AFFINITY BANCSHARES, INC., 10-K filed on 3/21/2024
Annual Report
v3.24.1
Document And Entity Information - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Mar. 19, 2024
Jun. 30, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2023    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Trading Symbol AFBI    
Entity Registrant Name Affinity Bancshares, Inc.    
Entity Central Index Key 0001823406    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Common Stock, Shares Outstanding   6,416,628  
Entity Public Float     $ 63.4
Entity Well-known Seasoned Issuer No    
Entity Current Reporting Status Yes    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Document Financial Statement Error Correction false    
Entity Voluntary Filers No    
Entity File Number 001-39914    
Entity Tax Identification Number 82-1147778    
Entity Address, Address Line One 3175 Highway 278    
Entity Address, City or Town Covington    
Entity Address, State or Province GA    
Entity Address, Postal Zip Code 30014    
City Area Code 770    
Local Phone Number 786-7088    
Entity Interactive Data Current Yes    
Title of 12(b) Security Common Stock, par value $0.01 per share    
Entity Incorporation, State or Country Code MD    
Document Annual Report true    
Document Transition Report false    
Security Exchange Name NASDAQ    
Documents Incorporated by Reference

1. Portions of the Proxy Statement for the 2024 Annual Meeting of Stockholders. (Part III)

    
Auditor Name Wipfli LLP    
Auditor Location Atlanta, Georgia    
Auditor Firm ID 344    
v3.24.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Assets    
Cash and due from banks $ 6,030 $ 2,928
Interest-earning deposits in other depository institutions 43,995 23,396
Cash and cash equivalents 50,025 26,324
Investment securities available-for-sale 48,561 46,200
Investment securities held-to-maturity (estimated fair value of $33,835, net of allowance for credit losses of $45 at December 31, 2023 and estimated fair value of $26,251 at December 31, 2022) 34,206 26,527
Other investments 5,434 1,082
Loans 659,876 646,234
Less allowance for credit losses (8,921) (9,325)
Total loans, net 650,955 636,909
Other real estate owned 2,850 2,901
Premises and equipment, net 3,797 4,257
Bank owned life insurance 16,086 15,724
Intangible assets 18,366 18,558
Other assets 12,978 12,801
Total assets 843,258 791,283
Liabilities :    
Noninterest-bearing checking 154,689 190,297
Interest-bearing checking 85,362 91,167
Money market accounts 138,673 148,097
Savings accounts 74,768 101,622
Certificate of deposit 220,951 125,989
Total deposits 674,443 657,172
Federal Home Loan Bank advances and other borrowings 40,000 10,025
Accrued interest payable and other liabilities 7,299 6,983
Total liabilities 721,742 674,180
Stockholders' equity:    
Common stock (par value $0.01 per share, 40,000,000 shares authorized; 6,416,628 issued and outstanding at December 31, 2023 and 6,605,384 issued and outstanding at December 31, 2022) 64 66
Preferred stock (10,000,000 shares authorized, no shares outstanding)
Additional paid in capital 61,026 63,130
Unearned ESOP shares (4,587) (4,795)
Retained earnings 71,345 65,357
Accumulated other comprehensive loss (6,332) (6,655)
Total stockholders' equity 121,516 117,103
Total liabilities and stockholders' equity $ 843,258 $ 791,283
v3.24.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Investment securities held-to-maturity estimated fair value $ 33,835,000 $ 26,251,000
Investment securities held-to-maturity estimated allowance for credit losses $ 45,000  
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 40,000,000 40,000,000
Common stock, shares issued 6,416,628 6,605,384
Common stock, shares outstanding 6,416,628 6,605,384
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares outstanding 0 0
v3.24.1
Consolidated Statements of Income - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Interest income:    
Loans, including fees $ 35,422,000 $ 30,045,000
Investment securities 4,042,000 1,318,000
Interest-earning deposits 3,236,000 771,000
Total interest income 42,700,000 32,134,000
Interest expense:    
Deposits 14,093,000 3,233,000
FHLB advances and other borrowings 1,409,000 (854,000)
Total interest expense 15,502,000 2,379,000
Net interest income before provision for credit losses 27,198,000 29,755,000
Provision/(recovery) for credit losses (42,000) 704,000
Net interest income after provision for credit losses 27,240,000 29,051,000
Noninterest income:    
Service charges on deposit accounts 1,620,000 1,611,000
Other 846,000 791,000
Total noninterest income 2,466,000 2,402,000
Noninterest expenses:    
Salaries and employee benefits 12,252,000 12,221,000
Occupancy 2,503,000 2,523,000
Data processing 2,025,000 1,947,000
FHLB prepayment penalties   647,000
Other 4,538,000 4,788,000
Total noninterest expenses 21,318,000 22,126,000
Income before income taxes 8,388,000 9,327,000
Income tax expense 1,940,000 2,193,000
Net income $ 6,448,000 $ 7,134,000
Weighted average common shares outstanding    
Basic 6,476,767 6,669,389
Diluted 6,557,053 6,761,771
Basic earnings per share $ 1 $ 1.07
Diluted earnings per share $ 0.98 $ 1.06
v3.24.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]    
Net income $ 6,448 $ 7,134
Other comprehensive income (loss):    
Net unrealized gain (loss) on available-for-sale securities, net of taxes of $108 and ($2,132) 323 (6,297)
Total other comprehensive income (loss) 323 (6,297)
Total comprehensive income $ 6,771 $ 837
v3.24.1
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]    
Net unrealized gain (loss) on available for sale securities, tax $ 108 $ (2,132)
v3.24.1
Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid In Capital
Unearned ESOP Shares
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2021 $ 120,968 $ 69 $ 68,038 $ (5,004) $ 58,223 $ (358)
ESOP loan payment and release of ESOP shares 313   104 209    
Issuance of restricted stock awards 78 1 77      
Stock-based compensation expense 616   616      
Change in unrealized loss on investment securities available-for-sale, net of tax (6,297)         (6,297)
Common stock repurchase (5,709) (4) (5,705)      
Net income 7,134       7,134  
Ending balance at Dec. 31, 2022 117,103 66 63,130 (4,795) 65,357 (6,655)
ESOP loan payment and release of ESOP shares 295   87 208    
Stock-based compensation expense 1,090   1,090      
Change in unrealized loss on investment securities available-for-sale, net of tax 323         323
Common stock repurchase (3,283) (2) (3,281)      
Adoption of new accounting pronouncement, net of tax (see Note 1) | ASU 2016-13 $ (460)       $ (460)  
Accounting Standards Update [Extensible Enumeration] | ASU 2016-13 Financing Receivable, Allowance for Credit Loss       Financing Receivable, Allowance for Credit Loss  
Net income $ 6,448       $ 6,448  
Ending balance at Dec. 31, 2023 $ 121,516 $ 64 $ 61,026 $ (4,587) $ 71,345 $ (6,332)
v3.24.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash flows from operating activities:    
Net income $ 6,448 $ 7,134
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and (accretion) amortization 734 338
Stock-based compensation expense 1,090 694
Deferred income tax expense (benefit) 399 280
Provision for credit losses (42) 704
ESOP expense 295 313
Net loss (gain) on sale and writedown of other real estate owned 51 105
Increase in cash surrender value of bank owned life insurance (362) (347)
Change in:    
Accrued interest receivable and other assets (527) (716)
Accrued interest payable and other liabilities (215) (936)
Net cash provided by operating activities 7,871 7,569
Cash flows from investing activities:    
Purchases of investment securities held-to-maturity (7,609) (26,525)
Purchases of investment securities available-for-sale (5,710) (10,143)
Purchases of premises and equipment (527) (1,394)
Proceeds from paydowns of investment securities available-for-sale 3,823 3,905
Proceeds from maturity of investment securities held-to-maturity 58 2
Purchases of other investments (6,666) (1,563)
Proceeds from sales of other investments 2,314 2,957
Net change in loans (13,818) (61,493)
Proceeds from sales of other real estate owned   532
Net cash used in investing activities (28,135) (93,722)
Cash flows from financing activities:    
Net change in deposits 17,273 44,385
Stock repurchase (3,283) (5,709)
Proceeds from FHLB advances 85,000 105,000
Repayment of FHLB advances (55,000) (143,000)
Proceeds from federal funds purchased 26 25
Repayment of federal funds purchased (51)  
Net cash provided by financing activities 43,965 701
Net change in cash and cash equivalents 23,701 (85,452)
Cash and cash equivalents at beginning of period 26,324 111,776
Cash and cash equivalents at end of period 50,025 26,324
Supplemental disclosures of cash flow information:    
Cash paid for income taxes 2,093 2,149
Cash paid for interest 14,491 3,096
Lease liability arising from obtaining right-of-use asset   3,031
Change in unrealized loss on investment securities available-for-sale, net of tax $ 323 $ (6,297)
v3.24.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
(1)
Summary of Significant Accounting Policies

 

Nature of Operations

Affinity Bancshares, Inc. (the “Company”) is a bank holding company headquartered in Covington, Georgia. The Company has one operating subsidiary, Affinity Bank, National Association (the “Bank”, and formerly named “Affinity Bank”), a national bank, conducting banking activities in Newton County, Georgia and surrounding counties and in Cobb and Fulton County, Georgia and surrounding counties, and originating dental practice loans and indirect automobile loans throughout the Southeastern United States. The Bank offers such customary banking services as consumer and commercial checking accounts, savings accounts, certificates of deposit, mortgage, commercial and consumer loans, including indirect automobile loans, money transfers and a variety of other banking services.

 

The Company was incorporated in September 2020 to be the successor corporation to Community First Bancshares, Inc., a federal corporation, upon completion of the second-step mutual-to-stock conversion (the “Conversion”) of Community First Bancshares, MHC, the top tier mutual holding company of Community First Bancshares, Inc. Community First Bancshares, Inc. was the former mid-tier holding company for the Bank.

Basis of Presentation

The accounting principles followed by the Company and the methods of applying these standards and principles conform with accounting principles generally accepted in the United States of America (“GAAP”) and with general practices within the banking industry. In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ significantly from those estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for credit losses, the valuation of real estate acquired in connection with or in lieu of foreclosure on loans, and valuation allowances associated with deferred tax assets, the recognition of which are based on future taxable income.

Earnings Per Share

 

Year Ended December 31,

 

 

2023

 

 

2022

 

 

(Dollars in thousands except per share data)

 

 

 

 

 

 

 

Net income

$

6,448

 

 

$

7,134

 

Weighted average common shares outstanding

 

6,476,767

 

 

 

6,669,389

 

Effect of dilutive common stock awards

 

80,286

 

 

 

92,382

 

Diluted weighted average common shares outstanding

 

6,557,053

 

 

 

6,761,771

 

Basic earnings per common share

$

1.00

 

 

$

1.07

 

Diluted earnings per common share

 

0.98

 

 

 

1.06

 

 

Adopted Accounting Pronouncements

Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), is intended to provide financial statement users with more decision-useful information related to expected credit losses on financial instruments and other commitments to extend credit by replacing the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 does not specify the method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. Additionally, the amendments of ASU 2016-13 require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The Company selected a third-party vendor to provide allowance for credit loss software as well as advisory services in developing a new methodology that would be compliant with ASU 2016-13. The Company adopted this ASU on January 1, 2023, and recorded a one-time entry

to retained earnings of $460,000, net of tax, primarily related to credit losses for unfunded commitments and credit losses on held-to-maturity securities.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU provides guidance on eliminating the requirement for classification of and disclosures around troubled debt restructurings. The purpose of this guidance is to eliminate unnecessary and overly-complex disclosures of loans that are already incorporated into the allowance for credit losses and related disclosures. This ASU further requires the disclosure of current-period gross charge-offs by year of origination. The updated guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for all entities which have implemented ASU 2016-13. The Company has historically had very few credit relationships classified as troubled debt restructurings, and as such the elimination of accounting for and disclosure of these types of credit relationships did not have a material impact to its financial statements upon implementation of ASU 2016-13 in the first quarter of 2023.

In March 2020, the FASB issued ASU No. 2020-04, Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The updated guidance was originally effective for all entities from March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06 which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company has been diligent in responding to reference rate reform and does not anticipate a material impact to its financial statements as a result.

New Accounting Pronouncements

ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures" The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact on its disclosures.

 

Cash and Cash Equivalents

Cash and cash equivalents include cash and due from banks and interest-earning deposits in other depository institutions.

Investment Securities

The Company classifies its investment securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities for which the Company has the ability and intent to hold the security until maturity. All other securities not included in trading or held-to-maturity are classified as available-for-sale.

Held-to-maturity securities are recorded at cost, adjusted for the amortization or accretion of premiums or discounts. Transfers of securities between categories are recorded at fair value at the date of transfer.

Management evaluates investment securities for other-than-temporary impairment on an annual basis. A decline in the market value of any held-to-maturity investment below cost that is deemed other-than-temporary is charged to earnings for the decline in value deemed to be credit related. The decline in value attributed to non-credit related factors is recognized in other comprehensive income and a new cost basis in the security is established.

Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as held-to-maturity are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

 

Allowance for Credit Losses ("ACL") - Investment Securities Available-for-Sale

 

For available-for-sale securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria

regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale securities that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the securities by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in the comprehensive income. Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses. The guidance under ASC Topic 326 had no impact on the Bank’s available-for-sale debt securities at January 1, or December 31, 2023.

Changes in the allowance for credit losses are recorded as provision of (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Allowance for Credit Losses - Investment Securities Held-to-Maturity

 

Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses. Management classifies the held-to-maturity portfolio into the following major security types: U.S. Treasuries, government agency mortgage-backed, and corporate securities. The U.S. Treasuries and the Government agency mortgage-backed securities held by the Bank are issues by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. The corporate securities are comprised of investments in corporate bonds whose issuers are primarily banks. At December 31, 2023, these securities are all rated as investment grade.

Other Investments

The Federal Home Loan Bank (“FHLB”) stock is an investment that does not have a readily determinable fair value and is carried at cost. The Company is required to hold the FHLB stock as a member of the FHLB and transfer of the stock is substantially restricted.

The First National Bankers Bank (“FNBB”) stock is an investment that does not have a readily determinable fair value and is carried at cost. The Company acquired the stock when it borrowed funds at the holding company from FNBB.

Loans, Loan Fees and Interest Income on Loans

Loans are stated at the principal amount outstanding, net of the allowance for credit losses. Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding.

Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts that the borrower’s financial condition is such that collection of interest is doubtful. When a loan is placed on nonaccrual status, previously accrued and uncollected interest is charged to interest income on loans. Generally, payments on nonaccrual loans are applied first to principal. Interest income is recorded after principal has been satisfied and as payments are received.

Loan fees, net of certain origination costs, are deferred and amortized over the lives of the respective loans as an adjustment to the yield.

A loan is impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price, or at the fair value of the collateral of the loan if the loan is collateral dependent. Estimated impairment losses for collateral dependent

loans are set up as specific reserves. Interest income on impaired loans is recognized using the cash-basis method of accounting during the time the loans are impaired.

 

Allowance for Credit Losses - Loans

 

The CECL framework requires an estimate of expected credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts. The following discussion provides a description of the methodology applied to calculate the ACL under CECL.

The ACL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses.


Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses. Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors. For the majority of loans and leases, the ACL is calculated using a discounted cash flow methodology applied at a loan level with a one-year reasonable and supportable forecast period and a two-year straight-line reversion period.


The ACL-loans is measured on a collective basis when similar risk characteristics exist. The Bank has identified the following portfolio segments and calculates the ACL for each using a discounted cash flow methodology at the loan level, with loss rates, prepayment assumptions and curtailment assumptions driven by each loan’s collateral type:

Commercial (secured by real estate - owner occupied)- Loans in this category are susceptible to business failure and general economic conditions.

Commercial (secured by real estate - non-owner occupied) - Common risks for this loan category are declines in general economic conditions, declines in real estate value, declines in occupancy rates, and lack of suitable alternative use for the property.

Commercial & industrial - Risks to this loan category include the inability to monitor the condition of the collateral, which often consists of inventory, accounts receivable and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.


Construction, land, and acquisition and development - Risks common to construction loans are cost overruns, changes in market demand for property, inadequate long-term financing arrangements and declines in real estate values.

Residential mortgage - Residential mortgage loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values.

Consumer installment - Risks common to consumer direct loans include unemployment and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.

When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

When the discounted cash flow method is used to determine the ACL, management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The ACL on a loan modification is measured using the same method as all other loans held for investment, except that the original interest rate is used to discount the expected cash flows, not the rate specified within the restructuring.


Determining the Contractual Term: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a loan modification will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Bank.

 

 

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures

 

The Bank estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Bank. The allowance for credit losses on off-balance sheet credit exposures is adjusted through provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate is influenced by historical loss experience, adjusted for current risk characteristics, and economic forecasts.

Other Real Estate Owned

Other real estate owned includes real estate acquired through foreclosure. Each other real estate property is initially recorded at its fair value less estimated costs to sell and is subsequently carried at fair value less estimated costs to sell. All foreclosed properties are actively marketed for sale. Fair value is principally based on independent appraisals performed by local credentialed appraisers. Any excess of the carrying value of the related loan over the fair value of the real estate at the date of foreclosure is charged against the allowance for credit losses. Properties in other real estate are re-evaluated annually. Any expense incurred in connection with holding such real estate or resulting from any write-downs in value subsequent to foreclosure is included in noninterest expense. When the other real estate property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property.

Premises and Equipment

Premises and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings for the period. The cost of maintenance and repairs that do not improve or extend the useful life of the respective asset is charged to earnings as incurred, whereas significant renewals and improvements are capitalized. The range of estimated useful lives for premises and equipment are as follows:

 

Equipment and furniture

3 - 10 years

Buildings

40 years

Automobile

5 years

Leases

The lease liability is initially and subsequently recognized based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate. Increases (decreases) to variable lease payments due to subsequent changes in an index or rate are recorded as variable lease expense (income) in the future period in which they are incurred.


The discount rate used is the implicit rate in the lease contract, if it is readily determinable, or the Company’s incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, the Company uses the incremental borrowing rate based on the information available at the commencement date for all leases. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an
amount equal to the lease payments under similar terms and in a similar economic environment.


 

The right-of-use ("ROU") asset for operating leases is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term.


For all underlying classes of assets, the Company has elected to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Leases containing termination clauses in which either party may terminate the lease without cause and the notice period is less than 12 months are deemed short-term leases with lease costs included in short-term lease expense. The Company recognizes short-term lease cost on a straight-line basis over the lease term.


Bank Owned Life Insurance

The Bank has purchased life insurance policies on certain key executives and members of management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other changes or other amounts due that are probable at settlement.

Intangible Assets

Intangible assets attributable to the value of core deposits are stated at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated lives of the assets. The excess of purchase price over fair value of net assets acquired (goodwill) is not amortized.


The Company evaluates whether goodwill and other intangible assets may be impaired at least annually and whenever events or changes in circumstances indicate it is more likely than not the fair value of the reporting unit or asset is less than its carrying amount.

Income Taxes

The Company uses the liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Additionally, this method requires the recognition of future tax benefits, such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities results in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing the realization of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.

The Company currently evaluates income tax positions judged to be uncertain. A loss contingency reserve is accrued if it is probable that the tax position will be challenged, it is probable that the future resolution of the challenge will confirm that a loss has been incurred, and the amount of such loss can be reasonably estimated.

Stock Compensation Plans

Stock compensation awards are measured at the grant date based on the fair value of the awards and are recognized as compensation expense over the service period, which is also the vesting period.

Other Comprehensive Income

Other comprehensive income is shown on the consolidated statements of comprehensive income. Accumulated other comprehensive loss consists of unrealized loss on securities available-for-sale, net of tax, and is shown on the consolidated statements of changes in stockholders’ equity.

Revenue Recognition

The core revenue recognition principle requires the Company to recognize revenue to depict the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those services or products recognized as performance obligations are satisfied. The guidance includes a five-step model to apply to revenue recognition, consisting of the following: (1) identify the contract with a customer; (2) identify the performance obligation(s) within the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) within the contract; and (5) recognize revenue when (or as) the performance obligation(s) are/is satisfied.


The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed, charged either on a periodic basis or based on activity. Since performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying revenue recognition that significantly affects the determination of the amount and timing of revenue from contracts with customers.


The following significant revenue-generating transactions are within the scope of Accounting Standards Codification ("ASC") 606, which are presented in the consolidated statements of income as components of noninterest income:

Service charges on deposit accounts: The deposit contract obligates the Company to serve as a custodian of the customer’s deposited funds and is generally terminable at will by either party. The contract permits the customer to access the funds on deposit and request additional services for which the Company earns a fee, including non-sufficient funds and analysis charges, related to the deposit account. Income for deposit accounts is recognized over the statement cycle period (typically on a monthly basis) or at the time the service is provided, if additional services are requested.

Small Business Administration ("SBA") loan fees: Origination fees on SBA loans are recognized into income up to the amount of the cost of making the loan as is done with other loans. The remainder is deferred and taken into income over the life of the loan. A portion of proceeds from the sale of SBA loans is taken into income while the remainder is deferred over the life of the loan.

ATM fee income: A contract between the Company, as a card-issuing bank, and its customers whereby the Company receives a transaction fee from the merchant’s bank whenever a customer uses a debit or credit card to make a purchase. These fees are earned as the service is provided (i.e., when the customer uses a debit or ATM card).

Other noninterest income: Other noninterest income includes several items, such as wire transfer income, check cashing fees, the increase in cash surrender value of life insurance and safe deposit box rental fees. This income is generally recognized at the time the service is provided and/or the income is earned.

