0001628280-23-029275 | 10-Q | XBRL Viewer | Southern States Bancshares INC

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 USD ($) office	Dec. 31, 2022 USD ($)
Finite-Lived Intangible Assets [Line Items]
Number of loan production offices \| office	2
Reserve balances, federal reserve bank	$ 0	$ 0
Securities held to maturity, at amortized cost	19,642,000	$ 19,652,000
Goodwill, impairment loss	0
Accounting Standards Update 2016-13
Finite-Lived Intangible Assets [Line Items]
Allowance for credit losses	$ 1,500,000
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, remaining amortization period	7 years
Impairment of intangible assets, finite-lived	$ 0

SUBORDINATED NOTES	6 Months Ended
SUBORDINATED NOTES	Jun. 30, 2023
Debt Disclosure [Abstract]
SUBORDINATED NOTES	SUBORDINATED NOTESOn February 7, 2022, the Company issued $48,000 of Fixed-to-Floating Rate Subordinated Notes due February 2032 (the “Notes”). The Notes bear interest at 3.5% per annum, payable quarterly in arrears. From and including February 7, 2027, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate plus 205 basis points, payable quarterly in arrears. The Company will be entitled to redeem the Notes, in whole or in part, on any interest payment on or after February 7, 2027, and to redeem the Notes in whole upon certain other events. Issuance costs related to the Notes totaled $1,093 and have been netted against the subordinated notes liability on the balance sheet. At June 30, 2023, the remaining balance of the debt issuance cost was $793. The debt issuance costs are being amortized using the straight line method over sixty months and are recorded as a component of interest expense.On October 26, 2022, the Company issued $40,000 of Fixed-to-Floating Rate Subordinated Notes due October 2032 (the “2032 Notes”). The 2032 Notes bear interest at 7.00% per annum, payable quarterly in arrears. From and including October 26, 2027, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to a Three-Month Term Secured Overnight Financing Rate plus 306 basis points, payable quarterly in arrears. The Company will be entitled to redeem the 2032 Notes, in whole or in part, on any interest payment on or after October 26, 2027, and to redeem the 2032 Notes in whole upon certain other events. Issuance costs related to the 2032 Notes totaled $832 and have been netted against the subordinated notes liability on the balance sheet. At June 30, 2023, the remaining balance of the debt issuance cost was $722. The debt issuance costs are being amortized using the straight line method over sixty months and are recorded as a component of interest expense.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - 6 months ended Jun. 30, 2023 - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Capital Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Unvested Restricted Stock	Vested Restricted Stock Units
Beginning balance (in shares) at Dec. 31, 2022		0	8,706,920
Beginning balance at Dec. 31, 2022	$ 181,719	$ 0	$ 43,714	$ 76,785	$ 73,764	$ (11,048)	$ (477)	$ (1,019)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	16,427				16,427
Issuance of common stock (in shares)			2,217
Issuance of common stock	45		$ 11	34
Exercise of common stock options (in shares)			43,029
Exercise of common stock options	540		$ 215	325
Issuance of restricted stock (in shares)			23,534
Issuance of restricted stock	0		$ 118	565			(683)
Forfeiture of restricted stock (in shares)			(6,397)
Forfeiture of restricted stock	0		$ (32)	(126)			158
Vested restricted stock units	0		$ 21	100				(121)
Issuance of restricted stock units (in shares)			12,713
Issuance of restricted stock units	363							363
Repurchase of common stock under the stock repurchase program (in shares)			(43,202)
Repurchase of common stock under the stock repurchase program	(979)		$ (216)	(763)
Stock-based compensation	474			181			293
Common stock dividends	(1,588)				(1,588)
Other comprehensive income	249					249
Ending balance (in shares) at Jun. 30, 2023		0	8,738,814
Ending balance at Jun. 30, 2023	$ 197,250	$ 0	$ 43,831	$ 77,101	$ 88,603	$ (10,799)	$ (709)	$ (777)

FAIR VALUE OF ASSETS AND LIABILITIES - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Financing Receivable, Recorded Investment	$ 21,719	$ 10,141	$ 11,662
Related Allowance	260	551
Fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Financing Receivable, Recorded Investment	1,069	1,571
Related Allowance	74	215
Cost
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Financing Receivable, Recorded Investment	$ 20,650	$ 8,570

LOANS - Impaired Loans (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2022	Jun. 30, 2023
With no related allowance recorded:
Recorded Investment	$ 10,139	$ 8,878
Unpaid Principal Balance		8,878
Average Recorded Investment	10,187	8,914
Interest Income Recognized	39
With an allowance recorded:
Recorded Investment	1,523	1,263
Unpaid Principal Balance		1,334
Related Allowance		551	$ 260
Average Recorded Investment	1,533	1,304
Interest Income Recognized	51
Total impaired loans
Recorded Investment	11,662	10,141	$ 21,719
Unpaid Principal Balance		10,212
Average Recorded Investment	11,720	10,218
Interest Income Recognized	90
Real estate mortgages \| Construction and development
With no related allowance recorded:
Recorded Investment	397	372
Unpaid Principal Balance		372
Average Recorded Investment	402	397
Interest Income Recognized	2
With an allowance recorded:
Recorded Investment	95	92
Unpaid Principal Balance		92
Related Allowance		39
Average Recorded Investment	96	95
Interest Income Recognized	2
Real estate mortgages \| Residential
With no related allowance recorded:
Recorded Investment	1,172	1,129
Unpaid Principal Balance		1,129
Average Recorded Investment	1,180	1,169
Interest Income Recognized	3
With an allowance recorded:
Recorded Investment	239	255
Unpaid Principal Balance		326
Related Allowance		90
Average Recorded Investment	240	265
Interest Income Recognized	0
Real estate mortgages \| Commercial
With no related allowance recorded:
Recorded Investment	8,532	7,323
Unpaid Principal Balance		7,323
Average Recorded Investment	8,565	7,282
Interest Income Recognized	29
With an allowance recorded:
Recorded Investment	432	623
Unpaid Principal Balance		623
Related Allowance		166
Average Recorded Investment	434	630
Interest Income Recognized	2
Commercial and industrial
With no related allowance recorded:
Recorded Investment	12	36
Unpaid Principal Balance		36
Average Recorded Investment	12	42
Interest Income Recognized	1
With an allowance recorded:
Recorded Investment	757	277
Unpaid Principal Balance		277
Related Allowance		248
Average Recorded Investment	763	298
Interest Income Recognized	47
Consumer and other
With no related allowance recorded:
Recorded Investment	26	18
Unpaid Principal Balance		18
Average Recorded Investment	28	24
Interest Income Recognized	4
With an allowance recorded:
Recorded Investment	0	16
Unpaid Principal Balance		16
Related Allowance		8
Average Recorded Investment	0	$ 16
Interest Income Recognized	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details)	Jun. 30, 2023
Minimum \| Buildings
Property, Plant and Equipment [Line Items]
Premises and equipment, estimated useful life	10 years
Minimum \| Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment, estimated useful life	3 years
Maximum \| Buildings
Property, Plant and Equipment [Line Items]
Premises and equipment, estimated useful life	39 years
Maximum \| Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment, estimated useful life	7 years

SECURITIES - Continuous Unrealized Loss Position (Details) loan in Thousands, $ in Thousands	Jun. 30, 2023 USD ($) loan	Dec. 31, 2022 USD ($)
Gross Unrealized Losses
Less Than Twelve Months	$ (1,309)	$ (6,963)
Over Twelve Months	(13,349)	(8,070)
Total Unrealized Losses	(14,658)	(15,033)
Fair Value
Less Than Twelve Months	38,723	95,631
Over Twelve Months	120,080	53,588
Gross Unrealized Losses
Less Than Twelve Months	0	(2,072)
Over Twelve Months	(3,820)	(2,215)
Total Unrealized Losses	(3,820)	(4,287)
Fair Value
Less Than Twelve Months	0	8,153
Over Twelve Months	15,822	7,211
Gross Unrealized Losses
Less Than Twelve Months	(1,309)	(9,035)
Over Twelve Months	(17,169)	(10,285)
Total Unrealized Losses	(18,478)	(19,320)
Fair Value
Less Than Twelve Months	38,723	103,784
Over Twelve Months	$ 135,902	60,799
Number of securities in loss position \| loan	232
U.S. Treasury securities
Gross Unrealized Losses
Less Than Twelve Months	$ 0	(119)
Over Twelve Months	(1,146)	(1,061)
Total Unrealized Losses	(1,146)	(1,180)
Fair Value
Less Than Twelve Months	0	1,873
Over Twelve Months	8,597	6,711
U.S. Government Sponsored Enterprises (GSEs)
Gross Unrealized Losses
Less Than Twelve Months	0	0
Over Twelve Months	(214)	(221)
Total Unrealized Losses	(214)	(221)
Fair Value
Less Than Twelve Months	0	0
Over Twelve Months	1,596	1,788
State and municipal securities
Gross Unrealized Losses
Less Than Twelve Months	(68)	(2,561)
Over Twelve Months	(5,260)	(3,818)
Total Unrealized Losses	(5,328)	(6,379)
Fair Value
Less Than Twelve Months	606	26,504
Over Twelve Months	39,373	19,012
Gross Unrealized Losses
Less Than Twelve Months	0	(2,072)
Over Twelve Months	(3,820)	(2,215)
Total Unrealized Losses	(3,820)	(4,287)
Fair Value
Less Than Twelve Months	0	8,153
Over Twelve Months	15,822	7,211
Corporate debt securities
Gross Unrealized Losses
Less Than Twelve Months	(440)	(507)
Over Twelve Months	(1,121)	(392)
Total Unrealized Losses	(1,561)	(899)
Fair Value
Less Than Twelve Months	3,560	8,497
Over Twelve Months	7,401	3,130
Asset based securities
Gross Unrealized Losses
Less Than Twelve Months	(161)	(178)
Over Twelve Months	(661)	(564)
Total Unrealized Losses	(822)	(742)
Fair Value
Less Than Twelve Months	10,706	6,497
Over Twelve Months	9,573	6,840
Mortgage-backed GSE residential/multifamily and non-GSE
Gross Unrealized Losses
Less Than Twelve Months	(640)	(3,598)
Over Twelve Months	(4,947)	(2,014)
Total Unrealized Losses	(5,587)	(5,612)
Fair Value
Less Than Twelve Months	23,851	52,260
Over Twelve Months	$ 53,540	$ 16,107

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the balance sheets. The majority of all commitments to extend credit and standby letters of credit are variable rate instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. A summary of the Company’s commitments is as follows:


	June 30, 2023		December 31, 2022
Commitments to extend credit	$	550,086	$	550,315
Standby letters of credit	3,604		5,632
Total	$	553,690	$	555,947

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral held varies and is required in instances which the Company deems necessary.

The Company has not been required to perform on any standby letters of credit, and the Company has not incurred any losses on financial standby letters of credit for the six months ended June 30, 2023 and June 30, 2022.

Contingencies

In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material effect on the Company’s financial statements.

FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial assets:
Cash and cash equivalents	$ 265,929	$ 168,499
Securities available for sale	163,075	155,544
Other equity securities	3,762	4,444
Loans held for sale	1,589	1,047
Trading assets	8,412	8,870
Loans, net	1,695,127	1,567,008
Bank owned life insurance	29,521	29,186
Annuities	15,359	15,478
Accrued interest receivable	7,372	6,963
Restricted equity securities	3,862	3,134
Financial liabilities:
Deposits	1,923,911	1,720,743
Trading liabilities	8,426	8,882
FHLB advances	45,000	31,000
Other borrowings	(13)	(19)
Subordinated notes	86,485	86,314
Accrued interest payable	1,063	584
Fair Value, Inputs, Level 1
Financial assets:
Cash and cash equivalents	265,929	168,499
Securities available for sale	0	0
Other equity securities	3,665	3,674
Loans held for sale	0	0
Trading assets	0	0
Loans, net	0	0
Bank owned life insurance	0	0
Annuities	0	0
Accrued interest receivable	0	0
Restricted equity securities	0	0
Financial liabilities:
Deposits	0	0
Trading liabilities	0	0
FHLB advances	0	0
Other borrowings	0	0
Subordinated notes	0	0
Accrued interest payable	0	0
Fair Value, Inputs, Level 2
Financial assets:
Cash and cash equivalents	0	0
Securities available for sale	163,075	155,544
Other equity securities	0	0
Loans held for sale	1,589	1,047
Trading assets	8,412	8,870
Loans, net	1,663,409	1,529,646
Bank owned life insurance	29,521	29,186
Annuities	15,359	15,478
Accrued interest receivable	7,372	6,963
Restricted equity securities	0	0
Financial liabilities:
Deposits	1,918,749	1,714,249
Trading liabilities	8,426	8,882
FHLB advances	44,842	30,788
Other borrowings	(13)	(19)
Subordinated notes	86,485	86,314
Accrued interest payable	1,063	584
Fair Value, Inputs, Level 3
Financial assets:
Cash and cash equivalents	0	0
Securities available for sale	0	0
Other equity securities	97	770
Loans held for sale	0	0
Trading assets	0	0
Loans, net	809	1,020
Bank owned life insurance	0	0
Annuities	0	0
Accrued interest receivable	0	0
Restricted equity securities	3,862	3,134
Financial liabilities:
Deposits	0	0
Trading liabilities	0	0
FHLB advances	0	0
Other borrowings	0	0
Subordinated notes	0	0
Accrued interest payable	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of Property, Plant and Equipment

The estimated useful lives are as follows:


			Years
Buildings			10-39
Furniture and equipment			3-7

SECURITIES

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

SECURITIES

The amortized cost and fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	9,743	$	—	$	(1,146)	$	8,597
U.S. Government Sponsored Enterprises (GSEs)	2,760		49		(214)		2,595
State and municipal securities	45,307		—		(5,328)		39,979
Corporate debt securities	12,522		—		(1,561)		10,961
Asset based securities	22,341		9		(822)		21,528
Mortgage-backed GSE residential/multifamily and non-GSE	84,995		7		(5,587)		79,415
Total securities available for sale	$	177,668	$	65	$	(14,658)	$	163,075

Securities Held to Maturity


State and municipal securities	19,642		—		(3,820)		15,822



Total securities held to maturity	$	19,642	$	—	$	(3,820)	$	15,822
Total securities	$	197,310	$	65	$	(18,478)	$	178,897


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	9,764	$	—	$	(1,180)	$	8,584
U.S. Government Sponsored Enterprises (GSEs)	2,009		—		(221)		1,788
State and municipal securities	56,204		100		(6,379)		49,925
Corporate debt securities	12,526		—		(899)		11,627
Asset based securities	14,079		—		(742)		13,337
Mortgage-backed GSE residential/multifamily and non-GSE	75,892		3		(5,612)		70,283
Total securities available for sale	$	170,474	$	103	$	(15,033)	$	155,544

Securities Held to Maturity


State and municipal securities	19,652		—		(4,287)		15,365



Total securities held to maturity	$	19,652	$	—	$	(4,287)	$	15,365
Total securities	$	190,126	$	103	$	(19,320)	$	170,909

Securities with a carrying value of $30,758 and $32,222 at June 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits and for other purposes as required or permitted by law.

