0001628280-24-011467 | 10-K | XBRL Viewer

Borrowed Funds (Tables)

12 Months Ended

Dec. 31, 2023

As of December 31, 2023 and 2022, the Company was indebted as follows:



	2023				2022
(dollars in thousands)	Balance		Interest		Balance		Interest
FHLB fixed rate advance due October 16, 2025	$	22,000	0.93	%	$	22,000	0.93	%
FHLB fixed rate advance due March 20, 2023	—		—		50,000		4.42
FHLB daily rate advance due September 13, 2023	—		—		35,000		4.57
Total - FHLB advances	$	22,000	0.93	%	$	107,000	3.75	%


Junior subordinated debentures due June 15, 2036	$	2,062	7.52	%	$	2,062	6.64	%
Other subordinated notes due November 30, 2030	10,000		5.00		10,000		5.00
Bank Term Funding Program borrowings	15,000		4.84		—		—


Total - Other borrowed funds	$	27,062	5.10	%	$	12,062	5.28	%

Parent Company Financial Information - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Assets
Total portfolio loans held for investment, net	$ 1,874,033	$ 1,702,207
Allowance for loan losses	28,610	26,385	$ 25,181
Accrued interest receivable	11,494	9,489
Deferred income taxes	12,252	13,777
Other assets	10,845	8,435
Total assets	2,226,176	2,123,655
Liabilities
Borrowed funds	27,062	12,062
Accrued interest payable	5,583	1,031
Other liabilities	20,675	21,475
Total liabilities	1,971,316	1,899,640
Stockholders' equity
Common stock	139	141
Additional paid-in capital	54,473	58,190
Retained earnings	213,345	182,435
Accumulated other comprehensive loss	(13,097)	(16,751)
Total stockholders' equity	254,860	224,015	$ 197,903
Total liabilities and stockholders' equity	2,226,176	2,123,655
Investment in Church Street Capital
Assets
Total portfolio loans held for investment, net	7,900
Allowance for loan losses	184
Parent Company
Assets
Cash and cash equivalents	3,499	272
Total portfolio loans held for investment, net	41,310	47,517
Allowance for loan losses	416	328
Accrued interest receivable	370	288
Deferred income taxes	165	100
Other assets	21	45
Total assets	267,699	236,781
Liabilities
Borrowed funds	12,062	12,062
Accrued interest payable	299	48
Other liabilities	478	656
Total liabilities	12,839	12,766
Stockholders' equity
Common stock	139	141
Additional paid-in capital	54,473	58,190
Retained earnings	213,345	182,435
Accumulated other comprehensive loss	(13,097)	(16,751)
Total stockholders' equity	254,860	224,015
Total liabilities and stockholders' equity	267,699	236,781
Parent Company \| Investment in Bank
Assets
Investment	215,698	183,095
Parent Company \| Investment in Church Street Capital
Assets
Investment	6,574	5,402
Parent Company \| Investment in Trust
Assets
Investment	$ 62	$ 62

Borrowed Funds - Additional Information (Details) - USD ($)			1 Months Ended	12 Months Ended
	Nov. 30, 2020	Jun. 15, 2006	Feb. 29, 2024	Dec. 31, 2023	Dec. 31, 2022	Nov. 30, 2015
Debt Instrument [Line Items]
Interest rate				0.93%	3.75%
Maximum borrowing capacity				$ 76,000,000
Line of credit, outstanding amount				0	$ 0
Certificates of deposits, brokered, outstanding				142,400,000	131,800,000
Line of Credit \| Federal Home Loan Bank
Debt Instrument [Line Items]
FHLB available borrowing capacity				$ 291,500,000	223,800,000
Line of Credit \| Pledged Loans \| Federal Home Loan Bank
Debt Instrument [Line Items]
FHLB maximum borrowing capacity, percent of assets				25.00%
Current borrowing capacity				$ 313,500,000	330,800,000
Line of Credit \| Pledged Loans \| Federal Reserve Bank Of Richmond
Debt Instrument [Line Items]
Current borrowing capacity				16,600,000	21,400,000
Line of Credit \| Collateral Pledged \| Federal Home Loan Bank
Debt Instrument [Line Items]
Investments at fair value				0	0
Certificates of Deposit \| Financial Network
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 326,500,000	$ 310,500,000
Maximum borrowing capacity, percent of assets				15.00%
Junior subordinated debentures due June 15, 2036 \| Junior Subordinated Debt
Debt Instrument [Line Items]
Interest rate				7.52%	6.64%
Junior subordinated debentures due June 15, 2036 \| Junior Subordinated Debt \| Three Month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate		0.26161%		1.87%
Junior subordinated debentures due June 15, 2036 \| Junior Subordinated Debt \| Capital Securities
Debt Instrument [Line Items]
Securities issued (in shares)		2,000
Face amount		$ 2,000,000
Junior subordinated debentures due June 15, 2036 \| Junior Subordinated Debt \| Common Securities
Debt Instrument [Line Items]
Face amount		$ 62,000
Other subordinated notes due November 30, 2030 \| Senior Subordinated Notes
Debt Instrument [Line Items]
Face amount	$ 10,000,000
Interest rate	5.00%			5.00%	5.00%
Initial fixed rate term	5 years
Debt issuance costs	$ 50,000
Other subordinated notes due November 30, 2030 \| Senior Subordinated Notes \| Three Month SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	4.90%
Bank Term Funding Program borrowings \| Senior Subordinated Notes
Debt Instrument [Line Items]
Face amount						$ 13,500,000
Interest rate				4.84%		6.95%
Bank Term Funding Program borrowings \| Subsequent Event
Debt Instrument [Line Items]
Repayments of debt			$ 15,000,000

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Interest income
Loans, including fees	$ 174,760	$ 144,408
Investment securities available for sale	4,815	3,912
Federal funds sold and other	3,631	2,326
Total interest income	183,206	150,646
Interest expense
Deposits	39,625	7,611
Borrowed funds	2,055	2,428
Total interest expense	41,680	10,039
Net interest income	141,526	140,607
Provision for credit losses	9,610	6,631
Release of credit losses on unfunded commitments	(101)	0
Net interest income after provision for loan losses	132,017	133,976
Noninterest income
Other income	1,842	1,767
Total noninterest income	24,975	29,372
Noninterest expenses
Salaries and employee benefits	48,754	42,898
Occupancy and equipment	5,673	4,865
Professional fees	9,270	11,012
Data processing	25,686	29,418
Advertising	6,161	6,220
Loan processing	1,633	1,702
Foreclosed real estate expenses (income), net	7	(183)
Operational losses	4,613	4,469
Outside service providers	1,932	3,338
Other operating	7,038	5,375
Total noninterest expenses	110,767	109,114
Income before income taxes	46,225	54,234
Income tax expense	10,354	12,430
Net income	$ 35,871	$ 41,804
Basic earnings per share (in dollars per share)	$ 2.56	$ 2.98
Diluted earnings per share (in dollars per share)	$ 2.55	$ 2.91
Weighted average common shares outstanding:
Basic (in shares)	14,002,556	14,024,598
Diluted (in shares)	14,080,547	14,362,203
Service charges on deposits
Noninterest income
Noninterest income	$ 964	$ 767
Credit card fees
Noninterest income
Noninterest income	17,273	21,972
Mortgage banking revenue
Noninterest income
Noninterest income	$ 4,896	$ 4,866

Portfolio Loans Receivable and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Portfolio Loans Receivable and Allowance for Credit Losses

The following is a summary of the major categories of total loans outstanding:


	December 31,
	2023				2022
(in thousands)	Amount		Percent		Amount		Percent
Real estate:
Residential	$	573,104	30	%	$	484,735	28	%
Commercial	684,229		35		664,551		38
Construction	290,108		15		238,099		14
Commercial and Industrial	238,548		13		220,221		13
Credit card, net of reserve(1)	123,331		7		128,434		7
Other consumer	950		—		1,179		—
Portfolio loans receivable, gross	1,910,270		100	%	1,737,219		100	%
Deferred origination fees, net	(7,627)				(8,627)
Allowance for credit losses	(28,610)				(26,385)
Portfolio loans receivable, net	$	1,874,033			$	1,702,207

(1) Credit card loans are presented net of reserve for interest and fees.

During the year ended December 31, 2023 the Company recorded a $284 thousand increase to the ACL, reflected in “Other,” from residual non-accretable discounts on acquired loans post CECL adoption. The following tables set forth the changes in the ACL and an allocation of the ACL by loan segment class for the year ended December 31, 2023 and the activity in the allowance for loan losses by loan segment class for the year ended December 31, 2022.


	Beginning Balance, Prior to Adoption of the CECL Standard		Impact of Adopting the CECL Standard		Other		Provision (Release of Provision) for Credit Losses		Charge-Offs		Recoveries		Ending Balance
(in thousands)
Year Ended December 31, 2023
Real estate:
Residential	$	5,481	$	(1,198)	$	91	$	1,814	$	(670)	$	—	$	5,518
Commercial	8,098		3,941		193		(1,075)		(943)		102		10,316
Construction	3,782		(1,973)		—		462		—		—		2,271
Commercial and Industrial	2,935		1,073		—		475		(98)		21		4,406
Credit card	6,078		(1,045)		—		7,939		(7,076)		191		6,087
Other consumer	11		6		—		(5)		—		—		12
Total	$	26,385	$	804	$	284	$	9,610	$	(8,787)	$	314	$	28,610

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)


(in thousands)	Beginning Balance		Provision (Release of Provision) for Loan Losses		Charge-Offs		Recoveries		Ending Balance
Year Ended December 31, 2022
Real estate:
Residential	$	5,612	$	(131)	$	—	$	—	$	5,481
Commercial	8,566		(468)		—		—		8,098
Construction	4,699		(900)		(17)		—		3,782
Commercial and Industrial	2,637		298		—		—		2,935
Credit card	3,655		7,833		(5,461)		51		6,078
Other consumer	12		(1)		—		—		11
Total	$	25,181	$	6,631	$	(5,478)	$	51	$	26,385

The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022.


(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:










December 31, 2022	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	5,481	$	4,288	$	480,447
Commercial	—		8,098		1,563		662,988
Construction	—		3,782		2,837		235,262
Commercial and Industrial	372		2,563		705		219,516
Credit card	—		6,078		—		128,434
Other consumer	—		11		—		1,179
Total	$	372	$	26,013	$	9,393	$	1,727,826

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Past due loans, segregated by age and class of loans, as of December 31, 2023 and 2022 were as follows:


Portfolio Loans Past Due					Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More days Past Due		Nonaccrual Loans
	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due
(in thousands)
December 31, 2023
Real estate:
Residential	$	2,201	$	3,096	$	11,066	$	16,363	$	556,741	$	573,104	$	17	$	11,398
Commercial	1,577		322		582		2,481		681,748		684,229		—		582
Construction	—		1,165		3,296		4,461		285,647		290,108		—		3,288
Commercial and Industrial	1,356		74		454		1,884		236,664		238,548		—		774
Credit card	7,767		6,877		519		15,163		108,168		123,331		519		—
Other consumer	—		—		—		—		950		950		—		—
Total	$	12,901	$	11,534	$	15,917	$	40,352	$	1,869,918	$	1,910,270	$	536	$	16,042



December 31, 2022
Real estate:
Residential	$	4	$	142	$	4,284	$	4,430	$	480,305	$	484,735	$	—	$	4,288
Commercial	—		—		1,563		1,563		662,988		664,551		—		1,563
Construction	1,164		640		2,837		4,641		233,458		238,099		—		2,837
Commercial and Industrial	117		386		569		1,072		219,149		220,221		—		705
Credit card	8,473		7,455		363		16,291		112,143		128,434		363		—
Other consumer	—		—		—		—		1,179		1,179		—		—
Total	$	9,758	$	8,623	$	9,616	$	27,997	$	1,709,222	$	1,737,219	$	363	$	9,393

There were $8.1 million and $1.3 million, respectively, of loans secured by one-to-four family residential properties in the process of foreclosure as of December 31, 2023 and 2022.

The following presents the nonaccrual loans as of December 31, 2023 and December 31, 2022:


	December 31, 2023								December 31, 2022
	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with an Allowance for Credit Loss		Total Nonaccrual Loans		Interest Recognized on Nonaccrual Loans		Total Nonaccrual Loans
(in thousands)

Real estate:
Residential	$	11,152	$	246	$	11,398	$	236	$	4,288
Commercial	582		—		582		46		1,563
Construction	3,288		—		3,288		185		2,837
Commercial and Industrial	598		176		774		71		705


Total	$	15,620	$	422	$	16,042	$	538	$	9,393

The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:

•Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences.

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

•Commercial real estate loans can be secured by either owner-occupied commercial real estate or non-owner-occupied investment commercial real estate. Typically, owner-occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner-occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.

•Construction loans are typically secured by owner-occupied commercial real estate or non-owner-occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner-occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction.

•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property.


Collateral dependent loans amortized cost
(in thousands)	December 31, 2023
Real estate:
Residential	$	11,152
Commercial	582
Construction	3,288
Commercial and Industrial	657

Total	$	15,679

Of the collateral dependent loans as of December 31, 2023, a specific reserve of $115 thousand was assessed for commercial and industrial loans. The Company had no modifications on loans to borrowers experiencing financial difficulty during the year ended December 31, 2023.

Prior to the adoption of the CECL standard, loans were considered impaired when, based on current information, management believed the Company would not collect all principal and interest payments according to contractual terms. Generally, loans were reviewed for impairment when the risk grade for a loan was downgraded to a classified asset category. For loans that were classified as impaired, an allowance was established when the collateral value, if the loan was collateral dependent, or the discounted cash flows of the impaired loan was lower than the carrying value of the loan. Loans were generally charged-off in part or in full when management determined the loan to be uncollectible.

The following table presents information related to impaired loans by class of loans as of and for the years ended December 31, 2022:



	Unpaid Contractual Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Recognized
(in thousands)
December 31, 2022
Real estate:
Residential	$	4,476	$	4,288	$	—	$	4,288	$	—	$	4,629	$	149
Commercial	1,647		1,563		—		1,563		—		1,656		52
Construction	2,939		2,837		—		2,837		—		2,938		75
Commercial and Industrial	899		247		458		705		372		1,199		77


Total	$	9,961	$	8,935	$	458	$	9,393	$	372	$	10,422	$	353

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Credit quality indicators

As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and general economic conditions in the Company’s market. From a credit risk standpoint, the Company utilizes a risk grading matrix to assign a risk grade to each of its loans. The classifications of loans reflect a judgment about the risk of expected credit loss associated with each loan. Credit quality indicators are reviewed and adjusted regularly to account for the degree of risk and expected credit loss that the Company believes to be appropriate for each financial asset.

A description of the general characteristics of loans characterized as classified is as follows:

Pass

Loans characterized as pass includes loans graded exceptional, very good, good, satisfactory and pass/watch. The Company believes that there is a low likelihood of credit deterioration related to those loans that are considered pass.

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 asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers.

Substandard

A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management.

Doubtful

A doubtful loan has all the weaknesses associated with a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period:

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)


December 31, 2023	Term Loans by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Residential – Real estate
Pass	$	140,394	$	137,362	$	76,556	$	76,938	$	36,122	$	88,055	$	—	$	555,427
Special Mention	—		—		134		3,670		1,176		288		—		5,268
Substandard	—		33		—		—		26		12,350		—		12,409
Doubtful	—		—		—		—		—		—		—		—
Total	140,394		137,395		76,690		80,608		37,324		100,693		—		573,104
Commercial – Real estate
Pass	62,095		185,776		145,756		68,748		96,238		116,347		—		674,960
Special Mention	—		6,897		—		—		805		985		—		8,687
Substandard	—		—		—		—		582		—		—		582
Doubtful	—		—		—		—		—		—		—		—
Total	62,095		192,673		145,756		68,748		97,625		117,332		—		684,229
Construction – Real estate
Pass	142,157		72,240		46,180		16,859		6,246		2,517		—		286,199
Special Mention	—		—		—		—		—		614		—		614
Substandard	—		—		—		1,254		597		1,444		—		3,295
Doubtful	—		—		—		—		—		—		—		—
Total	142,157		72,240		46,180		18,113		6,843		4,575		—		290,108
Commercial and Industrial
Pass	70,540		71,689		27,884		8,827		18,036		37,392		—		234,368
Special Mention	—		156		—		2,406		47		273		—		2,882
Substandard	30		814		211		—		42		201		—		1,298
Doubtful	—		—		—		—		—		—		—		—
Total	70,570		72,659		28,095		11,233		18,125		37,866		—		238,548
Other consumer
Pass	75		278		147		116		—		334		—		950
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total	75		278		147		116		—		334		—		950
Credit card
Ungraded	—		—		—		—		—		—		123,331		123,331
Portfolio loans receivable, gross	$	415,291	$	475,245	$	296,868	$	178,818	$	159,917	$	260,800	$	123,331	$	1,910,270


December 31, 2023
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Gross Charge-offs
Residential	$	—	$	—	$	—	$	—	$	—	$	670	$	—	$	670
Commercial	—		—		—		—		943		—		—		943
Commercial and Industrial	—		98		—		—		—		—		—		98
Credit card	—		—		—		—		—		—		7,076		7,076
Total	$	—	$	98	$	—	$	—	$	943	$	670	$	7,076	$	8,787

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

The following table presents the balances of classified loans based on the credit quality indicator:



(in thousands)	Pass(1)		Special Mention		Substandard		Doubtful		Ungraded(2)		Total










December 31, 2022
Real estate:
Residential	$	469,304	$	9,966	$	5,465	$	—	$	—	$	484,735
Commercial	657,411		5,577		1,563		—		—		664,551
Construction	235,262		—		2,837		—		—		238,099
Commercial and Industrial	196,381		22,469		1,371		—		—		220,221
Credit card	—		—		—		—		128,434		128,434
Other consumer	1,179		—		—		—		—		1,179
Portfolio loans receivable, gross	$	1,559,537	$	38,012	$	11,236	$	—	$	128,434	$	1,737,219

________________________

(1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch in addition to credit cards and consumer credits that are not individually graded.

(2) Credit card loans are not individually graded.

Certain loans have been modified where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties disclosed as troubled debt restructurings (“TDRs”). These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after confirmation of the borrower’s sustained repayment performance for a reasonable period, generally six months. The status of TDRs is as follows:


	Number of Contracts	Recorded Investment
(dollars in thousands)		Performing		Nonperforming		Total












December 31, 2022
Real estate:
Residential	1	$	—	$	288	$	288


Total	1	$	—	$	288	$	288

At December 31, 2022 the Company had one defaulted TDR for $288 thousand. In the 12 months ending December 31, 2022, four TDRs, totaling $215 thousand paid off.

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Outstanding loan commitments were as follows:



	December 31,
(in thousands)	2023		2022
Unused lines of credit
Real Estate:
Residential	$	15,436	$	14,336
Residential - Home Equity	43,892		43,128
Commercial	20,424		36,609
Construction	98,777		93,913
Commercial and Industrial	42,751		45,747
Credit card(1)	114,882		111,227
Other consumer	310		102



Total	$	336,472	$	345,062



Letters of credit	$	4,641	$	5,105

_______________

(1) Outstanding loan commitments in the credit card portfolio include $98.2 million and $106.9 million in secured and partially secured balances as of December 31, 2023 and 2022, respectively.

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will, at any given time, draw upon their lines in full. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee.

The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments.

The Company maintains an estimated reserve for unfunded commitments and certain off-balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with increases or decreases in the reserve being charged to or released from operating expense. Activity for this account is as follows for the periods presented:




(in thousands)	2023		2022
Balance at beginning of period	$	1,682	$	1,736
Impact of adopting the CECL standard on January 1, 2023	(775)		—
Release of credit losses on unfunded commitments	(101)		(54)


Balance at end of period	$	806	$	1,682

The Company makes representations and warranties that loans sold to investors meet the investors’ program guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program non-compliance, early payment default, and fraud or borrower misrepresentations.

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

The Company maintains a reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from a provision for credit loss expense. During the year ended December 31, 2022, this increase or decrease in reserve activity was included in other operating expense. Activity in this reserve is as follows for the periods presented:



(in thousands)	2023		2022
Balance at beginning of period	$	1,173	$	1,164
(Release of) provision for mortgage loan put-back reserve	(188)		9


Balance at end of period	$	985	$	1,173

Stock-Based Compensation - Restricted Stock Vesting Schedule (Details) - shares	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
2025 (in shares)	7,403
2026 (in shares)	3,570
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
2024 (in shares)	17,203
Nonvested restricted stock (in shares)	28,176	39,669	49,047

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(i)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(ii)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iii)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(01)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(02)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(03)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(ii)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
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-Paragraph 2
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(01)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iv)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

Fair Value - Impaired Loans and Foreclosed Real Estate (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans for credit loss, net		$ 9,393
Fair Value, Measurements, Nonrecurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans for credit loss, net	$ 15,620	9,021
Fair Value, Measurements, Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Valuation Technique, Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans for credit loss, net	16,000	9,400
Specific reserves	$ 422	$ 372
Minimum \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, discounts to appraisals or cash flows for estimated holding and/or selling costs, percent	0.00%
Maximum \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, discounts to appraisals or cash flows for estimated holding and/or selling costs, percent	25.00%

Stock-Based Compensation - Stock Option Pricing Assumptions (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Dividend yield	1.04%	0.99%
Risk free interest rate	4.52%	3.25%
Expected volatility	54.64%	55.91%
Expected life in years	5 years	5 years

Nature of Business and Basis of Presentation (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Accounting Standards Update and Change in Accounting Principle

The following table illustrates the impact of the adoption of ASC 326, or the CECL standard. The adoption of the standard required an $804 thousand increase in the ACL and a $775 thousand reduction to the reserve for unfunded commitments (“RUC”). The improved precision of the calculation of the historical utilization of unfunded commitments gave rise to the reduction. The net impact of the adoption of the CECL standard to retained earnings was $29 thousand.