Reclassification

Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on stockholders’ equity or net income.
v3.24.1
Investment Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Investment Securities

(2) Investment Securities

Investment securities available-for-sale at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Amortized

 

 

Gross
Unrealized

 

 

Gross
Unrealized

 

 

Estimated

 

December 31, 2023

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

U.S. Treasury securities

 

$

5,147

 

 

$

—

 

 

$

(649

)

 

$

4,498

 

Municipal securities - tax exempt

 

 

527

 

 

 

—

 

 

 

(85

)

 

 

442

 

Municipal securities - taxable

 

 

2,530

 

 

 

—

 

 

 

(395

)

 

 

2,135

 

U. S. Government sponsored enterprises

 

 

11,837

 

 

 

—

 

 

 

(3,207

)

 

 

8,630

 

Government agency mortgage-backed securities

 

 

18,643

 

 

 

—

 

 

 

(2,695

)

 

 

15,948

 

Corporate securities

 

 

18,355

 

 

 

30

 

 

 

(1,477

)

 

 

16,908

 

Total

 

$

57,039

 

 

$

30

 

 

$

(8,508

)

 

$

48,561

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

6,084

 

 

$

—

 

 

$

(776

)

 

$

5,308

 

Municipal securities - tax exempt

 

 

533

 

 

 

—

 

 

 

(96

)

 

 

437

 

Municipal securities - taxable

 

 

2,529

 

 

 

—

 

 

 

(485

)

 

 

2,044

 

U. S. Government sponsored enterprises

 

 

11,837

 

 

 

—

 

 

 

(3,499

)

 

 

8,338

 

Government agency mortgage-backed securities

 

 

20,555

 

 

 

—

 

 

 

(3,053

)

 

 

17,502

 

Corporate securities

 

 

13,571

 

 

 

5

 

 

 

(1,005

)

 

 

12,571

 

Total

 

$

55,109

 

 

$

5

 

 

$

(8,914

)

 

$

46,200

 

 

Investment securities held-to-maturity at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Amortized

 

 

Gross
Unrealized

 

 

Gross
Unrealized

 

 

 

 

 

Estimated Allowance for

 

December 31, 2023

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

Credit Losses

 

U.S. Treasury securities

 

$

999

 

 

$

—

 

 

$

(4

)

 

$

995

 

 

$

—

 

Government agency mortgage-backed securities

 

 

795

 

 

 

—

 

 

 

(76

)

 

 

719

 

 

 

—

 

Corporate securities

 

 

32,457

 

 

 

58

 

 

 

(394

)

 

 

32,121

 

 

 

(45

)

Total

 

$

34,251

 

 

$

58

 

 

$

(474

)

 

$

33,835

 

 

$

(45

)

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

998

 

 

$

—

 

 

$

—

 

 

$

998

 

 

$

—

 

Government agency mortgage-backed securities

 

 

837

 

 

 

—

 

 

 

(13

)

 

 

824

 

 

 

—

 

Corporate securities

 

 

24,692

 

 

 

4

 

 

 

(267

)

 

 

24,429

 

 

 

—

 

Total

 

$

26,527

 

 

$

4

 

 

$

(280

)

 

$

26,251

 

 

$

—

 

 

The Bank recorded $32,000 of provision for credit losses on held-to-maturity securities on January 1, 2023 upon adoption of ASC 326, and recorded an additional provision for credit losses for the year ended December 31, 2023 of $13,000 for held-to-maturity securities.

 

Investment securities available-for-sale in an unrealized loss position at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

December 31, 2023

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

4,498

 

 

$

(649

)

 

$

4,498

 

 

$

(649

)

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

442

 

 

 

(85

)

 

 

442

 

 

 

(85

)

Municipal securities - taxable

 

 

—

 

 

 

—

 

 

 

2,135

 

 

 

(395

)

 

 

2,135

 

 

 

(395

)

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

8,630

 

 

 

(3,207

)

 

 

8,630

 

 

 

(3,207

)

Government agency mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

15,948

 

 

 

(2,695

)

 

 

15,948

 

 

 

(2,695

)

Corporate securities

 

 

5,557

 

 

 

(214

)

 

 

8,774

 

 

 

(1,263

)

 

 

14,331

 

 

 

(1,477

)

Total

 

$

5,557

 

 

$

(214

)

 

$

40,427

 

 

$

(8,294

)

 

$

45,984

 

 

$

(8,508

)

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

4,331

 

 

$

(776

)

 

$

4,331

 

 

$

(776

)

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

437

 

 

 

(96

)

 

 

437

 

 

 

(96

)

Municipal securities - taxable

 

 

452

 

 

 

(32

)

 

 

1,592

 

 

 

(453

)

 

 

2,044

 

 

 

(485

)

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

8,338

 

 

 

(3,499

)

 

 

8,338

 

 

 

(3,499

)

Government agency mortgage-backed securities

 

 

5,598

 

 

 

(452

)

 

 

11,904

 

 

 

(2,601

)

 

 

17,502

 

 

 

(3,053

)

Corporate securities

 

 

4,541

 

 

 

(324

)

 

 

5,466

 

 

 

(681

)

 

 

10,007

 

 

 

(1,005

)

Total

 

$

10,591

 

 

$

(808

)

 

$

32,068

 

 

$

(8,106

)

 

$

42,659

 

 

$

(8,914

)

 

There were three available-for-sale securities in an unrealized loss position totaling $214,000 as of December 31, 2023 for less than 12 months. There were 66 available-for-sale securities in an unrealized loss position for 12 months or greater totaling $8.3 million as of December 31, 2023. The unrealized losses on the debt securities arose due to changing interest rates and market conditions and are considered to be temporary because of acceptable investment grades and are reviewed regularly. Four of the securities are agency bonds and five are U.S. Treasury bonds, so all of these are direct obligations of the U.S. Government. Thirty-nine of the securities are mortgage-backed bonds that have the direct or implied backing of the U.S. Government. Four of the bonds are municipal securities and the remaining 17 securities are corporate securities that are either trust preferred securities or subordinated debentures where the Bank performs a credit review regularly and such review has raised no concerns.

 

Debt securities issued by U.S. government agencies, U.S. government-sponsored enterprises ("GSEs"), and the U.S. Treasury, including notes and mortgage backed securities, accounted for the majority of the available-for-sale portfolio as of December 31, 2023, and the Bank expects no credit losses on these securities, given the explicit and implicit guarantees provided by the U.S. federal government. The available-for-sale portfolio also includes corporate securities, but are underwritten as loans with features that are typically found in commercial loans. Accordingly, the Bank monitors the credit quality of these corporate bonds through quarterly credit reviews to determine impairment, if any. The decline in fair value is attributable to changes in interest rates, and not credit quality, and the Bank does not have the intent to sell the U.S. government and agencies debt securities and the corporate securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Bank does not consider impairments on these securities to be credit related as of December 31, 2023 and no allowance for credit loss is required.

 

Investment securities held to maturity in an unrealized loss position at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

December 31, 2022

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Municipal securities - taxable

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Government agency mortgage-backed securities

 

$

824

 

 

$

(13

)

 

$

—

 

 

$

—

 

 

$

824

 

 

$

(13

)

Corporate securities

 

 

16,772

 

 

 

(267

)

 

 

—

 

 

 

—

 

 

 

16,772

 

 

 

(267

)

Total

 

$

17,596

 

 

$

(280

)

 

$

—

 

 

$

—

 

 

$

17,596

 

 

$

(280

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There were 11 held-to-maturity securities in an unrealized loss position totaling $372,000 as of December 31, 2023 for less than 12 months. There was one held-to-maturity security in an unrealized loss position of $102,000 greater than 12 months as of December 31, 2023. The unrealized losses on the debt securities arose due to changing interest rates and market conditions and are considered to be temporary because of acceptable investment grades and are reviewed regularly. One security is a U.S. Treasury bond, so it is a direct obligations of the U.S. Government. One security is a mortgage-backed security of a U.S. Government sponsored agency that has the implied backing of the U.S. Government. Ten are subordinated debentures of banks where the Bank performs a credit review quarterly and such reviews have raised no concerns. Corporate securities account for the majority of the held-to-maturity portfolio as of December 31, 2023. As stated above, these corporate securities are accounted for as securities, but are underwritten as loans with features that are typically found in commercial loans. Accordingly, the Bank monitors the credit quality of these corporate bonds through quarterly credit reviews to determine impairment, if any. At December 31, 2023 these securities are all rated as investment grade and the $45,000 of allowance for credit losses associated with these securities was calculated using a Moody's report on the cumulative default rates of corporate issuers.

The amortized cost and estimated fair value of investment securities available-for-sale and held to maturity at December 31, 2023, by contractual maturity, are shown below. Maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. (in thousands):

 

 

 

Available-for-Sale

 

 

Held-to-Maturity

 

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

Within 1 year

 

$

—

 

 

$

—

 

 

$

999

 

 

$

995

 

Greater than 1 to 5 years

 

 

6,942

 

 

 

6,559

 

 

 

16,770

 

 

 

16,723

 

Greater than 5 to 10 years

 

 

21,112

 

 

 

18,599

 

 

 

15,687

 

 

 

15,398

 

Greater than 10 years

 

 

10,342

 

 

 

7,455

 

 

 

—

 

 

 

—

 

 

 

 

38,396

 

 

 

32,613

 

 

 

33,456

 

 

 

33,116

 

Government agency mortgage-backed securities

 

 

18,643

 

 

 

15,948

 

 

 

795

 

 

 

719

 

Total

 

$

57,039

 

 

$

48,561

 

 

$

34,251

 

 

$

33,835

 

 

 

There were no sales of investment securities available-for-sale in 2023 or 2022.

Available-for-sale securities with a carrying value of approximately $4.2 million and $4.7 million were pledged to secure public deposits at both December 31, 2023 and 2022, respectively.

v3.24.1
Loans and Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Loans and Allowance for Credit Losses

(3) Loans and Allowance for Credit Losses

Major classifications of loans, by collateral code, at December 31, 2023 and 2022 are summarized as follows: (in thousands)

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Commercial (secured by real estate - owner occupied)

 

$

157,691

 

 

$

162,989

 

Commercial (secured by real estate - non-owner occupied)

 

 

145,100

 

 

 

135,720

 

Commercial and industrial

 

 

140,407

 

 

 

147,775

 

Construction, land and acquisition & development

 

 

47,685

 

 

 

37,158

 

Residential mortgage 1-4 family

 

 

53,650

 

 

 

51,324

 

Consumer installment

 

 

115,343

 

 

 

111,268

 

Total

 

 

659,876

 

 

 

646,234

 

Less allowance for credit losses

 

 

(8,921

)

 

 

(9,325

)

Total loans, net

 

$

650,955

 

 

$

636,909

 

 

 

 

The Bank grants loans and extensions of credit to individuals and a variety of firms and corporations located primarily in the Atlanta, Georgia Metropolitan Statistical Area. A substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market. The Bank has specialized expertise in lending to dentists and dental practices, with dental practice loans totaling $176.1 million, or 26.7%, and $185.1 million, or 28.6% of our loan portfolio, as of December 31, 2023 and 2022, respectively. The majority of these loans are commercial and industrial credits for practice acquisitions and equipment financing with the remainder being owner-occupied real estate. Accrued interest on loans totaled $2.1 million on December 31, 2023 and $1.6 million on December 31, 2022 and is included in other assets on the consolidated balance sheet.

The following table presents the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2023 and 2022: (in thousands)

 

December 31, 2023

 

Commercial
(Secured by Real
Estate - Owner Occupied)

 

 

Commercial
(Secured by Real Estate - Non-Owner Occupied)

 

 

Commercial
and Industrial

 

 

Construction,
Land and
Acquisition & Development

 

 

Residential
 Mortgage

 

 

Consumer
Installment

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance December 31, 2022

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Provision

 

 

(810

)

 

 

(781

)

 

 

(484

)

 

 

440

 

 

 

644

 

 

 

114

 

 

 

877

 

 

 

-

 

Charge-offs

 

 

(204

)

 

 

—

 

 

 

(3

)

 

 

—

 

 

 

—

 

 

 

(307

)

 

 

—

 

 

 

(514

)

Recoveries

 

 

8

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

49

 

 

 

52

 

 

 

—

 

 

 

110

 

Ending balance

 

$

1,397

 

 

$

1,298

 

 

$

1,806

 

 

$

927

 

 

$

1,038

 

 

$

1,534

 

 

$

921

 

 

$

8,921

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

2,701

 

 

$

1,980

 

 

$

2,242

 

 

$

162

 

 

$

502

 

 

$

969

 

 

$

3

 

 

$

8,559

 

Provision

 

 

(421

)

 

 

99

 

 

 

55

 

 

 

325

 

 

 

(196

)

 

 

801

 

 

 

41

 

 

 

704

 

Charge-offs

 

 

—

 

 

 

—

 

 

 

(26

)

 

 

—

 

 

 

—

 

 

 

(123

)

 

 

—

 

 

 

(149

)

Recoveries

 

 

123

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

39

 

 

 

28

 

 

 

—

 

 

 

211

 

Ending balance

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Ending allowance attributable to
   loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated

 

$

85

 

 

$

1

 

 

$

—

 

 

$

—

 

 

$

4

 

 

$

—

 

 

$

—

 

 

$

90

 

Collectively evaluated

 

 

2,318

 

 

 

2,078

 

 

 

2,292

 

 

 

487

 

 

 

341

 

 

 

1,675

 

 

 

44

 

 

 

9,235

 

Total ending allowance

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated

 

$

85

 

 

$

3,265

 

 

$

—

 

 

$

—

 

 

$

2,399

 

 

$

—

 

 

$

—

 

 

$

5,749

 

Collectively evaluated

 

 

162,904

 

 

 

132,455

 

 

 

147,775

 

 

 

37,158

 

 

 

48,925

 

 

 

111,268

 

 

 

—

 

 

 

640,485

 

Total loans

 

$

162,989

 

 

$

135,720

 

 

$

147,775

 

 

$

37,158

 

 

$

51,324

 

 

$

111,268

 

 

$

 

 

 

$

646,234

 

 

The Bank individually evaluates all loans that are on nonaccrual status or are rated substandard (as described below). A loan is considered impaired when, based on current events and circumstances, it is probable that all amounts due according to the contractual terms of the loan will not be collected. Impaired loans are measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, at the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Interest payments received on impaired loans are applied as a reduction of the outstanding principal balance.

 

The Bank recorded a provision for credit losses for unfunded commitments of $586,000 on January 1, 2023 upon adoption of ASC 326. A release on unfunded commitments for the year ended December 31, 2023 of $55,000 was recorded, and is included in other liabilities on the consolidated balance sheet. The Bank also recorded a provision of $13,000 for credit losses for held-to-maturity securities for a net $42,000 recorded of provision for credit losses for the year ended December 31, 2023.

 

 

Collateral-Dependent Loan

 

The Bank classifies a loan as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of collateral. Our commercial loans have collateral that is comprised of real estate and business assets. Our consumer loans have collateral that is substantially comprised of residential real estate. There were no significant changes in the extent to which collateral secures our collateral-dependent loans during the year ended December 31, 2023, and we had $4.3 million of collateral-dependent loans without an allowance and no collateral-dependent loans with an allowance at December 31, 2023.

Impaired loans at December 31, 2022 were as follows: (in thousands)

 

December 31, 2022

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Allocated
Related
Allowance

 

 

Average
Recorded
Investment

 

 

Interest
Income
Recognized

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Commercial (secured by real estate - non-owner occupied)

 

 

3,089

 

 

 

3,089

 

 

 

—

 

 

 

3,145

 

 

 

—

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

 

1,526

 

 

 

1,526

 

 

 

—

 

 

 

1,596

 

 

 

5

 

Consumer installment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,615

 

 

 

4,615

 

 

 

—

 

 

 

4,741

 

 

 

5

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

 

85

 

 

 

85

 

 

 

85

 

 

 

90

 

 

 

4

 

Commercial (secured by real estate - non-owner occupied)

 

 

176

 

 

 

176

 

 

 

1

 

 

 

182

 

 

 

8

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

 

873

 

 

 

873

 

 

 

4

 

 

 

907

 

 

 

22

 

Consumer installment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,134

 

 

 

1,134

 

 

 

90

 

 

 

1,179

 

 

 

34

 

Total impaired loans

 

$

5,749

 

 

$

5,749

 

 

$

90

 

 

$

5,920

 

 

$

39

 

 

 

 

The following table presents the aging of the recorded investment in past due loans, as well as the recorded investment in nonaccrual loans, as of December 31, 2023 and 2022 by class of loans: (in thousands)

 

December 31, 2023

 

30 -59
Days
 Past Due

 

 

60- 89
Days
 Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Accruing Loans
Past Due

 

 

Nonaccrual with Allowance

 

 

Nonaccrual without Allowance

 

 

Current

 

 

Total

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

157,691

 

 

$

157,691

 

Commercial (secured by real estate - non-owner occupied)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,505

 

 

 

140,595

 

 

 

145,100

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

140,407

 

 

 

140,407

 

Construction, land and acquisition &
   development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

47,685

 

 

 

47,685

 

Residential mortgage

 

 

2,534

 

 

 

—

 

 

 

—

 

 

 

2,534

 

 

 

—

 

 

 

2,504

 

 

 

48,612

 

 

 

53,650

 

Consumer installment

 

 

246

 

 

 

—

 

 

 

—

 

 

 

246

 

 

 

—

 

 

 

417

 

 

 

114,680

 

 

 

115,343

 

Total

 

$

2,780

 

 

$

—

 

 

$

—

 

 

$

2,780

 

 

$

—

 

 

$

7,426

 

 

$

649,670

 

 

$

659,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

30 -59
Days
 Past Due

 

 

60- 89
Days
 Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Accruing Loans
Past Due

 

 

Nonaccrual

 

 

Current

 

 

Total

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

85

 

 

$

162,904

 

 

$

162,989

 

 

 

 

Commercial (secured by real estate - non-owner occupied)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,312

 

 

 

132,408

 

 

 

135,720

 

 

 

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

147,772

 

 

 

147,775

 

 

 

 

Construction, land and acquisition &
   development

 

 

85

 

 

 

—

 

 

 

—

 

 

 

85

 

 

 

—

 

 

 

37,073

 

 

 

37,158

 

 

 

 

Residential mortgage

 

 

2,341

 

 

 

533

 

 

 

249

 

 

 

3,123

 

 

 

3,185

 

 

 

45,016

 

 

 

51,324

 

 

 

 

Consumer installment

 

 

571

 

 

 

59

 

 

 

—

 

 

 

630

 

 

 

135

 

 

 

110,503

 

 

 

111,268

 

 

 

 

Total

 

$

2,997

 

 

$

592

 

 

$

249

 

 

$

3,838

 

 

$

6,720

 

 

$

635,676

 

 

$

646,234

 

 

 

 

 

There was one residential mortgage loan with a balance of $249,000 that was past due over 90 days and still accruing interest as of December 31, 2022. This loan subsequently paid off in January 2023.

 

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Bank uses the following definitions for its risk ratings:

Special Mention. Loans have potential weaknesses that may, if not corrected, weaken or inadequately protect the Bank's credit position at some future date. Weaknesses are generally the result of deviation from prudent lending practices, such as over advances on collateral. Credits in this category should, within a 12-month period, move to Pass if improved or drop to Substandard if poor trends continue.

Substandard. Inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans have a well-defined weakness or weaknesses such as primary source of repayment is gone or severely impaired or cash flow is insufficient to reduce debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans have weaknesses of those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable. The likelihood of a loss on an asset or portion of an asset classified Doubtful is high.