The amortized cost and fair value of securities available for sale and securities held to maturity as of June 30, 2023 and December 31, 2022 by contractual maturity are shown below. Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid with or without penalty. Therefore, these securities are not included by maturity in the following summary:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities Available for Sale
Due in less than one year	$	346	$	333	$	—	$	—
Due from one year to five years	9,800		8,955		8,338		7,818
Due after five to ten years	22,903		20,165		24,468		22,047
Due after ten years	59,624		54,207		61,776		55,396
Mortgage-backed securities	84,995		79,415		75,892		70,283
Total securities available for sale	$	177,668	$	163,075	$	170,474	$	155,544

Securities Held to Maturity
Due in less than one year	$	—	$	—	$	—	$	—
Due from one year to five years	—		—		—		—
Due after five to ten years	6,226		5,108		5,310		4,255
Due after ten years	13,416		10,714		14,342		11,110
Mortgage-backed securities	—		—		—		—
Total securities held to maturity	$	19,642	$	15,822	$	19,652	$	15,365
Total securities	$	197,310	$	178,897	$	190,126	$	170,909

Restricted equity securities as of June 30, 2023 and December 31, 2022 consist of the following:


	June 30, 2023		December 31, 2022
Federal Home Loan Bank stock	$	2,937	$	2,209
First National Banker’s Bankshares, Inc. stock	675		675
Pacific Coast Banker’s Bank stock	250		250
Total restricted equity securities	$	3,862	$	3,134

The following table shows the gross unrealized losses and fair value of securities, aggregated by category and length of time that securities have been in a continuous unrealized loss position at June 30, 2023 and December 31, 2022.


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	—	$	—	$	(1,146)	$	8,597	$	(1,146)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(214)		1,596		(214)
State and municipal securities	(68)		606		(5,260)		39,373		(5,328)
Corporate debt securities	(440)		3,560		(1,121)		7,401		(1,561)
Asset based securities	(161)		10,706		(661)		9,573		(822)
Mortgage-backed GSE residential/multifamily and non-GSE	(640)		23,851		(4,947)		53,540		(5,587)
Total securities available for sale	$	(1,309)	$	38,723	$	(13,349)	$	120,080	$	(14,658)

Securities Held to Maturity


State and municipal securities	—		—		(3,820)		15,822		(3,820)



Total securities held to maturity	$	—	$	—	$	(3,820)	$	15,822	$	(3,820)
Total securities	$	(1,309)	$	38,723	$	(17,169)	$	135,902	$	(18,478)


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses

December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	(119)	$	1,873	$	(1,061)	$	6,711	$	(1,180)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(221)		1,788		(221)
State and municipal securities	(2,561)		26,504		(3,818)		19,012		(6,379)
Corporate debt securities	(507)		8,497		(392)		3,130		(899)
Asset based securities	(178)		6,497		(564)		6,840		(742)
Mortgage-backed GSE residential/multifamily and non-GSE	(3,598)		52,260		(2,014)		16,107		(5,612)
Total securities available for sale	$	(6,963)	$	95,631	$	(8,070)	$	53,588	$	(15,033)

Securities Held to Maturity


State and municipal securities	(2,072)		8,153		(2,215)		7,211		(4,287)



Total securities held to maturity	$	(2,072)	$	8,153	$	(2,215)	$	7,211	$	(4,287)
Total securities	$	(9,035)	$	103,784	$	(10,285)	$	60,799	$	(19,320)

The unrealized losses on 232 securities at June 30, 2023 were caused by interest rate changes. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before recovery of the amortized cost bases, at maturity, the Company does not consider these securities to be credit impaired at June 30, 2023.

At June 30, 2023, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased. Management measures expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to securities issued by states and political subdivisions, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Historical loss rates associated with securities having similar grades as those in our portfolio have generally not been significant. Furthermore, as of June 30, 2023, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for held to maturity state and municipal securities as such amount is not material at June 30, 2023. All debt securities in an unrealized loss position as of June 30, 2023 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary.

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	6 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Guarantor Obligations [Line Items]
Exposure to credit loss	$ 553,690,000		$ 555,947,000
Provision (credit) for credit losses	2,738,000	$ 2,004,000
Commitments to extend credit
Guarantor Obligations [Line Items]
Exposure to credit loss	550,086,000		550,315,000
Standby letters of credit
Guarantor Obligations [Line Items]
Exposure to credit loss	3,604,000		$ 5,632,000
Provision (credit) for credit losses	$ 0	$ 0

SUBORDINATED NOTES (Details) - Subordinated Debt - USD ($)			6 Months Ended
	Oct. 26, 2022	Feb. 07, 2022	Jun. 30, 2023
Subordinated Notes due February 2032
Debt Instrument [Line Items]
Face amount		$ 48,000,000
Interest rate, stated percentage		3.50%
Debt issuance costs, gross		$ 1,093,000
Debt issuance costs, net			$ 793,000
Amortization period			60 months
Subordinated Notes due February 2032 \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate		20500.00%
Subordinated Notes due October 2032
Debt Instrument [Line Items]
Face amount	$ 40,000,000
Interest rate, stated percentage	7.00%
Debt issuance costs, gross	$ 832,000
Debt issuance costs, net			$ 722,000
Amortization period			60 months
Subordinated Notes due October 2032 \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate	3.06%

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share reflect additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock options issued and the vesting of restricted stock units, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock options and restricted stock units.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Basic Earnings Per Share:
Net Income	$	8,756	$	5,223	$	16,427	$	9,780
Weighted average common shares outstanding	8,763,635		8,740,295		8,763,046		8,818,327
Basic earnings per share	$	1.00	$	0.60	$	1.87	$	1.11
Diluted Earnings Per Share:
Net income allocated to common shareholders	$	8,750	$	5,215	$	16,418	$	9,768
Weighted average common shares outstanding	8,763,635		8,740,295		8,763,046		8,818,327
Net dilutive effect of:
Assumed exercises of stock options and vesting of restricted stock units	187,212		154,282		238,554		142,238
Average shares and dilutive potential common shares	8,950,847		8,894,577		9,001,600		8,960,565
Dilutive earnings per share	$	0.98	$	0.59	$	1.82	$	1.09

REGULATORY MATTERS (Details) $ in Thousands	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Company
Tier 1 capital (to average assets)
Actual amount	$ 190,124	$ 174,679
Actual ratio	0.0870	0.0882
Required for capital adequacy purposes, amount	$ 87,394	$ 79,182
Required for capital adequacy purposes, ratio	0.0400	0.0400
CET 1 capital (to risk-weighted assets)
Actual amount	$ 190,124	$ 174,679
Actual ratio	0.0911	0.0886
Required for capital adequacy purposes, amount	$ 146,135	$ 138,018
Required for capital adequacy purposes, ratio	0.0700	0.0700
Tier 1 capital (to risk-weighted assets)
Actual amount	$ 190,124	$ 174,679
Actual ratio	0.0911	0.0886
Required for capital adequacy purposes, amount	$ 177,449	$ 167,593
Required for capital adequacy purposes, ratio	0.0850	0.0850
Total capital (to risk-weighted assets)
Actual amount	$ 301,004	$ 282,835
Actual ratio	0.1442	0.1434
Required for capital adequacy purposes, amount	$ 219,202	$ 207,027
Required for capital adequacy purposes, ratio	0.1050	0.1050
The Bank
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Retained earnings available for dividend declaration without regulatory approval	$ 71,607
Tier 1 capital (to average assets)
Actual amount	$ 258,303	$ 240,815
Actual ratio	0.1182	0.1217
Required for capital adequacy purposes, amount	$ 87,394	$ 79,182
Required for capital adequacy purposes, ratio	0.0400	0.0400
Minimums to be “well capitalized” under prompt corrective action, amount	$ 109,243	$ 98,977
Minimums to be “well capitalized” under prompt corrective action, ratio	0.0500	0.0500
CET 1 capital (to risk-weighted assets)
Actual amount	$ 258,303	$ 240,815
Actual ratio	0.1237	0.1221
Required for capital adequacy purposes, amount	$ 146,135	$ 138,018
Required for capital adequacy purposes, ratio	0.0700	0.0700
Minimums to be “well capitalized” under prompt corrective action, amount	$ 135,697	$ 128,160
Minimums to be “well capitalized” under prompt corrective action, ratio	0.0650	0.0650
Tier 1 capital (to risk-weighted assets)
Actual amount	$ 258,303	$ 240,815
Actual ratio	0.1237	0.1221
Required for capital adequacy purposes, amount	$ 177,449	$ 167,593
Required for capital adequacy purposes, ratio	0.0850	0.0850
Minimums to be “well capitalized” under prompt corrective action, amount	$ 167,011	$ 157,735
Minimums to be “well capitalized” under prompt corrective action, ratio	0.0800	0.0800
Total capital (to risk-weighted assets)
Actual amount	$ 281,183	$ 260,971
Actual ratio	0.1347	0.1324
Required for capital adequacy purposes, amount	$ 219,202	$ 207,027
Required for capital adequacy purposes, ratio	0.1050	0.1050
Minimums to be “well capitalized” under prompt corrective action, amount	$ 208,764	$ 197,169
Minimums to be “well capitalized” under prompt corrective action, ratio	0.1000	0.1000

REGULATORY MATTERS (Tables)

6 Months Ended

Jun. 30, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

Schedule of Regulatory Capital and Ratios

As of June 30, 2023, the Company and the Bank believe they are each well capitalized on a consolidated basis for bank regulatory purposes as their respective capital ratios exceed minimum total, Tier 1 and CET1 risk-based capital ratios and Tier 1 leverage capital ratios as set forth in the following table. As a bank holding company with less than $3.0 billion in total consolidated assets, the Company is eligible to be treated as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement. As a result, the Company’s capital adequacy is evaluated at the bank level and on a parent-only basis, and it is not subject to consolidated capital standards for regulatory purposes. The ratios set forth below as to the Company are for illustrative purposes in the event it were to become subject to consolidated capital standards for regulatory purposes. The column styled “Required for Capital Adequacy Purposes” includes the 2.50% capital conservation buffer.

The Bank is also subject to capital requirements under the FDIC’s prompt corrective action regime. As of June 30, 2023, the Bank was well capitalized under the regulatory framework for prompt corrective action.

Community Bank Leverage Ratio Framework

As part of the directive under the Economic Growth Act, in September 2019, the FDIC and other federal bank regulatory agencies approved the Community Bank Leverage Ratio (“CBLR”) framework. This optional framework became effective January 1, 2020, and is available to the Company and the Bank as an alternative to the Basel III risk-based capital framework. The CBLR framework provides for a simple measure of capital adequacy for certain community banking organizations. Specifically, depository institutions and depository institution holding companies that have less than $10.0 billion in total consolidated assets and meet other qualifying criteria, including a Tier 1 leverage ratio of greater than 9.00%, are considered qualifying community banking organizations and are eligible to opt into the CBLR framework, and replace the applicable Basel III risk-based capital requirements. As of June 30, 2023, the Company and the Bank qualify for the CBLR framework. Management does not intend to utilize the CBLR framework.


	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action

	Amount		Ratio		Amount		Ratio		Amount		Ratio

As of June 30, 2023

Tier 1 capital (to average assets)
Company	$	190,124	8.70	%	$	87,394	4.00	%	$	—	—
Bank	$	258,303	11.82	%	$	87,394	4.00	%	$	109,243	5.00	%

CET 1 capital (to risk-weighted assets)
Company	$	190,124	9.11	%	$	146,135	7.00	%	$	—	—
Bank	$	258,303	12.37	%	$	146,135	7.00	%	$	135,697	6.50	%

Tier 1 capital (to risk-weighted assets)
Company	$	190,124	9.11	%	$	177,449	8.50	%	$	—	—
Bank	$	258,303	12.37	%	$	177,449	8.50	%	$	167,011	8.00	%

Total capital (to risk-weighted assets)
Company	$	301,004	14.42	%	$	219,202	10.50	%	$	—	—
Bank	$	281,183	13.47	%	$	219,202	10.50	%	$	208,764	10.00	%


	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action

	Amount		Ratio		Amount		Ratio		Amount		Ratio

As of December 31, 2022

Tier 1 capital (to average assets)
Company	$	174,679	8.82	%	$	79,182	4.00	%	$	—	—
Bank	$	240,815	12.17	%	$	79,182	4.00	%	$	98,977	5.00	%

CET 1 capital (to risk-weighted assets)
Company	$	174,679	8.86	%	$	138,018	7.00	%	$	—	—
Bank	$	240,815	12.21	%	$	138,018	7.00	%	$	128,160	6.50	%

Tier 1 capital (to risk-weighted assets)
Company	$	174,679	8.86	%	$	167,593	8.50	%	$	—	—
Bank	$	240,815	12.21	%	$	167,593	8.50	%	$	157,735	8.00	%

Total capital (to risk-weighted assets)
Company	$	282,835	14.34	%	$	207,027	10.50	%	$	—	—
Bank	$	260,971	13.24	%	$	207,027	10.50	%	$	197,169	10.00	%

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
OPERATING ACTIVITIES
Net Income	$ 16,427	$ 9,780
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and software amortization	584	616
Net (gain) loss on securities	(469)	403
Net amortization of securities	319	485
Amortization of core deposit intangible	163	132
Provision for credit losses	2,738	2,004
Deferred income taxes	47	0
Loss on sale of foreclosed assets	7	0
Stock-based compensation	474	476
Net increase in loans held for sale	(542)	(309)
Income from bank owned life insurance	(335)	(287)
Increase in interest receivable	(409)	(669)
Increase (decrease) in interest payable	479	(44)
Net other operating activities	773	4,993
Net cash provided by operating activities	20,256	17,580
INVESTING ACTIVITIES
Purchase of securities available for sale	(23,992)	(39,668)
Proceeds from sale of securities available for sale	10,532	0
Proceeds from sale of other equity securities	703	1,978
Proceeds from maturities, calls, and paydowns of securities available for sale	5,933	5,250
Net purchase of restricted equity securities	(728)	(225)
Purchase of annuities	0	(2,622)
Purchase of bank owned life insurance	0	(7,021)
Net increase in loans	(130,804)	(179,946)
Purchase of premises, equipment and software	(196)	(2,040)
Net cash used in investing activities	(138,552)	(224,294)
FINANCING ACTIVITIES
Net increase in deposits	203,168	88,495
Proceeds from issuance of common stock	585	0
Proceeds from restricted stock units	363	0
Repurchase of common stock	(979)	(7,356)
Repayment of FHLB advances	0	(950)
Net proceeds of other borrowings	14,000	0
Proceeds of note payable	6
Repayment of note payable		(12,498)
Net proceeds of subordinated notes	171	47,013
Common stock dividends paid	(1,588)	(1,599)
Net cash provided by financing activities	215,726	113,105
Net increase (decrease) in cash and cash equivalents	97,430	(93,609)
Cash and cash equivalents at beginning of year	168,499	283,956
Cash and cash equivalents at end of year	265,929	190,347
Cash paid during the year for:
Interest	21,427	2,649
Income taxes	5,070	3,211
NONCASH TRANSACTIONS
Transfers of loans to foreclosed assets	0	0
Internally financed sale of foreclosed assets	$ 53	$ 0

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Unrealized holding gains (losses) on securities available for sale arising during the period, net of tax (benefit)	$ 335	$ 1,646	$ (84)	$ 3,707
Reclassification adjustment for losses (gains) on securities available for sale realized in net income, benefit (tax)	$ 0	$ 0	$ 3	$ 0

STOCKHOLDERS’ EQUITY (Details) - shares	Jun. 30, 2023	Dec. 31, 2022
Equity [Abstract]
Common stock issued (in shares)	8,738,814	8,706,920
Common stock outstanding (in shares)	8,738,814	8,706,920

STOCKHOLDERS’ EQUITY	6 Months Ended
STOCKHOLDERS’ EQUITY	Jun. 30, 2023
Equity [Abstract]
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY As of June 30, 2023, the Company had 8,738,814 shares of common stock issued and outstanding and does not have any non-voting shares issued and outstanding. As of December 31, 2022, the Company had 8,706,920 shares of common stock issued and outstanding and does not have any non-voting shares issued and outstanding.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 1
-Subparagraph (SX 210.3-04)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
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-Paragraph 14
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

FAIR VALUE OF ASSETS AND LIABILITIES - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 3,679	$ 3,950
Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	809	1,020
Foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	2,870	2,930
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 1 \| Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 1 \| Foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 2 \| Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 2 \| Foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0	0
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	3,679	3,950
Fair Value, Inputs, Level 3 \| Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	809	1,020
Fair Value, Inputs, Level 3 \| Foreclosed assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 2,870	$ 2,930

