Southern First Bancshares Inc 10-Q for FY2024 Q1

Southern First Bancshares Inc (SFST)

10-Q 2024-04-30 For: 2024-03-31

Added on April 07, 2026

About this 10-Q

Southern First Bancshares Inc filed this 10-Q on April 30, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.16M; up 87.1% from $622K a year earlier
Net income: $2.52M; down 6.7% from net income of $2.7M a year earlier
Diluted EPS: $0.31; down 6.1% from $0.33 a year earlier

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South Carolina		58-2459561
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6 Verdae Boulevard
Greenville, S.C.		29607
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SFST	The Nasdaq Global Market

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller Reporting Company	☐
		Emerging growth company	☐

		Page
PART I – CONSOLIDATED FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Shareholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Unaudited Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42

Item 4.	Controls and Procedures	42

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	43



	March 31,			December 31,
(dollars in thousands, except share data)	2024			2023
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	13,925			28,020
Federal funds sold		144,595			119,349
Interest-bearing deposits with banks		8,789			8,801
Total cash and cash equivalents		167,309			156,170
Investment securities:
Investment securities available for sale		125,996			134,702
Other investments		18,499			19,939
Total investment securities		144,495			154,641
Mortgage loans held for sale		11,842			7,194
Loans		3,643,766			3,602,627
Less allowance for credit losses		(40,441	)		(40,682	)
Loans, net		3,603,325			3,561,945
Bank owned life insurance		52,878			52,501
Property and equipment, net		93,007			94,301
Deferred income taxes, net		12,321			12,200
Other assets		20,527			16,837
Total assets	$	4,105,704			4,055,789
LIABILITIES
Deposits	$	3,460,681			3,379,564
FHLB advances and related debt		240,000			275,000
Subordinated debentures		36,349			36,322
Other liabilities		53,418			52,436
Total liabilities		3,790,448			3,743,322
SHAREHOLDERS’ EQUITY
Preferred stock, par value $.01 per share, 10,000,000 shares authorized		-			-
Common stock, par value $.01 per share, 10,000,000 shares authorized, 8,156,109 and 8,088,186 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		82			81
Nonvested restricted stock		(5,257	)		(3,596	)
Additional paid-in capital		124,159			121,777
Accumulated other comprehensive loss		(11,797	)		(11,342	)
Retained earnings		208,069			205,547
Total shareholders’ equity		315,256			312,467
Total liabilities and shareholders’ equity	$	4,105,704			4,055,789



	For the three months
	ended March 31,
(dollars in thousands, except share data)	2024			2023
Interest income
Loans	$	45,605			36,748
Investment securities		1,478			613
Federal funds sold and interest-bearing deposits with banks		1,280			969
Total interest income		48,363			38,330
Interest expense
Deposits		26,932			17,179
Borrowings		2,786			727
Total interest expense		29,718			17,906
Net interest income		18,645			20,424
Provision for (reversal of) credit losses		(175	)		1,825
Net interest income after provision for (reversal of) credit losses		18,820			18,599
Noninterest income
Mortgage banking income		1,164			622
Service fees on deposit accounts		387			325
ATM and debit card income		544			555
Income from bank owned life insurance		377			332
Other income		192			210
Total noninterest income		2,664			2,044
Noninterest expenses
Compensation and benefits		10,857			10,356
Occupancy		2,557			2,457
Outside service and data processing costs		1,846			1,629
Insurance		955			689
Professional fees		618			660
Marketing		369			366
Other		898			947
Total noninterest expenses		18,100			17,104
Income before income tax expense		3,384			3,539
Income tax expense		862			836
Net income	$	2,522			2,703
Earnings per common share
Basic	$	0.31			0.34
Diluted		0.31			0.33
Weighted average common shares outstanding
Basic		8,110,249			8,025,876
Diluted		8,141,921			8,092,270



	For the three months ended March 31,
(dollars in thousands)	2024			2023
Net income	$	2,522			2,703
Other comprehensive income (loss):
Unrealized gain (loss) on securities available for sale:
Unrealized holding gain (loss) arising during the period, pretax		(578	)		2,070
Tax benefit (expense)		123			(435	)
Other comprehensive income (loss)		(455	)		1,635
Comprehensive income	$	2,067			4,338



