QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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The
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Large accelerated filer
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☐
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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Emerging growth company
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Page
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PART I.
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3
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Item 1.
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3
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3
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4
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6
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7
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8
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||
Item 2.
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30
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Item 3.
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52
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Item 4.
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52
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PART II.
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53
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Item 1.
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53
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Item 1A.
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53
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Item 2.
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53
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Item 3.
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53
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Item 4.
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53
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Item 5.
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53
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Item 6.
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54
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55
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Item 1. |
Consolidated
Financial Statements
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September 30,
2022
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December 31,
2021
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|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Cash and due from banks
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$
|
|
$
|
|
||||
Interest-bearing deposits in banks
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||||||
Cash and cash equivalents
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||||||
Securities available for sale
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||||||
Loans held for sale
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||||||
Loans held for investment
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||||||
Allowance for loan losses
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(
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)
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(
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)
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||||
Loans held for investment, net
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||||||||
Accrued interest receivable
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||||||
Premises and equipment, net
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||||||
Bank-owned life insurance
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||||||
Goodwill
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||||||
Intangible assets, net
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||||||
Mortgage servicing rights
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||||||
Deferred tax asset, net
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||||||
Other assets
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||||||
Total assets
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$
|
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$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
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|
$
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|
||||
Interest-bearing
|
|
|
||||||
Total deposits
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|
||||||
Accrued expenses and other liabilities
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|
|
||||||
Subordinated debt securities
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||||||
Junior subordinated deferrable interest debentures
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|
||||||
Total liabilities
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|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $
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|
||||||
Additional paid-in capital
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|
||||||
Retained earnings
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|
||||||
Accumulated other comprehensive income (loss)
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(
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)
|
|
|||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
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$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Interest income:
|
||||||||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities:
|
||||||||||||||||
Taxable
|
|
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||||||||||||
Non-taxable
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||||||||||||
Federal funds sold and interest-bearing deposits in banks
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|
||||||||||||
Total interest income
|
|
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|
||||||||||||
Interest expense:
|
||||||||||||||||
Deposits
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|
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|
||||||||||||
Notes payable & other borrowings
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|
|
|
|
||||||||||||
Subordinated debt securities
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|
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|
||||||||||||
Junior subordinated deferrable interest debentures
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|
||||||||||||
Total interest expense
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|
||||||||||||
Net interest income
|
|
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|
||||||||||||
Provision for loan losses
|
(
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)
|
|
(
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)
|
(
|
)
|
|||||||||
Net interest income, after provision for loan losses
|
|
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|
||||||||||||
Noninterest income:
|
||||||||||||||||
Service charges on deposit accounts
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|
||||||||||||
Income from insurance activities
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||||||||||||
Net gain on sales of loans
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||||||||||||
Bank card services and interchange fees
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||||||||||||
Other mortgage banking income
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||||||||||||||
Investment commissions
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||||||||||||
Fiduciary fees
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||||||||||||
Other
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||||||||||||
Total noninterest income
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|
||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
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|
||||||||||||
Occupancy and equipment, net
|
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|
||||||||||||
Professional services
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||||||||||||
Marketing and development
|
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||||||||||||
IT and data services
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||||||||||||
Bank card expenses
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||||||||||||
Appraisal expenses
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|
||||||||||||
Other
|
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|
||||||||||||
Total noninterest expense
|
|
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|
||||||||||||
Income before income taxes
|
|
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|
||||||||||||
Income tax expense
|
|
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|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized gain (loss) on securities available for sale |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Less: Change in fair value on
hedged state and municipal securities
|
|
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|
|
||||||||||||
Tax effect
|
|
|
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|
||||||||||||