Loss. Loans considered uncollectible and of such little value that the continuance as a Bank asset is not warranted. This does not mean that the loan has no recovery or salvage value, but rather the asset should be charged off even though partial recovery may be possible in the future.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans. As of December 31, 2023 and 2022, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: (in thousands):

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolvers

 

 

Total

 

Pass

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

$

11,210

 

 

$

23,441

 

 

$

29,832

 

 

$

22,982

 

 

$

11,287

 

 

$

49,744

 

 

$

8,863

 

 

$

157,359

 

Commercial (secured by real estate - non-owner occupied)

 

32,830

 

 

 

37,395

 

 

 

25,702

 

 

 

4,436

 

 

 

10,015

 

 

 

15,546

 

 

 

10,562

 

 

 

136,486

 

Commercial and industrial

 

22,473

 

 

 

21,590

 

 

 

27,252

 

 

 

14,764

 

 

 

16,697

 

 

 

25,317

 

 

 

12,314

 

 

 

140,407

 

Construction, land and acquisition & development

 

21,557

 

 

 

17,392

 

 

 

5,034

 

 

 

721

 

 

 

216

 

 

 

210

 

 

 

2,534

 

 

 

47,664

 

Residential mortgage

 

5,354

 

 

 

5,672

 

 

 

2,447

 

 

 

1,289

 

 

 

1,424

 

 

 

28,710

 

 

 

5,736

 

 

 

50,632

 

Consumer installment

 

42,601

 

 

 

46,869

 

 

 

17,488

 

 

 

4,866

 

 

 

1,919

 

 

 

247

 

 

 

543

 

 

 

114,533

 

Total pass

 

136,025

 

 

 

152,359

 

 

 

107,755

 

 

 

49,058

 

 

 

41,558

 

 

 

119,774

 

 

 

40,552

 

 

 

647,081

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

332

 

 

 

—

 

 

 

332

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

3,539

 

 

 

—

 

 

 

—

 

 

 

540

 

 

 

—

 

 

 

4,079

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

222

 

 

 

—

 

 

 

222

 

Consumer installment

 

73

 

 

 

190

 

 

 

99

 

 

 

21

 

 

 

31

 

 

 

—

 

 

 

—

 

 

 

414

 

Total special mention

 

73

 

 

 

190

 

 

 

3,638

 

 

 

21

 

 

 

31

 

 

 

1,094

 

 

 

—

 

 

 

5,047

 

Substandard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,535

 

 

 

-

 

 

 

4,535

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

Residential mortgage

 

—

 

 

 

202

 

 

 

108

 

 

 

107

 

 

 

113

 

 

 

2,266

 

 

 

—

 

 

 

2,796

 

Consumer installment

 

50

 

 

 

205

 

 

 

118

 

 

 

11

 

 

 

12

 

 

 

—

 

 

 

—

 

 

 

396

 

Total substandard

 

50

 

 

 

407

 

 

 

226

 

 

 

139

 

 

 

125

 

 

 

6,801

 

 

 

-

 

 

 

7,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

136,148

 

 

$

152,956

 

 

$

111,619

 

 

$

49,218

 

 

$

41,714

 

 

$

127,669

 

 

$

40,552

 

 

$

659,876

 

Current year to date period gross write-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

204

 

 

 

—

 

 

 

204

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

3

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer installment

 

9

 

 

 

159

 

 

 

125

 

 

 

14

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

307

 

Total current period gross write-offs

$

9

 

 

$

159

 

 

$

125

 

 

$

14

 

 

$

—

 

 

$

207

 

 

$

—

 

 

$

514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

Pass

 

 

Special
Mention

 

 

Substandard

 

 

Doubtful/
Loss

 

 

Total

 

Commercial (secured by real estate - owner occupied)

 

$

162,541

 

 

$

362

 

 

$

86

 

 

$

—

 

 

$

162,989

 

Commercial (secured by real estate - non-owner occupied)

 

 

130,115

 

 

 

2,293

 

 

 

3,312

 

 

 

—

 

 

 

135,720

 

Commercial and industrial

 

 

147,772

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

147,775

 

Construction, land and acquisition & development

 

 

37,158

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

37,158

 

Residential mortgage

 

 

48,193

 

 

 

—

 

 

 

3,131

 

 

 

—

 

 

 

51,324

 

Consumer installment

 

 

111,049

 

 

 

84

 

 

 

135

 

 

 

—

 

 

 

111,268

 

Total

 

$

636,828

 

 

$

2,739

 

 

$

6,667

 

 

$

—

 

 

$

646,234

 

 

The Company did not have any loan modifications during 2023 and no trouble debt restructurings during 2022.

 
v3.24.1
Premises and Equipment
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Premises and Equipment

(4) Premises and Equipment

Premises and equipment at year ended December 31, 2023 and 2022 are summarized as follows: (in thousands)

 

 

 

 

 

 

 

 

 

 

December 31,
2023

 

 

December 31,
2022

 

Land

 

$

373

 

 

$

373

 

Buildings

 

 

4,356

 

 

 

4,336

 

Leasehold improvements

 

 

912

 

 

 

912

 

Equipment and furniture

 

 

4,232

 

 

 

3,663

 

Construction in process

 

 

226

 

 

 

286

 

Automobile

 

 

66

 

 

 

66

 

 

 

 

10,165

 

 

 

9,636

 

Less: Accumulated depreciation

 

 

6,368

 

 

 

5,379

 

 

 

$

3,797

 

 

$

4,257

 

 

Depreciation expense was approximately $980,000 and $905,000 for the years ended December 31, 2023 and 2022, respectively.
v3.24.1
Intangible Assets
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

(5) Intangible Assets

 

The core deposit premium intangible asset had a gross carrying amount of $1.9 million and accumulated amortization of $765,000 at December 31, 2023. The core deposit premium intangible asset had a gross carrying amount of $1.9 million and accumulated amortization of $574,000 at December 31, 2022. Aggregate amortization expense for the years ended was $191,000 during 2023 and 2022.


The following table shows the estimated future amortization of the core deposit premium intangible asset for the next five years (in thousands). The projections of amortization expense are based on existing asset balances as of December 31, 2023.

 

Years ending December 31,





 

 

2024



 

 

$

191

 

2025



 



 

191

 

2026



 



 

191

 

2027



 



 

191

 

2028



 



 

191

 

Thereafter



 



 

193

 

Total



 

 

$

1,148

 

 





Goodwill acquired through acquisition was $17.2 million at December 31, 2023 and 2022. The Company tested for impairment during the year and determined there was no impairment of goodwill during 2023 and 2022. No impairment loss was recognized during 2023 and 2022.
v3.24.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases

(6) Leases

 

Substantially all of the leases in which the Company is the lessee are comprised of real estate for branches and office space with terms extending through 2027. All of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated balance sheet. With the adoption of Topic 842, operating lease arrangements are required to be recognized on the consolidated balance sheet as a ROU asset and a corresponding lease liability. The following table represents the consolidated balance sheet classification of the Company’s ROU assets and liabilities.

 

 

Classification

 

December 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

Other assets

 

$

1,746

 

 

$

2,216

 

Liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

Other liabilities

 

$

2,158

 

 

 

2,697

 

 

The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated balance sheet.

 

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2022, the rate for the remaining lease term as of January 1, 2022 was used.

 

For the years ended December 31, 2023 and 2022 operating lease cost was $550,000 and $531,000, respectively. As of December 31, 2023, the weighted average remaining lease term was 3.54 years and the weighted average discount rate was 1.88%. The following table represents the future maturities of the Company’s operating lease liabilities and other lease information.

 

(dollars in thousands)

 

 

 

Years ending December 31,

 

Lease Liability

 

2024

 

$

610

 

2025

 

 

627

 

2026

 

 

645

 

2027

 

 

352

 

Total lease payments

 

 

2,234

 

Less: interest

 

 

76

 

Present value of lease liabilities

 

$

2,158

 

 

Supplemental Lease Information:

 

December 31, 2023

 

 

December 31, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

(dollars in thousands)

 

Operating cash flows from operating leases (cash payments)

 

$

586

 

 

$

427

 

Operating lease right-of-use assets obtained in exchange for leases entered into during the period

 

 

—

 

 

 

285

 

 

 
v3.24.1
Deposits
 12 Months Ended
Dec. 31, 2023
Deposits [Abstract]  
Deposits

(7) Deposits

At December 31, 2023, contractual maturities of certificate of deposits are summarized as follows: (in thousands).

 

Years ending December 31,

 

 

 

2024

 

$

79,833

 

2025

 

 

73,530

 

2026

 

 

10,232

 

2027

 

 

16,032

 

2028

 

 

36,748

 

Thereafter

 

 

4,576

 

Total

 

$

220,951

 

 

The aggregate amounts of certificates of deposit of $250,000 or more, the standard FDIC deposit insurance coverage limit per depositor, were approximately $31.2 million and $26.4 million at December 31, 2023 and 2022, respectively. Due to the FDIC insurance coverage rules and limits for a depositor's specific group of deposit accounts, it is important to note not all deposits in excess of $250,000 are uninsured.

 

Brokered certificate of deposits ("CDs") total $107.3 million and $34.9 million at December 31, 2023 and 2022. At December 31, 2023 brokered CDs had a weighted average rate of 4.87% and a weighted average maturity of 28 months.

v3.24.1
Borrowings
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Borrowings

(8) Borrowings

At December 31, 2023 and 2022, the Bank had a line of credit totaling $64.0 million and $81.8 million, respectively, from the FHLB, which is reviewed annually by the FHLB.

The following advance were outstanding at December 31, 2023:

 

Advance Date

 

Advance

 

 

Interest Rate

 

 

Maturity

 

Rate

 

Call Feature

1/6/2023

 

$

10,000,000

 

 

 

4.22

%

 

1/6/2026

 

Fixed

 

N/A

1/6/2023

 

 

10,000,000

 

 

 

3.94

%

 

1/6/2028

 

Fixed

 

N/A

10/25/2023

 

 

10,000,000

 

 

 

3.99

%

 

10/25/2028

 

Convertible

 

4/25/2024

12/14/2023

 

 

10,000,000

 

 

 

3.28

%

 

12/14/2028

 

Convertible

 

6/14/2024

 

 

$

40,000,000

 

 

 

 

 

 

 

 

 

 

 

There were FHLB advances totaling $10.0 million consisting of advances with a book value of $10.0 million and no fair value adjustment as of December 31, 2022. For the year ended December 31, 2022, we incurred $647,000 in prepayment penalties to payoff acquired advances.

 

At December 31, 2023 and 2022, the FHLB advances were collateralized by certain loans which totaled approximately $392.6 million and $384.4 million at December 31, 2023 and 2022, respectively, and by the Company’s investment in FHLB stock which totaled approximately $2.5 million and $832,000 at December 31, 2023 and 2022, respectively.

 

The Company had one FHLB letter of credit of $12.5 million, used to collateralize public deposits, outstanding at both December 31, 2023 and 2022.

At December 31, 2023 and 2022 the Bank had unsecured federal funds lines of credit of $32.5 million, for which $ 0 and $25,000 was outstanding as of December 31, 2023 and 2022. The Bank also has a line of $67.4 million and $75.0 million with the Federal Reserve Bank of Atlanta Discount Window secured by $96.1 million and $111.6 million in loans as of December 31, 2023 and 2022, respectively. No amount was outstanding on the Discount Window as of December 31, 2023 or 2022.

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

(9) Income Taxes

The components of income tax expense for the years ended December 31, 2023 and 2022 are as follows: (in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Current

 

$

1,541

 

 

$

1,913

 

Deferred expense (benefit)

 

 

399

 

 

 

280

 

 

 

$

1,940

 

 

$

2,193

 

 

The difference between income tax expense and the amount computed by applying the statutory federal income tax rate to income before taxes for the years ended December 31, 2023 and 2022 is as follows: (dollars in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Statutory Federal tax rate

 

 

21

%

 

 

21

%

Pretax income at statutory rate

 

$

1,761

 

 

$

1,959

 

State income tax, net of federal benefit

 

 

218

 

 

 

257

 

Cash surrender value of life insurance

 

 

(76

)

 

 

(73

)

Permanent adjustments

 

 

53

 

 

 

13

 

Other

 

 

(16

)

 

 

37

 

Actual tax expense 23.6% and 24.0%, respectively

 

$

1,940

 

 

$

2,193

 

 

The following summarizes the sources and expected tax consequences of future deductions or income for income tax purposes which comprised the net deferred taxes at December 31, 2023 and 2022: (in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Deferred income tax assets:

 

 

 

 

 

 

Allowance for credit losses

 

$

2,426

 

 

$

2,382

 

Deferred compensation

 

 

566

 

 

 

682

 

Net operating losses

 

 

1,522

 

 

 

1,686

 

Unrealized loss on investment securities available-for-sale

 

 

2,145

 

 

 

2,254

 

Fair value adjustments

 

 

133

 

 

 

180

 

Right-of-use liability

 

 

551

 

 

 

689

 

Other

 

 

289

 

 

 

205

 

Total deferred income tax assets

 

 

7,632

 

 

 

8,078

 

Deferred income tax liabilities:

 

 

 

 

 

 

Core deposit intangible

 

 

293

 

 

 

342

 

Premises and equipment

 

 

558

 

 

 

492

 

Right-of -use asset

 

 

511

 

 

 

649

 

Other

 

 

135

 

 

 

110

 

Total deferred income tax liabilities

 

 

1,497

 

 

 

1,593

 

Net deferred income tax asset

 

$

6,135

 

 

$

6,485

 

 

The Company establishes a valuation allowance if, based on the weight of the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2023 and 2022, the Company believes that it will have sufficient earnings to realize its deferred tax asset and has not provided an allowance.

The Company is subject to federal income tax and income tax of state taxing authorities. The Company's federal and state income tax returns for the years ended December 31, 2023, 2022, 2021 and 2020 are open to audit under the statutes of limitations. The Company has approximately $5.7 million of Federal net operating loss carryforwards and $7.2 million of state net operating loss carryforwards that will begin to expire in 2032.

The Company adopted ASC 326 Current Expected Credit Losses ("CECL") in 2023 that resulted in the recognition of additional deferred tax assets of $158,000 through retained earnings.

Prior to January 1, 1996, the Bank was permitted under the Internal Revenue Code (the “Code”) a special bad debt deduction related to additions to tax bad debt reserves established for the purpose of absorbing losses. The provisions of the Code permitted the Bank to deduct from taxable income an allowance for bad debts based on the greater of a percentage of taxable income before such deduction or actual loss experience. Retained earnings at December 31, 2023 includes approximately $3.6 million for which no deferred Federal income tax liability has been recognized. The amounts represent an allocation of income for bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses would create income for tax purposes only, which would be subject to the then current corporate income tax rate.

In 1996, legislation was passed which eliminated the percentage of taxable income bad debt deduction for thrift institutions for tax years beginning after December 31, 1995. This legislation also requires a thrift to generally recapture the excess of its current tax reserves over its 1987 base year reserves whereas the base year reserves are frozen from taxation. No additional financial statement tax expense resulted from this legislation as the Bank had previously provided deferred taxes on this recaptured amount.
v3.24.1
Employee Stock Ownership Plan
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Employee Stock Ownership Plan

(10) Employee Stock Ownership Plan

The Company sponsors an employee stock ownership plan (“ESOP”) that covers all employees who meet certain service requirements. The Company makes annual contributions to the ESOP in amounts as defined by the plan document. These contributions are used to pay debt service and purchase additional shares. Certain ESOP shares are pledged as collateral for debt. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of debt service paid in the year.

In 2017, the ESOP borrowed $3.0 million payable to the Company for the purpose of purchasing shares of the Company’s common stock. A total of 295,499 shares were purchased with the loan proceeds as part of the Company’s initial stock offering. In January 2021, the ESOP borrowed $3.0 million payable to the Company for the purpose of purchasing additional shares of the Company’s common stock. A total of 225,721 shares were purchased with the loan proceeds as part of the Company’s stock offering. The balance of the note payable of the ESOP was $5.2 million and $5.3 million at December 31, 2023 and 2022, respectively. Because the source of the loan payments are contributions received by the ESOP from the Company, the related notes receivable is shown as a reduction of stockholders’ equity. As of December 31, 2023 and 2022, 101,000 shares and 80,000 shares have been released, respectively.

v3.24.1
Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Benefit Plans

(11) Benefit Plans

The Company has a profit sharing plan to provide retirement benefits for all employees. Contributions have been paid in the past to a trust fund annually by the Company in an amount determined by the board of directors. No contributions were made to the plan for the plan years ended December 31, 2023 and 2022 as the board of directors adopted an incentive program and paid cash bonuses rather than having contributions made to the profit sharing plan.

In 2014, the Company added a 401(k) feature to the profit sharing plan that covers substantially all employees. Under the terms of the feature, the Company may make matching contributions to the plan and the employees can contribute up to the maximum amounts allowed by Internal Revenue Service guidelines. The contribution expense related to the 401(k) feature totaled $217,000 and $183,000 for the plan years ended December 31, 2023 and 2022, respectively.

The Company sponsors a deferred compensation plan for directors. Under this plan, participating directors may defer their Board fees and receive the deferred amounts plus interest upon completion of their time as a director or at their election. The cumulative deferred contributions for the directors in the plan and earnings thereon at December 31, 2023 and 2022 totaled approximately $1.6 million and $2.0 million, respectively. These amounts are included in other liabilities in the accompanying consolidated balance sheets. No contributions have been made to the plan since 2015 as the plan was frozen as of June 30, 2015.

The Company has a supplemental executive retirement plan ("SERP") for one of its executives. This normal retirement benefit consists of a monthly benefit payment equal to the amount that is paid from the annuity contract designated under the SERP. The normal retirement benefit will commence on the first day of the second month following the date of the executive’s separation from service, payable monthly and continuing for the executive’s lifetime. The monthly benefit equals $8,333. If the executive dies after benefit payments have commenced but before receiving a total of 180 monthly payments, the Company shall pay to the executive’s beneficiary the greater of (i) the account balance or (ii) the present value of the remaining payments to satisfy a total of 180 monthly payments. Such death benefit shall be payable in a lump sum no later than 60 days from the date of death. If the executive dies after receiving 180 or more benefit payments, the SERP will terminate and no additional payments will be made. The accrued liability for the plan at December 31, 2023 and 2022 was approximately $501,000 and $480,000, respectively and is recorded in other liabilities. The related expense for the plan was approximately $21,000 in 2023 and 2022, respectively. There was no earnings from the increase in the value of the annuity for the years ending December 31, 2023 and 2022. The carrying value of the annuity was approximately $956,000 for the years ended December 31, 2023 and 2022 and is recorded in other assets.

v3.24.1
Stock-Based Compensation Plans
 12 Months Ended
Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award, Additional General Disclosures [Abstract]  
Stock-Based Compensation Plans

(12) Stock-Based Compensation Plans

The Company may grant stock options and restricted stock under its stock-based compensation plans to certain officers, employees and directors. These plans are administered by a committee of the board of directors. In 2018, with subsequent shareholder approval, the 2018 Equity Incentive Plan was approved up to 133,987 shares of common stock and up to 334,970 stock options.

In May 2022, shareholders approved the Company's 2022 Equity Incentive Plan, which authorizes the issuance of up to 148,060 shares of common stock pursuant to restricted stock grants and up to 370,150 shares of common stock pursuant to the exercise of options.

A Black-Scholes model is utilized to estimate the fair value of stock option grants, while the market price of the Company’s stock at the date of grant is used to estimate the fair value of restricted stock awards. The weighted average assumptions used in the Black-Scholes model for valuing stock option grants during 2023 were as follows: dividend yield of 0%, expected volatility of 27.59%, risk-free interest rate of 4.35%, expected average life of 7.37, and weighted average per share fair value of options of $5.92. The weighted average assumptions used during 2022 were as follows: dividend yield of 0%, expected volatility of 32.12%, risk-free interest rate of 2.84%, expected average life of 7.32, and weighted average per share fair value of options of $5.34.

A summary of the Company's stock option activity is summarized below.

Stock Options

 

Option Shares Outstanding

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Life (Years)

 

 

Aggregate Intrinsic Value (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2021

 

 

334,970

 

 

$

9.90

 

 

 

7.80

 

 

$

676

 

 Granted

 

 

221,500

 

 

 

14.86

 

 

 

 

 

 

 

 Exercise of stock options*

 

 

(20,097

)

 

 

11.14

 

 

 

 

 

 

 

 Forfeited

 

 

(51,854

)

 

 

11.64

 

 

 

 

 

 

 

 Outstanding - December 31, 2022

 

 

484,519

 

 

 

12.21

 

 

 

8.45

 

 

 

1,522

 

 Exercisable - December 31, 2022

 

 

149,372

 

 

 

10.00

 

 

 

6.70

 

 

 

741

 

 Granted

 

 

175,000

 

 

 

14.42

 

 

 

 

 

 

 

 Exercise of stock options*

 

 

(8,753

)

 

 

11.14

 

 

 

 

 

 

 

 Forfeited

 

 

(10,000

)

 

 

14.85

 

 

 

 

 

 

 

 Outstanding - December 31, 2023

 

 

640,766

 

 

 

12.58

 

 

 

7.75

 

 

 

1,419

 

 Exercisable - December 31, 2023

 

 

225,739

 

 

 

10.81

 

 

 

6.39

 

 

 

901

 

* The terms of the stock option agreements permit having a number of shares of stock withheld, the fair market value of which as of the date of exercise is sufficient to satisfy the exercise price and/or tax withholding requirements. All 2023 and 2022 exercises of stock options were exercised in this manner.

Intrinsic value represents the amount by which the fair market value of the underlying stock exceeds the exercise price of the stock options. A summary of the Company's restricted stock activity is summarized below.

 

Restricted Stock

 

 

 

 

 

Restricted Shares Outstanding

 

 

Weighted Average Grant Date Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2021

 

 

 

 

 

 

93,336

 

 

$

8.63

 

 Granted

 

 

 

 

 

 

114,000

 

 

 

14.85

 

 Vested

 

 

 

 

 

 

(26,787

)

 

 

8.90

 

 Forfeited

 

 

 

 

 

 

(11,045

)

 

 

11.14

 

 Outstanding - December 31, 2022

 

 

 

 

 

 

169,504

 

 

 

11.97

 

 Granted

 

 

 

 

 

 

45,101

 

 

 

14.47

 

 Vested*

 

 

 

 

 

 

(48,014

)

 

 

12.30

 

 Forfeited

 

 

 

 

 

 

—

 

 

 

—

 

 Outstanding - December 31, 2023

 

 

 

 

 

 

166,591

 

 

 

13.46

 

* The terms of the restricted stock agreements permit the surrender of shares of the Company upon vesting in order to satisfy applicable tax withholding requirements at the minimum statutory withholding rate, and accordingly, 3,417 and 3,070 shares were surrendered during the year ended December 31, 2023 and 2022, respectively.

The Company recognized approximately $1.1 million and $742,000 of stock-based compensation expense (included in salary and employee benefits on the consolidated statements of income) during 2023 and 2022, respectively, associated with its common stock awards granted to directors and officers. This expense is net of approximately $46,000 and $48,000 during the years ended December 31, 2023 and 2022 for shares surrendered to satisfy applicable tax withholding requirements.

As of December 31, 2023, there was approximately $3.8 million of unrecognized compensation cost related to equity award grants. The cost is expected to be recognized over the remaining vesting period of approximately 2.49 years.
v3.24.1
Regulatory Matters
 12 Months Ended
Dec. 31, 2023
Regulatory Matters [Abstract]  
Regulatory Matters

(13) Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of Common Equity Tier 1, Total and Tier I Capital to Risk-Weighted Assets and of Tier I Capital to Average Assets. Management believes, as of December 31, 2023 and 2022, that the Bank meets all capital adequacy requirements to which it is subject.

