Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 11, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-55983 | ||
Entity Registrant Name | Meridian Corp | ||
Entity Incorporation, State or Country Code | PA | ||
Entity Tax Identification Number | 83-1561918 | ||
Entity Address, Address Line One | 9 Old Lincoln Highway | ||
Entity Address, City or Town | Malvern | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19355 | ||
City Area Code | 484 | ||
Local Phone Number | 568-5000 | ||
Title of 12(b) Security | Common Stock, par value $1 per share | ||
Trading Symbol | MRBK | ||
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 | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 143,633,306 | ||
Entity Common Stock, Shares Outstanding | 6,129,216 | ||
Auditor Name | Crowe LLP | ||
Auditor Firm ID | 173 | ||
Auditor Location | Washington, D.C. | ||
Entity Central Index Key | 0001750735 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Cash and due from banks | $ 23,480 | $ 34,190 |
Federal funds sold | 2,554 | |
Cash and cash equivalents | 23,480 | 36,744 |
Securities available-for-sale (amortized cost of $158,387 and $120,215 as of December 31, 2021 and December 31, 2020) | 159,302 | 123,562 |
Securities held-to-maturity (fair value of $6,591 and $6,857 as of December 31, 2021 and December 31, 2020) | 6,372 | 6,510 |
Equity investments | 2,354 | 1,031 |
Mortgage loans held for sale (amortized cost of $80,002 and $225,007 as of December 31, 2021 and December 31, 2020), at fair value | 80,882 | 229,199 |
Loans, net of fees and costs (includes $17,558 and $12,182 of loans at fair value, amortized cost of $17,106 and $11,514 as of December 31, 2021 and December 31, 2020) | 1,386,457 | 1,284,764 |
Allowance for loan and lease losses | (18,758) | (17,767) |
Loans, net of the allowance for loan and lease losses | 1,367,699 | 1,266,997 |
Restricted investment in bank stock | 5,117 | 7,861 |
Bank premises and equipment, net | 11,806 | 7,777 |
Bank owned life insurance | 22,503 | 12,138 |
Accrued interest receivable | 5,009 | 5,482 |
Deferred income taxes | 1,413 | 62 |
Servicing assets | 12,765 | 5,617 |
Goodwill | 899 | 899 |
Intangible assets | 3,379 | 3,601 |
Other assets | 10,463 | 12,717 |
Total assets | 1,713,443 | 1,720,197 |
Deposits: | ||
Non-interest bearing | 274,528 | 203,843 |
Interest bearing | 1,171,885 | 1,037,492 |
Total deposits | 1,446,413 | 1,241,335 |
Short-term borrowings | 41,344 | 106,862 |
Long-term debt | 165,546 | |
Subordinated debentures | 40,508 | 40,671 |
Accrued interest payable | 31 | 1,154 |
Other liabilities | 19,787 | 23,007 |
Total liabilities | 1,548,083 | 1,578,575 |
Stockholders' equity: | ||
Common stock, $1 par value. Authorized 25,000,000 and 10,000,000 shares as of December 31, 2021 and December 31, 2020; issued 6,534,587 and 6,455,566 as of December 31, 2021 and December 31, 2020 | 6,535 | 6,456 |
Surplus | 83,663 | 81,196 |
Treasury stock - 426,693 and 320,000 shares at December 31, 2021 and December 31, 2020 | (8,860) | (5,828) |
Unearned common stock held by employee stock ownership plan | (1,602) | (1,768) |
Retained earnings | 84,916 | 59,010 |
Accumulated other comprehensive income | 708 | 2,556 |
Total stockholders' equity | 165,360 | 141,622 |
Total liabilities and stockholders' equity | $ 1,713,443 | $ 1,720,197 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Available-for-sale, Amortized Cost | $ 158,387 | $ 120,215 |
Securities held-to-maturity | 6,591 | 6,857 |
Mortgage loans held for sale, amortized cost | 80,002 | 225,007 |
Loans at fair value | 17,558 | 12,182 |
Loans at amortized cost | $ 17,106 | $ 11,514 |
Common stock, par value | $ 1 | $ 1 |
Common stock, Authorized shares | 25,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 6,534,587 | 6,455,566 |
Treasury stock shares held | 426,693 | 320,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Interest income: | ||
Loans, including fees | $ 68,822 | $ 60,357 |
Securities: | ||
Taxable | 1,460 | 1,186 |
Tax-exempt | 1,192 | 1,044 |
Cash and cash equivalents | 48 | 69 |
Total interest income | 71,522 | 62,656 |
Interest expense: | ||
Deposits | 5,494 | 9,970 |
Borrowings | 2,917 | 3,690 |
Total interest expense | 8,411 | 13,660 |
Net interest income | 63,111 | 48,996 |
Provision for loan losses | 1,070 | 8,302 |
Net interest income after provision for loan losses | 62,041 | 40,694 |
Non-interest income: | ||
Mortgage banking income | 75,932 | 76,461 |
SBA loan income | 6,898 | 2,572 |
Earnings on investment in life insurance | 365 | 279 |
Net change in the fair value of derivative instruments | (4,338) | 4,975 |
Net change in the fair value of loans held-for-sale | (3,311) | 3,847 |
Net change in the fair value of loans held-for-investment | (189) | 323 |
Net gain (loss) on hedging activity | 2,961 | (9,400) |
Net gain on sale of investment securities available-for-sale | 435 | 1,345 |
Other | 4,305 | 2,555 |
Non-interest income | 87,988 | 86,918 |
Non-interest expenses: | ||
Salaries and employee benefits | 78,866 | 72,147 |
Occupancy and equipment | 4,545 | 4,292 |
Professional fees | 3,558 | 3,113 |
Advertising and promotion | 3,714 | 2,852 |
Data processing | 2,150 | 1,913 |
Information technology | 2,232 | 1,542 |
Pennsylvania bank shares tax | 609 | 1,049 |
Other | 8,053 | 6,168 |
Non-interest expenses | 103,727 | 93,076 |
Income before income taxes | 46,302 | 34,536 |
Income tax expense | 10,717 | 8,098 |
Net income | $ 35,585 | $ 26,438 |
Basic earnings per common share | $ 5.91 | $ 4.32 |
Diluted earnings per common share | $ 5.73 | $ 4.27 |
Wealth Management Income | ||
Non-interest income: | ||
Revenue from contracts with customers | $ 4,801 | $ 3,854 |
Service Charges | ||
Non-interest income: | ||
Revenue from contracts with customers | 129 | 107 |
Service charges | $ 128 | $ 107 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income: | $ 35,585 | $ 26,438 |
Net change in unrealized gains on investment securities available for sale: | ||
Net unrealized (losses) gains arising during the period, net of tax expense of ($485), and $1,121, respectively | (1,514) | 3,584 |
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of ($101), and ($320), respectively | (334) | (1,025) |
Unrealized investment (losses) gains, net of tax expense of $(584), and $801, respectively | (1,848) | 2,559 |
Total other comprehensive (loss) income | (1,848) | 2,559 |
Total comprehensive income | $ 33,737 | $ 28,997 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Tax expense (benefit) on unrealized (losses) gains arising during the period | $ (485) | $ 1,121 |
Tax expense (benefit) on reclassification adjustment for net gains on sales realized in net income | (101) | (320) |
Tax expense (benefit) on unrealized investment (losses) gains | $ (584) | $ 801 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common stock | Surplus | Treasury Stock | Unearned Common Stock ESOP | Retained Earnings | Accumulated Other Comprehensive Income | Total |
Balance beginning of the period at Dec. 31, 2019 | $ 6,408 | $ 80,196 | $ (3) | $ 34,097 | $ (3) | $ 120,695 | |
Comprehensive income: | |||||||
Net income | 26,438 | 26,438 | |||||
Net change in unrealized gains on securities available-for-sale, net of tax | 2,559 | 2,559 | |||||
Total comprehensive income | 28,997 | ||||||
Dividends paid or accrued | (1,525) | (1,525) | |||||
Shares purchased for ESOP plan | $ (2,000) | (2,000) | |||||
Net purchase of treasury stock through publicly announced plans | 122 | (5,825) | (5,703) | ||||
Common stock issued through share-based awards and exercises | 48 | 347 | 395 | ||||
ESOP shares committed to be released (13,328) | 232 | 232 | |||||
Stock based compensation | 531 | 531 | |||||
Balance ending of the period at Dec. 31, 2020 | 6,456 | 81,196 | (5,828) | (1,768) | 59,010 | 2,556 | 141,622 |
Comprehensive income: | |||||||
Net income | 35,585 | 35,585 | |||||
Net change in unrealized gains on securities available-for-sale, net of tax | (1,848) | (1,848) | |||||
Total comprehensive income | 33,737 | ||||||
Dividends paid or accrued | (9,679) | (9,679) | |||||
Net purchase of treasury stock through publicly announced plans | (3,032) | (3,032) | |||||
Common stock issued through share-based awards and exercises | 79 | 1,026 | 1,105 | ||||
ESOP shares committed to be released (13,328) | 228 | 166 | 394 | ||||
Stock based compensation | 1,213 | 1,213 | |||||
Balance ending of the period at Dec. 31, 2021 | $ 6,535 | $ 83,663 | $ (8,860) | $ (1,602) | $ 84,916 | $ 708 | $ 165,360 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
Dividends declared | $ 1.575 | $ 0.250 |
Shares purchased for ESOP plan | 133,601 | |
Treasury stock purchased | 106,693 | 316,625 |
Shares issued through share-based awards and exercises | 79,021 | 47,881 |
Shares committed to be released | 13,328 | 13,328 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net income | $ 35,585 | $ 26,438 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Gain on sale of investment securities | (435) | (1,345) |
Net amortization of investment premiums and discounts and change in fair value of equity securities | 1,369 | 425 |
Depreciation and amortization, net | (5,922) | (2,890) |
Provision for loan losses | 1,070 | 8,302 |
Amortization of issuance costs on subordinated debt | 118 | 112 |
Share-based compensation | 1,607 | 763 |
Net change in fair value of derivative instruments | 4,338 | (4,975) |
Net change in fair value of loans held for sale | 3,311 | (3,847) |
Net change in fair value of loans held for investment | 189 | (323) |
Gain on sale of OREO | (6) | |
Amortization and net impairment of servicing rights | 1,109 | 816 |
SBA loan income | (6,898) | (2,733) |
Proceeds from sale of loans | 2,483,373 | 2,235,986 |
Loans originated for sale | (2,270,693) | (2,356,821) |
Mortgage banking income | (75,932) | (77,116) |
Decrease (increase) in accrued interest receivable | 473 | (2,334) |
Increase (decrease) in other assets | (3,693) | 8,995 |
Earnings from investment in life insurance | (365) | (279) |
(Increase) decrease income in deferred income tax | (768) | 1,254 |
(Decrease) in accrued interest payable | (1,122) | 66 |
(Decreased) increase in other liabilities | (1,591) | 11,047 |
Net cash provided by (used in) operating activities | 165,123 | (158,465) |
Activity in available-for-sale securities: | ||
Maturities, repayments and calls | 10,447 | 8,247 |
Sales | 23,585 | 45,927 |
Purchases | (74,341) | (114,494) |
Activity in held-to-maturity securities: | ||
Maturities, repayments and calls | 2,140 | |
Proceeds from sale of OREO | 126 | |
Decrease in restricted stock | 2,743 | 211 |
Net increase in loans | (87,575) | (312,112) |
Purchases of premises and equipment | (5,374) | (747) |
Purchase of bank owned life insurance | (10,000) | |
Net cash used in investing activities | (140,515) | (370,702) |
Cash flows from financing activities: | ||
Net increase in deposits | 205,079 | 390,167 |
Decrease in short-term borrowings | (44,939) | (922) |
Decrease in short-term borrowings with original maturity > 90 days | (20,579) | (15,479) |
Repayment of long-term debt (subordinated debt) | (281) | (172) |
(Repayment) proceeds from long-term debt, net | (165,546) | 162,423 |
Repayment of acquisition note payable | (413) | |
Issuance costs on subordinated debt | (231) | |
Net purchase of treasury stock | (3,032) | (5,703) |
Dividends paid | (9,679) | (1,525) |
Purchase of common shares for ESOP | (2,000) | |
Share based awards and exercises | 1,105 | 395 |
Net cash (used in) provided by financing activities | (37,872) | 526,540 |
Net change in cash and cash equivalents | (13,264) | (2,627) |
Cash and cash equivalents at beginning of period | 36,744 | 39,371 |
Cash and cash equivalents at end of period | 23,480 | 36,744 |
Supplemental disclosure of cash flow information: | ||
Interest | 9,534 | 13,594 |
Income taxes | 14,069 | 5,295 |
Supplemental disclosure of cash flow information: | ||
Transfers from loans held for sale to loans held for investment | $ 8,410 | 3,313 |
Net loans purchased, not settled | $ 325 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies (a) Nature of Operations Meridian Corporation (“Meridian” or the “Corporation”) is a bank holding company engaged in banking activities through its wholly-owned subsidiary, Meridian Bank (the “Bank”), a full-service, state-chartered commercial bank with offices in the Delaware Valley tri-state market, which includes Pennsylvania, New Jersey and Delaware, as well as the Central Maryland market area. We have a financial services business model with significant noninterest income streams from mortgage lending, small business (“SBA”) lending and wealth management services. We provide services to small and middle market businesses, professionals and retail customers throughout our market area. We have a modern, progressive, consultative approach to creating innovative solutions for our customers. We are technology driven, with a culture that incorporates significant use of customer preferred deliver channel and bank-to-bank ACH. The Corporation operates in a highly competitive market areas that includes local, national and regional banks as competitors along with savings banks, credit unions, insurance companies, trust companies and registered investment advisors. The Corporation and its subsidiaries are regulated by many regulatory agencies including the Securities and Exchange Commission (“SEC”), Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve and the Pennsylvania Department of Banking and Securities. The Bank was incorporated on March 16, 2004 under the laws of the Commonwealth of Pennsylvania and is a Pennsylvania state-chartered bank. The Bank commenced operations on July 8, 2004 and is a full-service bank providing personal and business lending and deposit services through 6 full-service banking offices in Pennsylvania, 9 mortgage loan production offices throughout the Delaware Valley, and 8 mortgage loan production offices in Maryland. The Bank and Corporation are headquartered in Malvern, Pennsylvania, located in the western suburbs of Philadelphia. (b) Basis of Presentation The accounting policies of the Corporation conform to U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include accounts of the Corporation and its wholly owned subsidiary, the Bank, and the wholly owned subsidiaries of the Bank: Meridian Land Settlement Services LLC; APEX Realty LLC; Meridian Wealth Partners LLC; and Meridian Equipment Finance LLC. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Reclassifications had no effect on prior year net income or total stockholders’ equity. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Although our current estimates contemplate current conditions and how we expect them to change in the future, due to the continuing impact that the COVID-19 pandemic has had on financial markets and the economy both locally and nationally, it is reasonably possible that this could continue to materially affect these significant estimates and our results of operations and financial condition. (c) Significant Concentrations of Credit Risk Most of the Corporation’s activities are with customers located in the Delaware Valley tri-state market and the central Maryland market area. Note 4 discusses the types of securities that the Corporation invests in. Note 5 discusses types of lending that the Corporation engages in. Although the Corporation has a diversified loan portfolio, its debtors’ ability to honor their contracts is influenced by the region’s economy. The Corporation does not have any significant concentrations to any one industry or customer, however there is significant concentration of commercial real estate-backed loans, amounting to 37% and 38% of total loans held for investment, as of December 31, 2021 and December 31, 2020, respectively. (d) Presentation of Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold. Generally, federal funds are purchased or sold for one day periods. The Federal Reserve Board removed cash minimum reserve requirements in March 2020. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and the federal funds purchased and repurchased agreements. (e) Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities classified as available-for-sale are those securities that the Corporation intends to hold for an indefinite period of time but not necessarily to maturity. Securities available-for-sale are carried at fair value. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Corporation’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Unrealized gains and losses are reported as increases or decreases in other comprehensive income. Gains or losses on disposition are based on the net proceeds and cost of the securities sold, adjusted for the amortization of premiums and accretion of discounts, using the specific identification method. Securities classified as held to maturity are those debt securities the Corporation has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for the amortization of premium and accretion of discount, computed on a level yield basis. Investments in equity securities are recorded in accordance with ASC 321-10, Investments - Equity Securities. The Corporation’s accounting policy specifies that (a) if the Corporation does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired, unless there is a credit loss. When the Corporation does not intend to sell the security, and it is more likely than not, the Corporation will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. The Corporation did not recognize any other-than-temporary impairment charges during the years ended December 31, 2021 and 2020. (f) Loans Receivable Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Corporation generally amortizes these amounts over the contractual life of the loan. Loans that were originated by the Corporation and intended for sale in the secondary market to permanent investors, but were either repurchased or unsalable due to defect, are held for the foreseeable future or until maturity or payoff, are carried at fair value. The accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and charged against current year income. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. (g) Allowance for Loan and Lease Losses The allowance for loan and lease losses (“Allowance”) is a valuation for probable incurred credit losses established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the Allowance, and subsequent recoveries, if any, are credited to the Allowance. All, or part, of the principal balance of loans receivable are charged off to the Allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Charge-offs for retail consumer loans are generally made for any balance not adequately secured after 120 cumulative days past due. The Allowance is maintained at a level considered adequate to provide for probable incurred credit losses. Management’s periodic evaluation of the adequacy of the Allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Corporation’s Allowance and may require the Corporation to recognize additions to the Allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. The Allowance consists of general and specific components. The general component covers non-classified loans, as well as, non-impaired classified loans and is based on historical loss experience adjusted for qualitative factors. The specific component relates to loans that are classified as doubtful, substandard, and are on non-accrual and have been deemed impaired. Loan classifications are determined based on various assessments such as the borrower’s overall financial condition, payment history, repayment sources, guarantors and value of collateral. We apply historical loss rates to pools of loans with similar risk characteristics. Loss rates are calculated by historical charge-offs that have occurred within each pool of loans over the loss emergence period (“LEP”). The LEP is an estimate of the average amount of time from when an event happens that causes the borrower to be unable to pay on a loan until the loss is confirmed through a loan charge-off. Another key assumption is the look-back period (“LBP”), which represents the historical data period utilized to calculate loss rates. Our LBP goes back to Q1 2010 for all portfolio segments, as applicable, which encompasses our loss experience during the Financial Crisis, and our more recent improved loss experience. After consideration of the historic loss calculations, management applies qualitative adjustments so that the Allowance is reflective of the inherent losses that exist in the loan portfolio at the balance sheet date. Qualitative adjustments are made based upon changes in lending policies and practices, economic conditions, changes in the loan portfolio, changes in lending management, results of internal loan reviews, asset quality trends, collateral values, concentrations of credit risk and other external factors. The evaluation of the various components of the Allowance requires considerable judgment in order to estimate inherent loss exposures. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement, or a troubled debt restructure (“TDR”). Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. For commercial and construction loans, impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral adjusted for cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous residential mortgage and consumer loans are collectively evaluated for impairment. Accordingly, the Corporation does not separately identify individual loans of this nature for impairment disclosures, unless such loans become impaired or are troubled and the subject of a restructuring agreement. Loans whose terms are modified are classified as TDRs if the Corporation grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. TDRs are considered impaired loans No portion of the Allowance is restricted to any individual loan or groups of loans, and the entire Allowance is available to absorb any and all loan and lease losses. The Corporation has identified the following portfolio segments with similar risk characteristics for measuring credit losses: Commercial mortgage – Residential mortgage – Construction – Commercial and Industrial – Leases – Consumer, including home equity – The largest component of Meridian’s consumer loan portfolio consists of fixed rate home equity loans and variable rate home equity lines of credit. Substantially all home equity loans and lines of credit are secured by junior lien mortgages on principal residences. The Bank will lend amounts, which, together with all prior liens, typically may be up to 90 percent of the appraised value of the property securing the loan. Home equity term loans may have maximum terms up to 20 years, while home equity lines of credit generally have maximum terms of 15 years. Credit risk on such loans is mitigated through prudent underwriting standards, including evaluation of the creditworthiness of the borrower through credit scores and debt-to-income ratios and, if secured, the collateral value of the assets. h) Mortgage Banking Activities and Mortgage Loans Held for Sale The Corporation’s mortgage banking division operates 9 offices in the tri-state area of Pennsylvania, Delaware and New Jersey and another 8 offices in Maryland. The mortgage banking division originates conventional mortgages, FHA, VA, USDA, and other state insured mortgages. The loans are generally sold to various investors in the secondary market. Mortgage loans originated by the Corporation and intended for sale in the secondary market to permanent investors are classified as mortgage loans held for sale on the balance sheet as the Corporation has elected to measure loans held for sale at fair value. Fair value is based on outstanding investor commitments or, in the absence of such commitments, on current investor yield requirements based on third party models. Gains and losses on sales of these loans, as well as loan origination costs, are recorded as a component of noninterest income in the Consolidated Statements of Income. The Corporation’s current practice is to sell residential mortgage loans and retain the servicing rights, as discussed further below. Interest on loans held for sale is credited to income based on the principal amounts outstanding. The Corporation enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (interest rate lock commitments). Rate lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. Time elapsing between the issuance of a loan commitment and closing and sale of the loan generally ranges from 30 to 120 days. The Corporation protects itself from changes in interest rates through the use of best efforts forward sale contracts, whereby the Corporation commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan. The Corporation also commits to loan sales through a mandatory sales channel which are economically hedged by the future sale of mortgage-backed securities to third-party counterparties to mitigate the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. By entering into best efforts commitments and economically hedging the mandatory commitments, the Corporation limits its exposure to loss and its realization of significant gains related to its rate lock commitments due to changes in interest rates. The Corporation utilizes a third-party model to determine the fair value of rate lock commitments or forward sale contracts. This model uses investor quotes while taking into consideration the probability that the rate lock commitments will close. Net derivative assets and liabilities are recorded within other assets or other liabilities, respectively, on the consolidated balance sheets, with changes in fair value during the period recorded within net change in the fair value of derivative instruments on the consolidated statements of income. (i) Loan Servicing Rights The Corporation sells substantially all of the residential mortgage loans originated for sale in the secondary market; however, the Corporation may retain the servicing rights related to some of these loans. A fee, usually based on a percentage of the outstanding principal balance of the loan, is received in return for these services. Mortgage servicing rights (“MSRs") are recognized when a loan’s servicing rights are retained upon sale of a loan. When mortgage loans are sold with servicing retained, MSRs are initially recorded at fair value with the income effect recorded in non-interest income. The Corporation also sells the guaranteed portion of certain Small Business Administration (“SBA”) loans to third parties and retains servicing rights and receives servicing fees. All such transfers are accounted for as sales. While the Corporation may retain a portion of certain sold SBA loans, its continuing involvement in the portion of the loan that was sold is limited to certain servicing responsibilities. These servicing assets amortize in proportion to, and over the period of, the estimated future net servicing life of the underlying loans. The servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the servicing assets. (j) Other Real Estate Owned Other real estate owned (OREO) is comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure. The Corporation acquires OREO through the wholly owned subsidiary of the Bank, Apex Realty. OREO is recorded at the lower of cost or fair value, or the loan amount net of estimated selling costs, at the date of foreclosure. The cost basis of OREO is its recorded value at the time of acquisition. After acquisition, valuations are periodically performed by management and subsequent changes in the valuation allowance are charged to OREO expense. Revenues, such as rental income, and holding expenses are included in other income and other expenses, respectively. The Corporation had no OREO at December 31, 2021 and 2020. (k) Restricted Investment in Bank Stock Restricted bank stock is principally comprised of stock in the Federal Home Loan Bank of Pittsburgh (FHLB). Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula. As of December 31, 2021, and 2020, the Corporation had an investment of $5.1 million and $7.9 million, respectively, related to the FHLB stock. Also included in restricted stock is secondary stock from a correspondent bank in the amount of $50 thousand as of December 31, 2021 and 2020. All restricted stock is carried at cost. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) significance of the decline in net assets of the banks as compared to the capital stock amount and the length of time this situation has persisted, (2) commitments by the banks to make payments required by law or regulation and the level of such payments in relation to the operating performance of the banks, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the banks. Management believes no impairment charge is necessary related to these bank restricted stocks as of December 31, 2021 or 2020. (l ) Transfers of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. (m) Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 12 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 7 years and 3 to 5 years for computer software and hardware, respectively. Leasehold improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. The costs of maintenance and repairs are expensed as incurred; while major replacements, improvements and additions are capitalized. (n) Bank-Owned Life Insurance The Corporation invests in bank owned life insurance (“BOLI”) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Corporation on a chosen group of employees. The Corporation is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Earnings from the increase in cash surrender value of the policies are included in non-interest income on the consolidated statements of income. (o) Advertising Costs The Corporation follows the policy of charging the costs of advertising to expense as incurred. (p) Employee Benefit Plans The Corporation has a 401(k) Plan (the Plan) and an Employee Stock Ownership Plan (ESOP). All employees are eligible to participate in the Plan and ESOP after they have attained the age of 21 and have also completed 3 consecutive months of service. Employees must participate in the Plan to be eligible for participation in the ESOP. The employees may contribute to the Plan up to the maximum percentage allowable by law of their compensation. The Corporation may make a discretionary matching contribution to the Plan and the ESOP. Full vesting in the Corporation’s contribution to the Plan and ESOP is over a three-year period. The Corporation recorded expense for the Plan and ESOP of $1.4 million and $1.1 million, respectively for the year ended December 31, 2021 and $1.1 million and $1.2 million, respectively for the year ended December 31, 2020. The expense recorded by the Corporation for the ESOP for the year ended December 31, 2021 included a $663 thousand employer contribution, in addition to $437 thousand in stock compensation related expense. The expense recorded by the Corporation for the ESOP for the year ended December 31, 2020 included a $550 thousand employer contribution, and a $600 thousand one-time contribution approved by the Board of Directors. There was no such contribution made in 2021. During the year ended December 31, 2021, 45,606 shares were purchased by the ESOP at an average market value of $24.30, while for the year ended December 31, 2020, 161,576 shares were purchased by the ESOP at an average market value of $15.06. Shares in the ESOP that are committed to be released to employees are treated as outstanding shares in the Corporation’s computation of earnings per share. On August 31, 2020 the Corporation established a $2 million stock purchase authorization with the ESOP. By the end of 2020 the ESOP had fully utilized the $2 million loan to purchase 133,280 Corporation common shares and as of December 31, 2021, 26,656 of these common shares were released to the ESOP leaving 106,624 unallocated shares. The 133,280 common shares purchased using the loan proceeds are included in the 161,576 shares purchased by the ESOP in 2020. There were 269,904 shares in the ESOP as of December 31, 2021. Shares in the ESOP would be impacted by any stock dividends and stock splits in the same manner as all other outstanding common shares of the Corporation. (q) Income Taxes Deferred income taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and net operating losses and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and net operating loss carry-forwards and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Corporation follows accounting guidance related to accounting for uncertainty in income taxes. Under the “more likely than not” threshold guidelines, the Corporation believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the non-recognition of an existing tax benefit. As of December 31, 2021, and 2020, the Corporation had no material unrecognized tax benefits or accrued interest and penalties. The Corporation’s policy is to account for interest as a component of interest expense and penalties as a component of other expense. The Corporation is no longer subject to examination by federal, state and local taxing authorities for years before January 1, 2018. (r ) Stock Compensation Plans Stock compensation accounting guidance requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options and restricted share plans. The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Scholes model is used to estimate the fair value of stock options, while the market price of the Corporation’s common stock at the date of grant is used for restricted stock awards. (s) Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of other comprehensive income (loss) for the years ended December 31, 2021 and 2020 consist of unrealized holding gains and (losses) arising during the year on available-for-sale securities. (t ) Off-Balance Sheet Financial Instruments In the ordinary course of business, the Corporation has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded in the balance sheet when they are funded. (u) Derivative Financial Instruments The Corporation recognizes all derivative financial instruments related to its mortgage banking activities on its balance sheet at fair value. The Corporation utilizes investor quotes to determine the fair value of interest rate lock commitment derivatives and market pricing to determine the fair value of forward security purchase commitment derivatives. All changes in fair value of derivative instruments are recognized in earnings. The Corporation enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. The interest rate swaps are recognized on the Corporation’s balance sheet at fair value. Under these agreements, the Corporation originates variable-rate loans with customers in addition to interest rate swap agreements, which serve to effectively swap the customers’ variable-rate loans into fixed-rate loans. The Corporation then enters into corresponding swap agreements with swap dealer counterparties to economically hedge its exposure on the variable and fixed components of the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under ASC 815 and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. (v) Earnings per Common Share Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period reduced by unearned ESOP Plan shares and treasury stock. Diluted earnings per common share takes into account the potential dilution that would occur if in the-money stock options were exercised and converted into shares of common stock and restricted stock awards and performance-based stock awards were vested. Proceeds assumed to have been received on options exercises are assumed to be used to purchase shares of the Corporation’s common stock |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per Common Share | |
