Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 13, 2023 | Jun. 30, 2022 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-40711 | ||
Entity Registrant Name | ORANGE COUNTY BANCORP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-1135778 | ||
Entity Address, Address Line One | 212 Dolson Avenue | ||
Entity Address, City or Town | Middletown | ||
Entity Address State Or Province | NY | ||
Entity Address, Postal Zip Code | 10940 | ||
City Area Code | 845 | ||
Local Phone Number | 341-5000 | ||
Title of 12(b) Security | Common Stock, Par Value $0.50 per Share | ||
Trading Symbol | OBT | ||
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 | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 186.2 | ||
Entity Common Stock, Shares Outstanding | 5,643,203 | ||
Entity Central Index Key | 0001754226 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Crowe LLP | ||
Auditor Location | Grand Rapids, Michigan | ||
Auditor Firm ID | 173 |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and due from banks | $ 86,081 | $ 306,179 |
Investment securities - available-for-sale | 533,461 | 464,797 |
Restricted investment in bank stocks | 9,562 | 2,217 |
Loans | 1,569,430 | 1,291,428 |
Allowance for loan losses | (21,832) | (17,661) |
Loans, net | 1,547,598 | 1,273,767 |
Premises and equipment, net | 14,739 | 14,601 |
Accrued interest receivable | 6,320 | 6,643 |
Bank owned life insurance | 40,463 | 39,513 |
Goodwill | 5,359 | 5,359 |
Intangible assets | 1,392 | 1,678 |
Other assets | 42,359 | 27,829 |
TOTAL ASSETS | 2,287,334 | 2,142,583 |
Deposits: | ||
Noninterest bearing | 723,228 | 701,645 |
Interest bearing | 1,251,159 | 1,212,739 |
Total deposits | 1,974,387 | 1,914,384 |
FHLB advances, short term | 131,500 | |
Note payable | 3,000 | |
Subordinated notes, net of issuance costs | 19,447 | 19,376 |
Accrued expenses and other liabilities | 23,862 | 22,987 |
TOTAL LIABILITIES | 2,149,196 | 1,959,747 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.50 par value; 15,000,000 shares authorized; 5,683,304 issued; 5,642,621 and 5,637,376 outstanding, at December 31, 2022 and December 31, 2021, respectively | 2,842 | 2,842 |
Surplus | 120,107 | 119,825 |
Retained Earnings | 84,635 | 64,941 |
Accumulated other comprehensive income (loss), net of taxes | (68,196) | (3,443) |
Treasury stock, at cost; 40,683 and 45,928 shares at December 31, 2022 and December 31, 2021, respectively | (1,250) | (1,329) |
TOTAL STOCKHOLDERS' EQUITY | 138,138 | 182,836 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,287,334 | $ 2,142,583 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED STATEMENTS OF CONDITION | ||
Common stock, Par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, Authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, Issued (in shares) | 5,683,304 | 5,683,304 |
Common stock, Outstanding (in shares) | 5,642,621 | 5,637,376 |
Treasury stock (in shares) | 40,683 | 45,928 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INTEREST INCOME | ||
Interest and fees on loans | $ 69,327 | $ 57,524 |
Interest on investment securities: | ||
Taxable | 9,871 | 4,901 |
Tax exempt | 2,286 | 1,632 |
Interest on Federal funds sold and other | 2,739 | 372 |
TOTAL INTEREST INCOME | 84,223 | 64,429 |
INTEREST EXPENSE | ||
Savings and NOW accounts | 4,113 | 2,370 |
Time deposits | 346 | 511 |
FHLB advances | 599 | |
Note payable | 154 | 168 |
Subordinated notes | 923 | 919 |
TOTAL INTEREST EXPENSE | 6,135 | 3,968 |
NET INTEREST INCOME | 78,088 | 60,461 |
Provision for loan losses | 9,517 | 2,428 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 68,571 | 58,033 |
NONINTEREST INCOME | ||
Service charges on deposit accounts | 693 | 638 |
Trust income | 4,764 | 4,788 |
Investment advisory income | 4,537 | 4,853 |
Earnings on bank owned life insurance | 950 | 793 |
Other | 1,052 | 1,030 |
TOTAL NONINTEREST INCOME | 11,996 | 12,102 |
NONINTEREST EXPENSE | ||
Salaries | 22,461 | 19,710 |
Employee benefits | 5,579 | 3,257 |
Occupancy expense | 4,467 | 4,058 |
Professional fees | 4,066 | 3,649 |
Directors' fees and expenses | 1,157 | 1,041 |
Computer software expense | 4,803 | 5,168 |
FDIC assessment | 1,411 | 1,198 |
Advertising expenses | 1,601 | 1,220 |
Advisor expenses related to trust income | 215 | 533 |
Telephone expenses | 679 | 556 |
Intangible amortization | 286 | 285 |
Other | 3,565 | 2,783 |
TOTAL NONINTEREST EXPENSE | 50,290 | 43,458 |
Income before income taxes | 30,277 | 26,677 |
Provision for income taxes | 5,914 | 5,390 |
NET INCOME | $ 24,363 | $ 21,287 |
Basic earnings per share (in dollars per share) | $ 4.33 | $ 4.28 |
Diluted earnings per share (in dollars per share) | $ 4.33 | $ 4.28 |
Weighted average shares outstanding, Basic (in shares) | 5,621,630 | 4,968,692 |
Weighted average shares outstanding, Diluted (in shares) | 5,621,630 | 4,968,692 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net Income | $ 24,363 | $ 21,287 |