As of December 31, 2023 and 2022, the most recent notification from the Office of the Comptroller of the Currency categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum common equity Tier 1 risk-based, total risk-based, Tier I risk-based and Tier I leverage ratios as set forth below. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios for December 31, 2023 and 2022 are presented in the table below. (dollars in thousands)

 

 

 

 

 

 

 

 

 

For Capital

 

 

To Be Well Capitalized

 

 

 

 

 

 

 

 

 

Adequacy

 

 

Under Prompt Corrective

 

 

 

Actual

 

 

Purposes

 

 

Action Provisions

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

As of December 31, 2023:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 (to Risk Weighted Assets)

 

$

95,335

 

 

 

12.41

%

 

$

34,570

 

 

 

4.50

%

 

$

49,934

 

 

 

6.50

%

Total Capital (to Risk Weighted Assets)

 

 

104,858

 

 

 

13.65

%

 

 

61,455

 

 

 

8.00

%

 

 

76,819

 

 

 

10.00

%

Tier I Capital (to Risk Weighted Assets)

 

 

95,335

 

 

 

12.41

%

 

 

46,093

 

 

 

6.00

%

 

 

61,457

 

 

 

8.00

%

Tier I Capital (to Average Assets)

 

 

95,335

 

 

 

11.27

%

 

 

33,837

 

 

 

4.00

%

 

 

42,296

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 (to Risk Weighted Assets)

 

$

87,397

 

 

 

11.86

%

 

$

33,170

 

 

 

4.50

%

 

$

47,913

 

 

 

6.50

%

Total Capital (to Risk Weighted Assets)

 

 

96,612

 

 

 

13.11

%

 

 

58,970

 

 

 

8.00

%

 

 

73,712

 

 

 

10.00

%

Tier I Capital (to Risk Weighted Assets)

 

 

87,397

 

 

 

11.86

%

 

 

44,227

 

 

 

6.00

%

 

 

58,970

 

 

 

8.00

%

Tier I Capital (to Average Assets)

 

 

87,397

 

 

 

10.97

%

 

 

31,865

 

 

 

4.00

%

 

 

39,832

 

 

 

5.00

%

 
v3.24.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

(14) Related Party Transactions

The Company conducts transactions with its directors and executive officers, including companies in which they have beneficial interest, in the normal course of business. It is the policy of the Company that loan transactions with directors and executive officers be made on substantially the same terms as those prevailing at the time for comparable loans to other persons. The following is a summary of activity for related party loans: (in thousands).

 

 

 

For Year Ended
December 31, 2023

 

 

For Year Ended
December 31, 2022

 

Beginning balance

 

$

416

 

 

$

327

 

Change in directors

 

 

—

 

 

 

(257

)

Loans advanced

 

496

 

 

 

434

 

Repayments

 

 

(250

)

 

 

(88

)

Ending balance

 

$

662

 

 

$

416

 

The aggregate amount of deposits from directors and executive officers and their affiliates amounted to $3.8 million and $6.1 million at December 31, 2023 and 2022, respectively.
v3.24.1
Commitments
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments

(15) Commitments

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments could include commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

In most cases, the Bank requires collateral or other security to support financial instruments with credit risk.

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Financial instruments whose contract amounts
   represent credit risk: (in thousands)

 

 

 

 

 

 

Commitments to extend credit

 

$

79,949

 

 

$

90,297

 

Letters of credit

 

 

376

 

 

 

8

 

 

 

Commitments to extend credit are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank, upon extension of credit is based on management’s credit evaluation. Collateral held varies but may include unimproved and improved real estate, certificates of deposit, or personal property.
v3.24.1
Fair Value Measurements and Disclosures
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Disclosures

(16) Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. From time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans and other real estate owned. These nonrecurring fair value adjustments typically involve application of the lower of cost or market accounting or write-downs of individual assets. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

Fair Value Hierarchy

The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Following is a description of valuation methodologies used for assets and liabilities recorded at fair value.

Cash and Cash Equivalents

The carrying value of cash and cash equivalents is a reasonable estimate of fair value.

Investment Securities

Available-for-sale securities are recorded at market value and held-to-maturity securities are carried at amortized cost. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, and U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter market funds. Level 2 securities include mortgage-backed securities issued by government sponsored enterprises and state, county and municipal bonds. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Bank Owned Life Insurance

The carrying value of bank owned life insurance approximates fair value.

Other Investments

The carrying value of other investments includes FHLB Stock and FNBB stock and approximates fair value.

Loans

The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered individually evaluated and a specific reserve is established within the allowance for credit losses. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with GAAP. The fair value of impaired loans is estimated using one of three methods, including collateral value, market value of similar debt, and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. In accordance with GAAP, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price, the Company records the impaired loan as nonrecurring Level 2. When an appraised value is used or an appraisal is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3. For disclosure purposes, the fair value of fixed rate loans which are not considered impaired is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. For unimpaired variable rate loans, the carrying amount is a reasonable estimate of fair value for disclosure purposes.

Other Real Estate Owned

Other real estate properties are adjusted to fair value upon transfer of the loans to other real estate. Subsequently, other real estate assets are carried at fair value less estimated selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price, the Bank records the other real estate as nonrecurring Level 2. When an appraised value is used or an appraisal is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Bank records the other real estate asset as nonrecurring Level 3.

Deposits

The fair value of savings accounts, interest-bearing checking accounts, noninterest-bearing checking accounts and market rate checking accounts is the amount payable on demand at the reporting date, while the fair value of fixed maturity certificate of deposits is estimated by discounting the future cash flows using current rates at which comparable certificates would be issued.

FHLB Advances and Other Borrowings

Federal Home Loan Bank advances are carried at cost and the fair value is obtained from the Federal Home Loan Bank of Atlanta. Federal Funds Purchased are carried at cost and because they are overnight funds, the carrying value is a reasonable estimate of fair value.

Assets Recorded at Fair Value on a Recurring Basis

The Company’s only assets recorded at fair value on a recurring basis are available-for-sale securities that had a fair value of $48.6 million and $46.2 million at December 31, 2023 and 2022, respectively. They are classified as Level 2.

Assets Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below as of December 31, 2023 and 2022 (in thousands).

 

December 31, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other real estate owned

 

$

—

 

 

$

—

 

 

$

2,850

 

 

$

2,850

 

Collateral dependent loans

 

 

—

 

 

 

—

 

 

 

1,440

 

 

 

1,440

 

Total assets at fair value

 

$

—

 

 

$

—

 

 

$

4,290

 

 

$

4,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other real estate owned

 

$

—

 

 

$

—

 

 

$

2,901

 

 

$

2,901

 

Collateral dependent loans

 

 

—

 

 

 

—

 

 

 

5,659

 

 

 

5,659

 

Total assets at fair value

 

$

—

 

 

$

—

 

 

$

8,560

 

 

$

8,560

 

 

The carrying amounts and estimated fair values (in thousands) of the Company’s financial instruments at December 31, 2023 and 2022 are as follows:

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

Carrying

 

 

Estimated

 

 

Carrying

 

 

Estimated

 

 

 

 

Amount

 

 

Fair Value

 

 

Amount

 

 

Fair Value

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

50,025

 

 

$

50,025

 

 

$

26,324

 

 

$

26,324

 

Investment securities available-for-sale

Level 2

 

 

48,561

 

 

 

48,561

 

 

 

46,200

 

 

 

46,200

 

Investment securities held-to-maturity

Level 2

 

 

34,206

 

 

 

33,835

 

 

 

26,527

 

 

 

26,251

 

Other investments

Level 3

 

 

5,434

 

 

 

5,434

 

 

 

1,082

 

 

 

1,082

 

Loans, net

Level 3

 

 

650,955

 

 

 

635,957

 

 

 

636,909

 

 

 

611,687

 

Bank owned life insurance

Level 3

 

 

16,086

 

 

 

16,086

 

 

 

15,724

 

 

 

15,724

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

Level 2

 

 

674,443

 

 

 

673,854

 

 

 

657,172

 

 

 

653,577

 

FHLB advances and other borrowings

Level 3

 

 

40,000

 

 

 

39,830

 

 

 

10,025

 

 

 

10,025

 

 

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.
v3.24.1
Condensed Parent Company Only Financial Information
 12 Months Ended
Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract]  
Condensed Parent Company Only Financial Information

(17) Condensed Parent Company Only Financial Information

A condensed summary of Affinity Bancshares, Inc.’s financial information is shown.

Parent Only Condensed Balance Sheets

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

Cash in bank subsidiary

 

$

6,739

 

 

$

10,233

 

Investment in subsidiary, at underlying equity

 

 

108,269

 

 

 

100,314

 

Loan receivable - ESOP

 

 

5,134

 

 

 

5,292

 

Other assets

 

 

1,482

 

 

 

1,374

 

Total assets

 

$

121,624

 

 

$

117,213

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Other liabilities

 

$

108

 

 

$

110

 

Total liabilities

 

 

108

 

 

 

110

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Total stockholders' equity

 

 

121,516

 

 

 

117,103

 

Total liabilities and stockholders' equity

 

$

121,624

 

 

$

117,213

 

 

Parent Only Condensed Statements of Income

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Interest income:

 

 

 

 

 

 

Income on ESOP loan

 

$

172

 

 

$

177

 

Total interest income

 

 

172

 

 

 

177

 

Interest expense:

 

 

 

 

 

 

Interest expense on borrowings

 

 

—

 

 

 

—

 

Total interest expense

 

 

—

 

 

 

—

 

Net interest income

 

 

172

 

 

 

177

 

Noninterest expenses:

 

 

 

 

 

 

Other noninterest expense

 

 

540

 

 

 

555

 

Loss before income taxes

 

 

(368

)

 

 

(378

)

Income tax benefit

 

 

108

 

 

 

95

 

Loss before equity in undistributed earnings of Bank

 

 

(260

)

 

 

(283

)

Equity in undistributed earnings of Bank

 

 

6,708

 

 

 

7,417

 

Net income

 

$

6,448

 

 

$

7,134

 

 

 

Parent Only Condensed Statements of Cash Flows

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

6,448

 

 

$

7,134

 

Adjustments to reconcile net income to net cash used in operating activities

 

 

 

 

 

 

Equity in undistributed earnings of Bank

 

 

(6,708

)

 

 

(7,417

)

Other

 

 

(282

)

 

 

(328

)

Net cash used in operating activities

 

 

(542

)

 

 

(611

)

Cash flows from investing activities:

 

 

 

 

 

 

Payments from ESOP loan

 

 

331

 

 

 

331

 

Net cash provided by investing activities

 

 

331

 

 

 

331

 

Cash flows from financing activities:

 

 

 

 

 

 

Stock Repurchase

 

 

(3,283

)

 

 

(5,709

)

      Dividend from Bank

 

 

—

 

 

 

5,000

 

Net cash used in financing activities

 

 

(3,283

)

 

 

(709

)

Net change in cash and cash equivalents

 

 

(3,494

)

 

 

(989

)

Cash and cash equivalents at beginning of period

 

 

10,233

 

 

 

11,222

 

Cash and cash equivalents at end of period

 

$

6,739

 

 

$

10,233

 
v3.24.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Basis of Presentation

Basis of Presentation

The accounting principles followed by the Company and the methods of applying these standards and principles conform with accounting principles generally accepted in the United States of America (“GAAP”) and with general practices within the banking industry. In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ significantly from those estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for credit losses, the valuation of real estate acquired in connection with or in lieu of foreclosure on loans, and valuation allowances associated with deferred tax assets, the recognition of which are based on future taxable income.
Earnings Per Share

Earnings Per Share

 

Year Ended December 31,

 

 

2023

 

 

2022

 

 

(Dollars in thousands except per share data)

 

 

 

 

 

 

 

Net income

$

6,448

 

 

$

7,134

 

Weighted average common shares outstanding

 

6,476,767

 

 

 

6,669,389

 

Effect of dilutive common stock awards

 

80,286

 

 

 

92,382

 

Diluted weighted average common shares outstanding

 

6,557,053

 

 

 

6,761,771

 

Basic earnings per common share

$

1.00

 

 

$

1.07

 

Diluted earnings per common share

 

0.98

 

 

 

1.06

 
Adopted And Future Accounting Pronouncements

Adopted Accounting Pronouncements

Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), is intended to provide financial statement users with more decision-useful information related to expected credit losses on financial instruments and other commitments to extend credit by replacing the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 does not specify the method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. Additionally, the amendments of ASU 2016-13 require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The Company selected a third-party vendor to provide allowance for credit loss software as well as advisory services in developing a new methodology that would be compliant with ASU 2016-13. The Company adopted this ASU on January 1, 2023, and recorded a one-time entry

to retained earnings of $460,000, net of tax, primarily related to credit losses for unfunded commitments and credit losses on held-to-maturity securities.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU provides guidance on eliminating the requirement for classification of and disclosures around troubled debt restructurings. The purpose of this guidance is to eliminate unnecessary and overly-complex disclosures of loans that are already incorporated into the allowance for credit losses and related disclosures. This ASU further requires the disclosure of current-period gross charge-offs by year of origination. The updated guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for all entities which have implemented ASU 2016-13. The Company has historically had very few credit relationships classified as troubled debt restructurings, and as such the elimination of accounting for and disclosure of these types of credit relationships did not have a material impact to its financial statements upon implementation of ASU 2016-13 in the first quarter of 2023.

In March 2020, the FASB issued ASU No. 2020-04, Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. It provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The updated guidance was originally effective for all entities from March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06 which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company has been diligent in responding to reference rate reform and does not anticipate a material impact to its financial statements as a result.

New Accounting Pronouncements

ASU 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures" The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact on its disclosures.
Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and due from banks and interest-earning deposits in other depository institutions.
Investment Securities

Investment Securities

The Company classifies its investment securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities for which the Company has the ability and intent to hold the security until maturity. All other securities not included in trading or held-to-maturity are classified as available-for-sale.

Held-to-maturity securities are recorded at cost, adjusted for the amortization or accretion of premiums or discounts. Transfers of securities between categories are recorded at fair value at the date of transfer.

Management evaluates investment securities for other-than-temporary impairment on an annual basis. A decline in the market value of any held-to-maturity investment below cost that is deemed other-than-temporary is charged to earnings for the decline in value deemed to be credit related. The decline in value attributed to non-credit related factors is recognized in other comprehensive income and a new cost basis in the security is established.

Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as held-to-maturity are included in earnings and are derived using the specific identification method for determining the cost of securities sold.
Allowance for Credit Losses - Investment Securities Available-for-Sale and Investment Securities Held-to-Maturity

Allowance for Credit Losses ("ACL") - Investment Securities Available-for-Sale

 

For available-for-sale securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria

regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale securities that do not meet the aforementioned criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the securities by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in the comprehensive income. Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses. The guidance under ASC Topic 326 had no impact on the Bank’s available-for-sale debt securities at January 1, or December 31, 2023.

Changes in the allowance for credit losses are recorded as provision of (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Allowance for Credit Losses - Investment Securities Held-to-Maturity

 

Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses. Management classifies the held-to-maturity portfolio into the following major security types: U.S. Treasuries, government agency mortgage-backed, and corporate securities. The U.S. Treasuries and the Government agency mortgage-backed securities held by the Bank are issues by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. The corporate securities are comprised of investments in corporate bonds whose issuers are primarily banks. At December 31, 2023, these securities are all rated as investment grade.

Loans, Loan Fees and Interest Income on Loans

Loans, Loan Fees and Interest Income on Loans

Loans are stated at the principal amount outstanding, net of the allowance for credit losses. Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding.

Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts that the borrower’s financial condition is such that collection of interest is doubtful. When a loan is placed on nonaccrual status, previously accrued and uncollected interest is charged to interest income on loans. Generally, payments on nonaccrual loans are applied first to principal. Interest income is recorded after principal has been satisfied and as payments are received.

Loan fees, net of certain origination costs, are deferred and amortized over the lives of the respective loans as an adjustment to the yield.

A loan is impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price, or at the fair value of the collateral of the loan if the loan is collateral dependent. Estimated impairment losses for collateral dependent

loans are set up as specific reserves. Interest income on impaired loans is recognized using the cash-basis method of accounting during the time the loans are impaired.
Allowance for Credit Losses - Loans

Allowance for Credit Losses - Loans

 

The CECL framework requires an estimate of expected credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts. The following discussion provides a description of the methodology applied to calculate the ACL under CECL.

The ACL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses.


Management determines the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses. Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors. For the majority of loans and leases, the ACL is calculated using a discounted cash flow methodology applied at a loan level with a one-year reasonable and supportable forecast period and a two-year straight-line reversion period.


The ACL-loans is measured on a collective basis when similar risk characteristics exist. The Bank has identified the following portfolio segments and calculates the ACL for each using a discounted cash flow methodology at the loan level, with loss rates, prepayment assumptions and curtailment assumptions driven by each loan’s collateral type:

Commercial (secured by real estate - owner occupied)- Loans in this category are susceptible to business failure and general economic conditions.

Commercial (secured by real estate - non-owner occupied) - Common risks for this loan category are declines in general economic conditions, declines in real estate value, declines in occupancy rates, and lack of suitable alternative use for the property.

Commercial & industrial - Risks to this loan category include the inability to monitor the condition of the collateral, which often consists of inventory, accounts receivable and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.


Construction, land, and acquisition and development - Risks common to construction loans are cost overruns, changes in market demand for property, inadequate long-term financing arrangements and declines in real estate values.

Residential mortgage - Residential mortgage loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values.

Consumer installment - Risks common to consumer direct loans include unemployment and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.

When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

When the discounted cash flow method is used to determine the ACL, management adjusts the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The ACL on a loan modification is measured using the same method as all other loans held for investment, except that the original interest rate is used to discount the expected cash flows, not the rate specified within the restructuring.


Determining the Contractual Term: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a loan modification will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Bank.
Allowance for Credit Losses - Off-Balance Sheet Credit Exposures

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures

 

The Bank estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Bank. The allowance for credit losses on off-balance sheet credit exposures is adjusted through provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate is influenced by historical loss experience, adjusted for current risk characteristics, and economic forecasts.
Other Real Estate Owned

Other Real Estate Owned

Other real estate owned includes real estate acquired through foreclosure. Each other real estate property is initially recorded at its fair value less estimated costs to sell and is subsequently carried at fair value less estimated costs to sell. All foreclosed properties are actively marketed for sale. Fair value is principally based on independent appraisals performed by local credentialed appraisers. Any excess of the carrying value of the related loan over the fair value of the real estate at the date of foreclosure is charged against the allowance for credit losses. Properties in other real estate are re-evaluated annually. Any expense incurred in connection with holding such real estate or resulting from any write-downs in value subsequent to foreclosure is included in noninterest expense. When the other real estate property is sold, a gain or loss is recognized on the sale for the difference between the sales proceeds and the carrying amount of the property.
Premises and Equipment

Premises and Equipment

Premises and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings for the period. The cost of maintenance and repairs that do not improve or extend the useful life of the respective asset is charged to earnings as incurred, whereas significant renewals and improvements are capitalized. The range of estimated useful lives for premises and equipment are as follows:

 

Equipment and furniture

3 - 10 years

Buildings

40 years

Automobile

5 years

Leases

Leases

The lease liability is initially and subsequently recognized based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate. Increases (decreases) to variable lease payments due to subsequent changes in an index or rate are recorded as variable lease expense (income) in the future period in which they are incurred.


The discount rate used is the implicit rate in the lease contract, if it is readily determinable, or the Company’s incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, the Company uses the incremental borrowing rate based on the information available at the commencement date for all leases. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an
amount equal to the lease payments under similar terms and in a similar economic environment.


 

The right-of-use ("ROU") asset for operating leases is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term.


For all underlying classes of assets, the Company has elected to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Leases containing termination clauses in which either party may terminate the lease without cause and the notice period is less than 12 months are deemed short-term leases with lease costs included in short-term lease expense. The Company recognizes short-term lease cost on a straight-line basis over the lease term.
Bank Owned Life Insurance Bank Owned Life Insurance

The Bank has purchased life insurance policies on certain key executives and members of management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other changes or other amounts due that are probable at settlement.
Intangible Assets

Intangible Assets

Intangible assets attributable to the value of core deposits are stated at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated lives of the assets. The excess of purchase price over fair value of net assets acquired (goodwill) is not amortized.


The Company evaluates whether goodwill and other intangible assets may be impaired at least annually and whenever events or changes in circumstances indicate it is more likely than not the fair value of the reporting unit or asset is less than its carrying amount.
Income Taxes

Income Taxes

The Company uses the liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Additionally, this method requires the recognition of future tax benefits, such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities results in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing the realization of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.

The Company currently evaluates income tax positions judged to be uncertain. A loss contingency reserve is accrued if it is probable that the tax position will be challenged, it is probable that the future resolution of the challenge will confirm that a loss has been incurred, and the amount of such loss can be reasonably estimated.
Stock Compensation Plans

Stock Compensation Plans

Stock compensation awards are measured at the grant date based on the fair value of the awards and are recognized as compensation expense over the service period, which is also the vesting period.
Other Comprehensive Income

Other Comprehensive Income

Other comprehensive income is shown on the consolidated statements of comprehensive income. Accumulated other comprehensive loss consists of unrealized loss on securities available-for-sale, net of tax, and is shown on the consolidated statements of changes in stockholders’ equity.
Revenue Recognition

Revenue Recognition

The core revenue recognition principle requires the Company to recognize revenue to depict the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those services or products recognized as performance obligations are satisfied. The guidance includes a five-step model to apply to revenue recognition, consisting of the following: (1) identify the contract with a customer; (2) identify the performance obligation(s) within the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) within the contract; and (5) recognize revenue when (or as) the performance obligation(s) are/is satisfied.


The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed, charged either on a periodic basis or based on activity. Since performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying revenue recognition that significantly affects the determination of the amount and timing of revenue from contracts with customers.


The following significant revenue-generating transactions are within the scope of Accounting Standards Codification ("ASC") 606, which are presented in the consolidated statements of income as components of noninterest income:

Service charges on deposit accounts: The deposit contract obligates the Company to serve as a custodian of the customer’s deposited funds and is generally terminable at will by either party. The contract permits the customer to access the funds on deposit and request additional services for which the Company earns a fee, including non-sufficient funds and analysis charges, related to the deposit account. Income for deposit accounts is recognized over the statement cycle period (typically on a monthly basis) or at the time the service is provided, if additional services are requested.

Small Business Administration ("SBA") loan fees: Origination fees on SBA loans are recognized into income up to the amount of the cost of making the loan as is done with other loans. The remainder is deferred and taken into income over the life of the loan. A portion of proceeds from the sale of SBA loans is taken into income while the remainder is deferred over the life of the loan.

ATM fee income: A contract between the Company, as a card-issuing bank, and its customers whereby the Company receives a transaction fee from the merchant’s bank whenever a customer uses a debit or credit card to make a purchase. These fees are earned as the service is provided (i.e., when the customer uses a debit or ATM card).