	For the three months ended March 31,
(dollars in thousands,	Common stock				Preferred stock				Nonvested restricted			Additional paid-in		Accumulated other comprehensive			Retained
except share data)	Shares		Amount		Shares		Amount		stock			capital		income (loss)			earnings		Total
December 31, 2022		8,011,045	$	80		-	$	-	$	(3,306	)	$	119,027	$	(13,410	)	$	192,121	$	294,512
Net income		-		-		-		-		-			-		-			2,703		2,703
Proceeds from exercise of stock options		1,000		-		-		-		-			17		-			-		17
Issuance of restricted stock Retained earnings		35,930		-		-		-		(1,521	)		1,521		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		365			-		-			-		365
Compensation expense related to stock options, net of tax Common stock		-		-		-		-		-			118		-			-		118
Other comprehensive income		-		-		-		-		-			-		1,635			-		1,635
Additional paid-in capital
March 31, 2023 Preferred stock		8,047,975	$	80		-	$	-	$	(4,462	)	$	120,683	$	(11,775	)	$	194,824	$	299,350
December 31, 2023		8,088,186	$	81		-	$	-	$	(3,596	)	$	121,777	$	(11,342	)	$	205,547	$	312,467
Net income		-		-		-		-		-			-		-			2,522		2,522
Proceeds from exercise of stock options		11,000		-		-		-		-			167		-			-		167
Issuance of restricted stock, net of forfeitures		56,923		1		-		-		(2,112	)		2,111		-			-		-
Compensation expense related to restricted stock, net of tax		-		-		-		-		451			-		-			-		451
Compensation expense related to stock options, net of tax		-		-		-		-		-			104		-			-		104
Other comprehensive loss		-		-		-		-		-			-		(455	)		-		(455	)
Accumulated other comprehensive income (loss)
March 31, 2024		8,156,109	$	82		-	$	-	$	(5,257	)	$	124,159	$	(11,797	)	$	208,069	$	315,256



	For the three months ended March 31,
(dollars in thousands)	2024			2023
Operating activities
Net income	$	2,522			2,703
Adjustments to reconcile net income to cash provided by operating activities:
Provision for (reversal of) credit losses		(175	)		1,825
Depreciation and other amortization		1,214			1,203
Accretion and amortization of securities discounts and premium, net		131			129
Net change in operating leases		39			53
Compensation expense related to stock options and restricted stock grants		555			483
Gain on sale of loans held for sale		(1,014	)		(530	)
Loans originated and held for sale		(36,524	)		(17,892	)
Proceeds from sale of loans held for sale		32,890			15,360
Increase in cash surrender value of bank owned life insurance		(377	)		(331	)
Increase in other assets		(3,690	)		(508	)
Increase (decrease) in other liabilities		1,505			(1,258	)
Net cash (used for) provided by operating activities		(2,924	)		1,237
Investing activities
Increase (decrease) in cash realized from:
Increase in loans, net		(41,380	)		(144,641	)
Purchase of property and equipment		(280	)		(180	)
Purchase of investment securities:
Available for sale		(5,191	)		-
Other investments		(4,302	)		(18,264	)
Payments and maturities, calls and repayments of investment securities:
Available for sale		13,190			1,252
Other investments		5,742			19,000
Net cash used for investing activities		(32,221	)		(142,833	)
Financing activities
Increase in cash realized from:
Increase in deposits, net		81,117			292,910
Decrease in Federal Home Loan Bank advances and other borrowings, net		(35,000	)		(50,000	)
Proceeds from the exercise of stock options		167			17
Net cash provided by financing activities		46,284			242,927
Net increase in cash and cash equivalents		11,139			101,331
Cash and cash equivalents at beginning of the period		156,170			170,874
Cash and cash equivalents at end of the period	$	167,309			272,205
Supplemental information
Cash paid for
Interest	$	27,617			16,801
Schedule of non-cash transactions
Unrealized gain (loss) on securities, net of income taxes		(455	)		1,635

Schedule of amortized costs and fair value of investment securities

	March 31, 2024
	Amortized		Gross Unrealized				Fair
(dollars in thousands) Corporate bonds [Member]	Cost		Gains		Losses		Value
Available for sale Asset-backed securities [Member]
Corporate bonds	$	2,140		-		253		1,887
US treasuries US treasuries [Member]		999		-		111		888
US government agencies US government agencies [Member]		20,183		-		1,986		18,197
State and political subdivisions State and political subdivisions [Member]		22,579		-		3,042		19,537
Asset-backed securities Mortgage-backed securities [Member]		34,247		33		76		34,204
Mortgage-backed securities		60,782		-		9,499		51,283
Total investment securities available for sale	$	140,930		33		14,967		125,996