	January 1, 2023
(in thousands)	Pre-adoption of the CECL standard		As Reported Under ASC 326		Impact of adoption of the CECL standard
Assets:
Real estate:
Residential	$	484,735	$	484,735	$	—
Commercial	664,551		664,551		—
Construction	238,099		238,099		—
Commercial and Industrial	220,221		220,221		—
Credit card, net of reserve	128,434		128,434		—
Other consumer	1,179		1,179		—
Portfolio loans receivable, gross	$	1,737,219	$	1,737,219	$	—
Deferred origination fees, net	(8,627)		(8,627)		—
Allowance for credit losses	(26,385)		(27,189)		(804)
Portfolio loans receivable, net	$	1,702,207	$	1,701,403	$	(804)
Liabilities: Reserve for unfunded commitments	$	1,682	$	907	$	(775)

Schedule of Computing Basic and Diluted Earnings Per Common Share

The following is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per common share:


	For the Years Ended December 31,
	2023					2022
(dollars in thousands)	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
Basic EPS
Net income available to common stockholders	$	35,871	14,002,556	$	2.56	$	41,805	14,024,598	$	2.98
Effect of dilutive securities	—		77,991			—		337,605
Dilutive EPS per common share	$	35,871	14,080,547	$	2.55	$	41,805	14,362,203	$	2.91

Schedule of Accumulated Other Comprehensive Income Unrealized Gains and Losses

The Company's only component of other comprehensive loss is unrealized losses on investment securities available for sale, net of income taxes. Information concerning the Company's accumulated other comprehensive loss as of December 31, 2023 and 2022 are as follows:


	As of December 31,
(in thousands)	2023		2022
Unrealized losses on securities available for sale	$	(17,350)	$	(22,416)
Deferred tax benefit	4,253		5,665




Total accumulated comprehensive loss	$	(13,097)	$	(16,751)

Fair Value - Financial Instruments Carrying Amount, FV and Placement (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financial assets
Cash and due from banks	$ 14,513	$ 19,963
Interest-bearing deposits at other financial institutions	39,044	39,764
Federal funds sold	407	20,688
Carrying Amount \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets
Cash and due from banks	14,513	19,963
Interest-bearing deposits at other financial institutions	39,044	39,764
Federal funds sold	407	20,688
Financial liabilities
Noninterest-bearing deposits	617,373	674,313
Carrying Amount \| Significant Unobservable Inputs (Level 3)
Financial assets
Loans receivable, net	1,874,678	1,704,370
Restricted investments	4,353	7,362
Financial liabilities
Interest-bearing deposits	1,278,623	1,083,759
FHLB advances and other borrowed funds	49,062	119,062
Fair Value \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets
Cash and due from banks	14,513	19,963
Interest-bearing deposits at other financial institutions	39,044	39,764
Federal funds sold	407	20,688
Financial liabilities
Noninterest-bearing deposits	617,373	674,313
Fair Value \| Significant Unobservable Inputs (Level 3)
Financial assets
Loans receivable, net	1,855,158	1,659,283
Restricted investments	4,353	7,362
Financial liabilities
Interest-bearing deposits	1,280,682	1,090,553
FHLB advances and other borrowed funds	$ 46,634	$ 116,544

Portfolio Loans Receivable and Allowance for Credit Losses - Impaired Loans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Contractual Principal Balance	$ 9,961
Recorded Investment with no Allowance	8,935
Recorded Investment with Allowance	458
Total Recorded Investment	9,393
Related Allowance	372
Average Recorded Investment	10,422
Interest Recognized	353
Residential \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Contractual Principal Balance	4,476
Recorded Investment with no Allowance	4,288
Recorded Investment with Allowance	0
Total Recorded Investment	4,288
Related Allowance	0
Average Recorded Investment	4,629
Interest Recognized	149
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Contractual Principal Balance	899
Recorded Investment with no Allowance	247
Recorded Investment with Allowance	458
Total Recorded Investment	705
Related Allowance	372
Average Recorded Investment	1,199
Interest Recognized	77
Commercial \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Contractual Principal Balance	1,647
Recorded Investment with no Allowance	1,563
Recorded Investment with Allowance	0
Total Recorded Investment	1,563
Related Allowance	0
Average Recorded Investment	1,656
Interest Recognized	52
Construction \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Contractual Principal Balance	2,939
Recorded Investment with no Allowance	2,837
Recorded Investment with Allowance	0
Total Recorded Investment	2,837
Related Allowance	0
Average Recorded Investment	2,938
Interest Recognized	$ 75

Fair Value (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

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

The Company has categorized its financial instruments measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022 as follows:


	Fair Value Measurements Using:
(in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Investment securities available for sale

U.S. Treasuries	$	149,228	$	149,228	$	—	$	—
Municipal	9,372		—		9,372		—
Corporate	4,413		—		4,413		—
Asset-backed securities	7,045		—		7,045		—
Mortgage-backed securities	38,271		—		38,271		—
Total	$	208,329	$	149,228	$	59,101	$	—
Loans held for sale	$	7,481	$	—	$	7,481	$	—
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	—	$	—

December 31, 2022
Investment securities available for sale
U.S. Treasuries	$	199,449	$	199,449	$	—	$	—
Municipal	8,012		—		8,012		—
Corporate	4,600		—		4,600		—
Asset-backed securities	7,711		—		7,711		—
Mortgage-backed securities	32,709		—		32,709		—
Total	$	252,481	$	199,449	$	53,032	$	—

Loans held for sale	$	7,416	$	—	$	7,416	$	—
Derivative assets	$	10	$	—	$	10	$	—
Derivative liabilities	$	—	$	—	$	—	$	—

Schedule Of Fair Value Of Loans Held For Sale

The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity:


Fair Value of Loans Held for Sale

(in thousands)	December 31, 2023		December 31, 2022

Aggregate fair value	$	7,481	$	7,416
Contractual principal	5,168		6,808
Difference	$	2,313	$	608

Schedule of Fair Value Measurements, Nonrecurring


Fair Value of Individually Evaluated Loans

(in thousands)	2023		2022
Individually evaluated loans for credit loss, net


Level 3 Inputs	15,620		9,021
Total	$	15,620	$	9,021

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2023 and 2022:

Unobservable Inputs

Valuation Technique

Unobservable Inputs

General Range of Inputs

Individually evaluated loans

Appraised Value/Discounted Cash Flows

Discounts to appraisals or cash flows for estimated holding and/or selling costs

0 - 25%

Schedule of Fair Value Measurements, Recurring and Nonrecurring

The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments (in thousands).


Fair Value of Financial Assets and Liabilities
	December 31, 2023				December 31, 2022
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Level 1
Cash and due from banks	$	14,513	$	14,513	$	19,963	$	19,963
Interest-bearing deposits at other financial institutions	39,044		39,044		39,764		39,764

Federal funds sold	407		407		20,688		20,688
Level 3
Loans receivable, net	$	1,874,678	$	1,855,158	$	1,704,370	$	1,659,283
Restricted investments	4,353		4,353		7,362		7,362

Financial liabilities
Level 1
Noninterest-bearing deposits	$	617,373	$	617,373	$	674,313	$	674,313

Level 3
Interest-bearing deposits	$	1,278,623	$	1,280,682	$	1,083,759	$	1,090,553
FHLB advances and other borrowed funds	49,062		46,634		119,062		116,544

Investment Securities - Amortized cost to Estimated Fair Value (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 225,679,000	$ 274,897,000
Gross Unrealized Gains	17,000	0
Gross Unrealized Losses	(17,367,000)	(22,416,000)
Allowance for Credit Losses	0
Fair Value	$ 208,329,000	$ 252,481,000
Number of securities sold \| security	0	0
Security pledged as collateral	$ 0	$ 0
Securities loaned, fair value of collateral	$ 170,700,000	0
Standard & Poor's, AAA Rating
Debt Securities, Available-for-sale [Line Items]
Credit financing ratings	82.00%
Standard & Poor's, AA+ Rating
Debt Securities, Available-for-sale [Line Items]
Credit financing ratings	8.00%
Standard & Poor's, AA- Rating
Debt Securities, Available-for-sale [Line Items]
Credit financing ratings	10.00%
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 161,420,000	215,486,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(12,192,000)	(16,037,000)
Allowance for Credit Losses	0
Fair Value	149,228,000	199,449,000
Municipal
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	11,699,000	10,815,000
Gross Unrealized Gains	4,000	0
Gross Unrealized Losses	(2,331,000)	(2,803,000)
Allowance for Credit Losses	0
Fair Value	9,372,000	8,012,000
Corporate
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	5,000,000	5,000,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(587,000)	(400,000)
Allowance for Credit Losses	0
Fair Value	$ 4,413,000	4,600,000
Number of securities in a loss position for greater than twelve months \| security	5
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 7,069,000	7,970,000
Gross Unrealized Gains	13,000	0
Gross Unrealized Losses	(37,000)	(259,000)
Allowance for Credit Losses	0
Fair Value	$ 7,045,000	7,711,000
Number of securities in a loss position for greater than twelve months \| security	3
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 40,491,000	35,626,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(2,220,000)	(2,917,000)
Allowance for Credit Losses	0
Fair Value	$ 38,271,000	$ 32,709,000

Fair Value - Financial Instruments Measured at FV on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 208,329	$ 252,481
Loans held for sale	7,481	7,416
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	208,329	252,481
Loans held for sale	7,481	7,416
Derivative assets	0	10
Derivative liabilities	0	0
Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	149,228	199,449
Loans held for sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	59,101	53,032
Loans held for sale	7,481	7,416
Derivative assets	0	10
Derivative liabilities	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Loans held for sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
U.S. Treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	149,228	199,449
U.S. Treasuries \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	149,228	199,449
U.S. Treasuries \| Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	149,228	199,449
U.S. Treasuries \| Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
U.S. Treasuries \| Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	9,372	8,012
Municipal \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	9,372	8,012
Municipal \| Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Municipal \| Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	9,372	8,012
Municipal \| Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	4,413	4,600
Corporate \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	4,413	4,600
Corporate \| Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Corporate \| Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	4,413	4,600
Corporate \| Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	7,045	7,711
Asset-backed securities \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	7,045	7,711
Asset-backed securities \| Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Asset-backed securities \| Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	7,045	7,711
Asset-backed securities \| Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	38,271	32,709
Mortgage-backed securities \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	38,271	32,709
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	38,271	32,709
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 0	$ 0

Portfolio Loans Receivable and Allowance for Credit Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		$ 26,385	$ 25,181
Other	$ 284	284
(Release of) provision for mortgage loan put-back reserve		9,610	6,631
Charge-Offs		(8,787)	(5,478)
Recoveries		314	51
Balance at end of period	28,610	28,610	26,385
Nonaccrual with an Allowance for Credit Loss			372
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			26,013
Outstanding Loan Balances Evaluated for Impairment - Individually			9,393
Outstanding Loan Balances Evaluated for Impairment - Collectively			1,727,826
Impact of adoption of the CECL standard
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		804
Balance at end of period			804
Residential
Allowance for Loan and Lease Losses [Roll Forward]
Charge-Offs		(670)
Residential \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		5,481	5,612
Other		91
(Release of) provision for mortgage loan put-back reserve		1,814	(131)
Charge-Offs		(670)	0
Recoveries		0	0
Balance at end of period	5,518	5,518	5,481
Nonaccrual with an Allowance for Credit Loss			0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			5,481
Outstanding Loan Balances Evaluated for Impairment - Individually			4,288
Outstanding Loan Balances Evaluated for Impairment - Collectively			480,447
Residential \| Impact of adoption of the CECL standard \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		(1,198)
Balance at end of period			(1,198)
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Charge-Offs		(943)
Nonaccrual with an Allowance for Credit Loss			372
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			2,563
Outstanding Loan Balances Evaluated for Impairment - Individually			705
Outstanding Loan Balances Evaluated for Impairment - Collectively			219,516
Commercial \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		8,098	8,566
Other		193
(Release of) provision for mortgage loan put-back reserve		(1,075)	(468)
Charge-Offs		(943)	0
Recoveries		102	0
Balance at end of period	10,316	10,316	8,098
Nonaccrual with an Allowance for Credit Loss			0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			8,098
Outstanding Loan Balances Evaluated for Impairment - Individually			1,563
Outstanding Loan Balances Evaluated for Impairment - Collectively			662,988
Commercial \| Impact of adoption of the CECL standard \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		3,941
Balance at end of period			3,941
Construction \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		3,782	4,699
Other		0
(Release of) provision for mortgage loan put-back reserve		462	(900)
Charge-Offs		0	(17)
Recoveries		0	0
Balance at end of period	2,271	2,271	3,782
Nonaccrual with an Allowance for Credit Loss			0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			3,782
Outstanding Loan Balances Evaluated for Impairment - Individually			2,837
Outstanding Loan Balances Evaluated for Impairment - Collectively			235,262
Construction \| Impact of adoption of the CECL standard \| Real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		(1,973)
Balance at end of period			(1,973)
Commercial and Industrial
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		2,935	2,637
Other		0
(Release of) provision for mortgage loan put-back reserve		475	298
Charge-Offs		(98)	0
Recoveries		21	0
Balance at end of period	4,406	4,406	2,935
Commercial and Industrial \| Impact of adoption of the CECL standard
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		1,073
Balance at end of period			1,073
Consumer \| Credit card
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		6,078	3,655
Other		0
(Release of) provision for mortgage loan put-back reserve		7,939	7,833
Charge-Offs		(7,076)	(5,461)
Recoveries		191	51
Balance at end of period	6,087	6,087	6,078
Nonaccrual with an Allowance for Credit Loss			0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			6,078
Outstanding Loan Balances Evaluated for Impairment - Individually			0
Outstanding Loan Balances Evaluated for Impairment - Collectively			128,434
Consumer \| Other consumer
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		11	12
Other		0
(Release of) provision for mortgage loan put-back reserve		(5)	(1)
Charge-Offs		0	0
Recoveries		0	0
Balance at end of period	$ 12	12	11
Nonaccrual with an Allowance for Credit Loss			0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively			11
Outstanding Loan Balances Evaluated for Impairment - Individually			0
Outstanding Loan Balances Evaluated for Impairment - Collectively			1,179
Consumer \| Impact of adoption of the CECL standard \| Credit card
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		(1,045)
Balance at end of period			(1,045)
Consumer \| Impact of adoption of the CECL standard \| Other consumer
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period		$ 6
Balance at end of period			$ 6

Segments (Details) $ in Thousands	12 Months Ended
Segments (Details) $ in Thousands	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of reportable business segments \| segment	4
Interest income	$ 183,206	$ 150,646
Interest expense	41,680	10,039
Net interest income	141,526	140,607
Release of credit losses on unfunded commitments	(101)
Provision for credit losses	9,610	6,631
Net interest income after provision	132,017	133,976
Noninterest income	24,975	29,372
Noninterest expenses	110,767	109,114
Income before income taxes	46,225	54,234
Total assets	2,226,176	2,123,655
Open Sky
Segment Reporting Information [Line Items]
Noninterest expenses	23,700	27,000
Operating Segments \| Commercial Bank
Segment Reporting Information [Line Items]
Interest income	116,408	82,182
Interest expense	40,896	9,245
Net interest income	75,512	72,937
Release of credit losses on unfunded commitments	(101)
Provision for credit losses	1,540	(980)
Net interest income after provision	74,073	73,917
Noninterest income	2,737	2,122
Noninterest expenses	61,836	52,552
Income before income taxes	14,974	23,487
Total assets	2,051,945	1,939,601
Operating Segments \| CBHL
Segment Reporting Information [Line Items]
Interest income	382	435
Interest expense	135	218
Net interest income	247	217
Release of credit losses on unfunded commitments	0
Provision for credit losses	0	0
Net interest income after provision	247	217
Noninterest income	4,909	5,276
Noninterest expenses	6,001	8,450
Income before income taxes	(845)	(2,957)
Total assets	8,589	7,936
Operating Segments \| Open Sky
Segment Reporting Information [Line Items]
Interest income	62,476	64,859
Interest expense	0	0
Net interest income	62,476	64,859
Release of credit losses on unfunded commitments	0
Provision for credit losses	7,948	7,611
Net interest income after provision	54,528	57,248
Noninterest income	17,325	21,972
Noninterest expenses	42,524	47,647
Income before income taxes	29,329	31,573
Total assets	117,477	122,418
Operating Segments \| Corporate
Segment Reporting Information [Line Items]
Interest income	4,238	3,349
Interest expense	947	755
Net interest income	3,291	2,594
Release of credit losses on unfunded commitments	0
Provision for credit losses	122	0
Net interest income after provision	3,169	2,594
Noninterest income	4	2
Noninterest expenses	406	465
Income before income taxes	2,767	2,131
Total assets	277,565	245,399
Eliminations
Segment Reporting Information [Line Items]
Interest income	(298)	(179)
Interest expense	(298)	(179)
Net interest income	0	0
Release of credit losses on unfunded commitments	0
Provision for credit losses	0	0
Net interest income after provision	0	0
Noninterest income	0	0
Noninterest expenses	0	0
Income before income taxes	0	0
Total assets	$ (229,400)	$ (191,699)

Retirement Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Retirement Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Defined Benefit Plan, Plan Assets, Allocation [Line Items]
Company's contribution, percent of eligible compensation	3.00%
Company's contribution to the plan	$ 1,000	$ 850
Total vesting percentage	100.00%
Service period	10 years
Continuous employment period	10 years
Age of participant attaining separation under the LTIP	67 years
Chief Executive Officer
Defined Benefit Plan, Plan Assets, Allocation [Line Items]
Defined contribution plan earn an annual contribution percent	20.00%
Executive Management
Defined Benefit Plan, Plan Assets, Allocation [Line Items]
Defined contribution plan earn an annual contribution percent	15.00%

Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table reports the commitment and fair value amounts on the outstanding derivatives:



(in thousands)	December 31, 2023		December 31, 2022
Notional amount of open forward sales agreements	$	—	$	1,750
Fair value of open forward delivery sales agreements	—		9


Notional amount of interest rate lock commitments	—		626
Fair value of interest rate lock commitments	—		1

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References + Details

Portfolio Loans Receivable and Allowance for Credit Losses - Trouble Debt Restructuring (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) contract	Dec. 31, 2022 USD ($) contract
Financing Receivable, Troubled Debt Restructuring [Line Items]
Performing loan, repayment period	6 months
Number of Contracts \| contract		1
Recorded Investment	$ 15,679	$ 288
Defaulted TDR
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract	1
Recorded Investment	$ 288
Paid Off T D R
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract		4
Recorded Investment		$ 215
Residential \| Real estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract		1
Recorded Investment	$ 11,152	$ 288
Performing
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment		0
Performing \| Residential \| Real estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment		0
Nonperforming
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment		288
Nonperforming \| Residential \| Real estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment		$ 288

Portfolio Loans Receivable - Schedule of Non-Accrual Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual with No Allowance for Credit Loss	$ 15,620
Nonaccrual with an Allowance for Credit Loss	422
Nonaccrual Loans	16,042	$ 9,393
Interest Recognized on Nonaccrual Loans	538
Recorded Investment	15,679	288
Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Recorded Investment	115
Residential \| Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual with No Allowance for Credit Loss	11,152
Nonaccrual with an Allowance for Credit Loss	246
Nonaccrual Loans	11,398	4,288
Interest Recognized on Nonaccrual Loans	236
Recorded Investment	11,152	288
Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual with No Allowance for Credit Loss	598
Nonaccrual with an Allowance for Credit Loss	176
Nonaccrual Loans	774	705
Interest Recognized on Nonaccrual Loans	71
Commercial and Industrial \| Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual with No Allowance for Credit Loss	582
Nonaccrual with an Allowance for Credit Loss	0
Nonaccrual Loans	582	1,563
Interest Recognized on Nonaccrual Loans	46
Recorded Investment	582
Construction \| Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual with No Allowance for Credit Loss	3,288
Nonaccrual with an Allowance for Credit Loss	0
Nonaccrual Loans	3,288	$ 2,837
Interest Recognized on Nonaccrual Loans	185
Recorded Investment	3,288
Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Recorded Investment	$ 657

SBA-PPP Loans (Details) - USD ($)	12 Months Ended
SBA-PPP Loans (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 1,910,270,000	$ 1,737,219,000
Interest income	29,500	3,500,000
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	238,548,000	220,221,000
Commercial and Industrial \| Paycheck Protection Program
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	700,000	2,200,000
Unearned net fees	15,300	31,000
Earned fees	$ 15,700	$ 3,200,000

- Definition

Amount of operating interest income, including, but not limited to, amortization and accretion of premiums and discounts on securities.

+ References + Details

Premises and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Premises and Equipment

Year end premises and equipment owned and utilized in the operations of the Company and the related depreciation and amortization expense were as follows:



(in thousands)	2023		2022
Leasehold improvements	$	2,710	$	1,683
Furniture and equipment	4,926		4,775
Vehicle	54		54
Software	2,517		2,517
Construction in progress	33		694
	10,240		9,723
Less: Accumulated depreciation and amortization	(8,758)		(8,434)
Premises and equipment	1,482		1,289
Net lease asset	3,587		2,097
Premises and equipment, net	$	5,069	$	3,386

Depreciation and amortization expense	$	324	$	364

Parent Company Financial Information (Tables)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Schedule of Condensed Financial Statements

The balance sheets as of December 31, 2023 and 2022 and statements of income and cash flows for the years then ended, for Capital Bancorp, Inc. (Parent only) are presented below.


