 855 $ 15,378

Loans Receivable as of March 31, 2021 —

Loans Receivable as of June 30, 2021 —

Ending balance of originated loans $ 666,866 $ 178,722 $ 77,914 $ 30,673 $ — $ 954,175

7 unchanged sentences

Commercial/Agriculture Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Unallocated Total

Three months ended March 31, 2020

Three months ended June 30, 2020

Allowance for Loan Losses:

Beginning balance, April 1, 2020 $ 7,277 $ 1,659 $ 924 $ 530 $ 460 $ 10,850

Charge-offs — ( 222 ) — ( 65 ) — ( 287 )

Recoveries — — — 17 — 17

Provision 1,020 341 56 ( 2 ) 114 1,529

Total Allowance on originated loans 8,297 1,778 980 480 574 12,109

Purchased credit impaired loans — — — — — —

Other acquired loans:

Beginning balance, April 1, 2020 665 160 115 45 — 985

Charge-offs — ( 24 ) — — — ( 24 )

Recoveries 76 — 6 — — 82

Provision 5 198 ( 9 ) 27 — 221

Total Allowance on other acquired loans 746 334 112 72 — 1,264

Total Allowance on acquired loans 746 334 112 72 — 1,264

Ending balance, June 30, 2020 $ 9,043 $ 2,112 $ 1,092 $ 552 $ 574 $ 13,373

Commercial/Agriculture Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Unallocated Total

Six months ended June 30, 2020

Allowance for Loan Losses:

Beginning balance, January 1, 2020 $ 6,205 $ 1,643 $ 879 $ 467 $ 357 $ 9,551

11 unchanged sentences

Total Allowance on acquired loans 746 334 112 72 — 1,264

Ending balance, March 31, 2020 $ 7,942 $ 1,819 $ 1,039 $ 575 $ 460 $ 11,835

Allowance for Loan Losses at March 31, 2020:

Ending balance, June 30, 2020 $ 9,043 $ 2,112 $ 1,092 $ 552 $ 574 $ 13,373

Allowance for Loan Losses at June 30, 2020:

Amount of allowance for loan losses arising from loans individually evaluated for impairment $ 815 $ 181 $ 101 $ 1 $ — $ 1,098

Amount of allowance for loan losses arising from loans collectively evaluated for impairment $ 8,228 $ 1,931 $ 991 $ 551 $ 574 $ 12,275

Loans Receivable as of March 31, 2020:

Loans Receivable as of June 30, 2020:

Ending balance of originated loans $ 535,001 $ 243,512 $ 102,525 $ 46,206 $ — $ 927,244

21 unchanged sentences

Commercial/Agriculture Real Estate Loans C&I/Agricultural Operating Residential Mortgage Consumer Installment Totals

March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Performing loans

8 unchanged sentences

(1) Nonperforming loans are either 90+ days past due or nonaccrual.

As of March 31, 2021, the Company had $ 209,511 in unused commitments, compared to $ 247,324 in unused commitments as of December 31, 2020.

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of March 31, 2021 and December 31, 2020, respectively, was as follows:

As of June 30, 2021, the Company had $ 238,306 in unused commitments, compared to $ 247,324 in unused commitments as of December 31, 2020.

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of June 30, 2021 and December 31, 2020, respectively, was as follows:

30-59 Days Past Due and Accruing 60-89 Days Past Due and Accruing Greater Than 89 Days Past Due and Accruing Total

Past Due and Accruing Nonaccrual Loans Total Past Due Accruing and Nonaccrual Loans Current Total

March 31, 2021

June 30, 2021

Commercial/Agricultural real estate:

31 unchanged sentences

Total $ 18,886 $ 1,723 $ 586 $ 21,195 $ 10,747 $ 31,942 $ 1,214,947 $ 1,246,889

At March 31, 2021, the Company has identified impaired loans of $ 40,243 , consisting of $ 17,442 TDR loans, the carrying amount of purchased credit impaired loans of $ 16,475 and $ 6,326 of substandard non-TDR loans.

At June 30, 2021, the Company has identified impaired loans of $ 38,867 , consisting of $ 16,597 TDR loans, the carrying amount of purchased credit impaired loans of $ 15,613 and $ 6,657 of substandard non-TDR loans.

