What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-15 compared with 2022-08-16 · 366 added, 422 removed, 430 unchanged (65% of the section changed)

4 unchanged sentences

THOUSANDS EXCEPT PER SHARE AND SHARE DATA)

Cash and due from banks

Interest-bearing deposits with banks

Federal funds sold

Total Cash and Cash Equivalents

Investment securities available-for-sale

Loans held for sale

Loans receivable

Allowance for loan losses

Bank premises and equipment, net

Other real estate owned

Accrued interest receivable

Deferred taxes, net

Bank owned life insurance

Right-of-use assets – operating leases

Noninterest bearing

and due from banks

Interest-bearing

Total Deposits

Borrowed funds

Lease liabilities – operating leases

Accrued interest payable

Accrued expenses and other liabilities

Total Liabilities

SHAREHOLDERS’ EQUITY

Common stock - $ 2.00 par value;

deposits with banks

Cash and Cash Equivalents

securities available-for-sale

for loan losses

premises and equipment, net

real estate owned

interest receivable

owned life insurance

assets – operating leases

Interest-bearing

liabilities – operating leases

interest payable

expenses and other liabilities

SHAREHOLDERS’

stock - $ 2.00 par value;

50,000,000 shares authorized;

and 23,922,086 shares issued and outstanding at

June 30, 2022 and December 31, 2021, respectively

Additional paid-in-capital

Retained earnings

Accumulated other comprehensive loss

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

30, 2022 and December 31, 2021, respectively

paid-in-capital

other comprehensive loss

Shareholders’ Equity

Liabilities and Shareholders’ Equity

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF INCOME

THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

For the Three Months Ended

For the Six Months Ended

the Three Months Ended

the Nine Months Ended

AND DIVIDEND INCOME

including fees

Interest-earning

deposits with banks

on equity securities (restricted)

Interest and Dividend Income

Loans including fees

Federal funds sold

Interest-earning deposits with banks

Dividends on equity securities (restricted)

Total Interest and Dividend Income

Interest Expense

Borrowed funds

Total Interest Expense

NET INTEREST INCOME

PROVISION FOR LOAN LOSSES

NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES

INTEREST INCOME

FOR LOAN LOSSES

INTEREST INCOME AFTER

FOR LOAN LOSSES

charges and fees

processing and interchange

and investment fees

on sales of available-for-sale securities

noninterest income

Service charges and fees

Card processing and interchange

Insurance and investment fees

Other noninterest income

Total Noninterest Income

Noninterest Income

and employee benefits

and equipment expense

processing and telecommunications

operating expenses

Noninterest Expenses

Salaries and employee benefits

Occupancy and equipment expense

Data processing and telecommunications

Other operating expenses

Total Noninterest Expenses

INCOME BEFORE INCOME TAXES

INCOME TAX EXPENSE

Earnings per share

Basic and diluted

Average Weighted Shares of Common Stock

Basic and diluted

BEFORE INCOME TAXES

Weighted Shares of Common Stock

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

For the three months ended

For the six months ended

Other comprehensive (loss) income:

Investment securities activity

Unrealized losses arising during the period

Other comprehensive loss on investment securities

Related tax benefit

TOTAL OTHER COMPREHENSIVE LOSS

TOTAL COMPREHENSIVE (LOSS) INCOME

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

the Three Months Ended

the Nine Months Ended

comprehensive (loss) income:

securities activity

losses arising during the period

Reclassification

adjustment for net gains included

comprehensive loss on investment securities

OTHER COMPREHENSIVE LOSS

COMPREHENSIVE (LOSS) INCOME

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

THOUSANDS INCLUDING SHARE DATA)

Shares of Common Stock

Additional Paid-in- Capital

Accumulated Other

Comprehensive Income (Loss)

Total Shareholders’ Equity

of Common Stock

Paid-in- Capital

Comprehensive

Income (Loss)

Shareholders’ Equity

Balance, December

Other comprehensive loss, net of tax

comprehensive loss, net of tax

Balance, March 31, 2021

Other comprehensive loss, net of tax

comprehensive loss, net of tax

Balance, June 30, 2021

comprehensive loss, net of tax

September 30, 2021

Balance, December 31, 2021

Other comprehensive loss, net of tax

Cash dividend declared ($0.05 per share)

comprehensive loss, net of tax

dividend declared ($0.05 per share)

