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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 001-40607

CULLMAN BANCORP, INC.

(Exact Name of Registrant as Specified in Charter)


Maryland		61-1990996
(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification No.)


316 Second Avenue, SW, Cullman, Alabama		35055
(Address of Principal Executive Offices)		(Zip Code)

(256) 734-1740

(Registrant’s telephone number, including area code)

Not Applicable

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

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



Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, per value $0.01 per share	CULL	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), Yes ☒ No ☐ .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

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


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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 7,256,661 shares of Common Stock, par value $0.01 per share, were issued and outstanding as of November 14, 2023.

Table of Contents

CULLMAN BANCORP, INC.

Form 10-Q Quarterly Report

Table of Contents


PART I

ITEM 1.	FINANCIAL STATEMENTS	2
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	48
ITEM 4.	CONTROLS AND PROCEDURES	49

PART II

ITEM 1.	LEGAL PROCEEDINGS	50
ITEM 1A.	RISK FACTORS	50
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES	50
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	50
ITEM 4.	MINE SAFETY DISCLOSURES	50
ITEM 5.	OTHER INFORMATION	50
ITEM 6.	EXHIBITS	51

SIGNATURES		52

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

CULLMAN BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

September 30, 2023 and December 31, 2022

(All amounts in thousands, except share and per share data)


	September 30, 2023 (Unaudited)			December 31, 2022
ASSETS
Interest bearing cash and cash equivalents	$	123		$	434
Non-interest bearing cash and cash equivalents		3,578			5,986
Federal funds sold		19,100			30,225
Total cash and cash equivalents		22,801			36,645
Securities available for sale		27,325			29,796
Equity securities		—			479
Loans, net of allowance of $3,004 and $2,841 respectively		338,111			329,943
Premises and equipment, net		11,998			10,851
Foreclosed real estate		—			50
Accrued interest receivable		1,133			1,162
Restricted equity securities		2,770			2,033
Bank owned life insurance		9,168			8,964
Deferred tax asset, net		2,677			2,194
Other assets		1,332			1,112
Total assets	$	417,315		$	423,229

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits
Non-interest bearing	$	13,123		$	16,281
Interest bearing		261,078			276,668
Total deposits		274,201			292,949

Federal Home Loan Bank advances		35,000			25,000
Accrued interest payable		235			155
Other liabilities		6,669			4,943
Total liabilities		316,105			323,047

Shareholders' equity
Common stock, $0.01 par value; 50,000,000 shares authorized; 7,286,651 shares and 7,394,615 shares outstanding at September 30, 2023 and December 31, 2022 respectively		73			74
Additional paid-in capital		49,492			50,161
Retained earnings		58,514			56,561
Accumulated other comprehensive loss		(3,924	)		(3,558	)
Unearned ESOP shares, at cost		(2,945	)		(3,056	)
Total shareholders' equity		101,210			100,182
Total liabilities and shareholders' equity	$	417,315		$	423,229

Table of Contents

CULLMAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF NET INCOME (Unaudited)

Three and nine months ended September 30, 2023 and 2022

(All amounts in thousands, except share and per share data)


	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2023			2022		2023			2022
Interest and dividend income:
Loans, including fees	$	4,460		$	3,892	$	12,814		$	11,110
Non taxable securities		6			8		22			24
Securities		226			246		699			564
FHLB dividends		30			2		68			17
Federal funds sold and other		329			95		864			187
Total interest income		5,051			4,243		14,467			11,902
Interest expense:
Deposits		799			254		1,931			688
Federal Home Loan Bank advances and other borrowings		381			27		1,041			48
Total interest expense		1,180			281		2,972			736
Net interest income		3,871			3,962		11,495			11,166
Provision for credit losses on loans		(108	)		120		(85	)		275
Provision for unfunded commitments		108			—		132			—
Net interest income after provision for loan losses		3,871			3,842		11,448			10,891
Noninterest income:
Service charges on deposit accounts		285			272		825			753
Income on bank owned life insurance		71			67		204			160
Gain on sales of mortgage loans		—			24		15			86
Net gain on sale of foreclosed real estate		—			—		—			46
Gain on prepayment of Federal Home Loan Bank advances		—			—		127			91
Other		34			39		113			120
Total noninterest income		390			402		1,284			1,256
Noninterest expense:
Salaries and employee benefits		1,955			2,007		5,926			5,377
Occupancy and equipment		242			242		742			668
Data processing		261			221		730			632
Professional and supervisory fees		196			206		616			558
Office expense		46			52		123			150
Advertising		35			79		84			143
FDIC deposit insurance		40			21		122			55
Loss on prepayment of Federal Home Loan Bank advances		—			—		—			4
Other		109			132		336			339
Total noninterest expense		2,884			2,960		8,679			7,926
Income before income taxes		1,377			1,284		4,053			4,221
Income tax expense		297			358		930			973
Net income	$	1,080		$	926	$	3,123		$	3,248
Earnings per share:
Basic	$	0.15		$	0.13	$	0.44		$	0.46
Dilutive	$	0.15		$	0.13	$	0.44		$	0.45