The $ 38,867 total of impaired loans includes $ 11,603 of performing TDR loans.

3 unchanged sentences

Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis.

A summary of the Company’s impaired loans as of March 31, 2021, December 31, 2020 and March 31, 2020 was as follows:

Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized

March 31, 2021

A summary of the Company’s impaired loans as of June 30, 2021, December 31, 2020 and June 30, 2020 was as follows:

Three Months Ended Six Months Ended

Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

June 30, 2021

With No Related Allowance Recorded:

10 unchanged sentences

Total $ 4,952 $ 4,952 $ 1,467 $ 5,459 $ 48 $ 4,553 $ 118

March 31, 2021 Totals:

June 30, 2021 Totals:

Commercial/agriculture real estate $ 23,607 $ 23,607 $ 796 $ 24,278 $ 252 $ 24,956 $ 553

23 unchanged sentences

Total $ 43,397 $ 43,397 $ 1,115 $ 53,300 $ 2,835

Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized

March 31, 2020

Three Months Ended Six Months Ended

Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized

June 30, 2020

With No Related Allowance Recorded:

10 unchanged sentences

Total $ 5,156 $ 5,156 $ 1,098 $ 5,222 $ 17 $ 4,645 $ 59

March 31, 2020 Totals:

June 30, 2020 Totals:

Commercial/agriculture real estate $ 34,285 $ 34,285 $ 815 $ 35,378 $ 381 $ 38,471 $ 950

8 unchanged sentences

If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status.

There was one delinquent accruing TDR greater than 60 days past due with a recorded investment of $ 17 at March 31, 2021, compared to one such loans with a recorded investment of $ 20 at December 31, 2020.

Following is a summary of TDR loans by accrual status as of March 31, 2021 and December 31, 2020.

March 31, 2021 December 31, 2020

There were two delinquent accruing TDR greater than 60 days past due with a recorded investment of $ 133 at June 30, 2021, compared to one such loan with a recorded investment of $ 20 at December 31, 2020.

Following is a summary of TDR loans by accrual status as of June 30, 2021 and December 31, 2020.

June 30, 2021 December 31, 2020

Troubled debt restructure loans:

2 unchanged sentences

Total $ 16,597 $ 18,477

There were no loan commitments meeting our TDR criteria as of March 31, 2021 and December 31, 2020.

There were unused lines of credit totaling $ 42 and $ 15 meeting our TDR criteria as of March 31, 2021 and December 31, 2020, respectively.

The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three months ended March 31, 2021 and March 31, 2020:

There were no loan commitments meeting our TDR criteria as of June 30, 2021 and December 31, 2020.

There were unused lines of credit totaling $ 29 and $ 15 meeting our TDR criteria as of June 30, 2021 and December 31, 2020, respectively.

The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three and six months ended June 30, 2021 and June 30, 2020:

Number of Contracts Maturity Extension Modified Payment Modified Under- writing Other Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Specific Reserve

Three months ended March 31, 2021

Three months ended June 30, 2021

Commercial/agriculture real estate 1 $ 1 $ — $ — $ — $ 1 $ 1 $ —

4 unchanged sentences

Three months ended March 31, 2020

Six months ended June 30, 2021

Commercial/agriculture real estate 3 $ 39 $ 81 $ — $ — $ 120 $ 120 $ —

3 unchanged sentences

Totals 8 $ 111 $ 81 $ 272 $ — $ 464 $ 464 $ —

A summary of loans by loan segment modified in a troubled debt restructuring as of March 31, 2021 and March 31, 2020, was as follows:

March 31, 2021 March 31, 2020

Three months ended June 30, 2020

Commercial/agriculture real estate 6 $ 644 $ 198 $ — $ — $ 842 $ 842 $ —

C&I/Agricultural operating 3 295 78 — — 373 373 —

Residential mortgage 4 89 358 — — 447 447 —

Consumer installment — — — — — — — —

Totals 13 $ 1,028 $ 634 $ — $ — $ 1,662 $ 1,662 $ —

Six months ended June 30, 2020

Commercial/agriculture real estate 9 $ 892 $ 198 $ 17 $ — $ 1,107 $ 1,107 $ —

C&I/Agricultural operating 3 295 78 — — 373 373 —

Residential mortgage 5 89 358 85 — 532 532 —

Consumer installment 2 3 — 4 — 7 7 —

Totals 19 $ 1,279 $ 634 $ 106 $ — $ 2,019 $ 2,019 $ —

A summary of loans by loan segment modified in a troubled debt restructuring as of June 30, 2021 and June 30, 2020, was as follows:

June 30, 2021 June 30, 2020

Modifications Recorded

7 unchanged sentences

Total troubled debt restructurings 91 $ 16,597 102 $ 13,119

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2021 and March 31, 2020, as well as the recorded investment in these restructured loans as of March 31, 2021 and March 31, 2020:

March 31, 2021 March 31, 2020

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three and six months ended June 30, 2021 and June 30, 2020, as well as the recorded investment in these restructured loans as of June 30, 2021 and June 30, 2020:

Three Months Ended

June 30, 2021 June 30, 2020

Modifications Recorded

7 unchanged sentences

Total troubled debt restructurings — $ — — $ —

Six Months Ended

June 30, 2021 June 30, 2020

Modifications Recorded

Investment Number of

Modifications Recorded

Troubled debt restructurings:

Commercial/agriculture real estate — $ — 5 $ 1,892

C&I/Agricultural operating — — — —

Residential mortgage 1 19 — —

Consumer installment — — — —

Total troubled debt restructurings 1 $ 19 5 $ 1,892

All acquired loans were initially recorded at fair value at the acquisition date.

The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Accountable for under ASC 310-30 (Purchased Credit Impaired “PCI” loans)

8 unchanged sentences

The following table provides changes in accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:

March 31, 2021 March 31, 2020

Balance at beginning of period $ 3,976 $ 3,201

Balance at beginning of period, January 1 $ 3,976 $ 3,201

Acquisitions — —

2 unchanged sentences

Accretion ( 531 ) ( 480 )

Balance at end of period $ 3,683 $ 3,637

Balance at end of period, June 30 $ 3,524 $ 4,032

The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Balance at beginning of period $ 1,087 $ 6,290

7 unchanged sentences

Mortgage servicing rights-- Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.

The unpaid balances of these loans as of March 31, 2021 and December 31, 2020 were $ 551,622 and $ 553,655 , respectively, and consisted of one to four family residential real estate loans.

The unpaid balances of these loans as of June 30, 2021 and December 31, 2020 were $ 554.5 million and $ 553.7 million, respectively, and consisted of one to four family residential real estate loans.

These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the Federal National Mortgage Association.

The current period valuation allowance is included as amortization of mortgage servicing rights in non-interest expense on the consolidated statement of operations.

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $ 4,979 and $ 2,890 , at March 31, 2021 and December 31, 2020, respectively.

Mortgage servicing rights activity for the three month period ended March 31, 2021 and twelve months ended December 31, 2020 were as follows:

As of and for the Three Months Ended As of and for the Twelve Months Ended

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $ 5.0 million and $ 2.9 million at June 30, 2021 and December 31, 2020, respectively.

Mortgage servicing rights activity for the three and six month periods ended June 30, 2021 and June 30, 2020 were as follows:

As of and for the Three Months Ended As of and for the Three Months Ended As of and for the Six Months Ended As of and for the Six Months Ended

Mortgage servicing rights:

March 31, 2021 December 31, 2020

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Mortgage servicing rights, beginning of period $ 5,124 $ 4,467 $ 5,266 $ 4,541

1 unchanged sentence

Amortization during the period ( 464 ) ( 300 ) ( 903 ) ( 556 )

4,964 4,940 4,964 4,940

Valuation allowance:

6 unchanged sentences

end of period $ 3,894 $ 3,509 $ 3,894 $ 3,509

Residential mortgage loans serviced for others $ 551,622 $ 553,655

Net book value of mortgage servicing rights to loans serviced for others 0.73 % 0.59 %

Servicing fees totaled $ 352 and $ 339 for the three months ended March, 31 2021 and March 31, 2020, respectively.