Earnings per Common Share | (2) Earnings per Common Share Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period reduced by unearned ESOP Plan shares and treasury shares. Diluted earnings per common share takes into account the potential dilution computed pursuant to the treasury stock method that could occur if stock options were exercised and converted into common stock and if restricted stock awards were vested, and SERP plan liabilities were satisfied with common shares. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive. Year Ended December 31, (dollars in thousands, except per share data) 2021 2020 Numerator: Net income available to common stockholders $ 35,585 26,438 Denominator for basic earnings per share Weighted average shares outstanding 6,133 6,159 Average unearned ESOP shares (114) (37) Basic weighted averages shares outstanding 6,019 6,122 Dilutive effects of assumed exercises of stock options 130 23 Dilutive effects of SERP shares 57 42 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,206 6,187 Basic earnings per share $ 5.91 4.32 Diluted earnings per share $ 5.73 4.27 Antidilutive shares excluded from computation of average dilutive earnings per share 139 275 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangibles | |
Goodwill and Other Intangibles | (3) Goodwill and Other Intangibles The Corporation’s goodwill and intangible assets are detailed below: Balance Balance Amortization December 31, Amortization December 31, Period (dollars in thousands) 2020 Expense 2021 (in years) Goodwill - Wealth $ 899 — 899 Indefinite Total Goodwill 899 — 899 Intangible assets - trade name 266 — 266 Indefinite Intangible assets - customer relationships 3,319 (206) 3,113 20 Intangible assets - non competition agreements 16 (16) — 4 Total Intangible Assets 3,601 (222) 3,379 Total $ 4,500 (222) 4,278 Accumulated amortization of intangible assets was $1.2 million and $1 million as of December 31, 2021 and 2020, respectively. In accordance with ASC Topic 350, the Corporation performed a qualitative assessment of goodwill and identifiable intangible assets as of December 31, 2021 and determined it was more likely than not that the fair value of the Corporation, including the wealth reporting unit where the goodwill and identifiable intangible assets are held, was more than its carrying amount. At December 31, 2021, the schedule of future intangible asset amortization is as follows (in thousands): 2022 204 2023 204 2024 204 2025 204 2026 204 Thereafter 2,093 $ 3,113 |
Securities
Securities | 12 Months Ended |
Dec. 31, 2021 | |
Securities | |
Securities | (4) Securities The amortized cost and approximate fair value of securities as of December 31, 2021 and 2020 are as follows: December 31, 2021 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 16,850 55 (68) 16,837 10 U.S. government agency mortgage-backed securities 9,749 124 (60) 9,813 3 U.S. government agency collateralized mortgage obligations 22,276 358 (253) 22,381 10 State and municipal securities 72,099 1,379 (496) 72,982 12 U.S. Treasuries 29,973 1 (246) 29,728 21 Non-U.S. government agency collateralized mortgage obligations 990 ─ (15) 975 1 Corporate bonds 6,450 154 (18) 6,586 5 Total securities available-for-sale $ 158,387 2,071 (1,156) 159,302 62 Securities held-to-maturity: State and municipal securities 6,372 219 ─ 6,591 — Total securities held-to-maturity $ 6,372 219 — 6,591 — December 31, 2020 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 25,303 364 (75) 25,592 8 U.S. government agency mortgage-backed securities 3,854 192 — 4,046 — U.S. government agency collateralized mortgage obligations 23,010 916 (17) 23,909 1 State and municipal securities 63,848 2,025 (63) 65,810 3 Corporate bonds 4,200 7 (2) 4,205 2 Total securities available-for-sale $ 120,215 3,504 (157) 123,562 14 Securities held-to-maturity: State and municipal securities 6,510 347 — 6,857 — Total securities held-to-maturity $ 6,510 347 — 6,857 — Although the Corporation’s investment portfolio overall is in a net unrealized gain position at December 31, 2021, the temporary impairment in the above noted securities is primarily the result of changes in market interest rates subsequent to purchase and the Corporation does not intend to sell these securities prior to recovery and it is more likely than not that the Corporation will not be required to sell these securities prior to recovery to satisfy liquidity needs, and therefore, no securities are deemed to be other-than-temporarily impaired. As of December 31, 2021 and 2020, securities having a fair value of $92.2 million and $55.9 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB. The following table shows the Corporation’s investment gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at December 31, 2021 and 2020: December 31, 2021 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 12,330 (68) — — 12,330 (68) U.S. government agency mortgage-backed securities 3,852 (60) — — 3,852 (60) U.S. government agency collateralized mortgage obligations 8,836 (187) 1,657 (66) 10,493 (253) State and municipal securities 14,994 (427) 2,019 (69) 17,013 (496) U.S. Treasuries 28,750 (246) — — 28,750 (246) Non-U.S. government agency collateralized mortgage obligations 975 (15) — — 975 (15) Corporate bonds 2,232 (18) — — 2,232 (18) Total securities available-for-sale $ 71,969 (1,021) 3,676 (135) 75,645 (1,156) December 31, 2020 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 2,884 (4) 7,443 (71) 10,327 (75) U.S. government agency collateralized mortgage obligations 2,284 (17) — — 2,284 (17) State and municipal securities 4,163 (63) — — 4,163 (63) Corporate bonds 1,198 (2) — — 1,198 (2) Total securities available-for-sale $ 10,529 (86) 7,443 (71) 17,972 (157) The amortized cost and carrying value of securities at December 31, 2021 and 2020 are shown below by contractual maturities. Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties. December 31, 2021 December 31, 2020 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Investment securities: Due in one year or less $ — — 763 769 $ — — — — Due after one year through five years 12,934 12,885 2,354 2,397 — — 3,181 3,288 Due after five years through ten years 30,890 30,798 3,255 3,425 12,035 12,095 3,329 3,569 Due after ten years 81,548 82,450 — — 81,316 83,512 — — Subtotal 125,372 126,133 6,372 6,591 93,351 95,607 6,510 6,857 Mortgage-related securities 33,015 33,169 — — 26,864 27,955 — — Mutual funds with no stated maturity — — — — — — — — Total $ 158,387 159,302 6,372 6,591 $ 120,215 123,562 6,510 6,857 Proceeds from the sale of available for sale investment securities totaled $23.6 million for the year ended December 31, 2021, resulting in a gross gain on sale of $634 thousand and a gross loss on sale of $199 thousand for the year ended December 31, 2021. Proceeds from the sale of available for sale investment securities totaled $45.9 million for the year ended December 31, 2020, resulting in a gross gain on sale of $1.5 million and a gross loss on sale of $196 thousand for the year ended December 31, 2020. |
Loans Receivable
Loans Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Loans Receivable | |
Loans Receivable | (5) Loans Receivable Loans and leases outstanding at December 31, 2021 and 2020 are detailed by category as follows: December 31, December 31, (dollars in thousands) 2021 2020 Mortgage loans held for sale $ 80,882 229,199 Real estate loans: Commercial mortgage 516,928 485,103 Home equity lines and loans 52,299 64,987 Residential mortgage (1) 68,175 52,454 Construction 160,905 140,246 Total real estate loans 798,307 742,790 Commercial and industrial 293,771 261,750 Small business loans 114,158 49,542 Paycheck Protection Program ("PPP") loans 90,194 203,543 Main Street Lending Program ("MSLP") loans 597 580 Consumer 419 511 Leases, net 88,242 31,040 Total portfolio loans and leases 1,385,688 1,289,756 Total loans and leases $ 1,466,570 1,518,955 Loans with predetermined rates $ 488,220 658,458 Loans with adjustable or floating rates 978,350 860,497 Total loans and leases $ 1,466,570 1,518,955 Net deferred loan origination costs (fees) $ 769 (4,992) (1) Includes $17,558 and $12,182 of loans at fair value as of December 31, 2021 and 2020, respectively. Components of the net investment in leases at December 31, 2021 and 2020 are detailed as follows: December 31, December 31, (dollars in thousands) 2021 2020 Minimum lease payments receivable $ 105,608 37,919 Unearned lease income (17,366) (6,879) Total $ 88,242 31,040 Age Analysis of Past Due Loans and Leases The following table presents an aging of the Corporation’s loan and lease portfolio as of December 31, 2021 and 2020, respectively: Total 90+ days accruing Nonaccrual Total loans December 31, 2021 30-89 days past due and Total past loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 516,928 516,928 — 516,928 — % Home equity lines and loans 103 — 103 51,285 51,388 911 52,299 1.94 Residential mortgage (1) 600 — 600 65,177 65,777 2,398 68,175 4.40 Construction — — — 160,905 160,905 — 160,905 — Commercial and industrial — — — 274,970 274,970 18,801 293,771 6.40 Small business loans — — — 113,492 113,492 666 114,158 0.58 Paycheck Protection Program loans — — — 90,194 90,194 — 90,194 — Main Street Lending Program loans — — — 597 597 — 597 — Consumer — — — 419 419 — 419 — Leases, net 390 — 390 87,640 88,030 212 88,242 0.68 Total $ 1,093 — 1,093 1,361,607 1,362,700 22,988 1,385,688 1.74 % (1) Includes $17,558 of loans at fair value as of December 31, 2021 ($16,768 of current, $189 of 30-89 days past due and $601 of nonaccrual). The increase in nonaccrual loans and leases was largely due to one commercial loan relationship for $13.8 million that had been on COVID-19 deferral but became a non-performing loan relationship late in 2021. Total 90+ days accruing Nonaccrual Total loans December 31, 2020 30-89 days past due and Total past loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 482,042 482,042 3,061 485,103 0.63 % Home equity lines and loans — — — 64,128 64,128 859 64,987 1.32 Residential mortgage (1) 3,595 — 3,595 46,134 49,729 2,725 52,454 12.05 Construction — — — 140,246 140,246 — 140,246 — Commercial and industrial — — — 260,465 260,465 1,285 261,750 0.49 Small business loans — — — 49,542 49,542 — 49,542 — Paycheck Protection Program loans — — — 203,543 203,543 — 203,543 — Main Street Lending Program loans — — — 580 580 — 580 — Consumer — — — 511 511 — 511 — Leases, net 109 — 109 30,931 31,040 — 31,040 0.35 Total $ 3,704 — 3,704 1,278,122 1,281,826 7,930 1,289,756 0.90 % (1) Includes $12,182 of loans at fair value as of December 31, 2020 ($10,314 of current, $958 of 30-89 days past due and $910 of nonaccrual). |
Allowance for Loan and Lease Lo
Allowance for Loan and Lease Losses (the Allowance) | 12 Months Ended |
Dec. 31, 2021 | |
Allowance for Loan and Lease Losses (the Allowance) | |
Allowance for Loan and Lease Losses (the Allowance) | (6) Allowance for Loan and Lease Losses (the Allowance) The Allowance is evaluated on at least a quarterly basis, as losses are estimated to be probable and incurred. The provision for loan and lease losses increase or decrease the ALLL, if deemed necessary. Loans deemed to be uncollectible are charged against the Allowance, and subsequent recoveries, if any, are credited to the Allowance. The Allowance is maintained at a level considered adequate to provide for losses that are probable and estimable. Management’s periodic evaluation of the adequacy of the Allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available. Roll-Forward of the Allowance by Portfolio Segment The following tables detail the roll-forward of the Corporation’s Allowance, by portfolio segment, as of December 31, 2021 and 2020, respectively: Balance, Balance, (dollars in thousands) December 31, 2020 Charge-offs Recoveries Provision December 31, 2021 Commercial mortgage $ 7,451 — — (2,501) 4,950 Home equity lines and loans 434 (81) 82 (211) 224 Residential mortgage 385 — 5 (107) 283 Construction 2,421 — — (379) 2,042 Commercial and industrial 5,431 — 41 1,061 6,533 Small business loans 1,259 — — 2,478 3,737 Consumer 4 — 4 (5) 3 Leases 382 (130) — 734 986 Total $ 17,767 (211) 132 1,070 18,758 Balance, Balance, (dollars in thousands) December 31, 2019 Charge-offs Recoveries Provision December 31, 2020 Commercial mortgage $ 3,426 — — 4,025 7,451 Home equity lines and loans 342 (90) 14 168 434 Residential mortgage 179 — 7 199 385 Construction 2,362 — — 59 2,421 Commercial and industrial 2,684 (31) 58 2,720 5,431 Small business loans 509 — — 750 1,259 Consumer 6 (10) 4 4 4 Leases 5 — — 377 382 Total $ 9,513 (131) 83 8,302 17,767 The Allowance Allocated by Portfolio Segment The following table details the allocation of the Allowance and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of December 31, 2021 respectively: Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2021 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 4,950 4,950 $ 3,556 513,372 516,928 Home equity lines and loans — 224 224 905 51,394 52,299 Residential mortgage — 283 283 1,797 48,820 50,617 Construction — 2,042 2,042 1,206 159,699 160,905 Commercial and industrial 2,900 3,633 6,533 17,361 276,410 293,771 Small business loans 376 3,361 3,737 792 113,366 114,158 Paycheck Protection Program loans — — — — 90,194 90,194 (2) Main Street Lending Program — — — — 597 597 (2) Consumer — 3 3 — 419 419 Leases, net — 986 986 212 88,030 88,242 Total $ 3,276 15,482 18,758 $ 25,829 1,342,301 1,368,130 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. The following table details the allocation of the Allowance and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of December 31, 2020 respectively: Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2020 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,451 7,451 $ 1,606 483,497 485,103 Home equity lines and loans 9 425 434 921 64,066 64,987 Residential mortgage 73 312 385 1,817 38,455 40,272 Construction — 2,421 2,421 1,206 139,040 140,246 Commercial and industrial 1,563 3,868 5,431 4,645 257,105 261,750 Small business loans — 1,259 1,259 185 49,357 49,542 Paycheck Protection Program loans — — — — 203,543 203,543 (2) Main Street Lending Program — — — — 580 580 (2) Consumer — 4 4 — 511 511 Leases, net — 382 382 — 31,040 31,040 Total $ 1,645 16,122 17,767 $ 10,380 1,267,194 1,277,574 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. Loans and Leases by Credit Ratings As part of the process of determining the Allowance to the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows: ● Pass – Loans considered to be satisfactory with no indications of deterioration. ● Special mention – Loans classified as special mention have a potential weakness that deserves Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. ● Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment 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 institution will sustain some loss if the deficiencies are not corrected. ● Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, 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. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values. The following table details the carrying value of loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of December 31, 2021 and 2020, respectively: December 31, 2021 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 481,551 29,452 5,925 — 516,928 Home equity lines and loans 50,908 — 1,391 — 52,299 Construction 151,608 9,297 — — 160,905 Commercial and industrial 236,298 14,603 42,870 — 293,771 Small business loans 112,096 — 2,062 — 114,158 Paycheck Protection Program loans 90,194 — — — 90,194 Main Street Lending Program loans 597 — — — 597 Total $ 1,123,252 53,352 52,248 — 1,228,852 Commercial and industrial loans classified as substandard totaled $42.9 million as of December 31, 2021, an increase of $33.9 million, from $9.0 million as of December 31, 2020. The increase was driven by the $13.8 million commercial loan relationship in the advertising industry that became a non-performing loan relationship late in 2021, discussed above. The remaining $20.1 million of increase year-over-year was comprised of 18 different loan relationships with no specific industry concentration. December 31, 2020 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 449,545 32,059 3,499 — 485,103 Home equity lines and loans 63,923 — 1,064 — 64,987 Construction 132,286 7,960 — — 140,246 Commercial and industrial 227,349 21,721 9,000 3,680 261,750 Small business loans 46,789 — 2,753 — 49,542 Paycheck Protection Program loans 203,543 — — — 203,543 Main Street Lending Program loans 580 — — — 580 Total $ 1,124,015 61,740 16,316 3,680 1,205,751 In addition to credit quality indicators as shown in the above tables, Allowance allocations for residential mortgages, consumer loans and leases are also applied based on their performance status as December 31, 2021 and 2020, respectively. December 31, 2021 December 31, 2020 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 48,820 1,797 50,617 $ 38,457 1,815 40,272 Consumer 419 — 419 511 — 511 Leases, net 88,030 212 88,242 31,040 — 31,040 Total $ 137,269 2,009 139,278 $ 70,008 1,815 71,823 There were four nonperforming residential mortgage loans at December 31, 2021 and five at December 31, 2020 with a combined outstanding principal balance of $601 thousand and $910 thousand, respectively, which were carried at fair value and not included in the table above. No TDR’s performing according to modified terms are included in performing residential mortgages above for the twelve months ended December 31, 2021 and 2020, respectively. Impaired Loans The following tables detail the recorded investment and principal balance of impaired loans by portfolio segment, their related Allowance and interest income recognized for the periods. As of December 31, 2021 As of December 31, 2020 Recorded Principal Related Recorded Principal Related (dollars in thousands) investment balance allowance investment balance allowance Impaired loans with related allowance: Commercial and industrial $ 17,147 17,310 2,900 3,860 3,902 1,563 Small business loans 666 666 376 — — — Home equity lines and loans — — — 95 105 9 Residential mortgage — — — 689 689 73 Total $ 17,813 17,976 3,276 4,644 4,696 1,645 Impaired loans without related allowance: Commercial mortgage $ 3,556 3,559 — 1,606 1,642 — Commercial and industrial 214 269 — 785 862 — Small business loans 126 126 — 185 185 — Home equity lines and loans 905 935 — 826 839 — Residential mortgage 1,797 1,797 — 1,128 1,128 — Construction 1,206 1,206 — 1,206 1,206 — Leases 212 212 — — — — Total 8,016 8,104 — 5,736 5,862 — Grand Total $ 25,829 26,080 3,276 10,380 10,558 1,645 Year Ended Year Ended December 31, 2021 December 31, 2020 Average Interest Average Interest recorded income recorded income (dollars in thousands) investment recognized investment recognized Impaired loans with related allowance: Commercial and industrial 17,349 15 3,907 31 Small business loans 887 — — — Home equity lines and loans — — 102 — Residential mortgage — — 689 — Total $ 18,236 15 4,698 31 Impaired loans without related allowance: Commercial mortgage $ 3,578 43 1,697 86 Commercial and industrial 239 24 832 19 Small business loans 154 14 213 14 Home equity lines and loans 914 — 831 — Residential mortgage 1,807 11 1,131 133 Construction 1,206 62 1,208 45 Leases 240 — — — Total $ 8,138 154 5,912 297 Grand Total $ 26,374 169 10,610 328 Troubled Debt Restructuring (“TDR’s”) The restructuring of a loan is considered a TDR if both of the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the creditor has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan, and (e) for leases, a reduced lease payment. A less common concession granted is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower, were a concession not granted. The determination of whether a concession has been granted is very subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. The balance of TDRs at December 31, 2021 and 2020 are as follows: December 31, December 31, (dollars in thousands) 2021 2020 TDRs included in nonperforming loans and leases $ 361 244 TDRs in compliance with modified terms 3,446 3,362 Total TDRs $ 3,807 3,606 There were 2 loan and lease modifications granted during the year ended December 31, 2021 on commercial mortgages and no loan and lease modifications granted during the year ended December 31, 2020 that were categorized as TDRs. No loan and lease modifications granted during the twelve months ended December 31, 2021 and 2020 subsequently defaulted during the same time period. COVID-19 Assistance to Customers During 2021 and 2020 we assisted customers that were impacted by the COVID-19 pandemic through 2 distinct and impactful ways: the issuance of PPP loans and short-term loan deferrals on a limited basis, in accordance with Section 4103 of the CARES Act. Throughout the life of the PPP loan program we helped borrowers with the issuance of 1,451 such loans totaling over $370 million. As of March 10, 2022, approximately $314 million, or 1,224 loans, had been paid back. Out of the remaining $56.3 million that have yet to be forgiven by the SBA, $31.7 million have submitted for forgiveness and are awaiting a response from the SBA, while the remaining $24.6 million has not yet submitted a request for forgiveness. We also provided COVID-19 loan deferrals, typically in 3 month increments, to loan customers that amounted to $2.4 million as of December 31, 2021, down $21.8 million, or 90%, from the $24.2 million as of December 31, 2020 as detailed by industry concentration of the borrower in the table below: December 31, December 31, (dollars in thousands) 2021 2020 Hotels $ — 11,832 C&I building construction — 10,103 Other 2,424 2,243 Total $ 2,424 24,178 As these modifications related to the COVID-19 pandemic and qualify under the provisions of either Section 4013 of the CARES Act or Interagency Guidance, they are not considered TDR’s. loans are classified as performing and are not considered past due. Loans are to be placed on non-accrual when it becomes apparent that payment of interest or recovery of all principal is questionable, and the COVID-19 related modification is no longer considered short-term or the modification is deemed ineffective. As of January 31, 2022 the $2.4 million of deferrals that had existed as of December 31, 2021 expired without further deferral or modification given to these borrowers. |
Bank Premises and Equipment
Bank Premises and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Bank Premises and Equipment | |
Bank Premises and Equipment | (7) Bank Premises and Equipment The components of premises and equipment at December 31, 2021 and 2020 are as follows: (dollars in thousands) 2021 2020 Building $ 4,141 4,141 Leasehold improvements 3,347 3,202 Land 600 600 Land Improvements 218 218 Furniture, fixtures and equipment 3,229 2,700 Computer equipment and data processing software 7,971 7,034 Construction in process 3,763 — Less: accumulated depreciation (11,463) (10,118) Total $ 11,806 7,777 Total depreciation expense for the years ended December 31, 2021 and 2020 totaled $1.3 million and $1.6 million, respectively. In November 2021 Meridian purchased a building for $3.8 million that will serve as the future headquarters of our bank operations department, as well as other departments. As of December 31, 2021 this building was classified as construction in process as it has not yet been put into service, and therefore has not started to be depreciated. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2021 | |
Deposits: | |
Deposits | (8) Deposits The components of deposits at December 31, 2021 and 2020 are as follows: (dollars in thousands) 2021 2020 Demand, non-interest bearing $ 274,528 203,843 Demand, interest bearing 268,248 206,573 Savings accounts 45,038 8,056 Money market accounts 652,590 564,566 Time deposits 206,009 258,297 Total $ 1,446,413 1,241,335 The aggregate amount of time deposits in denominations over $250 thousand were $179.8 million and $233.1 milllion as of December 31, 2021 and 2020, respectively. At December 31, 2021, the scheduled maturities of time deposits are as follows (in thousands): 2022 $ 126,719 2023 18,106 2024 4,071 2025 24,271 2026 32,842 Total $ 206,009 |
Short-Term Borrowings and Long
Short-Term Borrowings and Long -Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Short-Term Borrowings and Long-Term Debt | |
Short-Term Borrowings and Long-Term Debt | (9) Short-Term Borrowings and Long-Term Debt The Corporation’s short-term borrowings generally consist of federal funds purchased and short-term borrowings extended under agreements with the Federal Home Loan Bank of Pittsburgh (“FHLB”). The Corporation has two unsecured Federal Funds borrowing facilities with correspondent banks: one of $24 million and one of $15 million. Federal funds purchased generally represent one-day borrowings. The Corporation had no Federal Funds purchased at December 31, 2021 and December 31, 2020. The Corporation also has a facility with the Federal Reserve discount window of $3.5 million. This facility is fully secured by investment securities. There were no borrowings under this at December 31, 2021 and $10 million at December 31, 2020. Short-term borrowings at December 31, 2021 and December 31, 2020 consisted of the following notes: Balance as of Maturity Interest December 31, December 31, (dollars in thousands) date rate 2021 2020 Open Repo Plus Weekly 05/31/2022 0.33 % $ 36,458 60,416 Mid-term Repo-fixed 09/12/2022 0.23 4,886 — Federal Reserve Discount Window 03/31/2021 0.25 — 10,000 Mid-term Repo-fixed 01/13/2021 0.36 — 4,605 Mid-term Repo-fixed 06/10/2021 0.10 — 6,376 Mid-term Repo-fixed 09/10/2021 0.11 — 10,000 Mid-term Repo-fixed 12/10/2021 0.16 — 10,000 Mid-term Repo-fixed 01/27/2021 0.23 — 5,465 Total $ 41,344 106,862 As part of the CARES Act, the FRB of Philadelphia offered secured discounted borrowings to banks who originated PPP loans through the Paycheck Protection Program Liquidity Facility or PPPLF program. Advances from this facility are secured 100% by the aggregate face value of pools comprised of loans with common maturity dates. PPPLF advances mature concurrently with the loans in a given pool. At December, 2021, the Corporation had no of PPPLF advances with the FRB of Philadelphia. Advances made on the PPPLF were ended by the FRB on July 30, 2021. Long-term debt at December 31, 2021 and December 31, 2020 consisted of the following fixed rate notes with the FHLB of Pittsburgh: Balance as of Maturity Interest December 31, December 31, (dollars in thousands) date rate 2021 2020 PPPLF Advances 2022 0.35 % $ — 153,269 Mid-term Repo-fixed 06/29/2022 0.32 — 7,392 Mid-term Repo-fixed 09/12/2022 0.23 — 4,885 Total ` $ — 165,546 The FHLB of Pittsburgh has also issued $131.5 million of letters of credit to the Corporation for the benefit of the Corporation’s public deposit funds and loan customers. These letters of credit expire throughout 2021. The Corporation has a maximum borrowing capacity with the FHLB of $505.4 million as of December 31, 2021 and $638.9 million as of December 31, 2020. All advances and letters of credit from the FHLB are secured by a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB. |
Subordinated Debentures
Subordinated Debentures | 12 Months Ended |
Dec. 31, 2021 | |
Subordinated Debentures | |