Other comprehensive income (loss)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Comprehensive income (loss)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Total
|
|||||||||||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
Balance at December 31, 2020
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Other comprehensive loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options and vesting of restricted stock units, net of
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Balance at December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Other comprehensive loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Impact of adoption of Topic 842 related to leases |
— | ( |
) | ( |
) | |||||||||||||||||||
Exercise of employee stock options and vesting of restricted stock units, net of
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Three Months Ended September 30,
|
||||||||||||||||||||||||
Balance at June 30,
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Other comprehensive loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
Balance at June 30, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net income
|
—
|
|
|
|
|
|
||||||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Other comprehensive loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options and vesting of restricted stock units, net of |
( |
) | ( |
) | ||||||||||||||||||||
Repurchases of common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||
Stock-based compensation
|
—
|
|
|
|
|
|
||||||||||||||||||
Balance at September 30, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Nine Months Ended
September 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
Provision for loan losses
|
(
|
)
|
(
|
)
|
||||
Depreciation and amortization
|
|
|
||||||
Accretion and amortization
|
|
|
||||||
Other gains, net
|
(
|
)
|
(
|
)
|
||||
Net gain on sales of loans
|
(
|
)
|
(
|
)
|
||||
Proceeds from sales of loans held for sale
|
|
|
||||||
Loans originated for sale
|
(
|
)
|
(
|
)
|
||||
Deferred income tax expense
|
||||||||
Earnings on bank-owned life insurance
|
(
|
)
|
(
|
)
|
||||
Stock-based compensation
|
|
|
||||||
Change in valuation of mortgage servicing rights
|
(
|
)
|
(
|
)
|
||||
Net change in:
|
||||||||
Accrued interest receivable and other assets
|
(
|
)
|
|
|||||
Accrued expenses and other liabilities
|
|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Activity in securities available for sale:
|
||||||||
Purchases
|
(
|
)
|
(
|
)
|
||||
Maturities, prepayments, and calls
|
|
|
||||||
Loan originations and principal collections, net
|
(
|
)
|
(
|
)
|
||||
Purchases of premises and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from sales of premises and equipment
|
|
|
||||||
Proceeds from sales of foreclosed assets
|
|
|
||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
|
|
||||||
Net change in short-term borrowings
|
|
(
|
)
|
|||||
Payments to tax authorities for stock-based compensation
|
(
|
)
|
(
|
)
|
||||
Payments made on notes payable and other borrowings
|
|
(
|
)
|
|||||
Cash dividends on common stock
|
(
|
)
|
(
|
)
|
||||
Payments to repurchase common stock
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Net change in cash and cash equivalents
|
(
|
)
|
|
|||||
Beginning cash and cash equivalents
|
|
|
||||||
Ending cash and cash equivalents
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid on deposits and borrowed funds
|
$
|
|
$
|
|
||||
Income taxes paid
|
||||||||
Supplemental schedule of noncash activities:
|
||||||||
Loans transferred to foreclosed assets
|
$
|
|
$
|
|
||||
Additions to mortgage servicing rights
|
|
|
Wholly-Owned, Consolidated Subsidiaries:
|
|
|
Bank subsidiary
|
|
Non-bank subsidiary
|
|
Non-bank subsidiary
|
|
Non-bank subsidiary
|
|
Non-bank subsidiary
|
|
Non-bank subsidiary
|
Wholly-Owned, Equity Method Subsidiaries:
|
|
|
Non-bank subsidiaries
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
September 30, 2022
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
State and municipal
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Mortgage-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Collateralized mortgage obligations
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed and other amortizing securities
|
|
|
(
|
)
|
|
|||||||||||
Other securities
|
|
|
(
|
)
|
|
|||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
December 31, 2021
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
State and municipal
|
$ |
|
$ |
|
$ |
(
|
)
|
$ |
|
|||||||
Mortgage-backed securities
|
|
|
(
|
)
|
|
|||||||||||
Collateralized mortgage obligations
|
|
|
(
|
)
|
|
|||||||||||
Asset-backed and other amortizing securities
|
|
|
(
|
)
|
|
|||||||||||
Other securities
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Available for Sale
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
Within 1 year
|
$
|
|
$
|
|
||||
After 1 year through 5 years
|
|
|
||||||
After 5 years through 10 years
|
|
|
||||||
After 10 years
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
|||||||||||||||||||
September 30, 2022
|
||||||||||||||||||||||||
State and municipal
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
|
|
|
|
|
|
||||||||||||||||||
Other securities
|
|
|
|
|
|
|
||||||||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
December 31, 2021
|
||||||||||||||||||||||||
State and municipal
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
||||||||||||||||||
Collateralized mortgage obligations
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
|
|
|
|
|
|
||||||||||||||||||
Other securities
|
|
|
|
|
|
|
||||||||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
2022
|
December 31,
2021
|
|||||||
Commercial real estate
|
$
|
|
$
|
|
||||
Commercial - specialized
|
|
|
||||||
Commercial - general
|
|
|
||||||
Consumer:
|
||||||||
1-4 family residential
|
|
|
||||||
Auto loans
|
|
|
||||||
Other consumer
|
|
|
||||||
Construction
|
|
|
||||||
|
|
|||||||
Allowance for loan losses
|
(
|
)
|
(
|
)
|
||||
Loans, net
|
$
|
|
$
|
|
Beginning
Balance
|
Provision for
Loan Losses
|
Charge-offs
|
Recoveries
|
Ending
Balance
|
||||||||||||||||
For the three months ended September 30, 2022
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||
Commercial - specialized
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Commercial - general
|
|
|
|
|
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
(
|
)
|
|
|
||||||||||||||
Auto loans
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Other consumer
|
|
|
(
|
)
|
|
|
||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||
For the three months ended September 30, 2021
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Commercial - specialized
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Commercial - general
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
|
|
|
|||||||||||||||
Auto loans
|
|
|
(
|
)
|
|
|
||||||||||||||
Other consumer
|
|
|
(
|
)
|
|
|
||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
Beginning
Balance
|
Provision for
Loan Losses
|
Charge-offs
|
Recoveries
|
Ending
Balance
|
||||||||||||||||
For the nine months ended September 30, 2022
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||
Commercial - specialized
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Commercial - general
|
|
|
(
|
)
|
|
|
||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
(
|
)
|
|
|
||||||||||||||
Auto loans
|
|
|
(
|
)
|
|
|
||||||||||||||
Other consumer
|
|
|
(
|
)
|
|
|
||||||||||||||
Construction
|
|
|
(
|
)
|
|
|
||||||||||||||
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||
For the nine months ended September 30, 2021
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
|||||||||
Commercial - specialized
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Commercial - general
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
(
|
)
|
|
|
||||||||||||||
Auto loans
|
|
(
|
)
|
(
|
)
|
|
|
|||||||||||||
Other consumer
|
|
|
(
|
)
|
|
|
||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
Recorded Investment
|
Allowance for Loan Losses
|
|||||||||||||||
Individually
Evaluated
|
Collectively
Evaluated
|
Individually
Evaluated
|
Collectively
Evaluated
|
|||||||||||||
September 30, 2022
|
||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial - specialized
|
|
|
|
|
||||||||||||
Commercial - general
|
|
|
|
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
|
|
|
|
||||||||||||
Auto loans
|
|
|
|
|
||||||||||||
Other consumer
|
|
|
|
|
||||||||||||
Construction
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
December 31, 2021
|
||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Commercial - specialized
|
|
|
|
|
||||||||||||
Commercial - general
|
|
|
|
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
|
|
|
|
||||||||||||
Auto loans
|
|
|
|
|
||||||||||||
Other consumer
|
|
|
|
|
||||||||||||
Construction
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
Unpaid
Contractual
Principal
Balance
|
Recorded
Investment
With No
Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
Average
Recorded
Investment
|
|||||||||||||||||||
September 30, 2022
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial - specialized
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - general
|
|
|
|
|
|
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family residential
|
|
|
|
|
|
|
||||||||||||||||||
Auto loans
|
|
|
|
|
|
|
||||||||||||||||||
Other consumer
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
December 31, 2021