The current period change in valuation allowance is included in non-interest expense as mortgage servicing rights expense, net on the consolidated statement of operations.

Servicing fees totaled $ 352 and $ 341 for the three months ended June 30, 2021 and June 30, 2020, respectively.

Servicing fees totaled $ 704 and $ 680 for the six months ended June 30, 2021 and June 30, 2020, respectively.

Late fees and ancillary fees related to loan servicing are not material.

2 unchanged sentences

Central to the valuation model is the discount rate.

Fair value at March 31, 2021 was determined using discount rates ranging from 9 % to 12 %.

Fair value at December 31, 2020 was determined using discount rates ranging from 9 % to 12 %.

Fair value at June 30, 2021 was determined using discount rates ranging from 9 % to 12 %.

Other assumptions utilized in the valuation model include, but are not limited to, prepayment speed, servicing costs, delinquencies, costs of advances, foreclosure costs, ancillary income, and income earned on float and escrow.

2 unchanged sentences

Our leases have remaining lease terms ranging from approximately 1.75 to 7.00 years, some of which include options to extend the leases for up to 5 additional years.

As of March 31, 2021, we have no additional lease commitments that have not yet commenced.

As of June 30, 2021, we have no additional lease commitments that have not yet commenced.

The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.

Three Months Ended

March 31, 2021 March 31, 2020

Six Months Ended

June 30, 2021 June 30, 2020

The components of total lease cost were as follows:

7 unchanged sentences

Operating cash flows from operating leases $ 276 $ 318

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Supplemental balance sheet information related to leases was as follows:

13 unchanged sentences

NOTE 6 – DEPOSITS

The following is a summary of deposits by type at March 31, 2021 and December 31, 2020, respectively:

March 31, 2021 December 31, 2020

The following is a summary of deposits by type at June 30, 2021 and December 31, 2020, respectively:

June 30, 2021 December 31, 2020

Non-interest bearing demand deposits $ 253,097 $ 238,348

6 unchanged sentences

$ 2,516 $ 2,516

At March 31, 2021, the scheduled maturities of time deposits were as follows:

March 31, 2022 $ 217,364

March 31, 2023 61,638

March 31, 2024 6,975

March 31, 2025 2,814

March 31, 2026 677

After March 31, 2026 —

At June 30, 2021, the scheduled maturities of time deposits were as follows for the year ended, except December 31, 2021 which is the six months ended:

December 31, 2021 $ 110,476

December 31, 2022 129,407

December 31, 2023 12,510

December 31, 2024 4,481

December 31, 2025 1,411

After December 31, 2025 751

Total $ 259,036

Time deposits of $250 or more were $ 42,992 and $ 46,660 at March 31, 2021 and December 31, 2020, respectively.

Time deposits of $250 or more were $ 34,245 and $ 46,660 at June 30, 2021 and December 31, 2020, respectively.

NOTE 7 – FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES AND OTHER BORROWINGS

A summary of Federal Home Loan Bank advances and other borrowings at March 31, 2021 and December 31, 2020 is as follows:

March 31, 2021 December 31, 2020

A summary of Federal Home Loan Bank advances and other borrowings at June 30, 2021 and December 31, 2020 is as follows:

June 30, 2021 December 31, 2020

Stated Maturity Amount Range of Stated Rates Amount Range of Stated Rates

16 unchanged sentences

Totals $ 169,876 $ 181,826

(1) The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $ 720,008 and $ 723,862 at March 31, 2021 and December 31, 2020, respectively.

At March 31, 2021, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $ 122,791 compared to $ 118,391 as of December 31, 2020.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $ 123,530 and $ 162,530 , during the three months ended March 31, 2021 and the twelve months ended December 31, 2020, respectively.

(3) The weighted-average interest rates on FHLB borrowings maturing within twelve months as of March 31, 2021 and December 31, 2020 were 1.80 % and 0.50 %, respectively.

(1) The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $ 740,586 and $ 723,862 at June 30, 2021 and December 31, 2020, respectively.

