NEW PEOPLES BANKSHARES INC 10-Q/A

Item 1 Financial Statements NEW PEOPLES BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT PER SHARE AND SHARE DATA) (UNAUDITED) March 31, December 31, 2022 2021 ASSETS Cash and due from banks $ 17,040 $ 14,952 Interest-bearing deposits with banks 61,806 45,766 Federal funds sold 18 228 Total Cash and Cash Equivalents 78,864 60,946 Investment securities available-for-sale, at fair value 106,820 107,358 Loans held for sale 100 — Loans receivable 595,132 593,744 Allowance for loan losses ( 6,759 ) ( 6,735 ) Net loans 588,373 587,009 Bank premises and equipment, net 20,293 20,735 Other real estate owned 795 1,361 Accrued interest receivable 2,087 2,112 Deferred taxes, net 2,610 1,673 Bank owned life insurance 4,690 4,685 Right-of-use assets – operating leases 3,981 4,062 Other assets 4,923 4,706 Total Assets $ 813,536 $ 794,647 LIABILITIES Deposits: Noninterest bearing $ 269,251 $ 251,257 Interest-bearing 461,717 456,256 Total Deposits 730,968 707,513 Borrowed funds 16,496 16,496 Lease liabilities – operating leases 3,981 4,062 Accrued interest payable 254 272 Accrued expenses and other liabilities 2,925 2,673 Total Liabilities 754,624 731,016 SHAREHOLDERS’ EQUITY Common stock - $ 2.00 par value; 50,000,000 shares authorized; 23,922,086 shares issued and outstanding at March 31, 2022 and December 31, 2021 47,844 47,844 Additional paid-in-capital 14,570 14,570 Retained earnings 2,756 2,031 Accumulated other comprehensive loss ( 6,258 ) ( 814 ) Total Shareholders’ Equity 58,912 63,631 Total Liabilities and Shareholders’ Equity $ 813,536 $ 794,647 The accompanying notes are an integral part of these consolidated financial statements. 3 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) INTEREST AND DIVIDEND INCOME 2022 2021 Loans including fees $ 6,674 $ 6,921 Interest-earning deposits with banks 21 19 Investments 435 247 Dividends on equity securities (restricted) 27 32 Total Interest and Dividend Income 7,157 7,219 INTEREST EXPENSE Deposits 430 683 Borrowed funds 106 123 Total Interest Expense 536 806 NET INTEREST INCOME 6,621 6,413 PROVISION FOR LOAN LOSSES 100 186 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,521 6,227 NONINTEREST INCOME Service charges and fees 1,007 832 Card processing and interchange 916 864 Insurance and investment fees 241 226 Other noninterest income 205 207 Total Noninterest Income 2,369 2,129 NONINTEREST EXPENSES Salaries and employee benefits 3,275 3,079 Occupancy and equipment expense 1,006 1,176 Data processing and telecommunications 554 573 Other operating expenses 1,604 1,521 Total Noninterest Expenses 6,439 6,349 INCOME BEFORE INCOME TAXES 2,451 2,007 INCOME TAX EXPENSE 530 422 NET INCOME $ 1,921 $ 1,585 Earnings Per Share Basic and diluted $ 0.08 $ 0.07 Average Weighted Shares of Common Stock Basic and diluted 23,922,086 23,922,086 The accompanying notes are an integral part of these consolidated financial statements. 4 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (IN THOUSANDS) (UNAUDITED) For the three months ended March 31, 2022 2021 NET INCOME $ 1,921 $ 1,585 Other comprehensive income: Investment Securities Activity Unrealized losses arising during the period ( 6,892 ) ( 525 ) Other comprehensive losses on investment securities ( 6,892 ) ( 525 ) Related tax benefit ( 1,448 ) ( 110 ) TOTAL OTHER COMPREHENSIVE LOSS ( 5,444 ) ( 415 ) TOTAL COMPREHENSIVE (LOSS) INCOME $ ( 3,523 ) $ 1,170 The accompanying notes are an integral part of these consolidated financial statements. 5 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (IN THOUSANDS INCLUDING SHARE DATA) (UNAUDITED) Shares of Common Stock Common Stock Additional Paid-in- Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Balance, December 31, 2020 23,922 $ 47,844 $ 14,570 $ ( 4,979 ) $ 742 $ 58,177 Net income — — — 1,585 — 1,585 Other comprehensive loss, net of tax — — — — ( 415 ) ( 415 ) Balance, March 31, 2021 23,922 $ 47,844 $ 14,570 $ ( 3,394 ) $ 327 $ 59,347 Balance, December 31, 2021 23,922 $ 47,844 $ 14,570 $ 2,031 $ ( 814 ) $ 63,631 Net income — — — 1,921 — 1,921 Other comprehensive loss, net of tax — — — — ( 5,444 ) ( 5,444 ) Cash dividend declared ($0.05 per share) — — — ( 1,196 ) — ( 1,196 ) Balance, March 31, 2022 23,922 $ 47,844 $ 14,570 $ 2,756 $ ( 6,258 ) $ 58,912 The accompanying notes are an integral part of these consolidated financial statements. 6 NEW PEOPLES BANKSHARES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (IN THOUSANDS) (UNAUDITED) 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,921 $ 1,585 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 471 563 Provision for loan losses 100 186 Income on bank owned life insurance ( 5 ) ( 12 ) Gain on sale of mortgage loans ( 6 ) ( 56 ) Loss on sale of premises and equipment — 3 (Gain) loss on sale of other real estate owned ( 27 ) 17 Loans originated for sale ( 337 ) ( 3,459 ) Proceeds from sales of loans originated for sale 243 3,904 Adjustment of carrying value of other real estate owned 137 28 Amortization of bond premiums 134 93 Deferred tax benefit 511 423 Net change in: Accrued interest receivable 25 169 Other assets ( 185 ) 1,002 Accrued interest payable ( 18 ) ( 77 ) Accrued expenses and other liabilities 262 24 Net Cash