LOANS - Aging of Recorded Investment (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	$ 1,722,278	$ 1,435,089	$ 1,592,707
Nonaccrual with ACL	360		674
Nonaccrual without ACL	650		1,570
Nonaccrual loans interest income	31	100
Real estate mortgages
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income		1,206,254
Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	228,236		255,736
Nonaccrual with ACL	0		0
Nonaccrual without ACL	33		67
Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	214,897		167,891
Nonaccrual with ACL	24		30
Nonaccrual without ACL	273		534
Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	1,011,815		904,872
Nonaccrual with ACL	336		351
Nonaccrual without ACL	335		927
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	259,195	219,284	256,553
Nonaccrual with ACL	0		277
Nonaccrual without ACL	9		35
Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	8,135	$ 9,551	7,655
Nonaccrual with ACL	0		16
Nonaccrual without ACL	0		7
Current
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	1,718,844		1,585,972
Current \| Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	227,719		255,575
Current \| Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	214,158		167,108
Current \| Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	1,009,806		900,895
Current \| Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	259,026		254,824
Current \| Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	8,135		7,570
Total Past Due
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	2,424		4,491
Total Past Due \| Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	484		94
Total Past Due \| Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	442		219
Total Past Due \| Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	1,338		2,699
Total Past Due \| Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	160		1,417
Total Past Due \| Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		62
30-59 Days
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	2,163		4,222
30-59 Days \| Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	484		0
30-59 Days \| Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	442		147
30-59 Days \| Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	1,077		2,634
30-59 Days \| Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	160		1,379
30-59 Days \| Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		62
60-89 Days
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	261		269
60-89 Days \| Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		94
60-89 Days \| Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		72
60-89 Days \| Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	261		65
60-89 Days \| Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		38
60-89 Days \| Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days \| Real estate mortgages \| Construction and development
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days \| Real estate mortgages \| Residential
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days \| Real estate mortgages \| Commercial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days \| Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	0		0
90+ Days \| Consumer and other
Financing Receivable, Past Due [Line Items]
Loans, net of unearned income	$ 0		$ 0

EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Basic Earnings Per Share:
Net Income	$	8,756	$	5,223	$	16,427	$	9,780
Weighted average common shares outstanding	8,763,635		8,740,295		8,763,046		8,818,327
Basic earnings per share	$	1.00	$	0.60	$	1.87	$	1.11
Diluted Earnings Per Share:
Net income allocated to common shareholders	$	8,750	$	5,215	$	16,418	$	9,768
Weighted average common shares outstanding	8,763,635		8,740,295		8,763,046		8,818,327
Net dilutive effect of:
Assumed exercises of stock options and vesting of restricted stock units	187,212		154,282		238,554		142,238
Average shares and dilutive potential common shares	8,950,847		8,894,577		9,001,600		8,960,565
Dilutive earnings per share	$	0.98	$	0.59	$	1.82	$	1.09

LOANS

6 Months Ended

Jun. 30, 2023

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

LOANS

Portfolio Segments and Classes

The composition of loans, excluding loans held for sale, is summarized as follows:


	June 30, 2023			December 31, 2022
	Amount		% of Total	Amount		% of Total
Real estate mortgages:
Construction and development	$	228,236	13.3%	$	255,736	16.1%
Residential	214,897		12.5%	167,891		10.5%
Commercial	1,011,815		58.7%	904,872		56.8%
Commercial and industrial	259,195		15.0%	256,553		16.1%
Consumer and other	8,135		0.5%	7,655		0.5%
Gross Loans	1,722,278		100.0%	1,592,707		100.0%
Deferred loan fees	(5,766)			(5,543)
Allowance for credit losses	(21,385)			(20,156)
Loans, net	$	1,695,127		$	1,567,008

For purposes of the disclosures required pursuant to ASC 310, the loan portfolio was disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are three loan portfolio segments that include real estate, commercial and industrial, and consumer and other. A class is generally determined based on the initial measurement attribute, risk characteristic of the loan, and an entity’s method for monitoring and assessing credit risk. Commercial and industrial is a separate commercial loan class. Classes within the real estate portfolio segment include construction and development, residential mortgages, and commercial mortgages. Consumer loans and other are a class in itself.

Portfolio Segments and Classes (Continued)

The following describe risk characteristics relevant to each of the portfolio segments and classes:

Real estate - As discussed below, the Company offers various types of real estate loan products. All loans within this portfolio segment are particularly sensitive to the valuation of real estate:

•Loans for real estate construction and development are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio class includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral.

•Residential mortgages include 1-4 family first mortgage loans which are repaid by various means such as a borrower’s income, sale of the property, or rental income derived from the property. Also included in residential mortgages are real estate loans secured by farmland, second liens, or open end real estate loans, such as home equity lines. These loans are typically repaid in the same means as 1-4 family first mortgages.

•Commercial real estate mortgage loans include both owner-occupied commercial real estate loans and other commercial real estate loans such as commercial loans secured by income producing properties. Owner-occupied commercial real estate loans made to operating businesses are long-term financing of land and buildings and are repaid by cash flows generated from business operations. Real estate loans for income-producing properties such as apartment buildings, hotels, office and industrial buildings, and retail shopping centers are repaid by cash flows from rent income derived from the properties.

Commercial and industrial - The commercial loan portfolio segment includes commercial and industrial loans. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, leases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the borrowers’ business operations.

Consumer and other - The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures which affects borrowers’ incomes and cash for repayment.

Credit Risk Management

The Chief Credit Officer, Officers Loan Committee and Directors Loan Committee are each involved in the credit risk management process and assess the accuracy of risk ratings, the quality of the portfolio and the estimation of inherent credit losses in the loan portfolio. This comprehensive process also assists in the prompt identification of problem credits. The Company has taken a number of measures to manage the portfolios and reduce risk, particularly in the more problematic portfolios.

The Company employs a credit risk management process with defined policies, accountability and routine reporting to manage credit risk in the loan portfolio segments. Credit risk management is guided by a comprehensive Loan Policy that provides for a consistent and prudent approach to underwriting and approvals of credits. Within the Board approved Loan Policy, procedures exist that elevate the approval requirements as credits become larger and more complex. All loans are individually underwritten, risk-rated, approved, and monitored.

Responsibility and accountability for adherence to underwriting policies and accurate risk ratings lies in each portfolio segment. For the consumer portfolio segment, the risk management process focuses on managing customers who become delinquent in their payments. For the commercial and real estate portfolio segments, the risk management process focuses on underwriting new business and, on an ongoing basis, monitoring the credit of the portfolios. To ensure problem credits are identified on a timely basis, several specific portfolio reviews occur each year to assess the larger adversely rated credits for proper risk rating and accrual status.

Credit Risk Management (Continued)

Credit quality and trends in the loan portfolio segments are measured and monitored regularly. Detailed reports, by product, collateral, accrual status, etc., are reviewed by the Chief Credit Officer and reported to the Board of Directors.

A description of the general characteristics of the risk categories used by the Company is as follows:

•Pass - A pass loan is a strong credit with no existing or known potential weaknesses deserving of management’s close attention.

•Special Mention - A loan that has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

•Substandard - Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

•Doubtful - Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

•Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

The following tables summarize the risk category of the Company’s loan portfolio based upon the most recent analysis performed as of June 30, 2023 and December 31, 2022:


	Pass		Special Mention		Substandard		Doubtful		Total
	(dollars in thousands)
As of June 30, 2023
Real estate mortgages:
Construction and development	$	223,741	$	4,462	$	33	$	—	$	228,236
Residential	213,170		912		815		—		214,897
Commercial	994,874		10,647		6,294		—		1,011,815
Commercial and industrial	237,665		8,442		13,088		—		259,195
Consumer and other	8,109		26		—		—		8,135
Total	$	1,677,559	$	24,489	$	20,230	$	—	$	1,722,278

As of December 31, 2022
Real estate mortgages:
Construction and development	$	251,130	$	4,539	$	67	$	—	$	255,736
Residential	165,388		1,787		716		—		167,891
Commercial	883,082		18,532		3,258		—		904,872
Commercial and industrial	247,948		8,322		283		—		256,553
Consumer and other	7,604		28		23		—		7,655
Total	$	1,555,152	$	33,208	$	4,347	$	—	$	1,592,707

Credit Risk Management (Continued)

Collateral Dependent Loans

The Company classifies a loan as collateral dependent when the borrower is experiencing financial difficulty, and expected repayment is to be provided substantially through the operation or sale of collateral. The following table summarizes collateral dependent loans, which are individually evaluated to determine expected credit losses.


As of June 30, 2023	Real Estate		Other		Total		ACL
Real estate mortgages:
Construction and development	$	254	$	—	$	254	$	35
Residential	1,170		—		1,170		77
Commercial	7,109		—		7,109		148
Commercial and industrial	—		27		27		—
Consumer and other	—		3		3		—
Total	$	8,533	$	30	$	8,563	$	260

Past Due Loans

A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. Generally,

management places a loan on nonaccrual when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. The following tables present the aging of the recorded investment in loans and leases as of June 30, 2023 and December 31, 2022:


			Past Due Status (Accruing Loans)
	Current		30-59 Days		60-89 Days		90+ Days		Total Past Due		Nonaccrual with ACL		Nonaccrual without ACL		Total
As of June 30, 2023
Real estate mortgages:
Construction and development	$	227,719	$	484	$	—	$	—	$	484	$	—	$	33	$	228,236
Residential	214,158		442		—		—		442		24		273		214,897
Commercial	1,009,806		1,077		261		—		1,338		336		335		1,011,815
Commercial and industrial	259,026		160		—		—		160		—		9		259,195
Consumer and other	8,135		—		—		—		—		—		—		8,135
Total	$	1,718,844	$	2,163	$	261	$	—	$	2,424	$	360	$	650	$	1,722,278

As of December 31, 2022
Real estate mortgages:
Construction and development	$	255,575	$	—	$	94	$	—	$	94	$	—	$	67	$	255,736
Residential	167,108		147		72		—		219		30		534		167,891
Commercial	900,895		2,634		65		—		2,699		351		927		904,872
Commercial and industrial	254,824		1,379		38		—		1,417		277		35		256,553
Consumer and other	7,570		62		—		—		62		16		7		7,655
Total	$	1,585,972	$	4,222	$	269	$	—	$	4,491	$	674	$	1,570	$	1,592,707

The Company recognized $31 and $100 of interest income on nonaccrual loans during the six months ended June 30, 2023, and June 30, 2022, respectively.

Allowance for Credit Losses

The following tables detail activity in the allowance for credit losses by portfolio segment as of June 30, 2023 and June 30, 2022. As described in Note 1, the Company adopted ASU 2016-13 on January 1, 2023, which replaced the existing incurred loss methodology with an expected credit loss methodology (referred to as CECL). Under the incurred loss methodology, reserves for credit losses were recognized only when the losses were probable or had been incurred; under CECL, the Company is required to recognize the full amount of expected credit losses for the lifetime of the loan, based on historical experience, current conditions and reasonable and supportable forecasts. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.


	Real Estate		Commercial		Consumer		Total
Allowance for credit losses:
Balance at December 31, 2022	$	14,443	$	5,642	$	71	$	20,156
Impact of adoption of ASC 326	(1,164)		(120)		(1)		(1,285)
Provision (credit) for credit losses	4,080		(1,403)		61		2,738
Loans charged off	—		(262)		(6)		(268)
Recoveries of loans previously charged off	28		14		2		44
Ending balance at June 30, 2023	$	17,387	$	3,871	$	127	$	21,385

Allowance for Loans Losses - Incurred Loss Methodology


	Real Estate		Commercial		Consumer		Total
Allowance for loan losses:
Balance at December 31, 2021	$	11,554	$	3,166	$	124	$	14,844
Provision (credit) for loan losses	93		1,954		(43)		2,004
Loans charged off	(73)		—		(7)		(80)
Recoveries of loans previously charged off	35		—		4		39
Ending balance at June 30, 2022	$	11,609	$	5,120	$	78	$	16,807

Ending balance - individually evaluated for impairment	$	146	$	612	$	—	$	758
Ending balance - collectively evaluated for impairment	11,423		4,508		78		16,009
Ending balance - loans acquired with deteriorated credit quality	40		—		—		40
Total ending balance at June 30, 2022	$	11,609	$	5,120	$	78	$	16,807

Loans:
Ending balance - individually evaluated for impairment	$	9,667	$	769	$	26	$	10,462
Ending balance - collectively evaluated for impairment	1,195,387		218,515		9,525		1,423,427
Ending balance - loans acquired with deteriorated credit quality	1,200		—		—		1,200
Total ending balance at June 30, 2022	$	1,206,254	$	219,284	$	9,551	$	1,435,089

Allowance for Loans Losses - Incurred Loss Methodology (Continued)

We maintain an allowance for credit losses on unfunded loan commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance for credit losses is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the consolidated balance sheet within other liabilities, while corresponding provision for these credit losses is recorded as a component of other operating expense. The allowance for credit losses on unfunded commitments as the result of the adoption of ASC 326 was $1.3 million. At June 30, 2023, $1.5 million in allowance for credit losses on unfunded commitments was included in other liabilities on the consolidated balance sheets.

Impaired Loans - Incurred Loss Methodology

A loan held for investment is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due (both principal and interest) according to the terms of the loan agreement. The following tables detail our impaired loans, by portfolio class as of December 31, 2022.


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
December 31, 2022
With no related allowance recorded:
Real estate mortgages:
Construction and development	$	372	$	372	$	—	$	397
Residential	1,129		1,129		—		1,169
Commercial	7,323		7,323		—		7,282
Commercial and industrial	36		36		—		42
Consumer and other	18		18		—		24
Total with no related allowance recorded	8,878		8,878		—		8,914

With an allowance recorded:
Real estate mortgages:
Construction and development	92		92		39		95
Residential	255		326		90		265
Commercial	623		623		166		630
Commercial and industrial	277		277		248		298
Consumer and other	16		16		8		16
Total with an allowance recorded	1,263		1,334		551		1,304
Total impaired loans	$	10,141	$	10,212	$	551	$	10,218

Impaired Loans - Incurred Loss Methodology (Continued)

A loan held for investment is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due (both principal and interest) according to the terms of the loan agreement. The following tables detail our interest income recognized on impaired loans, by portfolio class in the six months ended June 30, 2022.