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Commercial - specialized
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - general
|
|
|
|
|
|
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family residential
|
|
|
|
|
|
|
||||||||||||||||||
Auto loans
|
|
|
|
|
|
|
||||||||||||||||||
Other consumer
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
30-89 Days
Past Due
|
90 Days or
More Past Due
|
Nonaccrual
|
||||||||||
September 30, 2022
|
||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
||||||
Commercial - specialized
|
|
|
|
|||||||||
Commercial - general
|
|
|
|
|||||||||
Consumer:
|
||||||||||||
1-4 family residential
|
|
|
|
|||||||||
Auto loans
|
|
|
|
|||||||||
Other consumer
|
|
|
|
|||||||||
Construction
|
|
|
|
|||||||||
|
$
|
|
$
|
|
$
|
|
||||||
December 31, 2021
|
||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
||||||
Commercial - specialized
|
|
|
|
|||||||||
Commercial - general
|
|
|
|
|||||||||
Consumer:
|
||||||||||||
1-4 family residential
|
|
|
|
|||||||||
Auto loans
|
|
|
|
|||||||||
Other consumer
|
|
|
|
|||||||||
Construction
|
|
|
|
|||||||||
|
$
|
|
$
|
|
$
|
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
September 30, 2022
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Commercial - specialized
|
|
|
|
|
|
|||||||||||||||
Commercial - general
|
|
|
|
|
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
|
|
|
|||||||||||||||
Auto loans
|
|
|
|
|
|
|||||||||||||||
Other consumer
|
|
|
|
|
|
|||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
December 31, 2021
|
||||||||||||||||||||
Commercial real estate
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Commercial - specialized
|
|
|
|
|
|
|||||||||||||||
Commercial - general
|
|
|
|
|
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
|
|
|
|
|
|||||||||||||||
Auto loans
|
|
|
|
|
|
|||||||||||||||
Other consumer
|
|
|
|
|
|
|||||||||||||||
Construction
|
|
|
|
|
|
|||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
2022
|
December 31,
2021
|
|||||||
Amortized intangible assets
|
||||||||
Core deposit intangible
|
$
|
|
$
|
|
||||
Less: Accumulated amortization
|
(
|
)
|
(
|
)
|
||||
|
|
|||||||
Other intangibles
|
|
|
||||||
Less: Accumulated amortization
|
(
|
)
|
(
|
)
|
||||
|
|
|||||||
Other intangible assets, net
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Additions
|
|
|
|
|
||||||||||||
Valuation adjustment
|
|
|
|
|
||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Mortgage loans serviced for others
|
$
|
|
$
|
|
||||
Mortgage servicing rights assets as a percentage of serviced mortgage loans
|
|
%
|
|
%
|
September 30,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Weighted average constant prepayment rate
|
|
%
|
|
%
|
||||
Weighted average discount rate
|
|
%
|
|
%
|
||||
Weighted average life in years
|
|
|
Number
of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Nine Months Ended September 30, 2022
|
||||||||||||||||
Outstanding at beginning of year:
|
|
$
|
|
$
|
|
|||||||||||
Granted
|
|
|
|
|||||||||||||
Exercised
|
(
|
)
|
|
(
|
)
|
|||||||||||
Forfeited
|
(
|
)
|
|
(
|
)
|
|||||||||||
Expired
|
(
|
)
|
|
(
|
)
|
|||||||||||
Balance, September 30, 2022
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at end of period
|
|
$
|
|
|
$
|
|
||||||||||
Vested at end of period
|
|
$
|
|
|
$
|
|
Nine Months Ended
September 30,
|
||||||||
2022
|
2021
|
|||||||
Expected volatility
|
|
|
||||||
Expected dividend yield
|
|
|
|
|
||||
Expected term (years)
|
|
|
||||||
Risk-free interest rate
|
|
|
||||||
Weighted average grant date fair value
|
$
|
|
$
|
|
Number
of Shares
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Nine Months Ended September 30, 2022
|
||||||||
Outstanding at beginning of year:
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Balance, September 30, 2022
|
|
$
|
|
September 30,
2022
|
December 31,
2021
|
|||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
|
$
|
|
||||
Standby letters of credit
|
|
|
September 30,
2022
|
||||
Operating lease right of use assets (included in )
|
$
|
|
||
Operating lease liabilities (included in )
|
|
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
||||||
|
2022
|
2022
|
||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows used in operating leases
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for new lease obligations:
|
||||||||
Operating leases
|
$
|
|
$
|
|
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total minimum lease payments
|
|
|||
Less: Amount representing interest
|
(
|
)
|
||
Lease liabilities
|
$
|
|
Actual
|
Minimum Required
Under BASEL III
Fully Phased-In
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
September 30, 2022
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Common Equity Tier 1 to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
December 31, 2021
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
$
|
|
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Common Equity Tier 1 to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
Three Months Ended
|
||||||||||
September 30,
|
||||||||||
Interest Rate Contracts
|
Location
|
2022
|
2021
|
|||||||
Interest rate swaps - fair value hedges
|
Interest income
|
$
|
|
$
|
(
|
)
|
||||
Fair value hedge ineffectiveness
|
Other noninterest expense
|
$
|
|
$
|
|
Nine Months Ended
|
||||||||||
September 30,
|
||||||||||
Interest Rate Contracts
|
Location
|
2022
|
2021
|
|||||||
Interest rate swaps - fair value hedges
|
Interest income
|
$
|
|
$
|
(
|
)
|
||||
Fair value hedge ineffectiveness
|
Other noninterest expense
|
$
|
|
$
|
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other liabilities:
|
||||||||||||||||
Interest rate swaps related to fixed rate loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate swaps related to state and municipal securities
|
|
|
|
|
||||||||||||
Included in other assets:
|
||||||||||||||||
Interest rate swaps related to fixed rate loans
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate swaps related to state and municipal securities
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
September 30,
|
|||||||
|
Location |
2022
|
2021
|
||||||
Forward contracts related to mortgage loans held for sale
|
Net gain (loss) on sales of loans
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Interest rate lock commitments
|
Net gain (loss) on sales of loans
|
$
|
|
$
|
|
Nine Months Ended
|
|||||||||
September 30,
|
|||||||||
|
Location |
2022
|
2021
|
||||||
Forward contracts related to mortgage loans held for sale
|
Net gain (loss) on sales of loans
|
$
|
(
|
)
|
$
|
|
|||
Interest rate lock commitments
|
Net gain (loss) on sales of loans
|
$
|
|
$
|
(
|
)
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other assets:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate lock commitments
|
|
|
|
|
||||||||||||
Total included in other assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Included in other liabilities:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest rate lock commitments
|
|
|
|
|
||||||||||||
|
||||||||||||||||
Total included in other liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average common shares outstanding - basic
|
|
|
|
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock-based compensation awards
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding - diluted
|
|
|
|
|
||||||||||||
Basic earnings per share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted earnings per share
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30, 2022
|
Banking
|
Insurance
|
Consolidated
|
|||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
||||||
Provision for loan losses
|
|
|
|
|||||||||
Noninterest income
|
|
|
|
|||||||||
Noninterest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before income taxes
|
|
|
|
|||||||||
Income tax (expense) benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30, 2021
|
Banking
|
Insurance
|
Consolidated
|
|||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
||||||
Provision for loan losses
|
|
|
|
|||||||||
Noninterest income
|
|
|
|
|||||||||
Noninterest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before income taxes
|
|
|
|
|||||||||
Income tax (expense) benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income
|
$
|
|
$
|
|
$
|
|
Nine Months Ended September 30, 2022
|
Banking
|
Insurance
|
Consolidated
|
|||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
||||||
Provision for loan losses
|
|
|
|
|||||||||
Noninterest income
|
|
|
|
|||||||||
Noninterest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before income taxes
|
|
|
|
|||||||||
Income tax (expense) benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income
|
$
|
|
$
|
|
$
|
|
Nine Months Ended September 30, 2021
|
Banking
|
Insurance
|
Consolidated
|
|||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
||||||
Provision for loan losses
|
|
|
|
|||||||||
Noninterest income
|
|
|
|
|||||||||
Noninterest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before income taxes
|
|
|
|
|||||||||
Income tax (expense) benefit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net income
|
$
|
|
$
|
|
$
|
|
● |
Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or
liabilities that the reporting entity has the ability to access at the measurement date.
|
● |
Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs
other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or
other means.