At June 30, 2021, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $ 144,714 compared to $ 118,391 as of December 31, 2020.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $ 123,530 and $ 162,530 , during the six months ended June 30, 2021 and the twelve months ended December 31, 2020, respectively.

(3) The weighted-average interest rates on FHLB borrowings maturing within twelve months as of June 30, 2021 and December 31, 2020 were 1.97 % and 1.02 %, respectively.

(4) FHLB term notes totaling $ 55,000 , with various maturity dates in 2029 and 2030, can be called or replaced by the FHLB on a quarterly basis, beginning approximately three months after the initial advance.

13 unchanged sentences

This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest bearing deposit balances.

These balances were $ 179,725 and $ 179,400 at March 31, 2021 and December 31, 2020, respectively.

These balances were $ 167,425 and $ 179,400 at June 30, 2021 and December 31, 2020, respectively.

Federal Reserve Bank Paycheck Protection Program Liquidity Facility (“FRB PPPLF”) Program

The Bank has originated Small Business Association’s Paycheck Protection Program (“SBA PPP”) loans and has complied with the requirements to pledge these loans to the FRB PPPLF program which provides 100% funding for SBA PPP loans upon request.

At March 31, 2021 the Bank had $ 118,931 of borrowing capacity under the Federal Reserve SBA PPP facility, which the Federal Reserve established in 2020.

The Bank has no outstanding loan balances under this facility at March 31, 2021 and December 31, 2020.

Maximum month-end borrowed amounts outstanding under this agreement were $ 0 and $ 25,136 , during the three months ended March 31, 2021 and the twelve months ended December 31, 2020, respectively.

At June 30, 2021 the Bank had $ 74,925 of borrowing capacity under the Federal Reserve SBA PPP facility, which the Federal Reserve established in 2020.

The Bank has no outstanding loan balances under this facility at June 30, 2021 and December 31, 2020.

Maximum month-end borrowed amounts outstanding under this agreement were $ 0 and $ 25,136 , during the six months ended June 30, 2021 and the twelve months ended December 31, 2020, respectively.

This FRB PPPLF program is scheduled to expire on July 30, 2021.

In July 2021, the Bank pledged these SBA PPP loans to the FHLB.

NOTE 8 - CAPITAL MATTERS

7 unchanged sentences

If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

At March 31, 2021, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2021 and December 31, 2020, respectively, are presented below:

At June 30, 2021, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at June 30, 2021 and December 31, 2020, respectively, are presented below:

Actual For Capital Adequacy

3 unchanged sentences

Amount Ratio Amount Ratio Amount Ratio

As of March 31, 2021

As of June 30, 2021

Total capital (to risk weighted assets) $ 177,444 14.7 % $ 96,484 > = 8.0 % $ 120,606 > = 10.0 %

7 unchanged sentences

Tier 1 leverage ratio (to adjusted total assets) 157,081 9.9 % 63,718 > = 4.0 % 79,647 > = 5.0 %

The Company’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2021 and December 31, 2020, respectively, are presented below:

The Company’s Tier 1 (leverage) and risk-based capital ratios at June 30, 2021 and December 31, 2020, respectively, are presented below:

Actual For Capital Adequacy

Amount Ratio Amount Ratio

As of March 31, 2021

As of June 30, 2021

Total capital (to risk weighted assets) $ 170,860 14.2 % 96,484 > = 8.0 %

11 unchanged sentences

The aggregate number of shares of common stock reserved and available for issuance under the 2018 Equity Incentive Plan is 350,000 shares.

As of March 31, 2021, 163,974 restricted shares had been granted under this plan.

As of March 31, 2021, no stock options had been granted under this plan.

As of June 30, 2021, 163,974 restricted shares had been granted under this plan.

As of June 30, 2021, no stock options had been granted under this plan.

In February 2008, the Company’s stockholders approved the Company’s 2008 Equity Incentive Plan for a term of 10 years.

Due to the plan’s expiration, no new awards can be granted under this plan.

As of March 31, 2021,there are 3,619 remaining unvested restricted shares and 71,700 unexercised options.

As of June 30, 2021,there are 1,800 awarded unvested restricted shares and 69,700 awarded unexercised options.