	Recorded Investment		Average Recorded Investment		Interest Income Recognized
Six Months Ended June 30, 2022
With no related allowance recorded:
Real estate mortgages:
Construction and development	$	397	$	402	$	2
Residential	1,172		1,180		3
Commercial	8,532		8,565		29
Commercial and industrial	12		12		1
Consumer and other	26		28		4
Total with no related allowance recorded	10,139		10,187		39

With an allowance recorded:
Real estate mortgages:
Construction and development	95		96		2
Residential	239		240		—
Commercial	432		434		2
Commercial and industrial	757		763		47
Consumer and other	—		—		—
Total with an allowance recorded	1,523		1,533		51
Total impaired loans	$	11,662	$	11,720	$	90

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest income:
Loans, including fees	$ 27,630	$ 16,265	$ 52,965	$ 31,031
Taxable securities	1,641	788	3,024	1,407
Nontaxable securities	228	309	519	608
Other interest and dividends	2,686	390	4,376	578
Total interest income	32,185	17,752	60,884	33,624
Interest expense:
Deposits	10,998	889	18,766	1,762
Other borrowings	1,755	498	3,140	843
Total interest expense	12,753	1,387	21,906	2,605
Net interest income	19,432	16,365	38,978	31,019
Provision for credit losses	1,557	1,304	2,738	2,004
Net interest income after provision for credit losses	17,875	15,061	36,240	29,015
Noninterest income:
Service charges on deposit accounts	$ 456	$ 480	$ 906	$ 925
Revenue, Product and Service [Extensible Enumeration]	Deposit Account [Member]	Deposit Account [Member]	Deposit Account [Member]	Deposit Account [Member]
Swap fees	$ 173	$ 21	$ 169	$ 36
SBA/USDA fees	66	93	200	481
Mortgage origination fees	188	213	288	499
Net (loss) gain on securities	(45)	(42)	469	(403)
Employee retention credit and related revenue	5,100	0	5,100	0
Other operating income	924	639	1,516	1,199
Total noninterest income	6,862	1,404	8,648	2,737
Noninterest expenses:
Salaries and employee benefits	7,863	5,982	14,174	11,707
Equipment and occupancy expenses	694	719	1,377	1,424
Data processing fees	646	570	1,239	1,134
Regulatory assessments	180	262	522	525
Other operating expenses	4,049	2,119	6,278	4,152
Total noninterest expenses	13,432	9,652	23,590	18,942
Income before income taxes	11,305	6,813	21,298	12,810
Income tax expense	2,549	1,590	4,871	3,030
Net Income	$ 8,756	$ 5,223	$ 16,427	$ 9,780
Basic earnings per share (in dollars per share)	$ 1.00	$ 0.60	$ 1.87	$ 1.11
Dilutive earnings per share (in dollars per share)	$ 0.98	$ 0.59	$ 1.82	$ 1.09

LOANS - Allowance for Loans Losses (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Allowance for credit losses:
Beginning balance	$ 20,156	$ 14,844
Provision (credit) for credit losses	2,738	2,004
Loans charged off	(268)	(80)
Recoveries of loans previously charged off	44	39
Ending balance	21,385	16,807
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		758
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment		16,009
Loans and Leases Receivable Disclosure [Abstract]
Financing Receivable, Individually Evaluated for Impairment		10,462
Financing Receivable, Collectively Evaluated for Impairment		1,423,427
Gross loans	1,722,278	1,435,089	$ 1,592,707
Accounting Standards Update 2016-13
Allowance for credit losses:
Beginning balance	(1,285)
Ending balance	1,300
Loans and Leases Receivable Disclosure [Abstract]
Allowance for credit losses	1,500
Loans acquired with credit deterioration
Allowance for credit losses:
Ending balance		40
Loans and Leases Receivable Disclosure [Abstract]
Gross loans		1,200
Real Estate
Allowance for credit losses:
Beginning balance	14,443	11,554
Provision (credit) for credit losses	4,080	93
Loans charged off	0	(73)
Recoveries of loans previously charged off	28	35
Ending balance	17,387	11,609
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		146
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment		11,423
Loans and Leases Receivable Disclosure [Abstract]
Financing Receivable, Individually Evaluated for Impairment		9,667
Financing Receivable, Collectively Evaluated for Impairment		1,195,387
Gross loans		1,206,254
Real Estate \| Accounting Standards Update 2016-13
Allowance for credit losses:
Beginning balance	(1,164)
Real Estate \| Loans acquired with credit deterioration
Allowance for credit losses:
Ending balance		40
Loans and Leases Receivable Disclosure [Abstract]
Gross loans		1,200
Commercial
Allowance for credit losses:
Beginning balance	5,642	3,166
Provision (credit) for credit losses	(1,403)	1,954
Loans charged off	(262)	0
Recoveries of loans previously charged off	14	0
Ending balance	3,871	5,120
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		612
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment		4,508
Loans and Leases Receivable Disclosure [Abstract]
Financing Receivable, Individually Evaluated for Impairment		769
Financing Receivable, Collectively Evaluated for Impairment		218,515
Gross loans	259,195	219,284	256,553
Commercial \| Accounting Standards Update 2016-13
Allowance for credit losses:
Beginning balance	(120)
Commercial \| Loans acquired with credit deterioration
Allowance for credit losses:
Ending balance		0
Loans and Leases Receivable Disclosure [Abstract]
Gross loans		0
Consumer
Allowance for credit losses:
Beginning balance	71	124
Provision (credit) for credit losses	61	(43)
Loans charged off	(6)	(7)
Recoveries of loans previously charged off	2	4
Ending balance	127	78
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment		0
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment		78
Loans and Leases Receivable Disclosure [Abstract]
Financing Receivable, Individually Evaluated for Impairment		26
Financing Receivable, Collectively Evaluated for Impairment		9,525
Gross loans	8,135	9,551	$ 7,655
Consumer \| Accounting Standards Update 2016-13
Allowance for credit losses:
Beginning balance	$ (1)
Consumer \| Loans acquired with credit deterioration
Allowance for credit losses:
Ending balance		0
Loans and Leases Receivable Disclosure [Abstract]
Gross loans		$ 0

SECURITIES (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Debt Securities, Available-for-sale

The amortized cost and fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	9,743	$	—	$	(1,146)	$	8,597
U.S. Government Sponsored Enterprises (GSEs)	2,760		49		(214)		2,595
State and municipal securities	45,307		—		(5,328)		39,979
Corporate debt securities	12,522		—		(1,561)		10,961
Asset based securities	22,341		9		(822)		21,528
Mortgage-backed GSE residential/multifamily and non-GSE	84,995		7		(5,587)		79,415
Total securities available for sale	$	177,668	$	65	$	(14,658)	$	163,075

Securities Held to Maturity


State and municipal securities	19,642		—		(3,820)		15,822



Total securities held to maturity	$	19,642	$	—	$	(3,820)	$	15,822
Total securities	$	197,310	$	65	$	(18,478)	$	178,897


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	9,764	$	—	$	(1,180)	$	8,584
U.S. Government Sponsored Enterprises (GSEs)	2,009		—		(221)		1,788
State and municipal securities	56,204		100		(6,379)		49,925
Corporate debt securities	12,526		—		(899)		11,627
Asset based securities	14,079		—		(742)		13,337
Mortgage-backed GSE residential/multifamily and non-GSE	75,892		3		(5,612)		70,283
Total securities available for sale	$	170,474	$	103	$	(15,033)	$	155,544

Securities Held to Maturity


State and municipal securities	19,652		—		(4,287)		15,365



Total securities held to maturity	$	19,652	$	—	$	(4,287)	$	15,365
Total securities	$	190,126	$	103	$	(19,320)	$	170,909

Schedule of Debt Securities, Held-to-maturity

The amortized cost and fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	9,743	$	—	$	(1,146)	$	8,597
U.S. Government Sponsored Enterprises (GSEs)	2,760		49		(214)		2,595
State and municipal securities	45,307		—		(5,328)		39,979
Corporate debt securities	12,522		—		(1,561)		10,961
Asset based securities	22,341		9		(822)		21,528
Mortgage-backed GSE residential/multifamily and non-GSE	84,995		7		(5,587)		79,415
Total securities available for sale	$	177,668	$	65	$	(14,658)	$	163,075

Securities Held to Maturity


State and municipal securities	19,642		—		(3,820)		15,822



Total securities held to maturity	$	19,642	$	—	$	(3,820)	$	15,822
Total securities	$	197,310	$	65	$	(18,478)	$	178,897


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	9,764	$	—	$	(1,180)	$	8,584
U.S. Government Sponsored Enterprises (GSEs)	2,009		—		(221)		1,788
State and municipal securities	56,204		100		(6,379)		49,925
Corporate debt securities	12,526		—		(899)		11,627
Asset based securities	14,079		—		(742)		13,337
Mortgage-backed GSE residential/multifamily and non-GSE	75,892		3		(5,612)		70,283
Total securities available for sale	$	170,474	$	103	$	(15,033)	$	155,544

Securities Held to Maturity


State and municipal securities	19,652		—		(4,287)		15,365



Total securities held to maturity	$	19,652	$	—	$	(4,287)	$	15,365
Total securities	$	190,126	$	103	$	(19,320)	$	170,909

Schedule of Investments Classified by Contractual Maturity Date


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities Available for Sale
Due in less than one year	$	346	$	333	$	—	$	—
Due from one year to five years	9,800		8,955		8,338		7,818
Due after five to ten years	22,903		20,165		24,468		22,047
Due after ten years	59,624		54,207		61,776		55,396
Mortgage-backed securities	84,995		79,415		75,892		70,283
Total securities available for sale	$	177,668	$	163,075	$	170,474	$	155,544

Securities Held to Maturity
Due in less than one year	$	—	$	—	$	—	$	—
Due from one year to five years	—		—		—		—
Due after five to ten years	6,226		5,108		5,310		4,255
Due after ten years	13,416		10,714		14,342		11,110
Mortgage-backed securities	—		—		—		—
Total securities held to maturity	$	19,642	$	15,822	$	19,652	$	15,365
Total securities	$	197,310	$	178,897	$	190,126	$	170,909

Schedule of Restricted Investments

Restricted equity securities as of June 30, 2023 and December 31, 2022 consist of the following:


	June 30, 2023		December 31, 2022
Federal Home Loan Bank stock	$	2,937	$	2,209
First National Banker’s Bankshares, Inc. stock	675		675
Pacific Coast Banker’s Bank stock	250		250
Total restricted equity securities	$	3,862	$	3,134

Schedule of Available-for-sale in Continuous Unrealized Loss Position


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	—	$	—	$	(1,146)	$	8,597	$	(1,146)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(214)		1,596		(214)
State and municipal securities	(68)		606		(5,260)		39,373		(5,328)
Corporate debt securities	(440)		3,560		(1,121)		7,401		(1,561)
Asset based securities	(161)		10,706		(661)		9,573		(822)
Mortgage-backed GSE residential/multifamily and non-GSE	(640)		23,851		(4,947)		53,540		(5,587)
Total securities available for sale	$	(1,309)	$	38,723	$	(13,349)	$	120,080	$	(14,658)

Securities Held to Maturity


State and municipal securities	—		—		(3,820)		15,822		(3,820)



Total securities held to maturity	$	—	$	—	$	(3,820)	$	15,822	$	(3,820)
Total securities	$	(1,309)	$	38,723	$	(17,169)	$	135,902	$	(18,478)


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses

December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	(119)	$	1,873	$	(1,061)	$	6,711	$	(1,180)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(221)		1,788		(221)
State and municipal securities	(2,561)		26,504		(3,818)		19,012		(6,379)
Corporate debt securities	(507)		8,497		(392)		3,130		(899)
Asset based securities	(178)		6,497		(564)		6,840		(742)
Mortgage-backed GSE residential/multifamily and non-GSE	(3,598)		52,260		(2,014)		16,107		(5,612)
Total securities available for sale	$	(6,963)	$	95,631	$	(8,070)	$	53,588	$	(15,033)

Securities Held to Maturity


State and municipal securities	(2,072)		8,153		(2,215)		7,211		(4,287)



Total securities held to maturity	$	(2,072)	$	8,153	$	(2,215)	$	7,211	$	(4,287)
Total securities	$	(9,035)	$	103,784	$	(10,285)	$	60,799	$	(19,320)

Schedule of Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
June 30, 2023
Securities Available for Sale
U.S. Treasury securities	$	—	$	—	$	(1,146)	$	8,597	$	(1,146)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(214)		1,596		(214)
State and municipal securities	(68)		606		(5,260)		39,373		(5,328)
Corporate debt securities	(440)		3,560		(1,121)		7,401		(1,561)
Asset based securities	(161)		10,706		(661)		9,573		(822)
Mortgage-backed GSE residential/multifamily and non-GSE	(640)		23,851		(4,947)		53,540		(5,587)
Total securities available for sale	$	(1,309)	$	38,723	$	(13,349)	$	120,080	$	(14,658)

Securities Held to Maturity


State and municipal securities	—		—		(3,820)		15,822		(3,820)



Total securities held to maturity	$	—	$	—	$	(3,820)	$	15,822	$	(3,820)
Total securities	$	(1,309)	$	38,723	$	(17,169)	$	135,902	$	(18,478)


	Less Than Twelve Months				Over Twelve Months
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses

December 31, 2022
Securities Available for Sale
U.S. Treasury securities	$	(119)	$	1,873	$	(1,061)	$	6,711	$	(1,180)
U.S. Government Sponsored Enterprises (GSEs)	—		—		(221)		1,788		(221)
State and municipal securities	(2,561)		26,504		(3,818)		19,012		(6,379)
Corporate debt securities	(507)		8,497		(392)		3,130		(899)
Asset based securities	(178)		6,497		(564)		6,840		(742)
Mortgage-backed GSE residential/multifamily and non-GSE	(3,598)		52,260		(2,014)		16,107		(5,612)
Total securities available for sale	$	(6,963)	$	95,631	$	(8,070)	$	53,588	$	(15,033)

Securities Held to Maturity


State and municipal securities	(2,072)		8,153		(2,215)		7,211		(4,287)



Total securities held to maturity	$	(2,072)	$	8,153	$	(2,215)	$	7,211	$	(4,287)
Total securities	$	(9,035)	$	103,784	$	(10,285)	$	60,799	$	(19,320)

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

- Definition

Tabular disclosure of information about investment in debt security measured at amortized cost (held-to-maturity).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
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-Name Accounting Standards Codification
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+ Details

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Collateral already posted	$ 8,070
Loss recognized in income from fair value adjustment	(3)
Loss recognized in income from fee income	171
Fair value of derivatives in a net liability position	8,603
Termination value	$ 8,603

LOANS - Composition of Loans (Details) $ in Thousands	Jun. 30, 2023 USD ($) loan_portfolio_segment	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 1,722,278	$ 1,592,707	$ 1,435,089
% of Total	100.00%	100.00%
Deferred loan fees	$ (5,766)	$ (5,543)
Allowance for credit losses	(21,385)	(20,156)	(16,807)	$ (14,844)
Loans, net	$ 1,695,127	1,567,008
Number of loan portfolio segments \| loan_portfolio_segment	3
Real estate mortgages
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income			1,206,254
Allowance for credit losses	$ (17,387)	(14,443)	(11,609)	(11,554)
Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 228,236	$ 255,736
% of Total	13.30%	16.10%
Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 214,897	$ 167,891
% of Total	12.50%	10.50%
Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 1,011,815	$ 904,872
% of Total	58.70%	56.80%
Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 259,195	$ 256,553	219,284
% of Total	15.00%	16.10%
Allowance for credit losses	$ (3,871)	$ (5,642)	(5,120)	(3,166)
Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Loans, net of unearned income	$ 8,135	$ 7,655	9,551
% of Total	0.50%	0.50%
Allowance for credit losses	$ (127)	$ (71)	$ (78)	$ (124)

LOANS - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	$ 1,722,278	$ 1,592,707	$ 1,435,089
Financing receivable, covered, before allowance for credit loss	8,563
ACL	260
Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	8,533
Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	30
Real estate mortgages
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans			1,206,254
Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	228,236	255,736
Financing receivable, covered, before allowance for credit loss	254
ACL	35
Real estate mortgages \| Construction and development \| Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	254
Real estate mortgages \| Construction and development \| Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	0
Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	214,897	167,891
Financing receivable, covered, before allowance for credit loss	1,170
ACL	77
Real estate mortgages \| Residential \| Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	1,170
Real estate mortgages \| Residential \| Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	0
Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	1,011,815	904,872
Financing receivable, covered, before allowance for credit loss	7,109
ACL	148
Real estate mortgages \| Commercial \| Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	7,109
Real estate mortgages \| Commercial \| Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	0
Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	259,195	256,553	219,284
Financing receivable, covered, before allowance for credit loss	27
ACL	0
Commercial and industrial \| Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	0
Commercial and industrial \| Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	27
Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	8,135	7,655	$ 9,551
Financing receivable, covered, before allowance for credit loss	3
ACL	0
Consumer and other \| Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	0
Consumer and other \| Other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable, covered, before allowance for credit loss	3
Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	1,677,559	1,555,152
Pass \| Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	223,741	251,130
Pass \| Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	213,170	165,388
Pass \| Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	994,874	883,082
Pass \| Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	237,665	247,948
Pass \| Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	8,109	7,604
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	24,489	33,208
Special Mention \| Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	4,462	4,539
Special Mention \| Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	912	1,787
Special Mention \| Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	10,647	18,532
Special Mention \| Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	8,442	8,322
Special Mention \| Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	26	28
Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	20,230	4,347
Substandard \| Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	33	67
Substandard \| Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	815	716
Substandard \| Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	6,294	3,258
Substandard \| Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	13,088	283
Substandard \| Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	23
Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	0
Doubtful \| Real estate mortgages \| Construction and development
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	0
Doubtful \| Real estate mortgages \| Residential
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	0
Doubtful \| Real estate mortgages \| Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	0
Doubtful \| Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	0	0
Doubtful \| Consumer and other
Financing Receivable, Credit Quality Indicator [Line Items]
Gross loans	$ 0	$ 0

FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Information related to the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows:


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023
U.S. Treasury securities	$	8,597	$	—	$	8,597	$	—
U.S. Government Sponsored Enterprises (GSEs)	2,595		—		2,595		—
State and municipal securities	39,979		—		39,979		—
Corporate debt securities	10,961		—		10,961		—
Asset based securities	21,528		—		21,528		—
Mortgage-backed GSE residential/multifamily and non-GSE	79,415		—		79,415		—
Other equity securities	3,762		3,665		—		97
Interest Rate Products - asset	8,412		—		8,412		—
Interest Rate Products - liabilities	(8,426)		—		(8,426)		—

December 31, 2022
U.S. Treasury securities	$	8,584	$	—	$	8,584	$	—
U.S. Government Sponsored Enterprises (GSEs)	1,788		—		1,788		—
State and municipal securities	49,925		—		49,925		—
Corporate debt securities	11,627		—		11,627		—
Asset based securities	13,337		—		13,337		—
Mortgage-backed GSE residential/multifamily and non-GSE	70,283		—		70,283		—
Other equity securities	4,444		3,674		—		770
Interest Rate Products - asset	8,870		—		8,870		—
Interest Rate Products - liabilities	(8,882)		—		(8,882)		—

The carrying amount and estimated fair value of the Company’s financial instruments were as follows:


	June 30, 2023
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	265,929	$	265,929	$	—	$	—
Securities available for sale	163,075		—		163,075		—
Other equity securities	3,762		3,665		—		97
Loans held for sale	1,589		—		1,589		—
Trading assets	8,412		—		8,412		—
Loans, net	1,695,127		—		1,663,409		809
Bank owned life insurance	29,521		—		29,521		—
Annuities	15,359		—		15,359		—
Accrued interest receivable	7,372		—		7,372		—
Restricted equity securities	3,862		—		—		3,862

Financial liabilities:
Deposits	$	1,923,911	$	—	$	1,918,749	$	—
Trading liabilities	8,426		—		8,426		—
FHLB advances	45,000		—		44,842		—
Other borrowings	(13)		—		(13)		—
Subordinated notes	86,485		—		86,485		—
Accrued interest payable	1,063		—		1,063		—

Fair Value of Financial Instruments (Continued)


	December 31, 2022
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	168,499	$	168,499	$	—	$	—
Securities available for sale	155,544		—		155,544		—
Other equity securities	4,444		3,674		—		770
Loans held for sale	1,047		—		1,047		—
Trading assets	8,870		—		8,870		—
Loans, net	1,567,008		—		1,529,646		1,020
Bank owned life insurance	29,186		—		29,186		—
Annuities	15,478		—		15,478		—
Accrued interest receivable	6,963		—		6,963		—
Restricted equity securities	3,134		—		—		3,134

Financial liabilities:
Deposits	$	1,720,743	$	—	$	1,714,249	$	—
Trading liabilities	8,882		—		8,882		—
FHLB advances	31,000		—		30,788		—
Other borrowings	(19)		—		(19)		—
Subordinated notes	86,314		—		86,314		—
Accrued interest payable	584		—		584		—

Schedule of Fair Value Measurements, Nonrecurring

Assets measured at fair value on a nonrecurring basis are included in the table below as of June 30, 2023 and December 31, 2022:


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023:
Impaired loans	$	809	$	—	$	—	$	809
Foreclosed assets	2,870		—		—		2,870
Totals	$	3,679	$	—	$	—	$	3,679

Assets Measured at Fair Value on a Nonrecurring Basis (Continued)


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2022:
Impaired loans	$	1,020	$	—	$	—	$	1,020
Foreclosed assets	2,930		—		—		2,930
Totals	$	3,950	$	—	$	—	$	3,950

Schedule of Fair Value Measurement Inputs and Valuation Techniques

For Level 3 assets measured at fair value on a recurring basis as of June 30, 2023, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Recurring:

Other equity securities

Discounted cash flow

Discount rate (%)

N/A

For Level 3 assets measured at fair value on a recurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Recurring:

Other equity securities

770

Discounted cash flow

Discount rate (%)

N/A

For Level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2023, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Nonrecurring:

Impaired loans

809

Appraisal

Appraisal discounts (%)

15-20%

Foreclosed assets

2,870

Appraisal

Appraisal discounts (%)

10-15%

For Level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Nonrecurring:

Impaired loans

1,020

Appraisal

Appraisal discounts (%)

15-20%

Foreclosed assets

2,930

Appraisal

Appraisal discounts (%)

10-15%

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Values of Derivative Instruments on the Balance Sheet


June 30, 2023						December 31, 2022
Derivatives not Designated as Hedging Instruments	Notional Amount		Balance Sheet Location	Fair Value		Derivatives not Designated as Hedging Instruments	Notional Amount		Balance Sheet Location	Fair Value
Interest Rate Products	$	81,649	Other Assets	$	8,412	Interest Rate Products	$	73,631	Other Assets	$	8,870
Interest Rate Products	81,649		Other Liabilities	(8,426)		Interest Rate Products	73,631		Other Liabilities	(8,882)

SECURITIES - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 177,668	$ 170,474
Gross Unrealized Gains	65	103
Gross Unrealized Losses	(14,658)	(15,033)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	163,075	155,544
Securities Held to Maturity
Amortized Cost	19,642	19,652
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(3,820)	(4,287)
Securities held to maturity, at amortized cost	15,822	15,365
Total securities
Amortized Cost	197,310	190,126
Gross Unrealized Gains	65	103
Gross Unrealized Losses	(18,478)	(19,320)
Fair Value	178,897	170,909
Debt securities restricted	30,758	32,222
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	9,743	9,764
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1,146)	(1,180)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	8,597	8,584
U.S. Government Sponsored Enterprises (GSEs)
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,760	2,009
Gross Unrealized Gains	49	0
Gross Unrealized Losses	(214)	(221)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	2,595	1,788
State and municipal securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	45,307	56,204
Gross Unrealized Gains	0	100
Gross Unrealized Losses	(5,328)	(6,379)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	39,979	49,925
Securities Held to Maturity
Amortized Cost	19,642	19,652
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(3,820)	(4,287)
Securities held to maturity, at amortized cost	15,822	15,365
Corporate debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	12,522	12,526
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1,561)	(899)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	10,961	11,627
Asset based securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	22,341	14,079
Gross Unrealized Gains	9	0
Gross Unrealized Losses	(822)	(742)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	21,528	13,337
Mortgage-backed GSE residential/multifamily and non-GSE
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	84,995	75,892
Gross Unrealized Gains	7	3
Gross Unrealized Losses	(5,587)	(5,612)
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	$ 79,415	$ 70,283

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 21,299	$ 15,260
Interest-bearing deposits in banks	159,818	90,198
Federal funds sold	84,812	63,041
Total cash and cash equivalents	265,929	168,499
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	163,075	155,544
Securities held to maturity, at amortized cost	19,642	19,652
Other equity securities, at fair value	3,762	4,444
Restricted equity securities, at cost	3,862	3,134
Loans held for sale	1,589	1,047
Loans, net of unearned income	1,716,512	1,587,164
Less allowance for credit losses	21,385	20,156
Loans, net	1,695,127	1,567,008
Premises and equipment, net	26,957	27,345
Accrued interest receivable	7,372	6,963
Bank owned life insurance	29,521	29,186
Annuities	15,359	15,478
Foreclosed assets	2,870	2,930
Goodwill	16,862	16,862
Core deposit intangible	1,062	1,226
Other assets	24,814	25,886
Total assets	2,277,803	2,045,204
Deposits:
Noninterest-bearing	449,433	460,977
Interest-bearing	1,474,478	1,259,766
Total deposits	1,923,911	1,720,743
Other borrowings	(13)	(19)
FHLB advances	45,000	31,000
Subordinated notes	86,485	86,314
Accrued interest payable	1,063	584
Other liabilities	24,107	24,863
Total liabilities	2,080,553	1,863,485
Stockholders' equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2023 and December 31, 2022	0	0
Common stock, $5 par value, 30,000,000 shares authorized; 8,738,814 and 8,706,920 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	43,831	43,714
Capital surplus	77,101	76,785
Retained earnings	88,603	73,764
Accumulated other comprehensive loss	(10,799)	(11,048)
Unvested restricted stock	(709)	(477)
Vested restricted stock units	(777)	(1,019)
Total stockholders' equity	197,250	181,719
Total liabilities and stockholders' equity	$ 2,277,803	$ 2,045,204

DEPOSITS

6 Months Ended

Jun. 30, 2023

Banking and Thrift, Interest [Abstract]

DEPOSITS

Major classifications of deposits are as follows:


	June 30, 2023		December 31, 2022
Noninterest-bearing transaction	$	449,433	$	460,977
Interest-bearing transaction	922,835		837,127
Savings	41,574		49,235
Time deposits, $250,000 and under	438,228		307,145
Time deposits, over $250,000	71,841		66,259
Total	$	1,923,911	$	1,720,743

Brokered deposits totaled $194,109 at June 30, 2023 and $110,503 at December 31, 2022. The scheduled maturities of time deposits at June 30, 2023 are as follows:


July 1, 2023 – June 30, 2024	$	361,935
July 1, 2024 – June 30, 2025	106,573
July 1, 2025 – June 30, 2026	29,055
July 1, 2026 – June 30, 2027	6,128
July 1, 2027 – June 30, 2028	6,351
Thereafter	27
Total	$	510,069

At June 30, 2023 and December 31, 2022, overdrawn transaction accounts reclassified to loans totaled $119 and $137, respectively.

CONCENTRATIONS OF CREDIT (Details) $ in Thousands	6 Months Ended
CONCENTRATIONS OF CREDIT (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Concentration Risk [Line Items]
Commitments to expend in excess of capital, secured basis, percentage	20.00%
Commitments to expend in excess of capital, secured basis	$ 55,861
Commitments to expend in excess of capital, unsecured basis, percentage	10.00%
Commitments to expend in excess of capital, unsecured basis	$ 27,931
Real estate mortgages \| Financing Receivable \| Loan Portfolio Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	85.00%

FAIR VALUE OF ASSETS AND LIABILITIES - Quantitative Disclosures for Level 3 Fair Value Measurements (Details) $ in Thousands	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	$ 3,762	$ 4,444
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	97	770
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	3,762	4,444
Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	97	770
Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	3,679	3,950
Fair Value, Nonrecurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 3,679	$ 3,950
Impaired loans \| Minimum \| Measurement Input, Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted Average of Input	0.15	0.15
Impaired loans \| Maximum \| Measurement Input, Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted Average of Input	0.20	0.20
Impaired loans \| Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 809	$ 1,020
Impaired loans \| Fair Value, Nonrecurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 809	$ 1,020
Foreclosed assets \| Minimum \| Measurement Input, Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted Average of Input	0.10	0.10
Foreclosed assets \| Maximum \| Measurement Input, Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Weighted Average of Input	0.15	0.15
Foreclosed assets \| Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 2,870	$ 2,930
Foreclosed assets \| Fair Value, Nonrecurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 2,870	$ 2,930

FAIR VALUE OF ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE OF ASSETS AND LIABILITIES

Determination of Fair Value

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic (FASB ASC 820), the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

Fair Value Hierarchy

In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:

Cash and Cash Equivalents: The carrying amounts of cash and due from banks, interest-bearing deposits in banks, and federal funds sold make up cash and cash equivalents. The carrying amount of these short-term instruments approximate fair value.

Securities and Other Equity Securities: Where quoted prices are available in an active market, management classifies the securities within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government bonds and exchange-traded equities.

Fair Value Hierarchy (Continued)

If quoted market prices are not available, management estimates fair values using pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, and credit spreads. Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include GSE obligations, and state and municipal securities. Mortgage-backed securities are included in Level 2 if observable inputs are available. In certain cases where there is limited activity or less transparency around inputs to the valuation, those securities would be classified in Level 3.

Restricted Equity Securities: The carrying amount of restricted equity securities with no readily determinable fair value approximates fair value based on the redemption provisions of the issuers which is cost.

Loans Held for Sale: The carrying amounts of loans held for sale approximates fair value.

Loans: The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair values of fixed rate loans is estimated based on discounted contractual cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality.

Bank Owned Life Insurance: The carrying amount of bank owned life insurance approximates fair value.

Annuities: The carrying amounts of annuities approximate their fair values.

Deposits: The fair values disclosed for transaction deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits.

Other Borrowings: The fair value of fixed rate other borrowings is based on discounted contractual cash flows using interest rates currently being offered for borrowings of similar maturities. The fair values of the Company’s variable rate other borrowings approximate their carrying values.

Subordinated Notes: The carrying amounts of the subordinated notes approximate fair value.

Accrued Interest: The carrying amounts of accrued interest approximate fair value.

Trading Assets and Liabilities: The Company has derivative instruments in the form of interest rate swap agreements accounted for as trading assets and liabilities and carried at fair value. The fair value of these instruments is based on information obtained from a third party financial institution. The Company reflects these instruments within Level 2 of the valuation hierarchy.

Off-Balance Sheet Credit-Related Instruments: Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

Assets Measured at Fair Value on a Recurring Basis

The only assets and liabilities measured at fair value on a recurring basis are our securities available for sale and swaps. There were no transfers between levels during the period. Information related to the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022 is as follows:


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023
U.S. Treasury securities	$	8,597	$	—	$	8,597	$	—
U.S. Government Sponsored Enterprises (GSEs)	2,595		—		2,595		—
State and municipal securities	39,979		—		39,979		—
Corporate debt securities	10,961		—		10,961		—
Asset based securities	21,528		—		21,528		—
Mortgage-backed GSE residential/multifamily and non-GSE	79,415		—		79,415		—
Other equity securities	3,762		3,665		—		97
Interest Rate Products - asset	8,412		—		8,412		—
Interest Rate Products - liabilities	(8,426)		—		(8,426)		—

December 31, 2022
U.S. Treasury securities	$	8,584	$	—	$	8,584	$	—
U.S. Government Sponsored Enterprises (GSEs)	1,788		—		1,788		—
State and municipal securities	49,925		—		49,925		—
Corporate debt securities	11,627		—		11,627		—
Asset based securities	13,337		—		13,337		—
Mortgage-backed GSE residential/multifamily and non-GSE	70,283		—		70,283		—
Other equity securities	4,444		3,674		—		770
Interest Rate Products - asset	8,870		—		8,870		—
Interest Rate Products - liabilities	(8,882)		—		(8,882)		—

Assets Measured at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measure at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below as of June 30, 2023 and December 31, 2022:


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2023:
Impaired loans	$	809	$	—	$	—	$	809
Foreclosed assets	2,870		—		—		2,870
Totals	$	3,679	$	—	$	—	$	3,679

Assets Measured at Fair Value on a Nonrecurring Basis (Continued)


	Fair Value Measurements At Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2022:
Impaired loans	$	1,020	$	—	$	—	$	1,020
Foreclosed assets	2,930		—		—		2,930
Totals	$	3,950	$	—	$	—	$	3,950

Impaired Loans

Loans considered impaired under ASC 310-10-35, Receivables, are loans for which, based on current information and events, it is probable that the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. Impaired loans can be measured based on the present value of expected payments using the loan’s original effective rate as the discount rate, the loan’s observable market price, or the fair value of the collateral less estimated selling costs if the loan is collateral dependent.

The fair value of impaired loans were primarily measured based on the value of the collateral securing these loans. Impaired loans are classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets including equipment, inventory, and/or accounts receivable. The Company generally determines the value of real estate collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraised values are discounted for estimated costs to sell and may be discounted further based on management’s historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts by management are subjective and are typically significant unobservable inputs for determining fair value. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors discussed above.