Balance, March 31, 2022

Other comprehensive loss, net of tax

Repurchase of common stock

comprehensive loss, net of tax

of common stock

Balance, June 30, 2022

comprehensive loss, net of tax

of common stock

September 30, 2022

accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by

operating activities:

Provision for loan losses

THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

FLOWS FROM OPERATING ACTIVITIES

to reconcile net income to net cash provided by

for loan losses

(income) on bank owned life insurance

Net gain on sale of securities available-for-sale

Gain on sale of mortgage loans

Loss on sale or disposal of premises and equipment

(Gain) loss on sale of other real estate owned

Loans originated for sale

Proceeds from sales of loans originated for sale

Adjustment of carrying value of other real estate owned

Adjustment of carrying value of repossessed assets

Net amortization/accretion of bond premiums/discounts

Deferred tax expense

Net change in:

Accrued interest receivable

Accrued interest payable

Accrued expenses and other liabilities

Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

Net decrease (increase) in loans

Purchase of securities available-for-sale

Proceeds from repayments and maturities of securities available-for-sale

Net (purchase) redemption of equity securities (restricted)

Payments for the purchase of premises and equipment

Proceeds from sales of other real estate owned

Net Cash Used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net change in short term borrowings

Net change in noninterest bearing deposits

Net change in interest bearing deposits

Dividends paid

Repurchase of common stock

Net Cash Provided by Financing Activities

Net increase (decrease) in cash and cash equivalents

Cash and Cash Equivalents, Beginning of the Period

Cash and Cash Equivalents, End of the Period

Supplemental Disclosure of Cash Paid During the Period for:

Supplemental Disclosure of Non-cash Transactions:

Other real estate acquired in settlement of foreclosed loans

Loans made to finance sale of other real estate owned

Change in unrealized losses on securities available for sale

on sale of securities available-for-sale

on sale of mortgage loans

(gain) on sale or disposal of premises and equipment

on sale of other real estate owned

originated for sale

from sales of loans originated for sale

to carrying value of premises transferred to other real estate owned

of carrying value of other real estate owned

Net amortization/accretion

of bond premiums/discounts

interest receivable

interest payable

expenses and other liabilities

Cash Provided by Operating Activities

FLOWS FROM INVESTING ACTIVITIES

of securities available-for-sale

from sale of investment securities available-for-sale

from repayments and maturities of securities available-for-sale

Net (purchase)

redemption of equity securities (restricted)

for the purchase of premises and equipment

from sale of premises and equipment

from insurance claims on other real estate owned or premises

from sales of other real estate owned

Cash Provided by (Used) in Investing Activities

FLOWS FROM FINANCING ACTIVITIES

in short term borrowings

in noninterest bearing deposits

in interest bearing deposits

of common stock

Cash Provided by Financing Activities

(decrease) in cash and cash equivalents

and Cash Equivalents, Beginning of the Period

and Cash Equivalents, End of the Period

Disclosure of Cash Paid During the Period for:

Disclosure of Non-cash Transactions:

real estate acquired in settlement of foreclosed loans

made to finance sale of other real estate owned

of premises and equipment to other real estate

in unrealized losses on securities available for sale

accompanying notes are an integral part of these consolidated financial statements.

17 unchanged sentences

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 June 30, 2022 and December 31, 2021, and the results

of operations for the three- and six-month periods ended June 30, 2022 and 2021.

accruals) necessary to present fairly the Company’s financial position at September 30, 2022 and December 31, 2021, and the results

of operations for the three- and nine-month periods ended September 30, 2022 and 2021.

The Notes included herein should be read in conjunction

14 unchanged sentences

The determination of

the adequacy of the allowance for loan losses and the determination of the deferred tax asset and are based on estimates that are particularly

the adequacy of the allowance for loan losses and the determination of the deferred tax asset are based on estimates that are particularly

susceptible to significant changes in the economic environment and market conditions.

6 unchanged sentences

share reflect the additional common shares that would have been outstanding if dilutive potential common shares had been issued.

the three-month and six-month periods ended June 30, 2022 and 2021, there were no potential common shares.

Basic and diluted net income

per common share calculations follows:

the three-month and nine-month periods ended September 30, 2022 and 2021, there were no potential common shares.

