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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

(Mark One)

☒

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 

 

For the quarterly period ended September 30, 2022 or

 

☐

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 

 

For the transition period from ______ to ______

 

 

Commission File Number: 0-26128

 

Finward Bancorp

(Exact name of registrant as specified in its charter)

 

Indiana

35-1927981

(State or other jurisdiction of incorporation

(I.R.S. Employer Identification Number)

or organization)

 

 

 9204 Columbia Avenue

 

      Munster, Indiana     

46321

(Address of principal executive offices)

(ZIP code)

 

Registrant's telephone number, including area code: (219) 836‑4400

 

 

N/A

 
 

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock, no par value

FNWD

The NASDAQ Stock Market, LLC

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒                   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐  Accelerated filer ☐  Non-accelerated filer ☒

Smaller Reporting Company ☒  Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

There were 4,297,799 shares of the registrant’s Common Stock, without par value, outstanding at November 14, 2022.

 

 
 
 

 

 

Finward Bancorp

Index

                                                                                                                                                                                                

 

Page

 

Number

PART I. Financial Information

  
   

Item 1.Unaudited Financial Statements and Notes

 1
   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

28
   

Item 3. Quantitative and Qualitative Disclosures about Market Risk

43
   

Item 4. Controls and Procedures

43
   

PART II. Other Information

44
   

SIGNATURES

45
   

EXHIBITS

  

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

 

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

 

32.1 Section 1350 Certifications

 

101 XBRL Interactive Data File

  

 

 

 
 
 

 

 

Finward Bancorp

Consolidated Balance Sheet

 

(Dollars in thousands) 

September 30,

2022

(unaudited)

  

December 31,

2021  

 
         

ASSETS

        
         

Cash and non-interest bearing deposits in other financial institutions

 $26,463  $12,725 

Interest bearing deposits in other financial institutions

  11,151   19,987 

Federal funds sold

  682   464 
         

Total cash and cash equivalents

  38,296   33,176 
         

Certificates of deposit in other financial institutions

  2,214   1,709 
         

Securities available-for-sale

  359,035   526,889 

Loans held-for-sale

  997   4,987 

Loans receivable, net of deferred fees and costs

  1,502,696   966,720 

Less: allowance for loan losses

  (13,398)  (13,343)

Net loans receivable

  1,489,298   953,377 

Federal Home Loan Bank stock

  3,038   3,247 

Accrued interest receivable

  6,849   5,444 

Premises and equipment

  43,865   31,385 

Cash value of bank owned life insurance

  31,754   31,440 

Goodwill

  22,615   11,109 

Other intangible assets

  5,188   3,126 

Other assets

  49,837   14,854 
         

Total assets

 $2,052,986  $1,620,743 
         

LIABILITIES AND STOCKHOLDERS' EQUITY

        
         

Deposits:

        

Non-interest bearing

 $386,137  $295,294 

Interest bearing

  1,446,827   1,138,907 

Total

  1,832,964   1,434,201 

Repurchase agreements

  21,966   14,581 

Borrowed funds

  56,174   - 

Accrued expenses and other liabilities

  23,859   15,346 
         

Total liabilities

  1,934,963   1,464,128 
         

Commitments and contingencies

          
         

Stockholders' Equity:

        

Preferred stock, no par or stated value; 10,000,000 shares authorized, none outstanding

  -   - 

Common stock, no par or stated value; 10,000,000 shares authorized; shares issued and outstanding: September 30, 2022 - 4,297,900 December 31, 2021 - 3,480,701

  -   - 

Additional paid-in capital

  68,826   30,430 

Accumulated other comprehensive (loss) income

  (79,839)  4,276 

Retained earnings

  129,036   121,909 
         

Total stockholders' equity

  118,023   156,615 
         

Total liabilities and stockholders' equity

 $2,052,986  $1,620,743 
 

See accompanying notes to consolidated financial statements.

