What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 187 added, 144 removed, 725 unchanged (31% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE

MARCH 31, 2024

AND DECEMBER 31, 2023

JUNE 30, 2024 AND

DECEMBER 31, 2023

THOUSANDS EXCEPT PER SHARE AND SHARE DATA)

15 unchanged sentences

SHAREHOLDERS’

Common stock - $ 2.00 par value;

Common stock - $ 2.00 par

50,000,000 shares authorized;

and 23,745,900 shares issued and outstanding at

March 31, 2024 and December 31, 2023, respectively

June 30, 2024 and December 31, 2023, respectively

paid-in-capital

6 unchanged sentences

STATEMENTS OF INCOME

FOR THE THREE MONTHS

ENDED MARCH 31, 2024 AND 2023

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

8 unchanged sentences

INTEREST INCOME

OF) PROVISION FOR CREDIT LOSSES

FOR CREDIT LOSSES

INTEREST INCOME AFTER

OF) PROVISION FOR CREDIT LOSSES

FOR CREDIT LOSSES

charges and fees

1 unchanged sentence

services fees

gain on sale and disposal of premises and equipment

on sale and disposal of premises and equipment

noninterest income

12 unchanged sentences

OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS

ENDED MARCH 31, 2024 AND 2023

the Three Months Ended March 31,

comprehensive (loss) income:

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

the Three Months Ended

the Six Months Ended

comprehensive income (loss):

securities activity

(losses) gains arising during the period

tax benefit (expense)

OTHER COMPREHENSIVE (LOSS) INCOME

gains (losses) arising during the period

tax (expense) benefit

OTHER COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME

4 unchanged sentences

OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS

ENDED MARCH 31, 2024 AND 2023

FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(IN THOUSANDS INCLUDING

10 unchanged sentences

Balance, March 31, 2023

comprehensive loss, net of tax

of common stock

June 30, 2023

Balance, December 31, 2023

3 unchanged sentences

of common stock

March 31, 2024

Balance, March 31, 2024

comprehensive income, net of tax

of common stock

June 30, 2024

The accompanying notes

3 unchanged sentences

OF CASH FLOWS

FOR THE THREE MONTHS

ENDED MARCH 31, 2024 AND 2023

FOR THE SIX MONTHS

ENDED JUNE 30, 2024 AND 2023

FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

operating activities:

of) provision for credit losses

for credit losses

on bank owned life insurance

on sale of mortgage loans

(gain) on sale or disposal of premises and equipment

on sale or disposal of premises and equipment

on sale of other real estate owned

originated for sale

2 unchanged sentences

of bond premiums/discounts

tax (benefit) expense

interest receivable

5 unchanged sentences

from repayments and maturities of securities available-for-sale

Net (purchase)

redemption of equity securities (restricted)

of equity securities (restricted)

for the purchase of premises and equipment

from sale of premises and equipment

from sales of premises and equipment

from sales of other real estate owned

cash used in investing activities

FLOWS FROM FINANCING ACTIVITIES

of long-term debt

in noninterest bearing deposits

7 unchanged sentences

disclosure of non-cash transactions:

of loans to other real estate owned

in unrealized losses on securities available-for-sale

24 unchanged sentences

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 as of March 31, 2024 and December 31, 2023, and the results of operations

for the three-month periods ended March 31, 2024 and 2023.

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, 2023.

necessary to present fairly the Company’s financial position as of June 30, 2024 and December 31, 2023, and the results of operations

for the three- and six-month periods ended June 30, 2024 and 2023.

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, 2023.

The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a

19 unchanged sentences

None of these reclassifications are considered material

and have no impact on net income.

and have no impact on net income or shareholders’ equity.

The Company’s

3 unchanged sentences

31, 2023 except for the following:

Accounting Standards

Adopted in 2024 –

Accounting Standards Adopted in 2024 –

In March 2023, the

46 unchanged sentences

For the three-month

periods ended March 31, 2024 and 2023, there were no potential common shares.

Basic and diluted net income per common share calculations

and six-month periods ended June 30, 2024 and 2023, 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

2 unchanged sentences

the three months

ended March 31,

ended June 30

the six months

ended June 30,

average shares outstanding

22 unchanged sentences

The capital conservation buffer required is 2.50%.