Parent Company Only Balance Sheets

(in thousands)	2023		2022
Assets
Cash and cash equivalents	$	3,499	$	272
Investment in Bank	215,698		183,095
Investment in Church Street Capital	6,574		5,402
Investment in Trust	62		62
Loans receivable, net of allowance for credit losses of $416 and $328 at December 31, 2023 and 2022, respectively	41,310		47,517
Accrued interest receivable	370		288


Deferred income taxes	165		100
Other assets	21		45
Total assets	$	267,699	$	236,781

Liabilities and Stockholders’ Equity
Borrowed funds	$	12,062	$	12,062
Accrued interest payable	299		48
Other liabilities	478		656
Total liabilities	12,839		12,766
Stockholders’ equity
Common stock	139		141
Additional paid-in capital	54,473		58,190
Retained earnings	213,345		182,435
Accumulated other comprehensive loss	(13,097)		(16,751)
Total stockholders’ equity	254,860		224,015
Total liabilities and stockholders’ equity	$	267,699	$	236,781


Parent Company Only Statements of Income

(in thousands)	2023		2022
Interest and dividend income	$	2,646	$	2,146
Dividend from Bank	6,500		11,400
Total interest and dividend revenue	9,146		13,546
Interest expense	649		576
Net interest income	8,497		12,970
Provision for credit losses	88		—
Net interest income after provision for credit losses	8,409		12,970
Noninterest income	4		2
Noninterest expenses	629		447
Income before income taxes	7,784		12,525
Income tax expense	304		315
Income before undistributed net income of subsidiaries	7,480		12,210
Undistributed net income of subsidiaries	28,391		29,594
Net income	$	35,871	$	41,804

Note 16 - Parent Company Financial Information (continued)


Parent Company Only Statements of Cash Flows
(in thousands)	2023		2022
Cash flows from operating activities
Net Income	$	35,871	$	41,804
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	88		—
Undistributed net income of subsidiaries	(28,391)		(29,594)

Stock-based compensation expense	1,757		1,662
Director and employee compensation paid in Company stock	547		171
Deferred income tax benefit	(65)		—

Changes in assets and liabilities:
Accrued interest receivable	(82)		(71)

Other assets	24		(31)
Accrued interest payable	251		4
Other liabilities	597		528
Net cash provided by operating activities	10,597		14,473

Cash flows from investing activities
Net decrease (increase) in portfolio loans receivable	5,314		(11,319)
Capital contributions to subsidiaries	(1,729)		(1,662)
Net cash provided (used) by investing activities	3,585		(12,981)

Cash flows from financing activities

Dividends paid	(3,920)		(3,085)
Repurchase of common stock	(8,826)		—
Net proceeds from exercise of stock options	1,791		1,235


Net cash used by financing activities	(10,955)		(1,850)

Net increase (decrease) in cash and cash equivalents	3,227		(358)

Cash and cash equivalents, beginning of year	272		630

Cash and cash equivalents, end of year	$	3,499	$	272

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income tax expense was as follows:



	For the Years Ended December 31,
(in thousands)	2023		2022
Current expense
Federal	$	8,192	$	9,906
State	2,020		1,284
Total current expense	10,212		11,190
Deferred tax expense (benefit)	142		1,240
Total income tax expense	$	10,354	$	12,430

The components of the net deferred tax asset at December 31, 2023 and 2022 were:



(in thousands)	2023		2022
Deferred tax assets:
Allowance for credit losses	$	7,230	$	7,073
Reserve for recourse on mortgage loans sold	242		297
Deferred loan fees - PPP	—		8


Stock-based compensation	309		257
Long-term incentive program	372		428


Unrealized loss on investment securities available for sale	4,253		5,665

Other	61		85
	12,467		13,813
Deferred tax liabilities:



Accumulated depreciation	214		34
Other	1		2

	215		36


Net deferred tax asset	$	12,252	$	13,777

The differences between the federal income tax rate and the effective tax rate for the Company are reconciled as follows:



	2023		2022
Statutory federal income tax rate	21.00	%	21.00	%
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	3.13		2.58
Nondeductible expenses	0.73		0.56
Tax-exempt interest income and dividend income	(0.55)		(0.41)
Stock-based compensation expense	(0.68)		(0.48)
Bank-owned life insurance	(0.54)		(0.40)
Other, net	(0.69)		0.10
Effective Tax Rate	22.40	%	22.95	%

Deferred tax assets represent the future tax benefit of deductible differences and, if it is more likely than not that a tax asset will not be realized, a valuation allowance is required to reduce the net deferred tax assets to net realizable value. As of December 31, 2023, management has determined that it is more likely than not that the majority of the deferred tax asset from continuing operations will be realized. At December 31, 2023 and December 31, 2022, no valuation allowance was recognized.

Note 13 - Income Taxes (continued)

The Company does not have material uncertain tax positions and did not recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination of income tax returns for the years ending after December 31, 2019.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

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(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends to stockholders (in dollar per share)	$ 0.28	$ 0.22

Investment Securities - By Maturity Dates (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Amortized Cost
Within one year	$ 39,918	$ 53,739
One to five years	101,688	88,165
Five to ten years	26,215	79,090
Beyond ten years	10,298	10,307
Asset/Mortgage-backed securities	225,679	274,897
Fair Value
Within one year	39,294	53,204
One to five years	93,218	82,538
Five to ten years	22,511	68,805
Beyond ten years	7,990	7,514
Fair Value	208,329	252,481
Asset-backed securities
Amortized Cost
Asset/Mortgage-backed securities	7,069	7,970
Fair Value
Fair Value	7,045	7,711
Mortgage-backed securities
Amortized Cost
Asset/Mortgage-backed securities	40,491	35,626
Fair Value
Fair Value	$ 38,271	$ 32,709

Portfolio Loans Receivable and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Schedule of Loans Receivable

The following is a summary of the major categories of total loans outstanding:


	December 31,
	2023				2022
(in thousands)	Amount		Percent		Amount		Percent
Real estate:
Residential	$	573,104	30	%	$	484,735	28	%
Commercial	684,229		35		664,551		38
Construction	290,108		15		238,099		14
Commercial and Industrial	238,548		13		220,221		13
Credit card, net of reserve(1)	123,331		7		128,434		7
Other consumer	950		—		1,179		—
Portfolio loans receivable, gross	1,910,270		100	%	1,737,219		100	%
Deferred origination fees, net	(7,627)				(8,627)
Allowance for credit losses	(28,610)				(26,385)
Portfolio loans receivable, net	$	1,874,033			$	1,702,207

(1) Credit card loans are presented net of reserve for interest and fees.

Schedule of Allowance for Credit Losses on Loans Receivables


	Beginning Balance, Prior to Adoption of the CECL Standard		Impact of Adopting the CECL Standard		Other		Provision (Release of Provision) for Credit Losses		Charge-Offs		Recoveries		Ending Balance
(in thousands)
Year Ended December 31, 2023
Real estate:
Residential	$	5,481	$	(1,198)	$	91	$	1,814	$	(670)	$	—	$	5,518
Commercial	8,098		3,941		193		(1,075)		(943)		102		10,316
Construction	3,782		(1,973)		—		462		—		—		2,271
Commercial and Industrial	2,935		1,073		—		475		(98)		21		4,406
Credit card	6,078		(1,045)		—		7,939		(7,076)		191		6,087
Other consumer	11		6		—		(5)		—		—		12
Total	$	26,385	$	804	$	284	$	9,610	$	(8,787)	$	314	$	28,610

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)


(in thousands)	Beginning Balance		Provision (Release of Provision) for Loan Losses		Charge-Offs		Recoveries		Ending Balance
Year Ended December 31, 2022
Real estate:
Residential	$	5,612	$	(131)	$	—	$	—	$	5,481
Commercial	8,566		(468)		—		—		8,098
Construction	4,699		(900)		(17)		—		3,782
Commercial and Industrial	2,637		298		—		—		2,935
Credit card	3,655		7,833		(5,461)		51		6,078
Other consumer	12		(1)		—		—		11
Total	$	25,181	$	6,631	$	(5,478)	$	51	$	26,385

The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022.


(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:










December 31, 2022	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	5,481	$	4,288	$	480,447
Commercial	—		8,098		1,563		662,988
Construction	—		3,782		2,837		235,262
Commercial and Industrial	372		2,563		705		219,516
Credit card	—		6,078		—		128,434
Other consumer	—		11		—		1,179
Total	$	372	$	26,013	$	9,393	$	1,727,826

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Schedule of Past Due Loans Receivables

Past due loans, segregated by age and class of loans, as of December 31, 2023 and 2022 were as follows:


Portfolio Loans Past Due					Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More days Past Due		Nonaccrual Loans
	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due
(in thousands)
December 31, 2023
Real estate:
Residential	$	2,201	$	3,096	$	11,066	$	16,363	$	556,741	$	573,104	$	17	$	11,398
Commercial	1,577		322		582		2,481		681,748		684,229		—		582
Construction	—		1,165		3,296		4,461		285,647		290,108		—		3,288
Commercial and Industrial	1,356		74		454		1,884		236,664		238,548		—		774
Credit card	7,767		6,877		519		15,163		108,168		123,331		519		—
Other consumer	—		—		—		—		950		950		—		—
Total	$	12,901	$	11,534	$	15,917	$	40,352	$	1,869,918	$	1,910,270	$	536	$	16,042



December 31, 2022
Real estate:
Residential	$	4	$	142	$	4,284	$	4,430	$	480,305	$	484,735	$	—	$	4,288
Commercial	—		—		1,563		1,563		662,988		664,551		—		1,563
Construction	1,164		640		2,837		4,641		233,458		238,099		—		2,837
Commercial and Industrial	117		386		569		1,072		219,149		220,221		—		705
Credit card	8,473		7,455		363		16,291		112,143		128,434		363		—
Other consumer	—		—		—		—		1,179		1,179		—		—
Total	$	9,758	$	8,623	$	9,616	$	27,997	$	1,709,222	$	1,737,219	$	363	$	9,393

Schedule of Non-Accrual Loans

The following presents the nonaccrual loans as of December 31, 2023 and December 31, 2022:


	December 31, 2023								December 31, 2022
	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with an Allowance for Credit Loss		Total Nonaccrual Loans		Interest Recognized on Nonaccrual Loans		Total Nonaccrual Loans
(in thousands)

Real estate:
Residential	$	11,152	$	246	$	11,398	$	236	$	4,288
Commercial	582		—		582		46		1,563
Construction	3,288		—		3,288		185		2,837
Commercial and Industrial	598		176		774		71		705


Total	$	15,620	$	422	$	16,042	$	538	$	9,393


Collateral dependent loans amortized cost
(in thousands)	December 31, 2023
Real estate:
Residential	$	11,152
Commercial	582
Construction	3,288
Commercial and Industrial	657

Total	$	15,679

Schedule of Impaired Loans Receivables

The following table presents information related to impaired loans by class of loans as of and for the years ended December 31, 2022:



	Unpaid Contractual Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Recognized
(in thousands)
December 31, 2022
Real estate:
Residential	$	4,476	$	4,288	$	—	$	4,288	$	—	$	4,629	$	149
Commercial	1,647		1,563		—		1,563		—		1,656		52
Construction	2,939		2,837		—		2,837		—		2,938		75
Commercial and Industrial	899		247		458		705		372		1,199		77


Total	$	9,961	$	8,935	$	458	$	9,393	$	372	$	10,422	$	353

Schedule of Loans Receivables Credit Quality Indicators

The following table presents the balances of classified loans based on the credit quality indicator:



(in thousands)	Pass(1)		Special Mention		Substandard		Doubtful		Ungraded(2)		Total










December 31, 2022
Real estate:
Residential	$	469,304	$	9,966	$	5,465	$	—	$	—	$	484,735
Commercial	657,411		5,577		1,563		—		—		664,551
Construction	235,262		—		2,837		—		—		238,099
Commercial and Industrial	196,381		22,469		1,371		—		—		220,221
Credit card	—		—		—		—		128,434		128,434
Other consumer	1,179		—		—		—		—		1,179
Portfolio loans receivable, gross	$	1,559,537	$	38,012	$	11,236	$	—	$	128,434	$	1,737,219

________________________

(1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch in addition to credit cards and consumer credits that are not individually graded.

(2) Credit card loans are not individually graded.

Schedule of Troubled Debt Restructurings on Loans Receivables

The status of TDRs is as follows:


	Number of Contracts	Recorded Investment
(dollars in thousands)		Performing		Nonperforming		Total












December 31, 2022
Real estate:
Residential	1	$	—	$	288	$	288


Total	1	$	—	$	288	$	288

Schedule Of Outstanding Loan Commitments

Outstanding loan commitments were as follows:



	December 31,
(in thousands)	2023		2022
Unused lines of credit
Real Estate:
Residential	$	15,436	$	14,336
Residential - Home Equity	43,892		43,128
Commercial	20,424		36,609
Construction	98,777		93,913
Commercial and Industrial	42,751		45,747
Credit card(1)	114,882		111,227
Other consumer	310		102



Total	$	336,472	$	345,062



Letters of credit	$	4,641	$	5,105

_______________

(1) Outstanding loan commitments in the credit card portfolio include $98.2 million and $106.9 million in secured and partially secured balances as of December 31, 2023 and 2022, respectively.

Schedule of Credit Losses for Financing Receivables

Activity for this account is as follows for the periods presented:




(in thousands)	2023		2022
Balance at beginning of period	$	1,682	$	1,736
Impact of adopting the CECL standard on January 1, 2023	(775)		—
Release of credit losses on unfunded commitments	(101)		(54)


Balance at end of period	$	806	$	1,682

Activity in this reserve is as follows for the periods presented:



(in thousands)	2023		2022
Balance at beginning of period	$	1,173	$	1,164
(Release of) provision for mortgage loan put-back reserve	(188)		9


Balance at end of period	$	985	$	1,173

Related-Party Transactions - Activity in Related Party Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Loans and Leases Receivable, Related Parties [Roll Forward]
Balance at beginning of year	$ 36,305	$ 32,524
Add: New loans	0	18,326
Less: Amounts collected	(4,231)	(14,545)
Balance at end of year	$ 32,074	$ 36,305

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net income	$ 35,871	$ 41,804
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	9,610	6,631
Release of credit losses on unfunded commitments	(101)	(54)
(Release of) provision for mortgage put-back reserve, net	(188)	9
Net amortization on investments	188	540
Premises and equipment depreciation	324	364
Lease asset amortization	149	1,068
Increase in cash surrender value of BOLI	(1,187)	(1,018)
Executive long-term incentive plan expense	148	582
Stock-based compensation expense	1,757	1,662
Director and employee compensation paid in Company stock	547	171
Deferred income tax expense	142	1,240
Valuation allowance on derivatives	8	9
Gain on sale of foreclosed real estate	0	(20)
Loss on disposal of premises and equipment	0	14
Decrease in valuation of loans held for sale carried at fair value	6	0
Proceeds from sales of loans held for sale	176,373	308,549
Originations of loans held for sale	(176,444)	(299,976)
Changes in assets and liabilities:
Accrued interest receivable	(2,005)	(1,588)
Taxes payable	179	(282)
Other assets	(2,448)	(4,382)
Accrued interest payable	4,552	558
Other liabilities	(63)	(4,491)
Net cash provided by operating activities	47,418	51,390
Cash flows from investing activities
Purchases of securities available for sale	(6,960)	(113,078)
Proceeds from calls and maturities of securities available for sale	55,991	23,846
Net sales (purchases) of restricted investments	3,009	(3,864)
Net decrease in SBA-PPP loans receivable	1,518	106,122
Net increase in portfolio loans receivable	(182,240)	(210,037)
Net purchases of premises and equipment	(2,156)	(1,550)
Proceeds from sales of foreclosed real estate	0	106
Net cash used in investing activities	(130,838)	(198,455)
Net increase (decrease) in:
Noninterest-bearing deposits	(56,940)	(113,337)
Interest-bearing deposits	194,864	74,272
Federal Home Loan Bank (repayments) advances, net	(85,000)	85,000
Other borrowed funds	15,000	0
Dividends paid	(3,920)	(3,085)
Repurchase of common stock	(8,826)	0
Net proceeds from exercise of stock options	1,791	1,235
Net cash provided by financing activities	56,969	44,085
Net decrease in cash and cash equivalents	(26,451)	(102,980)
Cash and cash equivalents, beginning of year	80,415	183,395
Cash and cash equivalents, end of year	53,964	80,415
Noncash investing and financing activities:
Change in unrealized gains (losses) on investments	5,066	(20,912)
Cash paid during the period for:
Taxes	7,704	11,730
Interest	$ 37,128	$ 9,481

Cash and Cash Equivalents	12 Months Ended
Cash and Cash Equivalents	Dec. 31, 2023
Cash and Cash Equivalents [Abstract]
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash and amounts due from banks, interest-bearing deposits and federal funds sold. The Bank is required by regulations to maintain an average cash reserve balance based on a percentage of deposits; however, on March 15, 2020, the Federal Reserve announced that reserve requirement ratios would be reduced to zero percent effective March 26, 2020, due to economic conditions, which eliminated the reserve requirement for all depository institutions. The reserve requirement is still at zero percent as of December 31, 2023.

Fair Value

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. This includes certain U.S. Treasury and other U.S. Government and government agency securities actively traded in over-the-counter markets;

Level 2 - Significant other 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.

Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value on a recurring basis:

Investment securities available for sale - The fair values for investment securities available for sale are provided by an independent pricing service and are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, values debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Loans held for sale - The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2).

Derivative financial instruments - The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Note 17 - Fair Value (continued)

The Company has categorized its financial instruments measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022 as follows:


	Fair Value Measurements Using:
(in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Investment securities available for sale

U.S. Treasuries	$	149,228	$	149,228	$	—	$	—
Municipal	9,372		—		9,372		—
Corporate	4,413		—		4,413		—
Asset-backed securities	7,045		—		7,045		—
Mortgage-backed securities	38,271		—		38,271		—
Total	$	208,329	$	149,228	$	59,101	$	—
Loans held for sale	$	7,481	$	—	$	7,481	$	—
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	—	$	—

December 31, 2022
Investment securities available for sale
U.S. Treasuries	$	199,449	$	199,449	$	—	$	—
Municipal	8,012		—		8,012		—
Corporate	4,600		—		4,600		—
Asset-backed securities	7,711		—		7,711		—
Mortgage-backed securities	32,709		—		32,709		—
Total	$	252,481	$	199,449	$	53,032	$	—

Loans held for sale	$	7,416	$	—	$	7,416	$	—
Derivative assets	$	10	$	—	$	10	$	—
Derivative liabilities	$	—	$	—	$	—	$	—

Financial instruments recorded using FASB ASC 825-10

Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election, with respect to an item, may not be revoked once an election is made.

Note 17 - Fair Value (continued)


Fair Value of Loans Held for Sale

(in thousands)	December 31, 2023		December 31, 2022

Aggregate fair value	$	7,481	$	7,416
Contractual principal	5,168		6,808
Difference	$	2,313	$	608

The Company elects to account for loans held for sale at fair value to eliminate the mismatch that would occur by recording changes in market value on derivative instruments used to hedge loans held for sale while carrying the loans at the lower of cost or market.

Fair value measurements on a nonrecurring basis

Individually evaluated loans - The Company has measured expected credit losses based on the fair value of the loan's collateral and discounted cash flow analysis, where appropriate. Fair value of the collateral is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. As of December 31, 2023 and December 31, 2022, the fair values consist of loan balances of $16.0 million and $9.4 million, with specific reserves of $422 thousand and $372 thousand, respectively.

Foreclosed real estate - The Company's foreclosed real estate is measured at fair value less cost to sell. Fair value is determined based on offers and/or appraisals. Cost to sell the real estate is based on standard market factors. The Company categorizes its foreclosed real estate as Level 3. As of December 31, 2023 and December 31, 2022, there was no foreclosed real estate held by the Company.


Fair Value of Individually Evaluated Loans

(in thousands)	2023		2022
Individually evaluated loans for credit loss, net


Level 3 Inputs	15,620		9,021
Total	$	15,620	$	9,021

The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2023 and 2022:

Unobservable Inputs

Valuation Technique

Unobservable Inputs

General Range of Inputs

Individually evaluated loans

Appraised Value/Discounted Cash Flows

Discounts to appraisals or cash flows for estimated holding and/or selling costs

0 - 25%

Note 17 - Fair Value (continued)

Fair value of financial instruments

Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity the contractual right or obligation to either receive or deliver cash for another financial instrument.

The information used to determine fair value is highly subjective in nature and, therefore, the results are imprecise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different.

As of December 31, 2023, the technique used by the Company to estimate the exit price of the loan portfolio consists of similar procedures to those used as of December 31, 2022, but with added emphasis on both illiquidity risk and credit risk not captured by the previously applied entry price notion. The fair value of the Company’s loan portfolio has always included a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, impaired loans, and all other loans. The results are then adjusted to account for credit risk as described above. However, under the new guidance, the Company believes a further credit risk discount must be applied through the use of a discounted cash flow model to compensate for illiquidity risk, based on certain assumptions included within the discounted cash flow model, primarily the use of discount rates that better capture inherent credit risk over the lifetime of a loan. This consideration of enhanced credit risk provides an estimated exit price for the Company’s loan portfolio.

For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for individually evaluated loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral.

The fair value of cash and cash equivalents, interest-bearing deposits at other financial institutions, federal funds sold and restricted investments is the carrying amount. Restricted investments includes equity of the Federal Reserve and other banker’s banks.

The fair value of noninterest-bearing deposits and securities sold under agreements to repurchase is the carrying amount.

The fair value of checking, savings, and money market deposits is the amount payable on demand at the reporting date. Fair value of fixed maturity term accounts and individual retirement accounts is estimated using rates currently offered for accounts of similar remaining maturities.

The fair value of certificates of deposit in other financial institutions is estimated based on interest rates currently offered for deposits of similar remaining maturities.

The fair value of borrowings is estimated by discounting the value of contractual cash flows using current market rates for borrowings with similar terms and remaining maturities.

Note 17 - Fair Value (continued)

The fair value of outstanding loan commitments, unused lines of credit, and letters of credit are not included in the table since the carrying value generally approximates fair value. These instruments generate fees that approximate those currently charged to originate similar commitments.

The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments (in thousands).


Fair Value of Financial Assets and Liabilities
	December 31, 2023				December 31, 2022
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Level 1
Cash and due from banks	$	14,513	$	14,513	$	19,963	$	19,963
Interest-bearing deposits at other financial institutions	39,044		39,044		39,764		39,764

Federal funds sold	407		407		20,688		20,688
Level 3
Loans receivable, net	$	1,874,678	$	1,855,158	$	1,704,370	$	1,659,283
Restricted investments	4,353		4,353		7,362		7,362

Financial liabilities
Level 1
Noninterest-bearing deposits	$	617,373	$	617,373	$	674,313	$	674,313

Level 3
Interest-bearing deposits	$	1,278,623	$	1,280,682	$	1,083,759	$	1,090,553
FHLB advances and other borrowed funds	49,062		46,634		119,062		116,544

- 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

Investment Securities (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost, Fair Value for Credit Losses

The following table summarizes the amortized cost, fair value and allowance for credit losses of securities available-for-sale at December 31, 2023 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
(in thousands)
December 31, 2023
U.S. Treasuries	$	161,420	$	—	$	(12,192)	$	—	$	149,228
Municipal	11,699		4		(2,331)		—		9,372
Corporate	5,000		—		(587)		—		4,413
Asset-backed securities	7,069		13		(37)		—		7,045
Mortgage-backed securities	40,491		—		(2,220)		—		38,271
Total	$	225,679	$	17	$	(17,367)	$	—	$	208,329

The following table summarizes the amortized cost and fair value of securities available-for-sale at December 31, 2022 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)








December 31, 2022
U.S. Treasuries	$	215,486	$	—	$	(16,037)	$	199,449
Municipal	10,815		—		(2,803)		8,012
Corporate	5,000		—		(400)		4,600
Asset-backed securities	7,970		—		(259)		7,711
Mortgage-backed securities	35,626		—		(2,917)		32,709
Total	$	274,897	$	—	$	(22,416)	$	252,481

Schedule of Investments Classified by Contractual Maturity Date


	For the Years Ended December 31,
	2023				2022
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	39,918	$	39,294	$	53,739	$	53,204
One to five years	101,688		93,218		88,165		82,538
Five to ten years	26,215		22,511		79,090		68,805
Beyond ten years	10,298		7,990		10,307		7,514
Asset-backed securities(1)	7,069		7,045		7,970		7,711
Mortgage-backed securities(1)	40,491		38,271		35,626		32,709
	$	225,679	$	208,329	$	274,897	$	252,481

(1) Asset-backed and Mortgage-backed securities are due in monthly installments.