 

1
 

 

 

Finward Bancorp

Consolidated Statements of Income

(unaudited)

 

(Dollars in thousands)

  

Quarter Ended September 30,

    

Nine Months Ended September 30,

  

(Unaudited)

  

2022

    

2021

    

2022

    

2021

  

Interest income:

                                

Loans receivable

   $ 16,122     $ 10,270     $ 44,629     $ 31,291  

Securities

     2,292       2,378       7,358       6,483  

Other interest earning assets

     125       18       186       54  
                                 

Total interest income

     18,539       12,666       52,173       37,828  
                                 

Interest expense:

                                

Deposits

     871       452       1,597       1,652  

Repurchase agreements

     51       13       93       35  

Borrowed funds

     110       1       143       23  
                                 

Total interest expense

     1,032       466       1,833       1,710  
                                 

Net interest income

     17,507       12,200       50,340       36,118  

Provision for loan losses

     -       139       -       1,293  
                                 

Net interest income after provision for loan losses

     17,507       12,061       50,340       34,825  
                                 

Noninterest income:

                                

Fees and service charges

     1,570       1,473       4,434       4,010  

Wealth management operations

     407       604       1,590       1,787  

Gain on sale of loans held-for-sale, net

     344       1,229       1,242       4,394  

Gain on sale of securities, net

     23       590       662       1,276  

Increase in cash value of bank owned life insurance

     183       180       628       537  

Gain on sale of foreclosed real estate

     -       -       -       27  

Other

     103       70       114       108  
                                 

Total noninterest income

     2,630       4,146       8,670       12,139  
                                 

Noninterest expense:

                                

Compensation and benefits

     7,498       6,042       22,403       17,624  

Data processing

     1,212       872       5,512       1,997  

Occupancy and equipment

     1,804       1,380       5,033       4,076  

Marketing

     587       334       1,623       728  

Federal deposit insurance premiums

     350       236       949       620  

Net loss recognized on sale of premises and equipment

     254       -       254       -  

Other

     3,305       3,537       10,681       8,859  
                                 

Total noninterest expense

     15,010       12,401       46,455       33,904  
                                 

Income before income tax expenses

     5,127       3,806       12,555       13,060  

Income tax expenses

     571       268       1,433       1,408  
                                 

Net income

   $ 4,556     $ 3,538     $ 11,122     $ 11,652  
                                 

Earnings per common share:

                                

Basic

   $ 1.07     $ 1.02     $ 2.68     $ 3.35  

Diluted

   $ 1.07     $ 1.02     $ 2.67     $ 3.35  
                                 

Dividends declared per common share

   $ 0.31     $ 0.31     $ 0.93     $ 0.93  

 

See accompanying notes to consolidated financial statements.

 

2
 

 

 

Finward Bancorp

Consolidated Statements of Comprehensive (Loss) Income

(unaudited)

 

(Dollars in thousands)

  

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2022

    

2021

    

2022

    

2021

  
                                 

Net income

   $ 4,556     $ 3,538     $ 11,122     $ 11,652  
                                 

Net change in net unrealized gains and losses on securities available-for-sale:

                                

Unrealized (loss) gain arising during the period

     (27,900 )     (6,501 )     (105,810 )     (8,638 )

Less: reclassification adjustment for gains included in net income

     (23 )     (590 )     (662 )     (1,276 )

Net securities (loss) gain during the period

     (27,923 )     (7,091 )     (106,472 )     (9,914 )

Tax effect

     5,865       1,490       22,357       2,081  

Other comprehensive (loss) gain, net of tax

     (22,058 )     (5,601 )     (84,115 )     (7,833 )
                                 

Comprehensive (loss) gain, net of tax

     (17,502 )     (2,063 )     (72,993 )     3,819  

 

See accompanying notes to consolidated financial statements.

 

3
 

 

 

Finward Bancorp

Consolidated Statements of Changes in Stockholder's Equity

(unaudited)

 

          

Accumulated

         
      

Additional

  

Other

         
  

Common

  

Paid-in

  

Comprehensive

  

Retained

  

Total

 

(Dollars in thousands, except per share data)

 

Stock

  

Capital

  

(Loss)/Income

  

Earnings

  

Equity

 
                     
                     

Balance at June 30, 2021

 $-  $30,141  $8,209  $117,219  $155,569 
                     

Net income

  -   -   -   3,538   3,538 

Other comprehensive loss, net of tax

  -   -   (5,601)  -   (5,601)

Stock-based compensation expense

  -   143   -   -   143 

Cash dividends, $0.31 per share

  -   -   -   (1,080)  (1,080)
                     

