QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
The
|
Large accelerated filer
|
☐
|
|
☒
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
|
|
Emerging growth company
|
|
Page
|
||
PART I.
|
3
|
|
Item 1.
|
3
|
|
3
|
||
4
|
||
6
|
||
7
|
||
8
|
||
Item 2.
|
30
|
|
Item 3.
|
52
|
|
Item 4.
|
52
|
|
PART II.
|
53
|
|
Item 1.
|
53
|
|
Item 1A.
|
53
|
|
Item 2.
|
53
|
|
Item 3.
|
53
|
|
Item 4.
|
53
|
|
Item 5.
|
53
|
|
Item 6.
|
54
|
|
55
|
Item 1. |
Consolidated
Financial Statements
|
September 30,
2022
|
December 31,
2021
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest-bearing deposits in banks
|
|
|
||||||
Cash and cash equivalents
|
|
|
||||||
Securities available for sale
|
|
|
||||||
Loans held for sale
|
|
|
||||||
Loans held for investment
|
|
|
||||||
Allowance for loan losses
|
(
|
)
|
(
|
)
|
||||
Loans held for investment, net
|
||||||||
Accrued interest receivable
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Bank-owned life insurance
|
|
|
||||||
Goodwill
|
|
|
||||||
Intangible assets, net
|
|
|
||||||
Mortgage servicing rights
|
|
|
||||||
Deferred tax asset, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
|
$
|
|
||||
Interest-bearing
|
|
|
||||||
Total deposits
|
|
|
||||||
Accrued expenses and other liabilities
|
|
|
||||||
Subordinated debt securities
|
|
|
||||||
Junior subordinated deferrable interest debentures
|
|
|
||||||
Total liabilities
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
(
|
)
|
|
|||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Interest income:
|
||||||||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities:
|
||||||||||||||||
Taxable
|
|
|
|
|
||||||||||||
Non-taxable
|
|
|
|
|
||||||||||||
Federal funds sold and interest-bearing deposits in banks
|
|
|
|
|
||||||||||||
Total interest income
|
|
|
|
|
||||||||||||
Interest expense:
|
||||||||||||||||
Deposits
|
|
|
|
|
||||||||||||
Notes payable & other borrowings
|
|
|
|
|
||||||||||||
Subordinated debt securities
|
|
|
|
|
||||||||||||
Junior subordinated deferrable interest debentures
|
|
|
|
|
||||||||||||
Total interest expense
|
|
|
|
|
||||||||||||
Net interest income
|
|
|
|
|
||||||||||||
Provision for loan losses
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Net interest income, after provision for loan losses
|
|
|
|
|
||||||||||||
Noninterest income:
|
||||||||||||||||
Service charges on deposit accounts
|
|
|
|
|
||||||||||||
Income from insurance activities
|
|
|
|
|
||||||||||||
Net gain on sales of loans
|
|
|
|
|
||||||||||||
Bank card services and interchange fees
|
|
|
|
|
||||||||||||
Other mortgage banking income
|
|
|
||||||||||||||
Investment commissions
|
|
|
|
|
||||||||||||
Fiduciary fees
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total noninterest income
|
|
|
|
|
||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
|
|
|
|
||||||||||||
Occupancy and equipment, net
|
|
|
|
|
||||||||||||
Professional services
|
|
|
|
|
||||||||||||
Marketing and development
|
|
|
|
|
||||||||||||
IT and data services
|
|
|
|
|
||||||||||||
Bank card expenses
|
|
|
|
|
||||||||||||
Appraisal expenses
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total noninterest expense
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Income tax expense
|
|
|
|
|
||||||||||||
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
|
|
|
|
|
||||||||||||
Tax effect
|
|
|
|
|
||||||||||||
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
|
|
|