Provided by Operating Activities 3,226 4,393 CASH FLOWS FROM INVESTING ACTIVITIES Net increase in loans ( 1,156 ) ( 19,090 ) Purchase of securities available-for-sale ( 10,677 ) ( 1,481 ) Proceeds from repayments and maturities of securities available-for-sale 4,189 2,977 Net purchase of equity securities (restricted) ( 32 ) — Payments for the purchase of premises and equipment ( 29 ) ( 952 ) Proceeds from sales of other real estate owned 138 65 Net Cash Used in Investing Activities ( 7,567 ) ( 18,481 ) CASH FLOWS FROM FINANCING ACTIVITIES Net change in noninterest bearing deposits 17,994 35,580 Net change in interest bearing deposits 5,461 17,362 Dividends paid ( 1,196 ) — Net Cash Provided by Financing Activities 22,259 52,942 Net increase in cash and cash equivalents 17,918 38,854 Cash and Cash Equivalents, Beginning of the Period 60,946 92,350 Cash and Cash Equivalents, End of the Period $ 78,864 $ 131,204 Supplemental Disclosure of Cash Paid During the Period for: Interest $ 554 $ 883 Supplemental Disclosure of Non-cash Transactions: Other real estate acquired in settlement of foreclosed loans $ — $ 118 Loans made to finance sale of other real estate owned $ 308 $ — Change in unrealized losses on securities available for sale $ ( 6,892 ) $ ( 525 ) The accompanying notes are an integral part of these consolidated financial statements. 7 NEW PEOPLES BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 NATURE OF OPERATIONS Nature of Operations – New Peoples Bankshares, Inc. (New Peoples) is a financial holding company whose principal activity is the ownership and management of a community bank, New Peoples Bank, Inc. (the Bank). New Peoples and the Bank are organized and incorporated under the laws of the Commonwealth of Virginia. As a state chartered member bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System (the Federal Reserve). The Bank provides general banking services to individuals, small and medium size businesses and the professional community of southwest Virginia, southern West Virginia, western North Carolina and northeastern Tennessee. These services include commercial and consumer loans along with traditional deposit products such as checking and savings accounts. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements conform to U. S. generally accepted accounting principles (GAAP) and to general industry practices. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position at March 31, 2022 and December 31, 2021, and the results of operations for the three month periods ended March 31, 2022 and 2021. The notes included herein should be read in conjunction with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. The consolidated financial statements include New Peoples, the Bank, NPB Insurance Services, Inc., and NPB Web Services, Inc. (hereinafter, collectively referred to as the Company, we, us or our). All significant intercompany balances and transactions have been eliminated. In accordance with Accounting Standards Codification (ASC) 942, Financial Services – Depository and Lending, NPB Capital Trust I and 2 are not included in the consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The determination of the adequacy of the allowance for loan losses and the determination of the deferred tax asset and related valuation allowance are based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income. NOTE 3 EARNINGS PER SHARE Basic earnings per share computations are based on the weighted average number of shares outstanding during each period. Diluted earnings per share reflect the additional common shares that would have been outstanding if dilutive potential common shares had been issued. For the three month periods ended March 31, 2022 and 2021, there were no potential common shares. Basic and diluted net earnings per common share calculations follow: Schedule of basic and diluted net loss per common share calculations (Dollars in Thousands, Except Share and Per Share Data) For the three months ended March 31, 2022 2021 Net income $ 1,921 $ 1,585 Weighted average shares outstanding 23,922,086 23,922,086 Weighted average diluted shares outstanding 23,922,086 23,922,086 Basic and diluted income per share $ 0.08 $ 0.07 8 NOTE 4 CAPITAL Capital Requirements and Ratios The Company meets eligibility criteria of a small bank holding company in accordance with the Federal Reserve’s Small Bank Holding Company Policy Statement issued in February 2015 and, therefore, is not obligated to report consolidated regulatory capital. The Bank is subject to various capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital to risk-weighted assets, Tier 1 capital to average assets, and Common Equity Tier 1 capital to risk-weighted assets. As of March 31, 2022, the Bank meets all capital adequacy requirements to which it is subject. The Bank’s actual capital amounts and ratios are presented in the following table as of March 31, 2022 and December 31, 2021, respectively. Schedule of capital requirements Actual Minimum Capital Requirement Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars are in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2022: Total Capital to Risk Weighted Assets 86,861 15.90 % $ 43,711 8.0 % $ 54,639 