Balance at September 30, 2021

 $-  $30,284  $2,608  $119,677  $152,569 
                     

Balance at January 1, 2021

 $-  $29,987  $10,441  $111,261  $151,689 
                     

Net income

  -   -   -   11,652   11,652 

Other comprehensive loss, net of tax

  -   -   (7,833)  -   (7,833)

Net surrender value of 1,904 restricted stock awards

  -   (131)  -   -   (131)

Stock-based compensation expense

  -   428   -   -   428 

Cash dividends, $0.31 per share

  -   -   -   (3,236)  (3,236)
                     

Balance at September 30, 2021

 $-  $30,284  $2,608  $119,677  $152,569 
                     
                     

Balance at June 30, 2022

 $-  $68,623  $(57,781) $125,812  $136,654 
                     

Net income

  -   -   -   4,556   4,556 

Other comprehensive loss, net of tax

  -   -   (22,058)  -   (22,058)

Stock-based compensation expense

  -   203   -   -   203 

Cash dividends, $0.31 per share

  -   -   -   (1,332)  (1,332)
                     

Balance at September 30, 2022

 $-  $68,826  $(79,839) $129,036  $118,023 
                     

Balance at January 1, 2022

 $-  $30,430  $4,276  $121,909  $156,615 
                     

Net income

  -   -   -   11,122   11,122 

Other comprehensive loss, net of tax

  -   -   (84,115)  -   (84,115)

Net surrender value of 2,479 restricted stock awards

  -   (120)  -   -   (120)

Stock-based compensation expense

  -   535   -   -   535 

Issuance of 795,423 shares at $47.75 per share, for acquisition of Royal Financial, Inc

  -   37,981   -   -   37,981 

Cash dividends, $0.31 per share

  -   -   -   (3,995)  (3,995)
                     

Balance at September 30, 2022

 $-  $68,826  $(79,839) $129,036  $118,023 

 

See accompanying notes to consolidated financial statements.

 

4
 

 

 

Finward Bancorp

Consolidated Statements of Cash Flows

(unaudited)

 

(Dollars in thousands)

 

Nine months ended September 30,

 
  

2022

  

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net income

 $11,122  $11,652 

Adjustments to reconcile net income to net cash provided by operating activities:

        

Origination of loans for sale

  (40,775)  (120,101)

Sale of loans originated for sale

  45,994   131,477 

Depreciation and amortization, net of accretion

  4,695   3,289 

Stock based compensation expense

  535   428 

Gain on sale of securities, net

  (662)  (1,276)

Gain on sale of loans held-for-sale, net

  (1,352)  (4,546)

Loss on sale of premises and equipment, net

  254   - 

Gain on sale of foreclosed real estate

  -   (27)

Gain on cash value of bank owned life insurance

  (628)  (537)

Loss on derivatives

  110   152 

Provision for loan losses

  -   1,293 

Net change in:

        

Interest receivable

  431   (546)

Other assets

  (5,043)  1,591 

Accrued expenses and other liabilities

  (3,045)  (6,290)

Net cash provided by operating activities

  11,636   16,559 
         

CASH FLOWS FROM INVESTING ACTIVITIES:

        

Proceeds from maturities of certificates of deposit in other financial institutions

  474   920 

Purchase of certificates of deposit in other financial institutions

  (734)  - 

Proceeds from maturities and pay downs of securities available-for-sale

  37,289   43,488 

Proceeds from sales of securities available-for-sale

  53,953   28,565 

Purchase of securities available-for-sale

  (30,421)  (191,130)

Proceeds from bank owned life insurance

  314   - 

Net change in loans receivable

  (82,501)  20,148 

Proceeds of Federal Home Loan Bank Stock

  1,512   671 

Purchase of loans receivable

  (2,663)  (11,331)

Purchase of premises and equipment, net

  (2,656)  (1,019)

Proceeds from sale of premises and equipment

  1,694   - 

Proceeds from sale of foreclosed real estate

  -   484 

Cash and cash equivalents from acquisition activity, net

  33,799   - 

Net cash provided by (used in) investing activities

  10,060   (109,204)
         

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Change in deposits

  (76,273)  103,861 

Proceeds from FHLB advances

  37,000   - 

Repayment of FHLB advances

  -   (6,000)