At March 31, 2024, the Bank had a capital conservation buffer of 8.54%.

At June 30, 2024, the Bank had a capital conservation buffer of 8.74%.

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

Management believes

as of March 31, 2024, the Bank met all capital adequacy requirements to which it was subject.

as of June 30, 2024, the Bank met all capital adequacy requirements to which it was subject.

Prompt corrective

1 unchanged sentence

well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized

and critically undercapitalized, although these terms are not used to

represent overall

financial condition.

If adequately capitalized, regulatory approval is required to accept brokered deposits.

If undercapitalized, capital

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

At March 31, 2024, the most

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

There are no conditions or events since that notification that management believes have changed the institution's category.

and critically undercapitalized, although these terms are not used to represent overall financial condition.

If adequately capitalized,

regulatory approval is required to accept brokered deposits.

If undercapitalized, capital distributions are limited, as is asset growth

and expansion, and capital restoration plans are required.

At June 30, 2024, the most recent regulatory notifications categorized the

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

There are no conditions or events since that notification

that management believes have changed the institution's category.

2019, the U.S.

9 unchanged sentences

commencing January 1, 2023, and elected not to phase in the effect of CECL on regulatory capital.

actual capital amounts and ratios are presented in the following table as of March 31, 2024 and December 31, 2023, respectively.

actual capital amounts and ratios are presented in the following table as of June 30, 2024 and December 31, 2023, respectively.

Schedule of bank’s

actual capital amounts and ratios presented

Capital Requirement

1 unchanged sentence

in thousands)

March 31, 2024:

June 30, 2024:

capital to risk weighted assets

10 unchanged sentences

The amortized cost and estimated fair

value of available-for-sale (“AFS”) securities as of March 31, 2024 and December 31, 2023 are as follows:

value of available-for-sale (“AFS”) securities as of June 30, 2024 and December 31, 2023 are as follows:

Schedule of securities amortized cost and estimated fair value

in thousands)

March 31, 2024

June 30, 2024

Government Agencies

7 unchanged sentences

This information is aggregated by the length of time that individual

securities have been in a continuous unrealized loss position as of March 31, 2024 and December 31, 2023.

securities have been in a continuous unrealized loss position as of June 30, 2024 and December 31, 2023.

Schedule of fair value and gross unrealized losses on investment securities

8 unchanged sentences

securities available-for-sale

As of March 31, 2024,

As of June 30, 2024,

there were 211 securities in a loss position, of which 201 have been in a loss position for twelve months or more.

9 unchanged sentences

Investment securities

with a carrying value of $36.0 million and $36.8 million as of March 31, 2024 and December 31, 2023, respectively, were pledged as collateral

with a carrying value of $ 35.4 million and $ 36.8 million as of June 30, 2024 and December 31, 2023, respectively, were pledged as collateral

to secure public deposits and for other purposes required or permitted by law.

There were no sales

of available-for-sale investment securities during the three months ended March 31, 2024 and 2023.

of available-for-sale investment securities during the three and six months ended June 30, 2024 and 2023.

The amortized cost

and fair value of investment securities as of March 31, 2024, by contractual maturity, are shown in the following schedule.

maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without

call or prepayment penalties.

and fair value of investment securities as of June 30, 2024, 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

Schedule of amortized cost and fair value of investment securities contractual maturity

in thousands)

Available-for-Sale

(Dollars in thousands)

Securities Available-for-Sale

in one year or less

after one year through five years

after five years through ten years

one year through five years

five years through ten years

after ten years

5 unchanged sentences

which are included in other assets on the consolidated balance sheet, are restricted from trading and are recorded at a cost of $ 2.7

million and $2.7 million as of March 31, 2024 and December 31, 2023, respectively.

The stock has no quoted market value and no ready

market exists.

When evaluating these securities for impairment, their value is determined based on the ultimate recoverability of the

par value rather than by recognizing temporary declines in value.

Equity securities are viewed as long-term investments and management

believes the Company has the ability and the intent to hold these securities until their value is recovered.

million and $ 2.7 million as of June 30, 2024 and December 31, 2023, respectively.