10.0 % Tier 1 Capital to Risk Weighted Assets 80,102 14.66 % 32,784 6.0 % 43,711 8.0 % Tier 1 Capital to Average Assets 80,102 9.95 % 32,203 4.0 % 40,254 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 80,102 14.66 % 24,588 4.5 % 35,515 6.5 % December 31, 2021: Total Capital to Risk Weighted Assets 85,890 16.23 % $ 42,332 8.0 % $ 52,915 10.0 % Tier 1 Capital to Risk Weighted Assets 79,274 14.98 % 31,749 6.0 % ` 42,332 8.0 % Tier 1 Capital to Average Assets 79,274 9.86 % 32,145 4.0 % 40,181 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 79,274 14.98 % 23,812 4.5 % 34,395 6.5 % Accordingly, as of March 31, 2022 and December 31, 2021, the Bank was well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since such dates that management believes have changed the Bank’s category. The Bank is also subject to the rules implementing the Basel III capital framework and certain related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The final rules require the Bank to comply with the following minimum capital ratios: (i) a Common Equity Tier 1 capital to risk-weighted assets ratio of at least 4.5%, plus a 2.5% “capital conservation buffer” (effectively resulting in a minimum Common Equity Tier 1 capital to risk-weighted assets ratio of 7%), (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.5%), and (iv) a leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a Common Equity Tier 1 capital to risk-weighted assets ratio above the minimum but below the conservation buffer face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. All ratios shown in the table above exceed the minimum requirements. The Bank’s capital conservation buffer as of March 31, 2022 was 7.90 %. 9 NOTE 5 INVESTMENT SECURITIES The amortized cost and estimated fair value of available-for-sale (AFS) securities as of March 31, 2022 and December 31, 2021 are as follows: Schedule of securities amortized cost and estimated fair value Gross Gross Approximate Amortized Unrealized Unrealized Fair (Dollars are in thousands) Cost Gains Losses Value March 31, 2022 U.S. Treasuries $ 10,493 $ 3 $ 488 $ 10,008 U.S. Government Agencies 8,669 16 286 8,399 Taxable municipals 22,815 11 2,508 20,318 Corporate bonds 3,523 8 133 3,398 Mortgage backed securities 69,242 8 4,553 64,697 Total Securities AFS $ 114,742 $ 46 $ 7,968 $ 106,820 December 31, 2021 U.S. Treasuries $ 7,791 $ 2 $ 122 $ 7,671 U.S. Government Agencies 9,098 77 86 9,089 Taxable municipals 23,075 159 254 22,980 Corporate bonds 2,014 23 18 2,019 Mortgage backed securities 66,410 143 954 65,599 Total Securities available for sale $ 108,388 $ 404 $ 1,434 $ 107,358 The following table details unrealized losses and related fair values in the AFS portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2022 and December 31, 2021. Schedule of fair value and gross unrealized losses on investment securities Less than 12 Months 12 Months or More Total (Dollars are in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2022 U. S. Treasuries $ 8,289 $ 488 $ — $ — $ 8,289 $ 488 U.S. Government Agencies 3,317 162 3,115 124 6,432 286 Taxable municipals 18,655 2,455 350 53 19,005 2,508 Corporate bonds 1,867 133 — — 1,867 133 Mortgage backed securities 53,460 3,767 7,640 786 61,100 4,553 Total Securities AFS $ 85,588 $ 7,005 $ 11,105 $ 963 $ 96,693 $ 7,968 December 31, 2021 U.S. Treasuries $ 6,200 $ 122 $ — $ — $ 6,200 $ 122 U.S. Government Agencies 977 10 3,434 76 4,411 86 Taxable municipals 13,040 237 387 17 13,427 254 Corporate bonds 1,482 18 — — 1,482 18 Mortgage backed securities 52,180 758 6,282 196 58,462 954 Total Securities AFS $ 73,879 $ 1,145 $ 10,103 $ 289 $ 83,982 $ 1,434 At March 31, 2022, there were 192 securities in a loss position, of which 33 have been in a loss position for twelve months or more. Management believes that all unrealized losses have resulted from temporary changes in the interest rates and current market conditions and not as a result of credit deterioration. Management does not intend to sell, and it is not likely that the Bank will be required to sell any of the securities referenced in the table above before recovery of their amortized cost. Investment securities with a carrying value of $ 11.1 million and $ 12.1 million at March 31, 2022 and December 31, 2021, respectively, were pledged as collateral to secure public deposits and for other purposes required by law. 10 No AFS debt securities were sold during the three months ended March 31, 2022 and 2021. The amortized cost and fair value of investment securities at March 31, 2022, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Schedule of amortized cost and fair value of investment securities contractual maturity Weighted (Dollars are in thousands) Amortized Fair Average Securities Available-for-Sale Cost Value Yield Due in one year or less $ 301 $ 304 3.46 % Due after one year through five years 12,855 12,454 1.72 % Due after five years through ten years 13,449 12,711 1.70 % Due after ten years 88,137 81,351 1.70 % Total $ 114,742 $ 106,820 1.71 % The Bank, as a member of the Federal Reserve Bank of Richmond (the Reserve Bank) and the Federal Home Loan Bank (the FHLB) of Atlanta, is required to hold stock in each. The Bank also owns stock in CBB Financial