		December 31, 2023
		Amortized		Gross Unrealized				Fair
		Cost		Gains		Losses		Value
Available for sale
Corporate bonds	$	2,147		-		237		1,910
US treasuries		9,495		1		102		9,394
US government agencies		20,594		-		1,938		18,656
State and political subdivisions		22,642		11		2,912		19,741
Asset-backed securities		33,450		2		216		33,236
Mortgage-backed securities		60,730		-		8,965		51,765
Total investment securities available for sale	$	149,058		14		14,370		134,702

Schedule of maturities and yields on the company’s investment securities

	March 31, 2024
		Less than one year				One to five years				Five to ten years				Over ten years				Total
(dollars in thousands)			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield
Available for sale
Corporate bonds Corporate bonds [Member]		$	-	-		$	-	-		$	1,887	2.01	%	$	-	-		$	1,887	2.01	%
US treasuries			-	-			888	1.27	%		-	-			-	-			888	1.27	%
US government agencies US government agencies [Member]			980	0.45	%		2,380	1.00	%		14,837	4.38	%		-	-			18,197	3.72	%
State and political subdivisions State and political subdivisions [Member]			-	-			902	1.94	%		5,744	1.89	%		12,891	2.15	%		19,537	2.07	%
Asset-backed securities Asset-backed securities [Member]			-	-			211	6.21	%		-	-			33,993	6.61	%		34,204	6.61	%
Mortgage-backed securities Mortgage-backed securities [Member]			-	-			6,626	1.29	%		3,419	1.54	%		41,238	2.04	%		51,283	1.91	%
Total investment securities Total investment securities [Member]		$	980	0.45	%	$	11,007	1.37	%	$	25,887	3.28	%	$	88,122	3.82	%	$	125,996	3.47	%

			December 31, 2023
			Less than one year				One to five years				Five to ten years				Over ten years				Total
(dollars in thousands)			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield			Amount	Yield
Available for sale
Corporate bonds		$	-	-		$	-	-		$	1,910	2.01	%	$	-	-		$	1,910	2.01	%
US treasuries			8,497	5.42	%		897	1.27	%		-	-			-	-			9,394	5.02	%
US government agencies			970	0.45	%		2,385	1.00	%		15,301	4.41	%		-	-			18,656	3.77	%
State and political subdivisions			-	-			906	1.94	%		5,769	1.89	%		13,066	2.15	%		19,741	2.06	%
Asset-backed securities			-	-			296	(6.13	%)		-	-			32,940	6.63	%		33,236	6.57	%
Mortgage-backed securities			-	-			4,795	1.15	%		5,400	1.59	%		41,570	2.00	%		51,765	1.87	%
Total investment securities		$	9,467	4.91	%	$	9,279	0.98	%	$	28,380	3.20	%	$	87,576	3.76	%	$	134,702	3.55	%

Schedule of gross unrealized losses on investment securities and fair market value of related securities

													March 31, 2024
	Less than 12 months						12 months or longer						Total
(dollars in thousands)	#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		-	$	-	$	-		1	$	1,887	$	253		1	$	1,887	$	253
US treasuries		-		-		-		1		888		111		1		888		111
US government agencies		2		7,133		39		10		11,064		1,947		12		18,197		1,986
State and political subdivisions		2		759		4		30		18,778		3,038		32		19,537		3,042
Asset-backed		4		11,343		31		7		4,567		45		11		15,910		76
Mortgage-backed securities		1		1,387		8		64		49,896		9,491		65		51,283		9,499
Total investment securities		9	$	20,622	$	82		113	$	87,080	$	14,885		122	$	107,702	$	14,967

	December 31, 2023
		Less than 12 months						12 months or longer						Total
(dollars in thousands)		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses		#		Fair value		Unrealized losses
Available for sale
Corporate bonds		-	$	-	$	-		1	$	1,910	$	237		1	$	1,910	$	237
US treasuries		-		-		-		1		897		102		1		897		102
US government agencies		2		7,533		50		10		11,123		1,888		12		18,656		1,938
State and political subdivisions		-		-		-		30		18,964		2,912		30		18,964		2,912
Asset-backed		8		26,746		145		7		4,866		71		15		31,612		216
Mortgage-backed securities Mortgage-backed securities [Member]		2		2,869		36		62		48,896		8,929		64		51,765		8,965
Total investment securities		12	$	37,148	$	231		111	$	86,656	$	14,139		123	$	123,804	$	14,370

Schedule of other investments

(dollars in thousands)	March 31, 2024		December 31, 2023
Federal Home Loan Bank stock	$	14,633		16,063
Other nonmarketable investments		3,463		3,473
Investment in Trust Preferred subsidiaries		403		403
Total other investments	$	18,499		19,939