Impaired loans, which are usually measured for impairment using the fair value of collateral, had a carrying amount of $21,719 and $10,141 with a specific valuation allowance of $260 and $551 at June 30, 2023 and December 31, 2022, respectively. Of the $21,719 and $10,141 impaired loan portfolio, $1,069 and $1,571 were carried at fair value as a result of charge offs, specific valuation allowances, and the fair market adjustments at June 30, 2023 and December 31, 2022, respectively. The remaining $20,650 and $8,570 was carried at cost, as the fair value of the collateral on these loans exceeded the book value for each individual credit at June 30, 2023 and December 31, 2022, respectively. Charge offs and changes in specific valuation allowances at June 30, 2023 and December 31, 2022 on impaired loans carried at fair value resulted in additional provision for credit losses of $74 and $215, respectively.

Foreclosed Assets

Foreclosed assets, consisting of properties/assets obtained through foreclosure or in satisfaction of loans, are initially recorded at fair value less estimated costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value less estimated costs to sell. Fair values are generally based on third party appraisals of the property/assets and are classified within Level 3 of the fair value hierarchy. The appraisals are sometimes further discounted based on management’s historical knowledge, and/or changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts are typically significant unobservable inputs for determining fair value. In cases where the carrying amount exceeds the fair value, less estimated costs to sell, a loss is recognized in noninterest expense.

Quantitative Disclosures for Level 3 Fair Value Measurements

For Level 3 assets measured at fair value on a recurring basis as of June 30, 2023, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Recurring:

Other equity securities

Discounted cash flow

Discount rate (%)

N/A

For Level 3 assets measured at fair value on a recurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Recurring:

Other equity securities

770

Discounted cash flow

Discount rate (%)

N/A

For Level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2023, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Nonrecurring:

Impaired loans

809

Appraisal

Appraisal discounts (%)

15-20%

Foreclosed assets

2,870

Appraisal

Appraisal discounts (%)

10-15%

For Level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2022, the significant unobservable inputs used in the fair value measurements are presented below.

Carrying

Amount

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

of Input

Nonrecurring:

Impaired loans

1,020

Appraisal

Appraisal discounts (%)

15-20%

Foreclosed assets

2,930

Appraisal

Appraisal discounts (%)

10-15%

Fair Value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments were as follows:


	June 30, 2023
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	265,929	$	265,929	$	—	$	—
Securities available for sale	163,075		—		163,075		—
Other equity securities	3,762		3,665		—		97
Loans held for sale	1,589		—		1,589		—
Trading assets	8,412		—		8,412		—
Loans, net	1,695,127		—		1,663,409		809
Bank owned life insurance	29,521		—		29,521		—
Annuities	15,359		—		15,359		—
Accrued interest receivable	7,372		—		7,372		—
Restricted equity securities	3,862		—		—		3,862

Financial liabilities:
Deposits	$	1,923,911	$	—	$	1,918,749	$	—
Trading liabilities	8,426		—		8,426		—
FHLB advances	45,000		—		44,842		—
Other borrowings	(13)		—		(13)		—
Subordinated notes	86,485		—		86,485		—
Accrued interest payable	1,063		—		1,063		—

Fair Value of Financial Instruments (Continued)


	December 31, 2022
			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	168,499	$	168,499	$	—	$	—
Securities available for sale	155,544		—		155,544		—
Other equity securities	4,444		3,674		—		770
Loans held for sale	1,047		—		1,047		—
Trading assets	8,870		—		8,870		—
Loans, net	1,567,008		—		1,529,646		1,020
Bank owned life insurance	29,186		—		29,186		—
Annuities	15,478		—		15,478		—
Accrued interest receivable	6,963		—		6,963		—
Restricted equity securities	3,134		—		—		3,134

Financial liabilities:
Deposits	$	1,720,743	$	—	$	1,714,249	$	—
Trading liabilities	8,882		—		8,882		—
FHLB advances	31,000		—		30,788		—
Other borrowings	(19)		—		(19)		—
Subordinated notes	86,314		—		86,314		—
Accrued interest payable	584		—		584		—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

DEPOSITS - Schedule of Maturities of Time Deposits (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Banking and Thrift, Interest [Abstract]
July 1, 2023 – June 30, 2024	$ 361,935
July 1, 2024 – June 30, 2025	106,573
July 1, 2025 – June 30, 2026	29,055
July 1, 2026 – June 30, 2027	6,128
July 1, 2027 – June 30, 2028	6,351
Thereafter	27
Total time deposits	$ 510,069

COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Loan Commitments


	June 30, 2023		December 31, 2022
Commitments to extend credit	$	550,086	$	550,315
Standby letters of credit	3,604		5,632
Total	$	553,690	$	555,947

DEPOSITS - Schedule of Composition of Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Banking and Thrift, Interest [Abstract]
Noninterest-bearing transaction	$ 449,433	$ 460,977
Interest-bearing transaction	922,835	837,127
Savings	41,574	49,235
Time deposits, $250,000 and under	438,228	307,145
Time deposits, over $250,000	71,841	66,259
Total deposits	$ 1,923,911	$ 1,720,743

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Non-designated Hedges

Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments including the effects of offsetting as well as their classification on the consolidated balance sheets as of June 30, 2023 and December 31, 2022. As of June 30, 2023, the Company has posted cash collateral of $8,070. The amount of loss recognized in income on derivatives as a fair value adjustment and fee income, for the six months ended June 30, 2023, were $3 and $171, respectively.


June 30, 2023						December 31, 2022
Derivatives not Designated as Hedging Instruments	Notional Amount		Balance Sheet Location	Fair Value		Derivatives not Designated as Hedging Instruments	Notional Amount		Balance Sheet Location	Fair Value
Interest Rate Products	$	81,649	Other Assets	$	8,412	Interest Rate Products	$	73,631	Other Assets	$	8,870
Interest Rate Products	81,649		Other Liabilities	(8,426)		Interest Rate Products	73,631		Other Liabilities	(8,882)

Credit-risk-related Contingent Features

Applicable for OTC derivatives with dealers

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with certain of its derivative counterparties that contain a provision where if the company fails to maintain its status as a well / adequate capitalized institution, then the Company could be required to post additional collateral.

As of June 30, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $8,603. If the Company had breached any of these provisions at June 30, 2023, it could have been required to settle its obligations under the agreements at their termination value of $8,603, less the required collateral of $8,070.

DEPOSITS - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Banking and Thrift, Interest [Abstract]
Brokered deposits	$ 194,109	$ 110,503
Overdrawn deposits reclassified as loans	$ 119	$ 137

SECURITIES - Restricted Equity Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt and Equity Securities, FV-NI [Line Items]
Restricted equity securities, at cost	$ 3,862	$ 3,134
Federal Home Loan Bank stock
Debt and Equity Securities, FV-NI [Line Items]
Restricted equity securities, at cost	2,937	2,209
First National Banker’s Bankshares, Inc. stock
Debt and Equity Securities, FV-NI [Line Items]
Restricted equity securities, at cost	675	675
Pacific Coast Banker’s Bank stock
Debt and Equity Securities, FV-NI [Line Items]
Restricted equity securities, at cost	$ 250	$ 250

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Southern States Bancshares, Inc. (the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly-owned subsidiary, Southern States Bank (the “Bank”). The Bank is a commercial bank headquartered in Anniston, Calhoun County, Alabama. The Bank also operates branch offices in Birmingham, Opelika, Auburn, Huntsville, Sylacauga, Wedowee, and Roanoke, Alabama as well as Columbus, Carrollton, Dallas, and Newnan, Georgia. The Bank also has two loan production offices (LPO) located in Atlanta, Georgia. The Bank provides a full range of banking services in its primary market areas and the surrounding areas.

Basis of Presentation and Accounting Estimates

The unaudited consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany transactions and balances have been eliminated in consolidation.

In preparing the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of foreclosed assets, financial instruments, deferred taxes and investment securities. In connection with the determination of the estimated losses on loans and the valuation of foreclosed assets, management obtains independent appraisals for significant collateral.

The determination of the adequacy of the allowance for credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions.

The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its borrowers’ ability to honor their contracts is dependent on local economic conditions.

While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.

Cash, Cash Equivalents and Cash Flows

For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks and federal funds sold. Cash flows from loans held for sale, loans, restricted equity securities, and deposits are reported net.

The Company maintains amounts due from banks which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

The Bank may be required to maintain reserve balances in cash or on deposit with a correspondent bank for the Federal Reserve Bank, based on a percentage of deposits. The total of those reserve balances was $0 at June 30, 2023 and December 31, 2022.

Securities

The Company classifies its securities into one of two categories based upon management’s intent and ability to hold the securities: (i) securities held to maturity or (ii) securities available for sale. Securities classified as held to maturity are stated at cost adjusted for amortization of premiums and accretion of discounts. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. The Company has the ability, and it is management’s intention, to hold such securities to maturity. Securities classified as available for sale are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities available for sale are recorded on the trade date and are determined using the specific identification method.

Management uses a systematic methodology to determine its allowance for credit losses for held to maturity debt securities. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held to maturity portfolio. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The Company’s estimate of its allowance for credit losses involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. Management monitors the held to maturity portfolio to determine whether a valuation account would need to be recorded. As of June 30, 2023, the Company had $19,642 of held to maturity securities and no related valuation account.

For available for sale debt securities in an unrealized loss position, the Company will first assess whether (i) it intends to sell or (ii) it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. If either case is applicable, any previously recognized allowances are charged off and the debt security’s amortized cost is written down to fair value through income. If neither case is applicable, the debt security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the debt security by a rating agency and any adverse conditions specifically related to the debt security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the debt security are compared to the amortized cost basis of the debt security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis. Any impairment that has not been recorded through allowance for credit losses is recognized in other comprehensive income (loss), net of tax. Adjustments to the allowance are reported in the income statement as a component of credit loss expense. Available for sale debt securities are charged off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by the Company or when either of the aforementioned criteria regarding intent or requirement to sell is met.

The Company excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on debt securities and does not record an allowance for credit losses on accrued interest receivable.

Other Equity Securities

The mutual funds owned by the Company are classified as equity securities and are carried at fair value with any periodic changes in value recorded through the statement of income.

Restricted Equity Securities

Restricted equity securities are investments that are restricted in marketability. The Company, as a member of the Federal Home Loan Bank (FHLB) system, is required to maintain an investment in capital stock of the FHLB based upon its assets or outstanding advances. The Company has also purchased stock in First National Banker’s Bankshares, Inc. (FNBB), and Pacific Coast Banker’s Bank (PCBB), both correspondent banks. These securities are carried at cost and periodically evaluated for impairment based on ultimate recoverability of par value.

Loans Held For Sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value (LOCOM). For loans carried at LOCOM, gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. The estimated fair value of loans held for sale is based on independent third party quoted prices.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal balances less deferred fees and costs on originated loans and the allowance for credit losses. Interest income is accrued on the outstanding principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield over the life of the loan, using the straight-line method without anticipating prepayments.

The accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due, or at the time the loan is 90 days past due, unless the loan is well-secured and in the process of collection. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal and interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income or charged to the allowance; unless management believes that the accrual of interest is recoverable through the liquidation of collateral. Interest income on nonaccrual loans is recognized on the cash basis, until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and the loan has been performing according to the contractual terms generally for a period of not less than six months.

Certain Purchased Loans

Purchased loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for credit losses is not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased impaired or purchased non-impaired. Purchased impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments. The purchased impaired loans acquired are subject to the Company’s internal and external credit review and monitoring. If credit deterioration is experienced subsequent to the initial acquisition fair value amount, such deterioration will be measured, and a provision for credit losses will be charged to earnings.

Allowance for Credit Losses

As described below under Recent Accounting Pronouncements, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) effective January 1, 2023.

For loans the allowance for credit losses is based on the Company’s evaluation of the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The process is inherently subjective and subject to significant change as it requires material estimates. The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge offs, net of recoveries. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for credit losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

Allowance for Credit Losses (Continued)

Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, the Company utilizes a discounted cash flow, probability of default / loss given default, or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates and gross domestic product. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by the Company and are dependent on the current economic environment among other factors.

The estimated credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: changes in lending policies and quality of loan reviews, changes in nature and volume of loans, changes in volume and trends of problem loans, changes in concentration risk, trends in underlying collateral values, changes in competition, legal and regulatory environment and changes in economic conditions.

Credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis. Specific allowances are estimated based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.

The Company measures expected credit losses over the contractual term of a loan, adjusted for estimated prepayments. The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit losses are estimated on the amortized cost basis of loans. Accrued interest receivable on loans is excluded from the estimate of credit losses.

Off-Balance Sheet Credit Exposure

The Company also has off-balance sheet financial instruments, which include unfunded loan commitments and letters of credit. The Company minimizes these risks through underwriting guidelines and prudent risk management techniques. For off-balance sheet instruments, the allowance for credit losses is calculated in accordance with Topic 326, representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. The allowance is reported as a component of other liabilities within the consolidated balance sheets. Adjustments to the allowance for credit losses for unfunded commitments are reported in the income statement as a component of other operating expense. At June 30, 2023, $1.5 million in allowance for credit losses has been recognized on off-balance sheet financial instruments.

Premises and Equipment

Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized. Gains and losses on dispositions are reflected in income. The estimated useful lives are as follows:


			Years
Buildings			10-39
Furniture and equipment			3-7

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company - put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for credit losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Costs of improvements are capitalized, whereas costs related to holding foreclosed assets and subsequent write-downs to the value are expensed. Any gains and losses realized at the time of disposal are reflected in income.

Goodwill

Goodwill represents the excess of the amount paid over the fair value of the net assets at the date of acquisition. Goodwill is subject to an annual evaluation of impairment. If desired, the Company can assess qualitative factors to determine if comparing the carrying value of the reporting unit to its fair value is necessary. Should the fair value be less than the carrying value, an impairment write-down would be taken. Based on its assessment of qualitative factors, the Company determined that no impairment existed at June 30, 2023.

Goodwill is not amortized but is evaluated for impairment on a quarterly basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). The Company performed a goodwill impairment test in June 2023. The qualitative factors considered in determining if fair value of the unit was less than the carrying amount were economic conditions related to the change in the interest rate environment. A quantitative assessment of goodwill impairment included determining the estimated fair value of Company using a market-based approach. It was determined there was no impairment.

Core Deposit Intangible

A core deposit intangible is initially recognized based on a valuation, of acquired deposits, performed as of the acquisition date. The core deposit intangible is amortized over the average remaining life of the acquired customer deposits, or approximately 7 years. The intangible asset is reviewed annually for events or circumstances that could negatively impact the recoverability of the intangible. These events could include loss of core deposits, increased competition, or adverse changes in the economy. To the extent this intangible asset is deemed unrecoverable, an impairment charge would be recorded. The Company maintains steady deposit growth across our markets and continues to attract new customer deposits. The intangible asset was evaluated for impairment as of June 30, 2023 and based on that evaluation there was no impairment.

Accounting Policy for Derivative Instruments and Hedging Activities

Financial Accounting Standards Board (FASB) ASC 815, Derivatives and Hedging (ASC 815), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

Accounting Policy for Derivative Instruments and Hedging Activities (Continued)

As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Income Taxes

Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets may be reduced by deferred tax liabilities and a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Management believes that the Company will generate sufficient operating earnings to realize the deferred tax benefits.

Stock Compensation Plans

Stock compensation accounting guidance requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options and warrants, restricted stock plans, performance-based awards, share appreciation rights, and employee share purchase plans.

The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Scholes model is used to estimate the fair value of stock options, while the estimated market price of the Company’s common stock at the date of grant is used for restricted stock awards, restricted stock units and stock grants.

Comprehensive Income (Loss)

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income (loss).