Corp., which is a correspondent of the Bank. These equity securities, which are included in Other Assets on the consolidated balance sheet, are restricted from trading and are recorded at a cost of $ 2.1 million and $ 2.0 million at March 31, 2022 and December 31, 2021, respectively. The stock has no quoted market value and no ready market exists. NOTE 6 LOANS At March 31, 2022, $ 100 thousand of loans were held for sale. At December 31, 2021, no loans were held for sale, which represent mortgage loans originated for sale. These originations and sales are executed on a best efforts basis. Loans receivable outstanding as of March 31, 2022 and December 31, 2021 are summarized as follows: Schedule of Loans receivable outstanding (Dollars are in thousands) March 31, 2022 December 31, 2021 Real estate secured: Commercial $ 207,339 $ 206,162 Construction and land development 38,846 32,325 Residential 1-4 family 224,478 224,530 Multifamily 34,409 33,048 Farmland 18,107 18,735 Total real estate loans 523,179 514,800 Commercial 47,620 54,325 Agriculture 3,916 4,021 Consumer installment loans 18,947 18,756 All other loans 1,470 1,842 Total loans $ 595,132 $ 593,744 Included in commercial loans at March 31, 2022 and December 31, 2021 were $ 2.8 million and $ 6.4 million of Paycheck Protection Program (PPP) loans, respectively, that are guaranteed by the Small Business Administration (SBA). Also included in total loans above are deferred loan fees of $ 1.7 million and $ 1.8 million at March 31, 2022 and December 31, 2021, respectively. Deferred loan costs were $ 2.1 million and $ 2.0 million, at March 31, 2022 and December 31, 2021, respectively. Income from net deferred fees and costs is recognized over the lives of the respective loans as a yield adjustment. If loans repay prior to scheduled maturities any unamortized fee or costs is recognized at that time. 11 Loans receivable on nonaccrual status as of March 31, 2022 and December 31, 2021 are summarized as follows: Summary of loans receivable on nonaccrual status (Dollars are in thousands) March 31, 2022 December 31, 2021 Real estate secured: Commercial $ 289 $ 415 Construction and land development 36 37 Residential 1-4 family 2,217 2,314 Multifamily 50 111 Farmland 46 48 Total real estate loans 2,638 2,925 Commercial — 9 Consumer installment loans and other loans 2 7 Total loans receivable on nonaccrual status $ 2,640 $ 2,941 Total interest income not recognized on nonaccrual loans for the three months ended March 31, 2022 and March 31, 2021 was $5 thousand and $135 thousand, respectively. Under the provisions of the CARES Act, or related guidance issued by banking regulators, modifications, mainly in the form of short-term payment deferrals, were granted on 786 loans totaling $119.6 million, during 2020. At March 31, 2022 and December 31, 2021, no loans were subject to pandemic related forbearance. At March 31, 2022, 511 of the original 786 accounts remain, totaling $75.5 million. Of these remaining accounts, three loans totaling $133 thousand are past due 90 days or more. The following table presents information concerning the Company’s investment in loans considered impaired as of March 31, 2022 and December 31, 2021: Schedule of summary of impaired loans As of March 31, 2022 (Dollars are in thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Real estate secured: Commercial $ 97 $ 138 $ — Construction and land development 17 291 — Residential 1-4 family 1,484 1,786 — Multifamily — — — Farmland 301 470 — Commercial — — — Agriculture — — — Consumer installment loans 1 2 — All other loans — — — With an allowance recorded: Real estate secured: Commercial 307 368 86 Construction and land development — — — Residential 1-4 family 302 331 49 Multifamily 50 111 50 Farmland 193 205 13 Commercial 26 34 1 Agriculture — — — Consumer installment loans — — — All other loans — — — Total $ 2,778 $ 3,736 $ 199 12 As of December 31, 2021 (Dollars are in thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Real estate secured: Commercial $ 99 $ 140 $ — Construction and land development 24 298 — Residential 1-4 family 1,508 1,791 — Multifamily — — — Farmland 320 490 — Commercial — — — Agriculture — — — Consumer installment loans 2 2 — All other loans — — — With an allowance recorded: Real estate secured: Commercial 315 372 94 Construction and land development — — — Residential 1-4 family 340 372 53 Multifamily — — — Farmland 197 209 17 Commercial 28 35 2 Agriculture — — — Consumer installment loans — — — All other loans — — — Total $ 2,833 $ 3,709 $ 166 The following tables present information concerning the Company’s average impaired loans and interest recognized on those impaired loans, for the periods indicated: Three Months Ended March 31, 2022 March 31, 2021 (Dollars are in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no allowance recorded: Real estate secured: Commercial $ 171 $ 1 $ 441 $ — Construction and land development 41 4 94 4 Residential 1-4 family 1,602 11 1,781 14 Multifamily — — — — Farmland 370 6 483 9 Commercial — — — — Agriculture — — — — Consumer installment loans 2 — 4 — All other loans — — — — With an allowance recorded: Real estate secured: Commercial 589 1 1,501 3 Construction and land development — — — — Residential 1-4 family 320 3 319 — Multifamily 25 — — — Farmland 157 2 104 — Commercial 68 — 230 1 Agriculture — — — — Consumer installment loans — — — — All other loans — — — — Total $ 3,345 $ 28 $ 4,957 $ 31 13 An age analysis of past due loans receivable as of March 31, 2022 and December 31, 2021 is below. At March 31, 2022 and December 31, 2021, there were no loans over 90 days past due that were accruing. Summary age analysis of past due loans receivable As of March 31, 2022 (Dollars are in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Loans Real estate secured: Commercial $ — $ — $ — $ — $ 207,339 $ 207,339 Construction and land development 6 — 37 43 38,803 38,846 Residential 1-4 family 2,028 124 377 2,529 221,949 224,478 Multifamily — — 50 50 34,359 34,409 Farmland 17 — — 17 18,090 18,107 Total real estate loans 2,051 124 464 2,639 520,540 523,179 Commercial — — — — 47,620 47,620 Agriculture 1 — — 1 3,915 3,916 Consumer installment loans 67 14 — 81 18,866 18,947 All other loans — — — — 1,470 1,470 Total loans $ 2,119 $ 138 $ 464 $ 2,721 $ 592,411 $ 595,132 As of December 31, 2021 (Dollars are in thousands) Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Loans Real estate secured: Commercial — — — — 206,162 $ 206,162 Construction and land development 7 — 7 14 32,311 32,325 Residential 1-4 family 2,473 240 486 3,199 221,331 224,530 Multifamily — — 111 111 32,937 33,048 Farmland — — — — 18,735 18,735 Total real estate loans 2,480 240 604 3,324 511,476 514,800 Commercial 5 — — 5 54,320 54,325 Agriculture — — — — 4,021 4,021 Consumer installment Loans 56 5 — 61 18,695 18,756 All other loans — — — — 1,842 1,842 Total loans 2,541 245 604 3,390 590,354 $ 593,744 The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans receivable as to credit risk. The Company uses the following definitions for risk ratings: Pass - Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors. Special Mention - Loans in this category are currently protected but are potentially weak, including adverse trends in borrower’s operations, credit quality or financial strength. Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances. Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company’s credit position at some future date. 14 Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful - Loans classified doubtful have all the weaknesses inherent in loans classified as substandard, plus 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. Based on the most recent analysis performed, the risk categories of loans receivable as of March 31, 2022 and December 31, 2021 was as follows: Summary of risk category of loans receivable As of March 31, 2022 (Dollars are in thousands) Pass Special Mention Substandard Doubtful Total Real estate secured: Commercial $ 199,674 $ 7,376 $ 289 $ — $ 207,339 Construction and land development 37,917 892 37 — 38,846 Residential 1-4 family 221,493 769 2,216 — 224,478 Multifamily 33,928 431 50 — 34,409 Farmland 17,128 933 46 — 18,107 Total real estate loans 510,140 10,401 2,638 — 523,179 Commercial 46,566 1,054 — — 47,620 Agriculture 3,916 — — — 3,916 Consumer installment loans 18,944 1 2 — 18,947 All other loans 1,470 — — — 1,470 Total $ 581,036 $ 11,456 $ 2,640 $ — $ 595,132 As of December 31, 2021 (Dollars are in thousands) Pass Special Mention Substandard Doubtful Total Real estate secured: Commercial $ 198,022 $ 7,725 $ 415 $ — $ 206,162 Construction and land development 31,366 922 37 — 32,325 Residential 1-4 family 221,342 915 2,273 — 224,530 Multifamily 32,499 438 111 — 33,048 Farmland 18,137 550 48 — 18,735 Total real estate loans 501,366 10,550 2,884 — 514,800 Commercial 53,162 1,154 9 — 54,325 Agriculture 4,021 — — — 4,021 Consumer installment loans 18,746 2 8 — 18,756 All other loans 1,842 — — — 1,842 Total $ 579,137 $ 11,706 $ 2,901 $ — $ 593,744 NOTE 7 ALLOWANCE FOR LOAN LOSSES In determining the amount of our allowance for loan losses, we rely on an analysis of our loan portfolio, our experience and our evaluation of general economic conditions. If our assumptions prove to be incorrect, our current allowance may not be sufficient to cover future loan losses and we may experience significant increases to our provision. Due to the underlying SBA guarantee provided for PPP loans, these accounts were not included in either the portfolio segment or impairment calculations at March 31, 2022 and December 31, 2021. Additionally, due to uncertainties presented by the ongoing pandemic and the resulting economic uncertainty, internal and external qualitative factors were revised accordingly. This revision included reviewing our internal scoring related to loan modifications and extensions, and external factors, specifically, unemployment and other economic factors. The following tables present activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2022 and 2021, respectively. Additionally, the allocation of the allowance by recorded portfolio segment and impairment method is presented as of March 31, 2022, and December 31, 2021, respectively 15 Schedule of allocation of portion of allowance (Dollars are in thousand) Real estate secured Commercial Construction and Land Development Residential 1-4 family Multifamily Farmland Commercial