|
● |
Level 3 Inputs - Significant unobservable inputs for determining the fair values of assets
or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
September 30, 2022
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
State and municipal
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Mortgage-backed securities
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations
|
|
|
|
|
||||||||||||
Asset-backed and other amortizing securities
|
|
|
|
|
||||||||||||
Other securities
|
|
|
|
|
||||||||||||
Loans held for sale (mandatory)
|
|
|
|
|
||||||||||||
Mortgage servicing rights
|
|
|
|
|
||||||||||||
Asset derivatives
|
|
|
|
|
||||||||||||
Liability derivatives
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
|
|
|
|
||||||||||||
December 31, 2021
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
State and municipal
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Mortgage-backed securities
|
|
|
|
|
||||||||||||
Collateralized mortgage obligations
|
|
|
|
|
||||||||||||
Asset-backed and other amortizing securities
|
|
|
|
|
||||||||||||
Other securities
|
|
|
|
|
||||||||||||
Loans held for sale (mandatory)
|
|
|
|
|
||||||||||||
Mortgage servicing rights
|
|
|
|
|
||||||||||||
Asset derivatives
|
|
|
|
|
||||||||||||
Liability derivatives
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
|
|
|
|
Fair
Value
|
Valuation
Techniques
|
Unobservable
Inputs
|
Range of
Discounts
|
||||||||
September 30, 2022
|
|||||||||||
Non-recurring: |
|||||||||||
Impaired loans
|
$
|
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
|
%
|
|||||
Recurring: |
|||||||||||
Mortgage servicing rights
|
|
Discounted cash flows
|
Conditional prepayment rate
|
|
%
|
||||||
Discount rate
|
|
%
|
|||||||||
December 31, 2021
|
|||||||||||
Non-recurring: |
|||||||||||
Impaired loans
|
$
|
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
|
%
|
|||||
Recurring: |
|||||||||||
Mortgage servicing rights
|
|
Discounted cash flows
|
Conditional prepayment rate
|
|
%
|
||||||
Discount rate
|
|
%
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||||||
September 30, 2022
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Loans held for investment, net
|
|
|
|
|
|
|||||||||||||||
Loans held for sale (best efforts) |
||||||||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
|
|
|
|
|
|||||||||||||||
Subordinated debt securities
|
|
|
|
|
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||||||
December 31, 2021
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Loans held for investment, net
|
|
|
|
|
|
|||||||||||||||
Loans held for sale (best efforts) |
||||||||||||||||||||
Accrued interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Accrued interest payable
|
|
|
|
|
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
|
|
|
|
|
|||||||||||||||
Subordinated debt securities
|
|
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
● |
our ability to effectively execute our expansion strategy and manage our growth, including identifying and consummating suitable acquisitions;
|
● |
business and economic conditions, particularly those affecting our market areas, as well as the concentration of our business in such market areas;
|
● |
the impact, duration and severity of the ongoing COVID-19 pandemic, or any current or future variants thereof, and the response of governmental authorities to the COVID-19 pandemic and our participation in
COVID-19-related government programs such as the Paycheck Protection Program (the “PPP”) administered by the Small Business Administration (the “SBA”) and created under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES
Act”);
|
● |
the uncertain inflationary outlook in the United States and our market areas, and its impact on market interest rates, the economy and credit quality;
|
● |
high concentrations of loans secured by real estate located in our market areas;
|
● |
risks associated with our commercial loan portfolio, including the uncertain economic consequences of the ongoing COVID-19 pandemic, or any current or future variants thereof, or any deterioration in value of
the general business assets that secure such loans;
|
● |
potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;
|
● |
risks associated with our agricultural loan portfolio, including the heightened sensitivity to weather conditions, commodity prices, and other factors generally outside the borrowers and our control;
|
● |
risks associated with the sale of crop insurance products, including termination of or substantial changes to the federal crop insurance program;
|
● |
risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;
|
● |
public funds deposits comprising a relatively high percentage of our deposits;
|
● |
potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;
|
● |
our ability to maintain our reputation;
|
● |
our ability to successfully manage our credit risk and the sufficiency of our allowance for loan losses;
|
● |
our ability to attract, hire and retain qualified management personnel;
|
● |
our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;
|
● |
market interest rate fluctuations, which could have an adverse effect on our profitability;
|
● |
increases in market interest rates, which could negatively impact bond market values and result in a lower net book value;
|
● |
our ability to successfully manage the current rising market interest rate environment, our credit risk and the level of future non-performing assets and charge-offs;
|
● |
competition from banks, credit unions and other financial services providers;
|
● |
our ability to keep pace with technological change or difficulties we may experience when implementing new technologies;
|
● |
system failures, service denials, cyber-attacks and security breaches;
|
● |
our ability to maintain effective internal control over financial reporting;
|
● |
employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;
|
● |
increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;
|
● |
our ability to maintain adequate liquidity and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;
|
● |
costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;
|
● |
natural disasters, severe weather, acts of god, acts of war or terrorism, outbreaks of hostilities, public health outbreaks (such as the ongoing COVID-19 pandemic), other international or domestic calamities,
and other matters beyond our control;
|
● |
tariffs and trade barriers;
|
● |
compliance with governmental and regulatory requirements, including the Dodd-Frank Act Wall Street Reform and Consumer Protection Act, the Economic Growth, Regulatory Relief, and Consumer Protection Act
(“EGRRCPA”), and others relating to banking, consumer protection, securities and tax matters; and
|
● |
changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including our ability to navigate the uncertain
impacts of quantitative tightening and current and future governmental monetary and fiscal policies, including the policies of the Board of Governors of the Federal Reserve System (“Federal Reserve”) and as a result of initiatives of the
Biden administration.