Unrealized losses on securities: | ||
Unrealized holding losses arising during the period | (75,137) | (7,620) |
Tax effect | (15,779) | (1,599) |
Net of tax | (59,358) | (6,021) |
Defined benefit pension plans: | ||
Net gain/(loss) arising during the period | (6,786) | 1,002 |
Reclassification adjustment for amortization of prior service cost and net gains included in net periodic pension cost | (28) | (27) |
Tax effect | (1,431) | 204 |
Net of tax | (5,383) | 771 |
Deferred compensation liability: | ||
Unrealized loss | (15) | (16) |
Tax effect | (3) | (4) |
Net of tax | (12) | (12) |
Total other comprehensive loss | (64,753) | (5,262) |
Total comprehensive income/(loss) | $ (40,390) | $ 16,025 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Beginning balance at Dec. 31, 2020 | $ 2,266 | $ 85,111 | $ 47,683 | $ 1,819 | $ (1,456) | $ 135,423 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 21,287 | 21,287 | ||||
Other comprehensive loss, net of taxes | (5,262) | (5,262) | ||||
Cash dividends declared | (4,029) | (4,029) | ||||
Issue of restricted stock | (436) | 436 | ||||
Treasury stock purchased | (379) | (379) | ||||
Restricted stock expense | 475 | 475 | ||||
Stock-based compensation | (1) | 70 | 69 | |||
Issuance of stock offering, net of costs | 576 | 34,676 | 35,252 | |||
Ending balance at Dec. 31, 2021 | 2,842 | 119,825 | 64,941 | (3,443) | (1,329) | 182,836 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 24,363 | 24,363 | ||||
Other comprehensive loss, net of taxes | (64,753) | (64,753) | ||||
Cash dividends declared | (4,669) | (4,669) | ||||
Treasury stock purchased | (308) | (308) | ||||
Restricted stock expense | 166 | 166 | ||||
Issuance of stock offering, net of costs | 116 | 387 | 503 | |||
Ending balance at Dec. 31, 2022 | $ 2,842 | $ 120,107 | $ 84,635 | $ (68,196) | $ (1,250) | $ 138,138 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Cash dividends declared per share | $ 0.83 | $ 0.80 |
Restricted stock issued (in shares) | 15,162 | |
Treasury stock purchased (in shares) | 7,652 | 13,292 |
Stock-based compensation (in shares) | 2,404 | |
Proceeds of common stock (in shares) | 12,897 | 1,150,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 24,363 | $ 21,287 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 9,517 | 2,428 |
Depreciation | 1,407 | 1,375 |
Accretion on loans | (3,598) | (5,590) |
Amortization of intangibles | 286 | 285 |
Amortization of subordinated notes issuance costs | 71 | 69 |
Deferred income tax provision (benefit) | (958) | (403) |
Restricted stock expense | 166 | 475 |
Stock-based compensation | 503 | 69 |
Net amortization of investment premiums | 1,666 | 2,028 |
Earnings on bank owned life insurance | (950) | (793) |
Net change in: | ||
Accrued interest receivable | 323 | (349) |
Other assets | (3,176) | (5,641) |
Other liabilities | 863 | 5,080 |
Net cash from operating activities | 30,483 | 20,320 |
Cash flows from investing activities | ||
Purchases of investment securities available-for-sale | (211,749) | (258,225) |
Proceeds from paydowns of investment securities available-for-sale | 57,648 | 84,275 |
Proceeds from maturities and calls of investment securities available-for-sale | 8,634 | 29,608 |
Purchase of restricted investment in bank stocks | (12,098) | (783) |
Proceeds from redemptions of restricted investment in bank stocks | 4,752 | 15 |
Loans purchased | (8,232) | |
Net increase in loans | (279,749) | (125,806) |
Purchase of premises and equipment | (1,545) | (1,959) |
Purchase of bank owned life insurance | (10,200) | |
Net cash used by investing activities | (434,107) | (291,307) |
Cash flows from financing activities | ||
Net increase in deposits | 60,003 | 425,090 |
Net change in FHLB overnight advances | 131,500 | |
Repayments of note payable | (3,000) | |
Proceeds of issuance of stock offering , net of costs | 35,252 | |
Cash dividends paid | (4,669) | (4,029) |
Purchases of treasury stock | (308) | (379) |
Net cash from financing activities | 183,526 | 455,934 |
Net change in cash and cash equivalents | (220,098) | 184,947 |
Beginning cash and cash equivalents | 306,179 | 121,232 |
Ending cash and cash equivalents | 86,081 | 306,179 |
Supplemental cash flow information: | ||
Interest paid | 6,118 | 4,025 |
Income taxes paid | 7,255 | 3,715 |
Supplemental noncash disclosures: | ||