The stock has no quoted market value and no ready market

When evaluating these securities for impairment, their value is determined based on the ultimate recoverability of the par value

rather than by recognizing temporary declines in value.

Equity securities are viewed as long-term investments and management believes

the Company has the ability and the intent to hold these securities until their value is recovered.

Loans receivable

outstanding as of March 31, 2024, and December 31, 2023, are summarized as follows:

Summary of loans receivable outstanding

outstanding as of June 30, 2024, and December 31, 2023, are summarized as follows:

Schedule of loans receivable outstanding

in thousands)

4 unchanged sentences

Also included in

total loans above are deferred loan fees of $1.8 million and $1.8 million as of March 31, 2024 and December 31, 2023, respectively.

loan costs were $2.0 million and $2.0 million, as of March 31, 2024 and December 31, 2023, respectively.

total loans above are deferred loan fees of $ 1.8 million and $ 1.8 million as of June 30, 2024 and December 31, 2023, respectively.

loan costs were $ 2 .0 million and $ 2 .0 million, as of June 30, 2024 and December 31, 2023, respectively.

Income from net deferred fees

3 unchanged sentences

Loans receivable

on nonaccrual status as of March 31, 2024, and December 31, 2023, are summarized as follows:

Summary of loans receivable on nonaccrual status

(Dollars in thousands)

on nonaccrual status as of June 30, 2024, and December 31, 2023, are summarized as follows:

Schedule of Loans receivable

nonaccrual status

in thousands)

estate secured:

3 unchanged sentences

Total interest income

not recognized on nonaccrual loans for the three months ended March 31, 2024, and March 31, 2023, was $26,000 and $13,000, respectively.

The Company evaluates

loans that do not share risk characteristics on an individual basis utilizing the collateral or discounted cash flow methods.

The following

table presents the unpaid principal balance of collateral dependent loans, which are individually evaluated to determine expected credit

losses, and the related ACL allocated to those loans as March 31, 2024 and December 31, 2023:

not recognized on nonaccrual loans for the three and six months ended June 30, 2024, and June 30, 2023, was $ 43,000 and $ 69,000 , and

$ 15,000 and $ 28,000 , respectively.

Company evaluates loans that do not share risk characteristics on an individual basis utilizing the collateral or discounted cash flow

The following table presents the unpaid principal balance of collateral dependent loans, which are individually evaluated to

determine expected credit losses, and the related ACL allocated to those loans as of June 30, 2024 and December 31, 2023:

Schedule of summary of impaired loans

1 unchanged sentence

Principal Balance

(Dollars in thousands)

in thousands)

estate secured:

1 unchanged sentence

The following table

is an age analysis of past due loans receivable as of March 31, 2024, segregated by class:

is an age analysis of past due loans receivable as of June 30, 2024, segregated by class:

Schedule of analysis of past due loans receivable

in thousands)

32 unchanged sentences

The following table presents the credit

risk grade of loans by origination year as of March 31, 2024:

As of March 31, 2024

risk grade of loans by origination year as of June 30, 2024:

Schedule of credit

risk grade of loans

As of June 30, 2024

are in thousands)

17 unchanged sentences

As of December 31, 2023

(Dollars are in thousands)

are in thousands)

commercial real estate

12 unchanged sentences

period gross charge-offs

Total current period gross charge-offs

current period gross charge-offs

NOTE 7 ALLOWANCE

6 unchanged sentences

The following

table presents a disaggregated analysis of activity in the allowance for credit losses for loans as of March 31, 2024 and December 31,

table presents a disaggregated analysis of activity in the allowance for credit losses for loans as of June 30, 2024 and December 31,

Schedule of allowance for credit losses for loans

estate secured

(Dollars are in thousands)

in thousands)

and Land Development

and All Other

Three months ended March

Six months ended June 30,

Beginning balance

1 unchanged sentence

Ending balance

in thousands)

Three months ended June 30,

Beginning balance

Provision for credit losses

Ending balance

estate secured

(Dollars are in thousands)

and Land Development

31 unchanged sentences

may be granted.