|
Three Months Ended September 30,
|
||||||||||||||||||||||||
2022
|
2021
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, excluding PPP(1)
|
$
|
2,666,429
|
$
|
34,176
|
5.09
|
%
|
$
|
2,365,010
|
$
|
28,947
|
4.86
|
%
|
||||||||||||
Loans - PPP
|
4,754
|
288
|
24.03
|
86,645
|
1,872
|
8.57
|
||||||||||||||||||
Investment securities – taxable
|
617,722
|
4,166
|
2.68
|
531,620
|
2,309
|
1.72
|
||||||||||||||||||
Investment securities – non-taxable
|
215,508
|
1,428
|
2.63
|
221,026
|
1,468
|
2.64
|
||||||||||||||||||
Other interest-earning assets(2)
|
293,636
|
1,351
|
1.83
|
284,369
|
151
|
0.21
|
||||||||||||||||||
Total interest-earning assets
|
3,798,049
|
41,409
|
4.33
|
3,488,670
|
34,747
|
3.95
|
||||||||||||||||||
Noninterest-earning assets
|
208,135
|
259,641
|
||||||||||||||||||||||
Total assets
|
$
|
4,006,184
|
$
|
3,748,311
|
||||||||||||||||||||
Liabilities and Stockholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW, savings and money market deposits
|
$
|
1,873,786
|
$
|
3,514
|
0.74
|
%
|
$
|
1,820,677
|
$
|
1,005
|
0.22
|
%
|
||||||||||||
Time deposits
|
330,133
|
1,023
|
1.23
|
330,161
|
1,025
|
1.23
|
||||||||||||||||||
Short-term borrowings
|
4
|
—
|
0.00
|
725
|
—
|
0.00
|
||||||||||||||||||
Notes payable & other longer-term borrowings
|
—
|
—
|
0.00
|
—
|
—
|
0.00
|
||||||||||||||||||
Subordinated debt securities
|
75,914
|
1,012
|
5.29
|
75,728
|
1,013
|
5.31
|
||||||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
457
|
3.91
|
46,393
|
217
|
1.86
|
||||||||||||||||||
Total interest-bearing liabilities
|
$
|
2,326,230
|
$
|
6,006
|
1.02
|
%
|
$
|
2,273,684
|
$
|
3,260
|
0.57
|
%
|
||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
$
|
1,248,804
|
$
|
1,035,910
|
||||||||||||||||||||
Other liabilities
|
78,139
|
43,171
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
1,326,943
|
1,079,081
|
||||||||||||||||||||||
Stockholders’ equity
|
353,011
|
395,546
|
||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
4,006,184
|
$
|
3,748,311
|
||||||||||||||||||||
Net interest income
|
$
|
35,403
|
$
|
31,487
|
||||||||||||||||||||
Net interest spread
|
3.30
|
%
|
3.38
|
%
|
||||||||||||||||||||
Net interest margin(3)
|
3.70
|
%
|
3.58
|
%
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
2022
|
2021
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, excluding PPP(1)
|
$
|
2,548,174
|
$
|
97,321
|
5.11
|
%
|
$
|
2,246,650
|
$
|
82,314
|
4.90
|
%
|
||||||||||||
Loans - PPP
|
19,509
|
1,941
|
13.30
|
141,040
|
7,147
|
6.78
|
||||||||||||||||||
Investment securities – taxable
|
592,069
|
10,058
|
2.27
|
540,380
|
7,118
|
1.76
|
||||||||||||||||||
Investment securities – non-taxable
|
216,951
|
4,315
|
2.66
|
219,242
|
4,414
|
2.69
|
||||||||||||||||||
Other interest-earning assets(2)
|
363,659
|
2,213
|
0.81
|
328,412
|
373
|
0.15
|
||||||||||||||||||
Total interest-earning assets
|
3,740,362
|
115,848
|
4.14
|
3,475,724
|
101,366
|
3.90
|
||||||||||||||||||
Noninterest-earning assets
|
236,296
|
261,449
|
||||||||||||||||||||||
Total assets
|
$
|
3,976,658
|
$
|
3,737,173
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW, savings and money market deposits
|
$
|
1,905,000
|
$
|
5,782
|
0.41
|
%
|
$
|
1,834,113
|
$
|
3,259
|
0.24
|
%
|
||||||||||||
Time deposits
|
334,686
|
2,962
|
1.18
|
326,862
|
3,114
|
1.27
|
||||||||||||||||||
Short-term borrowings
|
4
|
—
|
0.00
|
10,725
|
5
|
0.06
|
||||||||||||||||||
Notes payable & other longer-term borrowings
|
—
|
—
|
0.00
|
26,188
|
38
|
0.19
|
||||||||||||||||||
Subordinated debt securities
|
75,852
|
3,037
|
5.35
|
75,682
|
3,044
|
5.38
|
||||||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
1,005
|
2.90
|
46,393
|
661
|
1.90
|
||||||||||||||||||
Total interest-bearing liabilities
|
$
|
2,361,935
|
$
|
12,786
|
0.72
|
%
|
$
|
2,319,963
|
$
|
10,121
|
0.58
|
%
|
||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
$
|
1,174,783
|
$
|
991,331
|
||||||||||||||||||||
Other liabilities
|
64,639
|
41,996
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
1,239,422
|
1,033,327
|
||||||||||||||||||||||
Shareholders’ equity
|
375,301
|
383,883
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
3,976,658
|
$
|
3,737,173
|
||||||||||||||||||||
Net interest income
|
$
|
103,062
|
$
|
91,245
|
||||||||||||||||||||
Net interest spread
|
3.42
|
%
|
3.32
|
%
|
||||||||||||||||||||
Net interest margin(3)
|
3.68
|
%
|
3.51
|
%
|
(1) |
Average loan balances include nonaccrual loans and loans held for sale.
|
(2) |
Includes income and average balances for interest-earning deposits at other banks, nonmarketable securities, federal funds sold and other miscellaneous interest-earning assets.
|
(3) |
Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.
|
Three Months Ended September 30,
|
||||||||||||
2022 over 2021
|
||||||||||||
Change due to:
|
Total
Variance
|
|||||||||||
Volume
|
Rate
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans, excluding PPP
|
$
|
3,689
|
$
|
1,540
|
$
|
5,229
|
||||||
Loans - PPP
|
(1,769
|
)
|
185
|
(1,584
|
)
|
|||||||
Investment securities – taxable
|
374
|
1,483
|
1,857
|
|||||||||
Investment securities – non-taxable
|
(37
|
)
|
(3
|
)
|
(40
|
)
|
||||||
Other interest-earning assets
|
5
|
1,195
|
1,200
|
|||||||||
Total increase (decrease) in interest income
|
2,262
|
4,400
|
6,662
|
|||||||||
Interest-bearing liabilities:
|
||||||||||||
NOW, Savings, MMDAs
|
29
|
2,480
|
2,509
|
|||||||||
Time deposits
|
—
|
(2
|
)
|
(2
|
)
|
|||||||
Short-term borrowings
|
—
|
—
|
—
|
|||||||||
Notes payable & other borrowings
|
—
|
—
|
—
|
|||||||||