Other noninterest income: Other noninterest income includes several items, such as wire transfer income, check cashing fees, the increase in cash surrender value of life insurance and safe deposit box rental fees. This income is generally recognized at the time the service is provided and/or the income is earned.
Reclassifications

Reclassification

Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on stockholders’ equity or net income.
FHLB Stock  
Investment Securities

Other Investments

The Federal Home Loan Bank (“FHLB”) stock is an investment that does not have a readily determinable fair value and is carried at cost. The Company is required to hold the FHLB stock as a member of the FHLB and transfer of the stock is substantially restricted.

The First National Bankers Bank (“FNBB”) stock is an investment that does not have a readily determinable fair value and is carried at cost. The Company acquired the stock when it borrowed funds at the holding company from FNBB.
v3.24.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Schedule of Calculations for Basic and Diluted Earnings Per Common Share

Earnings Per Share

 

Year Ended December 31,

 

 

2023

 

 

2022

 

 

(Dollars in thousands except per share data)

 

 

 

 

 

 

 

Net income

$

6,448

 

 

$

7,134

 

Weighted average common shares outstanding

 

6,476,767

 

 

 

6,669,389

 

Effect of dilutive common stock awards

 

80,286

 

 

 

92,382

 

Diluted weighted average common shares outstanding

 

6,557,053

 

 

 

6,761,771

 

Basic earnings per common share

$

1.00

 

 

$

1.07

 

Diluted earnings per common share

 

0.98

 

 

 

1.06

 
Schedule of Estimated Useful for Premises and Equipment The range of estimated useful lives for premises and equipment are as follows:

 

Equipment and furniture

3 - 10 years

Buildings

40 years

Automobile

5 years

v3.24.1
Investment Securities (Tables)
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Investment Securities Available-for-Sale

Investment securities available-for-sale at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Amortized

 

 

Gross
Unrealized

 

 

Gross
Unrealized

 

 

Estimated

 

December 31, 2023

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

U.S. Treasury securities

 

$

5,147

 

 

$

—

 

 

$

(649

)

 

$

4,498

 

Municipal securities - tax exempt

 

 

527

 

 

 

—

 

 

 

(85

)

 

 

442

 

Municipal securities - taxable

 

 

2,530

 

 

 

—

 

 

 

(395

)

 

 

2,135

 

U. S. Government sponsored enterprises

 

 

11,837

 

 

 

—

 

 

 

(3,207

)

 

 

8,630

 

Government agency mortgage-backed securities

 

 

18,643

 

 

 

—

 

 

 

(2,695

)

 

 

15,948

 

Corporate securities

 

 

18,355

 

 

 

30

 

 

 

(1,477

)

 

 

16,908

 

Total

 

$

57,039

 

 

$

30

 

 

$

(8,508

)

 

$

48,561

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

6,084

 

 

$

—

 

 

$

(776

)

 

$

5,308

 

Municipal securities - tax exempt

 

 

533

 

 

 

—

 

 

 

(96

)

 

 

437

 

Municipal securities - taxable

 

 

2,529

 

 

 

—

 

 

 

(485

)

 

 

2,044

 

U. S. Government sponsored enterprises

 

 

11,837

 

 

 

—

 

 

 

(3,499

)

 

 

8,338

 

Government agency mortgage-backed securities

 

 

20,555

 

 

 

—

 

 

 

(3,053

)

 

 

17,502

 

Corporate securities

 

 

13,571

 

 

 

5

 

 

 

(1,005

)

 

 

12,571

 

Total

 

$

55,109

 

 

$

5

 

 

$

(8,914

)

 

$

46,200

 
Schedule of Investment Securities Held-to-maturity

Investment securities held-to-maturity at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Amortized

 

 

Gross
Unrealized

 

 

Gross
Unrealized

 

 

 

 

 

Estimated Allowance for

 

December 31, 2023

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

 

Credit Losses

 

U.S. Treasury securities

 

$

999

 

 

$

—

 

 

$

(4

)

 

$

995

 

 

$

—

 

Government agency mortgage-backed securities

 

 

795

 

 

 

—

 

 

 

(76

)

 

 

719

 

 

 

—

 

Corporate securities

 

 

32,457

 

 

 

58

 

 

 

(394

)

 

 

32,121

 

 

 

(45

)

Total

 

$

34,251

 

 

$

58

 

 

$

(474

)

 

$

33,835

 

 

$

(45

)

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

998

 

 

$

—

 

 

$

—

 

 

$

998

 

 

$

—

 

Government agency mortgage-backed securities

 

 

837

 

 

 

—

 

 

 

(13

)

 

 

824

 

 

 

—

 

Corporate securities

 

 

24,692

 

 

 

4

 

 

 

(267

)

 

 

24,429

 

 

 

—

 

Total

 

$

26,527

 

 

$

4

 

 

$

(280

)

 

$

26,251

 

 

$

—

 
Schedule of Investment Securities Available-for-sale In An Unrealized Loss Position

Investment securities available-for-sale in an unrealized loss position at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

December 31, 2023

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

4,498

 

 

$

(649

)

 

$

4,498

 

 

$

(649

)

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

442

 

 

 

(85

)

 

 

442

 

 

 

(85

)

Municipal securities - taxable

 

 

—

 

 

 

—

 

 

 

2,135

 

 

 

(395

)

 

 

2,135

 

 

 

(395

)

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

8,630

 

 

 

(3,207

)

 

 

8,630

 

 

 

(3,207

)

Government agency mortgage-backed securities

 

 

—

 

 

 

—

 

 

 

15,948

 

 

 

(2,695

)

 

 

15,948

 

 

 

(2,695

)

Corporate securities

 

 

5,557

 

 

 

(214

)

 

 

8,774

 

 

 

(1,263

)

 

 

14,331

 

 

 

(1,477

)

Total

 

$

5,557

 

 

$

(214

)

 

$

40,427

 

 

$

(8,294

)

 

$

45,984

 

 

$

(8,508

)

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

4,331

 

 

$

(776

)

 

$

4,331

 

 

$

(776

)

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

437

 

 

 

(96

)

 

 

437

 

 

 

(96

)

Municipal securities - taxable

 

 

452

 

 

 

(32

)

 

 

1,592

 

 

 

(453

)

 

 

2,044

 

 

 

(485

)

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

8,338

 

 

 

(3,499

)

 

 

8,338

 

 

 

(3,499

)

Government agency mortgage-backed securities

 

 

5,598

 

 

 

(452

)

 

 

11,904

 

 

 

(2,601

)

 

 

17,502

 

 

 

(3,053

)

Corporate securities

 

 

4,541

 

 

 

(324

)

 

 

5,466

 

 

 

(681

)

 

 

10,007

 

 

 

(1,005

)

Total

 

$

10,591

 

 

$

(808

)

 

$

32,068

 

 

$

(8,106

)

 

$

42,659

 

 

$

(8,914

)
Schedule of Investment Securities Held-to-maturity In An Unrealized Loss Position

Investment securities held to maturity in an unrealized loss position at December 31, 2023 and 2022 are as follows: (in thousands)

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

Total

 

December 31, 2022

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

U.S. Treasury securities

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Municipal securities - tax exempt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Municipal securities - taxable

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

U. S. Government sponsored enterprises

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Government agency mortgage-backed securities

 

$

824

 

 

$

(13

)

 

$

—

 

 

$

—

 

 

$

824

 

 

$

(13

)

Corporate securities

 

 

16,772

 

 

 

(267

)

 

 

—

 

 

 

—

 

 

 

16,772

 

 

 

(267

)

Total

 

$

17,596

 

 

$

(280

)

 

$

—

 

 

$

—

 

 

$

17,596

 

 

$

(280

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Schedule of Amortized Cost and Estimated Fair Value of Investment Securities Available-for-Sale and Held to Maturity by Contractual Maturity

The amortized cost and estimated fair value of investment securities available-for-sale and held to maturity at December 31, 2023, by contractual maturity, are shown below. Maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. (in thousands):

 

 

 

Available-for-Sale

 

 

Held-to-Maturity

 

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

Within 1 year

 

$

—

 

 

$

—

 

 

$

999

 

 

$

995

 

Greater than 1 to 5 years

 

 

6,942

 

 

 

6,559

 

 

 

16,770

 

 

 

16,723

 

Greater than 5 to 10 years

 

 

21,112

 

 

 

18,599

 

 

 

15,687

 

 

 

15,398

 

Greater than 10 years

 

 

10,342

 

 

 

7,455

 

 

 

—

 

 

 

—

 

 

 

 

38,396

 

 

 

32,613

 

 

 

33,456

 

 

 

33,116

 

Government agency mortgage-backed securities

 

 

18,643

 

 

 

15,948

 

 

 

795

 

 

 

719

 

Total

 

$

57,039

 

 

$

48,561

 

 

$

34,251

 

 

$

33,835

 

 
v3.24.1
Loans and Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Summary of Major Classifications of Loans

Major classifications of loans, by collateral code, at December 31, 2023 and 2022 are summarized as follows: (in thousands)

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Commercial (secured by real estate - owner occupied)

 

$

157,691

 

 

$

162,989

 

Commercial (secured by real estate - non-owner occupied)

 

 

145,100

 

 

 

135,720

 

Commercial and industrial

 

 

140,407

 

 

 

147,775

 

Construction, land and acquisition & development

 

 

47,685

 

 

 

37,158

 

Residential mortgage 1-4 family

 

 

53,650

 

 

 

51,324

 

Consumer installment

 

 

115,343

 

 

 

111,268

 

Total

 

 

659,876

 

 

 

646,234

 

Less allowance for credit losses

 

 

(8,921

)

 

 

(9,325

)

Total loans, net

 

$

650,955

 

 

$

636,909

 

 

 
Summary of Allowance for Credit Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method

The following table presents the balance in the allowance for credit losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2023 and 2022: (in thousands)

 

December 31, 2023

 

Commercial
(Secured by Real
Estate - Owner Occupied)

 

 

Commercial
(Secured by Real Estate - Non-Owner Occupied)

 

 

Commercial
and Industrial

 

 

Construction,
Land and
Acquisition & Development

 

 

Residential
 Mortgage

 

 

Consumer
Installment

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance December 31, 2022

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Provision

 

 

(810

)

 

 

(781

)

 

 

(484

)

 

 

440

 

 

 

644

 

 

 

114

 

 

 

877

 

 

 

-

 

Charge-offs

 

 

(204

)

 

 

—

 

 

 

(3

)

 

 

—

 

 

 

—

 

 

 

(307

)

 

 

—

 

 

 

(514

)

Recoveries

 

 

8

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

49

 

 

 

52

 

 

 

—

 

 

 

110

 

Ending balance

 

$

1,397

 

 

$

1,298

 

 

$

1,806

 

 

$

927

 

 

$

1,038

 

 

$

1,534

 

 

$

921

 

 

$

8,921

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

2,701

 

 

$

1,980

 

 

$

2,242

 

 

$

162

 

 

$

502

 

 

$

969

 

 

$

3

 

 

$

8,559

 

Provision

 

 

(421

)

 

 

99

 

 

 

55

 

 

 

325

 

 

 

(196

)

 

 

801

 

 

 

41

 

 

 

704

 

Charge-offs

 

 

—

 

 

 

—

 

 

 

(26

)

 

 

—

 

 

 

—

 

 

 

(123

)

 

 

—

 

 

 

(149

)

Recoveries

 

 

123

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

39

 

 

 

28

 

 

 

—

 

 

 

211

 

Ending balance

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Ending allowance attributable to
   loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated

 

$

85

 

 

$

1

 

 

$

—

 

 

$

—

 

 

$

4

 

 

$

—

 

 

$

—

 

 

$

90

 

Collectively evaluated

 

 

2,318

 

 

 

2,078

 

 

 

2,292

 

 

 

487

 

 

 

341

 

 

 

1,675

 

 

 

44

 

 

 

9,235

 

Total ending allowance

 

$

2,403

 

 

$

2,079

 

 

$

2,292

 

 

$

487

 

 

$

345

 

 

$

1,675

 

 

$

44

 

 

$

9,325

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated

 

$

85

 

 

$

3,265

 

 

$

—

 

 

$

—

 

 

$

2,399

 

 

$

—

 

 

$

—

 

 

$

5,749

 

Collectively evaluated

 

 

162,904

 

 

 

132,455

 

 

 

147,775

 

 

 

37,158

 

 

 

48,925

 

 

 

111,268

 

 

 

—

 

 

 

640,485

 

Total loans

 

$

162,989

 

 

$

135,720

 

 

$

147,775

 

 

$

37,158

 

 

$

51,324

 

 

$

111,268

 

 

$

 

 

 

$

646,234

 
Summary of Impaired Loans

Impaired loans at December 31, 2022 were as follows: (in thousands)

 

December 31, 2022

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Allocated
Related
Allowance

 

 

Average
Recorded
Investment

 

 

Interest
Income
Recognized

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Commercial (secured by real estate - non-owner occupied)

 

 

3,089

 

 

 

3,089

 

 

 

—

 

 

 

3,145

 

 

 

—

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

 

1,526

 

 

 

1,526

 

 

 

—

 

 

 

1,596

 

 

 

5

 

Consumer installment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,615

 

 

 

4,615

 

 

 

—

 

 

 

4,741

 

 

 

5

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

 

85

 

 

 

85

 

 

 

85

 

 

 

90

 

 

 

4

 

Commercial (secured by real estate - non-owner occupied)

 

 

176

 

 

 

176

 

 

 

1

 

 

 

182

 

 

 

8

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

 

873

 

 

 

873

 

 

 

4

 

 

 

907

 

 

 

22

 

Consumer installment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,134

 

 

 

1,134

 

 

 

90

 

 

 

1,179

 

 

 

34

 

Total impaired loans

 

$

5,749

 

 

$

5,749

 

 

$

90

 

 

$

5,920

 

 

$

39

 

 

 
Summary of Recorded Investment in Past Due Loans, as Well as Nonaccrual Loans

The following table presents the aging of the recorded investment in past due loans, as well as the recorded investment in nonaccrual loans, as of December 31, 2023 and 2022 by class of loans: (in thousands)

 

December 31, 2023

 

30 -59
Days
 Past Due

 

 

60- 89
Days
 Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Accruing Loans
Past Due

 

 

Nonaccrual with Allowance

 

 

Nonaccrual without Allowance

 

 

Current

 

 

Total

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

157,691

 

 

$

157,691

 

Commercial (secured by real estate - non-owner occupied)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,505

 

 

 

140,595

 

 

 

145,100

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

140,407

 

 

 

140,407

 

Construction, land and acquisition &
   development

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

47,685

 

 

 

47,685

 

Residential mortgage

 

 

2,534

 

 

 

—

 

 

 

—

 

 

 

2,534

 

 

 

—

 

 

 

2,504

 

 

 

48,612

 

 

 

53,650

 

Consumer installment

 

 

246

 

 

 

—

 

 

 

—

 

 

 

246

 

 

 

—

 

 

 

417

 

 

 

114,680

 

 

 

115,343

 

Total

 

$

2,780

 

 

$

—

 

 

$

—

 

 

$

2,780

 

 

$

—

 

 

$

7,426

 

 

$

649,670

 

 

$

659,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

30 -59
Days
 Past Due

 

 

60- 89
Days
 Past Due

 

 

90 Days
or Greater
Past Due

 

 

Total Accruing Loans
Past Due

 

 

Nonaccrual

 

 

Current

 

 

Total

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

85

 

 

$

162,904

 

 

$

162,989

 

 

 

 

Commercial (secured by real estate - non-owner occupied)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,312

 

 

 

132,408

 

 

 

135,720

 

 

 

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

147,772

 

 

 

147,775

 

 

 

 

Construction, land and acquisition &
   development

 

 

85

 

 

 

—

 

 

 

—

 

 

 

85

 

 

 

—

 

 

 

37,073

 

 

 

37,158

 

 

 

 

Residential mortgage

 

 

2,341

 

 

 

533

 

 

 

249

 

 

 

3,123

 

 

 

3,185

 

 

 

45,016

 

 

 

51,324

 

 

 

 

Consumer installment

 

 

571

 

 

 

59

 

 

 

—

 

 

 

630

 

 

 

135

 

 

 

110,503

 

 

 

111,268

 

 

 

 

Total

 

$

2,997

 

 

$

592

 

 

$

249

 

 

$

3,838

 

 

$

6,720

 

 

$

635,676

 

 

$

646,234

 

 

 

 
Summary of Risk Category of Loans by Class of Loans

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans. As of December 31, 2023 and 2022, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: (in thousands):

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolvers

 

 

Total

 

Pass

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

$

11,210

 

 

$

23,441

 

 

$

29,832

 

 

$

22,982

 

 

$

11,287

 

 

$

49,744

 

 

$

8,863

 

 

$

157,359

 

Commercial (secured by real estate - non-owner occupied)

 

32,830

 

 

 

37,395

 

 

 

25,702

 

 

 

4,436

 

 

 

10,015

 

 

 

15,546

 

 

 

10,562

 

 

 

136,486

 

Commercial and industrial

 

22,473

 

 

 

21,590

 

 

 

27,252

 

 

 

14,764

 

 

 

16,697

 

 

 

25,317

 

 

 

12,314

 

 

 

140,407

 

Construction, land and acquisition & development

 

21,557

 

 

 

17,392

 

 

 

5,034

 

 

 

721

 

 

 

216

 

 

 

210

 

 

 

2,534

 

 

 

47,664

 

Residential mortgage

 

5,354

 

 

 

5,672

 

 

 

2,447

 

 

 

1,289

 

 

 

1,424

 

 

 

28,710

 

 

 

5,736

 

 

 

50,632

 

Consumer installment

 

42,601

 

 

 

46,869

 

 

 

17,488

 

 

 

4,866

 

 

 

1,919

 

 

 

247

 

 

 

543

 

 

 

114,533

 

Total pass

 

136,025

 

 

 

152,359

 

 

 

107,755

 

 

 

49,058

 

 

 

41,558

 

 

 

119,774

 

 

 

40,552

 

 

 

647,081

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

332

 

 

 

—

 

 

 

332

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

3,539

 

 

 

—

 

 

 

—

 

 

 

540

 

 

 

—

 

 

 

4,079

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

222

 

 

 

—

 

 

 

222

 

Consumer installment

 

73

 

 

 

190

 

 

 

99

 

 

 

21

 

 

 

31

 

 

 

—

 

 

 

—

 

 

 

414

 

Total special mention

 

73

 

 

 

190

 

 

 

3,638

 

 

 

21

 

 

 

31

 

 

 

1,094

 

 

 

—

 

 

 

5,047

 

Substandard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,535

 

 

 

-

 

 

 

4,535

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

Residential mortgage

 

—

 

 

 

202

 

 

 

108

 

 

 

107

 

 

 

113

 

 

 

2,266

 

 

 

—

 

 

 

2,796

 

Consumer installment

 

50

 

 

 

205

 

 

 

118

 

 

 

11

 

 

 

12

 

 

 

—

 

 

 

—

 

 

 

396

 

Total substandard

 

50

 

 

 

407

 

 

 

226

 

 

 

139

 

 

 

125

 

 

 

6,801

 

 

 

-

 

 

 

7,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

136,148

 

 

$

152,956

 

 

$

111,619

 

 

$

49,218

 

 

$

41,714

 

 

$

127,669

 

 

$

40,552

 

 

$

659,876

 

Current year to date period gross write-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial (secured by real estate - owner occupied)

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Commercial (secured by real estate - non-owner occupied)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

204

 

 

 

—

 

 

 

204

 

Commercial and industrial

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

3

 

Construction, land and acquisition & development

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Residential mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer installment

 

9

 

 

 

159

 

 

 

125

 

 

 

14

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

307

 

Total current period gross write-offs

$

9

 

 

$

159

 

 

$

125

 

 

$

14

 

 

$

—

 

 

$

207

 

 

$

—

 

 

$

514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

Pass

 

 

Special
Mention

 

 

Substandard

 

 

Doubtful/
Loss

 

 

Total

 

Commercial (secured by real estate - owner occupied)

 

$

162,541

 

 

$

362

 

 

$

86

 

 

$

—

 

 

$

162,989

 

Commercial (secured by real estate - non-owner occupied)

 

 

130,115

 

 

 

2,293

 

 

 

3,312

 

 

 

—

 

 

 

135,720

 

Commercial and industrial

 

 

147,772

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

147,775

 

Construction, land and acquisition & development

 

 

37,158

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

37,158

 

Residential mortgage

 

 

48,193

 

 

 

—

 

 

 

3,131

 

 

 

—

 

 

 

51,324

 

Consumer installment

 

 

111,049

 

 

 

84

 

 

 

135

 

 

 

—

 

 

 

111,268

 

Total

 

$

636,828

 

 

$

2,739

 

 

$

6,667

 

 

$

—

 

 

$

646,234

 
v3.24.1
Premises and Equipment (Tables)
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Summary of Premises and Equipment

Premises and equipment at year ended December 31, 2023 and 2022 are summarized as follows: (in thousands)

 

 

 

 

 

 

 

 

 

 

December 31,
2023

 

 

December 31,
2022

 

Land

 

$

373

 

 

$

373

 

Buildings

 

 

4,356

 

 

 

4,336

 

Leasehold improvements

 

 

912

 

 

 

912

 

Equipment and furniture

 

 

4,232

 

 

 

3,663

 

Construction in process

 

 

226

 

 

 

286

 

Automobile

 

 

66

 

 

 

66

 

 

 

 

10,165

 

 

 

9,636

 

Less: Accumulated depreciation

 

 

6,368

 

 

 

5,379

 

 

 

$

3,797

 

 

$

4,257

 

 
v3.24.1
Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Future Amortization Expense of Intangible Assets The following table shows the estimated future amortization of the core deposit premium intangible asset for the next five years (in thousands). The projections of amortization expense are based on existing asset balances as of December 31, 2023.