Agriculture Consumer and All Other Unallocated Total Three months ended March 31, 2022 Beginning balance $ 2,134 $ 189 $ 2,237 $ 254 $ 149 $ 1,099 $ 28 $ 108 $ 537 $ 6,735 Charge-offs — — — ( 61 ) — ( 28 ) — ( 14 ) — ( 103 ) Recoveries — — 14 — — 11 — 2 — 27 Provision ( 2 ) 40 ( 53 ) 120 ( 6 ) ( 77 ) — 16 62 100 Ending balance $ 2,132 $ 229 $ 2,198 $ 313 $ 143 $ 1,005 $ 28 $ 112 $ 599 $ 6,759 Allowance for loan losses at March 31, 2022 Individually evaluated for impairment $ 86 $ — $ 49 $ 50 $ 13 $ 1 $ — $ — $ — $ 199 Collectively evaluated for impairment 2,046 229 2,149 263 130 1,004 28 112 599 6,560 Total $ 2,132 $ 229 $ 2,198 $ 313 $ 143 $ 1,005 $ 28 $ 112 $ 599 $ 6,759 Loans at March 31, 2022 Individually evaluated for impairment $ 404 $ 17 $ 1,786 $ 50 $ 494 $ 26 $ — $ 1 $ — $ 2,778 Collectively evaluated for impairment 206,935 38,829 222,692 34,359 17,613 47,594 3,916 20,416 — 592,354 Total $ 207,339 $ 38,846 $ 224,478 $ 34,409 $ 18,107 $ 47,620 $ 3,916 $ 20,417 $ — $ 595,132 (Dollars are in thousands) Real estate secured Commercial Construction and Land Development Residential 1-4 family Multifamily Farmland Commercial Agriculture Consumer and All Other Unallocated Total Allowance for loan losses at December 31, 2021 Individually evaluated for impairment $ 94 $ — $ 53 $ — $ 17 $ 2 $ — $ — $ — $ 166 Collectively evaluated for impairment 2,040 189 2,184 254 132 1,097 28 108 537 6,569 Total $ 2,134 $ 189 $ 2,237 $ 254 $ 149 $ 1,099 $ 28 $ 108 $ 537 $ 6,735 Loans at December 31, 2021 Individually evaluated for impairment $ 414 $ 24 $ 1,848 $ — $ 517 $ 28 $ — $ 2 $ — $ 2,833 Collectively evaluated for impairment 205,748 32,301 222,682 33,048 18,218 54,297 4,021 20,596 — 590,911 Total $ 179,381 $ 25,031 $ 222,980 $ 16,569 $ 18,368 $ 86,010 $ 4,450 $ 22,777 $ — $ 593,744 (Dollars are in thousands) Real estate secured Commercial Construction and Land Development Residential 1-4 family Multifamily Farmland Commercial Agriculture Consumer and All Other Unallocated Total Three months ended March 31, 2021 Beginning balance $ 2,281 $ 233 $ 1,951 $ 151 $ 97 $ 2,275 $ 40 $ 163 $ — $ 7,191 Charge-offs — — ( 6 ) — — ( 92 ) — ( 13 ) — ( 111 ) Recoveries 2 — 8 — — — — 17 — 27 Provision 178 ( 47 ) 330 14 59 ( 298 ) ( 7 ) ( 43 ) — 186 Ending balance $ 2,461 $ 186 $ 2,283 $ 165 $ 156 $ 1,885 $ 33 $ 124 $ — $ 7,293 Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. NOTE 8 TROUBLED DEBT RESTRUCTURINGS There were $ 2.4 million and $ 2.5 million in loans classified as troubled debt restructurings at March 31, 2022 and December 31, 2021, respectively. All loans considered to be troubled debt restructurings are individually evaluated for impairment as part of the allowance for loan losses calculation. No loans modified during the three months ended March 31, 2022 or March 31, 2021, were considered to be troubled debt restructurings. One loan totaling $84 thousand, previously modified as a trouble debt restructuring, defaulted during the three months ended March 31, 2022. No restructured notes defaulted during the three months ended March 31, 2021. Generally, a restructured troubled debt is considered to be in default once it becomes 90 days or more past due following a modification. 16 In determining the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings in its estimate. The Company evaluates all troubled debt restructurings for possible further impairment. As a result, the allowance may be increased, adjustments may be made in the allocation of the allowance, or charge-offs may be taken to further write down the carrying value of the loan. NOTE 9 OTHER REAL ESTATE OWNED The following table summarizes the activity in other real estate owned for the three months ended March 31, 2022 and the year ended December 31, 2021: Schedule of other real estate owned (Dollars are in thousands) March 31, 2022 December 31, 2021 Balance, beginning of period $ 1,361 $ 3,334 Additions — 566 Transfers from premises and equipment — 950 Proceeds from sales ( 138 ) ( 2,645 ) Proceeds from insurance claims — ( 54 ) Loans made to finance sales ( 308 ) ( 400 ) Adjustment of carrying value ( 137 ) ( 466 ) Net gains from sales 17 76 Balance, end of period $ 795 $ 1,361 NOTE 10 FAIR VALUES The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic of FASB ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market and in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company's various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market and in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are valued using other financial instruments, the parameters of which can be directly observed. Level 3: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. 