Schedule of composition of our loan portfolio

	March 31, 2024						December 31, 2023
(dollars in thousands)Commercial [Member]	Amount			% of Total			Amount			% of Total
Commercial
Owner occupied REOwner occupied RE [Member]	$	631,047			17.3	%	$	631,657			17.5	%
Non-owner occupied RENon-owner occupied RE [Member]		944,530			25.9	%		942,529			26.2	%
ConstructionConstruction [Member]		157,464			4.3	%		150,680			4.2	%
BusinessBusiness [Member]		520,073			14.3	%		500,161			13.9	%
Total commercial loansConsumer [Member]		2,253,114			61.8	%		2,225,027			61.8	%
Consumer
Real estateReal estate [Member]		1,101,573			30.2	%		1,082,429			30.0	%
Home equityHome equity [Member]		184,691			5.1	%		183,004			5.1	%
Construction		53,216			1.5	%		63,348			1.7	%
OtherOther [Member]		51,172			1.4	%		48,819			1.4	%
Total consumer loans		1,390,652			38.2	%		1,377,600			38.2	%
Total gross loans, net of deferred fees		3,643,766			100.0	%		3,602,627			100.0	%
Less—allowance for credit losses		(40,441	)					(40,682	)
Total loans, net	$	3,603,325					$	3,561,945

Schedule of loan maturity distribution by type and related interest rate

					March 31, 2024
(dollars in thousands)	One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	15,855		185,107		388,424		41,661		631,047
Non-owner occupied RE		77,445		516,176		326,650		24,259		944,530
Construction		32,425		61,546		63,493		-		157,464
Business		117,557		218,031		180,132		4,353		520,073
Total commercial loans		243,282		980,860		958,699		70,273		2,253,114
Consumer
Real estate		10,230		52,771		310,383		728,189		1,101,573
Home equity		2,878		27,460		149,530		4,823		184,691
Construction		382		901		31,926		20,007		53,216
Other		12,564		34,683		3,103		822		51,172
Total consumer loans		26,054		115,815		494,942		753,841		1,390,652
Total gross loans, net of deferred fees	$	269,336		1,096,675		1,453,641		824,114		3,643,766

	December 31, 2023
(dollars in thousands)		One year or less		After one but within five years		After five but within fifteen years		After fifteen years		Total
Commercial
Owner occupied RE	$	17,358		177,203		395,130		41,966		631,657
Non-owner occupied RE		68,601		517,622		331,727		24,579		942,529
Construction		26,762		64,432		59,486		-		150,680
Business		114,432		194,416		186,927		4,386		500,161
Total commercial loans		227,153		953,673		973,270		70,931		2,225,027
Consumer
Real estate		10,593		51,956		301,095		718,785		1,082,429
Home equity		2,716		27,578		147,855		4,855		183,004
Construction		-		252		39,459		23,637		63,348
Other		11,157		33,592		3,265		805		48,819
Total consumer loans		24,466		113,378		491,674		748,082		1,377,600
Total gross loans, net of deferred fees	$	251,619		1,067,051		1,464,944		819,013		3,602,627

Schedule of loans due after one year by category

	March 31, 2024			December 31, 2023
	Interest Rate			Interest Rate
(dollars in thousands)		Fixed	Floating or Adjustable		Fixed	Floating or Adjustable
Commercial
Owner occupied RE	$	600,279	14,913		605,199	9,100
Non-owner occupied RE		746,525	120,560		768,048	105,880
Construction		96,176	28,863		81,326	42,592
Business		293,897	108,619		293,920	91,809
Total commercial loans		1,736,877	272,955		1,748,493	249,381
Consumer
Real estate		1,091,343	-		1,071,836	-
Home equity		11,485	170,328		11,441	168,847
Construction		52,834	-		63,348	-
Other		12,127	26,481		11,525	26,137
Total consumer loans		1,167,789	196,809		1,158,150	194,984
Total gross loans, net of deferred fees	$	2,904,666	469,764		2,906,643	444,365

	●	Pass—A pass loan ranges from minimal to average credit risk; however, still has acceptable credit risk.

	●	Watch—A watch loan exhibits above average credit risk due to minor weaknesses and warrants closer scrutiny by management.

	●	Special mention—A special mention loan 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 the institution’s credit position at some future date.

	●	Substandard—A substandard loan is 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, which may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

	●	Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.