Basic and diluted net

income per common share calculations follows:

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 June 30,

For the six months

ended June 30,

Weighted average shares outstanding

Weighted average dilutive shares outstanding

Basic and diluted Earnings per share

in Thousands, Except

and Per Share Data)

the three months

September 30,

the Nine months

September 30,

average shares outstanding

average dilutive shares outstanding

and diluted Earnings per share

Requirements and Ratios

16 unchanged sentences

The capital conservation buffer required is 2.50 %.

At June 30, 2022, the Bank had a capital conservation buffer

At September 30, 2022, the Bank had a capital conservation

buffer of 8.35%.

Amounts recorded to accumulated other comprehensive income (loss) are not included in computing regulatory capital.

believes as of June 30, 2022, the Bank met all capital adequacy requirements to which it was subject.

Management believes as of September 30, 2022, the Bank met all capital adequacy requirements to which it was subject.

corrective action regulations provide five classifications:

5 unchanged sentences

is asset growth and expansion, and capital restoration plans are required.

At June 30, 2022, the most recent regulatory notifications

At September 30, 2022, the most recent regulatory notifications

categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.

2 unchanged sentences

The Bank’s actual capital amounts and

ratios are presented in the following table as of June 30, 2022 and December 31, 2021, respectively.

ratios are presented in the following table as of September 30, 2022 and December 31, 2021, respectively.

Schedule of capital requirements

Minimum Capital Requirement

Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions

(Dollars are in thousands)

June 30, 2022:

Total Capital to Risk Weighted Assets

Tier 1 Capital to Risk Weighted Assets

Tier 1 Capital to Average Assets

Common Equity Tier 1 Capital

to Risk Weighted Assets

December 31, 2021:

Total Capital to Risk Weighted Assets

Tier 1 Capital to Risk Weighted Assets

Tier 1 Capital to Average Assets

Common Equity Tier 1 Capital

to Risk Weighted Assets

Capital Requirement

to Be Well Capitalized Under Prompt Corrective Action Provisions

are in thousands)

September 30,

Capital to Risk Weighted Assets

1 Capital to Risk Weighted Assets

1 Capital to Average Assets

Equity Tier 1 Capital

Risk Weighted Assets

Capital to Risk Weighted Assets

1 Capital to Risk Weighted Assets

1 Capital to Average Assets

Equity Tier 1 Capital

Risk Weighted Assets

5 INVESTMENT SECURITIES

amortized cost and estimated fair value of available-for-sale (AFS) securities as of June 30, 2022 and December 31, 2021 is as follows:

amortized cost and estimated fair value of available-for-sale (AFS) securities as of September 30, 2022 and December 31, 2021 is as follows:

Schedule of securities amortized cost and estimated fair value

(Dollars are in thousands)

June 30, 2022

are in thousands)

Government Agencies

Taxable municipals

Corporate bonds

Mortgage backed securities

Total Securities available for sale

December 31, 2021

backed securities

Securities available for sale

Government Agencies

Taxable municipals

Corporate bonds

Mortgage backed securities

Total Securities available for sale

backed securities

Securities available for sale

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 June 30, 2022 and December 31, 2021.

of time that individual securities have been in a continuous unrealized loss position as of September 30, 2022 and December 31, 2021.

Schedule of fair value and gross unrealized losses on investment securities

Less than 12 Months

than 12 Months

Months or More

(Dollars are in thousands)

June 30, 2022

are in thousands)

Government Agencies

Taxable municipals

Corporate bonds

Mortgage backed securities

Total Securities available for sale

December 31, 2021

backed securities

Securities available for sale

Government Agencies

Taxable municipals

Corporate bonds

Mortgage backed securities

Total Securities available for sale

June 30, 2022, there were 215 securities in a loss position, of which 47 have been in a loss position for twelve months or more.

believes that all unrealized losses have resulted from temporary changes in the interest rates and current market conditions and are

not 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.

securities with a carrying value of $ 29.7 million and $ 12.1 million at June 30, 2022 and December 31, 2021, respectively, were pledged

backed securities

Securities available for sale

September 30, 2022, there were 216 securities in a loss position, of which 100 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 are not 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.

securities with a carrying value of $ 28.3 million and $ 12.1 million at September 30, 2022 and December 31, 2021, respectively, were pledged

as collateral to secure public deposits and for other purposes required by law.