Restricted shares granted under the 2008 Equity Incentive Plan were awarded at no cost to the employee and vest pro rata over a two to five-year period from the grant date.

1 unchanged sentence

Unexercised incentive stock options expire within 10 years of the grant date.

Net compensation expense related to restricted stock awards from these plans was $ 171 for the three months ended March 31, 2021, compared to $ 139 for the three months ended March 31, 2020.

Net compensation expense related to restricted stock awards from these plans was $ 222 and $ 393 for the three and six months ended June 30, 2021, compared to $ 158 and $ 297 for the three and six months ended June 30, 2020.

Restricted Common Stock Award

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Number of Shares Weighted

6 unchanged sentences

Unvested and outstanding at end of year 102,659 $ 11.29 57,242 $ 12.23

The Company accounts for stock-based employee compensation related to the Company’s 2008 Equity Incentive Plan and 2018 Equity Incentive Plan using the fair-value-based method.

The Company accounts for stock option-based employee compensation related to the Company’s 2008 Equity Incentive Plan and 2018 Equity Incentive Plan using the fair-value-based method.

Accordingly, management records compensation expense based on the value of the award as measured on the grant date and then the Company recognizes that cost over the vesting period for the award.

The compensation cost recognized for stock-based employee compensation related to these plans for the three month period ended March 31, 2021 was $ 3 .

The compensation cost recognized for stock-based employee compensation related to these plans for the three month period ended March 31, 2020 was $ 4 .

The compensation cost recognized for stock option-based employee compensation related to these plans for the three and six month periods ended June 30, 2021 was $ 2 and $ 5 , respectively.

The compensation cost recognized for stock option-based employee compensation related to these plans for the three and six month period ended June 30, 2020 was $ 4 and $ 8 , respectively.

Common Stock Option Awards

1 unchanged sentence

Price Weighted

Term Aggregate

March, 31, 2021

Term in Years Aggregate

June 30, 2021

Outstanding at beginning of year 72,300 $ 11.05

1 unchanged sentence

Forfeited or expired ( 600 ) 13.76

Outstanding at end of year 71,700 $ 11.02 5.23

Exercisable at end of year 57,100 $ 10.69 5.06 $ 98

Fully vested and expected to vest 71,700 $ 11.02 5.23 $ 99

Outstanding at end of period 69,700 $ 11.09 5.03

Exercisable at end of period 61,300 $ 10.74 4.88 $ 180

December 31, 2020

4 unchanged sentences

Exercisable at end of year 54,100 $ 10.82 5.37 $ 4

Fully vested and expected to vest 72,300 $ 11.05 5.49 $ —

Information related to the 2008 Equity Incentive Plan for the respective periods follows:

Three months ended March 31, 2021 Twelve months ended December 31, 2020

Six months ended June 30, 2021 Twelve months ended December 31, 2020

Intrinsic value of options exercised $ 10 $ —

14 unchanged sentences

Assets Measured on a Recurring Basis

The following tables present the financial instruments measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

The following tables present the financial instruments measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020:

Value Quoted Prices in

3 unchanged sentences

(Level 2) Significant

March 31, 2021

June 30, 2021

Investment securities:

16 unchanged sentences

Assets Measured on Nonrecurring Basis

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of March 31, 2021 and December 31, 2020:

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of June 30, 2021 and December 31, 2020:

Carrying Value Quoted Prices in

3 unchanged sentences

(Level 2) Significant

March 31, 2021

June 30, 2021

Foreclosed and repossessed assets, net $ 145 $ — $ — $ 145

13 unchanged sentences

recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at

March 31, 2021.

June 30, 2021.

Value Valuation Techniques (1) Significant Unobservable Inputs (2) Range

March 31, 2021

June 30, 2021

Foreclosed and repossessed assets, net $ 145 Appraisal value Estimated costs to sell 10 % - 15 %

12 unchanged sentences

The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Valuation Method Used Carrying

18 unchanged sentences

Accrued interest payable (Level I) 685 685 796 796

NOTE 11— EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares outstanding for the period.