There were no

loans modified to borrowers experiencing financial difficulty in the three months ended March 31, 2024 and March 31, 2023,

respectively.

Additionally, there were no loans that had a payment default during the three months ended March 31, 2024 and March

31, 2023, respectively that were modified in the previous 12 months.

There were no loans

modified to borrowers experiencing financial difficulty in the three- and six-months ended June 30, 2024 and June 30, 2023, respectively.

Additionally, there were no loans that had a payment default during the three and six months ended June 30, 2024 and June 30, 2023, respectively

that were modified in the previous 12 months.

NOTE 9 CREDIT

ALLOWANCE FOR UNFUNDED COMMITMENT S

ALLOWANCE FOR UNFUNDED COMMITMENTS

The Company maintains

12 unchanged sentences

prior to the cancellation of the arrangement.

As of March 31, 2024

As of June 30, 2024

and December 31, 2023, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was $ 288,000

and $ 285,000 , respectively.

During the three months ended March 31, 2024, a recovery totaling $47,000 was included in the (Recovery of)

Provision for Credit Losses.

During the three and six months ended June 30, 2024, provisions totaling $ 50,000 and $ 3,000 , respectively

were included in the Provision for Credit Losses.

NOTE 10 OTHER

REAL ESTATE OWNE D

REAL ESTATE OWNED

The following table

summarizes the activity in other real estate owned for the three months ended March 31, 2024, and the year ended December 31, 2023:

summarizes the activity in other real estate owned for the three months ended June 30, 2024, and the year ended December 31, 2023:

Schedule of activity in other real estate owned

in thousands)

beginning of period

gains from sales

gains (losses) from sales

end of period

As of March 31, 2024 six loans totaling

$516,000 were in the process of foreclosure, of which five loans totaling $242,000 were secured by residential real estate.

As of June 30, 2024,

four loans secured by residential real estate totaling $211,000 were in the process of foreclosure.

NOTE 11 FAIR VALUES

42 unchanged sentences

is based upon quoted prices.

The Company’s available-for-sale securities, totaling $89.0 million and $89.8 million as of March

The Company’s available-for-sale securities, totaling $92.3 million and $89.8 million as of June 30,

2024 and December 31, 2023, respectively, are the only assets whose fair values are measured on a recurring basis using Level 2 inputs

26 unchanged sentences

Assets and liabilities

measured at fair value are as follows as of March 31, 2024 and December 31, 2023:

measured at fair value are as follows as of June 30, 2024 and December 31, 2023:

Schedule of assets and liabilities

measured at fair value

in thousands)

21 unchanged sentences

For Level 3 assets

measured at fair value on a recurring or non-recurring basis as of March 31, 2024 and December 31, 2023, the significant unobservable

measured at fair value on a recurring or non-recurring basis as of June 30, 2024 and December 31, 2023, the significant unobservable

inputs used in the fair value measurements were as follows:

2 unchanged sentences

Fair Value at

March 31, 2024

Fair Value at

4 unchanged sentences

to reflect current market conditions, ultimate collectability, and estimated costs to sell

Value/Other estimates from Independent Sources

to reflect current market conditions, ultimate collectability, and estimated costs to sell

6 unchanged sentences

upon the characteristics of the instruments and relevant market information.

Financial instruments

include cash, evidence of ownership

Financial instruments include cash, evidence of ownership

in an entity, or contracts that convey or impose on an entity that contractual right or obligation to either receive or deliver cash

10 unchanged sentences

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 March 31, 2024, and December 31, 2023, are as follows:

basis as of June 30, 2024, and December 31, 2023, are as follows:

Schedule of reported at fair value on a recurring

Value Measurements

24 unchanged sentences

The carrying values

of cash and due from banks, federal funds sold, bank owned life insurance, deposits with no stated maturities, and accrued interest approximates

fair value and are excluded from the table above.

of cash and due from banks, interest-bearing deposits with banks, federal funds sold, bank owned life insurance, deposits with no stated

maturities, and accrued interest approximates fair value and are excluded from the table above.