Schedule of Investment Portfolio in Continuous Unrealized Loss Position, Fair Value

The following table summarizes debt securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2023 and 2022, aggregated by major security type and length of time in a continuous unrealized loss position:


	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(in thousands)
December 31, 2023
U.S. Treasuries	$	—	$	—	$	149,228	$	(12,192)	$	149,228	$	(12,192)
Municipal	—		—		8,473		(2,331)		8,473		(2,331)
Corporate	—		—		4,413		(587)		4,413		(587)
Asset-backed securities	—		—		5,154		(37)		5,154		(37)
Mortgage-backed securities	6,057		(8)		32,214		(2,212)		38,271		(2,220)
Total	$	6,057	$	(8)	$	199,482	$	(17,359)	$	205,539	$	(17,367)

December 31, 2022
U.S. Treasuries	$	82,102	$	(1,396)	$	117,347	$	(14,641)	$	199,449	$	(16,037)
Municipal	1,452		(207)		6,560		(2,596)		8,012		(2,803)
Corporate	—		—		4,600		(400)		4,600		(400)
Asset-backed securities	6,156		(237)		1,555		(22)		7,711		(259)
Mortgage-backed securities	22,067		(1,884)		10,642		(1,033)		32,709		(2,917)
Total	$	111,777	$	(3,724)	$	140,704	$	(18,692)	$	252,481	$	(22,416)

Income Taxes - Reconciliation of Federal Tax Rate to the Effective Rate (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%
State income taxes, net of federal income tax benefit	3.13%	2.58%
Nondeductible expenses	0.73%	0.56%
Tax-exempt interest income and dividend income	(0.55%)	(0.41%)
Stock-based compensation expense	(0.68%)	(0.48%)
Bank-owned life insurance	(0.54%)	(0.40%)
Other, net	(0.69%)	0.10%
Effective Tax Rate	22.40%	22.95%
Valuation allowance	$ 0	$ 0

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

Information with respect to options outstanding during the years ended December 31, 2023 and 2022 is as follows:



	2023			2022
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at beginning of year	811,160	$	15.37	1,060,023	$	14.77
Add: Granted	168,819	23.34		2,000	24.25
Less: Exercised	(228,405)	11.96		(160,590)	12.46
Less: Retired on exercise	(124,939)	12.29		(63,697)	12.52
Less: Expired/cancelled/forfeited	(75,917)	20.49		(26,576)	12.82
Outstanding at end of year	550,718	$	19.21	811,160	$	15.37
Exercisable at end of year	295,450	$	16.69	538,066	$	13.63

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable

A summary of information about stock options outstanding is as follows:



	Exercise Price Range	Weighted Average Exercise Price		Average Remaining Life (years)	Outstanding Shares		Exercisable Shares
December 31, 2023

	$10.70 - 14.63	$	14.18	1.52	267,527		221,460
	14.64 - 18.56	15.27		1.57	24,000		15,000
	18.57 - 22.49	20.15		3.98	3,250		1,250
	22.50 - 26.41	24.82		3.56	255,941		57,740











Total outstanding options		$	19.21	2.48	550,718		295,450
Intrinsic value on December 31, 2023					$	2,999,807	$	2,346,106

December 31, 2022
	$10.70 - 14.63	$	13.02	1.73	648,651		492,909
	14.64 - 18.56	14.96		2.14	22,750		10,688
	18.57 - 22.49	21.86		3.07	2,500		625
	22.50 - 26.41	26.38		3.86	137,259		33,844







Total outstanding options		$	15.37	2.11	811,160		538,066
Intrinsic value on December 31, 2022					$	7,020,560	$	5,428,713

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted average fair value of options granted during 2023 and 2022 were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:



	2023	2022
Dividend yield	1.04%	0.99%
Risk free interest rate	4.52%	3.25%
Expected volatility	54.64%	55.91%
Expected life in years	5	5

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

Nonvested restricted stock for the years ended December 31, 2023 and 2022 is summarized in the following table.



	2023			2022
	Shares	Weighted Average Grant-Date Fair Value		Shares	Weighted Average Grant-Date Fair Value
Nonvested at beginning of year	39,669	$	17.45	49,047	$	14.33
Add: Granted	10,714	25.77		11,495	24.66
Less: Vested	(13,652)	15.92		(15,905)	14.01
Less: Retired on vesting	(8,555)	16.46		(4,968)	14.44

Nonvested at end of year	28,176	$	21.66	39,669	$	17.45

Share Based Compensation, Restricted Stock, Vesting Schedule

The vesting schedule of restricted shares as of December 31, 2023 is as follows:



Year						Shares
2024						17,203
2025						7,403
2026						3,570

						28,176

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and customers have locked into that interest rate. The Company then locks the loan and rate in with an investor and commits to deliver the loan if settlement occurs (Best Efforts). Certain loans under rate lock commitments are covered under forward sales contracts. Forward sales contracts are recorded at fair value with changes in fair value recorded in mortgage banking revenue. Interest rate lock commitments and commitments to deliver loans to investors are considered to be derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments by estimating the fair value of the underlying asset, which is impacted by current interest rates and takes into consideration the probability that the rate lock commitments will close or will be funded.

The following table reports the commitment and fair value amounts on the outstanding derivatives:



(in thousands)	December 31, 2023		December 31, 2022
Notional amount of open forward sales agreements	$	—	$	1,750
Fair value of open forward delivery sales agreements	—		9


Notional amount of interest rate lock commitments	—		626
Fair value of interest rate lock commitments	—		1

Parent Company Financial Information - Statements of Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Condensed Income Statements, Captions [Line Items]
Total interest income	$ 183,206	$ 150,646
Interest expense	41,680	10,039
Net interest income	141,526	140,607
Provision for credit losses	9,610	6,631
Net interest income after provision for credit losses	132,017	133,976
Noninterest income	24,975	29,372
Noninterest expenses	110,767	109,114
Income tax expense	10,354	12,430
Net income	35,871	41,804
Parent Company
Condensed Income Statements, Captions [Line Items]
Interest and dividend income	2,646	2,146
Total interest income	9,146	13,546
Interest expense	649	576
Net interest income	8,497	12,970
Provision for credit losses	88	0
Net interest income after provision for credit losses	8,409	12,970
Noninterest income	4	2
Noninterest expenses	629	447
Income before income taxes	7,784	12,525
Income tax expense	304	315
Income before undistributed net income of subsidiaries	7,480	12,210
Undistributed net income of subsidiaries	28,391	29,594
Net income	35,871	41,804
Parent Company \| Investment in Bank
Condensed Income Statements, Captions [Line Items]
Dividend from Bank	$ 6,500	$ 11,400

Regulatory Capital Matters (Tables)

12 Months Ended

Dec. 31, 2023

Mortgage Banking [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

Actual and required capital amounts and ratios are presented below at year-end.

Note 14 - Regulatory Capital Matters


Regulatory Capital
	Actual				Minimum Capital Adequacy				To Be Well Capitalized
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2023
The Company
Tier 1 leverage ratio (to average assets)	$	270,019	12.14	%	$	89,004	4.00	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	270,019		15.55	%	104,175		6.00	%	N/A		N/A
Common equity tier 1 capital ratio (to risk-weighted assets)	267,957		15.43	%	$	78,132	4.50	%	N/A		N/A
Total capital ratio (to risk-weighted assets)	301,817		17.38	%	$	138,900	8.00	%	N/A		N/A

The Bank
Tier 1 leverage ratio (to average assets)	$	228,794	10.51	%	$	87,068	4.00	%	$	108,835	5.00	%
Tier 1 capital (to risk-weighted assets)	228,794		13.56	%	101,251		6.00	%	135,001		8.00	%
Common equity tier 1 capital ratio (to risk-weighted assets)	228,794		13.56	%	75,938		4.50	%	109,688		6.50	%
Total capital ratio (to risk-weighted assets)	249,984		14.81	%	135,001		8.00	%	168,751		10.00	%

December 31, 2022
The Company
Tier 1 leverage ratio (to average assets)	$	242,829	11.24	%	$	86,442	4.00	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	242,829		15.13	%	96,315		6.00	%	N/A		N/A
Common equity tier 1 capital ratio (to risk-weighted assets)	240,767		15.00	%	72,237		4.50	%	N/A		N/A
Total capital ratio (to risk-weighted assets)	262,217		16.33	%	128,421		8.00	%	N/A		N/A

The Bank
Tier 1 leverage ratio (to average assets)	$	199,846	9.47	%	$	84,416	4.00	%	$	105,521	5.00	%
Tier 1 capital (to risk-weighted assets)	199,846		12.95	%	92,574		6.00	%	123,432		8.00	%
Common equity tier 1 capital ratio (to risk-weighted assets)	199,846		12.95	%	69,431		4.50	%	100,289		6.50	%
Total capital ratio (to risk-weighted assets)	219,234		14.21	%	123,432		8.00	%	154,290		10.00	%

Portfolio Loans Receivable and Allowance for Credit Losses - Credit Quality Indicators (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Term Loans by Origination Year
2023	$ 415,291
2022	475,245
2021	296,868
2020	178,818
2019	159,917
Prior	260,800
Revolving	123,331
Total	1,910,270	$ 1,737,219
Gross Charge-offs
Total	8,787	5,478
Pass
Term Loans by Origination Year
Total		1,559,537
Special Mention
Term Loans by Origination Year
Total		38,012
Substandard
Term Loans by Origination Year
Total		11,236
Doubtful
Term Loans by Origination Year
Total		0
Ungraded
Term Loans by Origination Year
Total		128,434
Residential
Gross Charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	670
Revolving	0
Total	670
Residential \| Real estate
Term Loans by Origination Year
2023	140,394
2022	137,395
2021	76,690
2020	80,608
2019	37,324
Prior	100,693
Revolving	0
Total	573,104	484,735
Gross Charge-offs
Total	670	0
Residential \| Real estate \| Pass
Term Loans by Origination Year
2023	140,394
2022	137,362
2021	76,556
2020	76,938
2019	36,122
Prior	88,055
Revolving	0
Total	555,427	469,304
Residential \| Real estate \| Special Mention
Term Loans by Origination Year
2023	0
2022	0
2021	134
2020	3,670
2019	1,176
Prior	288
Revolving	0
Total	5,268	9,966
Residential \| Real estate \| Substandard
Term Loans by Origination Year
2023	0
2022	33
2021	0
2020	0
2019	26
Prior	12,350
Revolving	0
Total	12,409	5,465
Residential \| Real estate \| Doubtful
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Residential \| Real estate \| Ungraded
Term Loans by Origination Year
Total		0
Commercial
Term Loans by Origination Year
Total	238,548	220,221
Gross Charge-offs
2023	0
2022	0
2021	0
2020	0
2019	943
Prior	0
Revolving	0
Total	943
Commercial \| Pass
Term Loans by Origination Year
Total		196,381
Commercial \| Special Mention
Term Loans by Origination Year
Total		22,469
Commercial \| Substandard
Term Loans by Origination Year
Total		1,371
Commercial \| Doubtful
Term Loans by Origination Year
Total		0
Commercial \| Ungraded
Term Loans by Origination Year
Total		0
Commercial \| Real estate
Term Loans by Origination Year
2023	62,095
2022	192,673
2021	145,756
2020	68,748
2019	97,625
Prior	117,332
Revolving	0
Total	684,229	664,551
Gross Charge-offs
Total	943	0
Commercial \| Real estate \| Pass
Term Loans by Origination Year
2023	62,095
2022	185,776
2021	145,756
2020	68,748
2019	96,238
Prior	116,347
Revolving	0
Total	674,960	657,411
Commercial \| Real estate \| Special Mention
Term Loans by Origination Year
2023	0
2022	6,897
2021	0
2020	0
2019	805
Prior	985
Revolving	0
Total	8,687	5,577
Commercial \| Real estate \| Substandard
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	582
Prior	0
Revolving	0
Total	582	1,563
Commercial \| Real estate \| Doubtful
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Commercial \| Real estate \| Ungraded
Term Loans by Origination Year
Total		0
Construction \| Real estate
Term Loans by Origination Year
2023	142,157
2022	72,240
2021	46,180
2020	18,113
2019	6,843
Prior	4,575
Revolving	0
Total	290,108	238,099
Gross Charge-offs
Total	0	17
Construction \| Real estate \| Pass
Term Loans by Origination Year
2023	142,157
2022	72,240
2021	46,180
2020	16,859
2019	6,246
Prior	2,517
Revolving	0
Total	286,199	235,262
Construction \| Real estate \| Special Mention
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	614
Revolving	0
Total	614	0
Construction \| Real estate \| Substandard
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	1,254
2019	597
Prior	1,444
Revolving	0
Total	3,295	2,837
Construction \| Real estate \| Doubtful
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Construction \| Real estate \| Ungraded
Term Loans by Origination Year
Total		0
Commercial and Industrial
Term Loans by Origination Year
2023	70,570
2022	72,659
2021	28,095
2020	11,233
2019	18,125
Prior	37,866
Revolving	0
Total	238,548
Gross Charge-offs
2023	0
2022	98
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	98	0
Commercial and Industrial \| Pass
Term Loans by Origination Year
2023	70,540
2022	71,689
2021	27,884
2020	8,827
2019	18,036
Prior	37,392
Revolving	0
Total	234,368
Commercial and Industrial \| Special Mention
Term Loans by Origination Year
2023	0
2022	156
2021	0
2020	2,406
2019	47
Prior	273
Revolving	0
Total	2,882
Commercial and Industrial \| Substandard
Term Loans by Origination Year
2023	30
2022	814
2021	211
2020	0
2019	42
Prior	201
Revolving	0
Total	1,298
Commercial and Industrial \| Doubtful
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0
Consumer \| Credit card
Term Loans by Origination Year
Total	123,331	128,434
Gross Charge-offs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	7,076
Total	7,076	5,461
Consumer \| Credit card \| Pass
Term Loans by Origination Year
Total		0
Consumer \| Credit card \| Special Mention
Term Loans by Origination Year
Total		0
Consumer \| Credit card \| Substandard
Term Loans by Origination Year
Total		0
Consumer \| Credit card \| Doubtful
Term Loans by Origination Year
Total		0
Consumer \| Credit card \| Ungraded
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	123,331
Total	123,331	128,434
Consumer \| Other consumer
Term Loans by Origination Year
2023	75
2022	278
2021	147
2020	116
2019	0
Prior	334
Revolving	0
Total	950	1,179
Gross Charge-offs
Total	0	0
Consumer \| Other consumer \| Pass
Term Loans by Origination Year
2023	75
2022	278
2021	147
2020	116
2019	0
Prior	334
Revolving	0
Total	950	1,179
Consumer \| Other consumer \| Special Mention
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Consumer \| Other consumer \| Substandard
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Consumer \| Other consumer \| Doubtful
Term Loans by Origination Year
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving	0
Total	0	0
Consumer \| Other consumer \| Ungraded
Term Loans by Origination Year
Total		$ 0
Charge Offs
Gross Charge-offs
2023	0
2022	98
2021	0
2020	0
2019	943
Prior	670
Revolving	7,076
Total	$ 8,787

Related-Party Transactions - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Management
Related Party Transaction [Line Items]
Related party deposits	$ 81,300	$ 92,000
Director \| Lease Payments
Related Party Transaction [Line Items]
Expenses from transactions with related party	85	$ 82
Director \| Convertible Subordinated Notes
Related Party Transaction [Line Items]
Accounts payable	$ 2,500

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Name	Elliott Davis, PLLC
Auditor Location	Raleigh, North Carolina
Auditor Firm ID	149

Deposits

12 Months Ended

Dec. 31, 2023

Deposits [Abstract]

Deposits

Time deposits that meet or exceed the FDIC Insurance Limit of $250,000 at year-end 2023 and 2022 were $124.7 million and $96.3 million.

Scheduled maturities of time deposits for the next five years were as follows:



(in thousands)
2024	$	350,658
2025	58,400
2026	1,425
2027	402
2028	69
Total	$	410,954

Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) plan $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense \| $	$ 1,800	$ 1,800
Number of shares authorized (in shares) \| shares			2,020,000
Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 10.81	$ 11.49
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of incentive compensation plans \| plan	2
Number of shares authorized (in shares) \| shares	1,120,000
Number of shares additional authorized (in shares) \| shares			900,000
Number of shares available for grant (in shares) \| shares		792,846
Award vesting period		4 years
Awards exercisable each anniversary of grant date, percent		25.00%
Unrecognized compensation expense period for recognition	5 years	5 years
Unrecognized compensation expense \| $	$ 1,400	$ 1,200
Exercises in period, intrinsic value \| $	1,900	1,900
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense (awards other than options) \| $	$ 78	$ 429

Leases - Assets and Liabilities and Lease Payment Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Lease asset	$ 6,810	$ 5,171
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Premises and equipment, net	Premises and equipment, net
Less: Accumulated amortization	$ (3,223)	$ (3,074)
Net lease asset	3,587	2,097
Lease liability	$ 6,892	$ 5,327
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Less: Accumulated amortization	$ (3,101)	$ (2,968)
Net lease liability	3,791	2,359
Amounts due in:
2024	1,161
2025	715
2026	665
2027	396
2028	266
thereafter	1,182
Total future lease payments	4,385
Discount of cash flows	(594)
Present value of net future lease payments	$ 3,791	$ 2,359

Parent Company Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net income	$ 35,871	$ 41,804
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	9,610	6,631
Stock-based compensation expense	1,757	1,662
Deferred income tax benefit	142	1,240
Changes in assets and liabilities:
Accrued interest receivable	(2,005)	(1,588)
Other assets	(2,448)	(4,382)
Accrued interest payable	4,552	558
Other liabilities	(63)	(4,491)
Net cash provided by operating activities	47,418	51,390
Cash flows from investing activities
Net cash used in investing activities	(130,838)	(198,455)
Cash flows from financing activities
Dividends paid	(3,920)	(3,085)
Repurchase of common stock	8,826	0
Net proceeds from exercise of stock options	1,791	1,235
Net cash provided by financing activities	56,969	44,085
Net decrease in cash and cash equivalents	(26,451)	(102,980)
Cash and cash equivalents, beginning of year	80,415	183,395
Cash and cash equivalents, end of year	53,964	80,415
Parent Company
Cash flows from operating activities
Net income	35,871	41,804
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	88	0
Undistributed net income of subsidiaries	(28,391)	(29,594)
Stock-based compensation expense	1,757	1,662
Director and employee compensation paid in Company stock	547	171
Deferred income tax benefit	(65)	0
Changes in assets and liabilities:
Accrued interest receivable	(82)	(71)
Other assets	24	(31)
Accrued interest payable	251	4
Other liabilities	597	528
Net cash provided by operating activities	10,597	14,473
Cash flows from investing activities
Net decrease (increase) in portfolio loans receivable	5,314	(11,319)
Capital contributions to subsidiaries	(1,729)	(1,662)
Net cash used in investing activities	3,585	(12,981)
Cash flows from financing activities
Dividends paid	(3,920)	(3,085)
Repurchase of common stock	8,826	0
Net proceeds from exercise of stock options	1,791	1,235
Net cash provided by financing activities	(10,955)	(1,850)
Net decrease in cash and cash equivalents	3,227	(358)
Cash and cash equivalents, beginning of year	272	630
Cash and cash equivalents, end of year	$ 3,499	$ 272

Parent Company Financial Information

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Parent Company Financial Information

The balance sheets as of December 31, 2023 and 2022 and statements of income and cash flows for the years then ended, for Capital Bancorp, Inc. (Parent only) are presented below.


Parent Company Only Balance Sheets

(in thousands)	2023		2022
Assets
Cash and cash equivalents	$	3,499	$	272
Investment in Bank	215,698		183,095
Investment in Church Street Capital	6,574		5,402
Investment in Trust	62		62
Loans receivable, net of allowance for credit losses of $416 and $328 at December 31, 2023 and 2022, respectively	41,310		47,517
Accrued interest receivable	370		288


Deferred income taxes	165		100
Other assets	21		45
Total assets	$	267,699	$	236,781

Liabilities and Stockholders’ Equity
Borrowed funds	$	12,062	$	12,062
Accrued interest payable	299		48
Other liabilities	478		656
Total liabilities	12,839		12,766
Stockholders’ equity
Common stock	139		141
Additional paid-in capital	54,473		58,190
Retained earnings	213,345		182,435
Accumulated other comprehensive loss	(13,097)		(16,751)
Total stockholders’ equity	254,860		224,015
Total liabilities and stockholders’ equity	$	267,699	$	236,781


Parent Company Only Statements of Income

(in thousands)	2023		2022
Interest and dividend income	$	2,646	$	2,146
Dividend from Bank	6,500		11,400
Total interest and dividend revenue	9,146		13,546
Interest expense	649		576
Net interest income	8,497		12,970
Provision for credit losses	88		—
Net interest income after provision for credit losses	8,409		12,970
Noninterest income	4		2
Noninterest expenses	629		447
Income before income taxes	7,784		12,525
Income tax expense	304		315
Income before undistributed net income of subsidiaries	7,480		12,210
Undistributed net income of subsidiaries	28,391		29,594
Net income	$	35,871	$	41,804

Note 16 - Parent Company Financial Information (continued)


Parent Company Only Statements of Cash Flows
(in thousands)	2023		2022
Cash flows from operating activities
Net Income	$	35,871	$	41,804
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	88		—
Undistributed net income of subsidiaries	(28,391)		(29,594)

Stock-based compensation expense	1,757		1,662
Director and employee compensation paid in Company stock	547		171
Deferred income tax benefit	(65)		—

Changes in assets and liabilities:
Accrued interest receivable	(82)		(71)

Other assets	24		(31)
Accrued interest payable	251		4
Other liabilities	597		528
Net cash provided by operating activities	10,597		14,473

Cash flows from investing activities
Net decrease (increase) in portfolio loans receivable	5,314		(11,319)
Capital contributions to subsidiaries	(1,729)		(1,662)
Net cash provided (used) by investing activities	3,585		(12,981)

Cash flows from financing activities

Dividends paid	(3,920)		(3,085)
Repurchase of common stock	(8,826)		—
Net proceeds from exercise of stock options	1,791		1,235


Net cash used by financing activities	(10,955)		(1,850)

Net increase (decrease) in cash and cash equivalents	3,227		(358)

Cash and cash equivalents, beginning of year	272		630

Cash and cash equivalents, end of year	$	3,499	$	272

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 35,871	$ 41,804
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities available for sale	5,066	(20,912)
Income tax benefit (expense) relating to the items above	(1,412)	5,237
Other comprehensive income (loss)	3,654	(15,675)
Comprehensive income	$ 39,525	$ 26,129

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Derivative Financial Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Open Forward Delivery Sales Agreements
Derivatives, Fair Value [Line Items]
Notional amount	$ 0	$ 1,750
Fair value of open forward delivery sales agreements	0	9
Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Notional amount	0	626
Fair value of interest rate lock commitments	$ 0	$ 1

- Definition

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset.