Subordinated debt securities
|
2
|
(3
|
)
|
(1
|
)
|
|||||||
Junior subordinated deferrable interest debentures
|
—
|
240
|
240
|
|||||||||
Total increase (decrease) interest expense:
|
31
|
2,715
|
2,746
|
|||||||||
Increase (decrease) in net interest income
|
$
|
2,231
|
$
|
1,685
|
$
|
3,916
|
Nine Months Ended September 30,
|
||||||||||||
2022 over 2021
|
||||||||||||
Change due to:
|
Total
Variance
|
|||||||||||
Volume
|
Rate
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans, excluding PPP
|
$
|
11,047
|
$
|
3,960
|
$
|
15,007
|
||||||
Loans - PPP
|
(6,158
|
)
|
952
|
(5,206
|
)
|
|||||||
Investment securities – taxable
|
681
|
2,259
|
2,940
|
|||||||||
Investment securities – non-taxable
|
(46
|
)
|
(53
|
)
|
(99
|
)
|
||||||
Other interest-earning assets
|
40
|
1,800
|
1,840
|
|||||||||
Total increase (decrease) in interest income
|
5,564
|
8,918
|
14,482
|
|||||||||
Interest-bearing liabilities:
|
||||||||||||
NOW, Savings, MMDAs
|
126
|
2,397
|
2,523
|
|||||||||
Time deposits
|
75
|
(227
|
)
|
(152
|
)
|
|||||||
Short-term borrowings
|
(5
|
)
|
—
|
(5
|
)
|
|||||||
Notes payable & other borrowings
|
(38
|
)
|
—
|
(38
|
)
|
|||||||
Subordinated debt securities
|
7
|
(14
|
)
|
(7
|
)
|
|||||||
Junior subordinated deferrable interest debentures
|
—
|
344
|
344
|
|||||||||
Total increase (decrease) interest expense:
|
165
|
2,500
|
2,665
|
|||||||||
Increase (decrease) in net interest income
|
$
|
5,399
|
$
|
6,418
|
$
|
11,817
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||
2022
|
2021
|
Increase
(Decrease)
|
2022
|
2021
|
Increase
(Decrease)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Noninterest income:
|
||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
1,764
|
$
|
1,851
|
$
|
(87
|
)
|
$
|
5,149
|
$
|
5,023
|
$
|
126
|
|||||||||||
Income from insurance activities
|
4,856
|
3,794
|
1,062
|
8,003
|
6,146
|
1,857
|
||||||||||||||||||
Bank card services and interchange fees
|
3,156
|
3,045
|
111
|
9,856
|
8,760
|
1,096
|
||||||||||||||||||
Mortgage banking activities
|
6,288
|
14,802
|
(8,514
|
)
|
28,594
|
47,329
|
(18,735
|
)
|
||||||||||||||||
Investment commissions
|
391
|
430
|
(39
|
)
|
1,403
|
1,390
|
13
|
|||||||||||||||||
Fiduciary income
|
568
|
556
|
12
|
1,815
|
2,234
|
(419
|
)
|
|||||||||||||||||
Other income and fees(1)
|
3,914
|
1,313
|
2,601
|
8,649
|
3,659
|
4,990
|
||||||||||||||||||
Total noninterest income
|
$
|
20,937
|
$
|
25,791
|
$
|
(4,854
|
)
|
$
|
63,469
|
$
|
74,541
|
$
|
(11,072
|
)
|
(1) |
Other income and fees includes the increase in the cash surrender value of life insurance, safe deposit box rental, check printing, collections, legal settlements, wire transfer and other miscellaneous
services.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||
2022
|
2021
|
Increase
(Decrease)
|
2022
|
2021
|
Increase
(Decrease)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Noninterest expense:
|
||||||||||||||||||||||||
Salaries and employee benefits
|
$
|
22,927
|
$
|
24,116
|
$
|
(1,189
|
)
|
$
|
67,620
|
$
|
71,811
|
$
|
(4,191
|
)
|
||||||||||
Occupancy expense, net
|
4,132
|
3,896
|
236
|
11,902
|
10,960
|
942
|
||||||||||||||||||
Professional services
|
2,523
|
1,388
|
1,135
|
7,795
|
4,483
|
3,312
|
||||||||||||||||||
Marketing and development
|
913
|
777
|
136
|
2,391
|
2,157
|
234
|
||||||||||||||||||
IT and data services
|
908
|
1,068
|
(160
|
)
|
2,902
|
3,029
|
(127
|
)
|
||||||||||||||||
Bankcard expenses
|
1,399
|
1,339
|
60
|
4,050
|
3,640
|
410
|
||||||||||||||||||
Appraisal expenses
|
359
|
790
|
(431
|
)
|
1,432
|
2,350
|
(918
|
)
|
||||||||||||||||
Other expenses(1)
|
4,240
|
4,689
|
(449
|
)
|
13,289
|
13,468
|
(179
|
)
|
||||||||||||||||
Total noninterest expense
|
$
|
37,401
|
$
|
38,063
|
$
|
(662
|
)
|
$
|
111,381
|
$
|
111,898
|
$
|
(517
|
)
|
(1) |
Other expenses include items such as telephone expenses, postage, courier fees, directors’ fees, and insurance.
|
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Fifteen Years
|
Due after
Fifteen Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Commercial real estate
|
$
|
116,194
|
$
|
426,898
|
$
|
244,483
|
$
|
81,656
|
$
|
869,231
|
||||||||||
Commercial - specialized
|
98,706
|
159,969
|
63,261
|
46,268
|
368,204
|
|||||||||||||||
Commercial - general
|
61,356
|
155,582
|
136,366
|
123,905
|
477,209
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
31,870
|
74,860
|
74,777
|
243,295
|
424,802
|
|||||||||||||||
Auto loans
|
3,064
|
161,110
|
144,937
|
—
|
309,111
|
|||||||||||||||
Other consumer
|
4,887
|
47,487
|
28,150
|
—
|
80,524
|
|||||||||||||||
Construction
|
139,837
|
2,661
|
938
|
17,849
|
161,285
|
|||||||||||||||
Total loans
|
$
|
455,914
|
$
|
1,028,567
|
$
|
692,912
|
$
|
512,973
|
$
|
2,690,366
|
Fixed
Rate
|
Adjustable
Rate
|
|||||||
(Dollars in thousands)
|
||||||||
Commercial real estate
|
$
|
326,890
|
$
|
426,148
|
||||
Commercial - specialized
|
69,927
|
199,571
|
||||||
Commercial - general
|
150,518
|
265,334
|
||||||
Consumer:
|
||||||||
1-4 family residential
|
231,728
|
161,204
|
||||||
Auto loans
|
306,047
|
—
|
||||||
Other consumer
|
75,271
|
365
|
||||||
Construction
|
1,617
|
19,832
|
||||||
Total loans
|
$
|
1,161,998
|
$
|
1,072,454
|
September 30,
2022
|
December 31,
2021
|
|||||||
(Dollars in thousands)
|
||||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
741,347
|
$
|
542,338
|
||||
Standby letters of credit
|
12,563
|
12,418
|
||||||
Total
|
$
|
753,910
|
$
|
554,756
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Net charge-offs (recoveries) during the period
|
||||||||||||||||
Commercial real estate