AFS debt securities were sold during the three and six months ended June 30, 2022 and 2022.

amortized cost and fair value of investment securities at June 30, 2022, by contractual maturity, are shown in the following schedule.

following table summarizes sales of AFS debt securities for the nine months-ended September 30,

Schedule of summarizes sales of AFS debt securities

are in thousands)

provision (benefit)

amortized cost and fair value of investment securities at September 30, 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

3 unchanged sentences

Securities Available-for-Sale

Due in one year or less

Due after one year through five years

Due after five years through ten years

Due after ten years

in one year or less

one year through five years

five years through ten years

after ten years

Bank, as a member bank of the Federal Reserve Bank of Richmond (Federal Reserve Bank) and the Federal Home Loan Bank of Atlanta (FHLB),

2 unchanged sentences

securities, which are included in Other Assets on the consolidated balance sheet, are restricted from trading and are recorded at a cost

of $ 4.3 million and $ 2.0 million at June 30, 2022 and December 31, 2021, respectively.

The stock has no quoted market value and no ready

market exists.

held for sale at June 30, 2022 and December 31, 2021, totaled $ 62 thousand and $ 0 , respectively, which represents mortgage loans originated

These originations and sales are executed on a best-efforts basis.

receivable outstanding as of June 30, 2022, and December 31, 2021, are summarized as follows:

of $ 3.0 million and $ 2.0 million at September 30, 2022 and December 31, 2021, respectively.

The stock has no quoted market value and

no ready market exists.

receivable outstanding as of September 30, 2022, and December 31, 2021, are summarized as follows:

Schedule of Loans receivable outstanding

(Dollars are in thousands)

December 31, 2021

Real estate secured:

Construction and land development

Residential 1-4 family

Total real estate loans

Consumer installment loans

All other loans

in commercial loans at June 30, 2022 and December 31, 2021 were $ 845 thousand and $ 6.4 million of Paycheck Protection Program (PPP) loans,

respectively, that are guaranteed by the Small Business Administration (SBA).

included in total loans above are deferred loan fees of $ 1.7 million and $ 1.8 million at June 30, 2022 and December 31, 2021, respectively.

Deferred loan costs were $ 2.1 million and $ 2.0 million, at June 30, 2022 and December 31, 2021, respectively.

are in thousands)

estate secured:

and land development

real estate loans

installment loans

in commercial loans at September 30, 2022 and December 31, 2021 were $ 298 thousand and $ 6.4 million of Paycheck Protection Program (PPP)

loans, respectively, that are guaranteed by the Small Business Administration (SBA).

included in total loans above are deferred loan fees of $ 1.7 million and $ 1.8 million at September 30, 2022 and December 31, 2021, respectively.

Deferred loan costs were $ 2.1 million and $ 2.0 million, at September 30, 2022 and December 31, 2021, respectively.

Income from net deferred

2 unchanged sentences

any unamortized fee or costs is recognized at that time.

receivable on nonaccrual status as of June 30, 2022, and December 31, 2021, are summarized as follows:

receivable on nonaccrual status as of September 30, 2022, and December 31, 2021, are summarized as follows:

Summary of loans receivable on nonaccrual status

(Dollars are in thousands)

December 31, 2021

Real estate secured:

Construction and land development

Residential 1-4 family

Total real estate loans

Consumer installment loans and other loans

Total loans receivable on nonaccrual status

interest income not recognized on nonaccrual loans for the six months ended June 30, 2022, and June 30, 2021, was $11 thousand and $264

thousand, respectively.

following tables presents information concerning the Company’s investment in loans considered impaired as of June 30, 2022, and

December 31, 2021:

are in thousands)

estate secured:

and land development

real estate loans

installment loans and other loans

loans receivable on nonaccrual status

interest income not recognized on nonaccrual loans for the nine months ended September 30, 2022, and September 30, 2021, was $22 thousand

and $445 thousand, respectively.

following tables presents information concerning the Company’s investment in loans considered impaired as of September 30, 2022,

and December 31, 2021:

Schedule of summary of impaired loans

As of June 30, 2022

(Dollars are in thousands)

Unpaid Principal Balance

With no related allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

With an allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

As of December 31, 2021

(Dollars are in thousands)

Unpaid Principal Balance

With no related allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

With an allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

of September 30, 2022

are in thousands)

Principal Balance

no related allowance recorded:

estate secured:

and land development

installment loans

an allowance recorded:

estate secured:

and land development

installment loans

of December 31, 2021

are in thousands)