 

Years ending December 31,





 

 

2024



 

 

$

191

 

2025



 



 

191

 

2026



 



 

191

 

2027



 



 

191

 

2028



 



 

191

 

Thereafter



 



 

193

 

Total



 

 

$

1,148

 

 
v3.24.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Schedule of Consolidated Balance Sheet Classification of ROU Assets and Liabilities The following table represents the consolidated balance sheet classification of the Company’s ROU assets and liabilities.

 

 

Classification

 

December 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

Other assets

 

$

1,746

 

 

$

2,216

 

Liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

Other liabilities

 

$

2,158

 

 

 

2,697

 
Summary of Future Maturities of Operating lease Liabilities and Other Lease Information The following table represents the future maturities of the Company’s operating lease liabilities and other lease information.

 

(dollars in thousands)

 

 

 

Years ending December 31,

 

Lease Liability

 

2024

 

$

610

 

2025

 

 

627

 

2026

 

 

645

 

2027

 

 

352

 

Total lease payments

 

 

2,234

 

Less: interest

 

 

76

 

Present value of lease liabilities

 

$

2,158

 

 

Supplemental Lease Information:

 

December 31, 2023

 

 

December 31, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

(dollars in thousands)

 

Operating cash flows from operating leases (cash payments)

 

$

586

 

 

$

427

 

Operating lease right-of-use assets obtained in exchange for leases entered into during the period

 

 

—

 

 

 

285

 
v3.24.1
Deposits (Tables)
 12 Months Ended
Dec. 31, 2023
Deposits [Abstract]  
Summary of Contractual Maturities of Certificate of Deposits

At December 31, 2023, contractual maturities of certificate of deposits are summarized as follows: (in thousands).

 

Years ending December 31,

 

 

 

2024

 

$

79,833

 

2025

 

 

73,530

 

2026

 

 

10,232

 

2027

 

 

16,032

 

2028

 

 

36,748

 

Thereafter

 

 

4,576

 

Total

 

$

220,951

 
v3.24.1
Borrowings (Tables)
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Schedule of Federal Home Loan Bank of Atlanta (FHLB) Advances

The following advance were outstanding at December 31, 2023:

 

Advance Date

 

Advance

 

 

Interest Rate

 

 

Maturity

 

Rate

 

Call Feature

1/6/2023

 

$

10,000,000

 

 

 

4.22

%

 

1/6/2026

 

Fixed

 

N/A

1/6/2023

 

 

10,000,000

 

 

 

3.94

%

 

1/6/2028

 

Fixed

 

N/A

10/25/2023

 

 

10,000,000

 

 

 

3.99

%

 

10/25/2028

 

Convertible

 

4/25/2024

12/14/2023

 

 

10,000,000

 

 

 

3.28

%

 

12/14/2028

 

Convertible

 

6/14/2024

 

 

$

40,000,000

 

 

 

 

 

 

 

 

 

 
v3.24.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Summary of Components of Income Tax Expense

The components of income tax expense for the years ended December 31, 2023 and 2022 are as follows: (in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Current

 

$

1,541

 

 

$

1,913

 

Deferred expense (benefit)

 

 

399

 

 

 

280

 

 

 

$

1,940

 

 

$

2,193

 
Schedule of Difference Between Income Tax Expense and Amount Computed by Applying Statutory Federal Income Taxes Rate to Income Before Taxes

The difference between income tax expense and the amount computed by applying the statutory federal income tax rate to income before taxes for the years ended December 31, 2023 and 2022 is as follows: (dollars in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Statutory Federal tax rate

 

 

21

%

 

 

21

%

Pretax income at statutory rate

 

$

1,761

 

 

$

1,959

 

State income tax, net of federal benefit

 

 

218

 

 

 

257

 

Cash surrender value of life insurance

 

 

(76

)

 

 

(73

)

Permanent adjustments

 

 

53

 

 

 

13

 

Other

 

 

(16

)

 

 

37

 

Actual tax expense 23.6% and 24.0%, respectively

 

$

1,940

 

 

$

2,193

 
Schedule of Net Deferred Taxes

The following summarizes the sources and expected tax consequences of future deductions or income for income tax purposes which comprised the net deferred taxes at December 31, 2023 and 2022: (in thousands)

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Deferred income tax assets:

 

 

 

 

 

 

Allowance for credit losses

 

$

2,426

 

 

$

2,382

 

Deferred compensation

 

 

566

 

 

 

682

 

Net operating losses

 

 

1,522

 

 

 

1,686

 

Unrealized loss on investment securities available-for-sale

 

 

2,145

 

 

 

2,254

 

Fair value adjustments

 

 

133

 

 

 

180

 

Right-of-use liability

 

 

551

 

 

 

689

 

Other

 

 

289

 

 

 

205

 

Total deferred income tax assets

 

 

7,632

 

 

 

8,078

 

Deferred income tax liabilities:

 

 

 

 

 

 

Core deposit intangible

 

 

293

 

 

 

342

 

Premises and equipment

 

 

558

 

 

 

492

 

Right-of -use asset

 

 

511

 

 

 

649

 

Other

 

 

135

 

 

 

110

 

Total deferred income tax liabilities

 

 

1,497

 

 

 

1,593

 

Net deferred income tax asset

 

$

6,135

 

 

$

6,485

 

 
v3.24.1
Stock-Based Compensation Plans (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award, Additional General Disclosures [Abstract]  
Summary of Stock Option Activity

A summary of the Company's stock option activity is summarized below.

Stock Options

 

Option Shares Outstanding

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Life (Years)

 

 

Aggregate Intrinsic Value (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2021

 

 

334,970

 

 

$

9.90

 

 

 

7.80

 

 

$

676

 

 Granted

 

 

221,500

 

 

 

14.86

 

 

 

 

 

 

 

 Exercise of stock options*

 

 

(20,097

)

 

 

11.14

 

 

 

 

 

 

 

 Forfeited

 

 

(51,854

)

 

 

11.64

 

 

 

 

 

 

 

 Outstanding - December 31, 2022

 

 

484,519

 

 

 

12.21

 

 

 

8.45

 

 

 

1,522

 

 Exercisable - December 31, 2022

 

 

149,372

 

 

 

10.00

 

 

 

6.70

 

 

 

741

 

 Granted

 

 

175,000

 

 

 

14.42

 

 

 

 

 

 

 

 Exercise of stock options*

 

 

(8,753

)

 

 

11.14

 

 

 

 

 

 

 

 Forfeited

 

 

(10,000

)

 

 

14.85

 

 

 

 

 

 

 

 Outstanding - December 31, 2023

 

 

640,766

 

 

 

12.58

 

 

 

7.75

 

 

 

1,419

 

 Exercisable - December 31, 2023

 

 

225,739

 

 

 

10.81

 

 

 

6.39

 

 

 

901

 

* The terms of the stock option agreements permit having a number of shares of stock withheld, the fair market value of which as of the date of exercise is sufficient to satisfy the exercise price and/or tax withholding requirements. All 2023 and 2022 exercises of stock options were exercised in this manner.
Summary of Restricted Stock Activity A summary of the Company's restricted stock activity is summarized below.

 

Restricted Stock

 

 

 

 

 

Restricted Shares Outstanding

 

 

Weighted Average Grant Date Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 Outstanding - December 31, 2021

 

 

 

 

 

 

93,336

 

 

$

8.63

 

 Granted

 

 

 

 

 

 

114,000

 

 

 

14.85

 

 Vested

 

 

 

 

 

 

(26,787

)

 

 

8.90

 

 Forfeited

 

 

 

 

 

 

(11,045

)

 

 

11.14

 

 Outstanding - December 31, 2022

 

 

 

 

 

 

169,504

 

 

 

11.97

 

 Granted

 

 

 

 

 

 

45,101

 

 

 

14.47

 

 Vested*

 

 

 

 

 

 

(48,014

)

 

 

12.30

 

 Forfeited

 

 

 

 

 

 

—

 

 

 

—

 

 Outstanding - December 31, 2023

 

 

 

 

 

 

166,591

 

 

 

13.46

 

* The terms of the restricted stock agreements permit the surrender of shares of the Company upon vesting in order to satisfy applicable tax withholding requirements at the minimum statutory withholding rate, and accordingly, 3,417 and 3,070 shares were surrendered during the year ended December 31, 2023 and 2022, respectively.

v3.24.1
Regulatory Matters (Tables)
 12 Months Ended
Dec. 31, 2023
Regulatory Matters [Abstract]  
Schedule of Bank's Actual Capital Amounts And Ratios

The Bank’s actual capital amounts and ratios for December 31, 2023 and 2022 are presented in the table below. (dollars in thousands)

 

 

 

 

 

 

 

 

 

For Capital

 

 

To Be Well Capitalized

 

 

 

 

 

 

 

 

 

Adequacy

 

 

Under Prompt Corrective

 

 

 

Actual

 

 

Purposes

 

 

Action Provisions

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

As of December 31, 2023:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 (to Risk Weighted Assets)

 

$

95,335

 

 

 

12.41

%

 

$

34,570

 

 

 

4.50

%

 

$

49,934

 

 

 

6.50

%

Total Capital (to Risk Weighted Assets)

 

 

104,858

 

 

 

13.65

%

 

 

61,455

 

 

 

8.00

%

 

 

76,819

 

 

 

10.00

%

Tier I Capital (to Risk Weighted Assets)

 

 

95,335

 

 

 

12.41

%

 

 

46,093

 

 

 

6.00

%

 

 

61,457

 

 

 

8.00

%

Tier I Capital (to Average Assets)

 

 

95,335

 

 

 

11.27

%

 

 

33,837

 

 

 

4.00

%

 

 

42,296

 

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 (to Risk Weighted Assets)

 

$

87,397

 

 

 

11.86

%

 

$

33,170

 

 

 

4.50

%

 

$

47,913

 

 

 

6.50

%

Total Capital (to Risk Weighted Assets)

 

 

96,612

 

 

 

13.11

%

 

 

58,970

 

 

 

8.00

%

 

 

73,712

 

 

 

10.00

%

Tier I Capital (to Risk Weighted Assets)

 

 

87,397

 

 

 

11.86

%

 

 

44,227

 

 

 

6.00

%

 

 

58,970

 

 

 

8.00

%

Tier I Capital (to Average Assets)

 

 

87,397

 

 

 

10.97

%

 

 

31,865

 

 

 

4.00

%

 

 

39,832

 

 

 

5.00

%
v3.24.1
Related Party Transactions (Tables)
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Summary of Activity for Related Party Loans The following is a summary of activity for related party loans: (in thousands).

 

 

 

For Year Ended
December 31, 2023

 

 

For Year Ended
December 31, 2022

 

Beginning balance

 

$

416

 

 

$

327

 

Change in directors

 

 

—

 

 

 

(257

)

Loans advanced

 

496

 

 

 

434

 

Repayments

 

 

(250

)

 

 

(88

)

Ending balance

 

$

662

 

 

$

416

 
v3.24.1
Commitments (Tables)
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Financial Instruments Contract Amounts Represent Credit Risk

In most cases, the Bank requires collateral or other security to support financial instruments with credit risk.

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Financial instruments whose contract amounts
   represent credit risk: (in thousands)

 

 

 

 

 

 

Commitments to extend credit

 

$

79,949

 

 

$

90,297

 

Letters of credit

 

 

376

 

 

 

8

 
v3.24.1
Fair Value Measurements and Disclosures (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Assets Measured at Fair Value on Nonrecurring Basis Assets measured at fair value on a nonrecurring basis are included in the table below as of December 31, 2023 and 2022 (in thousands).

 

December 31, 2023

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other real estate owned

 

$

—

 

 

$

—

 

 

$

2,850

 

 

$

2,850

 

Collateral dependent loans

 

 

—

 

 

 

—

 

 

 

1,440

 

 

 

1,440

 

Total assets at fair value

 

$

—

 

 

$

—

 

 

$

4,290

 

 

$

4,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other real estate owned

 

$

—

 

 

$

—

 

 

$

2,901

 

 

$

2,901

 

Collateral dependent loans

 

 

—

 

 

 

—

 

 

 

5,659

 

 

 

5,659

 

Total assets at fair value

 

$

—

 

 

$

—

 

 

$

8,560

 

 

$

8,560

 
Schedule of Carrying Amounts and Estimated Fair Values of Company's Financial Instruments

The carrying amounts and estimated fair values (in thousands) of the Company’s financial instruments at December 31, 2023 and 2022 are as follows:

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

Carrying

 

 

Estimated

 

 

Carrying

 

 

Estimated

 

 

 

 

Amount

 

 

Fair Value

 

 

Amount

 

 

Fair Value

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

Level 1

 

$

50,025

 

 

$

50,025

 

 

$

26,324

 

 

$

26,324

 

Investment securities available-for-sale

Level 2

 

 

48,561

 

 

 

48,561

 

 

 

46,200

 

 

 

46,200

 

Investment securities held-to-maturity

Level 2

 

 

34,206

 

 

 

33,835

 

 

 

26,527

 

 

 

26,251

 

Other investments

Level 3

 

 

5,434

 

 

 

5,434

 

 

 

1,082

 

 

 

1,082

 

Loans, net

Level 3

 

 

650,955

 

 

 

635,957

 

 

 

636,909

 

 

 

611,687

 

Bank owned life insurance

Level 3

 

 

16,086

 

 

 

16,086

 

 

 

15,724

 

 

 

15,724

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

Level 2

 

 

674,443

 

 

 

673,854

 

 

 

657,172

 

 

 

653,577

 

FHLB advances and other borrowings

Level 3

 

 

40,000

 

 

 

39,830

 

 

 

10,025

 

 

 

10,025

 
v3.24.1
Condensed Parent Company Only Financial Information (Tables)
 12 Months Ended
Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract]  
Condensed Summary of Financial Information

A condensed summary of Affinity Bancshares, Inc.’s financial information is shown.

Parent Only Condensed Balance Sheets

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

Cash in bank subsidiary

 

$

6,739

 

 

$

10,233

 

Investment in subsidiary, at underlying equity

 

 

108,269

 

 

 

100,314

 

Loan receivable - ESOP

 

 

5,134

 

 

 

5,292

 

Other assets

 

 

1,482

 

 

 

1,374

 

Total assets

 

$

121,624

 

 

$

117,213

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Other liabilities

 

$

108

 

 

$

110

 

Total liabilities

 

 

108

 

 

 

110

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Total stockholders' equity

 

 

121,516

 

 

 

117,103

 

Total liabilities and stockholders' equity

 

$

121,624

 

 

$

117,213

 

 

Parent Only Condensed Statements of Income

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Interest income:

 

 

 

 

 

 

Income on ESOP loan

 

$

172

 

 

$

177

 

Total interest income

 

 

172

 

 

 

177

 

Interest expense:

 

 

 

 

 

 

Interest expense on borrowings

 

 

—

 

 

 

—

 

Total interest expense

 

 

—

 

 

 

—

 

Net interest income

 

 

172

 

 

 

177

 

Noninterest expenses:

 

 

 

 

 

 

Other noninterest expense

 

 

540

 

 

 

555

 

Loss before income taxes

 

 

(368

)

 

 

(378

)

Income tax benefit

 

 

108

 

 

 

95

 

Loss before equity in undistributed earnings of Bank

 

 

(260

)

 

 

(283

)

Equity in undistributed earnings of Bank

 

 

6,708

 

 

 

7,417

 

Net income

 

$

6,448

 

 

$

7,134

 

Parent Only Condensed Statements of Cash Flows

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

6,448

 

 

$

7,134

 

Adjustments to reconcile net income to net cash used in operating activities

 

 

 

 

 

 

Equity in undistributed earnings of Bank

 

 

(6,708

)

 

 

(7,417

)

Other

 

 

(282

)

 

 

(328

)

Net cash used in operating activities

 

 

(542

)

 

 

(611

)

Cash flows from investing activities:

 

 

 

 

 

 

Payments from ESOP loan

 

 

331

 

 

 

331

 

Net cash provided by investing activities

 

 

331

 

 

 

331

 

Cash flows from financing activities:

 

 

 

 

 

 

Stock Repurchase

 

 

(3,283

)

 

 

(5,709

)

      Dividend from Bank

 

 

—

 

 

 

5,000

 

Net cash used in financing activities

 

 

(3,283

)

 

 

(709

)

Net change in cash and cash equivalents

 

 

(3,494

)

 

 

(989

)

Cash and cash equivalents at beginning of period

 

 

10,233

 

 

 

11,222

 

Cash and cash equivalents at end of period

 

$

6,739

 

 