|
$
|
—
|
$
|
—
|
$
|
(418
|
)
|
$
|
—
|
|||||||
Commercial – specialized
|
(831
|
)
|
(4
|
)
|
(836
|
)
|
(98
|
)
|
||||||||
Commercial – general
|
(135
|
)
|
(61
|
)
|
(76
|
)
|
186
|
|||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
15
|
(2
|
)
|
53
|
47
|
|||||||||||
Auto loans
|
27
|
91
|
105
|
335
|
||||||||||||
Other consumer
|
270
|
171
|
580
|
401
|
||||||||||||
Construction
|
—
|
—
|
166
|
(4
|
)
|
|||||||||||
Total net charge-offs (recoveries) during the period
|
(654
|
)
|
195
|
(426
|
)
|
867
|
||||||||||
Total average loans outstanding during period
|
$
|
2,671,183
|
$
|
2,451,655
|
$
|
2,567,683
|
$
|
2,387,690
|
||||||||
Total ratio of net charge-offs (recoveries) to average loans during the period (annualized)
|
(0.10
|
)%
|
0.03
|
%
|
(0.02
|
)%
|
0.05
|
%
|
September 30,
2022
|
December 31,
2021
|
|||||||
(Dollars in thousands)
|
||||||||
Total loans held for investment outstanding
|
$
|
2,690,366
|
$
|
2,437,577
|
||||
Nonaccrual loans
|
$
|
4,945
|
$
|
9,518
|
||||
Allowance for loan losses
|
$
|
39,657
|
$
|
42,098
|
||||
Ratio of allowance to total loans held for investment
|
1.47
|
%
|
1.73
|
%
|
||||
Ratio of allowance to nonaccrual loans
|
801.96
|
%
|
442.30
|
%
|
||||
Ratio of nonaccrual loans to total loans held for investment
|
0.18
|
%
|
0.39
|
%
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Commercial real estate
|
$
|
12,611
|
31.8
|
%
|
$
|
17,245
|
41.0
|
%
|
||||||||
Commercial – specialized
|
3,705
|
9.3
|
4,363
|
10.4
|
||||||||||||
Commercial – general
|
10,425
|
26.3
|
8,466
|
20.1
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
5,561
|
14.0
|
5,268
|
12.5
|
||||||||||||
Auto loans
|
3,892
|
9.8
|
3,653
|
8.7
|
||||||||||||
Other consumer
|
1,455
|
3.7
|
1,357
|
3.2
|
||||||||||||
Construction
|
2,008
|
5.1
|
1,746
|
4.1
|
||||||||||||
Total allowance for loan losses
|
$
|
39,657
|
100.0
|
%
|
$
|
42,098
|
100.0
|
%
|
As of September 30, 2022
|
||||||||||||||||||||||||||||||||
Due in One
Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Ten Years
|
Due after
Ten Years
|
|||||||||||||||||||||||||||||
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||||||||||
State and municipal
|
$
|
1,901
|
3.43
|
%
|
$
|
8,704
|
2.16
|
%
|
$
|
7,532
|
2.22
|
%
|
$
|
242,144
|
2.24
|
%
|
||||||||||||||||
Mortgage-backed securities
|
5
|
1.99
|
%
|
3,008
|
1.98
|
54,125
|
2.21
|
388,174
|
2.20
|
|||||||||||||||||||||||
Collateralized mortgage obligations
|
—
|
—
|
—
|
—
|
86,120
|
3.52
|
—
|
—
|
||||||||||||||||||||||||
Asset-backed and other amortizing securities
|
—
|
—
|
—
|
—
|
1,758
|
2.92
|
20,408
|
2.81
|
||||||||||||||||||||||||
Other securities
|
—
|
—
|
—
|
—
|
12,000
|
4.47
|
—
|
—
|
||||||||||||||||||||||||
Total available-for-sale
|
$
|
1,906
|
3.43
|
%
|
$
|
11,712
|
2.12
|
%
|
$
|
161,535
|
3.09
|
%
|
$
|
650,726
|
2.24
|
%
|
As of December 31, 2021
|
||||||||||||||||||||||||||||||||
Due in One
Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Ten Years
|
Due after
Ten Years
|
|||||||||||||||||||||||||||||
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||||||||||
State and municipal
|
$
|
1,939
|
2.74
|
%
|
$
|
7,563
|
2.58
|
%
|
$
|
10,502
|
2.11
|
%
|
$
|
245,139
|
2.24
|
%
|
||||||||||||||||
Mortgage-backed securities
|
—
|
—
|
1,476
|
1.43
|
59,116
|
2.20
|
242,381
|
1.86
|
||||||||||||||||||||||||
Collateralized mortgage obligations
|
—
|
—
|
—
|
—
|
106,733
|
0.56
|
—
|
—
|
||||||||||||||||||||||||
Asset-backed and other amortizing securities
|
—
|
—
|
—
|
—
|
2,328
|
2.90
|
23,718
|
2.82
|
||||||||||||||||||||||||
Other securities
|
—
|
—
|
—
|
—
|
12,000
|
4.47
|
—
|
—
|
||||||||||||||||||||||||
Total available-for-sale
|
$
|
1,939
|
2.74
|
%
|
$
|
9,039
|
2.39
|
%
|
$
|
190,679
|
1.43
|
%
|
$
|
511,238
|
2.09
|
%
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest-bearing deposits
|
$
|
1,262,072
|
36.5
|
%
|
$
|
1,071,367
|
32.1
|
%
|
||||||||
NOW and other transaction accounts
|
353,871
|
10.2
|
395,322
|
11.8
|
||||||||||||
Money market and other savings
|
1,518,485
|
43.9
|
1,534,795
|
45.9
|
||||||||||||
Time deposits
|
326,108
|
9.4
|
339,738
|
10.2
|
||||||||||||
Total deposits
|
$
|
3,460,536
|
100.0
|
%
|
$
|
3,341,222
|
100.0
|
%
|
Three Months Ended September 30,
|
||||||||||||||||
2022
|
2021
|
|||||||||||||||
Average
Balance
|
Weighted
Average Rate
|
Average
Balance
|
Weighted
Average Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest-bearing deposits
|
$
|
1,248,804
|
0.00
|
%
|
$
|
1,035,910
|
0.00
|
%
|
||||||||
Interest-bearing deposits:
|
||||||||||||||||
NOW and interest-bearing demand accounts
|
345,048
|
0.62
|
%
|
356,868
|
0.01
|
%
|
||||||||||
Savings accounts
|
153,848
|
0.34
|
%
|
134,436
|
0.09
|
%
|
||||||||||
Money market accounts
|
1,374,890
|
0.82
|
%
|
1,329,373
|
0.29
|
%
|
||||||||||
Time deposits
|
330,133
|
1.23
|
%
|
330,161
|
1.23
|
%
|
||||||||||
Total interest-bearing deposits
|
2,203,919
|
0.82
|
%
|
2,150,838
|
0.37
|
%
|
||||||||||
Total deposits
|
$
|
3,452,723
|
0.52
|
%
|
$
|
3,186,748
|
0.25
|
%
|
Nine Months Ended September 30,
|
||||||||||||||||
2022
|
2021
|
|||||||||||||||
Average
Balance
|
Weighted
Average Rate
|
Average
Balance
|
Weighted
Average Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest-bearing deposits
|
$
|
1,174,783
|
0.00
|
%
|
$
|
991,331
|
0.00
|
%
|
||||||||
Interest-bearing deposits:
|
||||||||||||||||
NOW and interest-bearing demand accounts
|
357,547
|
0.31
|
%
|
349,646
|
0.03
|
%
|
||||||||||
Savings accounts
|
150,133
|
0.18
|
%
|
129,004
|
0.08
|
%
|
||||||||||
Money market accounts
|
1,397,321
|
0.45