+ References

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+ Details

- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

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+ Details

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	49,000,000	49,000,000
Common stock, shares issued (in shares)	13,922,532	14,138,829
Common stock, shares outstanding (in shares)	13,922,532	14,138,829

Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Year end premises and equipment owned and utilized in the operations of the Company and the related depreciation and amortization expense were as follows:



(in thousands)	2023		2022
Leasehold improvements	$	2,710	$	1,683
Furniture and equipment	4,926		4,775
Vehicle	54		54
Software	2,517		2,517
Construction in progress	33		694
	10,240		9,723
Less: Accumulated depreciation and amortization	(8,758)		(8,434)
Premises and equipment	1,482		1,289
Net lease asset	3,587		2,097
Premises and equipment, net	$	5,069	$	3,386

Depreciation and amortization expense	$	324	$	364

Related-Party Transactions

12 Months Ended

Dec. 31, 2023

Related-Party Transactions

Certain executive officers and directors of the Company and Bank, and companies with which they are affiliated, are clients of and have banking transactions with the Company in the ordinary course of business. These transactions are conducted on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Company.

Activity in related-party loans during 2023 and 2022 is shown below:



(in thousands)	2023		2022
Balance at beginning of year	$	36,305	$	32,524
Add: New loans	—		18,326
Less: Amounts collected	(4,231)		(14,545)

Balance at end of year	$	32,074	$	36,305

Deposits from officers and directors and their related interests were $81.3 million at December 31, 2023, and $92.0 million at December 31, 2022.

A director of the Company owns an interest in an entity from which the Company leases space for one of its Rockville, Maryland locations. Payments made in accordance with the lease were $85 thousand and $82 thousand in 2023 and 2022, respectively.

Company directors, or their related interests, held $2.5 million of the subordinated notes outstanding as of December 31, 2023. These notes hold a fixed rate of interest until November 30, 2025, after which it converts to variable rate.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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+ Details

Deposits - Additional Information (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Deposits [Abstract]
Time deposits that meet or exceed the FDIC Insurance Limit	$ 124.7	$ 96.3

Nature of Business and Basis of Presentation

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Nature of Business and Basis of Presentation

Nature of operations:

Capital Bancorp, Inc. is a Maryland corporation and bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville and Columbia, Maryland; Reston, Virginia; and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), the Bank’s residential mortgage banking arm, and issues credit cards through OpenSky™, a digitally-driven, nationwide credit card platform providing secured, partially secured, and unsecured credit solutions.

The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. At December 31, 2023, Church Street Capital had loans totaling $7.9 million with a collectively assessed allowance for credit losses (“ACL”) of $184 thousand. Refer to Note 5 - Portfolio Loans Receivable to the Consolidated Financial Statements for further discussion of the consolidated ACL.

In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities.

Basis of presentation:

The accompanying consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. All intercompany transactions have been eliminated in consolidation. The Company reports its activities as four business segments: commercial banking; mortgage lending; credit cards; and corporate activities. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to general practices within the banking industry.

Significant accounting policies:

The preparation of consolidated financial statements in accordance with GAAP requires estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The primary reference point for the estimates is on historical experience and assumptions believed to be reasonable regarding the value of certain assets and liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may materially differ from these estimates under different assumptions or conditions.

Cash and cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest-bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods.

Note 1 - Nature of Business and Basis of Presentation (continued)

Investment securities

Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Changes in the fair value of debt securities available for sale are included in stockholder’s equity as unrealized gains and losses, net of the related tax effect.

Management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an ACL, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an ACL is recognized in other comprehensive income.

Changes in the ACL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes an AFS security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At December 31, 2023, there was no ACL related to the AFS portfolio.

Loans held for sale

Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis. Interest on loans held for sale is credited to income based on the principal amounts outstanding.

Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income.

The Company elects to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet.

Note 1 - Nature of Business and Basis of Presentation (continued)

U.S. Small Business Administration Paycheck Protection Program

During the global COVID-19 pandemic, pursuant to the CARES Act and the Consolidated Appropriations Act, 2021, the United States Small Business Administration Payroll Protection Program (“SBA-PPP”) provided forgivable loans to small businesses to enable them to maintain payroll, hire back employees who had been laid off, and cover overhead. SBA-PPP loans have an interest rate of 1%, have two or five year terms, and carry a 100% guarantee of the SBA. The program ended on May 31, 2021. SBA-PPP loans are eligible to be forgiven by the SBA.

Due to the unique nature of these provisions, SBA-PPP loans have been disclosed as a separate balance sheet item. Origination fees received by the SBA are capitalized into the carrying amount of the loans. The deferred fee income, net of origination costs, is recognized over the life of the loan as an adjustment to yield using the effective interest method. The remaining net deferred income is recognized upon forgiveness of the loan.

Portfolio loans and the ACL

Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the ACL. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. For reporting purposes, the Company discontinues the accrual of interest at the earlier of the date any portion of the principal and/or interest is 90 days past due, or at such time as we determine that it is probable that not all principal and interest payments will be collected, and that collateral is insufficient to discharge the debt in full. When the interest accrual is discontinued, all unpaid accrued interest is reversed from income. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.

Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies.

On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which replaces the incurred loss methodology for determining our provision for credit losses and ACL with an expected loss methodology that is referred to as the Current Expected Credit Loss model (“CECL”). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and held-to-maturity (“HTM”) debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASU 2016-02 “Leases (Topic 842)”.

Note 1 - Nature of Business and Basis of Presentation (continued)

In addition, ASU 2016-13 made changes to the accounting for AFS debt securities. One such change is to require credit-related impairments to be recognized as an ACL rather than as a write-down of the security’s amortized cost basis when the Company does not intend to sell or believes that the Company will be required to sell the securities prior to recovery of the security’s amortized cost basis. The Company adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company does not own HTM debt securities. There was no ACL on available for sale securities at December 31, 2023.


	January 1, 2023
(in thousands)	Pre-adoption of the CECL standard		As Reported Under ASC 326		Impact of adoption of the CECL standard
Assets:
Real estate:
Residential	$	484,735	$	484,735	$	—
Commercial	664,551		664,551		—
Construction	238,099		238,099		—
Commercial and Industrial	220,221		220,221		—
Credit card, net of reserve	128,434		128,434		—
Other consumer	1,179		1,179		—
Portfolio loans receivable, gross	$	1,737,219	$	1,737,219	$	—
Deferred origination fees, net	(8,627)		(8,627)		—
Allowance for credit losses	(26,385)		(27,189)		(804)
Portfolio loans receivable, net	$	1,702,207	$	1,701,403	$	(804)
Liabilities: Reserve for unfunded commitments	$	1,682	$	907	$	(775)

We maintain an ACL that represents management’s estimate of the expected credit losses and risks inherent in our loan portfolio. The amount of the ACL should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all. The allowance immediately recognizes lifetime expected credit losses when a financial asset is originated or purchased. The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged-off against the allowance when they are deemed uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

In determining the ACL, we estimate losses collectively based on quantitative analysis of historical credit losses adjusted for current conditions and reasonable and supportable forecasts of collectability of future cash flows over the remaining term of each financial instrument. The Company has elected to utilize a discounted cash flow methodology for all segments, except for the credit card and other consumer portfolio segments, which apply a simplified, non-discounted cash flow calculation. See further detail regarding our forecasting methodology in the “Cash Flow Method” section below.

Note 1 - Nature of Business and Basis of Presentation (continued)

Quarterly, the Company utilizes a Qualitative Scorecard to consider the need to qualitatively adjust expected credit loss estimates for information not already captured in the quantitative loss estimation process, which may impact expected credit losses. The Qualitative Scorecard evaluates certain risk environments such as economic conditions, changes in the nature and volume of portfolios, changes in experience, depth, and ability of lending management, changes in volume and severity of past due loans and similar conditions, and changes in the value of underlying collateral. The scorecard results help the Company analyze directional consistency to risk conditions and circumstances that should be considered for each loan segment and to refine its estimates of expected credit losses. As of December 31, 2023, there have been no significant changes applied through the Qualitative Scorecard subsequent to implementation on January 1, 2023.

Purchased Credit Deterioration

Upon adoption of ASU 2016-13, loans which were identified as Purchase Credit Impaired under the incurred loss model are identified as Purchased Credit Deteriorated (“PCD”) loans at January 1, 2023 without reassessment. In future acquisitions, the Company may purchase loans, some of which have experienced more than insignificant credit deterioration since origination. In those cases, the Company will consider certain criteria including days past due, accrual status, risk rating, credit mark, and other relevant factors in assessing whether purchased loans are PCD. PCD loans are recorded at the amount paid and the Company will determine the initial ACL required for PCD assets with no impact to earnings. The loan’s purchase price and ACL is then the initial amortized cost basis for PCD loans. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent to initial recognition, PCD loans are subject to the same interest income recognition and impairment model as non-PCD loans, with changes to the ACL recorded through provision expense.

Cash Flow Method

The Company uses the discounted cash flow (“DCF”) method to estimate expected credit losses for each portfolio loan segment, with the exception of credit card and other consumer loans, which use a non-discounted cash flow calculation. For each of these loan segments, the Company generates cash flow projections at the instrument level. Payment expectations are adjusted for estimated prepayment speed and for probability and severity of a loss. The expected credit losses derived from the cash flow calculations are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The modeling of expected prepayment speeds is primarily based on historical internal data. Industry benchmark data is utilized when a statistically insufficient history exists. The contractual term excludes expected extensions, renewals and modifications.

The Company uses regression analysis of historical internal and peer data to determine suitable portfolio segment level loss drivers to utilize when modeling lifetime probability of default, lifetime loss given default, and lifetime loss rates. This analysis also determines how expected probability of default, loss given default, and lifetime loss rates will react to forecasted levels of the loss drivers.

For the credit card portfolio, the Company calculates the credit card ACL collectively, applying segmentation based on collateral positions: secured, partially secured, and unsecured.

For all DCF and loss rate models, the Company has elected to use a four quarter forecast period across all portfolio segments. After the forecasted period, the models will revert to a long run average of each economic factor over four quarters. The Company uses economic projections from reputable and independent third parties to inform its loss driver forecast over the forecast period.

Note 1 - Nature of Business and Basis of Presentation (continued)

For the non-credit card and consumer portfolios, the combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. An effective interest rate is calculated by the Company, adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition, to produce an instrument-level net present value of expected cash flows. The ACL reflects the difference between the amortized cost basis and the present value of the expected cash flows.

Individual Evaluation

The Company will evaluate individual instruments for expected credit losses when those instruments do not share similar risk characteristics with instruments evaluated on a collective basis. Instruments may be evaluated whether or not there is an expectation of collectability in place. Instruments evaluated individually are not included in the Company’s collective analysis. Collateral dependent or secured loans with respect to which the Company expects repayment to be provided substantially through the operation or sale of the collateral utilize a collateral-based methodology in which ACL is measured based on the difference between the net realizable value of the collateral and the amortized cost basis of the asset as of the measurement date. If the collateral valuation is equal to or greater than amortized cost, no reserve is applied. If a loan is not collateral dependent, the loan will be analyzed based on a forecast of future cash flows.

Credit Losses on Off-Balance Sheet Credit Exposures

The Company’s financial instruments include off-balance sheet credit instruments such as unfunded commitments to make loans, commercial letters of credit issued, and commitments to fund other investments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans.

The Company maintains a RUC on off-balance sheet credit exposures through a provision reflected in other liabilities. Increases or decreases in the reserve are charged to or released from the provision for credit losses for unfunded commitments in the consolidated statements of income. The provision (credit) for credit losses on off-balance sheet exposures prior to January 1, 2023 was included in other noninterest expense in the consolidated statements of income. The RUC on off-balance credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model based on the segment loss factor and the estimated utilization rate of the unfunded commitments. The Company has analyzed its historic funding behavior at the segment level to determine an expected utilization rate.

The above methodology for determining an appropriate ACL is based on a comprehensive analysis of the loan portfolio in accordance with ASC 326. The analysis considers all significant factors that affect the expected collectability of the portfolio and supports the expected credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment. Additional disclosure on the ACL, and qualitative factors can be found in Part II, Item 1A - Risk Factors and Note 5 - Portfolio Loans Receivable.

Credit Losses on SBA-PPP loans and interest receivable

The ACL for SBA-PPP loans was separately evaluated given the explicit government guarantee. The Company has incorporated historical experience with similar SBA guarantees and underwriting adjusted for reasonable and supportable forecasts and concluded the expected credit loss is zero and, therefore, no allowance has been assigned to these loans.

Note 1 - Nature of Business and Basis of Presentation (continued)

The Company does not measure an ACL on accrued interest receivable balances because these balances are written off as a reduction to interest income when loans are placed on nonaccrual status.

Loan modifications

Effective January 1, 2023, the Company adopted ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. From time to time, the Company may elect to modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, to proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. These modifications may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Under ASU 2022-02, modifications to a loan for a borrower experiencing financial difficulty that have occurred in the current reporting period, are disclosed along with the impact of the modifications. During the year ended December 31, 2023, the Company did not have any such modifications.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related property, generally over two to seven years. Leasehold improvements are amortized over the estimated term of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is less. The costs of major renewals and improvements are capitalized with the corresponding costs associated with amortization or depreciation included as a component of occupancy and equipment expenses. Expenditures for maintenance, repairs, and minor replacements are charged to noninterest expenses as incurred.

Leases

The Company accounts for leases according to ASU 2016-02, Leases (Topic 842), and applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term.

Derivative financial instruments

The Company may enter into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue.

Note 1 - Nature of Business and Basis of Presentation (continued)

The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities, as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. As of December 31, 2023, there were no derivative instruments held which would require recognition by the Company.

Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we strive to maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed.

Financial assets that are recorded at fair value on a recurring basis include investment securities available for sale, loans held for sale, and derivative financial instruments. Financial liabilities that are recorded at fair value on a recurring basis are comprised of derivative financial instruments. See Note 17 - Fair Value.

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s consolidated statements of income are as follows:

Interest Income and Fees

Interest income and fees on loans and investment securities are recognized based on the contractual provisions of the underlying arrangements. Loan origination fees, direct loan origination costs, premiums and discounts on loans held for investment are deferred and generally amortized into interest income as yield adjustments over the contractual life and/or commitment period using the interest method. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12 or 24 month period.

Note 1 - Nature of Business and Basis of Presentation (continued)

The unamortized premiums, discounts and other basis adjustments on investment securities are included as components of the investment securities’ carrying value and are generally recognized in interest income as yield adjustments over the contractual lives of the securities using the interest method. However, premiums for certain callable investment securities are amortized to the earliest call date.

Finance charges and fees on credit card loans are recorded in revenue when earned and presented on our consolidated balance sheets within portfolio loans receivable. Annual membership fees are classified as interest income in our consolidated statements of income and are deferred and amortized over 12 months on a straight-line basis.

Bank-owned life insurance

The Company had $37.7 million of bank-owned life insurance at December 31, 2023 and $36.5 million at December 31, 2022. The Company recognized income on bank-owned life insurance, which is included in other noninterest income, of $1.2 million and $1.0 million for the years ended December 31, 2023 and December 31, 2022, respectively.

Income taxes

The Company employs the asset and liability method of accounting for income taxes as required by ASC Topic 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary timing differences) and are measured at the enacted rates that will be in effect when these differences reverse. The Company utilizes statutory requirements for its income tax accounting, and limits risks associated with potentially problematic tax positions that may incur challenge upon audit, where an adverse outcome is more likely than not. Therefore, no provisions are necessary for either uncertain tax positions nor accompanying potential tax penalties and interest for underpayments of income taxes in the Company’s tax reserves. In accordance with ASC Topic 740, the Company may establish a valuation allowance against deferred tax assets in those cases where realization is less than certain.

Earnings per share

Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method. At December 31, 2023 and 2022, there were 277,066 and 139,921 stock options, respectively, excluded from the calculation as their effect would have been anti-dilutive.

Note 1 - Nature of Business and Basis of Presentation (continued)

The following is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per common share:


	For the Years Ended December 31,
	2023					2022
(dollars in thousands)	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
Basic EPS
Net income available to common stockholders	$	35,871	14,002,556	$	2.56	$	41,805	14,024,598	$	2.98
Effect of dilutive securities	—		77,991			—		337,605
Dilutive EPS per common share	$	35,871	14,080,547	$	2.55	$	41,805	14,362,203	$	2.91

Comprehensive loss

The Company reports as comprehensive loss all changes in stockholders' equity during the year from non-stockholder sources. Other comprehensive loss refers to all components (income, expenses, gains, and losses) of comprehensive loss that are excluded from net income.


	As of December 31,
(in thousands)	2023		2022
Unrealized losses on securities available for sale	$	(17,350)	$	(22,416)
Deferred tax benefit	4,253		5,665




Total accumulated comprehensive loss	$	(13,097)	$	(16,751)

Note 1 - Nature of Business and Basis of Presentation (continued)

Recently issued accounting pronouncements:

In March 2020, the FASB released ASU 2020-04 - Reference Rate Reform, Topic 848, which provides temporary guidance to ease the potential accounting burden in accounting for, or recognizing the effects from, reference rate reform on financial reporting. The new standard is a result of London Interbank Offered Rate (“LIBOR”) likely being discontinued as an available benchmark rate. The standard is elective and provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, or other transactions that reference LIBOR, or another reference rate expected to be discontinued. The amendments in the update are effective for all entities between March 12, 2020 and an extended sunset date of December 31, 2024 which was extended by ASU 2022-06 issued by FASB in December 2022. The Company has completed the transition from LIBOR with no material impact on the Company’s financial position or results of operations.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 Requires public entities to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity’s chief operating decision maker ("CODM") and an explanation of how the CODM uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will update its segment related disclosures upon adoption.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for the Company for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company will update its income tax disclosures upon adoption.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

Reclassifications:

Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity.

Stock-Based Compensation - Stock Options Outstanding (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of year (in shares)	811,160	1,060,023
Add: Granted (in shares)	168,819	2,000
Less: Exercised (in shares)	(228,405)	(160,590)
Less: Retired on exercise (in shares)	(124,939)	(63,697)
Less: Expired/cancelled/forfeited (in shares)	(75,917)	(26,576)
Outstanding at end of year (in shares)	550,718	811,160
Exercisable at end of year (in shares)	295,450	538,066
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding at beginning of year (in dollars per share)	$ 15.37	$ 14.77
Add: Granted (in dollars per share)	23.34	24.25
Less: Exercised (in dollars per share)	11.96	12.46
Less: Retired on exercise (in dollars per share)	12.29	12.52
Less: Expired/cancelled/forfeited (in dollars per share)	20.49	12.82
Outstanding at end of year (in dollars per share)	19.21	15.37
Exercise Price Range (in dollars per share)	$ 16.69	$ 13.63

Premises and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 10,240	$ 9,723
Less: Accumulated depreciation and amortization	(8,758)	(8,434)
Premises and equipment	1,482	1,289
Net lease asset	3,587	2,097
Premises and equipment, net	5,069	3,386
Depreciation and amortization expense	324	364
Leasehold improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	2,710	1,683
Furniture and equipment
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	4,926	4,775
Vehicle
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	54	54
Software
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	2,517	2,517
Construction in progress
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 33	$ 694

Borrowed Funds

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowed Funds

As of December 31, 2023 and 2022, the Company was indebted as follows:



	2023				2022
(dollars in thousands)	Balance		Interest		Balance		Interest
FHLB fixed rate advance due October 16, 2025	$	22,000	0.93	%	$	22,000	0.93	%
FHLB fixed rate advance due March 20, 2023	—		—		50,000		4.42
FHLB daily rate advance due September 13, 2023	—		—		35,000		4.57
Total - FHLB advances	$	22,000	0.93	%	$	107,000	3.75	%


Junior subordinated debentures due June 15, 2036	$	2,062	7.52	%	$	2,062	6.64	%
Other subordinated notes due November 30, 2030	10,000		5.00		10,000		5.00
Bank Term Funding Program borrowings	15,000		4.84		—		—


Total - Other borrowed funds	$	27,062	5.10	%	$	12,062	5.28	%

The FHLB fixed rate advances accrue interest on a daily basis and are paid semi-annually.

Junior subordinated debentures

In June 2006, the Company formed Capital Bancorp (MD) Statutory Trust I (the “Trust”) and on June 15, 2006, the Trust issued 2,000 floating rate capital securities (the “Capital Securities”) with an aggregate liquidation value of $2.0 million to a third party in a private placement. Concurrent with the issuance of the Capital Securities, the Trust issued trust common securities to the Company in the aggregate liquidation value of $62 thousand.

