What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-06 · 173 added, 147 removed, 653 unchanged (33% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2022 and December 31, 2021

June 30, 2022 and December 31, 2021

(Dollars in thousands)

Cash and due from banks, including reserve requirements

of $0 at both 3/31/22 and 12/31/21

Cash and due from banks, including reserve requirements of $0 at both 6/30/22 and 12/31/21

Interest-bearing deposits

21 unchanged sentences

Preferred stock, no par value;

5,000,000 shares;

authorized 5,000,000 shares;

no shares issued and outstanding

Common stock, no par value;

20,000,000 shares;

issued and outstanding 5,656,030 shares

at March 31, 2022 and 5,661,569 shares at December 31, 2021

authorized 20,000,000 shares;

issued and outstanding 5,641,030 shares at June 30, 2022 and 5,661,569 shares at December 31, 2021

Common stock held by deferred compensation trust, at cost;

shares at March 31, 2022 and 162,193 shares at December 31, 2021

165,984 shares at June 30, 2022 and 162,193 shares at December 31, 2021

Deferred compensation

4 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Consolidated Statements of Earnings

Three Months Ended March 31, 2022 and 2021

Three and Six Months Ended June 30, 2022 and 2021

(Dollars in thousands, except per share amounts)

Three months ended

Six months ended

Interest income:

6 unchanged sentences

Interest expense:

Interest-bearing demand, MMDA & savings deposits

NOW, MMDA & savings deposits

Time deposits

2 unchanged sentences

Net interest income

Provision for (reduction of) loan losses

Provision for (recovery of) loan losses

Net interest income after provision for loan losses

5 unchanged sentences

Appraisal management fee income

Gain on sale of other real estate

Miscellaneous

6 unchanged sentences

Appraisal management fee expense

Miscellaneous

Total non-interest expense

7 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2022 and 2021

Three and Six Months Ended June 30, 2022 and 2021

(Dollars in thousands)

Other comprehensive loss:

Unrealized holding losses on securities available for sale

Income tax benefit related to other comprehensive loss:

Unrealized holding losses on securities available for sale

Total other comprehensive loss, net of tax

Three months ended

Six months ended

Other comprehensive income (loss):

Unrealized holding gains (losses) on securities available for sale

Income tax expense (benefit) related to other comprehensive income:

Unrealized holding gains (losses) on securities available for sale

Total other comprehensive income (loss), net of tax

Total comprehensive income (loss)

2 unchanged sentences

Consolidated Statements of Changes in Shareholders' Equity

Three Months Ended March 31, 2022 and 2021

Three and Six Months Ended June 30, 2022 and 2021

(Dollars in thousands)

8 unchanged sentences

Balance, March 31, 2022

Common stock repurchase

Cash dividends declared on common stock

Equity incentive plan, net

Change in accumulated other comprehensive loss, net of tax

Balance, June 30, 2022

Balance, December 31, 2020

3 unchanged sentences

Equity incentive plan, net

Change in accumulated other comprehensive income, net of tax

Change in accumulated other comprehensive loss, net of tax

Balance, March 31, 2021

Cash dividends declared on common stock

Equity incentive plan, net

Change in accumulated other comprehensive income, net of tax

Balance, June 30, 2021

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2022 and 2021

Six Months Ended June 30, 2022 and 2021

(Dollars in thousands)

2 unchanged sentences

Depreciation, amortization and accretion

Provision for (reduction of) loan losses

Provision for (recovery of) loan losses

Deferred income taxes

Gain on sale of other real estate

Restricted stock expense

10 unchanged sentences

Proceeds from paydowns of investment securities available for sale

Proceeds from paydowns of other investment securities

Redemption (purchase) of FHLB stock

Proceeds from paydowns on other investments

Redemptions (purchases) of FHLB stock

Net change in loans

Purchases of premises and equipment

Proceeds from sale of other real estate and repossessions

Proceeds from bank owned life insurance

Net cash used in investing activities

Net cash used by investing activities

Cash flows from financing activities:

9 unchanged sentences

Consolidated Statements of Cash Flows, continued

Three Months Ended March 31, 2022 and 2021

Six Months Ended June 30, 2022 and 2021

(Dollars in thousands)

2 unchanged sentences

Noncash investing and financing activities:

Change in unrealized loss on investment securities available for sale, net

Change in unrealized gain on investment securities available for sale, net

Issuance of accrued restricted stock units

Transfer of premises and equipment to other assets held for sale

Initial recognition of lease right-of-use asset and lease liability

21 unchanged sentences

Recent Accounting Pronouncements

The following table provides a summary of Accounting Standards Updates (“ASU’s”) issued by the FASB that the Company has not adopted as of March 31, 2022, which may impact the Company’s financial statements.

The following table provides a summary of Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that the Company has not adopted as of June 30, 2022, which may impact the Company’s financial statements.

Recently Issued Accounting Guidance Not Yet Adopted

52 unchanged sentences

The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.

Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures

Eliminates the guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 2 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination.

January 1, 2023

The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.

Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures.

3 unchanged sentences

(2) Investment Securities

Investment securities available for sale at March 31, 2022 and December 31, 2021 are as follows:

Investment securities available for sale at June 30, 2022 and December 31, 2021 are as follows:

(Dollars in thousands)

March 31, 2022

June 30, 2022

Amortized Cost

2 unchanged sentences

U.S Treasuries

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

6 unchanged sentences

U.S Treasuries

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

State and political subdivisions

The current fair value and associated unrealized losses on investments in securities with unrealized losses at March 31, 2022 and December 31, 2021 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

The current fair value and associated unrealized losses on investments in securities with unrealized losses at June 30, 2022 and December 31, 2021 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)

March 31, 2022

June 30, 2022

Less than 12 Months

3 unchanged sentences

Unrealized Losses

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

7 unchanged sentences

Unrealized Losses

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

State and political subdivisions

At March 31, 2022, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 25.2 million.

At June 30, 2022, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 43.6 million.

The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.

From the March 31, 2022 tables above, all three U.S.

From the June 30, 2022 tables above, all three U.S.

Treasury securities, 143 out of 164 securities issued by state and political subdivisions and 104 out of 124 securities issued by U.S.

Government sponsored enterprises contained unrealized losses.

Government sponsored enterprises, including mortgage-backed securities, contained unrealized losses.

These unrealized losses are considered temporary because of the acceptable financial condition and results of operations of the entities that issued each security and the repayment sources of principal and interest on U.S.

7 unchanged sentences

Government sponsored enterprises, including mortgage-backed securities, are government backed.

The amortized cost and estimated fair value of investment securities available for sale at March 31, 2022, by contractual maturity, are shown below.

The amortized cost and estimated fair value of investment securities available for sale at June 30, 2022, by contractual maturity, are shown below.

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

March 31, 2022

June 30, 2022

(Dollars in thousands)

5 unchanged sentences

Mortgage-backed securities

No securities available for sale were sold during the three months ended March 31, 2022 and 2021.

Securities with a fair value of approximately $ 99.7 million and $ 98.6 million at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes as required by law.

Major classifications of loans at March 31, 2022 and December 31, 2021 are summarized as follows:

No securities available for sale were sold during the three and six months ended June 30, 2022 and 2021.

Securities with a fair value of approximately $ 98.5 million and $ 98.6 million at June 30, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes as required by law.

Major classifications of loans at June 30, 2022 and December 31, 2021 are summarized as follows:

(Dollars in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

18 unchanged sentences

If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.

As of March 31, 2022, construction and land development loans comprised approximately 11 % of the Bank’s total loan portfolio.

Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

As of March 31, 2022, single-family residential loans comprised approximately 33 % of the Bank’s total loan portfolio, including Banco single-family residential non-traditional loans which were approximately 2 % of the Bank’s total loan portfolio.

Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service.

1 unchanged sentence

A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property.

As of March 31, 2022, commercial real estate loans comprised approximately 40 % of the Bank’s total loan portfolio.

Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business.

In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.

As of March 31, 2022, commercial loans comprised approximately 8 % of the Bank’s total loan portfolio, including $ 6.6 million in Paycheck Protection Program (“PPP”) loans.

Multifamily and farmland loans – Decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

As of March 31, 2022, construction and land development loans comprised approximately 7 % of the Bank’s total loan portfolio.

Loans are considered past due if the required principal and interest payments have not been received within 30 days of the date such payments were due.

4 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following tables present an age analysis of past due loans, by loan type, as of March 31, 2022 and December 31, 2021:

March 31, 2022

The following tables present an age analysis of past due loans, by loan type, as of June 30, 2022 and December 31, 2021:

June 30, 2022

(Dollars in thousands)

33 unchanged sentences

All other loans

The following table presents non-accrual loans as of March 31, 2022 and December 31, 2021:

The following table presents non-accrual loans as of June 30, 2022 and December 31, 2021:

(Dollars in thousands)

March 31, 2022

June 30, 2022

December 31, 2021

19 unchanged sentences

Impaired loans under $ 250,000 are not individually evaluated for impairment with the exception of the Bank’s Troubled Debt Restructurings (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment.

Impaired loans were $ 17.1 million, $ 18.3 million and $ 20.6 million at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Interest income recognized on accruing impaired loans was $ 216,000 , $ 1.0 million, and $ 283,000 for the three months ended March 31, 2022, the year ended December 31, 2021 and the three months ended March 31, 2021, respectively.

Impaired loans were $ 16.5 million, $ 18.3 million and $ 19.7 million at June 30, 2022, December 31, 2021 and June 30, 2021, respectively.

Interest income recognized on accruing impaired loans was $ 433,000 , $ 1.0 million, and $ 536,000 for the six months ended June 30, 2022, the year ended December 31, 2021 and the six months ended June 30, 2021, respectively.

Interest income recognized on accruing impaired loans was $ 217,000 and $ 253,000 for the three months ended June 30, 2022 and the three months ended June 30, 2021, respectively.

No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual.

The following table presents impaired loans as of March 31, 2022:

March 31, 2022

The following table presents impaired loans as of June 30, 2022:

June 30, 2022

(Dollars in thousands)

Contractual Principal Balance

Investment With No Allowance

Investment With Allowance

Investment in Impaired Loans

Unpaid Contractual Principal Balance

Recorded Investment With No Allowance

Recorded Investment With Allowance

Recorded Investment in Impaired Loans

Related Allowance

Real estate loans:

9 unchanged sentences

Total impaired loans

The following table presents impaired loans as of and for the year ended December 31, 2021:

December 31, 2021

The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2022 and 2021.

(Dollars in thousands)

Contractual Principal Balance

Investment With No Allowance

Investment With Allowance

Investment in Impaired Loans

Three months ended

Six months ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Average Balance

Interest Income Recognized

Average Balance

Interest Income Recognized

Average Balance

Interest Income Recognized

Average Balance

Interest Income Recognized

Real estate loans:

2 unchanged sentences

Single-family residential -

Banco de la Gente non-traditional

Banco de la Gente stated income

Multifamily and farmland

2 unchanged sentences

Commercial loans

Farm loans (non RE)

Consumer loans

Total impaired loans

The following table presents the average impaired loan balance and the interest income recognized by loan class for the three months ended March 31, 2022 and 2021 and the year ended December 31, 2021:

(Dollars in thousands)

Three months ended

Twelve months ended

March 31, 2022

March 31,2021

The following table presents impaired loans as of and for the year ended December 31, 2021:

December 31, 2021

Average Balance

Interest Income Recognized

Average Balance

Interest Income Recognized

Average Balance

Interest Income Recognized

(Dollars in thousands)

Unpaid Contractual Principal Balance

Recorded Investment With No Allowance

Recorded Investment With Allowance

Recorded Investment in Impaired Loans

Related Allowance

Average Outstanding Impaired Loans

YTD Interest Income Recognized

Real estate loans:

2 unchanged sentences

Single-family residential -

Banco de la Gente stated income

Banco de la Gente non-traditional

Multifamily and farmland

4 unchanged sentences

Total impaired loans

Impaired loans collectively evaluated for impairment totaled $ 5.3 million at March 31, 2022 and December 31, 2021 and are included in the tables above.

Allowance on impaired loans collectively evaluated for impairment totaled $ 47,000 and $ 52,000 at March 31, 2022 and December 31, 2021, respectively.

The following tables present changes in the allowance for loan losses for the three months ended March 31, 2022 and 2021.

Impaired loans collectively evaluated for impairment totaled $ 5.1 million at June 30, 2022 and December 31, 2021 and are included in the tables above.

Allowance on impaired loans collectively evaluated for impairment totaled $ 44,000 and $ 52,000 at June 30, 2022 and December 31, 2021, respectively.

The following tables present changes in the allowance for loan losses for the three and six months ended June 30, 2022 and 2021.

Unallocated balances in the following tables include allowance for loan losses based on qualitative factors such as economic outlook, concentrations of credit, interest rate risk and loan volume trends.

PPP loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the Small Business Administration (“SBA”).

Paycheck Protection Program ("PPP") loans are excluded from the allowance for loan losses as PPP loans are 100 percent guaranteed by the Small Business Administration (“SBA”).

(Dollars in thousands)

5 unchanged sentences

Consumer and All Other

Three months ended March 31, 2022

Six months ended June 30, 2022:

Allowance for loan losses:

Beginning balance

Provision (recovery)

Ending balance

Allowance for loan losses March 31, 2022

Three months ended June 30, 2022:

Allowance for loan losses:

Beginning balance

Ending balance

Allowance for loan losses at June 30, 2022:

Ending balance:

evaluated for impairment

2 unchanged sentences

Ending balance

Loans at March 31, 2022:

Loans at June 30, 2022:

Ending balance

10 unchanged sentences

Consumer and All Other

Three months ended March 31, 2021

Six months ended June 30, 2021:

Allowance for loan losses:

Beginning balance

Provision (recovery)

Ending balance

Allowance for loan losses March 31, 2021

Three months ended June 30, 2021:

Allowance for loan losses:

Beginning balance

Ending balance

Allowance for loan losses at June 30, 2021:

Ending balance:

evaluated for impairment

2 unchanged sentences

Ending balance

Loans March 31, 2021:

Loans at June 30, 2021:

Ending balance

3 unchanged sentences

evaluated for impairment

The provision for loan losses for the three months ended March 31, 2022 was $ 71,000 , compared to a recovery of $ 455,000 for the three months ended March 31, 2021.

The increase in the provision for loan losses is primarily attributable to an increase in reserves on loans in a pool that had once been given payment modifications as a result of the COVID-19 pandemic, and an increase in reserves due to a net increase in the volume of loans in the general reserve pool.

Loans that were previously modified have been separated from the pools for the general reserve to recognize their heightened susceptibility to an environment still affected by the economic effects of the pandemic.

Separating the previously modified loans into their own pool allows for more specific reserving factors to be considered that would not be applicable to loans in the pools for the general reserve.

There were no loans with modifications as a result of the COVID-19 pandemic at March 31, 2022 and December 31, 2021.

The Bank continues to track all loans that were previously modified as a result of the COVID-19 pandemic.

The loan balances associated with COVID-19 pandemic related modifications have been grouped into their own pool within the Bank’s Allowance for Loan and Lease Losses (“ALLL”) model as management considers that they have a higher likelihood of risk, and a higher reserve rate has been applied to that pool.

Loans included in this pool totaled $ 82.2 million and $ 88.7 million at March 31, 2022 and December 31, 2021, respectively.

The full effects of stimulus in the current environment are still unknown, and additional losses in this pool of loans may be present but not as yet identified.

Loan payment modifications associated with the COVID-19 pandemic are not classified as TDR due to Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which provides that a qualified loan modification is exempt by law from classification as a TDR pursuant to GAAP.

The Bank utilizes an internal risk grading matrix to assign a risk grade to each of its loans.

31 unchanged sentences

Loss is a temporary grade until the appropriate authority is obtained to charge the loan off.

The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of March 31, 2022 and December 31, 2021:

March 31, 2022

The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of June 30, 2022 and December 31, 2021:

June 30, 2022

(Dollars in thousands)

9 unchanged sentences

6- Substandard

There were no new TDR modifications during the three and six months ended June 30, 2022 and 2021.

December 31, 2021

10 unchanged sentences

6- Substandard

Past due TDR loans and non-accrual TDR loans totaled $ 3.3 million and $ 2.2 million at March 31, 2022 and December 31, 2021, respectively.

The terms of these loans have been renegotiated to provide a concession to original terms, including a reduction in principal or interest as a result of the deteriorating financial position of the borrower.

There were no performing loans classified as TDR loans at March 31, 2022 and December 31, 2021.

There were no new TDR modifications during the three months ended March 31, 2022 and 2021.

There were no loans modified as TDR loans that defaulted during the three months ended March 31, 2022 and 2021, which were within 12 months of their modification date.

Generally, a TDR loan is considered to be in default once it becomes 90 days or more past due following a modification.

There were no loans modified as TDR loans that defaulted during the six months ended June 30, 2022 and 2021, which were within 12 months of their modification date.

On March 27, 2020, President Trump signed the CARES Act, which established a $2 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the PPP.

3 unchanged sentences

Total PPP loans originated during the years ended December 31, 2020 and 2021 amounted to $ 128.1 million.

The outstanding balance of PPP loans was $ 6.6 million and $ 18.0 million at March 31, 2022 and December 31, 2021, respectively.

The Bank has received $ 5.7 million in fees from the SBA for PPP loans originated during the years ended December 31, 2020 and 2021.

The Bank recognized $ 600,000 and $ 999,000 of PPP loan fee income for the three months ended March 31, 2022 and the three months ended March 31, 2021, respectively.

The outstanding balance of PPP loans was $ 1.4 million and $ 18.0 million at June 30, 2022 and December 31, 2021, respectively, classified as commercial loans in the tables above.

The Bank recognized $ 293,000 and $ 1.5 million of PPP loan fee income for the three months ended June 30, 2022 and the three months ended June 30, 2021, respectively.

The Bank recognized $ 893,000 and $ 2.5 million of PPP loan fee income for the six months ended June 30, 2022 and six months ended June 30, 2021, respectively.

(4) Net Earnings Per Share

1 unchanged sentence

The average market price during the applicable period is used to compute equivalent shares.

The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three months ended March 31, 2022 and 2021 is as follows:

For the three months ended March 31, 2022

The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three and six months ended June 30, 2022 and 2021 is as follows:

For the three months ended June 30, 2022

Net Earnings (Dollars in thousands)

7 unchanged sentences

Diluted earnings per share

For the three months ended March 31, 2021

For the six months ended June 30, 2022

Net Earnings (Dollars in thousands)

7 unchanged sentences

Diluted earnings per share

For the three months ended June 30, 2021

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

Effect of dilutive securities:

Restricted stock units - unvested

Shares held in deferred comp plan

by deferred compensation trust

Diluted earnings per share

For the six months ended June 30, 2021

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

Effect of dilutive securities:

Restricted stock units - unvested

Shares held in deferred comp plan

by deferred compensation trust

Diluted earnings per share

(5) Fair Value

55 unchanged sentences

In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The tables below present the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2022 and December 31, 2021.

The tables below present all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of June 30, 2022 and December 31, 2021.

(Dollars in thousands)

March 31, 2022

June 30, 2022

Level 1 Valuation

1 unchanged sentence

Level 3 Valuation

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

State and political subdivisions

Mutual funds held in deferred compensation trust

(Dollars in thousands)

3 unchanged sentences

Level 3 Valuation

sponsored enterprises

Government sponsored enterprises

Mortgage-backed securities

State and political subdivisions

The tables below present the balance of mutual funds held in the deferred compensation trust, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2022 and December 31, 2021.

(Dollars in thousands)

March 31, 2022

Level 1 Valuation

Level 2 Valuation

Level 3 Valuation

Mutual funds held in deferred compensation trust

(Dollars in thousands)

December 31, 2021

Level 1 Valuation

Level 2 Valuation

Level 3 Valuation

Mutual funds held in deferred compensation trust

The fair value measurements for mortgage loans held for sale and impaired loans on a non-recurring basis at March 31, 2022 and December 31, 2021 are presented below.

The fair value measurements for mortgage loans held for sale and impaired loans on a non-recurring basis at June 30, 2022 and December 31, 2021 are presented below.

The fair value measurement process uses certified appraisals and other market-based information;

2 unchanged sentences

(Dollars in thousands)

Fair Value Measurements March 31, 2022

Fair Value Measurements June 30, 2022

Level 1 Valuation

11 unchanged sentences

(Dollars in thousands)

March 31, 2022

Fair Value December 31, 2021

Fair Value June 30, 2022

December 31, 2021

Valuation Technique

6 unchanged sentences

Discounts to reflect current market conditions and ultimate collectability

The carrying amount and estimated fair value of financial instruments at March 31, 2022 and December 31, 2021 are as follows:

The carrying amount and estimated fair value of financial instruments at June 30, 2022 and December 31, 2021 are as follows:

(Dollars in thousands)

Fair Value Measurements at March 31, 2022

Fair Value Measurements at June 30, 2022

Carrying Amount

17 unchanged sentences

compensation trust

Securities sold under agreements

to repurchase

Securities sold under agreements to repurchase

Junior subordinated debentures

As of March 31, 2022, the Bank had operating right of use assets of $ 6.2 million and operating lease liabilities of $ 6.3 million.

As of June 30, 2022, the Bank had operating right of use assets of $ 6.0 million and operating lease liabilities of $ 6.0 million.

The Bank maintains operating leases on land and buildings for some of the Bank’s branch facilities and loan production offices.

3 unchanged sentences

Leases with a term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.

The following table presents lease cost and other lease information as of March 31, 2022 and 2021.

The following table presents lease cost and other lease information as of June 30, 2022 and 2021.

(Dollars in thousands)

March 31,2022

March 31,2021

June 30, 2022

June 30, 2021

Operating lease cost

4 unchanged sentences

Weighted-average discount rate - operating leases

The following table presents lease maturities as of March 31, 2022 and December 31, 2021.

The following table presents lease maturities as of June 30, 2022 and December 31, 2021.

(Dollars in thousands)

Maturity Analysis of Operating Lease Liabilities:

March 31, 2022

June 30, 2022

December 31, 2021

5 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