17 A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy are as follows: Investment Securities Available for Sale - Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices. The Company’s available for sale securities, totaling $106.8 million and $107.4 million at March 31, 2022 and December 31, 2021, respectively, are the only assets whose fair values are measured on a recurring basis using Level 2 inputs from an independent pricing service. Loans - The Company does not record loans at fair value on a recurring basis. Real estate serves as collateral on a substantial majority of the Company’s loans. When a loan is considered impaired, a specific reserve may be established. Loans, which are deemed to be impaired and require a reserve are primarily valued on a non-recurring basis at the fair value of the underlying real estate collateral. Where there is no observable market price, such fair values are obtained using independent appraisals, which management evaluates to determine whether or not the fair value of the collateral is further impaired below the appraised value and adjusts for estimated costs of disposition. The Company records impaired loans as nonrecurring Level 3 assets. Other Real Estate Owned –Other real estate owned is adjusted to fair value upon transfer of the loans, or former bank premises, to other real estate owned. These assets are carried at the lower of their carrying value or fair value. Fair value is based upon observable market prices, when available, reduced by estimated disposition costs, which the Company considers to be nonrecurring Level 2 inputs. When observable market prices are not available, management determines the fair value of the foreclosed asset using independent third-party appraisals, evaluated to determine whether or not the property is further impaired below the appraised value, and adjusts for estimated costs of disposition. The Company records foreclosed assets as nonrecurring Level 3. Assets and liabilities measured at fair value are as follows as of March 31, 2022 (for purpose of this table the impaired loans are shown net of the related allowance): Schedule of summary of assets and liabilities measured at fair value March 31, 2022 (Dollars are in thousands) Quoted market price in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (On a recurring basis) Available for sale investments U.S. Treasuries $ — $ 10,008 $ — U.S. Government Agencies 8,399 Taxable municipals — 20,318 — Corporate bonds — 3,398 — Mortgage backed securities — 64,697 — (On a non-recurring basis) Other real estate owned — — 795 Impaired loans — — 2,579 Total $ — $ 106,820 $ 3,374 18 Assets and liabilities measured at fair value are as follows as of December 31, 2021 (for purpose of this table the impaired loans are shown net of the related allowance): December 31, 2021 (Dollars are in thousands) Quoted market price in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (On a recurring basis) Available for sale investments U.S. Treasuries $ — $ 7,671 $ — U.S. Government Agencies 9,089 Taxable municipals — 22,980 — Corporate bonds — 2,019 — Mortgage backed securities — 65,599 — (On a non-recurring basis) Other real estate owned — — 1,361 Impaired loans 2,667 Total $ — $ 107,358 4,194 For Level 3 assets measured at fair value on a recurring or non-recurring basis as of March 31, 2022 and December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows: Schedule of significant unobservable inputs In level 3 assets (Dollars in thousands) Fair Value at March 31, 2022 Fair Value at December 31, 2021 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Impaired Loans $ 2,579 $ 2,667 Appraised Value/ Market Value of Note Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell 0 – 18 % Other Real Estate Owned $ 795 $ 1,361 Appraised Value/Comparable Sales/Other Estimates from Independent Sources Discounts to reflect current market conditions and estimated costs to sell 0 – 18 % Fair Value of Financial Instruments FASB ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The carrying values of cash and due from banks, federal funds sold, interest-bearing deposits, deposits with no stated maturities and accrued interest approximates fair value and are excluded from the table below. The estimated fair values, and related carrying or notional amounts, of the Company's financial instruments and their placement in the fair value hierarchy at March 31, 2022 and December 31, 2021 was as follows (in thousands): 19 Schedule of estimated fair value of financial instruments Fair Value Measurements (Dollars are in thousands) Carrying Amount Fair Value Quoted market price in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) March 31, 2022 Financial Instruments – Assets Net Loans $ 588,373 $ 582,253 $ — $ — $ 582,253 Financial Instruments – Liabilities Time Deposits 190,572 192,407 — 192,407 — Borrowed funds 16,496 15,970 — 15,970 — December 31, 2021 Financial Instruments – Assets Net Loans $ 587,009 $ 580,024 $ — $ — $ 580,024 Financial Instruments – Liabilities Time Deposits 196,285 198,353 — 198,353 — Borrowed funds 16,496 15,649 — 15,649 — NOTE 11 LEASING ACTIVITIES As of March 31, 2022, the Bank leases four branch office sites resulting from sale leaseback transactions entered into in 2017 and a sublet of a lot adjacent to another office. The lease agreements have maturity dates ranging from May 2032 to December 2041. It is assumed that there are currently no circumstances in which the leases would be terminated prior to expiration. The weighted average remaining life of the lease terms at March 31, 2022 was 10.36 years. The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to the lease term for each transaction. This methodology is expected to be used for any other subsequent lease