Principal Balance

no related allowance recorded:

estate secured:

and land development

installment loans

an allowance recorded:

estate secured:

and land development

installment loans

following tables present information concerning the Company’s average impaired loans and interest recognized on those impaired

loans, for the periods indicated:

Six Months Ended

June 30, 2022

June 30, 2021

(Dollars are in thousands)

With no related allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

With an allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

Three Months Ended

June 30, 2022

June 30, 2021

(Dollars are in thousands)

With no related allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

With an allowance recorded:

Real estate secured:

Construction and land development

Residential 1-4 family

Consumer installment loans

All other loans

age analysis of past due loans receivable as of June 30, 2022, and December 31, 2021, is below.

At June 30, 2022 and December 31, 2021,

are in thousands)

no related allowance recorded:

estate secured:

and land development

installment loans

an allowance recorded:

estate secured:

and land development

installment loans

are in thousands)

no related allowance recorded:

estate secured:

and land development

installment loans

an allowance recorded:

estate secured:

and land development

installment loans

age analysis of past due loans receivable as of September 30, 2022, and December 31, 2021, is below.

At September 30, 2022 and December

31, 2021, no loans over 90 days past due were accruing.

Summary age analysis of past due loans receivable

As of June 30, 2022

(Dollars are in thousands)

Real estate secured:

Construction and land

Residential 1-4 family

Total real estate loans

Consumer installment

All other loans

As of December 31, 2021

(Dollars are in thousands)

Real estate secured:

Construction and land

Residential 1-4 family

Total real estate loans

Consumer installment

All other loans

of September 30, 2022

are in thousands)

estate secured:

real estate loans

of December 31, 2021

are in thousands)

estate secured:

real estate loans

Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their

22 unchanged sentences

on the basis of currently existing facts, conditions, and values highly questionable and improbable.

on the most recent analysis performed, the risk categories of loans receivable as of June 30, 2022, and December 31, 2021, was as follows:

on the most recent analysis performed, the risk categories of loans receivable as of September 30, 2022, and December 31, 2021, was as

Summary of risk category of loans receivable

As of June 30, 2022

(Dollars are in thousands)

Real estate secured:

Construction and land development

Residential 1-4 family

Total real estate loans

Consumer installment loans

All other loans

As of December 31, 2021

(Dollars are in thousands)

Real estate secured:

Construction and land development

Residential 1-4 family

Total real estate loans

Consumer installment loans

All other loans

of September 30, 2022

are in thousands)

estate secured:

and land development

real estate loans

installment loans

of December 31, 2021

are in thousands)

estate secured:

and land development

real estate loans

installment loans

7 ALLOWANCE FOR LOAN LOSSES

4 unchanged sentences

Due to the underlying SBA guarantee provided for PPP loans,

these accounts were not included in either the portfolio segment or impairment calculations at June 30, 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.

following table presents activity in the allowance for loan losses for the six- and three-month periods ended June 30, 2022 and 2021,

these accounts were not included in either the portfolio segment or impairment calculations at September 30, 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.

following table presents activity in the allowance for loan losses for the nine- and three-month periods ended September 30, 2022 and

2021, respectively.

Additionally, the allocation of the allowance by recorded portfolio segment and impairment method is presented as of June

30, 2022, and December 31, 2021, respectively.

Additionally, the allocation of the allowance by recorded portfolio segment and impairment method is presented as

of September 30, 2022, and December 31, 2021, respectively.

Schedule of allocation of portion of allowance

3 unchanged sentences

and All Other

Six months ended June

Beginning balance

Nine months ended September

Ending balance

Three months ended June

Three months ended September

Beginning balance

Ending balance

Allowance for loan

losses at June 30, 2022

Individually evluated for impairment

Collectively evaluated for impairment

Loans at June 30, 2022

Individually evluated for impairment

Collectively evaluated for impairment

for loan losses at September 30, 2022

Individually evaluated

for impairment

evaluated for impairment

Loans at September

Individually evaluated

for impairment

evaluated for impairment

estate secured

3 unchanged sentences

for loan losses at December 31, 2021

Individually evaluated

for impairment

Collectively evaluated

for impairment

at December 31, 2021

evaluated for impairment

Loans at December 31,

Individually evaluated

for impairment

Collectively evaluated

for impairment

estate secured

evaluated for impairment

Real estate secured

(Dollars are in thousands)

and Land Development

and All Other

Six months ended June

Construction and Land Development

Residential 1-4 family

Consumer and All Other

Nine months ended September 30, 2021

Beginning balance

Ending balance

Three months ended June

Three months ended September 30, 2021

Beginning balance

2 unchanged sentences

8 TROUBLED DEBT RESTRUCTURINGS

were $ 2.2 million and $ 2.5 million in loans classified as troubled debt restructurings at June 30, 2022 and December 31, 2021, respectively.