The proceeds of the issuance of the Capital Securities and trust common securities were invested in the Company’s Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Floating Rate Debentures”). The Floating Rate Debentures for the Trust will mature on June 15, 2036, which may be shortened if certain conditions are met (including the Company having received prior approval of the Board of Governors of the Federal Reserve System and any other required regulatory approvals). These Floating Rate Debentures, which are the only assets of the Trust, are subordinate and junior in right of payment to all present and future senior indebtedness (as defined in the Indenture dated June 15, 2006) of the Company. The Floating Rate Debentures for the Trust accrue interest at a floating rate equal to the three-month CME Term SOFR plus a spread adjustment of 0.26161% (or 26.161 basis points) plus 187 basis points, payable quarterly. As of December 31, 2023 and 2022, the rate for the Trust was 7.52% and 6.64%, respectively. The quarterly distributions on the Capital Securities will be paid at the same rate that interest is paid on the Floating Rate Debentures.

The Company has fully and unconditionally guaranteed the Trust’s obligation under the Capital Securities. The Trust must redeem the Capital Securities when the Floating Rate Debentures are paid at maturity or upon any earlier prepayment of the Floating Rate Debentures. The Floating Rate Debentures may be prepaid if certain events occur, including a change in the tax status or regulatory capital treatment of the Capital Securities, or a change in existing laws that requires the Trust to register as an investment company.

The junior subordinated debentures are treated as Tier 1 capital by the Company, to a limited extent, by the Federal Reserve.

Note 10 - Borrowed Funds (continued)

Other subordinated notes

On November 30, 2020, the Company issued $10.0 million of subordinated notes (the “Notes”). The Notes mature on November 30, 2030 and are redeemable in whole or part on November 30, 2025. The Notes bear interest at a fixed annual rate of 5.00% for the first five years, then adjust quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the three-month SOFR, plus 490 basis points. There were related debt issuance costs incurred totaling $50,000 which were fully expensed at the time of issuance. The Company used the proceeds from the Notes to redeem the outstanding $13.5 million, 6.95% fixed-to-floating rate subordinated notes issued in November 2015 and called on December 1, 2020.

Federal Reserve’s Bank Term Funding Program

On March 12, 2023, in response to liquidity concerns in the banking system, the Federal Deposit Insurance Corporation, Federal Reserve and U.S. Department of Treasury, collaboratively approved certain actions with a stated intention to reduce stress across the financial system, support financial stability and minimize any impact on business, households, taxpayers, and the broader economy. Among other actions, the Federal Reserve Board has created the BTFP to make additional funding available to eligible depository institutions to help assure institutions can meet the needs of their depositors. Eligible institutions may obtain liquidity against a wide range of collateral, at par value. BTFP advances can be requested through at least March 11, 2024. At December 31, 2023, the Company had $15.0 million of BTFP borrowings. In January 2024, the Company paid off the $15.0 million of BTFP borrowings.

Available lines of credit

The Company has available lines of credit of $76.0 million with other correspondent banks. There were no outstanding line of credit balances at December 31, 2023 and December 31, 2022.

The Company may borrow up to 25% of its assets from the FHLB, based on collateral available to pledge to secure the borrowings. Borrowings from the FHLB are secured by a portion of the Company’s loan and/or investment portfolio. As of December 31, 2023 and 2022, the Company had pledged loans providing borrowing capacity of $313.5 million and $330.8 million, respectively. The Company did not have any pledged investment securities to the FHLB at December 31, 2023 or December 31, 2022. As of December 31, 2023 and 2022, the Company had available borrowing capacity, net of advances and amounts pledged for letters of credit, from the FHLB of $291.5 million and $223.8 million, respectively.

As of December 31, 2023 and 2022, the Company had pledged commercial loans to the Federal Reserve Bank of Richmond to secure a borrowing capacity totaling $16.6 million and $21.4 million, respectively, under its discount window program.

The Company limits its certificate of deposit funding through financial networks to 15% of the Bank’s assets, or approximately $326.5 million and $310.5 million as of December 31, 2023 and 2022, respectively. The Company had $142.4 million outstanding as of December 31, 2023 and $131.8 million outstanding as of December 31, 2022.

- 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

Stock-Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Compensation cost is recognized for stock options and restricted stock awards issued to employees. Compensation cost is measured as the fair value of these awards on their date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used as the fair value of restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option awards and as the restriction period for restricted stock awards. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

The expense recognition of employee stock option and restricted stock awards resulted in net expense of approximately $1.8 million and $1.8 million during the years ended December 31, 2023 and 2022, respectively.

Stock options:

The Company currently has two incentive compensation plans with outstanding stock options, the 2002 Stock Option Plan and the 2017 Stock and Incentive Compensation Plan (the “Plan”). Only the Plan, which authorizes the use of stock options, stock appreciation rights, restricted stock and/or restricted stock, is available to grant options and shares to employees and directors. At inception the Plan allowed for up to 1,120,000 shares of common stock to be issued. In 2021, an additional 900,000 shares were authorized for a total of 2,020,000. As of December 31, 2023, there are 792,846 shares available for future grant. Shares of common stock related to any unexercised or unvested award granted under the Plan that terminate or expire, or are subsequently forfeited or cancelled for any reason, become available for re-grant under the Plan. Option prices are equal to or greater than the estimated fair value of the common stock at the date of grant. Options outstanding vest over a four-year period, whereby 25% of the options become exercisable on each anniversary of the grant date.

Information with respect to options outstanding during the years ended December 31, 2023 and 2022 is as follows:



	2023			2022
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding at beginning of year	811,160	$	15.37	1,060,023	$	14.77
Add: Granted	168,819	23.34		2,000	24.25
Less: Exercised	(228,405)	11.96		(160,590)	12.46
Less: Retired on exercise	(124,939)	12.29		(63,697)	12.52
Less: Expired/cancelled/forfeited	(75,917)	20.49		(26,576)	12.82
Outstanding at end of year	550,718	$	19.21	811,160	$	15.37
Exercisable at end of year	295,450	$	16.69	538,066	$	13.63

The weighted average fair value of options granted during the years ended December 31, 2023 and 2022, was $10.81 and $11.49, respectively.

Note 15 - Stock-Based Compensation (continued)

A summary of information about stock options outstanding is as follows:



	Exercise Price Range	Weighted Average Exercise Price		Average Remaining Life (years)	Outstanding Shares		Exercisable Shares
December 31, 2023

	$10.70 - 14.63	$	14.18	1.52	267,527		221,460
	14.64 - 18.56	15.27		1.57	24,000		15,000
	18.57 - 22.49	20.15		3.98	3,250		1,250
	22.50 - 26.41	24.82		3.56	255,941		57,740











Total outstanding options		$	19.21	2.48	550,718		295,450
Intrinsic value on December 31, 2023					$	2,999,807	$	2,346,106

December 31, 2022
	$10.70 - 14.63	$	13.02	1.73	648,651		492,909
	14.64 - 18.56	14.96		2.14	22,750		10,688
	18.57 - 22.49	21.86		3.07	2,500		625
	22.50 - 26.41	26.38		3.86	137,259		33,844







Total outstanding options		$	15.37	2.11	811,160		538,066
Intrinsic value on December 31, 2022					$	7,020,560	$	5,428,713

The aggregate intrinsic value as presented in the preceding tables is the difference between the estimated fair value of the stock as of December 31, 2023 and 2022, and the exercise price of the option multiplied by the number of options outstanding. Stock options with exercise prices greater than the estimated fair value of the stock are not included in this calculation.

Total unrecognized compensation expense related to stock options to be recognized over the next five years was $1.4 million and $1.2 million at December 31, 2023 and 2022, respectively.

The intrinsic value of stock options exercised was $1.9 million and $1.9 million during the years ended December 31, 2023 and 2022, respectively.

The weighted average fair value of options granted during 2023 and 2022 were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:



	2023	2022
Dividend yield	1.04%	0.99%
Risk free interest rate	4.52%	3.25%
Expected volatility	54.64%	55.91%
Expected life in years	5	5

Note 15 - Stock-Based Compensation (continued)

Restricted stock:

The Company from time-to-time also grants shares of restricted stock to key employees. These awards help align the interests of these employees with the interests of the stockholders of the Company by providing economic value directly related to increases in the value of the Company’s stock. These awards typically hold service requirements over various vesting periods. The value of the stock awarded is established as the fair market value of the stock at the time of the grant. The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants.

All restricted stock agreements are conditioned upon continued employment. Termination of employment prior to a vesting date, as described below, would terminate any interest in non-vested shares. All restricted shares will fully vest in the event of change in control of the Company.

Nonvested restricted stock for the years ended December 31, 2023 and 2022 is summarized in the following table.



	2023			2022
	Shares	Weighted Average Grant-Date Fair Value		Shares	Weighted Average Grant-Date Fair Value
Nonvested at beginning of year	39,669	$	17.45	49,047	$	14.33
Add: Granted	10,714	25.77		11,495	24.66
Less: Vested	(13,652)	15.92		(15,905)	14.01
Less: Retired on vesting	(8,555)	16.46		(4,968)	14.44

Nonvested at end of year	28,176	$	21.66	39,669	$	17.45

The vesting schedule of restricted shares as of December 31, 2023 is as follows:



Year						Shares
2024						17,203
2025						7,403
2026						3,570

						28,176

There was $78 thousand and $429 thousand of total unrecognized compensation expense related to nonvested restricted stock at December 31, 2023 and 2022, respectively.

Segments (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following schedule presents financial information for each reportable segment at and for the years ended December 31, 2023 and 2022.


For the Year Ended December 31, 2023
(in thousands)	Commercial Bank		CBHL		OpenSky™		Corporate(2)		Eliminations		Consolidated
Interest income	$	116,408	$	382	$	62,476	$	4,238	$	(298)	$	183,206
Interest expense	40,896		135		—		947		(298)		41,680
Net interest income	75,512		247		62,476		3,291		—		141,526
Provision for credit losses	1,540		—		7,948		122		—		9,610
Release of credit losses on unfunded commitments	(101)		—		—		—		—		(101)
Net interest income after provision	74,073		247		54,528		3,169		—		132,017
Noninterest income	2,737		4,909		17,325		4		—		24,975
Noninterest expense(1)	61,836		6,001		42,524		406		—		110,767
Net income (loss) before taxes	$	14,974	$	(845)	$	29,329	$	2,767	$	—	$	46,225

Total assets	$	2,051,945	$	8,589	$	117,477	$	277,565	$	(229,400)	$	2,226,176

For the Year Ended December 31, 2022
(in thousands)	Commercial Bank		CBHL		OpenSky™		Corporate(2)		Eliminations		Consolidated
Interest income	$	82,182	$	435	$	64,859	$	3,349	$	(179)	$	150,646
Interest expense	9,245		218		—		755		(179)		10,039
Net interest income	72,937		217		64,859		2,594		—		140,607
(Reversal of) provision for loan losses	(980)		—		7,611		—		—		6,631
Net interest income after provision	73,917		217		57,248		2,594		—		133,976
Noninterest income	2,122		5,276		21,972		2		—		29,372
Noninterest expense(1)	52,552		8,450		47,647		465		—		109,114
Net income (loss) before taxes	$	23,487	$	(2,957)	$	31,573	$	2,131	$	—	$	54,234

Total assets	$	1,939,601	$	7,936	$	122,418	$	245,399	$	(191,699)	$	2,123,655

_______________

(1)Noninterest expense includes $23.7 million and $27.0 million in data processing expenses in OpenSky’s™ segment for the years ended December 31, 2023 and 2022, respectively.

(2)The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

Portfolio Loans Receivable and Allowance for Credit Losses - Outstanding Loan Commitments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 1,910,270	$ 1,737,219
Residential \| Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	573,104	484,735
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	238,548	220,221
Commercial and Industrial \| Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	684,229	664,551
Construction \| Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	290,108	238,099
Consumer \| Credit card
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	123,331	128,434
Consumer \| Credit card \| Savings Deposits
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	98,200	106,900
Consumer \| Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	950	1,179
Commitments to Extend Credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	336,472	345,062
Letters of credit	4,641	5,105
Commitments to Extend Credit \| Residential \| Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	15,436	14,336
Commitments to Extend Credit \| Residential \| Residential - Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	43,892	43,128
Commitments to Extend Credit \| Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	42,751	45,747
Commitments to Extend Credit \| Commercial and Industrial \| Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	20,424	36,609
Commitments to Extend Credit \| Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	98,777
Commitments to Extend Credit \| Construction \| Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale		93,913
Commitments to Extend Credit \| Consumer \| Credit card
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	114,882	111,227
Commitments to Extend Credit \| Consumer \| Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commitments to originate residential loans held for sale	$ 310	$ 102

Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations and back office operations. The Company leases four of its full service branches and four other locations for corporate/administration activities, operations, and loan production. All property leases under lease agreements have been designated as operating leases. The Company does not have leases designated as finance leases.

Note 7 - Leases (continued)

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets are included in premises and equipment, and operating lease liabilities are included as other liabilities in the consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The historical weighted average discount rate used was 3.79% at December 31, 2023 and 1.94% at December 31, 2022. The operating lease ROU asset also includes any lease pre-payments. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately as the non-lease component amounts are readily determinable under most leases.

As of December 31, 2023, the Company’s net lease ROU assets and related lease liabilities were $3.6 million and $3.8 million, respectively, and have remaining terms ranging from one to nine years, including extension options that the Company is reasonably certain will be exercised. As of December 31, 2023, the Company had not entered into any material leases that have not yet commenced. The Company’s lease information is summarized as follows:



(in thousands)	2023		2022
Lease Right-of-Use Asset
Lease asset	$	6,810	$	5,171
Less: Accumulated amortization	(3,223)		(3,074)
Net lease asset	$	3,587	$	2,097

Lease Liability
Lease liability	$	6,892	$	5,327
Less: Accumulated amortization	(3,101)		(2,968)
Net lease liability	$	3,791	$	2,359

Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows at December 31, 2023:



(in thousands)	2023
Amounts due in:
2024	$	1,161
2025	715
2026	665
2027	396
2028	266
thereafter	1,182
Total future lease payments	4,385
Discount of cash flows	(594)
Present value of net future lease payments	$	3,791

Operating lease and rent expense totaled $1.3 million for both the years ended December 31, 2023 and 2022.

Income Taxes - Components of Net Deferred Tax Asset (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Allowance for credit losses	$ 7,230	$ 7,073
Reserve for recourse on mortgage loans sold	242	297
Deferred loan fees - PPP	0	8
Stock-based compensation	309	257
Long-term incentive program	372	428
Unrealized loss on investment securities available for sale	4,253	5,665
Other	61	85
Deferred tax assets, gross	12,467	13,813
Deferred tax liabilities:
Accumulated depreciation	214	34
Other	1	2
Deferred tax liabilities, gross	215	36
Net deferred tax asset	$ 12,252	$ 13,777

Portfolio Loans Receivable and Allowance for Credit Losses - Past Due Financing Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	$ 1,910,270	$ 1,737,219
Accruing Loans 90 or More days Past Due	536	363
Nonaccrual Loans	16,042	9,393
Residential Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	8,100	1,300
Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	12,901	9,758
Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	11,534	8,623
Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	15,917	9,616
Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	40,352	27,997
Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	1,869,918	1,709,222
Residential \| Real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	573,104	484,735
Accruing Loans 90 or More days Past Due	17	0
Nonaccrual Loans	11,398	4,288
Residential \| Real estate \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	2,201	4
Residential \| Real estate \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	3,096	142
Residential \| Real estate \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	11,066	4,284
Residential \| Real estate \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	16,363	4,430
Residential \| Real estate \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	556,741	480,305
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	238,548	220,221
Accruing Loans 90 or More days Past Due	0	0
Nonaccrual Loans	774	705
Commercial \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	1,356	117
Commercial \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	74	386
Commercial \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	454	569
Commercial \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	1,884	1,072
Commercial \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	236,664	219,149
Commercial \| Real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	684,229	664,551
Accruing Loans 90 or More days Past Due	0	0
Nonaccrual Loans	582	1,563
Commercial \| Real estate \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	1,577	0
Commercial \| Real estate \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	322	0
Commercial \| Real estate \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	582	1,563
Commercial \| Real estate \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	2,481	1,563
Commercial \| Real estate \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	681,748	662,988
Construction \| Real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	290,108	238,099
Accruing Loans 90 or More days Past Due	0	0
Nonaccrual Loans	3,288	2,837
Construction \| Real estate \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	0	1,164
Construction \| Real estate \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	1,165	640
Construction \| Real estate \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	3,296	2,837
Construction \| Real estate \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	4,461	4,641
Construction \| Real estate \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	285,647	233,458
Consumer \| Credit card
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	123,331	128,434
Accruing Loans 90 or More days Past Due	519	363
Nonaccrual Loans	0	0
Consumer \| Credit card \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	7,767	8,473
Consumer \| Credit card \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	6,877	7,455
Consumer \| Credit card \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	519	363
Consumer \| Credit card \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	15,163	16,291
Consumer \| Credit card \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	108,168	112,143
Consumer \| Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	950	1,179
Accruing Loans 90 or More days Past Due	0	0
Nonaccrual Loans	0	0
Consumer \| Other consumer \| Loans 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	0	0
Consumer \| Other consumer \| Loans 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	0	0
Consumer \| Other consumer \| Loans 90 or More Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	0	0
Consumer \| Other consumer \| Total Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	0	0
Consumer \| Other consumer \| Current Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Portfolio loans receivable, gross	$ 950	$ 1,179

Deposits - Maturities (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Deposits [Abstract]
2024	$ 350,658,000
2025		$ 58,400,000
2026	1,425,000
2027	402,000
2028	69,000
Total	$ 410,954,000

Regulatory Capital Matters (Details) $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Tier 1 leverage ratio (to average assets)
Tier One Leverage Capital	$ 270,019	$ 242,829
Tier One Leverage Capital to Average Assets	0.1214	0.1124
Tier One Leverage Capital Required for Capital Adequacy	$ 89,004	$ 86,442
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	0.0400	0.0400
Tier 1 capital (to risk-weighted assets)
Tier One Risk Based Capital	$ 270,019	$ 242,829
Tier One Risk Based Capital to Risk Weighted Assets	0.1555	0.1513
Tier One Risk Based Capital Required for Capital Adequacy	$ 104,175	$ 96,315
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.0600	0.0600
Common equity tier 1 capital ratio (to risk-weighted assets)
Common Equity Tier One Capital	$ 267,957	$ 240,767
Common Equity Tier One Capital Ratio	0.1543	0.1500
Common Equity Tier One Capital Required for Capital Adequacy	$ 78,132	$ 72,237
Common Equity Tier One Capital Required For Capital Adequacy To Risk Weighted Assets	4.50%	4.50%
Total capital ratio (to risk-weighted assets)
Capital	$ 301,817	$ 262,217
Capital to Risk Weighted Assets	0.1738	0.1633
Capital Required for Capital Adequacy	$ 138,900	$ 128,421
Capital Required for Capital Adequacy to Risk Weighted Assets	0.0800	0.0800
The Bank
Tier 1 leverage ratio (to average assets)
Tier One Leverage Capital	$ 228,794	$ 199,846
Tier One Leverage Capital to Average Assets	0.1051	0.0947
Tier One Leverage Capital Required for Capital Adequacy	$ 87,068	$ 84,416
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	0.0400	0.0400
Tier One Leverage Capital Required to be Well Capitalized	$ 108,835	$ 105,521
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	0.0500	0.0500
Tier 1 capital (to risk-weighted assets)
Tier One Risk Based Capital	$ 228,794	$ 199,846
Tier One Risk Based Capital to Risk Weighted Assets	0.1356	0.1295
Tier One Risk Based Capital Required for Capital Adequacy	$ 101,251	$ 92,574
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.0600	0.0600
Tier One Risk Based Capital Required to be Well Capitalized	$ 135,001	$ 123,432
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	0.0800	0.0800
Common equity tier 1 capital ratio (to risk-weighted assets)
Common Equity Tier One Capital	$ 228,794	$ 199,846
Common Equity Tier One Capital Ratio	0.1356	0.1295
Common Equity Tier One Capital Required for Capital Adequacy	$ 75,938	$ 69,431
Common Equity Tier One Capital Required For Capital Adequacy To Risk Weighted Assets	4.50%	4.50%
Common Equity Tier One Capital Required to be Well-Capitalized	$ 109,688	$ 100,289
Common Equity Tier One Capital To Be Well Capitalized To Risk Weighted Assets	6.50%	6.50%
Total capital ratio (to risk-weighted assets)
Capital	$ 249,984	$ 219,234
Capital to Risk Weighted Assets	0.1481	0.1421
Capital Required for Capital Adequacy	$ 135,001	$ 123,432
Capital Required for Capital Adequacy to Risk Weighted Assets	0.0800	0.0800
Capital Required to be Well Capitalized	$ 168,751	$ 154,290
Capital Required to be Well Capitalized to Risk Weighted Assets	0.1000	0.1000

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Assets and Liabilities, Lessee

The Company’s lease information is summarized as follows:



(in thousands)	2023		2022
Lease Right-of-Use Asset
Lease asset	$	6,810	$	5,171
Less: Accumulated amortization	(3,223)		(3,074)
Net lease asset	$	3,587	$	2,097

Lease Liability
Lease liability	$	6,892	$	5,327
Less: Accumulated amortization	(3,101)		(2,968)
Net lease liability	$	3,791	$	2,359

Schedule of Lessee, Operating Lease, Liability, Maturity

Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows at December 31, 2023:



(in thousands)	2023
Amounts due in:
2024	$	1,161
2025	715
2026	665
2027	396
2028	266
thereafter	1,182
Total future lease payments	4,385
Discount of cash flows	(594)
Present value of net future lease payments	$	3,791

Portfolio Loans Receivable and Allowance for Credit Losses - Classification of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 1,910,270	$ 1,737,219
Loans receivable, gross percent	100.00%	100.00%
Deferred origination fees, net	$ (7,627)	$ (8,627)
Allowance for credit losses	(28,610)	(26,385)	$ (25,181)
Total portfolio loans held for investment, net	1,874,033	1,702,207
Residential \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 573,104	$ 484,735
Loans receivable, gross percent	30.00%	28.00%
Allowance for credit losses	$ (5,518)	$ (5,481)	(5,612)
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 238,548	$ 220,221
Loans receivable, gross percent	13.00%	13.00%
Commercial \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 684,229	$ 664,551
Loans receivable, gross percent	35.00%	38.00%
Allowance for credit losses	$ (10,316)	$ (8,098)	(8,566)
Construction \| Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 290,108	$ 238,099
Loans receivable, gross percent	15.00%	14.00%
Allowance for credit losses	$ (2,271)	$ (3,782)	(4,699)
Consumer \| Credit card, net of reserve
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 123,331	$ 128,434
Loans receivable, gross percent	7.00%	7.00%
Allowance for credit losses	$ (6,087)	$ (6,078)	(3,655)
Consumer \| Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Portfolio loans receivable, gross	$ 950	$ 1,179
Loans receivable, gross percent	0.00%	0.00%
Allowance for credit losses	$ (12)	$ (11)	$ (12)

Regulatory Capital Matters

12 Months Ended

Dec. 31, 2023

Mortgage Banking [Abstract]

Regulatory Capital Matters

The Company and Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 2023, the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If not adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2023 and 2022, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Based on recent changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. For comparison purposes, the Company’s ratios are presented in the following table as well, all of which would have exceeded the “well-capitalized” level had the Company been subject to separate capital minimums.