Schedule of classified by credit quality indicators by year of origination

									March 31, 2024
(dollars in thousands)		2024	2023	2022	2021	2020		Prior		Revolving	Revolving Converted to Term	Total
Commercial
Owner occupied RE
Pass	$	11,770	42,283	180,226	134,787	63,949		164,174		85	-	597,274
Watch		-	-	3,429	456	15,880		10,101		-	-	29,866
Special Mention		-	-	177	-	-		2,889		-	-	3,066
Substandard		-	-	-	-	-		841		-	-	841
Total Owner occupied RE		11,770	42,283	183,832	135,243	79,829		178,005		85	-	631,047

Non-owner occupied RE
Pass		12,575	79,336	303,755	169,028	105,833		226,072		303	-	896,902
Watch		-	1,002	2,596	448	527		15,911		-	-	20,484
Special Mention		-	-	967	7,707	-		9,049		-	-	17,723
Substandard		-	-	-	305	-		9,116		-	-	9,421
Total Non-owner occupied RE		12,575	80,338	307,318	177,488	106,360		260,148		303	-	944,530

Construction
Pass		3,563	28,027	86,648	26,741	11,087		-		-	-	156,066
Watch		-	-	1,398	-	-		-		-	-	1,398
Total Construction		3,563	28,027	88,046	26,741	11,087		-		-	-	157,464

Business
Pass		8,232	52,166	134,401	45,948	18,339		61,981		163,010	-	484,077
Watch		-	120	17,160	1,814	980		4,600		6,942	5	31,621
Special Mention		-	231	942	89	500		1,736		101	-	3,599
Substandard		-	-	-	151	-		625		-	-	776
Total Business		8,232	52,517	152,503	48,002	19,819		68,942		170,053	5	520,073
Current period gross write-offs		-	-	-	-	(346	)	-		-	-	(346	)
Total Commercial loans		36,140	203,165	731,699	387,474	217,095		507,095		170,441	5	2,253,114

Consumer
Real estate
Pass		18,718	146,761	281,881	276,118	171,468		168,438		-	-	1,063,384
Watch		-	488	5,615	7,360	3,883		5,876		-	-	23,222
Special Mention		-	142	2,487	1,905	1,282		5,253		-	-	11,069
Substandard		-	275	350	631	986		1,656		-	-	3,898
Total Real estate		18,718	147,666	290,333	286,014	177,619		181,223		-	-	1,101,573


	December 31, 2023
(dollars in thousands)	2023		2022			2021		2020			2019		Prior			Revolving			Revolving Converted to Term			Total
Commercial
Owner occupied RE
Pass	$	42,846		180,654			138,549		64,818			59,880		110,502			85			166			597,500
Watch		-		3,460			460		15,997			3,525		6,616			-			-			30,058
Special Mention		-		181			-		-			-		3,057			-			-			3,238
Substandard		-		-			-		-			-		861			-			-			861
Total Owner occupied RE		42,846		184,295			139,009		80,815			63,405		121,036			85			166			631,657

Non-owner occupied RE
Pass		84,617		298,063			162,697		107,364			59,260		163,990			9,249			-			885,240
Watch		1,007		3,260			9,914		533			5,545		10,630			-			-			30,889
Special Mention		-		-			7,759		-			8,252		879			-			-			16,890
Substandard		-		-			313		-			8,088		1,109			-			-			9,510
Total Non-owner occupied RE		85,624		301,323			180,683		107,897			81,145		176,608			9,249			-			942,529
Current period gross write-offs		-		(200	)		-		-			-		(42	)		-			-			(242	)

Construction
Pass		27,262		86,161			24,399		11,459			-		-			-			-			149,281
Watch		-		1,399			-		-			-		-			-			-			1,399
Total Construction		27,262		87,560			24,399		11,459			-		-			-			-			150,680

Business
Pass		48,705		134,999			48,557		18,868			17,292		47,708			146,745			1,431			464,305
Watch		127		15,867			1,833		1,010			842		3,584			7,570			506			31,339
Special Mention		241		961			98		857			184		447			150			97			3,035
Substandard		-		-			155		-			132		1,195			-			-			1,482
Total Business		49,073		151,827			50,643		20,735			18,450		52,934			154,465			2,034			500,161
Current period gross write-offs		-		-			-		(28	)		-		-			(15	)		(22	)		(65	)
Total Commercial loans		204,805		725,005			394,734		220,906			163,000		350,578			163,799			2,200			2,225,027

Consumer
Real estate
Pass		144,179		273,585			278,138		176,395			66,087		105,383			-			-			1,043,767
Watch		490		5,658			8,230		3,917			2,051		3,890			-			-			24,236
Special Mention		143		2,499			1,657		1,291			2,220		3,360			-			-			11,170
Substandard		-		-			635		817			318		1,486			-			-			3,256
Total Real estate		144,812		281,742			288,660		182,420			70,676		114,119			-			-			1,082,429