$

10,233

 
v3.24.1
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
Dec. 31, 2023
Jan. 01, 2023
Dec. 31, 2022
Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]        
Related to credit losses for unfunded commitments $ 8,921,000   $ 9,325,000 $ 8,559,000
ASU 2016-13        
Summary Of Significant Accounting Policies [Line Items]        
Change in accounting principle, accounting standards update, adopted true      
Change in Accounting Principle, Accounting Standards Update, Adoption Date Jan. 01, 2023      
ASU 2016-13 | Unfunded Commmitments        
Summary Of Significant Accounting Policies [Line Items]        
Related to credit losses for unfunded commitments   $ 460,000    
v3.24.1
Summary of Significant Accounting Policies - Schedule of Calculations for Basic and Diluted Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Net income $ 6,448 $ 7,134
Weighted average common shares outstanding 6,476,767 6,669,389
Effect of dilutive common stock awards 80,286 92,382
Diluted weighted average common shares outstanding 6,557,053 6,761,771
Basic earnings per common share $ 1 $ 1.07
Diluted earnings per common share $ 0.98 $ 1.06
v3.24.1
Summary of Significant Accounting Policies - Schedule of Estimated Useful for Premises and Equipment (Details)
Dec. 31, 2023
Equipment and Furniture | Minimum  
Property Plant And Equipment [Line Items]  
Estimated useful lives for premises and equipment 3 years
Equipment and Furniture | Maximum  
Property Plant And Equipment [Line Items]  
Estimated useful lives for premises and equipment 10 years
Buildings  
Property Plant And Equipment [Line Items]  
Estimated useful lives for premises and equipment 40 years
Automobile  
Property Plant And Equipment [Line Items]  
Estimated useful lives for premises and equipment 5 years
v3.24.1
Investment Securities - Schedule of Investment Securities Available-for-Sale (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost $ 57,039 $ 55,109
Investment securities available-for-sale, Gross Unrealized Gains 30 5
Investment securities available-for-sale, Gross Unrealized Losses (8,508) (8,914)
Investment securities available-for-sale, Estimated Fair Value 48,561 46,200
U.S. Treasury Securities    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 5,147 6,084
Investment securities available-for-sale, Gross Unrealized Losses (649) (776)
Investment securities available-for-sale, Estimated Fair Value 4,498 5,308
Municipal Securities - Tax Exempt    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 527 533
Investment securities available-for-sale, Gross Unrealized Losses (85) (96)
Investment securities available-for-sale, Estimated Fair Value 442 437
Municipal Securities - Taxable    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 2,530 2,529
Investment securities available-for-sale, Gross Unrealized Losses (395) (485)
Investment securities available-for-sale, Estimated Fair Value 2,135 2,044
U.S. Government Sponsored Enterprises    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 11,837 11,837
Investment securities available-for-sale, Gross Unrealized Losses (3,207) (3,499)
Investment securities available-for-sale, Estimated Fair Value 8,630 8,338
Government Agency Mortgage-Backed Securities    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 18,643 20,555
Investment securities available-for-sale, Gross Unrealized Losses (2,695) (3,053)
Investment securities available-for-sale, Estimated Fair Value 15,948 17,502
Corporate Securities    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 18,355 13,571
Investment securities available-for-sale, Gross Unrealized Gains 30 5
Investment securities available-for-sale, Gross Unrealized Losses (1,477) (1,005)
Investment securities available-for-sale, Estimated Fair Value $ 16,908 $ 12,571
v3.24.1
Investment Securities - Schedule of Investment Securities Held-to-Maturity (Details) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held-to-maturity, Amortized Cost $ 34,251,000 $ 26,527,000
Investment securities held -to-maturity, Gross Unrealized Gain 58,000 4,000
Investment securities held -to-maturity, Gross Unrealized Losses (474,000) (280,000)
Investment securities held-to-maturity estimated fair value 33,835,000 26,251,000
Investment securities held-to-maturity estimated allowance for credit losses (45,000)  
U.S. Treasury Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held-to-maturity, Amortized Cost 999,000 998,000
Investment securities held -to-maturity, Gross Unrealized Losses (4,000)  
Investment securities held-to-maturity estimated fair value 995,000 998,000
Government Agency Mortgage-Backed Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held-to-maturity, Amortized Cost 795,000 837,000
Investment securities held -to-maturity, Gross Unrealized Losses (76,000) (13,000)
Investment securities held-to-maturity estimated fair value 719,000 824,000
Corporate Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held-to-maturity, Amortized Cost 32,457,000 24,692,000
Investment securities held -to-maturity, Gross Unrealized Gain 58,000 4,000
Investment securities held -to-maturity, Gross Unrealized Losses (394,000) (267,000)
Investment securities held-to-maturity estimated fair value 32,121,000 $ 24,429,000
Investment securities held-to-maturity estimated allowance for credit losses $ (45,000)  
v3.24.1
Investment Securities - Investment Securities Available-For-Sale in An Unrealized Loss Position (Details) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale Less Than 12 Months Fair Value $ 5,557,000 $ 10,591,000
Investment securities available-for-sale Less Than 12 Months Unrealized Loss (214,000) (808,000)
Investment securities available-for-sale 12 Months or More Fair Value 40,427,000 32,068,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (8,294,000) (8,106,000)
Investment securities available-for-sale Total Fair Value 45,984,000 42,659,000
Investment securities available-for-sale Total Unrealized Loss (8,508,000) (8,914,000)
U.S. Treasury Securities    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale 12 Months or More Fair Value 4,498,000 4,331,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (649,000) (776,000)
Investment securities available-for-sale Total Fair Value 4,498,000 4,331,000
Investment securities available-for-sale Total Unrealized Loss (649,000) (776,000)
Municipal Securities - Tax Exempt    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale 12 Months or More Fair Value 442,000 437,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (85,000) (96,000)
Investment securities available-for-sale Total Fair Value 442,000 437,000
Investment securities available-for-sale Total Unrealized Loss (85,000) (96,000)
Municipal Securities - Taxable    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale Less Than 12 Months Fair Value   452,000
Investment securities available-for-sale Less Than 12 Months Unrealized Loss   (32,000)
Investment securities available-for-sale 12 Months or More Fair Value 2,135,000 1,592,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (395,000) (453,000)
Investment securities available-for-sale Total Fair Value 2,135,000 2,044,000
Investment securities available-for-sale Total Unrealized Loss (395,000) (485,000)
U.S. Government Sponsored Enterprises    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale 12 Months or More Fair Value 8,630,000 8,338,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (3,207,000) (3,499,000)
Investment securities available-for-sale Total Fair Value 8,630,000 8,338,000
Investment securities available-for-sale Total Unrealized Loss (3,207,000) (3,499,000)
Government Agency Mortgage-Backed Securities    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale Less Than 12 Months Fair Value   5,598,000
Investment securities available-for-sale Less Than 12 Months Unrealized Loss   (452,000)
Investment securities available-for-sale 12 Months or More Fair Value 15,948,000 11,904,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (2,695,000) (2,601,000)
Investment securities available-for-sale Total Fair Value 15,948,000 17,502,000
Investment securities available-for-sale Total Unrealized Loss (2,695,000) (3,053,000)
Corporate Securities    
Debt Securities, Available-for-Sale [Line Items]    
Investment securities available-for-sale Less Than 12 Months Fair Value 5,557,000 4,541,000
Investment securities available-for-sale Less Than 12 Months Unrealized Loss (214,000) (324,000)
Investment securities available-for-sale 12 Months or More Fair Value 8,774,000 5,466,000
Investment securities available-for-sale 12 Months or More Unrealized Loss (1,263,000) (681,000)
Investment securities available-for-sale Total Fair Value 14,331,000 10,007,000
Investment securities available-for-sale Total Unrealized Loss $ (1,477,000) $ (1,005,000)
v3.24.1
Investment Securities - Investment Securities Held to Maturity in An Unrealized Loss Position (Details) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held to maturity Less Than 12 Months Fair Value   $ 17,596,000
Investment securities held to maturity Less Than 12 Months Unrealized Loss $ (372,000) (280,000)
Investment securities held to maturity Total Fair Value   17,596,000
Investment securities held to maturity Total Unrealized Loss (474,000) (280,000)
U.S. Treasury Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held to maturity Total Unrealized Loss (4,000)  
Government Agency Mortgage-Backed Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held to maturity Less Than 12 Months Fair Value   824,000
Investment securities held to maturity Less Than 12 Months Unrealized Loss   (13,000)
Investment securities held to maturity Total Fair Value   824,000
Investment securities held to maturity Total Unrealized Loss (76,000) (13,000)
Corporate Securities    
Schedule of Held-to-Maturity Securities [Line Items]    
Investment securities held to maturity Less Than 12 Months Fair Value   16,772,000
Investment securities held to maturity Less Than 12 Months Unrealized Loss   (267,000)
Investment securities held to maturity Total Fair Value   16,772,000
Investment securities held to maturity Total Unrealized Loss $ (394,000) $ (267,000)
v3.24.1
Investment Securities - Additional Information (Details)
 12 Months Ended
Jan. 01, 2023
USD ($)
Dec. 31, 2023
USD ($)
Security
Dec. 31, 2022
USD ($)
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   3  
Number of held-to-maturity securities in unrealized loss position less than 12 months | Security   11  
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss   $ 214,000 $ 808,000
Number of available-for-sale securities in unrealized loss position 12 months or greater | Security   66  
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss   $ 8,294,000 8,106,000
Provision for credit losses     704,000
Sales of available-for-sale securities   0 0
Debt Securities, held-to-maturity, continuous unrealized loss position, less than 12 Months   372,000 280,000
Debt Securities, Held-to-Maturity, Continuous Unrealized Loss Position, greater than 12 Months, Accumulated Loss   $ 102,000  
Number of held-to-maturity securities in unrealized loss position gretaer than 12 months | Security   1  
Investment securities held-to-maturity estimated allowance for credit losses   $ 45,000  
Carrying value of available-for-sale securities pledged to secure public deposits   48,561,000 46,200,000
Collateral Pledged      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Carrying value of available-for-sale securities pledged to secure public deposits   $ 4,200,000 $ 4,700,000
U.S. Treasury Bonds      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   5  
U.S. Agency Bonds      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   4  
Government Agency Mortgage-Backed Securities      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   39  
Municipal Securities      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   4  
Held to Maturity Securities      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Additional provision for credit losses   $ 13,000  
Held to Maturity Securities | ASU 2016-13      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Provision for credit losses $ 32,000    
Corporate Securities      
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]      
Number of available-for-sale securities in unrealized loss position less than 12 months | Security   17  
v3.24.1
Investment Securities - Schedule of Amortized Cost and Estimated Fair Value of Investment Securities Available-for-Sale and Held to Maturity by Contractual Maturity (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Greater than 1 to 5 years, Amortized Cost $ 6,942  
Investment securities available-for-sale, Greater than 5 to 10 years, Amortized Cost 21,112  
Investment securities available-for-sale, Greater than 10 years, Amortized Cost 10,342  
Investment securities available-for-sale, Amortized Cost 57,039 $ 55,109
Investment securities available-for-sale, Greater than 1 to 5 years, Estimated Fair Value 6,559  
Investment securities available-for-sale, Greater than 5 to 10 years, Estimated Fair Value 18,599  
Investment securities available-for-sale, Greater than10 years, Estimated Fair Value 7,455  
Investment securities available-for-sale, Estimated Fair Value 48,561 46,200
Investment securities held to maturity, within 1 year, Amortized Cost 999  
Investment securities held to maturity, Greater than 1 to 5 years, Amortized Cost 16,770  
Investment securities held to maturity, Greater than 5 to 10 years, Amortized Cost 15,687  
Investment securities held to maturity, Amortized Cost 34,251  
Investment securities held to maturity, within 1 year, Estimated Fair Value 995  
Investment securities held to maturity, Greater than 1 to 5 years, Estimated Fair Value 16,723  
Investment securities held to maturity, Greater than 5 to 10 years, Estimated Fair Value 15,398  
Investment securities held to maturity, Estimated Fair Value 33,835  
Debt Securities excluding Mortgage-Backed Securities    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 38,396  
Investment securities available-for-sale, Estimated Fair Value 32,613  
Investment securities held to maturity, Amortized Cost 33,456  
Investment securities held to maturity, Estimated Fair Value 33,116  
Government Agency Mortgage-Backed Securities    
Schedule Of Available For Sale Securities [Line Items]    
Investment securities available-for-sale, Amortized Cost 18,643 20,555
Investment securities available-for-sale, Estimated Fair Value 15,948 $ 17,502
Investment securities held to maturity, Amortized Cost 795  
Investment securities held to maturity, Estimated Fair Value $ 719  
v3.24.1
Loans and Allowance for Credit Losses - Summary of Major Classifications of Loans (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Loans And Leases Receivable Disclosure [Line Items]      
Total $ 659,876 $ 646,234  
Less allowance for credit losses (8,921) (9,325) $ (8,559)
Total loans, net 650,955 636,909  
Commercial (Secured by Real Estate - Owner Occupied)      
Loans And Leases Receivable Disclosure [Line Items]      
Total 157,691 162,989  
Less allowance for credit losses (1,397) (2,403) (2,701)
Commercial (Secured by Real Estate - Non-owner Occupied)      
Loans And Leases Receivable Disclosure [Line Items]      
Total 145,100 135,720  
Less allowance for credit losses (1,298) (2,079) (1,980)
Commercial and Industrial      
Loans And Leases Receivable Disclosure [Line Items]      
Total 140,407 147,775  
Construction, Land and Acquisition & Development      
Loans And Leases Receivable Disclosure [Line Items]      
Total 47,685 37,158  
Less allowance for credit losses (927) (487) (162)
Residential Mortgage 1-4 Family      
Loans And Leases Receivable Disclosure [Line Items]      
Total 53,650 51,324  
Consumer Installment      
Loans And Leases Receivable Disclosure [Line Items]      
Total 115,343 111,268  
Less allowance for credit losses $ (1,534) $ (1,675) $ (969)
v3.24.1
Loans and Allowance for Credit Losses - Additional Information (Details)
 12 Months Ended
Jan. 01, 2023
USD ($)
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Loan
Financing Receivable Recorded Investment Past Due [Line Items]      
Dental practice loans   $ 659,876,000 $ 646,234,000
Accrued interest on loans   2,100,000 1,600,000
Provision for credit losses     704,000
Provision for credit losses for held-to-maturity securities   13,000  
Provision for credit losses, net   (42,000) $ 704,000
Collateral-dependent loans without an allowance   4,300,000  
Collateral dependent loans with an allowance   $ 0  
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]   Other Assets Other Assets
ASU 2016-13 | Unfunded Commmitments      
Financing Receivable Recorded Investment Past Due [Line Items]      
Provision for credit losses $ 586,000 $ 55,000  
90 Days or Greater Past Due      
Financing Receivable Recorded Investment Past Due [Line Items]      
Troubled Debt Restructurings, Number of Contracts | Loan     1
Residential Mortgage      
Financing Receivable Recorded Investment Past Due [Line Items]      
Provision for credit losses   644,000 $ (196,000)
Residential Mortgage | 90 Days or Greater Past Due      
Financing Receivable Recorded Investment Past Due [Line Items]      
Dental practice loans     249,000
Dental Practice Loans      
Financing Receivable Recorded Investment Past Due [Line Items]      
Dental practice loans   $ 176,100,000 $ 185,100,000
Dental practice loans in percentage   26.70% 28.60%
v3.24.1
Loans and Allowance for Credit Losses - Summary of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Allowance for loan losses:    
Beginning balance $ 9,325 $ 8,559
Provision   704
Charge-offs (514) (149)
Recoveries 110 211
Ending balance 8,921 9,325
Ending allowance attributable to loans:    
Individually evaluated   90
Collectively evaluated   9,235
Ending balance   9,325
Loans:    
Individually evaluated   5,749
Collectively evaluated   640,485
Total 659,876 646,234
Commercial (Secured by Real Estate - Owner Occupied)    
Allowance for loan losses:    
Beginning balance 2,403 2,701
Provision (810) (421)
Charge-offs (204)  
Recoveries 8 123
Ending balance 1,397 2,403
Ending allowance attributable to loans:    
Individually evaluated   85
Collectively evaluated   2,318
Ending balance   2,403
Loans:    
Individually evaluated   85
Collectively evaluated   162,904
Total 157,691 162,989
Commercial (Secured by Real Estate - Non-owner Occupied)    
Allowance for loan losses:    
Beginning balance 2,079 1,980
Provision (781) 99
Ending balance 1,298 2,079
Ending allowance attributable to loans:    
Individually evaluated   1
Collectively evaluated   2,078
Ending balance   2,079
Loans:    
Individually evaluated   3,265
Collectively evaluated   132,455
Total 145,100 135,720
Commercial and Industrial    
Allowance for loan losses:    
Beginning balance 2,292 2,242
Provision (484) 55
Charge-offs (3) (26)
Recoveries 1 21
Ending balance 1,806 2,292
Ending allowance attributable to loans:    
Collectively evaluated   2,292
Ending balance   2,292
Loans:    
Collectively evaluated   147,775
Total 140,407 147,775
Construction, Land and Acquisition & Development    
Allowance for loan losses:    
Beginning balance 487 162
Provision 440 325
Ending balance 927 487
Ending allowance attributable to loans:    
Collectively evaluated   487
Ending balance   487
Loans:    
Collectively evaluated   37,158
Total 47,685 37,158
Residential Mortgage    
Allowance for loan losses:    
Beginning balance 345 502
Provision 644 (196)
Recoveries 49 39
Ending balance 1,038 345
Ending allowance attributable to loans:    
Individually evaluated   4
Collectively evaluated   341
Ending balance   345
Loans:    
Individually evaluated   2,399
Collectively evaluated   48,925
Total 53,650 51,324
Consumer Installment    
Allowance for loan losses:    
Beginning balance 1,675 969
Provision 114 801
Charge-offs (307) (123)
Recoveries 52 28
Ending balance 1,534 1,675
Ending allowance attributable to loans:    
Collectively evaluated   1,675
Ending balance   1,675
Loans:    
Collectively evaluated   111,268
Total 115,343 111,268
Unallocated    
Allowance for loan losses:    
Beginning balance 44 3
Provision 877 41
Ending balance $ 921 44
Ending allowance attributable to loans:    
Collectively evaluated   44
Ending balance   $ 44
v3.24.1
Loans and Allowance for Credit Losses - Summary of Impaired Loans (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
Financing Receivable Impaired [Line Items]  
Recorded Investment, With no related allowance recorded $ 4,615
Unpaid Principal Balance, With no related allowance recorded 4,615
Average Recorded Investment, With no related allowance recorded 4,741
Interest Income Recognized, With no related allowance recorded 5
Recorded Investment, With an allowance recorded 1,134
Unpaid Principal Balance, With an allowance recorded 1,134
Allocated Related Allowance, With an allowance recorded 90
Average Recorded Investment, With an allowance recorded 1,179
Interest Income Recognized, With an allowance recorded 34
Total impaired loans, Recorded Investment 5,749
Total impaired loans, Unpaid Principal Balance 5,749
Total impaired loans, Allocated Related Allowance 90
Total impaired loans, Average Recorded Investment 5,920
Total impaired loans, Interest Income Recognized 39
Commercial (Secured by Real Estate - Owner Occupied)  
Financing Receivable Impaired [Line Items]  
Recorded Investment, With an allowance recorded 85
Unpaid Principal Balance, With an allowance recorded 85
Allocated Related Allowance, With an allowance recorded 85
Average Recorded Investment, With an allowance recorded 90
Interest Income Recognized, With an allowance recorded 4
Commercial (Secured by Real Estate - Non-owner Occupied)  
Financing Receivable Impaired [Line Items]  
Recorded Investment, With no related allowance recorded 3,089
Unpaid Principal Balance, With no related allowance recorded 3,089
Average Recorded Investment, With no related allowance recorded 3,145
Recorded Investment, With an allowance recorded 176
Unpaid Principal Balance, With an allowance recorded 176
Allocated Related Allowance, With an allowance recorded 1
Average Recorded Investment, With an allowance recorded 182
Interest Income Recognized, With an allowance recorded 8
Residential Mortgage  
Financing Receivable Impaired [Line Items]  
Recorded Investment, With no related allowance recorded 1,526
Unpaid Principal Balance, With no related allowance recorded 1,526
Average Recorded Investment, With no related allowance recorded 1,596
Interest Income Recognized, With no related allowance recorded 5
Recorded Investment, With an allowance recorded 873
Unpaid Principal Balance, With an allowance recorded 873
Allocated Related Allowance, With an allowance recorded 4
Average Recorded Investment, With an allowance recorded 907
Interest Income Recognized, With an allowance recorded $ 22
v3.24.1
Loans and Allowance for Credit Losses - Summary of Recorded Investment in Past Due Loans, as Well as Nonaccrual Loans (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Financing Receivable Recorded Investment Past Due [Line Items]    
Total $ 659,876 $ 646,234
Nonaccrual   6,720
Nonaccrual without Allowance 7,426  
30 -59 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 2,780 2,997
60- 89 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   592
90 Days or Greater Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   249
Total Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 2,780 3,838
Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 649,670 635,676
Commercial (Secured by Real Estate - Owner Occupied)    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 157,691 162,989
Nonaccrual   85
Commercial (Secured by Real Estate - Owner Occupied) | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 157,691 162,904
Commercial (Secured by Real Estate - Non-owner Occupied)    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 145,100 135,720
Nonaccrual   3,312
Nonaccrual without Allowance 4,505  
Commercial (Secured by Real Estate - Non-owner Occupied) | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 140,595 132,408
Commercial and Industrial    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 140,407 147,775
Nonaccrual   3
Commercial and Industrial | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 140,407 147,772
Construction, Land and Acquisition & Development    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 47,685 37,158
Construction, Land and Acquisition & Development | 30 -59 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   85
Construction, Land and Acquisition & Development | Total Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   85
Construction, Land and Acquisition & Development | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 47,685 37,073
Residential Mortgage    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 53,650 51,324
Nonaccrual   3,185
Nonaccrual without Allowance 2,504  
Residential Mortgage | 30 -59 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 2,534 2,341
Residential Mortgage | 60- 89 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   533
Residential Mortgage | 90 Days or Greater Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   249
Residential Mortgage | Total Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 2,534 3,123
Residential Mortgage | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 48,612 45,016
Consumer Installment    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 115,343 111,268
Nonaccrual   135
Nonaccrual without Allowance 417  
Consumer Installment | 30 -59 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 246 571
Consumer Installment | 60- 89 Days Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total   59
Consumer Installment | Total Past Due    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total 246 630
Consumer Installment | Current    
Financing Receivable Recorded Investment Past Due [Line Items]    
Total $ 114,680 $ 110,503
v3.24.1
Loans and Allowance for Credit Losses - Summary of Risk Category of Loans by Class of Loans (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Composition Of Loan Portfolio [Line Items]    
2023 $ 136,148  
2022 152,956  
2021 111,619  
2020 49,218  
2019 41,714  
Prior 127,669  
Revolvers 40,552  
Total 659,876 $ 646,234
Pass    
Composition Of Loan Portfolio [Line Items]    
2023 136,025  
2022 152,359  
2021 107,755  
2020 49,058  
2019 41,558  
Prior 119,774  
Revolvers 40,552  
Total 647,081 636,828
Special Mention    
Composition Of Loan Portfolio [Line Items]    
2023 73  
2022 190  
2021 3,638  
2020 21  
2019 31  
Prior 1,094  
Total 5,047 2,739
Substandard    
Composition Of Loan Portfolio [Line Items]    
2023 50  