Table of Contents

CULLMAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Loss) (Unaudited)

Three and nine months ended September 30, 2023 and 2022

(All amounts in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net Income	$	1,080		$	926		$	3,123		$	3,248

Other comprehensive income, net of tax
Unrealized loss on securities available for sale		(1,120	)		(1,617	)		(737	)		(5,190	)
Less income tax effect		281			340			371			1,090
Other comprehensive loss		(839	)		(1,277	)		(366	)		(4,100	)

Comprehensive income (loss)	$	241		$	(351	)	$	2,757		$	(852	)

Table of Contents

CULLMAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

Three and nine months ended September 30, 2023 and 2022

(All amounts in thousands, except share and per share data)


	Shares			Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Unearned ESOP Shares			Total
Balance at July 1, 2023		7,382,539		$	74		$	50,302		$	57,434		$	(3,085	)	$	(2,982	)	$	101,743
Net income		—			—			—			1,080			—			—			1,080
Other comprehensive loss		—			—			—			—			(839	)		—			(839	)
Share repurchases		(95,888	)		(1	)		(1,042	)		—			—			—			(1,043	)
ESOP shares earned		—			—			—			—			—			37			37
Stock-based compensation expense		—			—			232			—			—			—			232
Balance at September 30, 2023		7,286,651		$	73		$	49,492		$	58,514		$	(3,924	)	$	(2,945	)	$	101,210


Balance at January 1, 2023		7,394,615		$	74		$	50,161		$	56,561		$	(3,558	)	$	(3,056	)	$	100,182
Net income		—			—			—			3,123			—			—			3,123
CECL implementations		—			—			—			(284	)		—			—			(284	)
Other comprehensive loss		—			—			—			—			(366	)		—			(366	)
Share repurchases		(107,964	)		(1	)		(1,179	)		—			—			—			(1,180	)
ESOP shares earned		—			—			—			—			—			111			111
Dividend paid		—			—			—			(886	)		—			—			(886	)
Stock-based compensation expense		—			—			510			—			—			—			510
Balance at September 30, 2023		7,286,651		$	73		$	49,492		$	58,514		$	(3,924	)	$	(2,945	)	$	101,210


	Shares			Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Unearned ESOP Shares			Total
Balance at July 1, 2022		7,405,893		$	74		$	49,952		$	54,700		$	(2,546	)	$	(3,484	)	$	98,696
Net income		—			—			—			926			—			—			926
Other comprehensive loss		—			—			—			—			(1,277	)		—			(1,277	)
ESOP shares earned		—			—			—			—			—			37			37
Stock-based compensation expense		—			—			139			—			—			—			139
Balance at September 30, 2022		7,405,893		$	74		$	50,091		$	55,626		$	(3,823	)	$	(3,447	)	$	98,521


Balance at January 1, 2022		7,405,893		$	74		$	49,674		$	53,267		$	277		$	(3,558	)	$	99,734
Net income		—			—			—			3,248			—			—			3,248
Other comprehensive loss		—			—			—			—			(4,100	)		—			(4,100	)
ESOP shares earned		—			—			—			—			—			111			111
Dividend paid		—			—			—			(889	)		—			—			(889	)
Stock-based compensation expense		—			—			417			—			—			—			417
Balance at September 30, 2022		7,405,893		$	74		$	50,091		$	55,626		$	(3,823	)	$	(3,447	)	$	98,521

Table of Contents

CULLMAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30, 2023 and 2022

(All amounts in thousands, except share and per share data)