Schedule of loan balances by payment status

	March 31, 2024
(dollars in thousands)	Accruing 30- 59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	-		-		-		-		631,047		631,047
Non-owner occupied RE		8,031		27		-		1,410		935,062		944,530
Construction		-		-		-		-		157,464		157,464
Business		428		18		-		488		519,139		520,073
Consumer
Real estate		2,903		-		-		1,380		1,097,290		1,101,573
Home equity		231		127		-		367		183,966		184,691
Construction		-		-		-		-		53,216		53,216
Other		-		7		-		1		51,164		51,172
Total loans	$	11,593		179		-		3,646		3,628,348		3,643,766
Total loans over 90 days past due		-		-		-		-		-		889

		December 31, 2023
(dollars in thousands)		Accruing 30- 59 days past due		Accruing 60-89 days past due		Accruing 90 days or more past due		Nonaccrual loans		Accruing current		Total
Commercial
Owner occupied RE	$	74		-		-		-		631,583		631,657
Non-owner occupied RE		8,102		-		-		1,423		933,004		942,529
Construction		-		-		-		-		150,680		150,680
Business		567		-		-		319		499,275		500,161
Consumer
Real estate		1,750		-		-		985		1,079,694		1,082,429
Home equity		601		30		-		1,236		181,137		183,004
Construction		-		-		-		-		63,348		63,348
Other		25		25		-		-		48,769		48,819
Total loans	$	11,119		55		-		3,963		3,587,490		3,602,627
Total loans over 90 days past due		-		-		-		-		-		1,300

Schedule nonaccrual loans by major categories

	March 31, 2024								December 31, 2023
	Nonaccrual		Nonaccrual				Nonaccrual		Nonaccrual
	loans		loans		Total		loans		loans		Total
	with no		with an		nonaccrual		with no		with an		nonaccrual
(dollars in thousands)		allowance		allowance		loans		allowance		allowance		loans
Commercial
Owner occupied RE	$	-		-		-	$	-		-		-
Non-owner occupied RE		646		764		1,410		653		770		1,423
Construction		-		-		-		-		-		-
Business		-		488		488		164		155		319
Total commercial		646		1,252		1,898		817		925		1,742
Consumer
Real estate		625		755		1,380		-		985		985
Home equity		367		-		367		343		893		1,236
Construction		-		-		-		-		-		-
Other		-		1		1		-		-		-
Total consumer		992		756		1,748		343		1,878		2,221
Total nonaccrual loans	$	1,638		2,008		3,646	$	1,160		2,803		3,963

Schedule of nonperforming assets

(dollars in thousands)	March 31, 2024			December 31, 2023
Nonaccrual loans	$	3,646			3,963
Other real estate owned		-			-
Total nonperforming assets	$	3,646			3,963
Nonperforming assets as a percentage of:
Total assets		0.09	%		0.10	%
Gross loans		0.10	%		0.11	%
Total loans over 90 days past due	$	889			1,300
Loans over 90 days past due and still accruing		-			-

Schedule of amortized cost basis of loans
						Term Extension
(dollars in thousands)	Amortized Cost Basis		% of Total Loan Type			Financial Effect
Commercial Business	$	309		0.06	%	Added a 1-year term to both of the loans modified. One loan was granted an extended amortization due to the inability to pay on a 3-year amortization. The other loan was given an interest only period due to the ability to pay only interest to get the loan renewed.

Schedule of activity related to the allowance for credit losses

									Three months ended March 31, 2024
	Commercial											Consumer
(dollars in thousands)	Owner occupied RE		Non- owner occupied RE			Construction			Business			Real Estate		Home Equity		Construction			Other			Total
Balance, beginning of period	$	6,118		11,167			1,594			7,385			10,647		2,600		677			494		40,682
Provision for credit losses		-		-			-			-			-		-		-			-		-
Loan charge-offs		-		-			-			(346	)		-		-		-			(78	)	(424	)
Loan recoveries		-		-			-			15			-		119		-			49		183
Net loan recoveries (charge-offs)		-		-			-			(331	)		-		119		-			(29	)	(241	)
Balance, end of period	$	6,118		11,167			1,594			7,054			10,647		2,719		677			465		40,441
Net charge-offs to average loans (annualized)																						0.03	%
Allowance for credit losses to gross loans																						1.11	%
Allowance for credit losses to nonperforming loans																						1,109.13	%