were $ 2.1 million and $ 2.5 million in loans classified as troubled debt restructurings at September 30, 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

No loans modified during the three and six months ended June 30, 2022 or June 30, 2021, were considered to be troubled debt

restructurings.

loans totaling $84 thousand, secured by residential real estate, previously modified as troubled debt restructurings, defaulted during

the three months ended June 30, 2022.

One loan totaling $81 thousand, previously modified as a trouble debt restructuring, that defaulted

during the first three months of 2022, was in compliance with the terms of the restructuring at June 30, 2022.

During the three months

ended June 30, 2021, two loans to the same borrower, previously modified as troubled debt restructurings, totaling $1.1 million defaulted,

resulting in charge-offs totaling $835 thousand.

No loans previously modified as troubled debt restructurings defaulted during the first

three months of 2021.

Generally, a restructured troubled debt is considered to be in default once it becomes 90 days or more past due

following a modification.

No loans modified during the three and nine months ended September 30, 2022 or September 30, 2021, were considered to be

troubled debt restructurings.

loan totaling $6 thousand, secured by residential real estate, previously modified as a troubled debt restructuring, was in default during

the three months ended September 30, 2022.

Two loans totaling $73 thousand, previously modified as a troubled debt restructuring, that

defaulted during the first nine months of 2022, were in compliance with the terms of the restructuring at September 30, 2022.

the nine months ended September 30, 2021, two loans to the same borrower, previously modified as troubled debt restructurings, totaling

$1.1 million defaulted, resulting in charge-offs totaling $835 thousand.

Generally, a restructured troubled debt is considered to be

in default once it becomes 90 days or more past due following a modification.

determining the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings

5 unchanged sentences

9 OTHER REAL ESTATE OWNED

following table summarizes the activity in other real estate owned for the six months ended June 30, 2022, and the year ended December

following table summarizes the activity in other real estate owned for the Nine months ended September 30, 2022, and the year ended December

Schedule of other real estate owned

(Dollars are in thousands)

September 30,

December 31, 2021

45 unchanged sentences

The Company’s available for sale securities, totaling $ 98.8 million and $ 107.4 million

at June 30, 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.

at September 30, 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.

- The Company does not record loans at fair value on a recurring basis.

16 unchanged sentences

The Company records foreclosed assets as nonrecurring Level 3.

and liabilities measured at fair value are as follows as of June 31, 2022 (for purpose of this table the impaired loans are shown net

of the related allowance):

and liabilities measured at fair value are as follows as of September 30, 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

June 30, 2022

September 30, 2022

(Dollars are in thousands)

13 unchanged sentences

net of the related allowance):

are in thousands)

market price in active markets

other observable inputs

unobservable inputs

a recurring basis)

for sale investments

December 31, 2021

(Dollars are in thousands)

Quoted market price in active markets

Significant other observable inputs

Significant unobservable inputs

(On a recurring basis)

Available for sale investments

Government Agencies

Mortgage-backed

a non-recurring basis)

real estate owned

Level 3 assets measured at fair value on a recurring or non-recurring basis as of June 30, 2022 and December 31, 2021, the significant

Taxable municipals

Corporate bonds

Mortgage-backed securities

(On a non-recurring basis)

Other real estate owned

Impaired loans

Level 3 assets measured at fair value on a recurring or non-recurring basis as of September 30, 2022 and December 31, 2021, the significant

unobservable inputs used in the fair value measurements were as follows:

1 unchanged sentence

in thousands)

Value at June 30, 2022

Value at September 30, 2022

Unobservable Inputs

19 unchanged sentences

carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair

value on a recurring basis as of June 30, 2022, and December 31, 2021, are as follows:

value on a recurring basis as of September 30, 2022, and December 31, 2021, are as follows:

Schedule of estimated fair value of financial instruments

4 unchanged sentences

Significant unobservable inputs

June 30, 2022

September 30, 2022

Financial Instruments – Assets

8 unchanged sentences

value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.