	2023			2022
Cash flows from operating activities
Net income	$	3,123		$	3,248
Adjustment to reconcile net income to net cash provided from operating activities:
Provision for loan losses		47			275
Depreciation, amortization and accretion, net		350			301
Deferred income taxes		(18	)		111
Net gains from sales and impairment of foreclosed real estate		—			(46	)
Net gain on extinguishment of debt		(127	)		(87	)
Gain from change in fair value of equity securities		(18	)		(3	)
Losses on disposals of fixed assets		12			—
Gains on sales of repossessions		(4	)		—
Income on bank owned life insurance		(204	)		(160	)
Gains on sale of mortgage loans		(15	)		(86	)
Mortgage loans originated for sale		(454	)		(3,261	)
Proceeds from sale of mortgage loans		469			3,347
ESOP Compensation expense		111			111
Stock based compensation expense		510			417
Net change in operating assets and liabilities
(Increase)/decrease in Accrued interest receivable		29			(279	)
Increase/(decrease) in Accrued interest payable		80			(25	)
(Increase)/decrease in other assets		(230	)		13
Decrease in other liabilities		1,726			1,380
Net cash provided by operating activities		5,387			5,256
Cash flows from investing activities
Net purchases of premises and equipment		(1,542	)		(993	)
Purchases of securities- available for sale		—			(13,077	)
Redemptions (purchases) of securities- equity		497			(1,000	)
Purchases of restricted equity securities		(737	)		—
Proceeds from maturities, prepayments and calls of securities		1,768			2,429
Proceeds from sales of foreclosed real estate		64			453
Redemption of restricted equity securities		—			120
Purchase of bank owned life insurance		—			(3,000	)
Loan originations and payments, net		(8,594	)		(73,805	)
Net cash used in investing activities		(8,544	)		(88,873	)
Cash flows from financing activities
Net (decrease)/increase in deposits		(18,748	)		54,730
Proceeds from Federal Home Loan Bank advances		25,000			15,000
Repayment of Federal Home Loan Bank advances		(14,873	)		(18,413	)
Cash payment of dividends		(886	)		(889	)
Payments from share repurchases		(1,180	)		—
Net cash (used for)/provided by financing activities		(10,687	)		50,428
Net change in cash and cash equivalents		(13,844	)		(33,189	)
Cash and cash equivalents at the beginning of period		36,645			61,938
Cash and cash equivalents at end of the period	$	22,801		$	28,749
Supplemental cash flow information
Interest expense	$	2,892		$	761
Income taxes paid		804			513
Supplemental noncash disclosures
Day 1 impact of adoption of Current Expected Credit Losses methodology		(379	)		—

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Principles of Consolidation: The consolidated financial statements of Cullman Bancorp, Inc. (“the Bancorp”) include the accounts of its wholly owned subsidiary, Cullman Savings Bank (“the Bank”), together referred to as “the Company”.

The Company provides financial services through its offices in Cullman County, Alabama. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers' ability to repay their loans is dependent on the real estate and general economic conditions in the area.

Risk and Uncertainties: Ongoing economic challenges, including issues such as rising inflation and global supply chain disruption have impacted global financial markets. Additionally, the Company faces increased public and regulatory scrutiny resulting from the financial market crisis resulting from recent bank failures. Because of the significant uncertainties related to the economy and its potential effects on customers and prospects, there can be no assurances as to how the crisis may ultimately affect the Company. It is unknown how long the adverse conditions associated with the ongoing issues will last and what the complete financial effect will be to the Company. It is reasonably possible that estimates made in the financial statements could be materially and adversely impacted in the near term as a result of these conditions, including expected credit losses on loans and off-balance sheet credit exposures.

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), the Bank is permitted an extended transition period for complying with new or revised accounting standards affecting public companies. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1.235 billion or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering (December 31, 2026), (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iv) the end of the fiscal year in which the market value of our equity securities that are held by non-affiliates exceeds $700 million as of June 30 of that year. We have elected to take advantage of this extended transition period, which means that the financial statements included herein, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act. If we do so, we will prominently disclose this decision in the first periodic report following our decision, and such decision is irrevocable. As a filer under the JOBS Act, we will implement new accounting standards subject to the effective dates required for non-public entities.

ADOPTION OF NEW ACCOUNTING STANDARDS:

FASB ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments”

On January 1, 2023, the Company adopted Accounting Standards Update (ASU) 2016-13 Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected credit losses under CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity 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). In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities. Management does not intend to sell or believes that it is more likely than not they will be required to sell.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company adopted Accounting Standards Codification (ASC) 326 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable generally accepted accounting principles (GAAP). The Company recorded a net decrease to retained earnings of $284, an increase to deferred tax asset of $95, and an increase to the allowance for credit losses of $379 as of January 1, 2023 for the cumulative effect of adopting ASC 326.

The following table illustrates the impact of ASC 326.


	January 1, 2023
Assets:	As Reported Under ASC 326		Pre-ASC 326 Adoption		Impact of ASC 326 Adoption
Allowance for credit losses on loans:
One-to-Four Family	$	1,827	$	1,710	$	117
Multi-Family		18		17		1
Commercial Real Estate		784		654		130
Construction		124		145		(21	)
Commercial		129		204		(75	)
Consumer		205		111		94
Allowance for credit losses on loans		3,087		2,841		246
Liabilities:
Allowance for credit losses on OBS(1) credit exposures		133		—		133
Totals:	$	3,220	$	2,841	$	379

(1) Off Balance Sheet

Allowance for Credit Losses- Available-For-Sale Securities: For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and the adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Allowance for Credit Losses- Loans: The allowance for credit losses (ACL) is a valuation account that is deducted from (or added to) the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged off.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors.