Actual and required capital amounts and ratios are presented below at year-end.

Note 14 - Regulatory Capital Matters (continued)


Regulatory Capital
	Actual				Minimum Capital Adequacy				To Be Well Capitalized
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2023
The Company
Tier 1 leverage ratio (to average assets)	$	270,019	12.14	%	$	89,004	4.00	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	270,019		15.55	%	104,175		6.00	%	N/A		N/A
Common equity tier 1 capital ratio (to risk-weighted assets)	267,957		15.43	%	$	78,132	4.50	%	N/A		N/A
Total capital ratio (to risk-weighted assets)	301,817		17.38	%	$	138,900	8.00	%	N/A		N/A

The Bank
Tier 1 leverage ratio (to average assets)	$	228,794	10.51	%	$	87,068	4.00	%	$	108,835	5.00	%
Tier 1 capital (to risk-weighted assets)	228,794		13.56	%	101,251		6.00	%	135,001		8.00	%
Common equity tier 1 capital ratio (to risk-weighted assets)	228,794		13.56	%	75,938		4.50	%	109,688		6.50	%
Total capital ratio (to risk-weighted assets)	249,984		14.81	%	135,001		8.00	%	168,751		10.00	%

December 31, 2022
The Company
Tier 1 leverage ratio (to average assets)	$	242,829	11.24	%	$	86,442	4.00	%	N/A		N/A
Tier 1 capital (to risk-weighted assets)	242,829		15.13	%	96,315		6.00	%	N/A		N/A
Common equity tier 1 capital ratio (to risk-weighted assets)	240,767		15.00	%	72,237		4.50	%	N/A		N/A
Total capital ratio (to risk-weighted assets)	262,217		16.33	%	128,421		8.00	%	N/A		N/A

The Bank
Tier 1 leverage ratio (to average assets)	$	199,846	9.47	%	$	84,416	4.00	%	$	105,521	5.00	%
Tier 1 capital (to risk-weighted assets)	199,846		12.95	%	92,574		6.00	%	123,432		8.00	%
Common equity tier 1 capital ratio (to risk-weighted assets)	199,846		12.95	%	69,431		4.50	%	100,289		6.50	%
Total capital ratio (to risk-weighted assets)	219,234		14.21	%	123,432		8.00	%	154,290		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

Fair Value - Loans Held For Sale (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale	$ 7,481	$ 7,416
Aggregate fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale	7,481	7,416
Contractual principal
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale	5,168	6,808
Difference
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale	$ 2,313	$ 608

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 14,513	$ 19,963
Interest-bearing deposits at other financial institutions	39,044	39,764
Federal funds sold	407	20,688
Total cash and cash equivalents	53,964	80,415
Investment securities available for sale	208,329	252,481
Restricted investments	4,353	7,362
Loans held for sale	7,481	7,416
U.S. Small Business Administration ("SBA") Payroll Protection Program ("PPP") loans receivable, net of fees and costs	645	2,163
Portfolio loans receivable, net of deferred fees and costs	1,902,643	1,728,592
Less allowance for credit losses	(28,610)	(26,385)
Total portfolio loans held for investment, net	1,874,033	1,702,207
Premises and equipment, net	5,069	3,386
Accrued interest receivable	11,494	9,489
Deferred tax asset	12,252	13,777
Bank owned life insurance	37,711	36,524
Other assets	10,845	8,435
Total assets	2,226,176	2,123,655
Deposits
Noninterest-bearing	617,373	674,313
Interest-bearing	1,278,623	1,083,759
Total deposits	1,895,996	1,758,072
Federal Home Loan Bank advances	22,000	107,000
Other borrowed funds	27,062	12,062
Accrued interest payable	5,583	1,031
Other liabilities	20,675	21,475
Total liabilities	1,971,316	1,899,640
Stockholders' equity
Common stock, $.01 par value; 49,000,000 shares authorized; 13,922,532 and 14,138,829 issued and outstanding	139	141
Additional paid-in capital	54,473	58,190
Retained earnings	213,345	182,435
Accumulated other comprehensive loss	(13,097)	(16,751)
Total stockholders' equity	254,860	224,015
Total liabilities and stockholders' equity	$ 2,226,176	$ 2,123,655

Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Dec. 31, 2023	Mar. 13, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-38671
Entity Registrant Name	CAPITAL BANCORP, INC
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-2083046
Entity Address, Address Line One	2275 Research Boulevard
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Rockville
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20850
City Area Code	301
Local Phone Number	468-8848
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CBNK
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction	false
Entity Shell Company	false
Entity Public Float			$ 161.7
Entity Common Stock, Shares Outstanding		13,903,570
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE The information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K will be found in the Company’s definitive proxy statement for its 2024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and such information is incorporated herein by this reference.
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Central Index Key	0001419536

Deposits (Tables)

12 Months Ended

Dec. 31, 2023

Deposits [Abstract]

Schedule of Time Deposit Maturities

Scheduled maturities of time deposits for the next five years were as follows:



(in thousands)
2024	$	350,658
2025	58,400
2026	1,425
2027	402
2028	69
Total	$	410,954

Stock-Based Compensation - Restricted Stock Summary (Details) - Restricted Stock - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested at beginning of year (in shares)	39,669	49,047
Add: Granted (in shares)	10,714	11,495
Less: Vested (in shares)	(13,652)	(15,905)
Less: Retired on vesting (in shares)	(8,555)	(4,968)
Nonvested at end of year (in shares)	28,176	39,669
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Nonvested at beginning of year (in dollars per share)	$ 17.45	$ 14.33
Add: Granted (in dollars per share)	25.77	24.66
Less: Vested (in dollars per share)	15.92	14.01
Less: Retired on vesting (in dollars per share)	16.46	14.44
Nonvested at end of year (in dollars per share)	$ 21.66	$ 17.45

SBA-PPP Loans

12 Months Ended

Dec. 31, 2023

Loans and Leases Receivable Disclosure [Line Items]

SBA-PPP Loans

Portfolio Loans Receivable and Allowance for Credit Losses

The following is a summary of the major categories of total loans outstanding:


	December 31,
	2023				2022
(in thousands)	Amount		Percent		Amount		Percent
Real estate:
Residential	$	573,104	30	%	$	484,735	28	%
Commercial	684,229		35		664,551		38
Construction	290,108		15		238,099		14
Commercial and Industrial	238,548		13		220,221		13
Credit card, net of reserve(1)	123,331		7		128,434		7
Other consumer	950		—		1,179		—
Portfolio loans receivable, gross	1,910,270		100	%	1,737,219		100	%
Deferred origination fees, net	(7,627)				(8,627)
Allowance for credit losses	(28,610)				(26,385)
Portfolio loans receivable, net	$	1,874,033			$	1,702,207

(1) Credit card loans are presented net of reserve for interest and fees.


	Beginning Balance, Prior to Adoption of the CECL Standard		Impact of Adopting the CECL Standard		Other		Provision (Release of Provision) for Credit Losses		Charge-Offs		Recoveries		Ending Balance
(in thousands)
Year Ended December 31, 2023
Real estate:
Residential	$	5,481	$	(1,198)	$	91	$	1,814	$	(670)	$	—	$	5,518
Commercial	8,098		3,941		193		(1,075)		(943)		102		10,316
Construction	3,782		(1,973)		—		462		—		—		2,271
Commercial and Industrial	2,935		1,073		—		475		(98)		21		4,406
Credit card	6,078		(1,045)		—		7,939		(7,076)		191		6,087
Other consumer	11		6		—		(5)		—		—		12
Total	$	26,385	$	804	$	284	$	9,610	$	(8,787)	$	314	$	28,610

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)


(in thousands)	Beginning Balance		Provision (Release of Provision) for Loan Losses		Charge-Offs		Recoveries		Ending Balance
Year Ended December 31, 2022
Real estate:
Residential	$	5,612	$	(131)	$	—	$	—	$	5,481
Commercial	8,566		(468)		—		—		8,098
Construction	4,699		(900)		(17)		—		3,782
Commercial and Industrial	2,637		298		—		—		2,935
Credit card	3,655		7,833		(5,461)		51		6,078
Other consumer	12		(1)		—		—		11
Total	$	25,181	$	6,631	$	(5,478)	$	51	$	26,385

The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022.


(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:










December 31, 2022	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	5,481	$	4,288	$	480,447
Commercial	—		8,098		1,563		662,988
Construction	—		3,782		2,837		235,262
Commercial and Industrial	372		2,563		705		219,516
Credit card	—		6,078		—		128,434
Other consumer	—		11		—		1,179
Total	$	372	$	26,013	$	9,393	$	1,727,826

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Past due loans, segregated by age and class of loans, as of December 31, 2023 and 2022 were as follows:


Portfolio Loans Past Due					Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More days Past Due		Nonaccrual Loans
	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due
(in thousands)
December 31, 2023
Real estate:
Residential	$	2,201	$	3,096	$	11,066	$	16,363	$	556,741	$	573,104	$	17	$	11,398
Commercial	1,577		322		582		2,481		681,748		684,229		—		582
Construction	—		1,165		3,296		4,461		285,647		290,108		—		3,288
Commercial and Industrial	1,356		74		454		1,884		236,664		238,548		—		774
Credit card	7,767		6,877		519		15,163		108,168		123,331		519		—
Other consumer	—		—		—		—		950		950		—		—
Total	$	12,901	$	11,534	$	15,917	$	40,352	$	1,869,918	$	1,910,270	$	536	$	16,042



December 31, 2022
Real estate:
Residential	$	4	$	142	$	4,284	$	4,430	$	480,305	$	484,735	$	—	$	4,288
Commercial	—		—		1,563		1,563		662,988		664,551		—		1,563
Construction	1,164		640		2,837		4,641		233,458		238,099		—		2,837
Commercial and Industrial	117		386		569		1,072		219,149		220,221		—		705
Credit card	8,473		7,455		363		16,291		112,143		128,434		363		—
Other consumer	—		—		—		—		1,179		1,179		—		—
Total	$	9,758	$	8,623	$	9,616	$	27,997	$	1,709,222	$	1,737,219	$	363	$	9,393

There were $8.1 million and $1.3 million, respectively, of loans secured by one-to-four family residential properties in the process of foreclosure as of December 31, 2023 and 2022.

The following presents the nonaccrual loans as of December 31, 2023 and December 31, 2022:


	December 31, 2023								December 31, 2022
	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with an Allowance for Credit Loss		Total Nonaccrual Loans		Interest Recognized on Nonaccrual Loans		Total Nonaccrual Loans
(in thousands)

Real estate:
Residential	$	11,152	$	246	$	11,398	$	236	$	4,288
Commercial	582		—		582		46		1,563
Construction	3,288		—		3,288		185		2,837
Commercial and Industrial	598		176		774		71		705


Total	$	15,620	$	422	$	16,042	$	538	$	9,393

•Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences.

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property.


Collateral dependent loans amortized cost
(in thousands)	December 31, 2023
Real estate:
Residential	$	11,152
Commercial	582
Construction	3,288
Commercial and Industrial	657

Total	$	15,679

The following table presents information related to impaired loans by class of loans as of and for the years ended December 31, 2022:



	Unpaid Contractual Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Recognized
(in thousands)
December 31, 2022
Real estate:
Residential	$	4,476	$	4,288	$	—	$	4,288	$	—	$	4,629	$	149
Commercial	1,647		1,563		—		1,563		—		1,656		52
Construction	2,939		2,837		—		2,837		—		2,938		75
Commercial and Industrial	899		247		458		705		372		1,199		77


Total	$	9,961	$	8,935	$	458	$	9,393	$	372	$	10,422	$	353

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Credit quality indicators

A description of the general characteristics of loans characterized as classified is as follows:

Pass

Special Mention

Substandard

Doubtful

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)


December 31, 2023	Term Loans by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Residential – Real estate
Pass	$	140,394	$	137,362	$	76,556	$	76,938	$	36,122	$	88,055	$	—	$	555,427
Special Mention	—		—		134		3,670		1,176		288		—		5,268
Substandard	—		33		—		—		26		12,350		—		12,409
Doubtful	—		—		—		—		—		—		—		—
Total	140,394		137,395		76,690		80,608		37,324		100,693		—		573,104
Commercial – Real estate
Pass	62,095		185,776		145,756		68,748		96,238		116,347		—		674,960
Special Mention	—		6,897		—		—		805		985		—		8,687
Substandard	—		—		—		—		582		—		—		582
Doubtful	—		—		—		—		—		—		—		—
Total	62,095		192,673		145,756		68,748		97,625		117,332		—		684,229
Construction – Real estate
Pass	142,157		72,240		46,180		16,859		6,246		2,517		—		286,199
Special Mention	—		—		—		—		—		614		—		614
Substandard	—		—		—		1,254		597		1,444		—		3,295
Doubtful	—		—		—		—		—		—		—		—
Total	142,157		72,240		46,180		18,113		6,843		4,575		—		290,108
Commercial and Industrial
Pass	70,540		71,689		27,884		8,827		18,036		37,392		—		234,368
Special Mention	—		156		—		2,406		47		273		—		2,882
Substandard	30		814		211		—		42		201		—		1,298
Doubtful	—		—		—		—		—		—		—		—
Total	70,570		72,659		28,095		11,233		18,125		37,866		—		238,548
Other consumer
Pass	75		278		147		116		—		334		—		950
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total	75		278		147		116		—		334		—		950
Credit card
Ungraded	—		—		—		—		—		—		123,331		123,331
Portfolio loans receivable, gross	$	415,291	$	475,245	$	296,868	$	178,818	$	159,917	$	260,800	$	123,331	$	1,910,270


December 31, 2023
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Gross Charge-offs
Residential	$	—	$	—	$	—	$	—	$	—	$	670	$	—	$	670
Commercial	—		—		—		—		943		—		—		943
Commercial and Industrial	—		98		—		—		—		—		—		98
Credit card	—		—		—		—		—		—		7,076		7,076
Total	$	—	$	98	$	—	$	—	$	943	$	670	$	7,076	$	8,787

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

The following table presents the balances of classified loans based on the credit quality indicator:



(in thousands)	Pass(1)		Special Mention		Substandard		Doubtful		Ungraded(2)		Total










December 31, 2022
Real estate:
Residential	$	469,304	$	9,966	$	5,465	$	—	$	—	$	484,735
Commercial	657,411		5,577		1,563		—		—		664,551
Construction	235,262		—		2,837		—		—		238,099
Commercial and Industrial	196,381		22,469		1,371		—		—		220,221
Credit card	—		—		—		—		128,434		128,434
Other consumer	1,179		—		—		—		—		1,179
Portfolio loans receivable, gross	$	1,559,537	$	38,012	$	11,236	$	—	$	128,434	$	1,737,219

________________________

(1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch in addition to credit cards and consumer credits that are not individually graded.

(2) Credit card loans are not individually graded.


	Number of Contracts	Recorded Investment
(dollars in thousands)		Performing		Nonperforming		Total












December 31, 2022
Real estate:
Residential	1	$	—	$	288	$	288


Total	1	$	—	$	288	$	288

At December 31, 2022 the Company had one defaulted TDR for $288 thousand. In the 12 months ending December 31, 2022, four TDRs, totaling $215 thousand paid off.

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)

Outstanding loan commitments were as follows:



	December 31,
(in thousands)	2023		2022
Unused lines of credit
Real Estate:
Residential	$	15,436	$	14,336
Residential - Home Equity	43,892		43,128
Commercial	20,424		36,609
Construction	98,777		93,913
Commercial and Industrial	42,751		45,747
Credit card(1)	114,882		111,227
Other consumer	310		102



Total	$	336,472	$	345,062



Letters of credit	$	4,641	$	5,105

_______________

(1) Outstanding loan commitments in the credit card portfolio include $98.2 million and $106.9 million in secured and partially secured balances as of December 31, 2023 and 2022, respectively.




(in thousands)	2023		2022
Balance at beginning of period	$	1,682	$	1,736
Impact of adopting the CECL standard on January 1, 2023	(775)		—
Release of credit losses on unfunded commitments	(101)		(54)


Balance at end of period	$	806	$	1,682

Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses (continued)



(in thousands)	2023		2022
Balance at beginning of period	$	1,173	$	1,164
(Release of) provision for mortgage loan put-back reserve	(188)		9


Balance at end of period	$	985	$	1,173

Paycheck Protection Program

Loans and Leases Receivable Disclosure [Line Items]

SBA-PPP Loans

SBA-PPP gross loans receivable totaled $0.7 million and $2.2 million at December 31, 2023 and 2022, respectively and were all rated as pass credits and were not past due, nonaccrual or otherwise impaired. Unearned net fees associated with the SBA-PPP loans amounted to $15.3 thousand and $31.0 thousand at December 31, 2023 and 2022, respectively.

SBA-PPP loans generated income of $29.5 thousand for the year ended December 31, 2023 and $3.5 million for the year ended December 31, 2022, of which, earned fees, primarily on loans forgiven by the SBA, represented $15.7 thousand and $3.2 million of the income, respectively.

Investment Securities - Unrealized Losses (Details) $ in Thousands	Dec. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($)
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	$ 6,057	$ 111,777
AFS, Less than 12 months, Unrealized Losses	(8)	(3,724)
AFS,12 Months or Longer, Fair Value	199,482	140,704
AFS, 12 months or longer, Unrealized Losses	(17,359)	(18,692)
AFS,Total, Fair Value	205,539	252,481
AFS, Total, Unrealized Losses	(17,367)	(22,416)
Maximum
Debt Securities, Available-for-sale [Line Items]
Subordinated debt amount	2,000
Minimum
Debt Securities, Available-for-sale [Line Items]
Subordinated debt amount	500
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	0	82,102
AFS, Less than 12 months, Unrealized Losses	0	(1,396)
AFS,12 Months or Longer, Fair Value	149,228	117,347
AFS, 12 months or longer, Unrealized Losses	(12,192)	(14,641)
AFS,Total, Fair Value	149,228	199,449
AFS, Total, Unrealized Losses	(12,192)	(16,037)
Municipal
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	0	1,452
AFS, Less than 12 months, Unrealized Losses	0	(207)
AFS,12 Months or Longer, Fair Value	8,473	6,560
AFS, 12 months or longer, Unrealized Losses	(2,331)	(2,596)
AFS,Total, Fair Value	8,473	8,012
AFS, Total, Unrealized Losses	(2,331)	(2,803)
Corporate
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	0	0
AFS, Less than 12 months, Unrealized Losses	0	0
AFS,12 Months or Longer, Fair Value	4,413	4,600
AFS, 12 months or longer, Unrealized Losses	(587)	(400)
AFS,Total, Fair Value	4,413	4,600
AFS, Total, Unrealized Losses	$ (587)	(400)
Number of securities in a loss position for greater than twelve months \| security	5
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	$ 0	6,156
AFS, Less than 12 months, Unrealized Losses	0	(237)
AFS,12 Months or Longer, Fair Value	5,154	1,555
AFS, 12 months or longer, Unrealized Losses	(37)	(22)
AFS,Total, Fair Value	5,154	7,711
AFS, Total, Unrealized Losses	$ (37)	(259)
Number of securities in a loss position for greater than twelve months \| security	3
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
AFS, Less than 12 Months, Fair Value	$ 6,057	22,067
AFS, Less than 12 months, Unrealized Losses	(8)	(1,884)
AFS,12 Months or Longer, Fair Value	32,214	10,642
AFS, 12 months or longer, Unrealized Losses	(2,212)	(1,033)
AFS,Total, Fair Value	38,271	32,709
AFS, Total, Unrealized Losses	$ (2,220)	$ (2,917)

Litigation	12 Months Ended
Litigation	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Litigation	Litigation In accordance with the current accounting standards for loss contingencies, the Company establishes reserves for litigation-related matters that arise in the ordinary course of its business activities when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss can be reasonably estimated. Litigation claims and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with assurance. In addition, the Company's defense of litigation claims may result in legal fees, which it expenses as incurred. None of the amounts the Company currently has recorded individually or in the aggregate are considered to be material to our financial condition as of December 31, 2023.