2022 407  
2021 226  
2020 139  
2019 125  
Prior 6,801  
Total 7,748 6,667
Current Period Gross Write-offs    
Composition Of Loan Portfolio [Line Items]    
2023 9  
2022 159  
2021 125  
2020 14  
Prior 207  
Total 514  
Commercial (Secured by Real Estate - Owner Occupied)    
Composition Of Loan Portfolio [Line Items]    
Total 157,691 162,989
Commercial (Secured by Real Estate - Owner Occupied) | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 11,210  
2022 23,441  
2021 29,832  
2020 22,982  
2019 11,287  
Prior 49,744  
Revolvers 8,863  
Total 157,359 162,541
Commercial (Secured by Real Estate - Owner Occupied) | Special Mention    
Composition Of Loan Portfolio [Line Items]    
Prior 332  
Total 332 362
Commercial (Secured by Real Estate - Owner Occupied) | Substandard    
Composition Of Loan Portfolio [Line Items]    
Total   86
Commercial (Secured by Real Estate - Non-owner Occupied)    
Composition Of Loan Portfolio [Line Items]    
Total 145,100 135,720
Commercial (Secured by Real Estate - Non-owner Occupied) | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 32,830  
2022 37,395  
2021 25,702  
2020 4,436  
2019 10,015  
Prior 15,546  
Revolvers 10,562  
Total 136,486 130,115
Commercial (Secured by Real Estate - Non-owner Occupied) | Special Mention    
Composition Of Loan Portfolio [Line Items]    
2021 3,539  
Prior 540  
Total 4,079 2,293
Commercial (Secured by Real Estate - Non-owner Occupied) | Substandard    
Composition Of Loan Portfolio [Line Items]    
Prior 4,535  
Total 4,535 3,312
Commercial (Secured by Real Estate - Non-owner Occupied) | Current Period Gross Write-offs    
Composition Of Loan Portfolio [Line Items]    
Prior 204  
Total 204  
Commercial and Industrial    
Composition Of Loan Portfolio [Line Items]    
Total 140,407 147,775
Commercial and Industrial | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 22,473  
2022 21,590  
2021 27,252  
2020 14,764  
2019 16,697  
Prior 25,317  
Revolvers 12,314  
Total 140,407 147,772
Commercial and Industrial | Substandard    
Composition Of Loan Portfolio [Line Items]    
Total   3
Commercial and Industrial | Current Period Gross Write-offs    
Composition Of Loan Portfolio [Line Items]    
Prior 3  
Total 3  
Construction, Land and Acquisition & Development    
Composition Of Loan Portfolio [Line Items]    
Total 47,685 37,158
Construction, Land and Acquisition & Development | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 21,557  
2022 17,392  
2021 5,034  
2020 721  
2019 216  
Prior 210  
Revolvers 2,534  
Total 47,664 37,158
Construction, Land and Acquisition & Development | Substandard    
Composition Of Loan Portfolio [Line Items]    
2020 21  
Total 21  
Residential Mortgage    
Composition Of Loan Portfolio [Line Items]    
Total 53,650 51,324
Residential Mortgage | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 5,354  
2022 5,672  
2021 2,447  
2020 1,289  
2019 1,424  
Prior 28,710  
Revolvers 5,736  
Total 50,632 48,193
Residential Mortgage | Special Mention    
Composition Of Loan Portfolio [Line Items]    
Prior 222  
Total 222  
Residential Mortgage | Substandard    
Composition Of Loan Portfolio [Line Items]    
2022 202  
2021 108  
2020 107  
2019 113  
Prior 2,266  
Total 2,796 3,131
Consumer Installment    
Composition Of Loan Portfolio [Line Items]    
Total 115,343 111,268
Consumer Installment | Pass    
Composition Of Loan Portfolio [Line Items]    
2023 42,601  
2022 46,869  
2021 17,488  
2020 4,866  
2019 1,919  
Prior 247  
Revolvers 543  
Total 114,533 111,049
Consumer Installment | Special Mention    
Composition Of Loan Portfolio [Line Items]    
2023 73  
2022 190  
2021 99  
2020 21  
2019 31  
Total 414 84
Consumer Installment | Substandard    
Composition Of Loan Portfolio [Line Items]    
2023 50  
2022 205  
2021 118  
2020 11  
2019 12  
Total 396 $ 135
Consumer Installment | Current Period Gross Write-offs    
Composition Of Loan Portfolio [Line Items]    
2023 9  
2022 159  
2021 125  
2020 14  
Total $ 307  
v3.24.1
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Property Plant And Equipment [Line Items]    
Premises and equipment, gross $ 10,165 $ 9,636
Less: Accumulated depreciation 6,368 5,379
Premises and equipment, net 3,797 4,257
Land    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross 373 373
Buildings    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross 4,356 4,336
Leasehold Improvements    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross 912 912
Equipment and Furniture    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross 4,232 3,663
Construction in Process    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross 226 286
Automobile    
Property Plant And Equipment [Line Items]    
Premises and equipment, gross $ 66 $ 66
v3.24.1
Premises and Equipment - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 980,000 $ 905,000
v3.24.1
Intangible Assets Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]    
Intangible asset gross carrying amount $ 1,900,000 $ 1,900,000
Accumulated amortization 765,000 574,000
Aggregate amortization expense 191,000 191,000
Goodwill acquired acquisition 17,200,000 17,200,000
Impairment of goodwill 0 0
Impairment loss $ 0 $ 0
v3.24.1
Intangible Assets - Schedule of Future Amortization Expense of Intangible Assets (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2024 $ 191
2025 191
2026 191
2027 191
2028 191
Thereafter 193
Total $ 1,148
v3.24.1
Leases - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Lessee, Lease, Description [Line Items]    
Option to extend terms extending through 2027  
Option to extend [true false] true  
Operating lease expiration year 2027  
Operating lease cost $ 550,000 $ 531,000
Weighted average remaining lease term 3 years 6 months 14 days  
Weighted average discount rate 1.88%  
ASU 2016-02    
Lessee, Lease, Description [Line Items]    
Change in Accounting Principle, Accounting Standards Update, Early Adoption [true false] true  
v3.24.1
Leases - Schedule of Consolidated Balance Sheet Classification of ROU Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Assets [Abstract]    
Operating lease right-of-use assets $ 1,746 $ 2,216
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other Assets Other Assets
Liabilities [Abstract]    
Operating lease liabilities $ 2,158 $ 2,697
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] Other Liabilities Other Liabilities
v3.24.1
Leases - Summary of Future Maturities of Operating lease Liabilities and Other Lease Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
2024 $ 610  
2025 627  
2026 645  
2027 352  
Total lease payments 2,234  
Less: interest 76  
Present value of lease liabilities 2,158 $ 2,697
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows from operating leases (cash payments) $ 586 427
Operating lease right-of-use assets obtained in exchange for leases entered into during the period   $ 285
v3.24.1
Deposits - Summary of Contractual Maturities of Certificate of Deposits (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Deposits [Abstract]    
2024 $ 79,833  
2025 73,530  
2026 10,232  
2027 16,032  
2028 36,748  
Thereafter 4,576  
Total $ 220,951 $ 125,989
v3.24.1
Deposits - Additional Information (Details) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Deposits [Abstract]    
Time certificates of deposit in denomination of $250,000 or more $ 31,200,000 $ 26,400,000
Cash, FDIC insured amount 250,000  
Brokered certificate of deposit $ 107,300,000 $ 34,900,000
Brokered certificate of deposit, weighted average rate 4.87%  
Brokered certificate of deposit, weighted average maturity 28 months  
v3.24.1
Borrowings - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2023
Line Of Credit Facility [Line Items]    
Advances from FHLB collateralized by certain loans $ 384,400,000 $ 392,600,000
Fair value adjustment 0  
Prepayment penalties 647,000  
Investment in FHLB stock 832,000 2,500,000
Line of credit amount outstanding 12,500,000 12,500,000
Federal Home Loan Bank (FHLB) advances 10,025,000 40,000,000
FHLB advances book value 10,000,000  
Federal Reserve Bank of Atlanta Discount Window    
Line Of Credit Facility [Line Items]    
Line of credit 75,000,000 67,400,000
Line of credit amount outstanding 0 0
Line of credit facility, secured loans 111,600,000 96,100,000
Federal Home Loan Bank of Atlanta    
Line Of Credit Facility [Line Items]    
Advances from FHLB   40,000,000
FHLB    
Line Of Credit Facility [Line Items]    
Line of credit 81,800,000 64,000,000
Unsecured Federal Funds    
Line Of Credit Facility [Line Items]    
Line of credit 32,500,000 32,500,000
Line of credit amount outstanding $ 25,000 $ 0
v3.24.1
Borrowings - Schedule of Federal Home Loan Bank of Atlanta (FHLB) Advances (Details) - Federal Home Loan Bank of Atlanta
 12 Months Ended
Dec. 31, 2023
USD ($)
Federal Home Loan Bank Advances [Line Items]  
Advances from FHLB $ 40,000,000
January 06, 2026  
Federal Home Loan Bank Advances [Line Items]  
Advances from FHLB, Advance Date Jan. 06, 2023
Advances from FHLB $ 10,000,000
Advances from FHLB, Interest Rate 4.22%
Advances from FHLB, Maturity Jan. 06, 2026
Advances from FHLB, Rate Fixed
Advances from FHLB, Call Feature N/A
January 06, 2028  
Federal Home Loan Bank Advances [Line Items]  
Advances from FHLB, Advance Date Jan. 06, 2023
Advances from FHLB $ 10,000,000
Advances from FHLB, Interest Rate 3.94%
Advances from FHLB, Maturity Jan. 06, 2028
Advances from FHLB, Rate Fixed
Advances from FHLB, Call Feature N/A
October 25, 2028  
Federal Home Loan Bank Advances [Line Items]  
Advances from FHLB, Advance Date Oct. 25, 2023
Advances from FHLB $ 10,000,000
Advances from FHLB, Interest Rate 3.99%
Advances from FHLB, Maturity Oct. 25, 2028
Advances from FHLB, Rate Convertible
Advances from FHLB, Call Feature 4/25/2024
December 14, 2028  
Federal Home Loan Bank Advances [Line Items]  
Advances from FHLB, Advance Date Dec. 14, 2023
Advances from FHLB $ 10,000,000
Advances from FHLB, Interest Rate 3.28%
Advances from FHLB, Maturity Dec. 14, 2028
Advances from FHLB, Rate Convertible
Advances from FHLB, Call Feature 6/14/2024
v3.24.1
Income Taxes - Summary of Components of Income Tax Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Current $ 1,541 $ 1,913
Deferred expense (benefit) 399 280
Income tax expense $ 1,940 $ 2,193
v3.24.1
Income Taxes - Schedule of Difference Between Income Tax Expense and Amount Computed by Applying Statutory Federal Income Taxes Rate to Income Before Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Statutory Federal tax rate 21.00% 21.00%
Pretax income at statutory rate $ 1,761 $ 1,959
State income tax, net of federal benefit 218 257
Cash surrender value of life insurance (76) (73)
Permanent adjustments 53 13
Other (16) 37
Income tax expense $ 1,940 $ 2,193
v3.24.1
Income Taxes - Schedule of Difference Between Income Tax Expense and Amount Computed by Applying Statutory Federal Income Taxes Rate to Income Before Taxes (Parenthetical) (Details)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Effective income tax rate reconciliation, percentage 23.60% 24.00%
v3.24.1
Income Taxes - Schedule of Net Deferred Taxes (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Deferred income tax assets:    
Allowance for credit losses $ 2,426 $ 2,382
Deferred compensation 566 682
Net operating losses 1,522 1,686
Unrealized loss on investment securities available-for-sale 2,145 2,254
Fair value adjustments 133 180
Right-of -use liability 551 689
Other 289 205
Total deferred income tax assets 7,632 8,078
Deferred income tax liabilities:    
Core deposit intangible 293 342
Premises and equipment 558 492
Right-of -use asset 511 649
Other 135 110
Total deferred income tax liabilities 1,497 1,593
Net deferred income tax asset $ 6,135 $ 6,485
v3.24.1
Income Taxes - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Taxes [Line Items]    
Deferred tax assets $ 158,000  
Deferred federal income tax liability 1,497,000 $ 1,593,000
Federal    
Income Taxes [Line Items]    
Net operating loss carryforwards $ 5,700,000  
Net operating loss carryforwards expiration year 2032  
Deferred federal income tax liability $ 0  
State and local jurisdiction    
Income Taxes [Line Items]    
Net operating loss carryforwards $ 7,200,000  
Net operating loss carryforwards expiration year 2032  
Retained Earnings    
Income Taxes [Line Items]    
Deferred tax liabilities, tax deferred income $ 3,600,000  
v3.24.1
Employee Stock Ownership Plan - Additional Information (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Jan. 31, 2021
Dec. 31, 2017
Share-Based Payment Arrangement [Abstract]        
Note payable balance of ESOP $ 5.2 $ 5.3 $ 3.0 $ 3.0
Shares purchased by ESOP     225,721 295,499
ESOP released shares 101,000 80,000    
v3.24.1
Benefit Plans - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Jun. 30, 2015
Defined Benefit Plan Disclosure [Line Items]      
Contributions by employer on retirement benefits $ 0 $ 0  
Deferred compensation plan 1,600,000 2,000,000 $ 0
401 K      
Defined Benefit Plan Disclosure [Line Items]      
Matching contributions to the plan 217,000 183,000  
Supplemental Executive Retirement Plan      
Defined Benefit Plan Disclosure [Line Items]      
Monthly benefit obligation $ 8,333    
Retirement plan description If the executive dies after benefit payments have commenced but before receiving a total of 180 monthly payments, the Company shall pay to the executive’s beneficiary the greater of (i) the account balance or (ii) the present value of the remaining payments to satisfy a total of 180 monthly payments. Such death benefit shall be payable in a lump sum no later than 60 days from the date of death. If the executive dies after receiving 180 or more benefit payments, the SERP will terminate and no additional payments will be made.    
Defined benefit plan related expense $ 21,000 $ 21,000  
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] Labor and Related Expense Labor and Related Expense  
Defined benefit plan earnings $ 0 $ 0  
Supplemental Executive Retirement Plan | Other Liabilities      
Defined Benefit Plan Disclosure [Line Items]      
Accrued liability for defined benefit plan 501,000 480,000  
Supplemental Executive Retirement Plan | Other Assets      
Defined Benefit Plan Disclosure [Line Items]      
Defined benefit plan carrying value $ 956,000 $ 956,000  
v3.24.1
Stock-Based Compensation Plans - Additional Information (Details) - USD ($)
 1 Months Ended 12 Months Ended
May 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation expense   $ 1,100,000 $ 742,000  
Unrecognized compensation cost related to equity award grants   $ 3,800,000    
Unrecognized compensation cost expected remaining vesting period   2 years 5 months 26 days    
Dividend yield   0.00% 0.00%  
Expected volatility   27.59% 32.12%  
Risk-free interest rate   4.35% 2.84%  
Expected average life   7 years 4 months 13 days 7 years 3 months 25 days  
Weighted average per share fair value   $ 5.92 $ 5.34  
Shares surrendered to satisfy applicable tax withholding requirements   $ 46,000 $ 48,000  
Restricted Stock        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of restricted stock grants   45,101 114,000  
2018 Equity Incentive Plan | Restricted Stock | Common Stock        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of shares approved under the plan       133,987
2018 Equity Incentive Plan | Stock Options | Common Stock        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of shares approved under the plan       334,970
2022 Equity Incentive Plan        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of shares approved under the plan 148,060      
2022 Equity Incentive Plan | Maximum        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Number of restricted stock grants 370,150      
v3.24.1
Stock-Based Compensation Plans - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award, Additional General Disclosures [Abstract]      
Option Shares Outstanding, Outstanding - Beginning Balance 484,519 334,970  
Option Shares Outstanding, Grants 175,000 221,500  
Option Shares Outstanding, Exercise of stock options (8,753) (20,097)  
Option Shares Outstanding, Forfeited (10,000) (51,854)  
Option Shares Outstanding, Outstanding - Ending Balance 640,766 484,519 334,970
Option Shares Outstanding, Exercisable 225,739 149,372  
Weighted Average Exercise Price, Outstanding - Beginning Balance $ 12.21 $ 9.9  
Weighted Average Exercise Price, Granted 14.42 14.86  
Weighted Average Exercise Price, Exercise Of Stock Options 11.14 11.14  
Weighted Average Exercise Price, Forfeited 14.85 11.64  
Weighted Average Exercise Price, Outstanding - Ending Balance 12.58 12.21 $ 9.9
Weighted Average Exercise Price, Exercisable $ 10.81 $ 10.00  
Weighted Average Remaining Life (Years), Outstanding 7 years 9 months 8 years 5 months 12 days 7 years 9 months 18 days
Weighted Average Remaining Life (Years), Exercisable 6 years 4 months 20 days 6 years 8 months 12 days  
Aggregate Intrinsic Value (in thousands), Outstanding $ 1,419 $ 1,522 $ 676
Aggregate Intrinsic Value (in thousands), Exercisable $ 901 $ 741  
v3.24.1
Stock-Based Compensation Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted Shares Outstanding, Outstanding - Beginning Balance 169,504 93,336
Restricted Shares Outstanding, Granted 45,101 114,000
Restricted Shares Outstanding, Vested (48,014) (26,787)
Restricted Shares Outstanding, Forfeited   (11,045)
Restricted Shares Outstanding, Outstanding - Ending Balance 166,591 169,504
Weighted Average Grant Date Fair Value, Outstanding - Beginning Balance $ 11.97 $ 8.63
Weighted Average Grant Date Fair Value, Granted 14.47 14.85
Weighted Average Grant Date Fair Value, Vested 12.3 8.9
Weighted Average Grant Date Fair Value, Forfeited   11.14
Weighted Average Grant Date Fair Value, Outstanding - Ending Balance $ 13.46 $ 11.97
v3.24.1
Stock-Based Compensation Plans - Summary of Restricted Stock Activity (Parenthetical) (Details) - shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares applicable tax withholding requirements 3,417 3,070
v3.24.1
Regulatory Matters - Schedule of Bank's Actual Capital Amounts And Ratios (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Regulatory Matters [Abstract]    
Common Equity Tier 1 Capital (to Risk-Weighted Assets) Actual, Amount $ 95,335 $ 87,397
Common Equity Tier 1 Capital (to Risk-Weighted Assets) Actual, Ratio 0.1241 0.1186
Common Equity Tier 1 Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Amount $ 34,570 $ 33,170
Common Equity Tier 1 Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Ratio 4.50% 4.50%
Common Equity Tier 1 Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount $ 49,934 $ 47,913
Common Equity Tier 1 Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio 6.50% 6.50%
Total Capital (to Risk-Weighted Assets) Actual, Amount $ 104,858 $ 96,612
Total Capital (to Risk-Weighted Assets) Actual, Ratio 0.1365 0.1311
Total Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Amount $ 61,455 $ 58,970
Total Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Ratio 0.08 0.08
Total Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount $ 76,819 $ 73,712
Total Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio 0.10 0.10
Tier I Capital (to Risk-Weighted Assets) Actual, Amount $ 95,335 $ 87,397
Tier I Capital (to Risk-Weighted Assets) Actual, Ratio 0.1241 0.1186
Tier I Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Amount $ 46,093 $ 44,227
Tier I Capital (to Risk-Weighted Assets) For Capital Adequacy Purposes, Ratio 0.06 0.06
Tier I Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount $ 61,457 $ 58,970
Tier I Capital (to Risk-Weighted Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio 0.08 0.08
Tier I Capital (to Average Assets) Actual, Amount $ 95,335 $ 87,397
Tier I Capital (to Average Assets) Actual, Ratio 0.1127 0.1097
Tier I Capital (to Average Assets) For Capital Adequacy Purposes, Amount $ 33,837 $ 31,865
Tier I Capital (to Average Assets) For Capital Adequacy Purposes, Ratio 0.04 0.04
Tier I Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount $ 42,296 $ 39,832
Tier I Capital (to Average Assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio 0.05 0.05
v3.24.1
Related Party Transactions - Summary of Activity for Related Party Loans (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Related Party Transactions [Abstract]    
Beginning balance $ 416 $ 327
Change in directors   (257)
Loans advanced 496 434
Repayments (250) (88)
Ending balance $ 662 $ 416
v3.24.1
Related Party Transactions - Additional Information (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Directors and Executive Officers    
Related Party Transaction [Line Items]    
Related party deposit liabilities $ 3.8 $ 6.1
v3.24.1
Commitments - Schedule of Financial Instruments Contract Amounts Represent Credit Risk (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Commitments to Extend Credit    
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]    
Appropriate Contract Amount $ 79,949 $ 90,297
Letters of Credit    
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items]    
Appropriate Contract Amount $ 376 $ 8
v3.24.1
Fair Value Measurements and Disclosures - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Investment securities available-for-sale, Estimated Fair Value $ 48,561 $ 46,200
Fair Value, Measurements, Recurring | Level 2    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Investment securities available-for-sale, Estimated Fair Value $ 48,600 $ 46,200
v3.24.1
Fair Value Measurements and Disclosures - Schedule of Assets Measured at Fair Value on Nonrecurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Other real estate owned $ 2,850 $ 2,901
Fair Value, Measurements, Nonrecurring    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Other real estate owned 2,850 2,901
Collateral dependent loans 1,440 5,659
Total assets at fair value 4,290 8,560
Fair Value, Measurements, Nonrecurring | Level 3    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Other real estate owned 2,850 2,901
Collateral dependent loans 1,440 5,659
Total assets at fair value $ 4,290 $ 8,560
v3.24.1
Fair Value Measurements and Disclosures - Schedule of Carrying Amounts and Estimated Fair Values of Company's Financial Instruments (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Financial assets:    
Investment securities available-for-sale $ 48,561 $ 46,200
Investment securities held-to-maturity 33,835 26,251
Carrying Amount | Level 1    
Financial assets:    
Cash and cash equivalents 50,025 26,324
Carrying Amount | Level 2    
Financial assets:    
Investment securities available-for-sale 48,561 46,200
Investment securities held-to-maturity 34,206 26,527
Financial liabilities:    
Deposits 674,443 657,172
Carrying Amount | Level 3    
Financial assets:    
Other investments 5,434 1,082
Loans, net 650,955 636,909
Bank owned life insurance 16,086 15,724
Financial liabilities:    
FHLB advances and other borrowings 40,000 10,025
Estimated Fair Value | Level 1    
Financial assets:    
Cash and cash equivalents 50,025 26,324
Estimated Fair Value | Level 2    
Financial assets:    
Investment securities available-for-sale 48,561 46,200
Investment securities held-to-maturity 33,835 26,251
Financial liabilities:    
Deposits 673,854 653,577
Estimated Fair Value | Level 3    
Financial assets:    
Other investments 5,434 1,082
Loans, net 635,957 611,687
Bank owned life insurance 16,086 15,724
Financial liabilities:    
FHLB advances and other borrowings $ 39,830 $ 10,025
v3.24.1
Condensed Parent Company Only Financial Information - Summary of Condensed Balance Sheets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Assets      
Cash in banks $ 6,030 $ 2,928  
Other assets 12,978 12,801  
Total assets 843,258 791,283  
Liabilities :      
Total liabilities 721,742 674,180  
Stockholders' equity:      
Total stockholders' equity 121,516 117,103 $ 120,968
Total liabilities and stockholders' equity 843,258 791,283  
Parent      
Assets      
Cash in bank subsidiary 6,739 10,233  
Investment in subsidiary, at underlying equity 108,269 100,314  
Loan receivable - ESOP 5,134 5,292  
Other assets 1,482 1,374  
Total assets 121,624 117,213  
Liabilities :      
Other liabilities 108 110  
Total liabilities 108 110  
Stockholders' equity:      
Total stockholders' equity 121,516 117,103  
Total liabilities and stockholders' equity $ 121,624 $ 117,213  
v3.24.1
Condensed Parent Company Only Financial Information - Summary of Condensed Statements of Income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Interest income:    
Total interest income $ 42,700 $ 32,134
Interest expense:    
Total interest expense 15,502 2,379
Net interest income after provision for credit losses 27,240 29,051
Noninterest expenses:    
Other noninterest expense 4,538 4,788
Income before income taxes 8,388 9,327
Income tax benefit (1,940) (2,193)
Net income 6,448 7,134
Parent    
Interest income:    
Income on ESOP loan 172 177
Total interest income 172 177
Interest expense:    
Net interest income after provision for credit losses 172 177
Noninterest expenses:    
Other noninterest expense 540 555
Income before income taxes (368) (378)
Income tax benefit 108 95
Loss before equity in undistributed earnings of Bank (260) (283)
Equity in undistributed earnings of Bank 6,708 7,417
Net income $ 6,448 $ 7,134
v3.24.1
Condensed Parent Company Only Financial Information - Summary of Condensed Statements of Cash Flows (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash flows from operating activities:    
Net income $ 6,448 $ 7,134
Adjustments to reconcile net income to net cash used in operating activities    
Net cash provided by operating activities 7,871 7,569
Cash flows from investing activities:    
Net cash used in investing activities (28,135) (93,722)
Cash flows from financing activities:    
Stock repurchase (3,283) (5,709)
Net cash provided by financing activities 43,965 701
Net change in cash and cash equivalents 23,701 (85,452)
Parent    
Cash flows from operating activities:    
Net income 6,448 7,134
Adjustments to reconcile net income to net cash used in operating activities    
Equity in undistributed earnings of Bank (6,708) (7,417)
Other (282) (328)
Net cash provided by operating activities (542) (611)
Cash flows from investing activities:    
Payments from ESOP loan 331 331
Net cash used in investing activities 331 331
Cash flows from financing activities:    
Stock repurchase (3,283) (5,709)
Dividend from Bank   5,000
Net cash provided by financing activities (3,283) (709)
Net change in cash and cash equivalents (3,494) (989)
Cash and cash equivalents at beginning of period 10,233 11,222
Cash and cash equivalents at end of period $ 6,739 $ 10,233