A reconciliation of the basic and diluted earnings per share is as follows:

Three Months Ended Six Months Ended

(Share count in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Net income attributable to common stockholders $ 4,706 $ 3,069 $ 10,212 $ 5,675

Weighted average common shares outstanding 10,778 11,151 10,879 11,182

Basic earnings per share $ 0.44 $ 0.28 $ 0.94 $ 0.51

Net income attributable to common stockholders $ 4,706 $ 3,069 $ 10,212 $ 5,675

Weighted average common shares outstanding 10,778 11,151 10,879 11,182

Dilutive stock options outstanding 12 — 8 1

Average shares and dilutive potential common shares 10,790 11,151 10,887 11,183

Diluted earnings per share $ 0.44 $ 0.28 $ 0.94 $ 0.51

Additional common stock option shares that have not been included due to their antidilutive effect 21 74 21 53

NOTE 12 – OTHER COMPREHENSIVE INCOME (LOSS)

The following tables show the tax effects allocated to each component of other comprehensive loss for the

three months ended March 31, 2021 and 2020:

The following tables show the tax effects allocated to each component of other comprehensive income for the three and six months ended June 30, 2021 and 2020:

Three months ended

March 31, 2021 March 31, 2020

June 30, 2021 June 30, 2020

Expense Net-of-Tax

2 unchanged sentences

Unrealized gains on securities:

Net unrealized losses arising during the period $ ( 672 ) $ 186 $ ( 486 ) $ ( 1,643 ) $ 452 $ ( 1,191 )

Net unrealized gains arising during the period $ 1,492 $ ( 410 ) $ 1,082 $ 2,245 $ ( 617 ) $ 1,628

Reclassification adjustment for gains included in net income ( 36 ) 10 ( 26 ) — — —

Other comprehensive loss $ ( 672 ) $ 186 $ ( 486 ) $ ( 1,570 ) $ 432 $ ( 1,138 )

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2020 and the three months ended March 31, 2021 were as follows:

Other comprehensive income $ 1,456 $ ( 400 ) $ 1,056 $ 2,245 $ ( 617 ) $ 1,628

Six Months Ended

June 30, 2021 June 30, 2020

Expense Net-of-Tax

Amount Before-Tax

Expense Net-of-Tax

Unrealized gains on securities:

Net unrealized gains arising during the period $ 820 $ ( 224 ) $ 596 $ 832 $ ( 229 ) $ 603

Reclassification adjustment for gains included in net income ( 36 ) 10 ( 26 ) ( 156 ) 43 ( 113 )

Other comprehensive income $ 784 $ ( 214 ) $ 570 $ 676 $ ( 186 ) $ 490

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2020 and the six months ended June 30, 2021 were as follows:

Gains (Losses)

5 unchanged sentences

Ending balance, December 31, 2020 $ 2,056 $ 1,490

Current year-to-date other comprehensive loss ( 672 ) ( 486 )

Ending balance, March 31, 2021 $ 1,384 $ 1,004

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2021 were as follows:

Current year-to-date other comprehensive income 784 570

Ending balance, June 30, 2021 $ 2,840 $ 2,060

Reclassifications out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2021 were as follows:

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended March 31, 2021 (1) Affected Line Item on the Statement of Operations

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended June 30, 2021 Six months ended June 30, 2021 (1) Affected Line Item on the Statement of Operations

Unrealized gains and losses

1 unchanged sentence

Tax Effect ( 10 ) ( 10 ) Provision for income taxes

Total reclassifications for the period $ — Net gain attributable to common shareholders

Total reclassifications for the period $ 26 $ 26 Net income attributable to common stockholders

(1) Amounts in parentheses indicate decreases to income/loss.

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2020 were as follows:

Reclassifications out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 were as follows:

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended March 31, 2020 (1) Affected Line Item on the Statement of Operations

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended June 30, 2020 Six months ended June 30, 2020 (1) Affected Line Item on the Statement of Operations

Unrealized gains and losses

1 unchanged sentence

Tax Effect — ( 43 ) Provision for income taxes

Total reclassifications for the period $ 53 Net gain attributable to common shareholders

Total reclassifications for the period $ — $ 113 Net income attributable to common stockholders

(1) Amounts in parentheses indicate decreases to profit/loss.

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