Stock-Based Compensation - Stock Option Summary (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 16.69	$ 13.63
Weighted Average Exercise Price (in dollars per share)	$ 19.21	$ 15.37	$ 14.77
Average Remaining Life (years)	2 years 5 months 23 days	2 years 1 month 9 days
Outstanding Shares (in shares)	550,718	811,160	1,060,023
Exercisable Shares (in shares)	295,450	538,066
Outstanding Shares, intrinsic value	$ 2,999,807	$ 7,020,560
Exercisable shares, intrinsic value	$ 2,346,106	$ 5,428,713
Exercise Price Range 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Exercise Price (in dollars per share)	$ 14.18	$ 13.02
Average Remaining Life (years)	1 year 6 months 7 days	1 year 8 months 23 days
Outstanding Shares (in shares)	267,527	648,651
Exercisable Shares (in shares)	221,460	492,909
Exercise Price Range 1 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 10.70
Exercise Price Range 1 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	14.63
Exercise Price Range 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Exercise Price (in dollars per share)	$ 15.27	$ 14.96
Average Remaining Life (years)	1 year 6 months 25 days	2 years 1 month 20 days
Outstanding Shares (in shares)	24,000	22,750
Exercisable Shares (in shares)	15,000	10,688
Exercise Price Range 2 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 14.64
Exercise Price Range 2 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	18.56
Exercise Price Range 3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Exercise Price (in dollars per share)	$ 20.15	$ 21.86
Average Remaining Life (years)	3 years 11 months 23 days	3 years 25 days
Outstanding Shares (in shares)	3,250	2,500
Exercisable Shares (in shares)	1,250	625
Exercise Price Range 3 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 18.57
Exercise Price Range 3 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	22.49
Exercise Price Range 4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Exercise Price (in dollars per share)	$ 24.82	$ 26.38
Average Remaining Life (years)	3 years 6 months 21 days	3 years 10 months 9 days
Outstanding Shares (in shares)	255,941	137,259
Exercisable Shares (in shares)	57,740	33,844
Exercise Price Range 4 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 22.50
Exercise Price Range 4 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Range (in dollars per share)	$ 26.41

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Impact of adoption of the CECL standard	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Impact of adoption of the CECL standard	Accumulated Other Comprehensive Income (Loss)
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Beginning balance (in shares) at Dec. 31, 2021			13,962,334
Beginning balance at Dec. 31, 2021	$ 197,903		$ 140	$ 54,306	$ 144,533		$ (1,076)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	41,804				41,804
Unrealized gain (loss) on investment securities available for sale, net of income taxes	$ (15,675)						(15,675)
Stock options exercised, net of shares withheld for purchase price (in shares)	160,590		160,590
Stock options exercised, net of shares withheld for purchase price	$ 1,235		$ 1	1,999	(765)
Shares issued as compensation (in shares)			15,905
Shares issued as compensation	171			223	(52)
Stock-based compensation	1,662			1,662
Cash dividends to stockholders	$ (3,085)				(3,085)
Ending balance (in shares) at Dec. 31, 2022	14,138,829		14,138,829
Ending balance at Dec. 31, 2022	$ 224,015	$ (29)	$ 141	58,190	182,435	$ (29)	(16,751)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	35,871				35,871
Unrealized gain (loss) on investment securities available for sale, net of income taxes	$ 3,654						3,654
Stock options exercised, net of shares withheld for purchase price (in shares)	228,405		228,405
Stock options exercised, net of shares withheld for purchase price	$ 1,791		$ 2	2,726	(937)
Shares issued as compensation (in shares)			30,644
Shares issued as compensation	547			622	(75)
Stock-based compensation	1,757			1,757
Cash dividends to stockholders	(3,920)				(3,920)
Shares repurchased and retired (in shares)			(475,346)
Shares repurchased and retired	$ (8,826)		$ (4)	(8,822)
Ending balance (in shares) at Dec. 31, 2023	13,922,532		13,922,532
Ending balance at Dec. 31, 2023	$ 254,860		$ 139	$ 54,473	$ 213,345		$ (13,097)

Investment Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
(in thousands)
December 31, 2023
U.S. Treasuries	$	161,420	$	—	$	(12,192)	$	—	$	149,228
Municipal	11,699		4		(2,331)		—		9,372
Corporate	5,000		—		(587)		—		4,413
Asset-backed securities	7,069		13		(37)		—		7,045
Mortgage-backed securities	40,491		—		(2,220)		—		38,271
Total	$	225,679	$	17	$	(17,367)	$	—	$	208,329

There was no ACL required on available-for-sale debt securities in an unrealized loss position at December 31, 2023.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(in thousands)








December 31, 2022
U.S. Treasuries	$	215,486	$	—	$	(16,037)	$	199,449
Municipal	10,815		—		(2,803)		8,012
Corporate	5,000		—		(400)		4,600
Asset-backed securities	7,970		—		(259)		7,711
Mortgage-backed securities	35,626		—		(2,917)		32,709
Total	$	274,897	$	—	$	(22,416)	$	252,481

There were no securities sold during the year ended December 31, 2023 or December 31, 2022.

Note 3 - Investment Securities (continued)

The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	For the Years Ended December 31,
	2023				2022
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	39,918	$	39,294	$	53,739	$	53,204
One to five years	101,688		93,218		88,165		82,538
Five to ten years	26,215		22,511		79,090		68,805
Beyond ten years	10,298		7,990		10,307		7,514
Asset-backed securities(1)	7,069		7,045		7,970		7,711
Mortgage-backed securities(1)	40,491		38,271		35,626		32,709
	$	225,679	$	208,329	$	274,897	$	252,481

(1) Asset-backed and Mortgage-backed securities are due in monthly installments.

There were no securities pledged at December 31, 2023 and 2022 to secure public deposits and repurchase agreements. Pledged securities at the Federal Reserve's Bank Term Funding Program (“BTFP”) totaled $170.7 million at par value at December 31, 2023 and $0 at December 31, 2022.

At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.


	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(in thousands)
December 31, 2023
U.S. Treasuries	$	—	$	—	$	149,228	$	(12,192)	$	149,228	$	(12,192)
Municipal	—		—		8,473		(2,331)		8,473		(2,331)
Corporate	—		—		4,413		(587)		4,413		(587)
Asset-backed securities	—		—		5,154		(37)		5,154		(37)
Mortgage-backed securities	6,057		(8)		32,214		(2,212)		38,271		(2,220)
Total	$	6,057	$	(8)	$	199,482	$	(17,359)	$	205,539	$	(17,367)

December 31, 2022
U.S. Treasuries	$	82,102	$	(1,396)	$	117,347	$	(14,641)	$	199,449	$	(16,037)
Municipal	1,452		(207)		6,560		(2,596)		8,012		(2,803)
Corporate	—		—		4,600		(400)		4,600		(400)
Asset-backed securities	6,156		(237)		1,555		(22)		7,711		(259)
Mortgage-backed securities	22,067		(1,884)		10,642		(1,033)		32,709		(2,917)
Total	$	111,777	$	(3,724)	$	140,704	$	(18,692)	$	252,481	$	(22,416)

Note 3 - Investment Securities (continued)

At December 31, 2023 management determined the Company does not have the intent to sell, nor is it more likely than not that it will be required to sell, available-for-sale debt securities in an unrealized loss position at December 31, 2023 before it is able to recover the amortized cost basis. Further, management reviewed the Company’s holdings as of December 31, 2023 and concluded there were no credit-related declines in fair value. Additional information related to the types of securities held at December 31, 2023, other than securities issued or guaranteed by U.S. Government entities or agencies, is as follows:

Corporate Securities – There have been no payment defaults on any of the Company’s holdings of corporate debt securities. There are 5 securities all of which are subordinated debt of other financial institutions with face amounts ranging from $0.5 million to $2 million.

Municipal Securities – All of the Company’s holdings of municipal bonds were investment grade and there have been no payment defaults. Summary ratings information at December 31, 2023, based on the amortized cost basis and reflecting the lowest enhanced or underlying rating by Moody’s, Standard & Poors or Fitch, is as follows: AAA – 82% of the portfolio; AA+ – 8%; AA – 10%.

Asset-backed Securities – There were 3 investment grade asset-backed securities, and there have been no payment defaults on these securities.

As such, it is deemed the above listed securities are not in an unrealized loss position due to credit-related issues and no further analysis is warranted as of December 31, 2023.

Segments

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segments

The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), and OpenSky™ (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment at and for the years ended December 31, 2023 and 2022.


For the Year Ended December 31, 2023
(in thousands)	Commercial Bank		CBHL		OpenSky™		Corporate(2)		Eliminations		Consolidated
Interest income	$	116,408	$	382	$	62,476	$	4,238	$	(298)	$	183,206
Interest expense	40,896		135		—		947		(298)		41,680
Net interest income	75,512		247		62,476		3,291		—		141,526
Provision for credit losses	1,540		—		7,948		122		—		9,610
Release of credit losses on unfunded commitments	(101)		—		—		—		—		(101)
Net interest income after provision	74,073		247		54,528		3,169		—		132,017
Noninterest income	2,737		4,909		17,325		4		—		24,975
Noninterest expense(1)	61,836		6,001		42,524		406		—		110,767
Net income (loss) before taxes	$	14,974	$	(845)	$	29,329	$	2,767	$	—	$	46,225

Total assets	$	2,051,945	$	8,589	$	117,477	$	277,565	$	(229,400)	$	2,226,176

For the Year Ended December 31, 2022
(in thousands)	Commercial Bank		CBHL		OpenSky™		Corporate(2)		Eliminations		Consolidated
Interest income	$	82,182	$	435	$	64,859	$	3,349	$	(179)	$	150,646
Interest expense	9,245		218		—		755		(179)		10,039
Net interest income	72,937		217		64,859		2,594		—		140,607
(Reversal of) provision for loan losses	(980)		—		7,611		—		—		6,631
Net interest income after provision	73,917		217		57,248		2,594		—		133,976
Noninterest income	2,122		5,276		21,972		2		—		29,372
Noninterest expense(1)	52,552		8,450		47,647		465		—		109,114
Net income (loss) before taxes	$	23,487	$	(2,957)	$	31,573	$	2,131	$	—	$	54,234

Total assets	$	1,939,601	$	7,936	$	122,418	$	245,399	$	(191,699)	$	2,123,655

_______________

(1)Noninterest expense includes $23.7 million and $27.0 million in data processing expenses in OpenSky’s™ segment for the years ended December 31, 2023 and 2022, respectively.

(2)The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

Beginning in 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. This change in allocation will be reflected in 2024 segment performance reporting.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 22
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Borrowed Funds - Schedule of Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Nov. 30, 2020
Debt Instrument [Line Items]
Total - FHLB advances	$ 22,000	$ 107,000
Interest	0.93%	3.75%
Total - Other borrowed funds	$ 27,062	$ 12,062
FHLB fixed rate advance due October 16, 2025
Debt Instrument [Line Items]
Total - FHLB advances	$ 22,000	$ 22,000
Interest	0.93%	0.93%
FHLB fixed rate advance due March 20, 2023
Debt Instrument [Line Items]
Total - FHLB advances	$ 0	$ 50,000
Interest	0.00%	4.42%
FHLB daily rate advance due September 13, 2023
Debt Instrument [Line Items]
Total - FHLB advances	$ 0	$ 35,000
Interest	0.00%	4.57%
Junior subordinated debentures due June 15, 2036 \| Junior Subordinated Debt
Debt Instrument [Line Items]
Interest	7.52%	6.64%
Long-term debt, gross	$ 2,062	$ 2,062
Other subordinated notes due November 30, 2030 \| Senior Subordinated Notes
Debt Instrument [Line Items]
Interest	5.00%	5.00%	5.00%
Long-term debt, gross	$ 10,000	$ 10,000
Bank Term Funding Program borrowings
Debt Instrument [Line Items]
Long-term debt, gross	15,000	$ 0
Bank Term Funding Program borrowings \| Senior Subordinated Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 15,000
Other Borrowed Funds
Debt Instrument [Line Items]
Interest	5.10%	5.28%
Total - Other borrowed funds	$ 27,062	$ 12,062

Portfolio Loans Receivable and Allowance for Credit Losses - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	$ 26,385	$ 25,181
Release of credit losses on unfunded commitments	9,610	6,631
Balance at end of period	28,610	26,385
Impact of adoption of the CECL standard
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	804
Balance at end of period		804
Unfunded Lines of Credit
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	1,682	1,736
Release of credit losses on unfunded commitments	(101)	(54)
Balance at end of period	806	1,682
Unfunded Lines of Credit \| Impact of adoption of the CECL standard
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	(775)	0
Balance at end of period		(775)
Mortgage Loans Sold
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	1,173	1,164
Release of credit losses on unfunded commitments	(188)	9
Balance at end of period	$ 985	$ 1,173

Nature of Business and Basis of Presentation - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Portfolio loans receivable, net	$ 1,874,033	$ 1,702,207
Allowance for loan losses	$ 28,610	26,385	$ 25,181
Number of reportable business segments \| segment	4
Origination cost amortization period	12 months
Derivative Asset Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag	balance sheet
Bank owned life insurance	$ 37,711	36,524
Other non interest income	1,187	$ 1,018
Investment in Church Street Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Portfolio loans receivable, net	7,900
Allowance for loan losses	$ 184
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Origination cost amortization period	12 months
Minimum \| Premises And Equipment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Useful lives	2 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Origination cost amortization period	24 months
Maximum \| Premises And Equipment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Useful lives	7 years

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net income	$ 35,871	$ 41,804

- Definition

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

+ References

+ Details

Retirement Plans	12 Months Ended
Retirement Plans	Dec. 31, 2023
Retirement Benefits [Abstract]
Retirement Plans	Retirement Plans The Company provides a defined contribution plan qualifying under Section 401(k) of the Internal Revenue Code to eligible employees. The Company contributes 3% of eligible compensation on behalf of all full‑time employees up to limits prescribed by the Internal Revenue Code. The Company’s contribution to the plan was $1.0 million in 2023 and $850 thousand in 2022. Note 11 - Retirement Plans (continued) The Bank adopted a Long-Term Incentive Plan (“LTIP”) for executive management members in 2021. The LTIP is in the form of a nonqualified deferred compensation plan and complies with Internal Revenue Code Section 409A as well as related guidance and regulations. The LTIP was introduced in order to align long-term interests of the Bank with the Bank’s key executive management members. Under the LTIP, the CEO is eligible to earn an annual contribution of 20% of salary for achieving targeted performance levels while other executive management members are eligible to earn an annual contribution of 15% of salary for achieving targeted performance levels. The Compensation Committee may award more for overachievement of the targets, and all targets are set for participants at the beginning of a fiscal year. All participants are subject to the following vesting schedule for any earnings (or losses) on the investment of the contribution: 100% vesting following completion of either (i) ten years of service by the applicable executive from the later of the effective date of the LTIP or the executive’s hire date or (ii) ten years of continuous, full-time employment with the Bank by the applicable executive (to include continuous employment prior to the effective date of the LTIP) and retirement, which is defined in the LTIP as the later of a participant’s separation from service or the executive attaining 67 years of age. In the event of a change in control, the LTIP will accelerate vesting. Any executive not fulfilling either vesting requirement will forfeit any employer contributions.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Nature of Business and Basis of Presentation - Impact of the Adoption of Accounting Standards Update (Details) - USD ($) $ in Thousands	Jan. 01, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to retained earnings		$ (254,860)	$ (224,015)	$ (197,903)
Portfolio loans receivable, gross		1,910,270	1,737,219
Deferred origination fees, net		(7,627)	(8,627)
Allowance for credit losses		(28,610)	(26,385)	(25,181)
Portfolio loans receivable, net		1,874,033	1,702,207
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to retained earnings		(213,345)	(182,435)	(144,533)
As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	$ 1,737,219
Deferred origination fees, net	(8,627)
Allowance for credit losses	(27,189)
Portfolio loans receivable, net	1,701,403
Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase (decrease) in credit loss reserve	804
Reduction to retained earnings			29
Portfolio loans receivable, gross	0
Deferred origination fees, net	0
Allowance for credit losses	(804)		(804)
Portfolio loans receivable, net	(804)
Impact of adoption of the CECL standard \| Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to retained earnings			29
Unfunded Lines of Credit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses		(806)	(1,682)	(1,736)
Liabilities: Reserve for unfunded commitments			1,682
Unfunded Lines of Credit \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase (decrease) in credit loss reserve	(775)
Liabilities: Reserve for unfunded commitments	907
Unfunded Lines of Credit \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			775	0
Liabilities: Reserve for unfunded commitments	(775)
Residential \| Real Estate
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		573,104	484,735
Allowance for credit losses		(5,518)	(5,481)	(5,612)
Residential \| Real Estate \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	484,735
Residential \| Real Estate \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	0
Allowance for credit losses			1,198
Commercial and Industrial
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		238,548	220,221
Commercial and Industrial \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	220,221
Commercial and Industrial \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	0
Commercial and Industrial \| Real Estate
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		684,229	664,551
Allowance for credit losses		(10,316)	(8,098)	(8,566)
Commercial and Industrial \| Real Estate \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	664,551
Commercial and Industrial \| Real Estate \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	0
Allowance for credit losses			(3,941)
Construction \| Real Estate
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		290,108	238,099
Allowance for credit losses		(2,271)	(3,782)	(4,699)
Construction \| Real Estate \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	238,099
Construction \| Real Estate \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	0
Allowance for credit losses			1,973
Consumer \| Other consumer
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		950	1,179
Allowance for credit losses		(12)	(11)	(12)
Consumer \| Other consumer \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	1,179
Consumer \| Other consumer \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	0
Allowance for credit losses			(6)
Consumer \| Credit card
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross		123,331	128,434
Allowance for credit losses		$ (6,087)	(6,078)	$ (3,655)
Consumer \| Credit card \| As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	128,434
Consumer \| Credit card \| Impact of adoption of the CECL standard
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Portfolio loans receivable, gross	$ 0
Allowance for credit losses			$ 1,045

Nature of Business and Basis of Presentation - Comprehensive Income (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated comprehensive loss	$ (13,097)	$ (16,751)
Accumulated Net Investment Gain (Loss) Attributable to Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized losses on securities available for sale	(17,350)	(22,416)
Deferred tax benefit	4,253	5,665
Total accumulated comprehensive loss	$ (13,097)	$ (16,751)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, after tax, of accumulated increase (decrease) in equity from transaction and other event and circumstance from nonowner source.

+ References + Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense

Income tax expense was as follows:



	For the Years Ended December 31,
(in thousands)	2023		2022
Current expense
Federal	$	8,192	$	9,906
State	2,020		1,284
Total current expense	10,212		11,190
Deferred tax expense (benefit)	142		1,240
Total income tax expense	$	10,354	$	12,430

Schedule of Deferred Tax Assets and Liabilities

The components of the net deferred tax asset at December 31, 2023 and 2022 were:



(in thousands)	2023		2022
Deferred tax assets:
Allowance for credit losses	$	7,230	$	7,073
Reserve for recourse on mortgage loans sold	242		297
Deferred loan fees - PPP	—		8


Stock-based compensation	309		257
Long-term incentive program	372		428


Unrealized loss on investment securities available for sale	4,253		5,665

Other	61		85
	12,467		13,813
Deferred tax liabilities:



Accumulated depreciation	214		34
Other	1		2

	215		36


Net deferred tax asset	$	12,252	$	13,777

Schedule of Effective Income Tax Rate Reconciliation

The differences between the federal income tax rate and the effective tax rate for the Company are reconciled as follows:



	2023		2022
Statutory federal income tax rate	21.00	%	21.00	%
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	3.13		2.58
Nondeductible expenses	0.73		0.56
Tax-exempt interest income and dividend income	(0.55)		(0.41)
Stock-based compensation expense	(0.68)		(0.48)
Bank-owned life insurance	(0.54)		(0.40)
Other, net	(0.69)		0.10
Effective Tax Rate	22.40	%	22.95	%

Nature of Business and Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Nature of operations

Nature of operations:

Basis of presentation

Basis of presentation:

Cash and cash equivalents

Investment securities

Loans held for sale

The Company elects to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet.

Note 1 - Nature of Business and Basis of Presentation (continued)

Small Business Administration Paycheck Protection Program

U.S. Small Business Administration Paycheck Protection Program

Portfolio loans and the ACL

Note 1 - Nature of Business and Basis of Presentation (continued)


	January 1, 2023
(in thousands)	Pre-adoption of the CECL standard		As Reported Under ASC 326		Impact of adoption of the CECL standard
Assets:
Real estate:
Residential	$	484,735	$	484,735	$	—
Commercial	664,551		664,551		—
Construction	238,099		238,099		—
Commercial and Industrial	220,221		220,221		—
Credit card, net of reserve	128,434		128,434		—
Other consumer	1,179		1,179		—
Portfolio loans receivable, gross	$	1,737,219	$	1,737,219	$	—
Deferred origination fees, net	(8,627)		(8,627)		—
Allowance for credit losses	(26,385)		(27,189)		(804)
Portfolio loans receivable, net	$	1,702,207	$	1,701,403	$	(804)
Liabilities: Reserve for unfunded commitments	$	1,682	$	907	$	(775)

Note 1 - Nature of Business and Basis of Presentation (continued)

Purchased Credit Deterioration

Cash Flow Method

For the credit card portfolio, the Company calculates the credit card ACL collectively, applying segmentation based on collateral positions: secured, partially secured, and unsecured.

Note 1 - Nature of Business and Basis of Presentation (continued)

Individual Evaluation

Credit Losses on Off-Balance Sheet Credit Exposures

Credit Losses on SBA-PPP loans and interest receivable

Note 1 - Nature of Business and Basis of Presentation (continued)

The Company does not measure an ACL on accrued interest receivable balances because these balances are written off as a reduction to interest income when loans are placed on nonaccrual status.

Loan modifications

Premises and equipment

Leases

Derivative financial instruments

Note 1 - Nature of Business and Basis of Presentation (continued)

Fair value measurements

Revenue Recognition

Interest Income and Fees

Note 1 - Nature of Business and Basis of Presentation (continued)

Income taxes

Earnings per share

Comprehensive income

Comprehensive loss

Recently issued accounting pronouncements

Recently issued accounting pronouncements:

Reclassifications

Reclassifications:

Nature of Business and Basis of Presentation - Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income available to common stockholders	$ 35,871	$ 41,805
Effect of dilutive securities	0	0
Dilutive EPS per common share	$ 35,871	$ 41,805
Weighted Average Shares, Basic (in shares)	14,002,556	14,024,598
Effect of dilutive securities (in shares)	77,991	337,605
Weighted Average Shares, Diluted (in shares)	14,080,547	14,362,203
Basic earnings per share (in dollars per share)	$ 2.56	$ 2.98
Diluted earnings per share (in dollars per share)	$ 2.55	$ 2.91
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	277,066	139,921

Related-Party Transactions (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Related Party Transactions

Activity in related-party loans during 2023 and 2022 is shown below:



(in thousands)	2023		2022
Balance at beginning of year	$	36,305	$	32,524
Add: New loans	—		18,326
Less: Amounts collected	(4,231)		(14,545)

Balance at end of year	$	32,074	$	36,305

Leases - Additional Information (Details) $ in Thousands	12 Months Ended
Leases - Additional Information (Details) $ in Thousands	Dec. 31, 2023 USD ($) branch	Dec. 31, 2022 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of full service branches \| branch	4
Number of locations \| branch	4
Weighted average discount rate	3.79%	1.94%
ROU assets	$ 3,587	$ 2,097
Present value of net future lease payments	3,791	2,359
Rent expense	$ 1,300	$ 1,300
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining term of contract	1 year
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining term of contract	9 years

Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current expense
Federal	$ 8,192	$ 9,906
State	2,020	1,284
Total current expense	10,212	11,190
Deferred tax expense (benefit)	142	1,240
Total income tax expense	$ 10,354	$ 12,430

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details