Subordinated Debentures | (10) Subordinated Debentures In December 2008, the Bank issued $550 thousand of mandatory convertible unsecured subordinated debentures (2008 Debentures). The 2008 Debentures have a maturity date of December 18, 2023 and interest on the 2008 Debentures is paid quarterly at 6%. The 2008 Debentures are convertible into 1 In December 2011, the Bank issued $1.4 million of mandatory convertible unsecured subordinated debentures (2011 Debentures). The 2011 Debentures have a maturity date of December 31, 2026 and interest on the 2011 Debentures is paid quarterly at 6%. The 2011 Debentures are convertible into 1 In April 2013, the Bank issued $1.4 million of mandatory convertible unsecured subordinated debentures (2013 Debentures). The 2013 Debentures have a maturity date of December 31, 2028 and interest on the 2013 Debentures is paid quarterly at 6.5%. The 2013 Debentures are convertible into 1 In June, August and September 2014, the Bank issued $3 million, $100 thousand, and $7 million of non-convertible unsecured subordinated debentures (2014 Debentures). The 2014 Debentures have maturity dates of June 30, 2024, June 30, 2024 and September 30, 2024, respectively. Interest on all three tranches of the 2014 Debentures is paid quarterly at 7.25%. During 2020, the Corporation redeemed the remaining $7.1 million of 2014 Debentures and therefore there was $0 outstanding as of December 31, 2021 and 2020. Upon formation of the bank holding company, the Corporation assumed the 2008, 2011, 2013 and 2014 Debentures that were originally issued by the Bank. During December 2019, the Corporation issued $40 million of fixed-to-floating rate non-convertible unsecured subordinated debentures (2019 Debentures). The 2019 Debentures have a maturity date of December 30, 2029 and interest on the 2019 Debentures is paid semiannually at 5.375%. The debt issuance costs are included as a direct deduction from the debt liability and these costs are amortized to interest expense using the effective yield method. During 2021 and 2020 the Corporation made interest payments of $2.2 million and $2.2 million on the 2019 Debentures, respectively. The 2008, 2011, and 2013 Debentures are includable as Tier 2 capital for determining the Bank’s compliance with regulatory capital requirements (see footnote 19). The 2019 Debentures are included as Tier 2 capital for the Corporation and as Tier 1 capital for the Bank. |
Servicing Assets
Servicing Assets | 12 Months Ended |
Dec. 31, 2021 | |
Servicing Assets | |
Servicing Assets | (11) Servicing Assets The Corporation sells certain residential mortgage loans and the guaranteed portion of certain SBA loans to third parties and retains servicing rights and receives servicing fees. All such transfers are accounted for as sales. When the Corporation sells a residential mortgage loan, it does not retain any portion of that loan and its continuing involvement in such transfers is limited to certain servicing responsibilities. While the Corporation may retain a portion of certain sold SBA loans, its continuing involvement in the portion of the loan that was sold is limited to certain servicing responsibilities. When the contractual servicing fees on loans sold with servicing retained are expected to be more than adequate compensation to a servicer for performing the servicing, a capitalized servicing asset is recognized. The Corporation accounts for the transfers and servicing of financial assets in accordance with ASC 860, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. Residential Mortgage Loans MSRs are amortized to non-interest expense in proportion to, and over the period of, the estimated future net servicing life of the underlying assets. MSR’s are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the MSR. The Corporation serviced $1.0 billion and $506.0 million of residential mortgage loans as of December 31, 2021 and 2020, respectively. During the twelve months ended December 31, 2021, the Corporation recognized servicing fee income of $2.0 million, compared to $498 thousand during the twelve months ended December 31, 2020, respectively. Changes in the MSR balance are summarized as follows: Year Ended December 31, (dollars in thousands) 2021 2020 Balance at beginning of the period $ 4,647 446 Servicing rights capitalized 6,769 4,856 Amortization of servicing rights (1,087) (318) Change in valuation allowance 427 (337) Balance at end of the period $ 10,756 4,647 Activity in the valuation allowance for MSR’s was as follows: Year Ended December 31, (dollars in thousands) 2021 2020 Valuation allowance, beginning of period $ (435) (98) Impairment — (337) Recovery 427 — Valuation allowance, end of period $ (8) (435) The Corporation uses assumptions and estimates in determining the fair value of MSRs. These assumptions include prepayment speeds and discount rates. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At December 31, 2021, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 7.23% and a discount rate equal to 9.00%. At December 31, 2020, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 9.39% and a discount rate equal to 9.00%. At December 31, 2021 and 2020, the sensitivity of the current fair value of the residential mortgage servicing rights to immediate 10% and 20% unfavorable changes in key economic assumptions are included in the following table. (dollars in thousands) December 31, 2021 December 31, 2020 Fair value of residential mortgage servicing rights $ 11,241 $ 4,647 Weighted average life (months) 11.0 5.0 Prepayment speed 7.23% 9.39% Impact on fair value: 10% adverse change $ (376) $ (183) 20% adverse change (731) (354) Discount rate 9.00% 9.00% Impact on fair value: 10% adverse change $ (436) $ (168) 20% adverse change (840) (329) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change. SBA Loans SBA loan servicing assets are amortized to non-interest expense in proportion to, and over the period of, the estimated future net servicing life of the underlying assets. SBA loan servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the SBA loan servicing asset. The Corporation serviced $115.1 million of SBA loans, as of December 31, 2021 and $55.9 million as of December 31, 2020. Changes in the SBA loan servicing asset balance are summarized as follows: Year Ended December 31, (dollars in thousands) 2021 2020 Balance at beginning of the period $ 970 337 Servicing rights capitalized 1,488 794 Amortization of servicing rights (392) (148) Change in valuation allowance (57) (13) Balance at end of the period $ 2,009 970 Activity in the valuation allowance for SBA loan servicing assets was as follows: Year Ended December 31, (dollars in thousands) 2021 2020 Valuation allowance, beginning of period $ (39) (26) Impairment (57) (13) Recovery — — Valuation allowance, end of period $ (96) (39) The Corporation uses assumptions and estimates in determining the fair value of SBA loan servicing rights. These assumptions include prepayment speeds, discount rates, and other assumptions. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At December 31, 2021, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 12.38%, and a discount rate equal to 9.01%. At December 31, 2020, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 12.73%, and a discount rate equal to 8.33%. At December 31, 2021 and 2020, the sensitivity of the current fair value of the SBA loan servicing rights to immediate 10% and 20% unfavorable changes in key economic assumptions are included in the following table. (dollars in thousands) December 31, 2021 December 31, 2020 Fair value of SBA loan servicing rights $ 2,107 $ 1,010 Weighted average life (years) 3.8 3.7 Prepayment speed 12.38% 12.73% Impact on fair value: 10% adverse change $ (69) $ (37) 20% adverse change (132) (71) Discount rate 9.01% 8.33% Impact on fair value: 10% adverse change $ (54) $ (25) 20% adverse change (106) (49) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the SBA servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2021 | |
Lease Commitments | |
Lease Commitments | (12) Lease Commitments The Corporation leases twenty-two offices from third parties under operating lease agreements expiring at different periods through March 2031. Under all current agreements, the Corporation is responsible for its portion of real estate taxes, utilities, insurance, and repairs and maintenance. Total rental expense for the years ended December 31, 2021 and 2020 was $2.2 million and $1.9 million, respectively. Future minimum lease payments by year and in the aggregate, under these lease agreements, are as follows: Future minimum lease payments (dollars in thousands) 2022 $ 2,179 2023 1,874 2024 1,737 2025 1,456 2026 1,436 Thereafter 3,134 $ 11,816 Refer to footnote 23 for discussion of ASU 2016-02 Leases, |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | (13) Stock-Based Compensation The Corporation has issued stock options under the Meridian Bank 2004 Stock Option Plan (2004 Plan). The 2004 Plan authorized the Board of Directors to grant options up to an aggregate of 446,091 shares, as adjusted for the 5% stock dividends in 2012, 2014 and 2016 to officers, other employees and directors of the Corporation. No additional shares are available for future grants. The shares granted under the 2004 Plan to directors are nonqualified options. The shares granted under the 2004 Plan to officers and other employees are incentive stock options, and are subject to the limitations under Section 422 of the Internal Revenue Code. The Meridian Bank 2016 Equity Incentive Plan (2016 Plan) was amended on May 24, 2019 to authorize the Board of Directors to grant up to an aggregate of 686,900 stock awards that can take different forms. A total of 438,750 stock options and 43,208 shares of restricted stock have been granted under the 2016 Plan through December 31, 2021. As of December 31, 2021 there were 204,942 stock awards remaining to be issued. Options granted under the 2016 Plan to directors are nonqualified options, while options granted to officers and other employees are incentive stock options, and are subject to the limitations under Section 422 of the Internal Revenue Code. Stock Options Stock-based compensation cost is measured at the grant date, based on the fair value of the award and is recognized as an expense over the vesting period. The fair value of stock option grants is determined using the Black-Scholes pricing model. The assumptions necessary for the calculation of the fair value are expected life of options, annual volatility of stock price, risk-free interest rate and annual dividend yield. Stock option awards granted under the 2016 Plan have a term that does not exceed ten years and vest according to each award’s specific vesting schedule. Currently, all option awards granted to date vest 25% upon grant and become fully exercisable after three years of service from the grant date. The following table provides information about stock options outstanding as of December 31, 2021 and 2020: Weighted Weighted average average exercise grant date Shares price fair value Outstanding at December 31, 2019 346,381 $ 16.13 $ 4.55 Exercised (14,673) 13.64 3.74 Granted 94,650 17.70 5.07 Forfeited (25,631) 17.03 4.73 Outstanding at December 31, 2020 400,727 16.53 4.69 Exercised (77,265) 13.68 4.35 Granted 142,650 27.50 9.47 Forfeited (4,148) 18.63 6.57 Outstanding at December 31, 2021 461,964 20.38 6.21 Exercisable at December 31, 2021 291,832 18.40 5.27 Nonvested at December 31, 2021 170,132 $ 23.77 $ 7.81 The weighted average remaining contractual life of the outstanding stock options at December 31, 2021 is 7.6 years. At December 31, 2021 the range of exercise prices is $11.79 to $31.00. The aggregate intrinsic value of options outstanding and exercisable was $7.6 million and $5.4 million, respectively, as of December 31, 2021. The fair value of each option granted in 2021 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0.0%, risk-free interest rate of between 1.02% and 1.54%, expected life of 5.75 years, and expected volatility of between 39.25% and 40.97% based on an average of the Corporation’s share price since going public. The weighted average fair value of options granted in 2021 was $8.14 to $9.57 per share. The fair value of each option granted in 2020 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0.0%, risk-free interest rate of between 0.47% and 1.68%, expected life of 5.75 years, and expected volatility of 21.81% and 39.65% based on an average of the Corporation’s share price since going public. The weighted average fair value of options granted in 2020 was $4.47 to $5.87 per share. Total stock option compensation cost for the twelve months ended December 31, 2021 and December 31, 2020 was $803 thousand and $451 thousand, respectively. During the twelve months ended December 31, 2021 and December 31, 2020, the Corporation received $1.0 million and $200 thousand from the exercise of stock options, respectively. There were no tax benefits recognized related to stock compensation cost for the twelve months ended December 31, 2021 and 2020. In accordance with ASU 2016-09 – Compensation – Stock Compensation (ASU 2016-09), forfeitures are recognized as they occur instead of applying an estimated forfeiture rate to each grant. For purposes of the determination of stock-based compensation expense for the year ended December 31, 2021, we recognized the forfeiture of 4,148 of shares of stock options that were previously granted to officers and other employees. As of December 31, 2021, there was $1.3 million of unrecognized compensation cost related to nonvested stock options. This cost will be recognized over a weighted average period of 1.24 years. During 2021, the intrinsic value of options exercised was $1.2 million. Restricted Stock The restricted stock granted under the 2016 Plan vest according to each award’s specific vesting schedule. All awards granted in 2021 vest 100% one year from the grant date, while all awards granted in 2020 vest 50% one year from the grant date and the remaining 50% on the second anniversary of the grant date. The grant date fair value of the restricted stock is based on the closing price on the date prior to the grant. Weighted Weighted average average exercise grant date Shares price fair value Outstanding at December 31, 2019 — $ — $ — Granted 33,208 14.00 14.00 Outstanding at December 31, 2020 33,208 14.00 14.00 Granted 10,000 26.36 26.36 Vested (16,603) 14.00 14.00 Outstanding at December 31, 2021 26,605 18.65 18.65 Nonvested at December 31, 2021 26,605 $ 18.65 $ 18.65 Compensation expense for restricted stock is measured based on the market price of the stock on the day prior to the grant date and is recognized on a straight-line basis over the vesting period. For the years ended December 31, 2021 and 2020, the Corporation recognized $460 thousand and $80 thousand of expense related to the restricted stock, respectively. As of December 31, 2021, there was $189 thousand in unrecognized compensation costs related to restricted stock. This cost will be recognized over a weighted average period of 0.23 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | (14) Income Taxes The components of the federal and state income tax expense for the years ended December 31, 2021 and 2020 were: (dollars in thousands) 2021 2020 Federal: Current $ 10,022 5,703 Deferred (717) 1,242 Total federal income tax expense 9,305 6,945 State: Current 1,463 1,141 Deferred (51) 12 Total state income tax expense 1,412 1,153 Total income tax expense $ 10,717 8,098 A reconciliation of the statutory income tax at 21% to the income tax expense included in the statement of operations is as follows for 2021 and 2020, respectively: (dollars in thousands) 2021 2020 Federal income tax at statutory rate $ 9,733 21.0 % 7,252 21.0 % State tax expense, net of federal benefit 1,116 2.4 911 2.6 Tax exempt interest (248) (0.5) (153) (0.4) Bank owned life insurance (77) (0.2) (59) (0.2) Incentive stock options 81 0.2 74 0.2 ESOP 41 0.1 — — Other 71 0.1 73 0.2 Effective income tax rate $ 10,717 23.1 % 8,098 23.4 % The components of the net deferred tax asset at December 31, 2021 and 2020 are as follows: (dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan and lease losses $ 4,345 4,230 Intangibles — 30 Accrued incentive compensation 287 — Accrued retirement 874 528 Deferred rent 141 180 Mortgage repurchase reserve 738 641 Other 183 122 Total deferred tax asset 6,568 5,731 Deferred tax liabilities: Property and equipment (535) (377) Loan servicing rights (2,957) (1,337) Intangibles (15) — Mortgage pipeline fair-value adjustment (308) (1,156) Hedge instrument fair-value adjustment (190) (1,252) Unrealized gain on available for sale securities (213) (797) Prepaid expenses (465) (340) Deferred loan costs (471) (406) Other (1) (4) Total deferred tax liability (5,155) (5,669) Net deferred tax asset $ 1,413 62 The effective tax rates for the twelve-month periods ended December 31, 2021 and 2020 were 23.1% and 23.4% respectively. The decrease in rate from 23.4% to 23.1% between 2020 and 2021 was primarily related to the decrease in state income tax expense from Meridian’s mortgage division, specifically in Maryland. Under ASC 740, Income Taxes, the effect of income tax law changes on deferred taxes should be recognized as a component of income tax expense related to continuing operations in the period in which the law is enacted. This requirement applies not only to items initially recognized in continuing operations, but also to items initially recognized in other comprehensive income. The CARES Act, enacted in March 2020 grants potential tax relief to businesses, including corporate tax provisions that: temporarily allow for the carryback of certain net operating losses, increase interest expense deduction limitations, and allow accelerated depreciation deductions on certain fixed asset improvements. The tax relief under the CARES Act had no material impact to the Corporation’s Consolidated Financial Statements. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deferred tax assets. As of December 31, 2021, the Corporation had an investment in low income housing tax credits of $3.3 million on which it recognized tax credits of $161 thousand, amortization of $183 thousand and tax benefits from losses of $144 thousand during the year ended December 31, 2021. As of December 31, 2020, the Corporation had an investment in low income housing tax credits of $1.3 million on which it recognized tax credits of $161 thousand, amortization of $180 thousand and tax benefits from losses of $26 thousand during the year ended December 31, 2020. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | (15) All of the Corporation’s revenue from contracts with customers in the scope of FASB ASU 2014-09 (Topic 606), “Revenue for Contracts with Customers” (ASC 606) is recognized within non-interest income. The following table presents the Corporation’s non-interest income by revenue stream and reportable segment for the years ended December 31, 2021 and 2020. Year Ended December 31, 2021 Year Ended December 31, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Non-interest Income Mortgage banking income (1) $ 1,097 — 74,835 75,932 $ 1,632 — 74,829 76,461 Wealth management income — 4,801 — 4,801 — 3,854 — 3,854 SBA loan income (1) 6,898 — — 6,898 2,572 — — 2,572 Net change in fair values (1) 43 — (7,881) (7,838) (40) — 9,185 9,145 Net gain (loss) on hedging activity (1) — — 2,961 2,961 — — (9,400) (9,400) Earnings on investment in life insurance (1) 365 — — 365 279 — — 279 Net gain on sale of investment securities available-for-sale (1) 435 — — 435 1,345 — — 1,345 Dividends on FHLB stock (1) 191 — — 191 325 — — 325 Service charges 128 — — 128 107 — — 107 Other (2) 1,622 1 2,492 4,115 1,468 14 748 2,230 Non-interest income $ 10,779 4,802 72,407 87,988 $ 7,688 3,868 75,362 86,918 (1) Not within the scope of ASC 606. (2) Within other non-interest income is $1.2 million and $925 thousand for the years ended December 31, 2021 and 2020, respectively, which are in the scope of ASC 606. These amounts include wire transfer fees, ATM/debit card commissions, and title fee income. A description of the Corporation’s primary revenue streams accounted for under ASC 606 follows: Wealth Management Income: Service Charges on Deposit Accounts: |
Transactions with Executive Off
Transactions with Executive Officers, Directors and Principal Stockholders | 12 Months Ended |
Dec. 31, 2021 | |
Transactions with Executive Officers, Directors and Principal Stockholders | |
Transactions with Executive Officers, Directors and Principal Stockholders | (16) The Corporation has had, and may be expected to have in the future, banking transactions in the ordinary course of business with its executive officers, directors, principal stockholders, their immediate families and affiliated companies (commonly referred to as related parties). Loans receivable from related parties totaled $5.1 million and $3.3 million at December 31, 2021 and 2020, respectively. Advances, repayments, and the effect of changes in composition of related parties during 2021 totaled $2.8 million, $1.3 million, and $284 thousand, respectively. Advances, repayments, and the effect of changes in composition of related parties during 2020 totaled $4.9 million, $3.8 million, and $1.5 million, respectively. Deposits of related parties totaled $34.7 million and $25.6 million at December 31, 2021 and 2020, respectively. Subordinated debt held by related parties totaled $409 thousand and $485 thousand at December 31, 2021 and 2020, respectively. The Corporation paid legal fees of $22 thousand and $8 thousand to a law firm of a director for the years ended December 31, 2021 and 2020, respectively. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments with Off-Balance Sheet Risk, Commitments and Contingencies | |
Financial Instruments with Off-Balance Sheet Risk, Commitments and Contingencies | (17) The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Corporation’s financial instrument commitments at December 31, 2021 and 2020 is as follows: (dollars in thousands) 2021 2020 Commitments to fund loans and commitments under lines of credit $ 486,632 421,399 Letters of credit 25,986 8,928 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Corporation evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory and equipment. Outstanding letters of credit are conditional commitments issued by the Corporation to guarantee the performance of a customer to a third party. The majority of these are standby letters of credit that expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Corporation requires collateral supporting these letters of credit as deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. Not included in commitments outstanding, in the table above are mortgage loan commitments of $143.9 million and $428.8 million in 2021 and 2020, respectively, which included interest rate lock commitments. These rate lock commitments represent an agreement to extend credit to a mortgage loan applicant whereby the interest rate on the loan is set prior to funding. The loan commitment binds the Corporation to lend funds to a potential borrower at the specified rate, regardless of whether interest rates change between the commitment date and the loan funding date. The Corporation’s loan commitments generally range between 30 Loans sold under FHA or investor programs are subject to indemnification or repurchase if they fail to meet the origination criteria of those programs or if the loan is two |
Recent Litigation
Recent Litigation | 12 Months Ended |
Dec. 31, 2021 | |
Recent Litigation | |
Recent Litigation | (18) In the ordinary course of business, the Corporation and its subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings are generally based on alleged violations of banking, employment, contract and other laws. In some of these actions and proceedings, claims for substantial monetary damages are asserted against the Corporation and its subsidiaries. In the ordinary course of business, the Corporation and its subsidiaries are also subject to regulatory and governmental examinations, information gathering requests, inquiries, investigations, and threatened legal actions and proceedings. In connection with formal and informal inquiries by federal, state, and local agencies, the Corporation and its subsidiaries receive numerous requests, subpoenas and orders for documents, testimony and information in connection with various aspects of their activities. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2021 | |
Regulatory Matters | |
Regulatory Matters | (19) The Bank and the Corporation are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank and the Corporation must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s and the Corporation’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank and the Corporation to maintain minimum amounts and ratios (set forth below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2021, that the Bank and the Corporation meet all capital adequacy requirements to which it is subject. Community banks have long raised concerns with bank regulators about the regulatory burden, complexity, and costs associated with certain provisions of the Basel III Rule. In response, Congress provided an “off-ramp” for institutions, like us, with total consolidated assets of less than $10 billion. Section 201 of the Regulatory Relief Act instructed the federal banking regulators to establish a single "Community Bank Leverage Ratio" (“CBLR”) of between 8 and 10%. Under the final rule, a community banking organization is eligible to elect the new framework if it has: less than $10 billion in total consolidated assets, limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9%.The bank regulatory agencies temporarily lowered the CBLR to 8% as a result of the COVID-19 pandemic. As of December 31, 2021, the Federal Deposit Insurance Corporation 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 Bank’s category. The Bank is subject to certain restrictions on the amount of dividends that it may declare and pay to the Corporation due to regulatory considerations. The Pennsylvania Banking Code provides that cash dividends may be declared and paid only out of accumulated net earnings. The Corporation’s and the Banks’s actual and required capital amounts and ratios under the CBLR rules at December 31, 2021 and the Basel III rules at December 31, 2020 are presented below. December 31, 2021 To Be Well Capitalized Actual Under CBLR Framework (dollars in thousands) Amount Ratio Amount Ratio Tier 1 capital (to average assets) Corporation $ 160,379 9.39% $ 136,621 8.00% Bank 196,506 11.51% 136,620 8.00% December 31, 2020 To Be Well Capitalized Actual Under CBLR Framework (dollars in thousands) Amount Ratio Amount Ratio Tier 1 capital (to average assets) Corporation $ 134,564 8.96% $ 120,082 8.00% Bank 173,231 11.54% 120,080 8.00% |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements and Disclosures | |
Fair Value Measurements and Disclosures | (20) The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Corporation’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation techniques or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Corporation groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows: December 31, 2021 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 16,837 — 16,837 — U.S. government agency mortgage-backed securities 9,813 — 9,813 — U.S. government agency collateralized mortgage obligations 22,381 — 22,381 — State and municipal securities 72,982 — 72,982 — U.S. Treasuries 29,728 29,728 — — Non-U.S. government agency collateralized mortgage obligations 975 — 975 — Corporate bonds 6,586 — 6,586 — Equity investments 2,354 — 2,354 — Mortgage loans held for sale 80,882 — 80,882 — Mortgage loans held for investment 17,558 — 17,558 — Interest rate lock commitments 1,122 — — 1,122 Forward commitments 65 — 65 — Customer derivatives - interest rate swaps 961 — 961 — Total $ 262,244 29,728 231,394 1,122 Liabilities Interest rate lock commitments 203 — — 203 Forward commitments 106 — 106 — Customer derivatives - interest rate swaps 1,018 — 1,018 — $ 1,327 — 1,124 203 December 31, 2020 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 25,592 — 25,592 — U.S. government agency mortgage-backed securities 4,046 — 4,046 — U.S. government agency collateralized mortgage obligations 23,909 — 23,909 — State and municipal securities 65,810 — 65,810 — Corporate bonds 4,205 — 4,205 — Equity investments 1,031 — 1,031 — Mortgage loans held for sale 229,199 — 229,199 — Mortgage loans held for investment 12,182 — 12,182 — Interest rate lock commitments 6,932 — — 6,932 Forward commitments — — — — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 374,024 — 367,092 6,932 Liabilities Interest rate lock commitments 100 — — 100 Forward commitments 1,572 — 1,572 — Customer derivatives - interest rate swaps 1,219 — 1,219 — $ 2,891 — 2,791 100 Assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 (dollars in thousands) Fair Value Fair Value Mortgage servicing rights $ 10,756 4,647 SBA loan servicing rights 2,009 970 Impaired loans (1) Commercial and industrial 1,837 2,297 Small business loans 290 — Home equity lines and loans — 86 Residential mortgage — 615 Total $ 14,892 8,615 (1) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Refer to the following page for further qualitative discussion around impaired loans. The following table details the valuation techniques for Level 3 impaired loans. Fair Value Unobservable (dollars in thousands) Level 3 Valuation Technique Input Range of Inputs December 31, 2021 $ 2,127 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount December 31, 2020 2,998 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount Below is management’s estimate of the fair value of all financial instruments, whether carried at cost or fair value on the Corporation’s balance sheet. The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair value of the Corporation’s financial instruments: (a) Cash and Cash Equivalents The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values. (b) Securities The fair value of securities 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, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. U.S. Treasuries includes in the available for sale portfolio are the only securities considered Level 1, while all other securities are considered Level 2. (c) Mortgage Loans Held-for-Sale The fair value of loans held for sale is based on secondary market prices. (d) Loans Receivable The fair value of loans receivable is estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value below is reflective of an exit price. (e) Mortgage Loans Held-for-Investment The fair value of mortgage loans held for investment is based on the price secondary markets are currently offering for similar loans using observable market data. (f) Loan Servicing Rights The Corporation estimates the fair value of mortgage servicing rights and SBA servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the interest rates of the portfolios serviced. These servicing rights are classified within Level 3 in the fair value hierarchy based upon management’s assessment of the inputs. The Corporation reviews the servicing rights portfolios on a quarterly basis for impairment. (g) Impaired Loans Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the Allowance policy. (h) Restricted Investment in Bank Stock The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities. (i) Accrued Interest Receivable and Payable The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value. (j) Deposit Liabilities The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. (k) Short-Term Borrowings The carrying amounts of short-term borrowings approximate their fair values. (l) Long-Term Debt Fair values of FHLB advances and the acquisition purchase note payable are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. (m) Subordinated Debt Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. (n) Off-Balance Sheet Financial Instruments Off-balance sheet instruments are primarily comprised of loan commitments, which are generally priced at market at the time of funding. Fees on commitments to extend credit and stand-by letters of credit are deemed to be immaterial and these instruments are expected to be settled at face value or expire unused. It is impractical to assign any fair value to these instruments and as a result they are not included in the table below. Fair values assigned to the notional value of interest rate lock commitments and forward sale contracts are based on market quotes. (o) Derivative Financial Instruments The fair value of forward commitments and interest rate swaps is based on market pricing and therefore are considered Level 2. Derivatives classified as Level 3 consist of interest rate lock commitments related to mortgage loan commitments. The determination of fair value includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. A significant increase or decrease in the external market price would result in a significantly higher or lower fair value measurement. The estimated fair values of the Corporation’s financial instruments at December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 23,480 23,480 36,744 36,744 Securities available-for-sale (1) Level 2 159,302 159,302 123,562 123,562 Securities held-to-maturity Level 2 6,372 6,591 6,510 6,857 Equity investments Level 2 2,354 2,354 1,031 1,031 Mortgage loans held for sale Level 2 80,882 80,882 229,199 229,199 Loans receivable, net of the allowance for loan and lease losses Level 3 1,368,899 1,370,885 1,272,582 1,289,776 Mortgage loans held for investment Level 2 17,558 17,558 12,182 12,182 Interest rate lock commitments Level 3 1,122 1,122 6,932 6,932 Forward commitments Level 2 65 65 — — Restricted investment in bank stock NA 5,117 NA 7,861 NA Accrued interest receivable Level 3 5,009 5,009 5,482 5,482 Customer derivatives - interest rate swaps Level 2 961 961 1,118 1,118 Financial liabilities: Deposits Level 2 1,446,413 1,549,100 1,241,335 1,392,500 Short-term borrowings Level 2 41,344 41,344 106,862 106,862 Long-term debt Level 2 — — 165,546 168,000 Subordinated debentures Level 2 40,508 40,803 40,671 38,375 Accrued interest payable Level 2 31 31 1,154 1,154 Interest rate lock commitments Level 3 203 203 100 100 Forward commitments Level 2 106 106 1,572 1,572 Customer derivatives - interest rate swaps Level 2 1,018 1,018 1,219 1,219 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 486,632 — 421,399 — Letters of credit Level 2 25,986 — 8,928 — (1) U.S. Treasuries within securities available-for-sale are classified as Level 1. The following table includes a rollforward of interest rate lock commitments for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the years ended December 31, 2021 and 2020. Year Ended December 31, 2021 2020 Balance at beginning of the period $ 6,932 504 (Decrease) increase in value (5,810) 6,428 Balance at end of the period $ 1,122 6,932 The following table details the valuation techniques for Level 3 interest rate lock commitments. Significant Fair Value Unobservable Range of Weighted (dollars in thousands) Level 3 Valuation Technique Input Inputs Average December 31, 2021 $ 1,122 Market comparable pricing Pull through 1 - 99 % 87.66 % December 31, 2020 6,932 Market comparable pricing Pull through 1 - 99 83.08 Net realized losses of $5.9 million and gains of $6.5 million due to changes in the fair value of interest rate lock commitments which are classified as Level 3 assets and liabilities for the twelve months ended December 31, 2021 and 2020, respectively, are recorded in non-interest income as net change in the fair value of derivative instruments in the Corporation’s consolidated statements of income. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | (21) Risk Management Objective of Using Derivatives The Corporation is exposed to certain risk arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Corporation’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation’s known or expected cash receipts and its known or expected cash payments principally related to the Corporation’s loan portfolio. Mortgage Banking Derivatives In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Interest rate lock commitments and forward commitments are recorded within other assets/liabilities on the consolidated balance sheets, with changes in fair values during the period recorded within net change in the fair value of derivative instruments on the consolidated statements of income. Customer Derivatives – Interest Rate Swaps Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain customers to swap a fixed rate product for a variable rate product, or vice versa. The Corporation executes interest rate derivatives with commercial banking customers to facilitate their respective risk management strategies. Those interest rate derivatives are simultaneously hedged by offsetting derivatives that the Corporation executes with a third party, such that the Corporation minimizes its net interest rate risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. The following table presents a summary of the notional amounts and fair values of derivative financial instruments: December 31, 2021 December 31, 2020 (dollars in thousands) Balance Sheet Line Item Notional Amount Asset (Liability) Fair Value Notional Amount Asset (Liability) Fair Value Interest Rate Lock Commitments Positive fair values Other assets $ 108,653 1,122 406,422 6,932 Negative fair values Other liabilities 35,264 (203) 22,406 (100) Total 143,917 919 428,828 6,832 Forward Commitments Positive fair values Other assets 30,500 65 — — Negative fair values Other liabilities 45,500 (106) 218,000 (1,572) Total 76,000 (41) 218,000 (1,572) Customer Derivatives - Interest Rate Swaps Positive fair values Other assets 35,447 961 20,979 1,118 Negative fair values Other liabilities 35,447 (1,018) 20,979 (1,219) Total 70,894 (57) 41,958 (101) Total derivative financial instruments $ 290,811 821 688,786 5,159 Interest rate lock commitments are considered Level 3 in the fair value hierarchy, while the forward commitments and interest rate swaps are considered Level 2 in the fair value hierarchy. The following table presents a summary of the fair value gains and losses on derivative financial instruments: Year Ended December 31, (dollars in thousands) 2021 2020 Interest Rate Lock Commitments $ (5,913) 6,486 Forward Commitments 1,531 (1,459) Customer Derivatives - Interest Rate Swaps 44 (52) Net fair value (losses) gains on derivative financial instruments $ (4,338) 4,975 Net realized gains on derivative hedging activities were $3.0 million and net realized losses were $9.4 million for the year ended December 31, 2021 and 2020, respectively, and are included in non-interest income in the consolidated statements of income. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2021 | |
Segments | |
Segments | (22) ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations. Our Banking segment (“Bank”) consists of commercial and retail banking. The Banking segment generates interest income from its lending (including leasing) and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of available for sale investment securities, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income, title insurance fees, and other less significant non-interest income. Meridian Wealth (“Wealth”), a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future. The unit generates non-interest income through advisory fees. Meridian’s mortgage banking segment (“Mortgage”) consists of one central loan production facility and several retail and profit sharing loan production offices located throughout suburban Philadelphia and Maryland. The Mortgage segment originates 1 – 4 family residential mortgages and sells nearly all of its production to third party investors. The unit generates net interest income on the loans it originates and holds temporarily, then earns fee income (primarily gain on sales) at the time of the sale. The unit also recognizes income from document preparation fees, changes in portfolio pipeline fair values and related net hedging gains (losses). The table below summarizes income and expenses, directly attributable to each business line, which has been included in the statement of operations. Total assets for each segment is also provided. Year Ended December 31, 2021 Year Ended December 31, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 61,032 15 2,064 63,111 $ 46,997 (48) 2,047 48,996 Provision for loan losses 1,070 — — 1,070 8,302 — — 8,302 Net interest income after provision 59,962 15 2,064 62,041 38,695 (48) 2,047 40,694 Non-interest Income Mortgage banking income 1,097 — 74,835 75,932 1,632 — 74,829 76,461 Wealth management income — 4,801 — 4,801 — 3,854 — 3,854 SBA loan income 6,898 — — 6,898 2,572 — — 2,572 Net change in fair values 43 — (7,881) (7,838) (40) — 9,185 9,145 Net gain (loss) on hedging activity — — 2,961 2,961 — — (9,400) (9,400) Other 2,741 1 2,492 5,234 3,524 14 748 4,286 Non-interest income 10,779 4,802 72,407 87,988 7,688 3,868 75,362 86,918 Non-interest expense 40,392 3,496 59,839 103,727 33,351 3,213 56,512 93,076 Income before income taxes $ 30,349 1,321 14,632 46,302 $ 13,032 607 20,897 34,536 Total Assets $ 1,608,305 6,355 98,783 1,713,443 $ 1,488,312 5,479 226,406 1,720,197 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2021 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (23) 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 $1,070,000,000 or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering (December 31, 2022), (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. Adopted Pronouncements in 2021: FASB ASU 2018-15 (Topic 350), "Intangibles - Goodwill and Other - Internal-Use Software" Issued in August 2018, ASU 2018-15 provides clarity on capitalizing and expensing implementation costs for cloud computing arrangements in a service contract. If an implementation cost is capitalized, the cost should be recognized over the noncancellable term and periodically assessed for impairment. The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2020 and interim periods within annual periods beginning after December 15, 2021. Adoption should be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures. FASB ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” Issued in December 2019, ASU 2019-12 adds new guidance to simplify accounting for income taxes, changes the accounting for certain income tax transactions and makes minor improvements to the codification. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures. Pronouncements Not Effective as of December 31, 2021: FASB ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments” Issued in June 2016, ASU 2016-13 significantly changes how companies measure and recognize credit impairment for many financial assets. This ASU requires businesses and other organizations to measure the current expected credit losses (“CECL”) on financial assets, such as loans, net investments in leases, certain debt securities, bond insurance and other receivables. The amendments affect entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. Current GAAP requires an incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The amendments in this ASU replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonableness and supportable information to inform credit loss estimates. An entity should apply the amendments through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (modified retrospective approach). Acquired credit impaired loans for which the guidance in Accounting Standards Codification (ASC) Topic 310-30 has been previously applied should prospectively apply the guidance in this ASU. A prospective transition approach is required for debt securities for which an other-than-temporary impairment has been recognized before the effective date. In October 2019, the FASB approved a delay for the implementation of the ASU. Accordingly, as an emerging growth company, the Corporation’s effective date for the implementation of the ASU will be January 1, 2023. FASB ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” Issued in April 2019, ASU 2019-04 clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments (addressed by ASUs 2016-13, 2017-12, and 2016-01, respectively). The amendments to estimating expected credit losses (ASU 2016-13), in particular, how a company considers recoveries and extension options when estimating expected credit losses, are the most relevant to the Corporation. The ASU clarifies that (1) the estimate of expected credit losses should include expected recoveries of financial assets, including recoveries of amounts expected to be written off and those previously written off, and (2) that contractual extension or renewal options that are not unconditionally cancellable by the lender are considered when determining the contractual term over which expected credit losses are measured. Management will consider the impact of ASU 2019-04 when considering the impact of ASU 2016-13 as discussed above. FASB ASU 2016-02 (Topic 842), “Leases” Issued in February 2016, ASU 2016-02 revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use (ROU) asset for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard became effective for us on January 1, 2022. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. Management has elected to use the effective date as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022. The Corporation has implemented a third party lease accounting system to assist with the measurement of lease liabilities and related right-of-use assets, the post-implementation administration aspect of lease accounting, and the preparation of applicable disclosures related to the new guidance. The new standard provided a number of optional practical expedients in transition. We have elected the ‘package of practical expedients’, which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. This standard will have a material effect on our Consolidated Balance Sheet and related disclosures but is not expected to have a material impact on our Consolidated Statement of Income. Any additional assets recorded as a result of adoption is expected to have a negative impact on the Corporation and Bank capital ratios under current regulatory guidance. On adoption, we recorded approximately $10.6 million of operating lease liabilities and $10.8 million of related right-of-use assets at January 1, 2022. The new standard also provides practical expedients for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also have elected the practical expedient to not separate lease and non-lease components for all of our leases. FASB ASU 2020-04 (Topic 848), “Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” Issued in March 2020, ASU 2020-04 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The Corporation does not have a significant concentration of loans, derivative contracts, borrowings or other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. The guidance under ASC-848 will be available for a limited time, generally through December 31, 2022. The Corporation expects to adopt the LIBOR transition relief allowed under this standard. FASB ASU 2020-06, “Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ” This ASU clarifies the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature models. For public business entities that meet the definition of an SEC filer (excluding smaller reporting entities), the amendments are effective for fiscal years beginning after Dec. 15, 2021, and interim periods within. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2023, and interim periods within. |
Parent Company Financial Statem
Parent Company Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Parent Company Financial Statements | |
Parent Company Financial Statements | (24) The condensed financial statements of the Corporation (parent company only) are presented below. These statements should be read in conjunction with the notes to the consolidated financial statements. A. Condensed Balance Sheets December 31, December 31, (dollars in thousands, except per share data) 2021 2020 Cash and due from banks $ 2,836 213 Investments in subsidiaries 200,410 180,288 Other assets 1,382 360 Total assets $ 204,628 180,861 Liabilities: Subordinated debentures 39,057 38,904 Accrued interest payable 6 6 Other liabilities 205 329 Total liabilities 39,268 39,239 Stockholders’ equity: Common stock, $1 par value. Authorized 25,000,000 shares; issued 6,534,587 and 6,455,566 as of December 31, 2021 and December 31, 2020 6,535 6,456 Surplus 83,663 81,196 Treasury Stock- 426,693 and 320,000 shares at December 31, 2021 and December 31, 2020, respectively (8,860) (5,828) Unearned common stock held by employee stock ownership plan (1,602) (1,768) Retained earnings 84,916 59,010 Accumulated other comprehensive income 708 2,556 Total stockholders’ equity 165,360 141,622 Total liabilities and stockholders’ equity $ 204,628 180,861 B. Condensed Statements of Income Year ended December 31, (dollars in thousands, except per share data) 2021 2020 Dividends from Bank $ 17,187 11,512 Non-interest and other income — 10 Total operating income 17,187 11,522 Interest expense 2,303 2,202 Other expenses 1,675 — Income before equity in undistributed income of subsidiaries 13,209 9,320 Equity in undistributed income of subsidiaries 22,376 17,118 Income before income taxes 35,585 26,438 Income tax expense — — Net income 35,585 26,438 Total other comprehensive (loss) income (1,848) 2,559 Total comprehensive income $ 33,737 28,997 C. Condensed Statements of Cash Flows Year ended December 31, (dollars in thousands) 2021 2020 Net income $ 35,585 26,438 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed income of subsidiaries (22,376) (17,818) Share-based compensation 1,607 763 Amortization of issuance costs on subordinated debt 153 112 (Decrease) in accrued interest payable — (72) Other, net (740) (294) Net cash provided by operating activities 14,229 9,129 Cash flows from financing activities: Issuance cost on subordinated debt — (231) Net purchase of treasury stock (3,032) (5,703) Dividends paid (9,679) (1,525) Purchase of common shares for ESOP — (2,000) Share based awards and exercises 1,105 395 Net cash (used in) provided by financing activities (11,606) (9,064) Net change in cash and cash equivalents 2,623 65 Cash and cash equivalents at beginning of period 213 148 Cash and cash equivalents at end of period $ 2,836 213 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | (25) Special Dividend On January 27, 2022, the Corporation’s Board of Directors declared a special dividend of $1.00 per share on its Common Stock, payable on February 21, 2022 to shareholders of record as of February 14, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Nature of Operations | (a) Nature of Operations Meridian Corporation (“Meridian” or the “Corporation”) is a bank holding company engaged in banking activities through its wholly-owned subsidiary, Meridian Bank (the “Bank”), a full-service, state-chartered commercial bank with offices in the Delaware Valley tri-state market, which includes Pennsylvania, New Jersey and Delaware, as well as the Central Maryland market area. We have a financial services business model with significant noninterest income streams from mortgage lending, small business (“SBA”) lending and wealth management services. We provide services to small and middle market businesses, professionals and retail customers throughout our market area. We have a modern, progressive, consultative approach to creating innovative solutions for our customers. We are technology driven, with a culture that incorporates significant use of customer preferred deliver channel and bank-to-bank ACH. The Corporation operates in a highly competitive market areas that includes local, national and regional banks as competitors along with savings banks, credit unions, insurance companies, trust companies and registered investment advisors. The Corporation and its subsidiaries are regulated by many regulatory agencies including the Securities and Exchange Commission (“SEC”), Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve and the Pennsylvania Department of Banking and Securities. The Bank was incorporated on March 16, 2004 under the laws of the Commonwealth of Pennsylvania and is a Pennsylvania state-chartered bank. The Bank commenced operations on July 8, 2004 and is a full-service bank providing personal and business lending and deposit services through 6 full-service banking offices in Pennsylvania, 9 mortgage loan production offices throughout the Delaware Valley, and 8 mortgage loan production offices in Maryland. The Bank and Corporation are headquartered in Malvern, Pennsylvania, located in the western suburbs of Philadelphia. |
Basis of Presentation | (b) Basis of Presentation The accounting policies of the Corporation conform to U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include accounts of the Corporation and its wholly owned subsidiary, the Bank, and the wholly owned subsidiaries of the Bank: Meridian Land Settlement Services LLC; APEX Realty LLC; Meridian Wealth Partners LLC; and Meridian Equipment Finance LLC. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Reclassifications had no effect on prior year net income or total stockholders’ equity. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Although our current estimates contemplate current conditions and how we expect them to change in the future, due to the continuing impact that the COVID-19 pandemic has had on financial markets and the economy both locally and nationally, it is reasonably possible that this could continue to materially affect these significant estimates and our results of operations and financial condition. |
Significant Concentrations of Credit Risk | (c) Significant Concentrations of Credit Risk Most of the Corporation’s activities are with customers located in the Delaware Valley tri-state market and the central Maryland market area. Note 4 discusses the types of securities that the Corporation invests in. Note 5 discusses types of lending that the Corporation engages in. Although the Corporation has a diversified loan portfolio, its debtors’ ability to honor their contracts is influenced by the region’s economy. The Corporation does not have any significant concentrations to any one industry or customer, however there is significant concentration of commercial real estate-backed loans, amounting to 37% and 38% of total loans held for investment, as of December 31, 2021 and December 31, 2020, respectively. |
Presentation of Cash Flows | (d) Presentation of Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold. Generally, federal funds are purchased or sold for one day periods. The Federal Reserve Board removed cash minimum reserve requirements in March 2020. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and the federal funds purchased and repurchased agreements. |
Securities | (e) Securities Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities classified as available-for-sale are those securities that the Corporation intends to hold for an indefinite period of time but not necessarily to maturity. Securities available-for-sale are carried at fair value. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Corporation’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Unrealized gains and losses are reported as increases or decreases in other comprehensive income. Gains or losses on disposition are based on the net proceeds and cost of the securities sold, adjusted for the amortization of premiums and accretion of discounts, using the specific identification method. Securities classified as held to maturity are those debt securities the Corporation has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for the amortization of premium and accretion of discount, computed on a level yield basis. Investments in equity securities are recorded in accordance with ASC 321-10, Investments - Equity Securities. The Corporation’s accounting policy specifies that (a) if the Corporation does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired, unless there is a credit loss. When the Corporation does not intend to sell the security, and it is more likely than not, the Corporation will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. The Corporation did not recognize any other-than-temporary impairment charges during the years ended December 31, 2021 and 2020. |
Loans Receivable | (f) Loans Receivable Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Corporation generally amortizes these amounts over the contractual life of the loan. Loans that were originated by the Corporation and intended for sale in the secondary market to permanent investors, but were either repurchased or unsalable due to defect, are held for the foreseeable future or until maturity or payoff, are carried at fair value. The accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and charged against current year income. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. |
Allowance for Loan and Lease Losses | (g) Allowance for Loan and Lease Losses The allowance for loan and lease losses (“Allowance”) is a valuation for probable incurred credit losses established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the Allowance, and subsequent recoveries, if any, are credited to the Allowance. All, or part, of the principal balance of loans receivable are charged off to the Allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Charge-offs for retail consumer loans are generally made for any balance not adequately secured after 120 cumulative days past due. The Allowance is maintained at a level considered adequate to provide for probable incurred credit losses. Management’s periodic evaluation of the adequacy of the Allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available. In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Corporation’s Allowance and may require the Corporation to recognize additions to the Allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. The Allowance consists of general and specific components. The general component covers non-classified loans, as well as, non-impaired classified loans and is based on historical loss experience adjusted for qualitative factors. The specific component relates to loans that are classified as doubtful, substandard, and are on non-accrual and have been deemed impaired. Loan classifications are determined based on various assessments such as the borrower’s overall financial condition, payment history, repayment sources, guarantors and value of collateral. We apply historical loss rates to pools of loans with similar risk characteristics. Loss rates are calculated by historical charge-offs that have occurred within each pool of loans over the loss emergence period (“LEP”). The LEP is an estimate of the average amount of time from when an event happens that causes the borrower to be unable to pay on a loan until the loss is confirmed through a loan charge-off. Another key assumption is the look-back period (“LBP”), which represents the historical data period utilized to calculate loss rates. Our LBP goes back to Q1 2010 for all portfolio segments, as applicable, which encompasses our loss experience during the Financial Crisis, and our more recent improved loss experience. After consideration of the historic loss calculations, management applies qualitative adjustments so that the Allowance is reflective of the inherent losses that exist in the loan portfolio at the balance sheet date. Qualitative adjustments are made based upon changes in lending policies and practices, economic conditions, changes in the loan portfolio, changes in lending management, results of internal loan reviews, asset quality trends, collateral values, concentrations of credit risk and other external factors. The evaluation of the various components of the Allowance requires considerable judgment in order to estimate inherent loss exposures. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement, or a troubled debt restructure (“TDR”). Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. For commercial and construction loans, impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral adjusted for cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous residential mortgage and consumer loans are collectively evaluated for impairment. Accordingly, the Corporation does not separately identify individual loans of this nature for impairment disclosures, unless such loans become impaired or are troubled and the subject of a restructuring agreement. Loans whose terms are modified are classified as TDRs if the Corporation grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. TDRs are considered impaired loans No portion of the Allowance is restricted to any individual loan or groups of loans, and the entire Allowance is available to absorb any and all loan and lease losses. The Corporation has identified the following portfolio segments with similar risk characteristics for measuring credit losses: Commercial mortgage – Residential mortgage – Construction – Commercial and Industrial – Leases – Consumer, including home equity – The largest component of Meridian’s consumer loan portfolio consists of fixed rate home equity loans and variable rate home equity lines of credit. Substantially all home equity loans and lines of credit are secured by junior lien mortgages on principal residences. The Bank will lend amounts, which, together with all prior liens, typically may be up to 90 percent of the appraised value of the property securing the loan. Home equity term loans may have maximum terms up to 20 years, while home equity lines of credit generally have maximum terms of 15 years. Credit risk on such loans is mitigated through prudent underwriting standards, including evaluation of the creditworthiness of the borrower through credit scores and debt-to-income ratios and, if secured, the collateral value of the assets. |
Mortgage Banking Activities and Mortgage Loans Held for Sale | h) Mortgage Banking Activities and Mortgage Loans Held for Sale The Corporation’s mortgage banking division operates 9 offices in the tri-state area of Pennsylvania, Delaware and New Jersey and another 8 offices in Maryland. The mortgage banking division originates conventional mortgages, FHA, VA, USDA, and other state insured mortgages. The loans are generally sold to various investors in the secondary market. Mortgage loans originated by the Corporation and intended for sale in the secondary market to permanent investors are classified as mortgage loans held for sale on the balance sheet as the Corporation has elected to measure loans held for sale at fair value. Fair value is based on outstanding investor commitments or, in the absence of such commitments, on current investor yield requirements based on third party models. Gains and losses on sales of these loans, as well as loan origination costs, are recorded as a component of noninterest income in the Consolidated Statements of Income. The Corporation’s current practice is to sell residential mortgage loans and retain the servicing rights, as discussed further below. Interest on loans held for sale is credited to income based on the principal amounts outstanding. The Corporation enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (interest rate lock commitments). Rate lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. Time elapsing between the issuance of a loan commitment and closing and sale of the loan generally ranges from 30 to 120 days. The Corporation protects itself from changes in interest rates through the use of best efforts forward sale contracts, whereby the Corporation commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan. The Corporation also commits to loan sales through a mandatory sales channel which are economically hedged by the future sale of mortgage-backed securities to third-party counterparties to mitigate the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. By entering into best efforts commitments and economically hedging the mandatory commitments, the Corporation limits its exposure to loss and its realization of significant gains related to its rate lock commitments due to changes in interest rates. The Corporation utilizes a third-party model to determine the fair value of rate lock commitments or forward sale contracts. This model uses investor quotes while taking into consideration the probability that the rate lock commitments will close. Net derivative assets and liabilities are recorded within other assets or other liabilities, respectively, on the consolidated balance sheets, with changes in fair value during the period recorded within net change in the fair value of derivative instruments on the consolidated statements of income. |