Fair Value of Financial Instruments

Fair values of financial instruments are estimates using relevant market information and other assumptions, as more fully disclosed in Note 12. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

Revenue Recognition

On January 1, 2019, the Company adopted ASC 606 and all subsequent amendments (collectively ASC 606) which (1) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (2) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as foreclosed assets. The majority of the Company’s revenues come from interest income and other sources, including loans and securities that are outside the scope of ASC 606. With the exception of gains/losses on sale of foreclosed assets, the Company’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligations to the customer. Services within the scope of ASC 606 reported in noninterest income include service charges on deposit accounts, bank card services and interchange fees, and ATM fees.

Recent Accounting Pronouncements

In July 2018 the FASB issued ASU 2018-11, “Leases – Targeted Improvements” to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02. Specifically, under the amendments in ASU 2018-11: (1) entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and (2) lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02 (January 1, 2022 for the Company). The Company adopted ASU 2018-11 on June 30, 2021 and there was no material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for other than public business entities for fiscal years beginning after December 15, 2020, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The amended presentation and disclosure guidance is required only prospectively. The Company did not experience any impact on the Company’s consolidated financial position, results of operations or cash flows as a result of ASU 2017-12.

Recent Accounting Pronouncements (Continued)

In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new credit loss methodology, Current Expected Credit Losses (CECL), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. Since its original issuance in 2016, the FASB has issued several updates to the original ASU. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, off-balance sheet credit exposures, and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For available for sale securities where fair value is less than cost, credit-related impairment, if any, is recognized through an allowance for credit losses and adjusted each period for changes in credit risk. The Company adopted ASU 2016-13 on January 1, 2023 with no material impact on the consolidated financial statements. The Company has not restated comparative information for 2022 and, therefore, the comparative information for 2022 is reported under the old methodology and is not comparable to the information presented for 2023. The Company did not have an aggregate effect of modification resulting from adoption of ASU 2016-13.

In February 2016 the FASB issued ASU 2016-02, “Leases (Topic 842)” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU 2016-02 requires organizations that lease assets (lessees) to recognize on the balance sheet the assets and liabilities for the rights and obligations created by the lease for all operating leases under current U.S. GAAP with a term of more than 12 months. The ASU was effective for non-public business entities for fiscal years beginning after December 15, 2021. Early adoption was permitted. The ASU was applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted ASU 2016-02 on June 30, 2021 and there was no material impact on the Company’s consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Accounting Estimates	Basis of Presentation and Accounting Estimates The unaudited consolidated financial statements include the accounts of the Company and its subsidiary. Significant intercompany transactions and balances have been eliminated in consolidation. In preparing the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the valuation of foreclosed assets, financial instruments, deferred taxes and investment securities. In connection with the determination of the estimated losses on loans and the valuation of foreclosed assets, management obtains independent appraisals for significant collateral. The determination of the adequacy of the allowance for credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its borrowers’ ability to honor their contracts is dependent on local economic conditions. While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Cash, Cash Equivalents and Cash Flows	Cash, Cash Equivalents and Cash Flows For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks and federal funds sold. Cash flows from loans held for sale, loans, restricted equity securities, and deposits are reported net. The Company maintains amounts due from banks which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Bank may be required to maintain reserve balances in cash or on deposit with a correspondent bank for the Federal Reserve Bank, based on a percentage of deposits. The total of those reserve balances was $0 at June 30, 2023 and December 31, 2022.
Securities and Other Equity Securities	Securities The Company classifies its securities into one of two categories based upon management’s intent and ability to hold the securities: (i) securities held to maturity or (ii) securities available for sale. Securities classified as held to maturity are stated at cost adjusted for amortization of premiums and accretion of discounts. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. The Company has the ability, and it is management’s intention, to hold such securities to maturity. Securities classified as available for sale are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities available for sale are recorded on the trade date and are determined using the specific identification method. Management uses a systematic methodology to determine its allowance for credit losses for held to maturity debt securities. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held to maturity portfolio. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The Company’s estimate of its allowance for credit losses involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. Management monitors the held to maturity portfolio to determine whether a valuation account would need to be recorded. As of June 30, 2023, the Company had $19,642 of held to maturity securities and no related valuation account. For available for sale debt securities in an unrealized loss position, the Company will first assess whether (i) it intends to sell or (ii) it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. If either case is applicable, any previously recognized allowances are charged off and the debt security’s amortized cost is written down to fair value through income. If neither case is applicable, the debt security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the debt security by a rating agency and any adverse conditions specifically related to the debt security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the debt security are compared to the amortized cost basis of the debt security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis. Any impairment that has not been recorded through allowance for credit losses is recognized in other comprehensive income (loss), net of tax. Adjustments to the allowance are reported in the income statement as a component of credit loss expense. Available for sale debt securities are charged off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by the Company or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Company excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on debt securities and does not record an allowance for credit losses on accrued interest receivable. Other Equity Securities The mutual funds owned by the Company are classified as equity securities and are carried at fair value with any periodic changes in value recorded through the statement of income.
Restricted Equity Securities	Restricted Equity Securities Restricted equity securities are investments that are restricted in marketability. The Company, as a member of the Federal Home Loan Bank (FHLB) system, is required to maintain an investment in capital stock of the FHLB based upon its assets or outstanding advances. The Company has also purchased stock in First National Banker’s Bankshares, Inc. (FNBB), and Pacific Coast Banker’s Bank (PCBB), both correspondent banks. These securities are carried at cost and periodically evaluated for impairment based on ultimate recoverability of par value.
Loans held for sale	Loans Held For Sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value (LOCOM). For loans carried at LOCOM, gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. The estimated fair value of loans held for sale is based on independent third party quoted prices.
Loans, Certain Purchased Loans, Allowance for Credit Losses and Troubled Debt Restructurings	Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal balances less deferred fees and costs on originated loans and the allowance for credit losses. Interest income is accrued on the outstanding principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield over the life of the loan, using the straight-line method without anticipating prepayments. The accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due, or at the time the loan is 90 days past due, unless the loan is well-secured and in the process of collection. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal and interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income or charged to the allowance; unless management believes that the accrual of interest is recoverable through the liquidation of collateral. Interest income on nonaccrual loans is recognized on the cash basis, until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and the loan has been performing according to the contractual terms generally for a period of not less than six months. Certain Purchased Loans Purchased loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for credit losses is not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased impaired or purchased non-impaired. Purchased impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments. The purchased impaired loans acquired are subject to the Company’s internal and external credit review and monitoring. If credit deterioration is experienced subsequent to the initial acquisition fair value amount, such deterioration will be measured, and a provision for credit losses will be charged to earnings. Allowance for Credit Losses As described below under Recent Accounting Pronouncements, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) effective January 1, 2023. For loans the allowance for credit losses is based on the Company’s evaluation of the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The process is inherently subjective and subject to significant change as it requires material estimates. The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge offs, net of recoveries. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for credit losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination. Allowance for Credit Losses (Continued) Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, the Company utilizes a discounted cash flow, probability of default / loss given default, or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates and gross domestic product. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by the Company and are dependent on the current economic environment among other factors. The estimated credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: changes in lending policies and quality of loan reviews, changes in nature and volume of loans, changes in volume and trends of problem loans, changes in concentration risk, trends in underlying collateral values, changes in competition, legal and regulatory environment and changes in economic conditions. Credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis. Specific allowances are estimated based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows. The Company measures expected credit losses over the contractual term of a loan, adjusted for estimated prepayments. The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit losses are estimated on the amortized cost basis of loans. Accrued interest receivable on loans is excluded from the estimate of credit losses. Off-Balance Sheet Credit Exposure The Company also has off-balance sheet financial instruments, which include unfunded loan commitments and letters of credit. The Company minimizes these risks through underwriting guidelines and prudent risk management techniques. For off-balance sheet instruments, the allowance for credit losses is calculated in accordance with Topic 326, representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. The allowance is reported as a component of other liabilities within the consolidated balance sheets. Adjustments to the allowance for credit losses for unfunded commitments are reported in the income statement as a component of other operating expense. At June 30, 2023, $1.5 million in allowance for credit losses has been recognized on off-balance sheet financial instruments.
Premises and Equipment	Premises and EquipmentLand is carried at cost. Premises and equipment are carried at cost less accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized. Gains and losses on dispositions are reflected in income.
Transfers of Financial Assets	Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company - put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.
Foreclosed Assets	Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for credit losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Costs of improvements are capitalized, whereas costs related to holding foreclosed assets and subsequent write-downs to the value are expensed. Any gains and losses realized at the time of disposal are reflected in income.
Goodwill and Core Deposit Intangible	Goodwill Goodwill represents the excess of the amount paid over the fair value of the net assets at the date of acquisition. Goodwill is subject to an annual evaluation of impairment. If desired, the Company can assess qualitative factors to determine if comparing the carrying value of the reporting unit to its fair value is necessary. Should the fair value be less than the carrying value, an impairment write-down would be taken. Based on its assessment of qualitative factors, the Company determined that no impairment existed at June 30, 2023. Goodwill is not amortized but is evaluated for impairment on a quarterly basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). The Company performed a goodwill impairment test in June 2023. The qualitative factors considered in determining if fair value of the unit was less than the carrying amount were economic conditions related to the change in the interest rate environment. A quantitative assessment of goodwill impairment included determining the estimated fair value of Company using a market-based approach. It was determined there was no impairment. Core Deposit Intangible A core deposit intangible is initially recognized based on a valuation, of acquired deposits, performed as of the acquisition date. The core deposit intangible is amortized over the average remaining life of the acquired customer deposits, or approximately 7 years. The intangible asset is reviewed annually for events or circumstances that could negatively impact the recoverability of the intangible. These events could include loss of core deposits, increased competition, or adverse changes in the economy. To the extent this intangible asset is deemed unrecoverable, an impairment charge would be recorded. The Company maintains steady deposit growth across our markets and continues to attract new customer deposits. The intangible asset was evaluated for impairment as of June 30, 2023 and based on that evaluation there was no impairment.
Accounting Policy for Derivative Instruments and Hedging Activities	Accounting Policy for Derivative Instruments and Hedging Activities Financial Accounting Standards Board (FASB) ASC 815, Derivatives and Hedging (ASC 815), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. Accounting Policy for Derivative Instruments and Hedging Activities (Continued) As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Income Taxes	Income Taxes Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets may be reduced by deferred tax liabilities and a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Management believes that the Company will generate sufficient operating earnings to realize the deferred tax benefits.
Stock Compensation Plans	Stock Compensation Plans Stock compensation accounting guidance requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options and warrants, restricted stock plans, performance-based awards, share appreciation rights, and employee share purchase plans. The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Scholes model is used to estimate the fair value of stock options, while the estimated market price of the Company’s common stock at the date of grant is used for restricted stock awards, restricted stock units and stock grants.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income (loss).
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair values of financial instruments are estimates using relevant market information and other assumptions, as more fully disclosed in Note 12. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.
Revenue Recognition	Revenue RecognitionOn January 1, 2019, the Company adopted ASC 606 and all subsequent amendments (collectively ASC 606) which (1) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (2) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as foreclosed assets. The majority of the Company’s revenues come from interest income and other sources, including loans and securities that are outside the scope of ASC 606. With the exception of gains/losses on sale of foreclosed assets, the Company’s services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligations to the customer. Services within the scope of ASC 606 reported in noninterest income include service charges on deposit accounts, bank card services and interchange fees, and ATM fees.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In July 2018 the FASB issued ASU 2018-11, “Leases – Targeted Improvements” to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02. Specifically, under the amendments in ASU 2018-11: (1) entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and (2) lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02 (January 1, 2022 for the Company). The Company adopted ASU 2018-11 on June 30, 2021 and there was no material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for other than public business entities for fiscal years beginning after December 15, 2020, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The amended presentation and disclosure guidance is required only prospectively. The Company did not experience any impact on the Company’s consolidated financial position, results of operations or cash flows as a result of ASU 2017-12. Recent Accounting Pronouncements (Continued) In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new credit loss methodology, Current Expected Credit Losses (CECL), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. Since its original issuance in 2016, the FASB has issued several updates to the original ASU. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, off-balance sheet credit exposures, and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For available for sale securities where fair value is less than cost, credit-related impairment, if any, is recognized through an allowance for credit losses and adjusted each period for changes in credit risk. The Company adopted ASU 2016-13 on January 1, 2023 with no material impact on the consolidated financial statements. The Company has not restated comparative information for 2022 and, therefore, the comparative information for 2022 is reported under the old methodology and is not comparable to the information presented for 2023. The Company did not have an aggregate effect of modification resulting from adoption of ASU 2016-13. In February 2016 the FASB issued ASU 2016-02, “Leases (Topic 842)” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU 2016-02 requires organizations that lease assets (lessees) to recognize on the balance sheet the assets and liabilities for the rights and obligations created by the lease for all operating leases under current U.S. GAAP with a term of more than 12 months. The ASU was effective for non-public business entities for fiscal years beginning after December 15, 2021. Early adoption was permitted. The ASU was applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted ASU 2016-02 on June 30, 2021 and there was no material impact on the Company’s consolidated financial statements.

SECURITIES - Amortized Cost and Fair Value by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Due in less than one year	$ 346	$ 0
Due from one year to five years	9,800	8,338
Due after five to ten years	22,903	24,468
Due after ten years	59,624	61,776
Mortgage-backed securities	84,995	75,892
Amortized Cost	177,668	170,474
Fair Value
Due in less than one year	333	0
Due from one year to five years	8,955	7,818
Due after five to ten years	20,165	22,047
Due after ten years	54,207	55,396
Mortgage-backed securities	79,415	70,283
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	163,075	155,544
Amortized Cost
Due in less than one year	0	0
Due from one year to five years	0	0
Due after five to ten years	6,226	5,310
Due after ten years	13,416	14,342
Mortgage-backed securities	0	0
Amortized Cost	19,642	19,652
Securities Held to Maturity
Due in less than one year	0	0
Due from one year to five years	0	0
Due after five to ten years	5,108	4,255
Due after ten years	10,714	11,110
Mortgage-backed securities	0	0
Securities held to maturity, at amortized cost	15,822	15,365
Total securities
Amortized Cost	197,310	190,126
Fair Value	$ 178,897	$ 170,909

REGULATORY MATTERS

6 Months Ended

Jun. 30, 2023

Regulatory Capital Requirements Under Banking Regulations [Abstract]

REGULATORY MATTERS

The Bank is subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. At June 30, 2023, approximately $71,607 of retained earnings was available for dividend declaration without regulatory approval.

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

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. In addition, the Bank is subject to a capital conservation buffer, which requires it to maintain common equity Tier 1 capital of 2.50% above minimum requirements for the common equity Tier 1 ratio, Tier 1 risk-based ratio and total risk-based ratio to avoid limitations on distributions and discretionary bonus payments. The capital conservation buffer is included in the minimum capital requirements in the following tables. Management believes, as of June 30, 2023 and December 31, 2022, that the Bank met all capital adequacy requirements to which it is subject.

Community Bank Leverage Ratio Framework


	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action

	Amount		Ratio		Amount		Ratio		Amount		Ratio

As of June 30, 2023

Tier 1 capital (to average assets)
Company	$	190,124	8.70	%	$	87,394	4.00	%	$	—	—
Bank	$	258,303	11.82	%	$	87,394	4.00	%	$	109,243	5.00	%

CET 1 capital (to risk-weighted assets)
Company	$	190,124	9.11	%	$	146,135	7.00	%	$	—	—
Bank	$	258,303	12.37	%	$	146,135	7.00	%	$	135,697	6.50	%

Tier 1 capital (to risk-weighted assets)
Company	$	190,124	9.11	%	$	177,449	8.50	%	$	—	—
Bank	$	258,303	12.37	%	$	177,449	8.50	%	$	167,011	8.00	%

Total capital (to risk-weighted assets)
Company	$	301,004	14.42	%	$	219,202	10.50	%	$	—	—
Bank	$	281,183	13.47	%	$	219,202	10.50	%	$	208,764	10.00	%


	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action

	Amount		Ratio		Amount		Ratio		Amount		Ratio

As of December 31, 2022

Tier 1 capital (to average assets)
Company	$	174,679	8.82	%	$	79,182	4.00	%	$	—	—
Bank	$	240,815	12.17	%	$	79,182	4.00	%	$	98,977	5.00	%

CET 1 capital (to risk-weighted assets)
Company	$	174,679	8.86	%	$	138,018	7.00	%	$	—	—
Bank	$	240,815	12.21	%	$	138,018	7.00	%	$	128,160	6.50	%

Tier 1 capital (to risk-weighted assets)
Company	$	174,679	8.86	%	$	167,593	8.50	%	$	—	—
Bank	$	240,815	12.21	%	$	167,593	8.50	%	$	157,735	8.00	%

Total capital (to risk-weighted assets)
Company	$	282,835	14.34	%	$	207,027	10.50	%	$	—	—
Bank	$	260,971	13.24	%	$	207,027	10.50	%	$	197,169	10.00	%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

DEPOSITS (Tables)

6 Months Ended

Jun. 30, 2023

Banking and Thrift, Interest [Abstract]

Schedule of Composition of Deposits

Major classifications of deposits are as follows:


	June 30, 2023		December 31, 2022
Noninterest-bearing transaction	$	449,433	$	460,977
Interest-bearing transaction	922,835		837,127
Savings	41,574		49,235
Time deposits, $250,000 and under	438,228		307,145
Time deposits, over $250,000	71,841		66,259
Total	$	1,923,911	$	1,720,743

Schedule of Time Deposit Maturities

The scheduled maturities of time deposits at June 30, 2023 are as follows:


July 1, 2023 – June 30, 2024	$	361,935
July 1, 2024 – June 30, 2025	106,573
July 1, 2025 – June 30, 2026	29,055
July 1, 2026 – June 30, 2027	6,128
July 1, 2027 – June 30, 2028	6,351
Thereafter	27
Total	$	510,069

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income	$ 8,756	$ 5,223	$ 16,427	$ 9,780
Other comprehensive loss:
Unrealized holding (losses) gains on securities available for sale arising during the period, net of benefit (tax)	(953)	(4,684)	240	(10,552)
Reclassification adjustment for losses (gains) on securities available for sale realized in net income, net of benefit (tax)	0	0	9	0
Other comprehensive loss	(953)	(4,684)	249	(10,552)
Comprehensive income	$ 7,803	$ 539	$ 16,676	$ (772)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
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-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
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Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
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Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 1A
-Subparagraph (a)
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Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

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-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
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-Topic 942
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

LOANS (Tables)

6 Months Ended

Jun. 30, 2023

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule of Composition of Loans

The composition of loans, excluding loans held for sale, is summarized as follows:


	June 30, 2023			December 31, 2022
	Amount		% of Total	Amount		% of Total
Real estate mortgages:
Construction and development	$	228,236	13.3%	$	255,736	16.1%
Residential	214,897		12.5%	167,891		10.5%
Commercial	1,011,815		58.7%	904,872		56.8%
Commercial and industrial	259,195		15.0%	256,553		16.1%
Consumer and other	8,135		0.5%	7,655		0.5%
Gross Loans	1,722,278		100.0%	1,592,707		100.0%
Deferred loan fees	(5,766)			(5,543)
Allowance for credit losses	(21,385)			(20,156)
Loans, net	$	1,695,127		$	1,567,008

Schedule of Financing Receivable Credit Quality Indicators

The following tables summarize the risk category of the Company’s loan portfolio based upon the most recent analysis performed as of June 30, 2023 and December 31, 2022:


	Pass		Special Mention		Substandard		Doubtful		Total
	(dollars in thousands)
As of June 30, 2023
Real estate mortgages:
Construction and development	$	223,741	$	4,462	$	33	$	—	$	228,236
Residential	213,170		912		815		—		214,897
Commercial	994,874		10,647		6,294		—		1,011,815
Commercial and industrial	237,665		8,442		13,088		—		259,195
Consumer and other	8,109		26		—		—		8,135
Total	$	1,677,559	$	24,489	$	20,230	$	—	$	1,722,278

As of December 31, 2022
Real estate mortgages:
Construction and development	$	251,130	$	4,539	$	67	$	—	$	255,736
Residential	165,388		1,787		716		—		167,891
Commercial	883,082		18,532		3,258		—		904,872
Commercial and industrial	247,948		8,322		283		—		256,553
Consumer and other	7,604		28		23		—		7,655
Total	$	1,555,152	$	33,208	$	4,347	$	—	$	1,592,707

Credit Risk Management (Continued)

Collateral Dependent Loans


As of June 30, 2023	Real Estate		Other		Total		ACL
Real estate mortgages:
Construction and development	$	254	$	—	$	254	$	35
Residential	1,170		—		1,170		77
Commercial	7,109		—		7,109		148
Commercial and industrial	—		27		27		—
Consumer and other	—		3		3		—
Total	$	8,533	$	30	$	8,563	$	260

Schedule of Aging Analysis

The following tables present the aging of the recorded investment in loans and leases as of June 30, 2023 and December 31, 2022:


			Past Due Status (Accruing Loans)
	Current		30-59 Days		60-89 Days		90+ Days		Total Past Due		Nonaccrual with ACL		Nonaccrual without ACL		Total
As of June 30, 2023
Real estate mortgages:
Construction and development	$	227,719	$	484	$	—	$	—	$	484	$	—	$	33	$	228,236
Residential	214,158		442		—		—		442		24		273		214,897
Commercial	1,009,806		1,077		261		—		1,338		336		335		1,011,815
Commercial and industrial	259,026		160		—		—		160		—		9		259,195
Consumer and other	8,135		—		—		—		—		—		—		8,135
Total	$	1,718,844	$	2,163	$	261	$	—	$	2,424	$	360	$	650	$	1,722,278

As of December 31, 2022
Real estate mortgages:
Construction and development	$	255,575	$	—	$	94	$	—	$	94	$	—	$	67	$	255,736
Residential	167,108		147		72		—		219		30		534		167,891
Commercial	900,895		2,634		65		—		2,699		351		927		904,872
Commercial and industrial	254,824		1,379		38		—		1,417		277		35		256,553
Consumer and other	7,570		62		—		—		62		16		7		7,655
Total	$	1,585,972	$	4,222	$	269	$	—	$	4,491	$	674	$	1,570	$	1,592,707

Schedule of Allowance for Credit Loss


	Real Estate		Commercial		Consumer		Total
Allowance for credit losses:
Balance at December 31, 2022	$	14,443	$	5,642	$	71	$	20,156
Impact of adoption of ASC 326	(1,164)		(120)		(1)		(1,285)
Provision (credit) for credit losses	4,080		(1,403)		61		2,738
Loans charged off	—		(262)		(6)		(268)
Recoveries of loans previously charged off	28		14		2		44
Ending balance at June 30, 2023	$	17,387	$	3,871	$	127	$	21,385

Allowance for Loans Losses - Incurred Loss Methodology


	Real Estate		Commercial		Consumer		Total
Allowance for loan losses:
Balance at December 31, 2021	$	11,554	$	3,166	$	124	$	14,844
Provision (credit) for loan losses	93		1,954		(43)		2,004
Loans charged off	(73)		—		(7)		(80)
Recoveries of loans previously charged off	35		—		4		39
Ending balance at June 30, 2022	$	11,609	$	5,120	$	78	$	16,807

Ending balance - individually evaluated for impairment	$	146	$	612	$	—	$	758
Ending balance - collectively evaluated for impairment	11,423		4,508		78		16,009
Ending balance - loans acquired with deteriorated credit quality	40		—		—		40
Total ending balance at June 30, 2022	$	11,609	$	5,120	$	78	$	16,807

Loans:
Ending balance - individually evaluated for impairment	$	9,667	$	769	$	26	$	10,462
Ending balance - collectively evaluated for impairment	1,195,387		218,515		9,525		1,423,427
Ending balance - loans acquired with deteriorated credit quality	1,200		—		—		1,200
Total ending balance at June 30, 2022	$	1,206,254	$	219,284	$	9,551	$	1,435,089

Allowance for Loans Losses - Incurred Loss Methodology (Continued)

Schedule of Impaired Loans

The following tables detail our impaired loans, by portfolio class as of December 31, 2022.


	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
December 31, 2022
With no related allowance recorded:
Real estate mortgages:
Construction and development	$	372	$	372	$	—	$	397
Residential	1,129		1,129		—		1,169
Commercial	7,323		7,323		—		7,282
Commercial and industrial	36		36		—		42
Consumer and other	18		18		—		24
Total with no related allowance recorded	8,878		8,878		—		8,914

With an allowance recorded:
Real estate mortgages:
Construction and development	92		92		39		95
Residential	255		326		90		265
Commercial	623		623		166		630
Commercial and industrial	277		277		248		298
Consumer and other	16		16		8		16
Total with an allowance recorded	1,263		1,334		551		1,304
Total impaired loans	$	10,141	$	10,212	$	551	$	10,218

Impaired Loans - Incurred Loss Methodology (Continued)

A loan held for investment is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due (both principal and interest) according to the terms of the loan agreement. The following tables detail our interest income recognized on impaired loans, by portfolio class in the six months ended June 30, 2022.


	Recorded Investment		Average Recorded Investment		Interest Income Recognized
Six Months Ended June 30, 2022
With no related allowance recorded:
Real estate mortgages:
Construction and development	$	397	$	402	$	2
Residential	1,172		1,180		3
Commercial	8,532		8,565		29
Commercial and industrial	12		12		1
Consumer and other	26		28		4
Total with no related allowance recorded	10,139		10,187		39

With an allowance recorded:
Real estate mortgages:
Construction and development	95		96		2
Residential	239		240		—
Commercial	432		434		2
Commercial and industrial	757		763		47
Consumer and other	—		—		—
Total with an allowance recorded	1,523		1,533		51
Total impaired loans	$	11,662	$	11,720	$	90

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 10, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-40727
Entity Registrant Name	Southern States Bancshares, Inc.
Entity Incorporation, State or Country Code	AL
Entity Tax Identification Number	26-2518085
Entity Address, Address Line One	615 Quintard Ave
Entity Address, City or Town	Anniston
Entity Address, State or Province	AL
Entity Address, Postal Zip Code	36201
City Area Code	256
Local Phone Number	241-1092
Title of 12(b) Security	Common Stock, $5.00 par value per share
Trading Symbol	SSBK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		8,832,964
Entity Central Index Key	0001689731
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Securities available for sale, allowance for credit losses	$ 0	$ 0
Securities available for sale, amortized cost	$ 177,668	$ 170,474
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	2,000,000	2,000,000
Preferred stock outstanding (in shares)	0	0
Preferred stock issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 5	$ 5
Common stock authorized (in shares)	30,000,000	30,000,000
Common stock outstanding (in shares)	8,738,814	8,706,920
Common stock issued (in shares)	8,738,814	8,706,920

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
EARNINGS PER SHARE (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Basic Earnings Per Share:
Net Income	$ 8,756,000	$ 5,223,000	$ 16,427,000	$ 9,780,000
Weighted average common shares outstanding (in shares)	8,763,635	8,740,295	8,763,046	8,818,327
Basic earnings per share (in dollars per share)	$ 1.00	$ 0.60	$ 1.87	$ 1.11
Diluted Earnings Per Share:
Net income allocated to common shareholders (in shares)	$ 8,750,000	$ 5,215,000	$ 16,418,000	$ 9,768,000
Weighted average common shares outstanding (in shares)	8,763,635	8,740,295	8,763,046	8,818,327
Net dilutive effect of:
Assumed exercises of stock options (in shares)	187,212	154,282	238,554	142,238
Average shares and dilutive potential common shares (in shares)	8,950,847	8,894,577	9,001,600	8,960,565
Dilutive earnings per share (in dollars per share)	$ 0.98	$ 0.59	$ 1.82	$ 1.09

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Values of Derivative Instruments on the Balance Sheet (Details) - Interest Rate Products - Not Designated as Hedging Instrument - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Assets
Notional Amount	$ 81,649	$ 73,631
Fair Value	8,412	8,870
Other Liabilities
Notional Amount	81,649	73,631
Fair Value	$ (8,426)	$ (8,882)

- Definition

Nominal or face amount used to calculate payments on the derivative asset.

+ References + Details

- Definition

Nominal or face amount used to calculate payments on the derivative liability.

+ References + Details

FAIR VALUE OF ASSETS AND LIABILITIES - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	$ 163,075	$ 155,544
Other equity securities, at fair value	3,762	4,444
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Other equity securities, at fair value	3,665	3,674
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	163,075	155,544
Other equity securities, at fair value	0	0
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Other equity securities, at fair value	97	770
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	3,762	4,444
Interest Rate Products - asset	8,412	8,870
Interest Rate Products - liabilities	(8,426)	(8,882)
Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	3,665	3,674
Interest Rate Products - asset	0	0
Interest Rate Products - liabilities	0	0
Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	0	0
Interest Rate Products - asset	8,412	8,870
Interest Rate Products - liabilities	(8,426)	(8,882)
Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other equity securities, at fair value	97	770
Interest Rate Products - asset	0	0
Interest Rate Products - liabilities	0	0
U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	8,597	8,584
U.S. Treasury securities \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	8,597	8,584
U.S. Treasury securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
U.S. Treasury securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	8,597	8,584
U.S. Treasury securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
U.S. Government Sponsored Enterprises (GSEs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	2,595	1,788
U.S. Government Sponsored Enterprises (GSEs) \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	2,595	1,788
U.S. Government Sponsored Enterprises (GSEs) \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
U.S. Government Sponsored Enterprises (GSEs) \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	2,595	1,788
U.S. Government Sponsored Enterprises (GSEs) \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
State and municipal securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	39,979	49,925
State and municipal securities \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	39,979	49,925
State and municipal securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
State and municipal securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	39,979	49,925
State and municipal securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	10,961	11,627
Corporate debt securities \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	10,961	11,627
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	10,961	11,627
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Asset based securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	21,528	13,337
Asset based securities \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	21,528	13,337
Asset based securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Asset based securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	21,528	13,337
Asset based securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Mortgage-backed GSE residential/multifamily and non-GSE
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	79,415	70,283
Mortgage-backed GSE residential/multifamily and non-GSE \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	79,415	70,283
Mortgage-backed GSE residential/multifamily and non-GSE \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	0	0
Mortgage-backed GSE residential/multifamily and non-GSE \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	79,415	70,283
Mortgage-backed GSE residential/multifamily and non-GSE \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value ($177,668 amortized cost, $0 allowance for credit losses at June 30, 2023; $170,474 amortized cost, $0 allowance for loan losses at December 31, 2022)	$ 0	$ 0

CONCENTRATIONS OF CREDIT	6 Months Ended
CONCENTRATIONS OF CREDIT	Jun. 30, 2023
Risks and Uncertainties [Abstract]
CONCENTRATIONS OF CREDIT	CONCENTRATIONS OF CREDIT The Company originates primarily commercial, commercial real estate, residential real estate, and consumer loans to customers in Alabama and Georgia. The ability of the majority of the Company’s customers to honor their contractual loan obligations is dependent on the economy in these areas. Eighty-five percent of the Company’s loan portfolio is concentrated in real estate. A substantial portion of these loans are secured by real estate in the Company’s primary market area. In addition, a substantial portion of the other real estate owned is located in those same markets. Accordingly, the ultimate collectibility of the loan portfolio and the recovery of the carrying amount of the other real estate owned are susceptible to changes in market conditions in the Company’s primary market area. The other concentrations of credit by type of loan are set forth in Note 4. The Company, according to regulatory restrictions, may not generally extend credit to any single borrower or group of related borrowers on a secured basis in excess of 20% of capital, as defined, or approximately $55,861 or on an unsecured basis in excess of 10% of capital, as defined, or approximately $27,931.