Net surrender value of restricted stock awards

  (120)  (131)

Change in repurchase agreements

  7,385   10,133 

Change in other borrowed funds

  19,174   (149)

Dividends paid

  (3,742)  (3,226)

Net cash (used in) provided by financing activities

  (16,576)  104,488 

Net change in cash and cash equivalents

  5,120   11,843 

Cash and cash equivalents at beginning of period

  33,176   19,922 

Cash and cash equivalents at end of period

 $38,296  $31,765 
         

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

        

Cash paid during the period for:

        

Interest

 $1,749  $1,744 

Income taxes

  1,157   2,185 

Acquisition activity:

        

Fair value of assets acquired, including cash and cash equivalents

 $528,321  $- 

Value of goodwill and other intangible assets

  14,726   - 

Fair value of liabilities assumed

  486,341   - 

Cash paid for acquisition

  18,725   - 

Issuance of common stock for acquisition

  37,981   - 

Noncash activities:

        

Dividends declared not paid

  1,332   1,080 

Securities purchased not settled

  -   11,187 

 

See accompanying notes to consolidated financial statements.

 

5
 

 

Finward Bancorp

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

 

Note 1 - Basis of Presentation

 

Organization and Description of Business

 

The consolidated financial statements include the accounts of Finward Bancorp (the “Bancorp” or “FNWD”), its wholly-owned subsidiaries NWIN Risk Management, Inc. (a captive insurance subsidiary) and Peoples Bank (the “Bank”), and the Bank’s wholly-owned subsidiaries, Peoples Service Corporation, NWIN, LLC; NWIN Funding, Incorporated, 1683 Real Estate LLC, and Columbia Development Company, LLC. The Bancorp’s business activities include being a holding company for the Bank as well as a holding company for NWIN Risk Management, Inc. The Bancorp’s earnings are primarily dependent upon the earnings of the Bank. The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by U.S. generally accepted accounting principles for complete presentation of consolidated financial statements. In the opinion of management, the consolidated financial statements contain all adjustments necessary to present fairly the consolidated balance sheets of the Bancorp as of September 30, 2022, and December 31, 2021, and the consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the quarter and nine months ended September 30, 2022, and 2021, and consolidated statements of cash flows for the nine months ended September 30, 2022, and 2021. The income reported for the nine month period ended September 30, 2022, is not necessarily indicative of the results to be expected for the full year.

 

The Notes to the Consolidated Financial Statements appearing in Finward Bancorp’s Annual Report on Form 10-K (2021 Annual Report), which include descriptions of significant accounting policies, should be read in conjunction with these interim financial statements. The Consolidated Balance Sheet at December 31, 2021, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

 

 

Note 2 - Use of Estimates

Preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period, as well as the disclosures provided. Actual results could differ from those estimates. Estimates associated with the allowance for loan losses, fair values of foreclosed real estate, loan servicing rights, investment securities, deferred tax assets, goodwill, and the status of contingencies are particularly susceptible to material change in the near term.

 

 

Note 3 - Acquisition Activity

On January 31, 2022, Finward Bancorp (“Finward”) completed its previously announced acquisition of Royal Financial, Inc., a Delaware corporation (“RYFL”), pursuant to an Agreement and Plan of Merger dated July 28, 2021 (the “Merger Agreement”) between Finward and RYFL. The stockholders of both Finward and RYFL approved the Merger Agreement at the respective stockholder meetings of the companies held on December 13, 2021. Pursuant to the Merger Agreement, RYFL merged with and into Finward, with Finward as the surviving corporation (the “Merger”), and Royal Savings Bank, an Illinois state-chartered savings bank and wholly-owned subsidiary of RYFL, merged with and into Peoples Bank, the wholly-owned Indiana state-chartered commercial bank subsidiary of Finward, with Peoples Bank as the surviving bank.

 

Under the terms of the merger agreement, RYFL stockholders who owned 101 or more shares of RYFL common stock were permitted to elect to receive either 0.4609 shares of Finward common stock or $20.14 in cash, or a combination of both, for each share of RYFL common stock owned, subject to proration and allocation provisions such that 65% of the shares of RYFL common stock outstanding immediately prior to the closing of the merger were converted into the right to receive shares of Finward common stock and the remaining 35% of the outstanding RYFL shares were converted into the right to receive cash. Stockholders holding less than 101 shares of RYFL common stock received fixed consideration of $20.14 in cash per share and no stock consideration.

 

6
 
 

As a result of RYFL stockholder stock and cash elections and the related allocation and proration provisions of the merger agreement, Finward issued 795,423 shares of its common stock and paid cash consideration of approximately $18.7 million in the Merger. Based on the January 28, 2022, closing price of $47.75 per share of Finward common stock, the transaction had an implied valuation of approximately $56.7 million. In connection with the acquisition, Robert W. Youman, was appointed to the boards of directors of Finward and Peoples Bank effective as of the closing of the Merger. RYFL had a home office and eight branch offices in Cook County and DuPage County, Illinois. The acquisition has further expanded the Bank’s banking center network in Cook County and DuPage County, Illinois.

 

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on the valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, which are based on estimates and assumptions that are subject to change, the final purchase price for the RYFL acquisition is allocated as follows:

 

ASSETS

    

LIABILITIES

    

Cash and due from banks

 $52,524 

Deposits

    

Investment securities, available for sale

  - 

Non-interest bearing

 $32,095 

Certificate of deposit in other financial institutions

  245 

NOW accounts

  63,639 
     

Savings and money market

  184,149 

Total Loans

  450,757 

Certificates of deposits

  195,153 
     

Total Deposits

  475,036 

Premises and equipment, net

  13,896      

FHLB stock

  1,303 

Interest payable

  75 

Goodwill

  11,506 

Other liabilities

  11,228 

Core deposit intangible

  3,220      

Interest receivable

  1,836      

Other assets

  7,758      

Total assets purchased

 $543,045      

Common shares issued

  37,981      

Cash paid

  18,725      

Total purchase price

 $56,706 

Total liabilities assumed

 $486,339 

 

 

During the second quarter of 2022, an adjustment was made to the carrying value of other assets of $189 thousand, due to the valuation of prepaids brought over in the acquisition, and premises and equipment, net, of $48 thousand, due to a correction in the valuation of buildings, in addition, a correction was made to the valuation of shares issued increasing the value by $79 thousand. The resulting impact of these changes was a decrease to the goodwill balance related to the RYFL acquisition of $158 thousand.

 

Final estimates of fair value on the date of acquisition have not been finalized yet. Prior to the end of the one-year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation prospectively. If any adjustments are made to the preliminary assumptions (provisional amounts), disclosures will be made in the notes to the financial statements of the amounts recorded in the current period earnings by line item that have been recorded in previous reporting periods as if the adjustments to the provisional amounts had been recognized as of the acquisition date.

 

Goodwill of approximately $11.5 million, which is the excess of the acquisition consideration over the fair value of net assets acquired, is expected to be recorded in the RYFL acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes. To the extent that management revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded in the RYFL acquisition will change.

 

Gross loans acquired during the RYFL transaction totaled $456.7 million. As of the nine months ended September 30, 2022, the remaining outstanding principal of loans directly related to the RYFL acquisition total $389.5 million, of which $5.6 million are expected to be uncollectable.

 

7
 
 

The following pro-forma and earnings (unaudited) of the combined company are presented as if the RYFL merger had occurred on January 1, 2022 and January 1, 2021:

 

  

For the three months ended

  

For the three months ended

  

For the nine months ended

  

For the nine months ended

 

(in thousands)

 

September 30, 2022

  

September 30, 2021

  

September 30, 2022

  

September 30, 2021

 

Selected Financial Data

                

Interest income

 $18,539  $17,939  $53,868  $52,593 

Interest expense

  (1,032)  (838)  (1,934)  (3,027)

Recovery of (provision for) loan losses

  -   (14)  -   (1,108)

Non-interest income

  2,630   4,376   8,809   12,794 

Non-interest expense (1)

  (15,010)  (15,559)  (44,583)  (42,335)

Income before provision for income taxes

  5,127   5,904   16,160   18,917 

Income tax expense

  (571)  (866)  (2,190)  (2,678)

Net income

 $4,556  $5,038  $13,970  $16,239 
                 

Earnings per common share:

                

Basic

 $1.07  $1.45  $3.36  $4.67 

Diluted

 $1.07  $1.45  $3.35  $4.67 

 

(1) Excludes $2.9 million in pre-tax merger expenses for the nine months ended September 30, 2022.