										Three months ended March 31, 2023
		Commercial														Consumer
(dollars in thousands)		Owner occupied RE		Non-owner occupied RE			Construction			Business			Real Estate		Home Equity		Construction			Other		Total
Balance, beginning of period	$	5,867		10,376			1,292			7,861			9,487		2,551		893			312		38,639
Provision for credit losses		117		1,038			(182	)		150			592		53		(83	)		170		1,855
Loan charge-offs		-		(160	)		-			(1	)		-		-		-			-		(161	)
Loan recoveries		-		31			-			12			-		59		-			-		102
Net loan recoveries (charge-offs)		-		(129	)		-			11			-		59		-			-		(59	)
Balance, end of period	$	5,984		11,285			1,110			8,022			10,079		2,663		810			482		40,435
Net charge-offs to average loans (annualized)																						0.01	%
Allowance for credit losses to gross loans																						1.18	%
Allowance for credit losses to nonperforming loans																						854.33	%

Schedule of analysis of collateral-dependent loans

					March 31, 2024
	Real		Business
(dollars in thousands)	estate		assets		Other		Total
Commercial
Owner occupied RE	$	-		-		-		-
Non-owner occupied RE		723		-		-		723
Construction		-		-		-		-
Business		-		-		-		-
Total commercial		723		-		-		723
Consumer
Real estate		789		-		-		789
Home equity		367		-		-		367
Construction		-		-		-		-
Other		-		-		-		-
Total consumer		1,156		-		-		1,156
Total	$	1,879		-		-		1,879

	December 31, 2023
		Real		Business
(dollars in thousands)		estate		assets		Other		Total
Commercial
Owner occupied RE	$	-		-		-		-
Non-owner occupied RE		720		-		-		720
Construction		-		-		-		-
Business		164		-		-		164
Total commercial		884		-		-		884
Consumer
Real estate		166		-		-		166
Home equity		343		-		-		343
Construction		-		-		-		-
Other		-		-		-		-
Total consumer		509		-		-		509
Total	$	1,393		-		-		1,393

Schedule of allowance for credit losses for unfunded loan commitments

	Three months ended			Twelve months ended
(dollars in thousands)	March 31, 2024			December 31, 2023
Balance, beginning of period	$	1,831			2,780
Provision for (reversal of) credit losses		(175	)		(949	)
Balance, end of period	$	1,656			1,831
Unfunded Loan Commitments	$	710,669			724,606
Reserve for Unfunded Commitments to Unfunded Loan Commitments		0.23	%		0.25	%

Schedule of carrying value of hedged asset and liability and cumulative fair value hedging adjustment
	March 31, 2024				December 31, 2023
(dollars in thousands)		Carrying Amount		Hedged Asset		Carrying Amount		Hedged Liability
Fixed Rate Asset/Liability¹	$	203,206	$	3,206	$	199,518	$	482

Schedule of outstanding financial derivative instruments
				March 31, 2024
				Fair Value
(dollars in thousands)	Notional		Balance Sheet Location	Asset/(Liability)
Derivatives designated as hedging instruments:
Fair value swap Fair value swap [Member]	$	200,000	Other assets	$	3,206

Derivatives not designated as hedging instruments:
Mortgage loan interest rate lock commitments Mortgage loan interest rate lock commitments [Member]		28,986	Other assets		316
MBS forward sales commitments MBS forward sales commitments [Member]		19,500	Other liabilities		(59	)
Total derivative financial instruments Total derivative financial instruments [Member]	$	248,486		$	3,463

					December 31, 2023
					Fair Value
(dollars in thousands)		Notional	Balance Sheet Location		Asset/(Liability)
Derivatives designated as hedging instruments:
Fair value swap	$	200,000	Other liabilities	$	(482	)

Derivatives not designated as hedging instruments:
Mortgage loan interest rate lock commitments		12,973	Other assets		159
MBS forward sales commitments		10,000	Other liabilities		(68	)
Total derivative financial instruments	$	222,973		$	(391	)

Schedule of summarize the effect of fair value hedging relationship recognized in consolidated statement of income
	Three months ended March 31,
(dollars in thousands)		2024		2023
Gain (loss) on fair value hedging relationship:
Hedged asset	$	3,688		-
Fair value derivative designated as hedging instrument		(3,738	)	-
Total gain (loss) recognized in interest income on loans	$	(50	)	-

	Level 1 – Quoted market price in active markets
	Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include certain debt and equity securities that are traded in an active exchange market.

	Level 2 – Significant other observable inputs
	Observable inputs other than Level 1 prices such as 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 assets or liabilities. Level 2 assets and liabilities include fixed income securities and mortgage-backed securities that are held in the Company’s available-for-sale portfolio and valued by a third-party pricing service, as well as certain individually evaluated loans.