NOTE 12 LEASING

of March 31, 2024, the Bank leases four branch offices, one administrative office and sublets a lot adjacent to another branch 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 as of March 31, 2024

was 9.10 years.

of June 30, 2024, the Bank leases five branch offices, and sublets a lot adjacent to another branch office.

The lease agreements have

maturity dates ranging from November 2028 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 as of June 30, 2024 was 7.74 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 as of March 31, 2024 was 3.37%.

For the three months

ended March 31, 2024 and 2023, operating lease expenses were $140,000 and $114,000, respectively.

average discount rate for the leases as of June 30, 2024 was 3.37%.

the three and six months ended June 30, 2024 and 2023, operating lease expenses were $145,000 and $289,000, and $110,000 and $224,000,

respectively.

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

As of March 31, 2024,

As of June 30, 2024,

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

lease payments

1 unchanged sentence

13 BORROWED FUNDS

funds totaled $36,186 and $36,186 as of March 31, 2024 and December 31, 2023, respectively.

For additional information on borrowed funds,

refer to Note 18 in Item 8 of Form 10-K for the year ended December 31, 2023.

funds totaled $ 36,186 and

$ 36,186 as of June 30,

2024 and December 31, 2023, respectively.

Borrowed funds consist of trust preferred securities of $ 16.2

million, Federal Home Loan Bank advance of $ 10.0

million and Federal Reserve Bank Bank Term Funding Program loan of $ 10.0

million, as of June 30, 2024 and December 31, 2023, respectively.

For additional information on borrowed funds, refer to Note 18 in

Item 8 of Form 10-K for the year ended December 31, 2023.

14 REVENUE FROM CONTRACTS WITH CUSTOMERS

2 unchanged sentences

Report on Form 10-K for the year ended December 31, 2023 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 months ended March 31, 2024 and 2023:

The following table presents noninterest income by revenue stream for the three and six months ended June 30, 2024 and 2023:

Schedule of revenue from contracts with customers

the three months ended

the six months ended

in thousands)

1 unchanged sentence

processing and interchange income

and investment fees

services fees

noninterest income

3 unchanged sentences

included as part of noninterest expenses, consisted of the following for the periods presented:

Schedule of noninterest expenses

Schedule of non interest

the three months ended

the six months ended

in thousands)

1 unchanged sentence

network expense

accounting, and professional

Legal, accounting, and professional fees

related expenses

2 unchanged sentences

other operating expenses

NOTE 16 SUBSEQUENT

Subsequent events

are events or transactions that occur after the balance sheet date but before financial statements are issued.

Recognized subsequent

events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including

the estimates inherent in the process of preparing financial statements.

Non-recognized subsequent events are events that provide evidence

about conditions that did not exist at the date of the balance sheet but arose after that date.

On August 12, 2024

a commercial real estate property securing a loan, that was individually evaluated as part of our assessment of the allowance for credit

losses, was acquired in a foreclosure sale.

As a result, approximately $ 1.2 million was transferred from the loan portfolio to other

real estate owned with no loss recognized.

NOTE 17 RECENT

59 unchanged sentences

This ASU contains amendments to the Codification that remove references to various Concepts Statements.

In most instances, the references are extraneous and not required to understand or apply the guidance.

In other instances, the references

were used in prior Statements to provide guidance in certain topical areas.

In most instances, the references are extraneous and not

required to understand or apply the guidance.

In other instances, the references were used in prior Statements to provide guidance in

certain topical areas.

This ASU is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied prospectively to all new transactions recognized on or after

the date that the entity first applies the amendments or retrospectively to the beginning of the earliest comparative period presented

in which the amendments were first applied.

If an entity adopts the amendments retrospectively, it should adjust the opening balance

of retained earnings as of the beginning of the earliest comparative period presented.

The Company does not expect the adoption of ASU

2024-02 to have a material impact on its consolidated financial statements.

The amendments

should be applied prospectively to all new transactions recognized on or after the date that the entity first applies the amendments

or retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied.

adopts the amendments retrospectively, it should adjust the opening balance of retained earnings as of the beginning of the earliest

comparative period presented.

The Company does not expect the adoption of ASU 2024-02 to have a material impact on its consolidated financial

Other accounting

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements