What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-13 compared with 2023-08-10 · 122 added, 122 removed, 853 unchanged (22% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

2023 December 31,

27 unchanged sentences

Authorized - 90,000,000 shares

Issued and outstanding - 11,448,621 shares and 11,784,246 shares at June 30, 2023 and December 31, 2022, respectively

Issued and outstanding - 11,300,075 shares and 11,784,246 shares at September 30, 2023 and December 31, 2022, respectively

113,001 117,842

8 unchanged sentences

Condensed Consolidated Statements of Income

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

16 unchanged sentences

Net gains on loan and lease sales 89,510 116,155 399,111 580,919

Gain on sale of real estate owned — — 1,921 —

Other income 377,660 273,376 955,688 830,924

11 unchanged sentences

Real estate owned expense 12,112 14,248 35,935 22,534

Loss on sale of real estate owned — 847 — 847

Other expenses 1,153,819 965,508 3,019,254 2,712,418

8 unchanged sentences

Richmond Mutual Bancorporation, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net Income $ 1,948,757 $ 3,158,228 $ 7,544,930 $ 9,661,162

Other Comprehensive (Loss) Income

Unrealized (loss) gain on available-for-sale securities, net of tax of $( 1,227,830 ), $( 3,695,140 ), $ 412,287 , and $( 10,108,049 ), respectively.

Other Comprehensive Loss

Unrealized loss on available-for-sale securities, net of tax of $( 3,063,330 ), $( 4,245,908 ), $( 2,651,043 ), and $( 14,353,958 ), respectively.

( 11,523,955 ) ( 15,972,703 ) ( 9,972,970 ) ( 53,998,222 )

Comprehensive (Loss) Income $ ( 1,926,852 ) $ ( 10,415,421 ) $ 7,147,158 $ ( 31,522,585 )

Comprehensive Loss $ ( 9,575,198 ) $ ( 12,814,475 ) $ ( 2,428,040 ) $ ( 44,337,060 )

See Notes to Condensed Consolidated Statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Common Stock Additional

4 unchanged sentences

Outstanding Amount

Balances, March 31, 2023 11,685,693 $ 116,857 $ 105,305,039 $ 86,314,805 $ ( 12,009,214 ) $ ( 43,581,211 ) $ 136,146,276

Balances, June 30, 2023 11,448,621 $ 114,486 $ 103,216,869 $ 87,523,266 $ ( 11,825,384 ) $ ( 48,200,190 ) $ 130,829,047

Net income — — — 1,948,757 — — 1,948,757

5 unchanged sentences

Repurchase of common stock ( 148,546 ) ( 1,485 ) ( 1,690,478 ) — — — ( 1,691,963 )

Balances, June 30, 2023 11,448,621 $ 114,486 $ 103,216,869 $ 87,523,266 $ ( 11,825,384 ) $ ( 48,200,190 ) $ 130,829,047

Six Months Ended June 30, 2023

Balances, September 30, 2023 11,300,075 $ 113,001 $ 101,883,204 $ 88,001,390 $ ( 11,641,555 ) $ ( 59,724,145 ) $ 118,631,895

Nine Months Ended September 30, 2023

Common Stock Additional

13 unchanged sentences

Repurchase of common stock ( 484,171 ) ( 4,841 ) ( 5,269,329 ) — — — ( 5,274,170 )

Balances, June 30, 2023 11,448,621 $ 114,486 $ 103,216,869 $ 87,523,266 $ ( 11,825,384 ) $ ( 48,200,190 ) $ 130,829,047

Three Months Ended June 30, 2022

Balances, September 30, 2023 11,300,075 $ 113,001 $ 101,883,204 $ 88,001,390 $ ( 11,641,555 ) $ ( 59,724,145 ) $ 118,631,895

Three Months Ended September 30, 2022

Common Stock Additional

4 unchanged sentences

Outstanding Amount

Balances, March 31, 2022 12,310,004 $ 123,100 $ 113,263,417 $ 82,037,495 $ ( 12,744,530 ) $ ( 25,336,767 ) $ 157,342,715

Balances, June 30, 2022 11,848,113 $ 118,481 $ 106,200,912 $ 84,423,594 $ ( 12,560,701 ) $ ( 39,237,530 ) $ 138,944,756

Net income — — — 3,158,228 — — 3,158,228

5 unchanged sentences

Repurchase of common stock ( 45,689 ) ( 457 ) ( 647,012 ) — — — ( 647,469 )

Balances, June 30, 2022 11,848,113 $ 118,481 $ 106,200,912 $ 84,423,594 $ ( 12,560,701 ) $ ( 39,237,530 ) $ 138,944,756

Six Months Ended June 30, 2022

Balances, September 30, 2022 11,802,424 $ 118,024 $ 105,945,726 $ 86,495,710 $ ( 12,376,872 ) $ ( 55,210,233 ) $ 124,972,355

Nine Months Ended September 30, 2022

Common Stock Additional

12 unchanged sentences

Repurchase of common stock ( 597,771 ) ( 5,978 ) ( 9,615,035 ) — — — ( 9,621,013 )

Balances, June 30, 2022 11,848,113 $ 118,481 $ 106,200,912 $ 84,423,594 $ ( 12,560,701 ) $ ( 39,237,530 ) $ 138,944,756

Balances, September 30, 2022 11,802,424 $ 118,024 $ 105,945,726 $ 86,495,710 $ ( 12,376,872 ) $ ( 55,210,233 ) $ 124,972,355

See Notes to Condensed Consolidated Statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

22 unchanged sentences

Investing Activities

Net change in interest-bearing time deposits 245,000 —

Purchases of securities available for sale ( 9,555,258 ) ( 19,441,154 )

44 unchanged sentences

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or note disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles.

Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023 (SEC File No.

Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K") filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023 (SEC File No.

However, in the opinion of management, all adjustments which are necessary for a fair presentation of the consolidated financial statements have been included.

69 unchanged sentences

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows:

June 30, 2023

September 30, 2023

Available for sale

23 unchanged sentences

Total investment securities $ 354,548 $ 22 $ 63,093 $ 291,477

The amortized cost and fair value of investment securities at June 30, 2023, by contractual maturity, are shown below.

The amortized cost and fair value of investment securities at September 30, 2023, by contractual maturity, are shown below.

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

8 unchanged sentences

Totals $ 339,831 $ 264,229 $ 5,134 $ 4,891

Investment securities with a carrying value of $ 155,514,000 and $ 134,302,000 were pledged at June 30, 2023 and December 31, 2022, respectively, to secure certain deposits and for other purposes as permitted or required by law.

There were no sales of securities available for sale for the three and six months ended June 30, 2023 and 2022.

Investment securities with a carrying value of $ 155,982,000 and $ 134,302,000 were pledged at September 30, 2023 and December 31, 2022, respectively, to secure certain deposits and for other purposes as permitted or required by law.

There were no sales of securities available for sale for the three and nine months ended September 30, 2023 and 2022.

Certain investments in debt securities, as reflected in the table below, are reported in the condensed consolidated financial statements and notes at an amount less than their historical cost.

Total fair value of these investments at June 30, 2023 and December 31, 2022 was $ 284,544,000 and $ 288,846,000 , respectively, which is approximately 99 % and 99 % of the Company’s aggregated available-for-sale and held-to-maturity investment portfolio at those dates, respectively.

Total fair value of these investments at September 30, 2023 and December 31, 2022 was $ 268,401,000 and $ 288,846,000 , respectively, which is approximately 100 % and 99 % of the Company’s aggregated available-for-sale and held-to-maturity investment portfolio at those dates, respectively.

These declines primarily resulted from changes in market interest rates since their purchase.

The Company does not consider available-for-sale securities with unrealized losses to be experiencing credit losses at June 30, 2023.

The Company does not consider available-for-sale securities with unrealized losses to be experiencing credit losses at September 30, 2023.

Management considers it more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost basis, which may be the maturity dates of the securities.

3 unchanged sentences

The Company monitors the credit quality of securities held to maturity through the use of credit ratings quarterly.

As of June 30, 2023, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio.

The following table summarizes the amortized cost of held to maturity securities by credit quality indicator, as of June 30, 2023:

As of September 30, 2023, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio.

The following table summarizes the amortized cost of held to maturity securities by credit quality indicator as of September 30, 2023:

State and municipal obligations

1 unchanged sentence

The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses.

The following tables show the Company’s investment securities by gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2023 and December 31, 2022:

Description of

Securities June 30, 2023

Securities September 30, 2023

Less Than 12 Months 12 Months or More Total

46 unchanged sentences

Loans, Leases and Allowance

The following table shows the composition of the loan and lease portfolio at June 30, 2023 and December 31, 2022:

The following table shows the composition of the loan and lease portfolio at September 30, 2023 and December 31, 2022:

September 30,

2023 December 31,

51 unchanged sentences

No material changes have been made to the risk characteristics discussed above contained in the Company's 2022 Form 10-K.

The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of June 30, 2023 and rating category as of December 31, 2022:

The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of September 30, 2023 and rating category as of December 31, 2022:

2023 2022 2021 2020 2019 Prior Revolving loans amortized cost basis Total

As of June 30, 2023:

As of September 30, 2023:

Commercial mortgage

5 unchanged sentences

Pass 31,311 12,682 13,998 5,493 1,856 10,586 29,706 105,632

Special Mention — — — — — 600 — 600

Substandard — 26 109 20 — 873 4,790 5,818

30 unchanged sentences

Total current period gross charge-offs $ 41 $ 216 $ 439 $ 88 $ 2 $ 1 $ — $ 787

For the three months ended June 30, 2023, the Company did not have any revolving loans convert to term loans.

For the three months ended September 30, 2023, the Company did not have any revolving loans convert to term loans.

Pass Special Mention Substandard Doubtful Loss Total

9 unchanged sentences

Total $ 958,227 $ 4,034 $ 12,710 $ 29 $ — $ 975,000

The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of June 30, 2023 and December 31, 2022:

June 30, 2023

The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of September 30, 2023 and December 31, 2022:

September 30, 2023

Delinquent Loans and Leases Current Total

27 unchanged sentences

Totals $ 673 $ 213 $ 9,103 $ 9,989 $ 965,011 $ 975,000 $ 3,173

The following table presents information on the Company’s nonaccrual loans and leases at June 30, 2023, and at December 31, 2022:

The following table presents information on the Company’s nonaccrual loans and leases at September 30, 2023, and at December 31, 2022:

September 30,

2023 December 31,

5 unchanged sentences

Total nonaccrual loans and leases $ 6,315 $ 1,373 $ 6,003

During the three and six months ended June 30, 2023, the Company recognized $ 2,000 and $ 3,000 , respectively, of interest income on nonaccrual loans and leases.

During the three and nine months ended September 30, 2023, the Company recognized $ 12,000 and $ 15,000 , respectively, of interest income on nonaccrual loans and leases.

The following table presents the Company's amortized cost basis of collateral dependent loans, which are individually analyzed to determine expected credit losses:

September 30,

Amortized Cost Basis Allowance on Collateral Dependent Loans

Commercial mortgage $ 2,239 $ —

Commercial and industrial 4,919 —

7 unchanged sentences

If a determination is made that a modified loan has been deemed uncollectible, the loan (or portion of the loan) is charged-off, reducing the amortized cost basis of the loan and adjusting the allowance for credit losses.

During the three months ended June 30, 2023, the Company had no new modifications to borrowers experiencing financial difficulty.

There were no modified loans and leases that had a payment default during the three and six months ended June 30, 2023 and that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

During the three months ended September 30, 2023, the Company had no new modifications to borrowers experiencing financial difficulty.

There were no modified loans and leases that had a payment default during the three and nine months ended September 30, 2023 and that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Troubled Debt Restructuring (TDR) Disclosures Prior to the Adoption of ASU 2022-02

During the three and six months ended June 30, 2022, there were no newly classified TDRs.

For the three and six months ended June 30, 2022, the Company recorded no charge-offs related to TDRs.

During the three and nine months ended September 30, 2022, there were no newly classified TDRs.

For the three and nine months ended September 30, 2022, the Company recorded no charge-offs related to TDRs.

As of December 31, 2022, TDRs had a related allowance of $ 0 .

During the three and six months ended June 30, 2022, there were no TDRs for which there was a payment default within the first 12 months of the modification.

During the three and nine months ended September 30, 2022, there were no TDRs for which there was a payment default within the first 12 months of the modification.

Other Real Estate Owned

At June 30, 2023 and December 31, 2022, the balance of real estate owned included $ 167,000 and $ 57,000 , respectively, of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property.

At June 30, 2023 and December 31, 2022, the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $ 431,000 and $ 1,071,000 , respectively.

At September 30, 2023 and December 31, 2022, the balance of real estate owned included $ 636,000 and $ 57,000 , respectively, of foreclosed real estate properties recorded as a result of obtaining physical possession of the property.

At September 30, 2023 and December 31, 2022, the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $ 383,000 and $ 1,071,000 , respectively.

Direct Financing Leases

The following lists the components of the net investment in direct financing leases:

September 30,

2023 December 31,

4 unchanged sentences

Net investment in direct finance leases $ 154,520 $ 133,469

There were no leases serviced by the Company for the benefit of others at June 30, 2023 and December 31, 2022.

Certain leases have been sold from time to time by the Company with partial recourse.

The Company estimates and records its obligation based upon historical loss percentages.

At both June 30, 2023 and December 31, 2022, the Company did not have any recorded recourse obligations on leases sold.

The following table summarizes the future minimum lease payments receivable subsequent to June 30, 2023:

The following table summarizes the future minimum lease payments receivable subsequent to September 30, 2023:

Remainder of 2023 $ 17,006

12 unchanged sentences

Loans within each segment are collectively evaluated using either a loss-rate methodology or remaining life methodology.

The following table summarizes changes in the allowance for credit losses by segment for the three and six months ended June 30, 2023:

Balances, March 31, 2023 Provision (reversal) for credit losses Charge-offs Recoveries Balances, June 30, 2023

The following tables summarize changes in the allowance for credit losses by segment for the three and nine months ended September 30, 2023:

Balances, June 30, 2023 Provision (reversal) for credit losses Charge-offs Recoveries Balances, September 30, 2023

Commercial mortgage $ 4,963 $ 215 $ — $ — $ 5,178

7 unchanged sentences

Total $ 15,391 $ 404 $ ( 353 ) $ 54 $ 15,496

Balances, December 31, 2022 Impact of adopting ASC 326 Balances, January 1, 2023 Post-ASC 326 adoption Provision (reversal) for credit losses Charge-offs Recoveries Balances, June 30, 2023

Balances, December 31, 2022 Impact of adopting ASC 326 Balances, January 1, 2023 Post-ASC 326 adoption Provision (reversal) for credit losses Charge-offs Recoveries Balances, September 30, 2023

Commercial mortgage $ 4,776 $ ( 395 ) $ 4,381 $ 784 $ — $ 13 $ 5,178

7 unchanged sentences

Total $ 12,413 $ 2,664 $ 15,077 $ 855 $ ( 787 ) $ 351 $ 15,496

During the second quarter of 2023, the allowance for credit losses on loans and leases decreased from $ 15.5 million at March 31, 2023, to $ 15.4 million at June 30, 2023.

The decrease was attributable to net charge-offs totaling $ 215,000 , while adding a net total of $ 111,000 to the provision over the course of the second quarter.

During the third quarter of 2023, the allowance for credit losses on loans and leases increased from $ 15.4 million at June 30, 2023, to $ 15.5 million at September 30, 2023.

The increase was attributable to additional provisions totaling $ 404,000 during the third quarter of 2023, partially offset by net charge-offs of $ 299,000 .

Multiple loan categories experienced loan growth, while a few declined slightly.

The commercial mortgage portfolio increased due to commercial construction loans being completed and termed out to permanent financing.

Since there were more commercial construction loans completed, the total balance in this segment decreased.

The balance in commercial and industrial loans increased contributing to an overall increase in the allowance within this segment.

The remaining portfolio segments saw an increase in their respective allowances due to loan growth, with the exception of home equity loans.

• Commercial Mortgage – allowance increased due to loan balances increasing $ 20.2 million.

• Commercial & Industrial – allowance increased due to loan balances increasing $ 16.3 million.

• Construction & Development – allowance decreased due to loan balances decreasing $ 8.5 million.

• Multi-Family – allowance increased due to loan balances increasing $ 9.1 million.

• Residential Mortgage – allowance increased due to loan balances increasing $ 7.4 million.

• Home Equity – allowance decreased due to loan balances decreasing $ 431,000 .

• Leases – allowance increased due to lease balances increasing $ 8.9 million with net charge-offs totaling $ 236,000 .

The construction and development category increased as loans under construction were funded during the construction process, increasing the total balance in this segment.

Consumer loans increased in both outstanding balance and allowance.

Commercial and industrial loans and multi-family loans decreased in outstanding balances, contributing to a decrease in the allowance of those respective portfolios.

• Commercial Mortgage – allowance increased due to loan balances increasing $ 4.2 million, owner-occupied and nonowner-occupied.

• Commercial & Industrial – allowance decreased due to loan balances decreasing $ 2.7 million, with net charge-offs totaling $ 40,000 .

• Construction & Development – allowance increased due to loan balances increasing $ 23.6 million.

• Multi-Family – allowance decreased due to loan balances decreasing $ 6.1 million.

• Residential Mortgage – no change to allowance.

• Home Equity – allowance decreased slightly, while balances increased $ 284,000 .

• Direct Financing Leases – allowance decreased while balances increased $ 2.3 million, due to a lower calculated reserve percentage.

Net charge-offs totaled $ 206,000 .

• Consumer – allowance increased slightly due to loan balances increasing $ 1.5 million with net charge-offs totaling $ 64,000 .

3 unchanged sentences

Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio.

As of June 30, 2023, the most significant economic factors affecting the Company's loan portfolio are persistent inflation, higher interest rates, a weakened economic growth and unemployment outlook, and increased geopolitical risk.

As of September 30, 2023, the most significant economic factors continuing to affect the Company's loan portfolio are persistent inflation, higher interest rates, a weakened economic growth and unemployment outlook, increased geopolitical risk, and stock market volatility.

These key factors are impacting and will continue to adversely impact the Company’s loan and lease portfolio for the remainder of 2023 and potentially into 2024.

Also, recent market liquidity events have added additional unpredictability into the economic environment and the potential for tighter credit conditions could impact economic conditions in the future.

For several years, the Company has targeted loan opportunities in three growth market regions:

Also, recent market liquidity events continue to add unpredictability into the economic environment and the potential for tighter credit conditions could impact economic conditions in the future.

The Company remains committed to three growth market regions:

Columbus, Ohio, Dayton/Springfield, Ohio, and Indianapolis, Indiana.

These market regions specialize in commercial real estate loans, and their respective forecasts are described below:

• Columbus, Ohio – The market region is forecasting estimated job growth to be lower for the remainder of 2023, however job growth is expected to exceed the national average and most other market region averages.

Furthermore, the forecasted unemployment rate for the region is slightly below the national unemployment rate estimate.

• Dayton/Springfield, Ohio – The economic outlook for this region remains positive, although concerns about a potential recession occurring in the last half of 2023 remain a factor.

The region has one of the lowest unemployment rates in the state, just above the Columbus market region.

• Indianapolis, Indiana – The market region is forecasting a material economic growth rate decrease in 2023.

The forecast estimates have been lowered primarily due to inflation and rising interest rates, which have dampened demand and are impacting economic growth.

As high-growth areas, these market regions specialize in commercial real estate loans Their respective forecasts are described below:

• Columbus, Ohio – This market region is forecasting estimated job growth to be lower for the remainder of 2023, however job growth is expected to exceed the national average and most other market region averages.

Although the forecasted unemployment rate for the region has slightly increased, the region still remains slightly below the national unemployment rate estimate.

• Dayton/Springfield, Ohio – The economic outlook for this market region remains positive, however flatter than the prior quarter.

Although concerns about a potential recession are still present, the region continues to reflect one of the lowest unemployment rates in the state, just above the Columbus market region.

• Indianapolis, Indiana – This market region forecasts minimal economic growth for the remainder of 2023.

The forecast estimates have been lowered primarily due to inflation, rising interest rates, and unemployment forecasts which are impacting economic growth.

The Company’s assumption of future economic slowdown could potentially have an adverse impact on the loan and lease portfolio and the allowance for credit losses in the near future;

4 unchanged sentences

2016-13, Financial Instruments-Credit Losses (Topic 326) on January 1, 2023, the Company maintained an allowance for loan and lease losses in accordance with the Incurred Loss Method.

The following table summarizes changes in the allowance for loan and lease losses under the Incurred Loss Method by segment for the three and six months ended June 30, 2022:

The following table summarizes changes in the allowance for loan and lease losses under the Incurred Loss Method by segment for the three and nine months ended September 30, 2022:

Balance, beginning of period Provision (reversal) for losses Charge-offs Recoveries Balance, end of period

Three Months Ended June 30, 2022:

Three Months Ended September 30, 2022:

Commercial mortgage $ 4,804 $ ( 36 ) $ — $ 7 $ 4,775

8 unchanged sentences

Balance, beginning of period Provision (reversal) for losses Charge-offs Recoveries Balance, end of period

Six Months Ended June 30, 2022:

Nine Months Ended September 30, 2022:

Commercial mortgage $ 4,742 $ ( 15 ) $ — $ 48 $ 4,775

40 unchanged sentences

Total impaired loans $ 5,974 $ 6,410 $ 1,031

The following table presents the Company’s average investment in impaired loans and leases, and interest income recognized for the three and six months ended June 30, 2022 under the incurred loss method:

The following table presents the Company’s average investment in impaired loans and leases, and interest income recognized for the three and nine months ended September 30, 2022 under the incurred loss method:

Investment in

Loans and Leases Interest

Three Months Ended June 30, 2022:

Three Months Ended September 30, 2022:

Total impaired loans

Commercial mortgage $ 58 $ —

Commercial and industrial $ 967 $ 6

4 unchanged sentences

Loans and Leases Interest

Six Months Ended June 30, 2022:

Nine Months Ended September 30, 2022:

Total impaired loans

8 unchanged sentences

Additional provisions applied to the allowance are recognized in the provision for credit losses on the Condensed Consolidated Statements of Income.

The following table details activity in the allowance for credit losses on unfunded commitments during the three and six months ended June 30, 2023:

Three Months Ended June 30, 2023

Balance, March 31, 2023 $ 2,204

Recovery of provision for credit losses ( 103 )

The following table details activity in the allowance for credit losses on unfunded commitments during the three and nine months ended September 30, 2023:

Three Months Ended September 30, 2023

Balance, June 30, 2023 $ 2,101

Six Months Ended June 30, 2023

Recovery of provision for credit losses ( 354 )

Balance, September 30, 2023 $ 1,747

Nine Months Ended September 30, 2023

Balance, December 31, 2022 $ —

1 unchanged sentence

Recovery of provision for credit losses ( 627 )

Balance, June 30, 2023 $ 2,101

Balance, September 30, 2023 $ 1,747

Fair Value of Financial Instruments

8 unchanged sentences

Recurring Measurements

The following tables present the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023 and December 31, 2022:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

June 30, 2023

September 30, 2023

Available-for-sale securities

20 unchanged sentences

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

There have been no significant changes in the valuation techniques during the six months ended June 30, 2023.

There have been no significant changes in the valuation techniques during the nine months ended September 30, 2023.

Available-for-Sale Securities

5 unchanged sentences

Nonrecurring Measurements

The following table presents the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023 and December 31, 2022:

As of September 30, 2023, there were no assets or liabilities measured at fair value on a nonrecurring basis.

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

June 30, 2023

Collateral-dependent loans $ 1,645 $ — $ — $ 1,645

December 31, 2022

19 unchanged sentences

Unobservable (Level 3) Inputs

The following tables present the fair value measurement of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023 and December 31, 2022:

Fair Value at June 30,

2023 Valuation

Technique Unobservable

Collateral-dependent loans $ 1,645 Appraisal Marketability discount 0 - 46 %

The following table presents the fair value measurement of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2022.

As of September 30, 2023, there were no assets measured at fair value on a nonrecurring basis.

Fair Value at December 31,

4 unchanged sentences

Fair Value of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2023 and December 31, 2022:

The following tables present estimated fair values of the Company’s financial instruments at September 30, 2023 and December 31, 2022:

Fair Value Measurements Using

2 unchanged sentences

(Level 2) Significant

June 30, 2023

September 30, 2023

Financial assets

5 unchanged sentences

Loans and leases receivable, net 1,066,892 — — 954,857

Federal Reserve and FHLB stock 10,802 — 10,802 —

FHLB stock 11,297 — 11,297 —

Interest receivable 5,316 — 5,316 —

26 unchanged sentences

The following table presents the computation of basic and diluted EPS for the periods indicated:

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Net income $ 1,949 $ 3,158

8 unchanged sentences

Diluted Earnings Per Share $ 0.19 $ 0.29

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Net income $ 7,545 $ 9,661

11 unchanged sentences

The Company matches employees' contributions at the rate of 50 percent for the first six percent of base salary contributed by participants.

The Company’s expense for the plan was $ 66,000 , $ 104,000 , $ 55,000 and $ 108,000 for the three and six months ended June 30, 2023 and 2022, respectively.

The Company’s expense for the plan was $ 93,000 , $ 196,000 , $ 62,000 and $ 170,000 for the three and nine months ended September 30, 2023 and 2022, respectively.

Employee Stock Ownership Plan

4 unchanged sentences

Unearned ESOP shares which have not yet been allocated to ESOP participants are excluded from the computation of average shares outstanding for earnings per share calculation.

Accordingly, $ 11,825,384 and $ 12,193,043 of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity at June 30, 2023 and December 31, 2022, respectively.

Accordingly, $ 11,641,555 and $ 12,193,043 of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity at September 30, 2023 and December 31, 2022, respectively.

Shares are released to participants proportionately as the loan is repaid.

ESOP expense for the three and six months ended June 30, 2023 and 2022 was approximately $ 141,000 , $ 311,000 , $ 208,000 , and $ 434,000 , respectively.

ESOP expense for the three and nine months ended September 30, 2023 and 2022 was approximately $ 154,000 , $ 465,000 , $ 188,000 , and $ 622,000 , respectively.

September 30,

2023 December 31,

14 unchanged sentences

Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

The following table summarizes the restricted stock activity in the 2020 EIP during the six months ended June 30, 2023.

Six Months Ended June 30, 2023

The following table summarizes the restricted stock activity in the 2020 EIP during the nine months ended September 30, 2023.

Nine Months Ended September 30, 2023

Number of Restricted Shares Weighted Average Grant Date Fair Value

2 unchanged sentences

Forfeited — —

Non-vested, June 30, 2023 174,192 10.56

Total compensation cost recognized in the income statement for restricted stock awards during the three and six months ended June 30, 2023 was $ 229,000 and $ 456,000 , and the related tax benefit recognized was $ 48,000 and $ 96,000 , respectively.

As of June 30, 2023, unrecognized compensation expense related to restricted stock awards was $ 1.8 million.

Non-vested, September 30, 2023 174,192 10.56

Total compensation cost recognized in the income statement for restricted stock awards during the three and nine months ended September 30, 2023 was $ 231,000 and $ 687,000 , and the related tax benefit recognized was $ 49,000 and $ 144,000 ,

respectively.

As of September 30, 2023, unrecognized compensation expense related to restricted stock awards was $ 1.6 million.

Stock Option Plan.

3 unchanged sentences

Forfeited options may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030.

The following table summarizes the stock option activity in the 2020 EIP during the six months ended June 30, 2023.

Six Months Ended June 30, 2023

The following table summarizes the stock option activity in the 2020 EIP during the nine months ended September 30, 2023.

Nine Months Ended September 30, 2023

Number of Shares Weighted-Average Exercise Price

2 unchanged sentences

Forfeited/expired — —

Balance, June 30, 2023 1,050,961 10.56

Balance, September 30, 2023 1,050,961 10.56

Exercisable at end of period 625,737 $ 10.56

5 unchanged sentences

Expected life of options 6.1 years

A summary of the status of the Company stock option shares as of June 30, 2023 is presented below.

A summary of the status of the Company stock option shares as of September 30, 2023 is presented below.

Shares Weighted Average Grant Date Fair Value

2 unchanged sentences

Forfeited — —

Non-vested, June 30, 2023 425,224 $ 2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three and six months ended June 30, 2023 was $ 154,000 and $ 307,000 , and the related tax benefit recognized was $ 17,000 and $ 34,000 , respectively.

As of June 30, 2023, unrecognized compensation expense related to the stock option awards was $ 1.2 million.

Non-vested, September 30, 2023 425,224 $ 2.91

Total compensation cost recognized in the income statement for option-based payment arrangements for the three and nine months ended September 30, 2023 was $ 156,000 and $ 462,000 , and the related tax benefit recognized was $ 17,000 and

$ 51,000 , respectively.

As of September 30, 2023, unrecognized compensation expense related to the stock option awards was $ 1.1 million.

Subsequent Event

Subsequent to June 30, 2023 through August 10, 2023, the Company purchased 25,546 shares of the Company's common stock pursuant to the existing stock repurchase program, leaving 1,082,611 shares available for future repurchase.

Subsequent to September 30, 2023 through November 13, 2023, the Company purchased 55,406 shares of the Company's common stock pursuant to the existing stock repurchase program, leaving 904,205 shares available for future repurchase.

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