Loan Servicing Rights | (i) Loan Servicing Rights The Corporation sells substantially all of the residential mortgage loans originated for sale in the secondary market; however, the Corporation may retain the servicing rights related to some of these loans. A fee, usually based on a percentage of the outstanding principal balance of the loan, is received in return for these services. Mortgage servicing rights (“MSRs") are recognized when a loan’s servicing rights are retained upon sale of a loan. When mortgage loans are sold with servicing retained, MSRs are initially recorded at fair value with the income effect recorded in non-interest income. The Corporation also sells the guaranteed portion of certain Small Business Administration (“SBA”) loans to third parties and retains servicing rights and receives servicing fees. All such transfers are accounted for as sales. While the Corporation may retain a portion of certain sold SBA loans, its continuing involvement in the portion of the loan that was sold is limited to certain servicing responsibilities. These servicing assets amortize in proportion to, and over the period of, the estimated future net servicing life of the underlying loans. The servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the servicing assets. |
Other Real Estate Owned | (j) Other Real Estate Owned Other real estate owned (OREO) is comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure. The Corporation acquires OREO through the wholly owned subsidiary of the Bank, Apex Realty. OREO is recorded at the lower of cost or fair value, or the loan amount net of estimated selling costs, at the date of foreclosure. The cost basis of OREO is its recorded value at the time of acquisition. After acquisition, valuations are periodically performed by management and subsequent changes in the valuation allowance are charged to OREO expense. Revenues, such as rental income, and holding expenses are included in other income and other expenses, respectively. The Corporation had no OREO at December 31, 2021 and 2020. |
Restricted Investment in Bank Stock | (k) Restricted Investment in Bank Stock Restricted bank stock is principally comprised of stock in the Federal Home Loan Bank of Pittsburgh (FHLB). Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula. As of December 31, 2021, and 2020, the Corporation had an investment of $5.1 million and $7.9 million, respectively, related to the FHLB stock. Also included in restricted stock is secondary stock from a correspondent bank in the amount of $50 thousand as of December 31, 2021 and 2020. All restricted stock is carried at cost. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) significance of the decline in net assets of the banks as compared to the capital stock amount and the length of time this situation has persisted, (2) commitments by the banks to make payments required by law or regulation and the level of such payments in relation to the operating performance of the banks, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the banks. Management believes no impairment charge is necessary related to these bank restricted stocks as of December 31, 2021 or 2020. |
Transfers of Financial Assets | (l ) Transfers of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Bank Premises and Equipment | (m) Bank Premises and Equipment Bank premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 12 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 7 years and 3 to 5 years for computer software and hardware, respectively. Leasehold improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. The costs of maintenance and repairs are expensed as incurred; while major replacements, improvements and additions are capitalized. |
Bank-Owned Life Insurance | (n) Bank-Owned Life Insurance The Corporation invests in bank owned life insurance (“BOLI”) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Corporation on a chosen group of employees. The Corporation is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Earnings from the increase in cash surrender value of the policies are included in non-interest income on the consolidated statements of income. |
Advertising Costs | (o) Advertising Costs The Corporation follows the policy of charging the costs of advertising to expense as incurred. |
Employee Benefit Plans | (p) Employee Benefit Plans The Corporation has a 401(k) Plan (the Plan) and an Employee Stock Ownership Plan (ESOP). All employees are eligible to participate in the Plan and ESOP after they have attained the age of 21 and have also completed 3 consecutive months of service. Employees must participate in the Plan to be eligible for participation in the ESOP. The employees may contribute to the Plan up to the maximum percentage allowable by law of their compensation. The Corporation may make a discretionary matching contribution to the Plan and the ESOP. Full vesting in the Corporation’s contribution to the Plan and ESOP is over a three-year period. The Corporation recorded expense for the Plan and ESOP of $1.4 million and $1.1 million, respectively for the year ended December 31, 2021 and $1.1 million and $1.2 million, respectively for the year ended December 31, 2020. The expense recorded by the Corporation for the ESOP for the year ended December 31, 2021 included a $663 thousand employer contribution, in addition to $437 thousand in stock compensation related expense. The expense recorded by the Corporation for the ESOP for the year ended December 31, 2020 included a $550 thousand employer contribution, and a $600 thousand one-time contribution approved by the Board of Directors. There was no such contribution made in 2021. During the year ended December 31, 2021, 45,606 shares were purchased by the ESOP at an average market value of $24.30, while for the year ended December 31, 2020, 161,576 shares were purchased by the ESOP at an average market value of $15.06. Shares in the ESOP that are committed to be released to employees are treated as outstanding shares in the Corporation’s computation of earnings per share. On August 31, 2020 the Corporation established a $2 million stock purchase authorization with the ESOP. By the end of 2020 the ESOP had fully utilized the $2 million loan to purchase 133,280 Corporation common shares and as of December 31, 2021, 26,656 of these common shares were released to the ESOP leaving 106,624 unallocated shares. The 133,280 common shares purchased using the loan proceeds are included in the 161,576 shares purchased by the ESOP in 2020. There were 269,904 shares in the ESOP as of December 31, 2021. Shares in the ESOP would be impacted by any stock dividends and stock splits in the same manner as all other outstanding common shares of the Corporation. |
Income Taxes | (q) Income Taxes Deferred income taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and net operating losses and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and net operating loss carry-forwards and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Corporation follows accounting guidance related to accounting for uncertainty in income taxes. Under the “more likely than not” threshold guidelines, the Corporation believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the non-recognition of an existing tax benefit. As of December 31, 2021, and 2020, the Corporation had no material unrecognized tax benefits or accrued interest and penalties. The Corporation’s policy is to account for interest as a component of interest expense and penalties as a component of other expense. The Corporation is no longer subject to examination by federal, state and local taxing authorities for years before January 1, 2018. |
Stock Compensation Plans | (r ) Stock Compensation Plans Stock compensation accounting guidance requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the grant date fair value of the equity or liability instruments issued. The stock compensation accounting guidance covers a wide range of share-based compensation arrangements including stock options and restricted share plans. The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Scholes model is used to estimate the fair value of stock options, while the market price of the Corporation’s common stock at the date of grant is used for restricted stock awards. |
Comprehensive Income | (s) Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of other comprehensive income (loss) for the years ended December 31, 2021 and 2020 consist of unrealized holding gains and (losses) arising during the year on available-for-sale securities. |
Off-Balance Sheet Financial Instruments | (t ) Off-Balance Sheet Financial Instruments In the ordinary course of business, the Corporation has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded in the balance sheet when they are funded. |
Derivative Financial Instruments | (u) Derivative Financial Instruments The Corporation recognizes all derivative financial instruments related to its mortgage banking activities on its balance sheet at fair value. The Corporation utilizes investor quotes to determine the fair value of interest rate lock commitment derivatives and market pricing to determine the fair value of forward security purchase commitment derivatives. All changes in fair value of derivative instruments are recognized in earnings. The Corporation enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. The interest rate swaps are recognized on the Corporation’s balance sheet at fair value. Under these agreements, the Corporation originates variable-rate loans with customers in addition to interest rate swap agreements, which serve to effectively swap the customers’ variable-rate loans into fixed-rate loans. The Corporation then enters into corresponding swap agreements with swap dealer counterparties to economically hedge its exposure on the variable and fixed components of the customer agreements. The interest rate swaps with both the customers and third parties are not designated as hedges under ASC 815 and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. |
Earnings per Common Share | (v) Earnings per Common Share Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period reduced by unearned ESOP Plan shares and treasury stock. Diluted earnings per common share takes into account the potential dilution that would occur if in the-money stock options were exercised and converted into shares of common stock and restricted stock awards and performance-based stock awards were vested. Proceeds assumed to have been received on options exercises are assumed to be used to purchase shares of the Corporation’s common stock at the average market price during the period, as required by the treasury stock method of accounting. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive. |
Revenue Recognition | (w) Revenue Recognition The Corporation recognizes all sources of income on the accrual method, with the exception of nonaccrual loans and leases. The Corporation earns wealth management fee income from investment advisory services provided to individual and 401k customers. Fees that are determined based on the market value of the assets held in their accounts are generally billed quarterly, in advance, based on the market value of assets at the end of the previous billing period. Other related services that are based on a fixed fee schedule are recognized when the services are rendered. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e. the trade date. Included in other assets on the balance sheet is a receivable for wealth management fees that have been earned but not yet collected. |
Loss Contingencies | (x) Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements. |
Operating Segments | (y) Operating Segments While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis. The Corporation has identified three segments: a banking segment, a wealth management segment and a mortgage banking segment, as more fully disclosed in the Segment note to the consolidated financial statements. |
Fair Value of Financial Instruments | (z) Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Fair Value Measurements and Disclosures note to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings per Common Share | |
Schedule of basic and diluted earnings per common share | Year Ended December 31, (dollars in thousands, except per share data) 2021 2020 Numerator: Net income available to common stockholders $ 35,585 26,438 Denominator for basic earnings per share Weighted average shares outstanding 6,133 6,159 Average unearned ESOP shares (114) (37) Basic weighted averages shares outstanding 6,019 6,122 Dilutive effects of assumed exercises of stock options 130 23 Dilutive effects of SERP shares 57 42 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,206 6,187 Basic earnings per share $ 5.91 4.32 Diluted earnings per share $ 5.73 4.27 Antidilutive shares excluded from computation of average dilutive earnings per share 139 275 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Other Intangibles | |
Schedule of goodwill and intangibles assets related to acquisition | Balance Balance Amortization December 31, Amortization December 31, Period (dollars in thousands) 2020 Expense 2021 (in years) Goodwill - Wealth $ 899 — 899 Indefinite Total Goodwill 899 — 899 Intangible assets - trade name 266 — 266 Indefinite Intangible assets - customer relationships 3,319 (206) 3,113 20 Intangible assets - non competition agreements 16 (16) — 4 Total Intangible Assets 3,601 (222) 3,379 Total $ 4,500 (222) 4,278 |
Schedule of future amortization | At December 31, 2021, the schedule of future intangible asset amortization is as follows (in thousands): 2022 204 2023 204 2024 204 2025 204 2026 204 Thereafter 2,093 $ 3,113 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Securities | |
Schedule of amortized cost and fair value of securities | December 31, 2021 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 16,850 55 (68) 16,837 10 U.S. government agency mortgage-backed securities 9,749 124 (60) 9,813 3 U.S. government agency collateralized mortgage obligations 22,276 358 (253) 22,381 10 State and municipal securities 72,099 1,379 (496) 72,982 12 U.S. Treasuries 29,973 1 (246) 29,728 21 Non-U.S. government agency collateralized mortgage obligations 990 ─ (15) 975 1 Corporate bonds 6,450 154 (18) 6,586 5 Total securities available-for-sale $ 158,387 2,071 (1,156) 159,302 62 Securities held-to-maturity: State and municipal securities 6,372 219 ─ 6,591 — Total securities held-to-maturity $ 6,372 219 — 6,591 — December 31, 2020 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 25,303 364 (75) 25,592 8 U.S. government agency mortgage-backed securities 3,854 192 — 4,046 — U.S. government agency collateralized mortgage obligations 23,010 916 (17) 23,909 1 State and municipal securities 63,848 2,025 (63) 65,810 3 Corporate bonds 4,200 7 (2) 4,205 2 Total securities available-for-sale $ 120,215 3,504 (157) 123,562 14 Securities held-to-maturity: State and municipal securities 6,510 347 — 6,857 — Total securities held-to-maturity $ 6,510 347 — 6,857 — |
Schedule of investment gross unrealized loss in continuous unrealized loss position | December 31, 2021 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 12,330 (68) — — 12,330 (68) U.S. government agency mortgage-backed securities 3,852 (60) — — 3,852 (60) U.S. government agency collateralized mortgage obligations 8,836 (187) 1,657 (66) 10,493 (253) State and municipal securities 14,994 (427) 2,019 (69) 17,013 (496) U.S. Treasuries 28,750 (246) — — 28,750 (246) Non-U.S. government agency collateralized mortgage obligations 975 (15) — — 975 (15) Corporate bonds 2,232 (18) — — 2,232 (18) Total securities available-for-sale $ 71,969 (1,021) 3,676 (135) 75,645 (1,156) December 31, 2020 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 2,884 (4) 7,443 (71) 10,327 (75) U.S. government agency collateralized mortgage obligations 2,284 (17) — — 2,284 (17) State and municipal securities 4,163 (63) — — 4,163 (63) Corporate bonds 1,198 (2) — — 1,198 (2) Total securities available-for-sale $ 10,529 (86) 7,443 (71) 17,972 (157) |
Schedule of amortized cost and carrying value of held-to-maturity securities and available-for-sale securities by contractual maturity | December 31, 2021 December 31, 2020 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Investment securities: Due in one year or less $ — — 763 769 $ — — — — Due after one year through five years 12,934 12,885 2,354 2,397 — — 3,181 3,288 Due after five years through ten years 30,890 30,798 3,255 3,425 12,035 12,095 3,329 3,569 Due after ten years 81,548 82,450 — — 81,316 83,512 — — Subtotal 125,372 126,133 6,372 6,591 93,351 95,607 6,510 6,857 Mortgage-related securities 33,015 33,169 — — 26,864 27,955 — — Mutual funds with no stated maturity — — — — — — — — Total $ 158,387 159,302 6,372 6,591 $ 120,215 123,562 6,510 6,857 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Receivable | |
Summary of loans and leases outstanding | December 31, December 31, (dollars in thousands) 2021 2020 Mortgage loans held for sale $ 80,882 229,199 Real estate loans: Commercial mortgage 516,928 485,103 Home equity lines and loans 52,299 64,987 Residential mortgage (1) 68,175 52,454 Construction 160,905 140,246 Total real estate loans 798,307 742,790 Commercial and industrial 293,771 261,750 Small business loans 114,158 49,542 Paycheck Protection Program ("PPP") loans 90,194 203,543 Main Street Lending Program ("MSLP") loans 597 580 Consumer 419 511 Leases, net 88,242 31,040 Total portfolio loans and leases 1,385,688 1,289,756 Total loans and leases $ 1,466,570 1,518,955 Loans with predetermined rates $ 488,220 658,458 Loans with adjustable or floating rates 978,350 860,497 Total loans and leases $ 1,466,570 1,518,955 Net deferred loan origination costs (fees) $ 769 (4,992) (1) Includes $17,558 and $12,182 of loans at fair value as of December 31, 2021 and 2020, respectively. |
Schedule of components of the net investment in leases | December 31, December 31, (dollars in thousands) 2021 2020 Minimum lease payments receivable $ 105,608 37,919 Unearned lease income (17,366) (6,879) Total $ 88,242 31,040 |
Schedule of age analysis of past due loans and leases | Total 90+ days accruing Nonaccrual Total loans December 31, 2021 30-89 days past due and Total past loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 516,928 516,928 — 516,928 — % Home equity lines and loans 103 — 103 51,285 51,388 911 52,299 1.94 Residential mortgage (1) 600 — 600 65,177 65,777 2,398 68,175 4.40 Construction — — — 160,905 160,905 — 160,905 — Commercial and industrial — — — 274,970 274,970 18,801 293,771 6.40 Small business loans — — — 113,492 113,492 666 114,158 0.58 Paycheck Protection Program loans — — — 90,194 90,194 — 90,194 — Main Street Lending Program loans — — — 597 597 — 597 — Consumer — — — 419 419 — 419 — Leases, net 390 — 390 87,640 88,030 212 88,242 0.68 Total $ 1,093 — 1,093 1,361,607 1,362,700 22,988 1,385,688 1.74 % (1) Includes $17,558 of loans at fair value as of December 31, 2021 ($16,768 of current, $189 of 30-89 days past due and $601 of nonaccrual). Total 90+ days accruing Nonaccrual Total loans December 31, 2020 30-89 days past due and Total past loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 482,042 482,042 3,061 485,103 0.63 % Home equity lines and loans — — — 64,128 64,128 859 64,987 1.32 Residential mortgage (1) 3,595 — 3,595 46,134 49,729 2,725 52,454 12.05 Construction — — — 140,246 140,246 — 140,246 — Commercial and industrial — — — 260,465 260,465 1,285 261,750 0.49 Small business loans — — — 49,542 49,542 — 49,542 — Paycheck Protection Program loans — — — 203,543 203,543 — 203,543 — Main Street Lending Program loans — — — 580 580 — 580 — Consumer — — — 511 511 — 511 — Leases, net 109 — 109 30,931 31,040 — 31,040 0.35 Total $ 3,704 — 3,704 1,278,122 1,281,826 7,930 1,289,756 0.90 % (1) Includes $12,182 of loans at fair value as of December 31, 2020 ($10,314 of current, $958 of 30-89 days past due and $910 of nonaccrual). |
Allowance for Loan and Lease _2
Allowance for Loan and Lease Losses (the Allowance) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Allowance for Loan and Lease Losses (the Allowance) | |
Roll-forward of allowance for loan and lease losses by portfolio segment | Balance, Balance, (dollars in thousands) December 31, 2020 Charge-offs Recoveries Provision December 31, 2021 Commercial mortgage $ 7,451 — — (2,501) 4,950 Home equity lines and loans 434 (81) 82 (211) 224 Residential mortgage 385 — 5 (107) 283 Construction 2,421 — — (379) 2,042 Commercial and industrial 5,431 — 41 1,061 6,533 Small business loans 1,259 — — 2,478 3,737 Consumer 4 — 4 (5) 3 Leases 382 (130) — 734 986 Total $ 17,767 (211) 132 1,070 18,758 Balance, Balance, (dollars in thousands) December 31, 2019 Charge-offs Recoveries Provision December 31, 2020 Commercial mortgage $ 3,426 — — 4,025 7,451 Home equity lines and loans 342 (90) 14 168 434 Residential mortgage 179 — 7 199 385 Construction 2,362 — — 59 2,421 Commercial and industrial 2,684 (31) 58 2,720 5,431 Small business loans 509 — — 750 1,259 Consumer 6 (10) 4 4 4 Leases 5 — — 377 382 Total $ 9,513 (131) 83 8,302 17,767 |
Schedule of allocation of the allowance for loan and lease losses | The following table details the allocation of the Allowance and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of December 31, 2021 respectively: Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2021 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 4,950 4,950 $ 3,556 513,372 516,928 Home equity lines and loans — 224 224 905 51,394 52,299 Residential mortgage — 283 283 1,797 48,820 50,617 Construction — 2,042 2,042 1,206 159,699 160,905 Commercial and industrial 2,900 3,633 6,533 17,361 276,410 293,771 Small business loans 376 3,361 3,737 792 113,366 114,158 Paycheck Protection Program loans — — — — 90,194 90,194 (2) Main Street Lending Program — — — — 597 597 (2) Consumer — 3 3 — 419 419 Leases, net — 986 986 212 88,030 88,242 Total $ 3,276 15,482 18,758 $ 25,829 1,342,301 1,368,130 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. The following table details the allocation of the Allowance and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of December 31, 2020 respectively: Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2020 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,451 7,451 $ 1,606 483,497 485,103 Home equity lines and loans 9 425 434 921 64,066 64,987 Residential mortgage 73 312 385 1,817 38,455 40,272 Construction — 2,421 2,421 1,206 139,040 140,246 Commercial and industrial 1,563 3,868 5,431 4,645 257,105 261,750 Small business loans — 1,259 1,259 185 49,357 49,542 Paycheck Protection Program loans — — — — 203,543 203,543 (2) Main Street Lending Program — — — — 580 580 (2) Consumer — 4 4 — 511 511 Leases, net — 382 382 — 31,040 31,040 Total $ 1,645 16,122 17,767 $ 10,380 1,267,194 1,277,574 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. |
Schedule of carrying value of loans and leases by portfolio segment based on the credit quality indicators | December 31, 2021 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 481,551 29,452 5,925 — 516,928 Home equity lines and loans 50,908 — 1,391 — 52,299 Construction 151,608 9,297 — — 160,905 Commercial and industrial 236,298 14,603 42,870 — 293,771 Small business loans 112,096 — 2,062 — 114,158 Paycheck Protection Program loans 90,194 — — — 90,194 Main Street Lending Program loans 597 — — — 597 Total $ 1,123,252 53,352 52,248 — 1,228,852 December 31, 2020 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 449,545 32,059 3,499 — 485,103 Home equity lines and loans 63,923 — 1,064 — 64,987 Construction 132,286 7,960 — — 140,246 Commercial and industrial 227,349 21,721 9,000 3,680 261,750 Small business loans 46,789 — 2,753 — 49,542 Paycheck Protection Program loans 203,543 — — — 203,543 Main Street Lending Program loans 580 — — — 580 Total $ 1,124,015 61,740 16,316 3,680 1,205,751 |
Schedule of allocations based on the credit quality indicators | December 31, 2021 December 31, 2020 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 48,820 1,797 50,617 $ 38,457 1,815 40,272 Consumer 419 — 419 511 — 511 Leases, net 88,030 212 88,242 31,040 — 31,040 Total $ 137,269 2,009 139,278 $ 70,008 1,815 71,823 |
Schedule of recorded investment and principal balance of impaired loans | As of December 31, 2021 As of December 31, 2020 Recorded Principal Related Recorded Principal Related (dollars in thousands) investment balance allowance investment balance allowance Impaired loans with related allowance: Commercial and industrial $ 17,147 17,310 2,900 3,860 3,902 1,563 Small business loans 666 666 376 — — — Home equity lines and loans — — — 95 105 9 Residential mortgage — — — 689 689 73 Total $ 17,813 17,976 3,276 4,644 4,696 1,645 Impaired loans without related allowance: Commercial mortgage $ 3,556 3,559 — 1,606 1,642 — Commercial and industrial 214 269 — 785 862 — Small business loans 126 126 — 185 185 — Home equity lines and loans 905 935 — 826 839 — Residential mortgage 1,797 1,797 — 1,128 1,128 — Construction 1,206 1,206 — 1,206 1,206 — Leases 212 212 — — — — Total 8,016 8,104 — 5,736 5,862 — Grand Total $ 25,829 26,080 3,276 10,380 10,558 1,645 |
Schedule of average recorded investment on impaired loans | Year Ended Year Ended December 31, 2021 December 31, 2020 Average Interest Average Interest recorded income recorded income (dollars in thousands) investment recognized investment recognized Impaired loans with related allowance: Commercial and industrial 17,349 15 3,907 31 Small business loans 887 — — — Home equity lines and loans — — 102 — Residential mortgage — — 689 — Total $ 18,236 15 4,698 31 Impaired loans without related allowance: Commercial mortgage $ 3,578 43 1,697 86 Commercial and industrial 239 24 832 19 Small business loans 154 14 213 14 Home equity lines and loans 914 — 831 — Residential mortgage 1,807 11 1,131 133 Construction 1,206 62 1,208 45 Leases 240 — — — Total $ 8,138 154 5,912 297 Grand Total $ 26,374 169 10,610 328 |
Schedule of TDRs | December 31, December 31, (dollars in thousands) 2021 2020 TDRs included in nonperforming loans and leases $ 361 244 TDRs in compliance with modified terms 3,446 3,362 Total TDRs $ 3,807 3,606 |
Schedule of loan deferral by industrial concentration | December 31, December 31, (dollars in thousands) 2021 2020 Hotels $ — 11,832 C&I building construction — 10,103 Other 2,424 2,243 Total $ 2,424 24,178 |
Bank Premises and Equipment (Ta
Bank Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Bank Premises and Equipment | |
Schedule of components of premises and equipment, net of depreciation | (dollars in thousands) 2021 2020 Building $ 4,141 4,141 Leasehold improvements 3,347 3,202 Land 600 600 Land Improvements 218 218 Furniture, fixtures and equipment 3,229 2,700 Computer equipment and data processing software 7,971 7,034 Construction in process 3,763 — Less: accumulated depreciation (11,463) (10,118) Total $ 11,806 7,777 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deposits: | |
Summary of components of deposits | (dollars in thousands) 2021 2020 Demand, non-interest bearing $ 274,528 203,843 Demand, interest bearing 268,248 206,573 Savings accounts 45,038 8,056 Money market accounts 652,590 564,566 Time deposits 206,009 258,297 Total $ 1,446,413 1,241,335 |
Scheduled maturities of time deposits | At December 31, 2021, the scheduled maturities of time deposits are as follows (in thousands): 2022 $ 126,719 2023 18,106 2024 4,071 2025 24,271 2026 32,842 Total $ 206,009 |
Short-Term Borrowings and Long-
Short-Term Borrowings and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Short-Term Borrowings and Long-Term Debt | |
Schedule of short term borrowings | Balance as of Maturity Interest December 31, December 31, (dollars in thousands) date rate 2021 2020 Open Repo Plus Weekly 05/31/2022 0.33 % $ 36,458 60,416 Mid-term Repo-fixed 09/12/2022 0.23 4,886 — Federal Reserve Discount Window 03/31/2021 0.25 — 10,000 Mid-term Repo-fixed 01/13/2021 0.36 — 4,605 Mid-term Repo-fixed 06/10/2021 0.10 — 6,376 Mid-term Repo-fixed 09/10/2021 0.11 — 10,000 Mid-term Repo-fixed 12/10/2021 0.16 — 10,000 Mid-term Repo-fixed 01/27/2021 0.23 — 5,465 Total $ 41,344 106,862 |
Schedule of long term debt | Balance as of Maturity Interest December 31, December 31, (dollars in thousands) date rate 2021 2020 PPPLF Advances 2022 0.35 % $ — 153,269 Mid-term Repo-fixed 06/29/2022 0.32 — 7,392 Mid-term Repo-fixed 09/12/2022 0.23 — 4,885 Total ` $ — 165,546 |
Servicing Assets (Tables)
Servicing Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Mortgage Servicing Rights | |
Servicing Assets at Fair Value [Line Items] | |
Schedule of servicing assets | Year Ended December 31, (dollars in thousands) 2021 2020 Balance at beginning of the period $ 4,647 446 Servicing rights capitalized 6,769 4,856 Amortization of servicing rights (1,087) (318) Change in valuation allowance 427 (337) Balance at end of the period $ 10,756 4,647 |
Schedule of valuation allowance for servicing assets | Year Ended December 31, (dollars in thousands) 2021 2020 Valuation allowance, beginning of period $ (435) (98) Impairment — (337) Recovery 427 — Valuation allowance, end of period $ (8) (435) |
Schedule of sensitivity of fair value of servicing assets | (dollars in thousands) December 31, 2021 December 31, 2020 Fair value of residential mortgage servicing rights $ 11,241 $ 4,647 Weighted average life (months) 11.0 5.0 Prepayment speed 7.23% 9.39% Impact on fair value: 10% adverse change $ (376) $ (183) 20% adverse change (731) (354) Discount rate 9.00% 9.00% Impact on fair value: 10% adverse change $ (436) $ (168) 20% adverse change (840) (329) |
SBA Loan Servicing Rights | |
Servicing Assets at Fair Value [Line Items] | |
Schedule of servicing assets | Year Ended December 31, (dollars in thousands) 2021 2020 Balance at beginning of the period $ 970 337 Servicing rights capitalized 1,488 794 Amortization of servicing rights (392) (148) Change in valuation allowance (57) (13) Balance at end of the period $ 2,009 970 |
Schedule of valuation allowance for servicing assets | Year Ended December 31, (dollars in thousands) 2021 2020 Valuation allowance, beginning of period $ (39) (26) Impairment (57) (13) Recovery — — Valuation allowance, end of period $ (96) (39) |
Schedule of sensitivity of fair value of servicing assets | (dollars in thousands) December 31, 2021 December 31, 2020 Fair value of SBA loan servicing rights $ 2,107 $ 1,010 Weighted average life (years) 3.8 3.7 Prepayment speed 12.38% 12.73% Impact on fair value: 10% adverse change $ (69) $ (37) 20% adverse change (132) (71) Discount rate 9.01% 8.33% Impact on fair value: 10% adverse change $ (54) $ (25) 20% adverse change (106) (49) |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Lease Commitments | |