Schedule of assets and liabilities measured at fair value on a recurring basis

					March 31, 2024
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale
Corporate bonds Level 1 [Member]	$	-		1,887		-		1,887
US treasuries Level 2 [Member]		-		888		-		888
US government agencies Level 3 [Member]		-		18,197		-		18,197
State and political subdivisions		-		19,537		-		19,537
Asset-backed securities		-		34,204		-		34,204
Mortgage-backed securities		-		51,283		-		51,283
Mortgage loans held for sale		-		11,842		-		11,842
Mortgage loan interest rate lock commitments		-		316		-		316
Derivative asset		-		3,206		-		3,206
Total assets measured at fair value on a recurring basis	$	-		141,360		-		141,360
Liabilities
MBS forward sales commitments	$	-		59		-		59
Total liabilities measured at fair value on a recurring basis	$	-		59		-		59

Schedule of assets and liabilities measured at fair value on a nonrecurring basis
					As of March 31, 2024
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Individually evaluated loans	$	-		1,638		2,153		3,791
Total assets measured at fair value on a nonrecurring basis	$	-		1,638		2,153		3,791

						As of December 31, 2023
(dollars in thousands)		Level 1		Level 2		Level 3		Total
Assets
Individually evaluated loans	$	-		1,160		2,976		4,136
Total assets measured at fair value on a nonrecurring basis	$	-		1,160		2,976		4,136

	Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Individually evaluated loans	Appraised Value/ Discounted Cash Flows	Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal	0-25%

Schedule of estimated fair values of the company's financial instruments

					March 31, 2024
(dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Other investments, at cost	$	18,499		18,499		-		-		18,499
Loans¹		3,598,837		3,269,154		-		-		3,269,154
Financial Liabilities:
Deposits		3,460,681		2,954,382		-		2,954,382		-
Subordinated debentures		36,349		40,617		-		40,617		-

Schedule of maturities of lease liabilities
(dollars in thousands)		Operating Leases
2024	$	1,578
2025		2,157
2026		2,210
2027		2,267
2028		2,015
Thereafter		20,187
Total undiscounted lease payments		30,414
Discount effect of cash flows		6,117
Total lease liability	$	24,297

Schedule of earnings per share calculation
	Three months ended March 31,
(dollars in thousands, except share data)		2024	2023
Numerator:
Net income available to common shareholders	$	2,522	2,703
Denominator:
Weighted-average common shares outstanding – basic		8,110,249	8,025,876
Common stock equivalents		31,672	66,394
Weighted-average common shares outstanding – diluted		8,141,921	8,092,270
Earnings per common share:
Basic	$	0.31	0.34
Diluted		0.31	0.33


	Three Months Ended
		March 31, 2024 vs. 2023								March 31, 2023 vs. 2022
		Increase (Decrease) Due to								Increase (Decrease) Due to
(dollars in thousands)		Volume	Rate		Rate/ Volume		Total			Volume		Rate		Rate/ Volume		Total
Interest income
Loans	$	3,234	5,168		455		8,857		$	7,189		4,328		1,300		12,817
Investment securities		297	382		186		865			(103	)	309		(67	)	139
Federal funds sold and interest-bearing deposits with banks		45	254		12		311			(2	)	945		(33	)	910
Total interest income		3,576	5,804		653		10,033			7,084		5,582		1,200		13,866
Interest expense
Deposits		503	8,987		263		9,753			253		12,521		3,497		16,271
FHLB advances and other borrowings		2,444	(31	)	(384	)	2,029			1		170		17		188
Subordinated debentures		2	28		-		30			1		146		-		147
Total interest expense		2,949	8,984		(121	)	11,812			255		12,837		3,514		16,606
Net interest income	$	627	(3,180	)	774		(1,779	)	$	6,829		(7,255	)	(2,314	)	(2,740	)


	March 31,		December 31,
(dollars in thousands)	2024		2023
Non-interest bearing	$	671,708		674,167
Interest bearing:
NOW accounts		293,064		310,218
Money market accounts		1,603,796		1,605,278
Savings		32,248		31,669
Time, less than $250,000		206,657		190,167
Time and out-of-market deposits, $250,000 and over		653,208		568,065
Total deposits	$	3,460,681		3,379,564


(dollars in thousands)	March 31, 2024
Three months or less	$	84,482
Over three through six months		65,646
Over six through twelve months		144,396
Over twelve months		358,684
Total	$	653,208