|
%
|
1,355,463
|
0.31
|
%
|
||||||||||
Time deposits
|
334,686
|
1.18
|
%
|
326,862
|
1.27
|
%
|
||||||||||
Total interest-bearing deposits
|
2,239,687
|
0.52
|
%
|
2,160,975
|
0.39
|
%
|
||||||||||
Total deposits
|
$
|
3,414,470
|
0.34
|
%
|
$
|
3,152,306
|
0.27
|
%
|
(Dollars in thousands)
|
Three
Months
|
Three to
Six Months
|
Six to
12 Months
|
After
12 Months
|
Total
|
|||||||||||||||
$
|
37,983
|
$
|
27,761
|
$
|
12,920
|
$
|
3,504
|
$
|
82,168
|
As of/For the
Three Months Ended
September 30,
|
As of/For the
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Amount outstanding at end of the period
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Weighted average interest rate at end of the period
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||||
Maximum month-end balance during the period
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
75,000
|
||||||||
Average balance outstanding during the period
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
26,188
|
||||||||
Weighted average interest rate during the period
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.19
|
%
|
Name of Trust
|
Issue
Date
|
Amount of
Trust Preferred
Securities
|
Amount of
Debentures
|
Stated
Maturity Date of
Trust Preferred
Securities and
Debentures(1)
|
Interest Rate of
Trust Preferred
Securities and
Debentures(2)(3)
|
||||||||||
(Dollars in thousands)
|
|||||||||||||||
South Plains Financial Capital Trust III
|
2004
|
$
|
10,000
|
$
|
10,310
|
2034
|
3-mo. LIBOR + 265 bps; 3.83%
|
||||||||
South Plains Financial Capital Trust IV
|
2005
|
20,000
|
20,619
|
2035
|
3-mo. LIBOR + 139 bps; 3.22%
|
||||||||||
South Plains Financial Capital Trust V
|
2007
|
15,000
|
15,464
|
2037
|
3-mo. LIBOR + 150 bps; 3.33%
|
||||||||||
Total
|
$
|
45,000
|
$
|
46,393
|
(1) |
May be redeemed at the Company’s option.
|
(2) |
Interest payable quarterly with principal due at maturity.
|
(3) |
Rate as of last reset date, prior to September 30, 2022.
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
South Plains Financial, Inc.:
|
||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
551,832
|
16.46
|
%
|
$
|
524,836
|
18.40
|
%
|
||||||||
Tier 1 capital (to risk-weighted assets)
|
436,081
|
13.01
|
413,322
|
14.49
|
||||||||||||
CET1 capital (to risk-weighted assets)
|
391,081
|
11.67
|
368,322
|
12.91
|
||||||||||||
Tier 1 capital (to average assets)
|
436,081
|
10.95
|
413,322
|
10.77
|
||||||||||||
City Bank:
|
||||||||||||||||
Total capital (to risk-weighted assets)
|
$
|
448,194
|
13.37
|
%
|
$
|
425,748
|
14.93
|
%
|
||||||||
Tier 1 capital (to risk-weighted assets)
|
408,357
|
12.18
|
390,015
|
13.67
|
||||||||||||
CET1 capital (to risk-weighted assets)
|
408,357
|
12.18
|
390,015
|
13.67
|
||||||||||||
Tier 1 capital (to average assets)
|
408,357
|
10.26
|
390,015
|
10.16
|
September 30,
2022
|
December 31,
2021
|
||||||||
Change in Interest Rates (Basis Points)
|
Percent Change in
Net Interest Income
|
Percent Change in
Net Interest Income
|
|||||||
+300
|
2.03
|
%
|
6.89
|
%
|
|||||
+200
|
1.29
|
%
|
4.53
|
%
|
|||||
+100
|
0.74
|
%
|
2.02
|
%
|
|||||
-100
|
(1.96
|
)%
|
(1.05
|
)%
|
September 30,
2022
|
December 31,
2021
|
|||||||
(Dollars in thousands)
|
||||||||
Total stockholders’ equity
|
$
|
341,799
|
$
|
407,427
|
||||
Less: Goodwill and other intangibles
|
(24,228
|
)
|
(25,403
|
)
|
||||
Tangible common equity
|
$
|
317,571
|
$
|
382,024
|
||||
Total assets
|
$
|
3,992,690
|
$
|
3,901,855
|
||||
Less: Goodwill and other intangibles
|
(24,228
|
)
|
(25,403
|
)
|
||||
Tangible assets
|
$
|
3,968,462
|
$
|
3,876,452
|
||||
Shares outstanding
|
17,064,640
|
17,760,243
|
||||||
Total stockholders’ equity to total assets
|
8.56
|
%
|
10.44
|
%
|
||||
Tangible common equity to tangible assets
|
8.00
|
%
|
9.85
|
%
|
||||
Book value per share
|
$
|
20.03
|
$
|
22.94
|
||||
Tangible book value per share
|
$
|
18.61
|
$
|
21.51
|
Item 3. |
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Total Shares
Repurchased
|
Average Price
Paid Per Share
|
Total Dollar Amount
Purchased Pursuant to
Publicly-Announced Plan
|
Maximum Dollar Amount
Remaining Available for
Repurchase Pursuant to
Publicly-Announced Plan
|
|||||||||||||
July 2022
|
42,125
|
$
|
24.04
|
$
|
1,012,803
|
$
|
12,500,532
|
|||||||||
August 2022
|
194,852
|
26.46
|
5,155,013
|
7,345,519
|
||||||||||||
September 2022
|
129,150
|
27.49
|
3,550,729
|
3,794,789
|
||||||||||||
Total
|
366,127
|
Item 3. |
Defaults upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Exhibit
Number
|
Description
|
|
Amended and Restated Certificate of Formation of South Plains Financial, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form S-1 filed with the SEC on April 12, 2019)
(File No. 333-230851).
|
||
Second Amended and Restated Bylaws of South Plains Financial, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 1,
2021) (File No. 001-38895).
|
||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101*
|
The following material from South Plains Financial, Inc.’s Form 10-Q for the quarter ended September 30, 2022, formatted in XBRL (eXtensible Business Reporting Language), filed herewith:
(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Consolidated
Financial Statements.
|
* |
Filed with this Form 10-Q
|
** |
Furnished with this Form 10-Q
|
South Plains Financial, Inc.
|
|||
Date:
|
November 8, 2022
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
|||
Chairman and Chief Executive Officer
|
|||
Date:
|
November 8, 2022
|
By:
|
/s/ Steven B. Crockett
|
Steven B. Crockett
|
|||
Chief Financial Officer and Treasurer
|