Schedule of Future minimum lease payments | Future minimum lease payments (dollars in thousands) 2022 $ 2,179 2023 1,874 2024 1,737 2025 1,456 2026 1,436 Thereafter 3,134 $ 11,816 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Summary of stock option activity | Weighted Weighted average average exercise grant date Shares price fair value Outstanding at December 31, 2019 346,381 $ 16.13 $ 4.55 Exercised (14,673) 13.64 3.74 Granted 94,650 17.70 5.07 Forfeited (25,631) 17.03 4.73 Outstanding at December 31, 2020 400,727 16.53 4.69 Exercised (77,265) 13.68 4.35 Granted 142,650 27.50 9.47 Forfeited (4,148) 18.63 6.57 Outstanding at December 31, 2021 461,964 20.38 6.21 Exercisable at December 31, 2021 291,832 18.40 5.27 Nonvested at December 31, 2021 170,132 $ 23.77 $ 7.81 |
Summary of restricted stock activity | Weighted Weighted average average exercise grant date Shares price fair value Outstanding at December 31, 2019 — $ — $ — Granted 33,208 14.00 14.00 Outstanding at December 31, 2020 33,208 14.00 14.00 Granted 10,000 26.36 26.36 Vested (16,603) 14.00 14.00 Outstanding at December 31, 2021 26,605 18.65 18.65 Nonvested at December 31, 2021 26,605 $ 18.65 $ 18.65 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Summary of components of the federal and state income tax expense | (dollars in thousands) 2021 2020 Federal: Current $ 10,022 5,703 Deferred (717) 1,242 Total federal income tax expense 9,305 6,945 State: Current 1,463 1,141 Deferred (51) 12 Total state income tax expense 1,412 1,153 Total income tax expense $ 10,717 8,098 |
Schedule of reconciliation of the statutory income tax | (dollars in thousands) 2021 2020 Federal income tax at statutory rate $ 9,733 21.0 % 7,252 21.0 % State tax expense, net of federal benefit 1,116 2.4 911 2.6 Tax exempt interest (248) (0.5) (153) (0.4) Bank owned life insurance (77) (0.2) (59) (0.2) Incentive stock options 81 0.2 74 0.2 ESOP 41 0.1 — — Other 71 0.1 73 0.2 Effective income tax rate $ 10,717 23.1 % 8,098 23.4 % |
Summary of net deferred tax assets | (dollars in thousands) 2021 2020 Deferred tax assets: Allowance for loan and lease losses $ 4,345 4,230 Intangibles — 30 Accrued incentive compensation 287 — Accrued retirement 874 528 Deferred rent 141 180 Mortgage repurchase reserve 738 641 Other 183 122 Total deferred tax asset 6,568 5,731 Deferred tax liabilities: Property and equipment (535) (377) Loan servicing rights (2,957) (1,337) Intangibles (15) — Mortgage pipeline fair-value adjustment (308) (1,156) Hedge instrument fair-value adjustment (190) (1,252) Unrealized gain on available for sale securities (213) (797) Prepaid expenses (465) (340) Deferred loan costs (471) (406) Other (1) (4) Total deferred tax liability (5,155) (5,669) Net deferred tax asset $ 1,413 62 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contracts with Customers | |
Schedule of revenue from contracts with customers in the scope of ASC 606 | Year Ended December 31, 2021 Year Ended December 31, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Non-interest Income Mortgage banking income (1) $ 1,097 — 74,835 75,932 $ 1,632 — 74,829 76,461 Wealth management income — 4,801 — 4,801 — 3,854 — 3,854 SBA loan income (1) 6,898 — — 6,898 2,572 — — 2,572 Net change in fair values (1) 43 — (7,881) (7,838) (40) — 9,185 9,145 Net gain (loss) on hedging activity (1) — — 2,961 2,961 — — (9,400) (9,400) Earnings on investment in life insurance (1) 365 — — 365 279 — — 279 Net gain on sale of investment securities available-for-sale (1) 435 — — 435 1,345 — — 1,345 Dividends on FHLB stock (1) 191 — — 191 325 — — 325 Service charges 128 — — 128 107 — — 107 Other (2) 1,622 1 2,492 4,115 1,468 14 748 2,230 Non-interest income $ 10,779 4,802 72,407 87,988 $ 7,688 3,868 75,362 86,918 (1) Not within the scope of ASC 606. (2) Within other non-interest income is $1.2 million and $925 thousand for the years ended December 31, 2021 and 2020, respectively, which are in the scope of ASC 606. These amounts include wire transfer fees, ATM/debit card commissions, and title fee income. |
Financial Instruments with Off
Financial Instruments with Off Balance Sheet Risk, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments with Off-Balance Sheet Risk, Commitments and Contingencies | |
Schedule of financial instrument commitments | (dollars in thousands) 2021 2020 Commitments to fund loans and commitments under lines of credit $ 486,632 421,399 Letters of credit 25,986 8,928 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Regulatory Matters | |
Schedule of corporation's actual capital amounts and ratios. | December 31, 2021 To Be Well Capitalized Actual Under CBLR Framework (dollars in thousands) Amount Ratio Amount Ratio Tier 1 capital (to average assets) Corporation $ 160,379 9.39% $ 136,621 8.00% Bank 196,506 11.51% 136,620 8.00% December 31, 2020 To Be Well Capitalized Actual Under CBLR Framework (dollars in thousands) Amount Ratio Amount Ratio Tier 1 capital (to average assets) Corporation $ 134,564 8.96% $ 120,082 8.00% Bank 173,231 11.54% 120,080 8.00% |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of financial assets measured at fair value on a recurring basis | December 31, 2021 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 16,837 — 16,837 — U.S. government agency mortgage-backed securities 9,813 — 9,813 — U.S. government agency collateralized mortgage obligations 22,381 — 22,381 — State and municipal securities 72,982 — 72,982 — U.S. Treasuries 29,728 29,728 — — Non-U.S. government agency collateralized mortgage obligations 975 — 975 — Corporate bonds 6,586 — 6,586 — Equity investments 2,354 — 2,354 — Mortgage loans held for sale 80,882 — 80,882 — Mortgage loans held for investment 17,558 — 17,558 — Interest rate lock commitments 1,122 — — 1,122 Forward commitments 65 — 65 — Customer derivatives - interest rate swaps 961 — 961 — Total $ 262,244 29,728 231,394 1,122 Liabilities Interest rate lock commitments 203 — — 203 Forward commitments 106 — 106 — Customer derivatives - interest rate swaps 1,018 — 1,018 — $ 1,327 — 1,124 203 December 31, 2020 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 25,592 — 25,592 — U.S. government agency mortgage-backed securities 4,046 — 4,046 — U.S. government agency collateralized mortgage obligations 23,909 — 23,909 — State and municipal securities 65,810 — 65,810 — Corporate bonds 4,205 — 4,205 — Equity investments 1,031 — 1,031 — Mortgage loans held for sale 229,199 — 229,199 — Mortgage loans held for investment 12,182 — 12,182 — Interest rate lock commitments 6,932 — — 6,932 Forward commitments — — — — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 374,024 — 367,092 6,932 Liabilities Interest rate lock commitments 100 — — 100 Forward commitments 1,572 — 1,572 — Customer derivatives - interest rate swaps 1,219 — 1,219 — $ 2,891 — 2,791 100 |
Schedule of financial assets measured at fair value on non-recurring basis | December 31, 2021 December 31, 2020 (dollars in thousands) Fair Value Fair Value Mortgage servicing rights $ 10,756 4,647 SBA loan servicing rights 2,009 970 Impaired loans (1) Commercial and industrial 1,837 2,297 Small business loans 290 — Home equity lines and loans — 86 Residential mortgage — 615 Total $ 14,892 8,615 (1) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Refer to the following page for further qualitative discussion around impaired loans. The following table details the valuation techniques for Level 3 impaired loans. Fair Value Unobservable (dollars in thousands) Level 3 Valuation Technique Input Range of Inputs December 31, 2021 $ 2,127 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount December 31, 2020 2,998 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount |
Schedule of estimated fair values of financial instruments | December 31, 2021 December 31, 2020 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 23,480 23,480 36,744 36,744 Securities available-for-sale (1) Level 2 159,302 159,302 123,562 123,562 Securities held-to-maturity Level 2 6,372 6,591 6,510 6,857 Equity investments Level 2 2,354 2,354 1,031 1,031 Mortgage loans held for sale Level 2 80,882 80,882 229,199 229,199 Loans receivable, net of the allowance for loan and lease losses Level 3 1,368,899 1,370,885 1,272,582 1,289,776 Mortgage loans held for investment Level 2 17,558 17,558 12,182 12,182 Interest rate lock commitments Level 3 1,122 1,122 6,932 6,932 Forward commitments Level 2 65 65 — — Restricted investment in bank stock NA 5,117 NA 7,861 NA Accrued interest receivable Level 3 5,009 5,009 5,482 5,482 Customer derivatives - interest rate swaps Level 2 961 961 1,118 1,118 Financial liabilities: Deposits Level 2 1,446,413 1,549,100 1,241,335 1,392,500 Short-term borrowings Level 2 41,344 41,344 106,862 106,862 Long-term debt Level 2 — — 165,546 168,000 Subordinated debentures Level 2 40,508 40,803 40,671 38,375 Accrued interest payable Level 2 31 31 1,154 1,154 Interest rate lock commitments Level 3 203 203 100 100 Forward commitments Level 2 106 106 1,572 1,572 Customer derivatives - interest rate swaps Level 2 1,018 1,018 1,219 1,219 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 486,632 — 421,399 — Letters of credit Level 2 25,986 — 8,928 — (1) U.S. Treasuries within securities available-for-sale are classified as Level 1. |
Schedule of level 3 inputs reconciliation | Year Ended December 31, 2021 2020 Balance at beginning of the period $ 6,932 504 (Decrease) increase in value (5,810) 6,428 Balance at end of the period $ 1,122 6,932 |
Interest rate lock commitments | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of measurement inputs | Significant Fair Value Unobservable Range of Weighted (dollars in thousands) Level 3 Valuation Technique Input Inputs Average December 31, 2021 $ 1,122 Market comparable pricing Pull through 1 - 99 % 87.66 % December 31, 2020 6,932 Market comparable pricing Pull through 1 - 99 83.08 |
Impaired Loans | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of measurement inputs | Fair Value Unobservable (dollars in thousands) Level 3 Valuation Technique Input Range of Inputs December 31, 2021 $ 2,127 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount December 31, 2020 2,998 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 2-15% discount |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Financial Instruments | |
Summary of the notional amounts and fair values of derivative financial instruments | December 31, 2021 December 31, 2020 (dollars in thousands) Balance Sheet Line Item Notional Amount Asset (Liability) Fair Value Notional Amount Asset (Liability) Fair Value Interest Rate Lock Commitments Positive fair values Other assets $ 108,653 1,122 406,422 6,932 Negative fair values Other liabilities 35,264 (203) 22,406 (100) Total 143,917 919 428,828 6,832 Forward Commitments Positive fair values Other assets 30,500 65 — — Negative fair values Other liabilities 45,500 (106) 218,000 (1,572) Total 76,000 (41) 218,000 (1,572) Customer Derivatives - Interest Rate Swaps Positive fair values Other assets 35,447 961 20,979 1,118 Negative fair values Other liabilities 35,447 (1,018) 20,979 (1,219) Total 70,894 (57) 41,958 (101) Total derivative financial instruments $ 290,811 821 688,786 5,159 |
Summary of the fair value gains and losses on derivative financial instruments | Year Ended December 31, (dollars in thousands) 2021 2020 Interest Rate Lock Commitments $ (5,913) 6,486 Forward Commitments 1,531 (1,459) Customer Derivatives - Interest Rate Swaps 44 (52) Net fair value (losses) gains on derivative financial instruments $ (4,338) 4,975 |
Segment (Tables)
Segment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segments | |
Schedule of business segment financial information | Year Ended December 31, 2021 Year Ended December 31, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 61,032 15 2,064 63,111 $ 46,997 (48) 2,047 48,996 Provision for loan losses 1,070 — — 1,070 8,302 — — 8,302 Net interest income after provision 59,962 15 2,064 62,041 38,695 (48) 2,047 40,694 Non-interest Income Mortgage banking income 1,097 — 74,835 75,932 1,632 — 74,829 76,461 Wealth management income — 4,801 — 4,801 — 3,854 — 3,854 SBA loan income 6,898 — — 6,898 2,572 — — 2,572 Net change in fair values 43 — (7,881) (7,838) (40) — 9,185 9,145 Net gain (loss) on hedging activity — — 2,961 2,961 — — (9,400) (9,400) Other 2,741 1 2,492 5,234 3,524 14 748 4,286 Non-interest income 10,779 4,802 72,407 87,988 7,688 3,868 75,362 86,918 Non-interest expense 40,392 3,496 59,839 103,727 33,351 3,213 56,512 93,076 Income before income taxes $ 30,349 1,321 14,632 46,302 $ 13,032 607 20,897 34,536 Total Assets $ 1,608,305 6,355 98,783 1,713,443 $ 1,488,312 5,479 226,406 1,720,197 |
Parent Company Financial Stat_2
Parent Company Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Parent Company Financial Statements | |
Schedule of parent only consolidated balance sheets | December 31, December 31, (dollars in thousands, except per share data) 2021 2020 Cash and due from banks $ 2,836 213 Investments in subsidiaries 200,410 180,288 Other assets 1,382 360 Total assets $ 204,628 180,861 Liabilities: Subordinated debentures 39,057 38,904 Accrued interest payable 6 6 Other liabilities 205 329 Total liabilities 39,268 39,239 Stockholders’ equity: Common stock, $1 par value. Authorized 25,000,000 shares; issued 6,534,587 and 6,455,566 as of December 31, 2021 and December 31, 2020 6,535 6,456 Surplus 83,663 81,196 Treasury Stock- 426,693 and 320,000 shares at December 31, 2021 and December 31, 2020, respectively (8,860) (5,828) Unearned common stock held by employee stock ownership plan (1,602) (1,768) Retained earnings 84,916 59,010 Accumulated other comprehensive income 708 2,556 Total stockholders’ equity 165,360 141,622 Total liabilities and stockholders’ equity $ 204,628 180,861 |
Schedule of parent only consolidated statements of operations | Year ended December 31, (dollars in thousands, except per share data) 2021 2020 Dividends from Bank $ 17,187 11,512 Non-interest and other income — 10 Total operating income 17,187 11,522 Interest expense 2,303 2,202 Other expenses 1,675 — Income before equity in undistributed income of subsidiaries 13,209 9,320 Equity in undistributed income of subsidiaries 22,376 17,118 Income before income taxes 35,585 26,438 Income tax expense — — Net income 35,585 26,438 Total other comprehensive (loss) income (1,848) 2,559 Total comprehensive income $ 33,737 28,997 |
Schedule of parent only consolidated statements of cash flows | Year ended December 31, (dollars in thousands) 2021 2020 Net income $ 35,585 26,438 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed income of subsidiaries (22,376) (17,818) Share-based compensation 1,607 763 Amortization of issuance costs on subordinated debt 153 112 (Decrease) in accrued interest payable — (72) Other, net (740) (294) Net cash provided by operating activities 14,229 9,129 Cash flows from financing activities: Issuance cost on subordinated debt — (231) Net purchase of treasury stock (3,032) (5,703) Dividends paid (9,679) (1,525) Purchase of common shares for ESOP — (2,000) Share based awards and exercises 1,105 395 Net cash (used in) provided by financing activities (11,606) (9,064) Net change in cash and cash equivalents 2,623 65 Cash and cash equivalents at beginning of period 213 148 Cash and cash equivalents at end of period $ 2,836 213 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2021Office | |
PENNSYLVANIA | |
Business Acquisition [Line Items] | |
Number of full-service offices | 6 |
Delaware Valley | |
Business Acquisition [Line Items] | |
Number of mortgage loan production offices | 9 |
Maryland | |
Business Acquisition [Line Items] | |
Number of mortgage loan production offices | 8 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Significant Concentrations of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Assets Total | Credit Concentration Risk | Commercial mortgage | ||
Concentration Risk [Line Items] | ||
Total loans (as a percent) | 37.00% | 38.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash Flows, Allowance for Loan Losses and Mortgage Banking Activities (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)Office | Dec. 31, 2020USD ($) | |
Securities | ||
Equity investments | $ | $ 2,354 | $ 1,031 |
Allowance for Loan Losses | ||
Cumulative days past due for charge off for retail consumer loans | 120 days | |
Percentage of appraised value of property securing the loan | 90.00% | |
Other real estate owned | ||
Other real estate owned | $ | $ 0 | $ 0 |
Minimum | ||
Mortgage Banking Activities and Mortgage Loans Held for Sale | ||
Loan commitment to sale duration | 30 days | |
Maximum | ||
Allowance for Loan Losses | ||
Term of loans receivable | 5 years | |
Mortgage Banking Activities and Mortgage Loans Held for Sale | ||
Loan commitment to sale duration | 120 days | |
Home equity term loans | Maximum | ||
Allowance for Loan Losses | ||
Look-back period | 20 years | |
Home equity lines of credit | Maximum | ||
Allowance for Loan Losses | ||
Look-back period | 15 years | |
Pennsylvania, Delaware and New Jersey | ||
Mortgage Banking Activities and Mortgage Loans Held for Sale | ||
Number of mortgage loan production offices | Office | 9 | |
Maryland | ||
Mortgage Banking Activities and Mortgage Loans Held for Sale | ||
Number of mortgage loan production offices | Office | 8 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Restricted Investment in Bank Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Federal Home Loan Bank (FHLB) | ||
Restricted Investment in Bank Stock | ||
FHLB stock | $ 5,100 | $ 7,900 |
Investment impairment | 0 | 0 |
Atlantic Central Bankers Bank | ||
Restricted Investment in Bank Stock | ||
Investment | $ 50 | $ 50 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Bank Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Building | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 12 years |
Building | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 40 years |
Furniture, fixtures and equipment. | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Furniture, fixtures and equipment. | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 7 years |
Computer Software and Hardware | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 3 years |
Computer Software and Hardware | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment useful life | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Employee Benefit Plans and Operating Segments (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Aug. 31, 2020USD ($) | |
Employee Benefit Plans | |||
Age | 21 years | ||
Minimum service term | 3 months | ||
Vesting period | 3 years | ||
Employer contribution under 401(k) plan | $ 1,400 | $ 1,100 | |
Employer contribution under ESOP | 1,100 | 1,200 | |
Employer contributions | 663 | 550 | |
Stock compensation related expense | 437 | ||
One-time contribution under ESOP | $ 0 | $ 600 | |
Shares purchased under ESOP | shares | 45,606 | 161,576 | |
Shares purchased under ESOP | shares | 133,280 | ||
Shares released under ESOP | shares | 26,656 | ||
Unallocated shares | shares | 106,624 | ||
Shares purchased for ESOP average purchase price | $ / shares | $ 24.30 | $ 15.06 | |
Shares held by ESOP | shares | 269,904 | ||
Employee Stock Ownership Plan ESOP Value Shares Purchase Authorized Amount | $ 2,000 | $ 2,000 | |
Operating Segments | |||
Number of Operating Segments | segment | 3 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net income available to common stockholders | $ 35,585 | $ 26,438 |
Denominator for basic earnings per share - weighted average shares outstanding | 6,133 | 6,159 |
Average unearned ESOP shares | (114) | (37) |
Basic weighted averages shares outstanding | 6,019 | 6,122 |
Dilutive effects of assumed exercises of stock options | 130 | 23 |
Dilutive effects of SERP shares | 57 | 42 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding | 6,206 | 6,187 |
Basic earnings per share (in dollars per share) | $ 5.91 | $ 4.32 |
Diluted earnings per share (in dollars per share) | $ 5.73 | $ 4.27 |
Antidilutive shares excluded from computation of average dilutive earnings per share | 139 | 275 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and other intangibles rollforward | ||
Goodwill, Beginning Balance | $ 899 | |
Goodwill, Ending Balance | 899 | |
Amortization expense | (222) | |
Finite-Lived Intangible Assets, Ending Balance | 3,113 | |
Total Intangible Assets | 3,379 | $ 3,601 |
Total | 4,278 | 4,500 |
Accumulated Amortization | 1,200 | $ 1,000 |
Customer relationships | ||
Goodwill and other intangibles rollforward | ||
Finite-Lived Intangible Assets, Beginning Balance | 3,319 | |
Amortization expense | (206) | |
Finite-Lived Intangible Assets, Ending Balance | $ 3,113 | |
Amortization Period | 20 years | |
Non competition agreements | ||
Goodwill and other intangibles rollforward | ||
Finite-Lived Intangible Assets, Beginning Balance | $ 16 | |
Amortization expense | $ (16) | |
Amortization Period | 4 years | |
Trade name | ||
Goodwill and other intangibles rollforward | ||
Indefinite-lived Intangible Assets (Excluding Goodwill), Beginning Balance | $ 266 | |
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance | $ 266 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Future Amortization (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Other Intangibles | |
2022 | $ 204 |
2023 | 204 |
2024 | 204 |
2025 | 204 |
2026 | 204 |
Thereafter | 2,093 |
Total future amortization | $ 3,113 |
Securities - Amortized cost and
Securities - Amortized cost and fair value (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security | |
Securities available-for-sale: | ||
Amortized Cost | $ 158,387 | $ 120,215 |
Gross unrealized gains | 2,071 | 3,504 |
Gross unrealized losses | (1,156) | (157) |
Fair value | 159,302 | 123,562 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 6,372 | 6,510 |
Held-to-maturity, Gross Unrealized Gains | 219 | 347 |
Fair Value | $ 6,591 | $ 6,857 |
Number of securities in unrealized loss positions | 62 | 14 |
Number of securities deemed other-than-temporarily impaired | security | 0 | |
Securities pledged as collateral fair value | $ 92,200 | $ 55,900 |
U.S. asset backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | 16,850 | 25,303 |
Gross unrealized gains | 55 | 364 |
Gross unrealized losses | (68) | (75) |
Fair value | $ 16,837 | $ 25,592 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 10 | 8 |
U.S. government agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | $ 9,749 | $ 3,854 |
Gross unrealized gains | 124 | 192 |
Gross unrealized losses | (60) | |
Fair value | $ 9,813 | 4,046 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 3 | |
U.S. government agency collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Amortized Cost | $ 22,276 | 23,010 |
Gross unrealized gains | 358 | 916 |
Gross unrealized losses | (253) | (17) |
Fair value | $ 22,381 | $ 23,909 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 10 | 1 |
State and municipal securities | ||
Securities available-for-sale: | ||
Amortized Cost | $ 72,099 | $ 63,848 |
Gross unrealized gains | 1,379 | 2,025 |
Gross unrealized losses | (496) | (63) |
Fair value | 72,982 | 65,810 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 6,372 | 6,510 |
Held-to-maturity, Gross Unrealized Gains | 219 | 347 |
Fair Value | $ 6,591 | $ 6,857 |
Number of securities in unrealized loss positions | security | 12 | 3 |
U.S. Treasuries | ||
Securities available-for-sale: | ||
Amortized Cost | $ 29,973 | |
Gross unrealized gains | 1 | |
Gross unrealized losses | (246) | |
Fair value | $ 29,728 | |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 21 | |
Non-U.S. government agencies collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Amortized Cost | $ 990 | |
Gross unrealized losses | (15) | |
Fair value | $ 975 | |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 1 | |
Corporate bonds | ||
Securities available-for-sale: | ||
Amortized Cost | $ 6,450 | $ 4,200 |
Gross unrealized gains | 154 | 7 |
Gross unrealized losses | (18) | (2) |
Fair value | $ 6,586 | $ 4,205 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 5 | 2 |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Securities | ||
Proceeds from the sale of available for sale investments | $ 23,585 | $ 45,927 |
Gross gain on sale of available for sale investments | 634 | 1,500 |
Gross loss on sale of available for sale investments | 199 | 196 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 71,969 | 10,529 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 3,676 | 7,443 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 75,645 | 17,972 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (1,021) | (86) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (135) | (71) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (1,156) | (157) |
U.S. asset backed securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 12,330 | 2,884 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 7,443 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 12,330 | 10,327 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (68) | (4) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (71) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (68) | (75) |
U.S. government agency mortgage-backed securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 3,852 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 3,852 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (60) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (60) | |
U.S. government agency collateralized mortgage obligations | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 8,836 | 2,284 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 1,657 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 10,493 | 2,284 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (187) | (17) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (66) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (253) | (17) |
State and municipal securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 14,994 | 4,163 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 2,019 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 17,013 | 4,163 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (427) | (63) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (69) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (496) | (63) |
U.S. Treasuries | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 28,750 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 28,750 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (246) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (246) | |
Non-U.S. government agencies collateralized mortgage obligations | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 975 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 975 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (15) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (15) | |
Corporate bonds | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 2,232 | 1,198 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 2,232 | 1,198 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (18) | (2) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ (18) | $ (2) |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Amortized Cost | $ 158,387 | $ 120,215 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Fair Value | 159,302 | 123,562 |
Contractual Maturities, Held-to-maturity, Amortized Cost | ||
Amortized Cost | 6,372 | 6,510 |
Contractual Maturities, Held-to-maturity, Fair Value | ||
Fair Value | 6,591 | 6,857 |
U.S. Asset Backed And State And Municipal Securities | ||
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Due after one year through five years | 12,934 | |
Due after five years through ten years | 30,890 | 12,035 |
Due after ten years | 81,548 | 81,316 |
Amortized Cost | 125,372 | 93,351 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Due after one year through five years | 12,885 | |
Due after five years through ten year | 30,798 | 12,095 |
Due after ten years | 82,450 | 83,512 |
Fair Value | 126,133 | 95,607 |
Contractual Maturities, Held-to-maturity, Amortized Cost | ||
Due in one year or less | 763 | |
Due after one year through five years | 2,354 | 3,181 |
Due after five years through ten years | 3,255 | 3,329 |
Amortized Cost | 6,372 | 6,510 |
Contractual Maturities, Held-to-maturity, Fair Value | ||
Due in one year or less | 769 | |
Due after one year through five years | 2,397 | 3,288 |
Due after five years through ten years | 3,425 | 3,569 |
Fair Value | 6,591 | 6,857 |
Mortgage-related securities | ||
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Amortized Cost | 33,015 | 26,864 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Fair Value | $ 33,169 | $ 27,955 |
Loans Receivable - Loans and le
Loans Receivable - Loans and leases outstanding by category (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Mortgage loans held for sale | $ 80,882 | $ 229,199 |
Total portfolio loans and leases | 1,385,688 | 1,289,756 |
Total loans and leases | 1,466,570 | 1,518,955 |
Loans at fair value | 17,558 | 12,182 |
Real estate loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 798,307 | 742,790 |
Commercial mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 516,928 | 485,103 |
Home equity lines and loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 52,299 | 64,987 |
Residential mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 68,175 | 52,454 |
Loans at fair value | 17,558 | 12,182 |
Construction | ||
Loans Receivable | ||
Total portfolio loans and leases | 160,905 | 140,246 |
Commercial and industrial | ||
Loans Receivable | ||
Total portfolio loans and leases | 293,771 | 261,750 |
Small business loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 114,158 | 49,542 |
Paycheck Protection Program loans ("PPP") loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 90,194 | 203,543 |
Main Street Lending Program Loans ("MSLP") loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 597 | 580 |
Consumer | ||
Loans Receivable | ||
Total portfolio loans and leases | 419 | 511 |
Leases, net | ||
Loans Receivable | ||
Total portfolio loans and leases | $ 88,242 | $ 31,040 |
Loans Receivable - Loans and _2
Loans Receivable - Loans and leases outstanding by rate type (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Loans with predetermined rates | $ 488,220 | $ 658,458 |
Loans with adjustable or floating rates | 978,350 | 860,497 |
Total loans and leases | 1,466,570 | 1,518,955 |
Net deferred loan origination costs (fees) | $ 769 | $ (4,992) |
Loans Receivable - Components o
Loans Receivable - Components of the net investment in leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Minimum lease payments receivable | $ 105,608 | $ 37,919 |
Unearned lease income | (17,366) | (6,879) |
Total | $ 88,242 | $ 31,040 |
Loans Receivable - Age analysis
Loans Receivable - Age analysis of past due loans and leases (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,093 | $ 3,704 |
Total accruing loans and leases | 1,362,700 | 1,281,826 |
Nonaccrual loans and leases | 22,988 | 7,930 |
Loans and Leases Receivable, Gross, Total | $ 1,385,688 | $ 1,289,756 |
Delinquency percentage | 1.74% | 0.90% |
Loans at fair value | $ 17,558 | $ 12,182 |
Covid 19 Deferral | ||
Age Analysis of Past Due Loans and Leases | ||
Number of modification on nonaccrual of non-performing loans | loan | 1 | |
Nonaccrual for non-performing loans | $ 13,800 | |
Commercial mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | 516,928 | 482,042 |
Nonaccrual loans and leases | 3,061 | |
Loans and Leases Receivable, Gross, Total | 516,928 | $ 485,103 |
Delinquency percentage | 0.63% | |
Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 103 | |
Total accruing loans and leases | 51,388 | $ 64,128 |
Nonaccrual loans and leases | 911 | 859 |
Loans and Leases Receivable, Gross, Total | $ 52,299 | $ 64,987 |
Delinquency percentage | 1.94% | 1.32% |
Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 600 | $ 3,595 |
Total accruing loans and leases | 65,777 | 49,729 |
Nonaccrual loans and leases | 2,398 | 2,725 |
Loans and Leases Receivable, Gross, Total | $ 68,175 | $ 52,454 |
Delinquency percentage | 4.40% | 12.05% |
Loans at fair value | $ 17,558 | $ 12,182 |
Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | 160,905 | 140,246 |
Loans and Leases Receivable, Gross, Total | 160,905 | 140,246 |
Commercial and industrial | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | 274,970 | 260,465 |
Nonaccrual loans and leases | 18,801 | 1,285 |
Loans and Leases Receivable, Gross, Total | $ 293,771 | $ 261,750 |
Delinquency percentage | 6.40% | 0.49% |
Small business loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | $ 113,492 | $ 49,542 |
Nonaccrual loans and leases | 666 | |
Loans and Leases Receivable, Gross, Total | $ 114,158 | 49,542 |
Delinquency percentage | 0.58% | |
Paycheck Protection Program loans ("PPP") loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | $ 90,194 | 203,543 |
Loans and Leases Receivable, Gross, Total | 90,194 | 203,543 |
Main Street Lending Program Loans ("MSLP") loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | 597 | 580 |
Loans and Leases Receivable, Gross, Total | 597 | 580 |
Consumer | ||
Age Analysis of Past Due Loans and Leases | ||
Total accruing loans and leases | 419 | 511 |
Loans and Leases Receivable, Gross, Total | 419 | 511 |
Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 390 | 109 |
Total accruing loans and leases | 88,030 | 31,040 |
Nonaccrual loans and leases | 212 | |
Loans and Leases Receivable, Gross, Total | $ 88,242 | $ 31,040 |
Delinquency percentage | 0.68% | 0.35% |
30-89 days past due | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,093 | $ 3,704 |
30-89 days past due | Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 103 | |
30-89 days past due | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 600 | 3,595 |
Loans at fair value | 189 | 958 |
30-89 days past due | Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 390 | 109 |
Current | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 1,361,607 | 1,278,122 |
Current | Commercial mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 516,928 | 482,042 |
Current | Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 51,285 | 64,128 |
Current | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 65,177 | 46,134 |
Loans at fair value | 16,768 | 10,314 |
Current | Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 160,905 | 140,246 |
Current | Commercial and industrial | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 274,970 | 260,465 |
Current | Small business loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 113,492 | 49,542 |
Current | Paycheck Protection Program loans ("PPP") loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 90,194 | 203,543 |
Current | Main Street Lending Program Loans ("MSLP") loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 597 | 580 |
Current | Consumer | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 419 | 511 |
Current | Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 87,640 | 30,931 |
Nonaccrual | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Loans at fair value | $ 601 | $ 910 |
Allowance for Loan and Lease _3
Allowance for Loan and Lease Losses (the Allowance) - Roll-forward of allowance by portfolio segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | $ 17,767 | $ 9,513 |
Charge-offs | (211) | (131) |
Recoveries | 132 | 83 |
Provision | 1,070 | 8,302 |
Balance at end of period | 18,758 | 17,767 |
Commercial mortgage. | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 7,451 | 3,426 |
Provision | (2,501) | 4,025 |
Balance at end of period | 4,950 | 7,451 |
Home equity lines and loans | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 434 | 342 |
Charge-offs | (81) | (90) |
Recoveries | 82 | 14 |
Provision | (211) | 168 |
Balance at end of period | 224 | 434 |
Residential mortgage | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 385 | 179 |
Recoveries | 5 | 7 |
Provision | (107) | 199 |
Balance at end of period | 283 | 385 |
Construction | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 2,421 | 2,362 |
Provision | (379) | 59 |
Balance at end of period | 2,042 | 2,421 |
Commercial and industrial | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 5,431 | 2,684 |
Charge-offs | (31) | |
Recoveries | 41 | 58 |
Provision | 1,061 | 2,720 |
Balance at end of period | 6,533 | 5,431 |
Small business loans | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 1,259 | 509 |
Provision | 2,478 | 750 |
Balance at end of period | 3,737 | 1,259 |
Consumer | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 4 | 6 |
Charge-offs | (10) | |
Recoveries | 4 | 4 |
Provision | (5) | 4 |
Balance at end of period | 3 | 4 |
Leases, net | ||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||
Balance at beginning of period | 382 | 5 |
Charge-offs | (130) | |
Provision | 734 | 377 |
Balance at end of period | $ 986 | $ 382 |
Allowance for Loan and Lease _4
Allowance for Loan and Lease Losses (the Allowance) - Allowance allocated by portfolio segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Impaired Loans | |||
Allowance on loans and leases individually evaluated for impairment | $ 3,276 | $ 1,645 | |
Allowance on loans and leases collectively evaluated for impairment | 15,482 | 16,122 | |
Total | 18,758 | 17,767 | $ 9,513 |
Carrying value of loans and leases individually evaluated for impairment | 25,829 | 10,380 | |
Carrying value of loans and leases collectively evaluated for impairment | 1,342,301 | 1,267,194 | |
Total | 1,368,130 | 1,277,574 | |
Commercial mortgage. | |||
Impaired Loans | |||
Allowance on loans and leases collectively evaluated for impairment | 4,950 | 7,451 | |
Total | 4,950 | 7,451 | 3,426 |
Carrying value of loans and leases individually evaluated for impairment | 3,556 | 1,606 | |
Carrying value of loans and leases collectively evaluated for impairment | 513,372 | 483,497 | |
Total | 516,928 | 485,103 | |
Home equity lines and loans | |||
Impaired Loans | |||
Allowance on loans and leases individually evaluated for impairment | 9 | ||
Allowance on loans and leases collectively evaluated for impairment | 224 | 425 | |
Total | 224 | 434 | 342 |
Carrying value of loans and leases individually evaluated for impairment | 905 | 921 | |
Carrying value of loans and leases collectively evaluated for impairment | 51,394 | 64,066 | |
Total | 52,299 | 64,987 | |
Residential mortgage | |||
Impaired Loans | |||
Allowance on loans and leases individually evaluated for impairment | 73 | ||
Allowance on loans and leases collectively evaluated for impairment | 283 | 312 | |
Total | 283 | 385 | 179 |
Carrying value of loans and leases individually evaluated for impairment | 1,797 | 1,817 | |
Carrying value of loans and leases collectively evaluated for impairment | 48,820 | 38,455 | |
Total | 50,617 | 40,272 | |
Construction | |||
Impaired Loans | |||
Allowance on loans and leases collectively evaluated for impairment | 2,042 | 2,421 | |
Total | 2,042 | 2,421 | 2,362 |
Carrying value of loans and leases individually evaluated for impairment | 1,206 | 1,206 | |
Carrying value of loans and leases collectively evaluated for impairment | 159,699 | 139,040 | |
Total | 160,905 | 140,246 | |
Commercial and industrial | |||
Impaired Loans | |||
Allowance on loans and leases individually evaluated for impairment | 2,900 | 1,563 | |
Allowance on loans and leases collectively evaluated for impairment | 3,633 | 3,868 | |
Total | 6,533 | 5,431 | 2,684 |
Carrying value of loans and leases individually evaluated for impairment | 17,361 | 4,645 | |
Carrying value of loans and leases collectively evaluated for impairment | 276,410 | 257,105 | |
Total | 293,771 | 261,750 | |
Small business loans | |||
Impaired Loans | |||
Allowance on loans and leases individually evaluated for impairment | 376 | ||
Allowance on loans and leases collectively evaluated for impairment | 3,361 | 1,259 | |
Total | 3,737 | 1,259 | 509 |
Carrying value of loans and leases individually evaluated for impairment | 792 | 185 | |
Carrying value of loans and leases collectively evaluated for impairment | 113,366 | 49,357 | |
Total | 114,158 | 49,542 | |
Paycheck Protection Program loans ("PPP") loans | |||
Impaired Loans | |||
Carrying value of loans and leases collectively evaluated for impairment | 90,194 | 203,543 | |
Total | 90,194 | 203,543 | |
Main Street Lending Program Loans ("MSLP") loans | |||
Impaired Loans | |||
Carrying value of loans and leases collectively evaluated for impairment | 597 | 580 | |
Total | $ 597 | $ 580 | |
Paycheck Protection Program And Main Street Lending Program Loans | |||
Impaired Loans | |||
Percentage Guaranteed | 100.00% | 100.00% | |
Consumer | |||
Impaired Loans | |||
Allowance on loans and leases collectively evaluated for impairment | $ 3 | $ 4 | |
Total | 3 | 4 | 6 |
Carrying value of loans and leases collectively evaluated for impairment | 419 | 511 | |
Total | 419 | 511 | |
Leases, net | |||
Impaired Loans | |||
Allowance on loans and leases collectively evaluated for impairment | 986 | 382 | |
Total | 986 | 382 | $ 5 |
Carrying value of loans and leases individually evaluated for impairment | 212 | ||
Carrying value of loans and leases collectively evaluated for impairment | 88,030 | 31,040 | |
Total | $ 88,242 | $ 31,040 |
Allowance for Loan and Lease _5
Allowance for Loan and Lease Losses (the Allowance) - Carrying value based on credit quality indicators (Details) $ in Thousands | Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($) |
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | $ 1,228,852 | $ 1,205,751 |
Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 1,123,252 | 1,124,015 |
Special mention | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 53,352 | 61,740 |
Substandard | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 52,248 | 16,316 |
Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 3,680 | |
Commercial mortgage. | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 516,928 | 485,103 |
Commercial mortgage. | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 481,551 | 449,545 |
Commercial mortgage. | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 29,452 | 32,059 |
Commercial mortgage. | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 5,925 | 3,499 |
Home equity lines and loans | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 52,299 | 64,987 |
Home equity lines and loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 50,908 | 63,923 |
Home equity lines and loans | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 1,391 | 1,064 |
Construction | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 160,905 | 140,246 |
Construction | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 151,608 | 132,286 |
Construction | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 9,297 | 7,960 |
Commercial and industrial | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 293,771 | 261,750 |
Commercial and industrial | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 236,298 | 227,349 |
Commercial and industrial | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 14,603 | 21,721 |
Commercial and industrial | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 42,870 | 9,000 |
Increase in value of loans and leases excluding residential mortgage, consumer and leases | 33,900 | |
Nonaccrual for non-performing loans | 13,800 | |
Increase of remaining financing receivable of different loan relationships with no specific industry | $ 20,100 | |
Number of loans relationship with no specific industry concentrations | loan | 18 | |
Commercial and industrial | Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 3,680 | |
Small business loans | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | $ 114,158 | 49,542 |
Small business loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 112,096 | 46,789 |
Small business loans | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 2,062 | 2,753 |
Paycheck Protection Program loans ("PPP") loans | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 90,194 | 203,543 |
Paycheck Protection Program loans ("PPP") loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 90,194 | 203,543 |
Main Street Lending Program Loans ("MSLP") loans | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | 597 | 580 |
Main Street Lending Program Loans ("MSLP") loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carrying value of loans and leases excluding residential mortgage, consumer and leases | $ 597 | $ 580 |
Allowance for Loan and Lease _6
Allowance for Loan and Lease Losses (the Allowance) - Carrying value based on performance status (Details) $ in Thousands | Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan |
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 139,278 | $ 71,823 |
Troubled debt restructurings | 3,807 | 3,606 |
Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 137,269 | 70,008 |
Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 2,009 | 1,815 |
Residential mortgage | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 50,617 | 40,272 |
Residential mortgage | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 48,820 | 38,457 |
Troubled debt restructurings | 0 | 0 |
Residential mortgage | Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 1,797 | $ 1,815 |
Number of loans | loan | 4 | 5 |
Loans receivable, net of the allowance for loan and lease losses | $ 601 | $ 910 |
Consumer | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 419 | 511 |
Consumer | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 419 | 511 |
Leases, net | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 88,242 | 31,040 |
Leases, net | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 88,030 | $ 31,040 |
Leases, net | Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 212 |
Allowance for Loan and Lease _7
Allowance for Loan and Lease Losses (the Allowance) - Impaired loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Impaired loans with related allowance: | ||
Recorded investment | $ 17,813 | $ 4,644 |
Principal balance | 17,976 | 4,696 |
Related allowance | 3,276 | 1,645 |
Impaired loans without related allowance: | ||
Recorded investment | 8,016 | 5,736 |
Principal balance | 8,104 | 5,862 |
Grand Total | ||
Recorded investment | 25,829 | 10,380 |
Principal balance | 26,080 | 10,558 |
Related allowance | 3,276 | 1,645 |
Commercial mortgage. | ||
Impaired loans without related allowance: | ||
Recorded investment | 3,556 | 1,606 |
Principal balance | 3,559 | 1,642 |
Commercial and industrial | ||
Impaired loans with related allowance: | ||
Recorded investment | 17,147 | 3,860 |
Principal balance | 17,310 | 3,902 |
Related allowance | 2,900 | 1,563 |
Impaired loans without related allowance: | ||
Recorded investment | 214 | 785 |
Principal balance | 269 | 862 |
Small business loans | ||
Impaired loans with related allowance: | ||
Recorded investment | 666 | |
Principal balance | 666 | |
Related allowance | 376 | |
Impaired loans without related allowance: | ||
Recorded investment | 126 | 185 |
Principal balance | 126 | 185 |
Home equity lines and loans | ||
Impaired loans with related allowance: | ||
Recorded investment | 95 | |
Principal balance | 105 | |
Related allowance | 9 | |
Impaired loans without related allowance: | ||
Recorded investment | 905 | 826 |
Principal balance | 935 | 839 |
Residential mortgage | ||
Impaired loans with related allowance: | ||
Recorded investment | 689 | |
Principal balance | 689 | |
Related allowance | 73 | |
Impaired loans without related allowance: | ||
Recorded investment | 1,797 | 1,128 |
Principal balance | 1,797 | 1,128 |
Construction | ||
Impaired loans without related allowance: | ||
Recorded investment | 1,206 | 1,206 |
Principal balance | 1,206 | $ 1,206 |
Leases, net | ||
Impaired loans without related allowance: | ||
Recorded investment | 212 | |
Principal balance | $ 212 |
Allowance for Loan and Lease _8
Allowance for Loan and Lease Losses (the Allowance) - Impaired Loan Average Recorded Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Impaired loans with related allowance: | ||
Average recorded investment | $ 18,236 | $ 4,698 |
Interest income recognized | 15 | 31 |
Impaired loans without related allowance: | ||
Average recorded investment | 8,138 | 5,912 |
Interest income recognized | 154 | 297 |
Grand Total | ||
Average recorded investment | 26,374 | 10,610 |
Total interest income recognized | 169 | 328 |
Commercial mortgage. | ||
Impaired loans without related allowance: | ||
Average recorded investment | 3,578 | 1,697 |
Interest income recognized | 43 | 86 |
Commercial and industrial | ||
Impaired loans with related allowance: | ||
Average recorded investment | 17,349 | 3,907 |
Interest income recognized | 15 | 31 |
Impaired loans without related allowance: | ||
Average recorded investment | 239 | 832 |
Interest income recognized | 24 | 19 |
Small business loans | ||
Impaired loans with related allowance: | ||
Average recorded investment | 887 | |
Impaired loans without related allowance: | ||
Average recorded investment | 154 | 213 |
Interest income recognized | 14 | 14 |
Home equity lines and loans | ||
Impaired loans with related allowance: | ||
Average recorded investment | 102 | |
Impaired loans without related allowance: | ||
Average recorded investment | 914 | 831 |
Residential mortgage | ||
Impaired loans with related allowance: | ||
Average recorded investment | 689 | |
Impaired loans without related allowance: | ||
Average recorded investment | 1,807 | 1,131 |
Interest income recognized | 11 | 133 |
Construction | ||
Impaired loans without related allowance: | ||
Average recorded investment | 1,206 | 1,208 |
Interest income recognized | 62 | $ 45 |
Leases, net | ||
Impaired loans without related allowance: | ||
Average recorded investment | $ 240 |
Allowance for Loan and Lease _9
Allowance for Loan and Lease Losses (the Allowance) - Troubled debt restructuring (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for Loan and Lease Losses (the Allowance) | ||
TDRs included in nonperforming loans and leases | $ 361 | $ 244 |
TDRs in compliance with modified terms | 3,446 | 3,362 |
Total TDRs | $ 3,807 | $ 3,606 |
Allowance for Loan and Lease_10
Allowance for Loan and Lease Losses (the Allowance) - Loan and lease modifications granted categorized as TDRs (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)contract | Dec. 31, 2020USD ($)contract | |
Allowance for Loan and Lease Losses (the Allowance) | ||
Number of Contracts | contract | 2 | 0 |
Loan and lease modifications granted and subsequently defaulted | $ | $ 0 | $ 0 |
Allowance for Loan and Lease_11
Allowance for Loan and Lease Losses (the Allowance) - COVID-19 Assistance to Customers (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021USD ($)loan | Mar. 10, 2022USD ($)loan | Jan. 31, 2022USD ($) | Dec. 31, 2020USD ($) | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Gross amount of loans | $ 1,466,570 | $ 1,518,955 | ||
Loan increment term | 3 months | |||
Reduced loan amount | $ 21,800 | |||
Percentage of reduced loan amount | 90.00% | |||
Amount of loan deferrals | $ 2,424 | $ 24,178 | ||
Amount of loan deferrals expired | $ 2,400 | |||
Paycheck Protection Program loans ("PPP") loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Number of loans issued | loan | 1,451 | |||
Paycheck Protection Program loans ("PPP") loans | Minimum | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Gross amount of loans | $ 370,000 | |||
Subsequent event | Paycheck Protection Program loans ("PPP") loans | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Value of loans paid back | $ 314,000 | |||
Number of loans paid back | loan | 1,224 | |||
Loan amount yet to be forgiven | $ 56,300 | |||
Loan amount submitted for forgiveness | 31,700 | |||
Loan amount not yet submitted for forgiveness | $ 24,600 |
Allowance for Loan and Lease_12
Allowance for Loan and Lease Losses (the Allowance) - Loan deferral by industrial concentration (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Total | $ 2,424 | $ 24,178 |
Hotels | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Total | 11,832 | |
C&I building construction | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Total | 10,103 | |
Other | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Total | $ 2,424 | $ 2,243 |
Bank Premises and Equipment (De
Bank Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2021 | |
Bank Premises and Equipment | |||
Less: accumulated depreciation | $ (11,463) | $ (10,118) | |
Total | 11,806 | 7,777 | |
Depreciation | 1,300 | 1,600 | |
Building | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 4,141 | 4,141 | |
Leasehold improvements | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 3,347 | 3,202 | |
Land | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 600 | 600 | |
Land Improvements | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 218 | 218 | |
Furniture, fixtures and equipment | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 3,229 | 2,700 | |
Computer equipment and data processing software | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | 7,971 | $ 7,034 | |
Construction in process | |||
Bank Premises and Equipment | |||
Property, Plant and Equipment, Gross | $ 3,763 | $ 3,800 |
Deposits - Components of deposi
Deposits - Components of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deposits: | ||
Demand, non-interest bearing | $ 274,528 | $ 203,843 |
Demand, interest-bearing | 268,248 | 206,573 |
Savings accounts | 45,038 | 8,056 |
Money market accounts | 652,590 | 564,566 |
Time deposits | 206,009 | 258,297 |
Total deposits | 1,446,413 | 1,241,335 |
Time deposits over FDIC Insurance Limit | $ 179,800 | $ 233,100 |
Deposits - Scheduled maturities
Deposits - Scheduled maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Scheduled maturities | ||
2022 | $ 126,719 | |
2023 | 18,106 | |
2024 | 4,071 | |
2025 | 24,271 | |
2026 | 32,842 | |
Time Deposits, Total | $ 206,009 | $ 258,297 |
Short-Term Borrowings and Lon_2
Short-Term Borrowings and Long-Term Debt - Short-term borrowings (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | |
Short-Term Borrowings | ||
Short term borrowings | $ 41,344,000 | $ 106,862,000 |
Federal funds purchased | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Number of borrowing facilities | item | 2 | |
Short term borrowings | $ 0 | 0 |
Federal funds purchased, facility one | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | 24,000,000 | |
Federal funds purchased, facility two | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | $ 15,000,000 | |
Open Repo Plus Weekly 0.33%, Maturing On 05/31/2022 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.33% | |
Short term borrowings | $ 36,458,000 | 60,416,000 |
Mid-term Repo-fixed 0.23%, Maturing On 09/12/2022 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.23% | |
Short term borrowings | $ 4,886,000 | |
Federal Reserve discount window | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.25% | |
Short term borrowings | 10,000,000 | |
Federal Reserve discount window | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | $ 3,500,000 | |
Short term borrowings | $ 0 | 10,000,000 |
PPPLF Advances | ||
Short-Term Borrowings | ||
Advances secured percentage | 100.00% | |
Short term borrowings | $ 0 | |
Mid-term Repo-fixed 0.36%, Maturing On 01/13/2021 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.36% | |
Short term borrowings | 4,605,000 | |
Mid-term Repo-fixed 0.10%, Maturing On 06/10/2021 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.10% | |
Short term borrowings | 6,376,000 | |
Mid-term Repo-fixed 0.11%, Maturing On 09/10/2021 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.11% | |
Short term borrowings | 10,000,000 | |
Mid-term Repo-fixed 0.16%, Maturing On 12/10/2021 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.16% | |
Short term borrowings | 10,000,000 | |
Mid-term Repo-fixed 0.23%, Maturing On 01/27/2021 | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.23% | |
Short term borrowings | $ 5,465,000 |
Short-Term Borrowings and Lon_3
Short-Term Borrowings and Long-Term Debt - Long-term debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Long Term Debt | ||
Long-term debt | $ 165,546 | |
PPPLF Advances | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.35% | |
Long-term debt | 153,269 | |
Mid-term Repo-fixed Maturing On 06/29/2022 | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.32% | |
Long-term debt | 7,392 | |
Mid-term Repo-fixed Maturing On 09/12/2022 | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.23% | |
Long-term debt | 4,885 | |
Federal Home Loan Bank of Pittsburgh | Letters of credit | ||
Long Term Debt | ||
Proceeds from long term debt | $ 131,500 | |
Maximum borrowing capacity | $ 505,400 | $ 638,900 |
Subordinated Debentures (Detail
Subordinated Debentures (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($)installment | Dec. 31, 2019USD ($) | Apr. 30, 2013USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2008USD ($)installment | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2014tranche | Sep. 30, 2014USD ($) | Aug. 31, 2014USD ($) | Jun. 30, 2014USD ($) | |
Subordinated Borrowing [Line Items] | |||||||||||
Debenture outstanding | $ 40,671 | $ 40,508 | $ 40,671 | ||||||||
Repayments of debt | 281 | 172 | |||||||||
2008 Debentures | |||||||||||
Subordinated Borrowing [Line Items] | |||||||||||
Debt issued | $ 550 | ||||||||||
Conversion ratio | 0.0667 | ||||||||||
Interest rate | 6.00% | ||||||||||
Debenture outstanding | 113 | ||||||||||
Repayments of debt | 56 | 56 | |||||||||
Number of equal principal installments | installment | 8 | ||||||||||
2011 Debentures | |||||||||||
Subordinated Borrowing [Line Items] | |||||||||||
Debt issued | $ 1,400 | ||||||||||
Conversion ratio | 0.0588 | ||||||||||
Interest rate | 6.00% | ||||||||||
Debenture outstanding | 578 | ||||||||||
Repayments of debt | 116 | 116 | |||||||||
Number of equal principal installments | installment | 8 | ||||||||||
2013 Debentures | |||||||||||
Subordinated Borrowing [Line Items] | |||||||||||
Debt issued | $ 1,400 | ||||||||||
Conversion ratio | 0.0455 | ||||||||||
Interest rate | 6.50% | ||||||||||
Debenture outstanding | 761 | ||||||||||
Repayments of debt | 109 | 0 | |||||||||
2014 Debentures | |||||||||||
Subordinated Borrowing [Line Items] | |||||||||||
Debt issued | $ 7,000 | $ 100 | $ 3,000 | ||||||||
Interest rate | 7.25% | ||||||||||
Debenture outstanding | $ 0 | 0 | 0 | ||||||||
Repayments of debt | 7,100 | ||||||||||
Number of tranches | tranche | 3 | ||||||||||
2019 Debentures | |||||||||||
Subordinated Borrowing [Line Items] | |||||||||||
Debt issued | $ 40,000 | ||||||||||
Interest rate | 5.375% | ||||||||||
Interest payments | $ 2,200 | $ 2,200 |
Servicing Assets - Residential
Servicing Assets - Residential Mortgage Loan Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance at beginning of the period | $ 5,617 | |
Balance at end of the period | 12,765 | $ 5,617 |
Mortgage Servicing Rights | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced | 1,000,000 | 506,000 |
Servicing fee income | 2,000 | 498 |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance at beginning of the period | 4,647 | 446 |
Servicing rights capitalized | 6,769 | 4,856 |
Amortization of servicing rights | (1,087) | (318) |
Change in valuation allowance | 427 | (337) |
Balance at end of the period | 10,756 | 4,647 |
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward] | ||
Valuation allowance, beginning of period | (435) | (98) |
Impairment | 337 | |
Recovery | 427 | |
Valuation allowance, end of the period | $ (8) | $ (435) |
Servicing Assets - MSR Sensitiv
Servicing Assets - MSR Sensitivity Analysis (Details) - Mortgage Servicing Rights - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Fair value of residential mortgage servicing rights | $ 11,241 | $ 4,647 |
Weighted average life (years) | 11 months | 5 months |
Prepayment speed | 7.23% | 9.39% |
Impact on fair value of a 10% adverse change in prepayment speed | $ (376) | $ (183) |
Impact on fair value of a 20% adverse change in prepayment speed | $ (731) | $ (354) |
Discount rate | 9.00% | 9.00% |
Impact on fair value of a 10% adverse change in the discount rate | $ (436) | $ (168) |
Impact on fair value of a 20% adverse change in the discount rate | $ (840) | $ (329) |
Servicing Assets - SBA Loan Ser
Servicing Assets - SBA Loan Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance at beginning of the period | $ 5,617 | |
Balance at end of the period | 12,765 | $ 5,617 |
SBA Loan Servicing Rights | ||
Servicing Assets at Fair Value [Line Items] | ||
Loans serviced | 115,100 | 55,900 |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance at beginning of the period | 970 | 337 |
Servicing rights capitalized | 1,488 | 794 |
Amortization of servicing rights | (392) | (148) |
Change in valuation allowance | (57) | (13) |
Balance at end of the period | 2,009 | 970 |
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward] | ||
Valuation allowance, beginning of period | (39) | (26) |
Impairment | (57) | (13) |
Valuation allowance, end of the period | $ (96) | $ (39) |
Servicing Assets - SBA Sensitiv
Servicing Assets - SBA Sensitivity Analysis (Details) - SBA Loan Servicing Rights - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Fair value of SBA loan servicing rights | $ 2,107 | $ 1,010 |
Weighted average life (years) | 3 years 9 months 18 days | 3 years 8 months 12 days |
Prepayment speed | 12.38% | 12.73% |
Impact on fair value of a 10% adverse change in prepayment speed | $ (69) | $ (37) |
Impact on fair value of a 20% adverse change in prepayment speed | $ (132) | $ (71) |
Discount rate | 9.01% | 8.33% |
Impact on fair value of a 10% adverse change in the discount rate | $ (54) | $ (25) |
Impact on fair value of a 20% adverse change in the discount rate | $ (106) | $ (49) |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | |
Lease Commitments | ||
Number of branch spaces leased | item | 22 | |
Operating Leases, Rent Expense | $ 2,200 | $ 1,900 |
Future minimum lease payments | ||
2022 | 2,179 | |
2023 | 1,874 | |
2024 | 1,737 | |
2025 | 1,456 | |
2026 | 1,436 | |
Thereafter | 3,134 | |
Total | $ 11,816 |
Stock-Based Compensation - 2016
Stock-Based Compensation - 2016 Plan (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||
Granted | 142,650 | 94,650 |
Restricted Stock | ||
Stock-Based Compensation | ||
Granted | 10,000 | 33,208 |
2016 Plan | ||
Stock-Based Compensation | ||
Shares authorized | 686,900 | |
Number of shares available for future grants | 204,942 | |
Term of award | 10 years | |
Vesting percentage | 25.00% | |
Vesting period | 3 years | |
2016 Plan | Employee stock option | ||
Stock-Based Compensation | ||
Granted | 438,750 | |
2016 Plan | Restricted Stock | ||
Stock-Based Compensation | ||
Granted | 43,208 | |
2004 Plan | ||
Stock-Based Compensation | ||
Shares authorized | 446,091 | |
Stock dividend percentage | 5.00% | |
Number of shares available for future grants | 0 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding, at the beginning of the period | 400,727 | 346,381 |
Exercised | (77,265) | (14,673) |
Granted | 142,650 | 94,650 |
Forfeited | (4,148) | (25,631) |
Outstanding, at the end of the period | 461,964 | 400,727 |
Exercisable at the end of the period | 291,832 | |
Nonvested at the end of the period | 170,132 | |
Weighted average exercise price | ||
Outstanding, at the beginning of the period | $ 16.53 | $ 16.13 |