agreements. The weighted average discount rate for the leases at March 31, 2022 was 3.24 %. The Company’s operating lease costs for the three months ended March 31, 2022 and 2021, as the result of the transactions discussed above, were $ 114 thousand and $ 138 thousand, respectively. The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. At March 31, 2022, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands): Schedule of future minimum rental commitments under the non-cancellable operating leases 2022 $ 330 2023 455 2024 455 2025 455 2026 455 Thereafter 2,698 Total lease payments 4,848 Less imputed interest 867 Total $ 3,981 NOTE 12 REVENUE FROM CONTRACTS WITH CUSTOMERS All our revenue from contracts with customers as defined in ASC 606 is recognized within Noninterest income. The following table presents Noninterest income by revenue stream for the three months ended March 31, 2022 and 2021: 20 Schedule of revenue from contracts with customers For the three months ended March 31, (Dollars in thousands) 2022 2021 Service charges and fees $ 1,007 $ 832 Card processing and interchange income 916 864 Insurance and investment fees 241 226 Other noninterest income 205 207 Total Noninterest Income $ 2,369 $ 2,129 NOTE 13 NONINTEREST EXPENSES Other operating expenses, included as part of noninterest expenses, consisted of the following for the periods presented: Schedule of noninterest expenses For the three months ended March 31, (Dollars are in thousands) 2022 2021 Advertising $ 28 $ 35 ATM network expense 367 342 Legal, accounting and professional fees 231 267 Consulting fees 67 55 Loan related expenses 97 107 Printing and supplies 33 36 FDIC insurance premiums 49 70 Other real estate owned, net 130 97 Other 602 512 Total other operating expenses $ 1,604 $ 1,521 NOTE 14 SUBSEQUENT EVENTS On April 20, 2022, the United States District Court for the Western District of Virginia issued summary judgment, in favor of the Bank, dismissing all remaining claims made in a lawsuit filed by a former employee in January 2021, alleging wrongful termination based on gender, religion and age. On April 28, 2022 the board of directors of the Company authorized the repurchase of up to 500,000 shares of the Company’s outstanding common stock through March 31, 2023. The actual means and timing of any purchases, number of shares and prices or range of prices will be determined by the Company in its discretion and will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. There is no assurance that the Company will purchase any shares under this program. NOTE 15 RECENT ACCOUNTING DEVELOPMENTS The following is a summary of recent authoritative announcements: In June 2016, per ASU No. 2016-13, ‘Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,’ the Financial Accounting Standards Board (the FASB) issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. Subsequently, per ASU No. 2019-10, implementation for the Company is delayed until reporting periods beginning after December 15, 2022. Early adoption is permitted for all organizations for periods beginning after December 15, 2018. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. The Company has contracted with a software vendor and is currently working through the implementation process. It is anticipated the Company will run the new methodology parallel to the current allowance methodology for several periods before full implementation. 21 In March 2020, the FASB released ASU 2020-04, ‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting,’ which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offering Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The amendments in the Update are effective for the Company as of March 12, 2020 through December 31, 2022. The Company is working through implementation of this guidance, and to date this amendment has not had a material impact on its financial statements. In January 2021, the FASB released ASU 2021-01, ‘Reference Rate Reform (Topic 848),’ which clarifies that certain optional expedients and exceptions in topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition related to reference rate reform. The amendments in this Update are effective immediately for all entities. An entity may elect to apply the amendments in the Update on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final Update, up to the date that financial statements are available to be issued. The Company does not expect this amendment to have a material effect on its financial statements. In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-02, “Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures.” ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The amendments in this ASU should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. For entities that have adopted ASU 2016-13, ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted ASU 2016-13, the effective dates for ASU 2022-02 are the same as the effective dates in ASU 2016-13. Early adoption is permitted if an entity has adopted ASU 2016-13. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The Company is currently assessing the impact that ASU 2022-02 will have on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. 22