 

For the nine months ended September 30, 2022, the Bancorp has recorded $2.9 million in pre-tax one-time merger expenses related to the RYFL acquisition, and these expenses have been allocated to the following non-interest expense line items within the income statement:

 

(in thousands)

 

Nine months ended

 

Noninterest expense:

 

September 30, 2022

 

Compensation and benefits

 $132 

Data processing

  1,929 

Marketing

  135 

Other

  656 
     

Period merger expense

 $2,852 

 
 

Note 4 - Securities

The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

 

  

(Dollars in thousands)

 
      

Gross

  

Gross

  

Estimated

 
  

Cost

  

Unrealized

  

Unrealized

  

Fair

 
  

Basis

  

Gains

  

Losses

  

Value

 

September 30, 2022

                

U.S. government sponsored entities

 $8,883  $-  $(1,338) $7,545 

U.S. treasury securities

  394   -   -   394 

Collateralized mortgage obligations and residential mortgage-backed securities

  166,651   -   (29,370)  137,281 

Municipal securities

  282,002   -   (69,214)  212,788 

Collateralized debt obligations

  2,173   -   (1,146)  1,027 

Total securities available-for-sale

 $460,103  $-  $(101,068) $359,035 

 

  

(Dollars in thousands)

 
      

Gross

  

Gross

  

Estimated

 
  

Cost

  

Unrealized

  

Unrealized

  

Fair

 
  

Basis

  

Gains

  

Losses

  

Value

 

December 31, 2021

                

U.S. government sponsored entities

 $8,883  $-  $(214) $8,669 

U.S. treasury securities

  400   -   -   400 

Collateralized mortgage obligations and residential mortgage-backed securities

  187,279   961   (3,539)  184,701 

Municipal securities

  322,750   9,904   (527)  332,127 

Collateralized debt obligations

  2,173   -   (1,181)  992 

Total securities available-for-sale

 $521,485  $10,865  $(5,461) $526,889 

 

8
 
 

The cost basis and estimated fair value of available-for-sale debt securities at September 30, 2022, by contractual maturity, were as follows. Securities not due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.

 

  

(Dollars in thousands)

 
  

Available-for-sale

 
      

Estimated

 
  

Cost

  

Fair

 

September 30, 2022

 

Basis

  

Value

 

Due in one year or less

 $190  $190 

Due from one to five years

  1,978   1,972 

Due from five to ten years

  21,124   18,207 

Due over ten years

  270,160   201,385 
         

Collateralized mortgage obligations and residential mortgage-backed securities

  166,651   137,281 

Total

 $460,103  $359,035 

 

 

Sales of available-for-sale securities were as follows for the quarter ended:

 

  

(Dollars in thousands)

 
  

September 30,

  

September 30,

 
  

2022

  

2021

 
         

Proceeds

 $10,178  $9,275 

Gross gains

  41   591 

Gross losses

  (18)  (1)

 

 

Sales of available-for-sale securities were as follows for the nine months ended:

 

  

(Dollars in thousands)

 
  

September 30,

  

September 30,

 
  

2022

  

2021

 
         

Proceeds

 $53,953  $28,565 

Gross gains

  733   1,297 

Gross losses

  (71)  (21)

 

 

Accumulated other comprehensive income/(loss) balances, net of tax, related to available-for-sale securities, were as follows:

 

  

(Dollars in thousands)

 
  

Unrealized
gain/(loss)

 

Ending balance, June 30, 2022

 $(57,781)

Current period change

  (22,058)

Ending balance, September 30, 2022

 $(79,839)

 

  

(Dollars in thousands)

 
  

Unrealized
gain/(loss)

 

Ending balance, June 30, 2021

 $8,209 

Current period change

  (5,601)

Ending balance, September 30, 2021

 $2,608 

 

  

(Dollars in thousands)

 
  

Unrealized
gain/(loss)

 

Ending balance, December 31, 2021

 $4,276 

Current period change

  (84,115)

Ending balance, September 30, 2022

 $(79,839)

 

  

(Dollars in thousands)

 
  

Unrealized
gain/(loss)