Exercised | 13.68 | 13.64 |
Granted | 27.50 | 17.70 |
Forfeited | 18.63 | 17.03 |
Outstanding, at the end of the period | 20.38 | 16.53 |
Exercisable at the end of the period | 18.40 | |
Nonvested at the end of the period | 23.77 | |
Weighted average grant date fair value | ||
Outstanding, at the beginning of the period | 4.69 | 4.55 |
Exercised | 4.35 | 3.74 |
Granted | 9.47 | 5.07 |
Forfeited | 6.57 | 4.73 |
Outstanding, at the end of the period | 6.21 | $ 4.69 |
Exercisable at December 31, 2018 | 5.27 | |
Nonvested at December 31, 2018 | $ 7.81 | |
Weighted average remaining contractual life | 7 years 7 months 6 days | |
Range of exercise prices, lower limit | $ 11.79 | |
Range of exercise prices, upper limit | $ 31 | |
Aggregate intrinsic value of options outstanding | $ 7,600 | |
Aggregate intrinsic value of options exercisable | 5,400 | |
Employee stock option | ||
Weighted average grant date fair value | ||
Allocated Share-based Compensation Expense | $ 803 | $ 451 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted average assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation fair value assumptions | ||
Weighted average fair value of options granted | $ 9.47 | $ 5.07 |
Proceeds from exercise of stock options | $ 1,000 | $ 200 |
Forfeited | 4,148 | 25,631 |
ASU 2016-09 | ||
Stock-based compensation fair value assumptions | ||
Forfeited | 4,148 | |
Employee stock option | ||
Stock-based compensation fair value assumptions | ||
Expected dividends | 0.00% | 0.00% |
Risk-free rate, minimum | 1.02% | 0.47% |
Risk-free rate, maximum | 1.54% | 1.68% |
Expected life | 5 years 9 months | 5 years 9 months |
Expected volatility, minimum | 39.25% | 21.81% |
Expected volatility, maximum | 40.97% | 39.65% |
Tax benefits recognized related to stock compensation cost | $ 0 | $ 0 |
Unrecognized compensation cost | $ 1,300 | |
Weighted average period in which the unrecognized compensation cost will be recognized | 1 year 2 months 26 days | |
Intrinsic value of options exercised | $ 1,200 | |
Employee stock option | Minimum | ||
Stock-based compensation fair value assumptions | ||
Weighted average fair value of options granted | $ 8.14 | $ 4.47 |
Employee stock option | Maximum | ||
Stock-based compensation fair value assumptions | ||
Weighted average fair value of options granted | $ 9.57 | $ 5.87 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock outstanding (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding, at the beginning of the period | 33,208 | |
Granted | 10,000 | 33,208 |
Vested | (16,603) | |
Outstanding, at the end of the period | 26,605 | 33,208 |
Nonvested | 26,605 | |
Weighted Average Exercise Price | ||
Outstanding, at the beginning of the period | $ 14 | |
Granted | 26.36 | $ 14 |
Vested | 14 | |
Outstanding, at the end of the period | 18.65 | 14 |
Nonvested | 18.65 | |
Weighted Average Grant Date Fair Value | ||
Outstanding, at the beginning of the period | 14 | |
Granted | 26.36 | 14 |
Vested | 14 | |
Outstanding, at the end of the period | 18.65 | $ 14 |
Nonvested | $ 18.65 | |
Compensation cost | $ 460 | |
Unrecognized compensation cost | $ 189 | $ 80 |
Weighted average period in which the unrecognized compensation cost will be recognized | 2 months 23 days | |
Awards Vesting in one year | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 100.00% | 50.00% |
Vesting period | 1 year | |
Awards Vesting on second anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 50.00% |
Income Taxes - Federal and stat
Income Taxes - Federal and state (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Federal: | ||
Current | $ 10,022 | $ 5,703 |
Deferred | (717) | 1,242 |
Total federal income tax expense | 9,305 | 6,945 |
State: | ||
Current | 1,463 | 1,141 |
Deferred | (51) | 12 |
Total state income tax expense | 1,412 | 1,153 |
Total income tax expense | $ 10,717 | $ 8,098 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Federal income tax at statutory rate | $ 9,733 | $ 7,252 |
State tax expense, net of federal benefit | 1,116 | 911 |
Tax exempt interest | (248) | (153) |
Bank owned life insurance | (77) | (59) |
Incentive stock options | 81 | 74 |
ESOP | 41 | |
Other | 71 | 73 |
Total income tax expense | $ 10,717 | $ 8,098 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Federal income tax at statutory rate (as a percent) | 21.00% | 21.00% |
State tax expense, net of federal benefit (as a percent) | 2.40% | 2.60% |
Tax exempt interest (as a percent) | (0.50%) | (0.40%) |
Bank owned life insurance (as a percent) | (0.20%) | (0.20%) |
Incentive stock options (as a percent) | 0.20% | 0.20% |
ESOP (as a percentage) | 0.10% | |
Other (as a percent) | 0.10% | 0.20% |
Effective income tax rate (as a percent) | 23.10% | 23.40% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax asset (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets: | ||
Allowance for loan and lease losses | $ 4,345 | $ 4,230 |
Intangibles | 30 | |
Accrued incentive compensation | 287 | |
Accrued retirement | 874 | 528 |
Deferred rent | 141 | 180 |
Mortgage repurchase reserve | 738 | 641 |
Other | 183 | 122 |
Total deferred tax asset | 6,568 | 5,731 |
Deferred tax liabilities: | ||
Property and equipment | (535) | (377) |
Loan servicing rights | (2,957) | (1,337) |
Intangibles | (15) | |
Mortgage pipeline fair-value adjustment | (308) | (1,156) |
Hedge instrument fair-value adjustment | (190) | (1,252) |
Unrealized gain on available for sale securities | (213) | (797) |
Prepaid expenses | (465) | (340) |
Deferred loan costs | (471) | (406) |
Other | (1) | (4) |
Total deferred tax liability | (5,155) | (5,669) |
Net deferred tax asset | $ 1,413 | $ 62 |
Effective income tax rate (as a percent) | 23.10% | 23.40% |
Investment in low income housing tax credits | $ 3,300 | $ 1,300 |
Tax credit recognized | 161 | 161 |
Tax credit, amortization | 183 | 180 |
Tax benefit from losses | $ 144 | $ 26 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Non-Interest Income: | ||
Mortgage banking income | $ 75,932 | $ 76,461 |
SBA loan income | 6,898 | 2,572 |
Net change in fair values | (7,838) | 9,145 |
Net gain (loss) on hedging activity | 2,961 | (9,400) |
Earnings on investment in life insurance | 365 | 279 |
Net gain on sale of securities | 435 | 1,345 |
Dividends on FHLB stock | 191 | 325 |
Other | 4,115 | 2,230 |
Non-interest income | 87,988 | 86,918 |
Wealth Management Income | ||
Non-Interest Income: | ||
Revenue from contracts with customers | 4,801 | 3,854 |
Service Charges | ||
Non-Interest Income: | ||
Revenue from contracts with customers | 129 | 107 |
Service charges on deposit accounts | 128 | 107 |
ATM/Debit Card Commissions and Title Fee Income | ||
Non-Interest Income: | ||
Revenue from contracts with customers | 1,200 | 925 |
Bank | ||
Non-Interest Income: | ||
Mortgage banking income | 1,097 | 1,632 |
SBA loan income | 6,898 | 2,572 |
Net change in fair values | 43 | (40) |
Earnings on investment in life insurance | 365 | 279 |
Net gain on sale of securities | 435 | 1,345 |
Dividends on FHLB stock | 191 | 325 |
Other | 1,622 | 1,468 |
Non-interest income | 10,779 | 7,688 |
Bank | Service Charges | ||
Non-Interest Income: | ||
Service charges on deposit accounts | 128 | 107 |
Wealth | ||
Non-Interest Income: | ||
Other | 1 | 14 |
Non-interest income | 4,802 | 3,868 |
Wealth | Wealth Management Income | ||
Non-Interest Income: | ||
Revenue from contracts with customers | 4,801 | 3,854 |
Mortgage | ||
Non-Interest Income: | ||
Mortgage banking income | 74,835 | 74,829 |
Net change in fair values | (7,881) | 9,185 |
Net gain (loss) on hedging activity | 2,961 | (9,400) |
Other | 2,492 | 748 |
Non-interest income | $ 72,407 | $ 75,362 |
Transactions with Executive O_2
Transactions with Executive Officers, Directors and Principal Stockholders (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Transactions with Executive Officers, Directors and Principal Stockholders | ||
Loans receivable from related parties | $ 5,100 | $ 3,300 |
Payments for advances for related parties | 2,800 | 4,900 |
Proceeds repayments from related party | 1,300 | 3,800 |
Effect of changes in composition of related parties | 284 | 1,500 |
Deposits of related parties | 34,700 | 25,600 |
Subordinated debt held by related parties | 409 | 485 |
Legal fees paid | $ 22 | $ 8 |
Financial Instruments with Of_2
Financial Instruments with Off Balance Sheet Risk, Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 290,811 | $ 688,786 |
Indemnification or repurchase of loan | $ 109 | |
Number of loans indemnification signed | loan | 1 | 0 |
Provision for loan losses | $ 3,200 | $ 2,700 |
Number of loans receivable repurchased | loan | 6 | 1 |
Loan receivables repurchased | $ 1,300 | $ 153 |
Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Repurchase or Indemnification Term of Loan | 2 months | |
Delinquency period of loan | 6 months | |
Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Repurchase or Indemnification Term of Loan | 3 months | |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet financial instruments | $ 486,632 | 421,399 |
Mortgage Loans Commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet financial instruments | $ 143,900 | 428,800 |
Mortgage Loans Commitments | Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitment term | 30 days | |
Mortgage Loans Commitments | Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitment term | 120 days | |
Letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet financial instruments | $ 25,986 | 8,928 |
Commitment term | 12 months | |
Forward Commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitment term | 90 days | |
Notional Amount | $ 76,000 | 218,000 |
Forward Sale Of Mortgage Backed Securities | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | 68,600 | 230,100 |
Forward Best Effort Sale Commitment | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 75,800 | $ 198,700 |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Tier 1 capital (to risk-weighted assets) | ||
Actual, Amount | $ 160,379 | $ 134,564 |
To be well capitalized under prompt corrective action provisions, Amount | $ 136,621 | $ 120,082 |
Actual, Ratio | 9.39 | 8.96 |
To be well capitalized under prompt corrective action provisions, Ratio | 8 | 8 |
Meridian Bank | ||
Tier 1 capital (to average assets) | ||
Actual, Amount | $ 196,506 | $ 173,231 |
To be well capitalized under prompt corrective action provisions, Amount | $ 136,620 | $ 120,080 |
Actual, Ratio | 11.51 | 11.54 |
To be well capitalized under prompt corrective action provisions, Ratio | 8 | 8 |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Financial assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Securities available-for-sale | $ 159,302 | $ 123,562 |
Equity investments | 2,354 | 1,031 |
Mortgage loans held for investment | 17,558 | 12,182 |
U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 16,837 | 25,592 |
U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 9,813 | 4,046 |
U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,381 | 23,909 |
State and municipal securities | ||
Assets | ||
Securities available-for-sale | 72,982 | 65,810 |
U.S. Treasuries | ||
Assets | ||
Securities available-for-sale | 29,728 | |
Non-U.S. government agencies collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 975 | |
Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,586 | 4,205 |
Recurring | ||
Assets | ||
Equity investments | 2,354 | 1,031 |
Mortgage loans held-for-sale | 80,882 | 229,199 |
Mortgage loans held for investment | 17,558 | 12,182 |
Total | 262,244 | 374,024 |
Liabilities | ||
Total | 1,327 | 2,891 |
Recurring | U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 16,837 | 25,592 |
Recurring | U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 9,813 | 4,046 |
Recurring | U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,381 | 23,909 |
Recurring | State and municipal securities | ||
Assets | ||
Securities available-for-sale | 72,982 | 65,810 |
Recurring | U.S. Treasuries | ||
Assets | ||
Securities available-for-sale | 29,728 | |
Recurring | Non-U.S. government agencies collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 975 | |
Recurring | Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,586 | 4,205 |
Recurring | Interest rate lock commitments | ||
Assets | ||
Derivative assets, Fair value | 1,122 | 6,932 |
Liabilities | ||
Derivative Liability | 203 | 100 |
Recurring | Forward Commitments | ||
Assets | ||
Securities available-for-sale | 65 | |
Liabilities | ||
Derivative Liability | 106 | 1,572 |
Recurring | Customer derivatives - interest rate swaps | ||
Assets | ||
Derivative assets, Fair value | 961 | 1,118 |
Liabilities | ||
Derivative Liability | 1,018 | 1,219 |
Recurring | Level 1 | ||
Assets | ||
Total | 29,728 | |
Recurring | Level 1 | U.S. Treasuries | ||
Assets | ||
Securities available-for-sale | 29,728 | |
Recurring | Level 2 | ||
Assets | ||
Equity investments | 2,354 | 1,031 |
Mortgage loans held-for-sale | 80,882 | 229,199 |
Mortgage loans held for investment | 17,558 | 12,182 |
Total | 231,394 | 367,092 |
Liabilities | ||
Total | 1,124 | 2,791 |
Recurring | Level 2 | U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 16,837 | 25,592 |
Recurring | Level 2 | U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 9,813 | 4,046 |
Recurring | Level 2 | U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,381 | 23,909 |
Recurring | Level 2 | State and municipal securities | ||
Assets | ||
Securities available-for-sale | 72,982 | 65,810 |
Recurring | Level 2 | Non-U.S. government agencies collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 975 | |
Recurring | Level 2 | Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,586 | 4,205 |
Recurring | Level 2 | Forward Commitments | ||
Assets | ||
Securities available-for-sale | 65 | |
Liabilities | ||
Derivative Liability | 106 | 1,572 |
Recurring | Level 2 | Customer derivatives - interest rate swaps | ||
Assets | ||
Derivative assets, Fair value | 961 | 1,118 |
Liabilities | ||
Derivative Liability | 1,018 | 1,219 |
Recurring | Level 3 | ||
Assets | ||
Total | 1,122 | 6,932 |
Liabilities | ||
Total | 203 | 100 |
Recurring | Level 3 | Interest rate lock commitments | ||
Assets | ||
Derivative assets, Fair value | 1,122 | 6,932 |
Liabilities | ||
Derivative Liability | $ 203 | $ 100 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Financial assets measured at fair value on non-recurring basis (Details) - Nonrecurring - Level 3 - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financial assets measured at fair value on a nonrecurring basis | ||
Mortgage servicing rights | $ 10,756 | $ 4,647 |
SBA loan servicing rights | 2,009 | 970 |
Total | 14,892 | 8,615 |
Commercial and industrial | ||
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | 1,837 | 2,297 |
Small business loans | ||
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | $ 290 | |
Home equity lines and loans | ||
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | 86 | |
Residential mortgage | ||
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | $ 615 |
Fair Value Measurements and D_5
Fair Value Measurements and Disclosures - Estimated fair values of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Securities available-for-sale | $ 159,302 | $ 123,562 |
Securities held-to-maturity | 6,591 | 6,857 |
Equity investments | 2,354 | 1,031 |
Mortgage loans held for investment | 17,558 | 12,182 |
Carrying amount | ||
Financial assets: | ||
Restricted investment in bank stock | 5,117 | 7,861 |
Level 1 | Carrying amount | ||
Financial assets: | ||
Cash and cash equivalents | 23,480 | 36,744 |
Level 1 | Fair value | ||
Financial assets: | ||
Cash and cash equivalents | 23,480 | 36,744 |
Level 2 | Carrying amount | ||
Financial assets: | ||
Securities available-for-sale | 159,302 | 123,562 |
Securities held-to-maturity | 6,372 | 6,510 |
Equity investments | 2,354 | 1,031 |
Mortgage loans held-for-sale | 80,882 | 229,199 |
Mortgage loans held for investment | 17,558 | 12,182 |
Financial liabilities: | ||
Deposits | 1,446,413 | 1,241,335 |
Short-term borrowings | 41,344 | 106,862 |
Long-term debt | 165,546 | |
Subordinated debentures | 40,508 | 40,671 |
Accrued interest payable | 31 | 1,154 |
Level 2 | Carrying amount | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 65 | |
Financial liabilities: | ||
Derivatives | 106 | 1,572 |
Level 2 | Carrying amount | Customer derivatives - interest rate swaps | ||
Financial assets: | ||
Derivative asset | 961 | 1,118 |
Financial liabilities: | ||
Derivatives | 1,018 | 1,219 |
Level 2 | Fair value | ||
Financial assets: | ||
Securities available-for-sale | 159,302 | 123,562 |
Securities held-to-maturity | 6,591 | 6,857 |
Equity investments | 2,354 | 1,031 |
Mortgage loans held-for-sale | 80,882 | 229,199 |
Mortgage loans held for investment | 17,558 | 12,182 |
Financial liabilities: | ||
Deposits | 1,549,100 | 1,392,500 |
Short-term borrowings | 41,344 | 106,862 |
Long-term debt | 168,000 | |
Subordinated debentures | 40,803 | 38,375 |
Accrued interest payable | 31 | 1,154 |
Level 2 | Fair value | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 65 | |
Financial liabilities: | ||
Derivatives | 106 | 1,572 |
Level 2 | Fair value | Customer derivatives - interest rate swaps | ||
Financial assets: | ||
Derivative asset | 961 | 1,118 |
Financial liabilities: | ||
Derivatives | 1,018 | 1,219 |
Level 3 | Carrying amount | ||
Financial assets: | ||
Loans receivable, net of the allowance for loan and lease losses | 1,368,899 | 1,272,582 |
Accrued interest receivable | 5,009 | 5,482 |
Level 3 | Carrying amount | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 1,122 | 6,932 |
Financial liabilities: | ||
Derivatives | 203 | 100 |
Level 3 | Fair value | ||
Financial assets: | ||
Loans receivable, net of the allowance for loan and lease losses | 1,370,885 | 1,289,776 |
Accrued interest receivable | 5,009 | 5,482 |
Level 3 | Fair value | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 1,122 | 6,932 |
Financial liabilities: | ||
Derivatives | $ 203 | $ 100 |
Fair Value Measurements and D_6
Fair Value Measurements and Disclosures - Off-balance sheet financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 486,632 | $ 421,399 |
Letters of credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | 25,986 | 8,928 |
Carrying amount | Level 2 | Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | 486,632 | 421,399 |
Carrying amount | Level 2 | Letters of credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 25,986 | $ 8,928 |
Fair Value Measurements and D_7
Fair Value Measurements and Disclosures - Fair value on a recurring basis (Details) - Interest rate lock commitments - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at beginning of the period | $ 6,932 | $ 504 |
(Decrease) Increase in value | (5,810) | 6,428 |
Balance at end of the period | $ 1,122 | $ 6,932 |
Fair Value Measurements and D_8
Fair Value Measurements and Disclosures - Valuation Techniques for Level 3 interest rate lock (Details) - Level 3 $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Appraisal of collateral | Management adjustments on appraisals | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 2,127 | $ 2,998 |
Appraisal of collateral | Management adjustments on appraisals | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, Measurement input | 0.02 | 0.02 |
Appraisal of collateral | Management adjustments on appraisals | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, Measurement input | 0.15 | 0.15 |
Interest rate lock commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Net realized gains (losses) | $ (5,900) | $ 6,500 |
Interest rate lock commitments | Market comparable pricing | Pull through | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset | $ 1,122 | $ 6,932 |
Valuation technique extensible list | Market comparable pricing | Market comparable pricing |
Measurement input extensible list | Pull through | Pull through |
Interest rate lock commitments | Market comparable pricing | Pull through | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.01 | 0.01 |
Interest rate lock commitments | Market comparable pricing | Pull through | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.99 | 0.99 |
Interest rate lock commitments | Market comparable pricing | Pull through | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 87.66 | 83.08 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional amounts and fair values of derivative financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Financial Instruments | ||
Notional Amount | $ 290,811 | $ 688,786 |
Asset (Liability) Fair Value | 821 | 5,159 |
Interest rate lock commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 143,917 | 428,828 |
Asset (Liability) Fair Value | 919 | 6,832 |
Interest rate lock commitments | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 108,653 | 406,422 |
Asset (Liability) Fair Value | 1,122 | 6,932 |
Interest rate lock commitments | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 35,264 | 22,406 |
Asset (Liability) Fair Value | (203) | (100) |
Forward Commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 76,000 | 218,000 |
Asset (Liability) Fair Value | (41) | (1,572) |
Forward Commitments | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 30,500 | |
Asset (Liability) Fair Value | 65 | |
Forward Commitments | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 45,500 | 218,000 |
Asset (Liability) Fair Value | (106) | (1,572) |
Customer derivatives - interest rate swaps | ||
Derivative Financial Instruments | ||
Notional Amount | 70,894 | 41,958 |
Asset (Liability) Fair Value | (57) | (101) |
Customer derivatives - interest rate swaps | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 35,447 | 20,979 |
Asset (Liability) Fair Value | 961 | 1,118 |
Customer derivatives - interest rate swaps | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 35,447 | 20,979 |
Asset (Liability) Fair Value | $ (1,018) | $ (1,219) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair value gains and losses on derivative financial instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of the fair value gains and losses on derivative financial instruments | ||
Net fair value (losses) gains on derivative financial instruments | $ (4,338) | $ 4,975 |
Realized gain (losses) on derivatives | 2,961 | (9,400) |
Interest rate lock commitments | ||
Summary of the fair value gains and losses on derivative financial instruments | ||
Net fair value (losses) gains on derivative financial instruments | (5,913) | 6,486 |
Forward Commitments | ||
Summary of the fair value gains and losses on derivative financial instruments | ||
Net fair value (losses) gains on derivative financial instruments | 1,531 | (1,459) |
Customer derivatives - interest rate swaps | ||
Summary of the fair value gains and losses on derivative financial instruments | ||
Net fair value (losses) gains on derivative financial instruments | $ 44 | $ (52) |
Segments (Details)
Segments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loanfacility | Dec. 31, 2020USD ($) | |
Segments | ||
Number of central loan production | loanfacility | 1 | |
Net-interest Income: | ||
Net interest income | $ 63,111 | $ 48,996 |
Provision for loan losses | 1,070 | 8,302 |
Net interest income after provision | 62,041 | 40,694 |
Non-Interest Income: | ||
Mortgage banking income | 75,932 | 76,461 |
Wealth management income | 4,801 | 3,854 |
SBA loan income | 6,898 | 2,572 |
Net change in fair values | (7,838) | 9,145 |
Net gain (loss) on hedging activity | 2,961 | (9,400) |
Other | 5,234 | 4,286 |
Non-interest income | 87,988 | 86,918 |
Non-interest expenses: | ||
Salaries and employee benefits | 78,866 | 72,147 |
Occupancy and equipment | 4,545 | 4,292 |
Professional fees | 3,558 | 3,113 |
Advertising and promotion | 3,714 | 2,852 |
Other | 8,053 | 6,168 |
Non-interest expenses | 103,727 | 93,076 |
Income before income taxes | 46,302 | 34,536 |
Total Assets | 1,713,443 | 1,720,197 |
Bank | ||
Net-interest Income: | ||
Net interest income | 61,032 | 46,997 |
Provision for loan losses | 1,070 | 8,302 |
Net interest income after provision | 59,962 | 38,695 |
Non-Interest Income: | ||
Mortgage banking income | 1,097 | 1,632 |
SBA loan income | 6,898 | 2,572 |
Net change in fair values | 43 | (40) |
Other | 2,741 | 3,524 |
Non-interest income | 10,779 | 7,688 |
Non-interest expenses: | ||
Non-interest expenses | 40,392 | 33,351 |
Income before income taxes | 30,349 | 13,032 |
Total Assets | 1,608,305 | 1,488,312 |
Wealth | ||
Net-interest Income: | ||
Net interest income | 15 | (48) |
Net interest income after provision | 15 | (48) |
Non-Interest Income: | ||
Wealth management income | 4,801 | 3,854 |
Other | 1 | 14 |
Non-interest income | 4,802 | 3,868 |
Non-interest expenses: | ||
Non-interest expenses | 3,496 | 3,213 |
Income before income taxes | 1,321 | 607 |
Total Assets | 6,355 | 5,479 |
Mortgage | ||
Net-interest Income: | ||
Net interest income | 2,064 | 2,047 |
Net interest income after provision | 2,064 | 2,047 |
Non-Interest Income: | ||
Mortgage banking income | 74,835 | 74,829 |
Net change in fair values | (7,881) | 9,185 |
Net gain (loss) on hedging activity | 2,961 | (9,400) |
Other | 2,492 | 748 |
Non-interest income | 72,407 | 75,362 |
Non-interest expenses: | ||
Non-interest expenses | 59,839 | 56,512 |
Income before income taxes | 14,632 | 20,897 |
Total Assets | 98,783 | 226,406 |
Wealth Management Income | ||
Non-Interest Income: | ||
Revenue from contracts with customers | 4,801 | 3,854 |
Wealth Management Income | Wealth | ||
Non-Interest Income: | ||
Revenue from contracts with customers | $ 4,801 | $ 3,854 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - ASU 2016-02 $ in Millions | Jan. 01, 2022USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease liabilities | $ 10.6 |
Operating lease right-of-use assets | $ 10.8 |
Parent Company Financial Stat_3
Parent Company Financial Statements - Condensed Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and due from banks | $ 23,480 | $ 34,190 |
Federal funds sold | 2,554 | |
Other assets | 10,463 | 12,717 |
Total assets | 1,713,443 | 1,720,197 |
Liabilities: | ||
Subordinated debentures | 40,508 | 40,671 |
Accrued interest payable | 31 | 1,154 |
Other liabilities | 19,787 | 23,007 |
Total liabilities | 1,548,083 | 1,578,575 |
Stockholders' equity: | ||
Common stock, $1 par value. Authorized 10,000,000 shares; issued 6,534,587 and 6,455,566 as of December 31, 2021 and December 31, 2020 | 6,535 | 6,456 |
Surplus | 83,663 | 81,196 |
Treasury stock - 426,693 and 320,000 shares at December 31, 2021 and December 31, 2020 | (8,860) | (5,828) |
Unearned common stock held by employee stock ownership plan | (1,602) | (1,768) |
Retained earnings | 84,916 | 59,010 |
Accumulated other comprehensive income | 708 | 2,556 |
Total stockholders' equity | 165,360 | 141,622 |
Total liabilities and stockholders' equity | $ 1,713,443 | $ 1,720,197 |
Common stock, par value | $ 1 | $ 1 |
Common stock, Authorized shares | 25,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 6,534,587 | 6,455,566 |
Treasury stock shares held | 426,693 | 320,000 |
Parent Company | ||
Stockholders' equity: | ||
Treasury stock shares held | 426,693 | 320,000 |
Parent Company | Reportable Legal Entities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and due from banks | $ 2,836 | $ 213 |
Investment in subsidiaries | 200,410 | 180,288 |
Other assets | 1,382 | 360 |
Total assets | 204,628 | 180,861 |
Liabilities: | ||
Subordinated debentures | 39,057 | 38,904 |
Accrued interest payable | 6 | 6 |
Other liabilities | 205 | 329 |
Total liabilities | 39,268 | 39,239 |
Stockholders' equity: | ||
Common stock, $1 par value. Authorized 10,000,000 shares; issued 6,534,587 and 6,455,566 as of December 31, 2021 and December 31, 2020 | 6,535 | 6,456 |
Surplus | 83,663 | 81,196 |
Treasury stock - 426,693 and 320,000 shares at December 31, 2021 and December 31, 2020 | (8,860) | (5,828) |
Unearned common stock held by employee stock ownership plan | (1,602) | (1,768) |
Retained earnings | 84,916 | 59,010 |
Accumulated other comprehensive income | 708 | 2,556 |
Total stockholders' equity | 165,360 | 141,622 |
Total liabilities and stockholders' equity | $ 204,628 | $ 180,861 |
Common stock, par value | $ 1 | $ 1 |
Common stock, Authorized shares | 25,000,000 | 25,000,000 |
Common Stock, Shares, Issued | 6,534,587 | 6,455,566 |
Parent Company Financial Stat_4
Parent Company Financial Statements - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Income Statements, Captions [Line Items] | ||
Total operating income | $ 71,522 | $ 62,656 |
Interest expense | 8,411 | 13,660 |
Other expenses | 8,053 | 6,168 |
Income before income taxes | 46,302 | 34,536 |
Income tax expense | 10,717 | 8,098 |
Net income | 35,585 | 26,438 |
Total other comprehensive (loss) income | (1,848) | 2,559 |
Total comprehensive income | 33,737 | 28,997 |
Parent Company | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Dividends from Bank | 17,187 | 11,512 |
Non-interest and other income | 10 | |
Total operating income | 17,187 | 11,522 |
Interest expense | 2,303 | 2,202 |
Other expenses | 1,675 | |
Income before equity in undistributed income of subsidiaries | 13,209 | 9,320 |
Equity in undistributed income of subsidiaries | 22,376 | 17,118 |
Income before income taxes | 35,585 | 26,438 |
Net income | 35,585 | 26,438 |
Total other comprehensive (loss) income | (1,848) | 2,559 |
Total comprehensive income | $ 33,737 | $ 28,997 |
Parent Company Financial Stat_5
Parent Company Financial Statements - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net income | $ 35,585 | $ 26,438 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Share-based compensation | 1,607 | 763 |
Amortization of issuance costs on subordinated debt | 118 | 112 |
(Decrease) in accrued interest payable | (1,122) | 66 |
Other, net | (3,693) | 8,995 |
(Decrease) increase in other liabilities | (1,591) | 11,047 |
Net cash provided by (used in) operating activities | 165,123 | (158,465) |
Cash flows from investing activities: | ||
Net cash used in investing activities | (140,515) | (370,702) |
Cash flows from financing activities: | ||
Issuance costs on subordinated debt | (231) | |
Dividends paid | (9,679) | (1,525) |
Purchase of common shares for ESOP | (2,000) | |
Share based awards and exercises | 1,105 | 395 |
Net cash (used in) provided by financing activities | 37,872 | (526,540) |
Net change in cash and cash equivalents | (13,264) | (2,627) |
Cash and cash equivalents at beginning of period | 36,744 | 39,371 |
Cash and cash equivalents at end of period | 23,480 | 36,744 |
Parent Company | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net income | 35,585 | 26,438 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity in undistributed income of subsidiaries | (22,376) | (17,818) |
Share-based compensation | 1,607 | 763 |
Amortization of issuance costs on subordinated debt | 153 | 112 |
(Decrease) in accrued interest payable | (72) | |
Other, net | (740) | (294) |
Net cash provided by (used in) operating activities | 14,229 | 9,129 |
Cash flows from financing activities: | ||
Issuance costs on subordinated debt | (231) | |
Net purchase of treasury stock | (3,032) | (5,703) |
Dividends paid | (9,679) | (1,525) |
Purchase of common shares for ESOP | (2,000) | |
Share based awards and exercises | 1,105 | 395 |
Net cash (used in) provided by financing activities | (11,606) | (9,064) |
Net change in cash and cash equivalents | 2,623 | 65 |
Cash and cash equivalents at beginning of period | 213 | 148 |
Cash and cash equivalents at end of period | $ 2,836 | $ 213 |
Subsequent Events (Details)
Subsequent Events (Details) | Jan. 27, 2022$ / shares |
Subsequent event | |
Subsequent Event [Line Items] | |
Common Stock, Special Dividends, Per Share, Declared | $ 1 |