These estimates do not reflect any premium or discount that could result from offering for sale at one

the Company’s entire holdings of a particular financial instrument.

Because no market exists for a significant portion of the Company’s

financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions,

risk characteristics of various financial instruments and other factors.

These estimates are subjective in nature and involve uncertainties

and matters of significant judgment and therefore cannot be determined with precision.

Changes in assumptions can significantly affect

the estimates.

These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire

holdings of a particular financial instrument.

Because no market exists for a significant portion of the Company’s financial instruments,

fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics

of various financial instruments and other factors.

These estimates are subjective in nature and involve uncertainties and matters of

significant judgment and therefore cannot be determined with precision.

Changes in assumptions can significantly affect the estimates.

fair values have been determined by the Company using historical data, as generally provided in the Company’s regulatory reports,

2 unchanged sentences

and assumptions are set forth below for the Company’s other financial instruments.

carrying values of cash and due from banks, federal funds sold, interest-bearing deposits, deposits with no stated maturities, trust

preferred securities and accrued interest approximates fair value and are excluded from the table above.

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 above.

accordance with our adoption of Accounting Standards Update (ASU) 2016-01 in 2018, the methods utilized to measure the fair value of

financial instruments at June 30, 2022 and December 31, 2021, represent an approximation of exit price;

however, an actual exit price

financial instruments at September 30, 2022 and December 31, 2021, represent an approximation of exit price;

however, an actual exit

price may differ.

11 LEASING ACTIVITIES

of June 30, 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.

of September 30, 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 June 30, 2022 was 10.12 years.

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 September 30, 2022 was 9.87 years.

discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to

1 unchanged sentence

This methodology is expected to be used for any other subsequent lease agreements.

average discount rate for the leases at June 30, 2022 was 3.24 %.

the six months ended June 30, 2022 and 2021, operating lease expenses were $ 228 thousand and $ 275 thousand, respectively.

average discount rate for the leases at September 30, 2022 was 3.24 %.

the nine months ended September 30, 2022 and 2021, operating lease expenses were $ 342 thousand and $ 421 thousand, respectively.

Company’s other operating leases were evaluated and determined to be immaterial to the financial statements.

At June 30, 2022,

At September 30, 2022,

future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands):

3 unchanged sentences

12 BORROWED FUNDS

in Borrowed Funds are two short-term FHLB Advances totaling $ 60 million at June 30, 2022.

No short-term borrowings were outstanding at

December 31, 2021.

Of the outstanding advances at June 30, 2022, $20 million, at an interest rate of 2.05%, matures September 16, 2022;

and $40 million, at a rate of 2.60%, matures December 19, 2022.

in Borrowed Funds is a short-term FHLB Advance totaling $ 25 million at September 30, 2022.

No short-term borrowings were outstanding

at December 31, 2021.

The outstanding advance at September 30, 2022, of $25 million, has a fixed rate of 2.60%, and matures December

13 REVENUE FROM CONTRACTS WITH CUSTOMERS

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 and six months ended June 30, 2022 and 2021:

Refer to Note 23 in our Annual

Report on Form 10-K for the year ended December 31, 2021 for a description of how each revenue stream is accounted for under ASC 606.

The following table presents Noninterest income by revenue stream for the three and nine months ended September 30, 2022 and 2021:

Schedule of revenue from contracts with customers

the three months ended

the six months ended

the three months

For the nine months

in thousands)

1 unchanged sentence

Processing and interchange income

on sale of securities available-for-sale (1)

and investment fees

1 unchanged sentence

Noninterest Income

Not within the scope of ASU 2014-19

14 NONINTEREST EXPENSES

1 unchanged sentence

Schedule of noninterest expenses

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the Nine months ended September 30,

(Dollars are in thousands)

31 unchanged sentences

initial assumptions have been input and historical loan and loss activity has been input and validated.

The Company will run the new

methodology parallel to the current allowance methodology for several periods before full implementation, beginning with the June 30,

The Company is running the new

methodology parallel to the current allowance methodology, and will be assessing the comparative results for the first three quarterly

calculations during the fourth quarter of 2022.

March 2020, the FASB released ASU 2020-04, ‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform

43 unchanged sentences

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

What changed 10-Q/A

Item 1. Financial Statements