The allowance for credit losses is measured on a collective pool basis when similar risk characteristics exist. The Company has identified the following portfolio segments:

• One-to-four family

• Multi-family

• Commercial real estate

• Construction

• Commercial

• Home equity loans and line of credit

• Consumer loans

The Company uses call code and loan level information in a probability of default/loss given default model. The model incorporates life-of-loan requirements and considers assumptions that effect the contractual life. There is one set of financial models for all interest rate risk, liquidity risk and credit risk modeling, in addition to loan origination and pricing process.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through the unfunded commitments provision. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

FASB ASU 2022-02 (Topic 326), “Financial Instruments- Credit Losses: Troubled Debt Restructurings and Vintage Disclosures”

On January 1, 2023, the Company prospectively adopted ASU 2022-02 “Financial Instruments- Credit Losses: Troubled Debt Restructurings and Vintage Disclosures” related to troubled debt restructurings and vintage disclosures for financing receivables. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan modifications and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivable by year or origination in the vintage disclosures. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 2 – SECURITIES AVAILABLE FOR SALE

Debt Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income at September 30, 2023 and December 31, 2022 were as follows:


September 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S Government sponsored entities	$	5,989	$	—	$	(900	)	$	5,089
Municipal – taxable		14,315		—		(3,286	)		11,029
Municipal – tax exempt		945		—		(83	)		862
Residential mortgage-backed		9,854		—		(906	)		8,948
Commercial mortgage-backed		990		—		(24	)		966
SBA(1) guaranteed debenture		472		—		(41	)		431
Total	$	32,565	$	—	$	(5,240	)	$	27,325


December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S Government sponsored entities	$	5,987	$	—	$	(734	)	$	5,253
Municipal – taxable		14,421		14		(2,924	)		11,511
Municipal – tax exempt		1,365		—		(50	)		1,315
Residential mortgage-backed		10,871		—		(729	)		10,142
Commercial mortgage-backed		983		—		(23	)		960
SBA guaranteed debenture		672		—		(57	)		615
Total	$	34,299	$	14	$	(4,517	)	$	29,796

(1) Small Business Administration

The Company’s mortgage-backed securities are primarily issued by agencies such as Fannie Mae and Ginnie Mae.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued)

The proceeds from calls of securities are listed below:


	For the Nine Months Ended September 30,
	2023		2022
Proceeds	$	75	$	90
Gross gains		—		—
Gross losses		—		—

There were no sales or tax expense related to sales of securities in the nine months ended September 30, 2023 and 2022.

The amortized cost and fair value of the investment securities portfolio are shown below by expected 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.


	September 30, 2023
	Amortized Cost		Estimated Fair Value
Due within one year	$	250	$	248
Due after one to five years		3,916		3,802
Due after five to ten years		4,074		3,412
Due after ten years		13,009		9,518
Residential mortgage-backed		9,854		8,948
Commercial mortgage-backed		990		966
SBA guaranteed debenture		472		431
Total	$	32,565	$	27,325

Carrying amounts of securities pledged to secure public deposits as of September 30, 2023 and December 31, 2022 were $19,155 and $26,666, respectively. At September 30, 2023 and December 31, 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.

(Continued)

Table of Contents

CULLMAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data)

NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued)

Securities with unrealized losses at September 30, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:


	Less than 12 months					12 months or more					Total
September 30, 2023	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S Government sponsored entities	$	—	$	—		$	5,089	$	(900	)	$	5,089	$	(900	)
Municipal – taxable		681		(15	)		10,348		(3,271	)		11,029		(3,286	)
Municipal – tax exempt		248		(2	)		614		(81	)		862		(83	)
Residential mortgage-backed		—		—			8,948		(906	)		8,948		(906	)
Commercial mortgage-backed		—		—			966		(24	)		966		(24	)
SBA guaranteed debenture		—		—			431		(41	)		431		(41	)
Total temporarily impaired	$	929	$	(17	)	$	26,396	$	(5,223	)	$	27,325	$	(5,240	)


	Less than 12 months					12 months or more					Total
December 31, 2022	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S Government sponsored entities	$	2,978	$	(9	)	$	2,275	$	(725	)	$	5,253	$	(734	)
Municipal – taxable		4,404		(815	)		6,318		(2,109	)		10,722		(2,924	)
Municipal – tax exempt		1,065		(50	)		—		—			1,065		(50	)
Residential mortgage-backed		9,789		(661	)		353

Cullman Bancorp, Inc. /MD/ 10-Q