Lease liabilities arising from obtaining right-of-use assets | $ 1,430 | $ 993 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 — Summary of Significant Accounting Policies Nature of Operations and Principles of Consolidation: The Company provides commercial and consumer banking services to individuals, small businesses and local municipal governments as well as trust and investment services through the Bank and HVIA. The Company is headquartered in Middletown, New York, with eight locations in Orange County, New York, seven in Westchester County, New York, two in Rockland County, New York and one in Bronx County, New York. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial & industrial and residential mortgage loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial & industrial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the areas in which they operate. Assets held by the Company in an agency or fiduciary capacity for its customers are excluded from the consolidated financial statements since they do not constitute assets of the Company. Assets held by the Company amounted to $1,272,498 and $1,325,894 at December 31, 2022 and 2021, respectively. Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Cash Flows: Securities: Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Loans: Interest income on loans is discontinued and placed on non-accrual status at the time the loan is 120 days (in the case of residential mortgage loans) or 90 days (in the case of commercial loans) delinquent unless the loan is well-secured and in process of collection. Loans are charged off to the extent principal or interest is deemed uncollectible. Secured consumer loans, except those secured by the borrower’s primary or secondary residence, are charged off upon becoming 180 days past due, or whenever collection is doubtful, whichever occurs first. All unsecured consumer loans are charged off when they become 180 days delinquent or if it is determined that the debt is uncollectible, whichever occurs first. Past-due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Concentration of Credit Risk: Allowance for Loan Losses: The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. 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. All criticized and classified consumer mortgages, commercial loans, and commercial real estate loans are reviewed to determine impairment status. Minimally, loans in which the borrower has filed bankruptcy; loans in non-accrual status; or loans that are considered TDRs would be considered impaired. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. A specific allocation within the allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. For commercial loans secured by real estate, estimated fair values of collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging reports, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The Company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. The general component covers loans that are collectively evaluated for impairment. Large groups of smaller balance homogeneous loans, such as consumer, are collectively evaluated for impairment, and accordingly, they are not included in the separately identified impairment disclosures. The general allowance component also includes loans that are not individually identified for impairment evaluation, such as those loans that are individually evaluated but are not considered impaired. The general component is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 4 years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans (including TDRs); levels of and trends in charge-offs and recoveries; migration of loans to the classification of special mention, substandard, or doubtful; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentration. In addition, federal regulatory agencies and the New York State Department of Financial Services, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses and may require the Bank 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 loan portfolio is segmented into commercial and industrial, commercial real estate, commercial real estate construction, residential real estate, home equity, and consumer loans. Commercial and Industrial Lending: Commercial and industrial loans are generally secured with short-term assets; however, in many cases, additional collateral such as real estate is provided as additional security for the loan. Loan-to-value maximum values have been established by the Bank and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc. In underwriting commercial and industrial loans, an analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral as well as an evaluation of conditions affecting the borrower is performed. Analysis of the borrower’s past, present and future cash flows is also an important aspect of the Bank’s analysis. Commercial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. Commercial Real Estate Lending — In underwriting these loans, the Bank performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Bank are performed by independent appraisers. Commercial real estate loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. Commercial Real Estate Construction Lending: The Bank’s commercial real estate construction loans are generally secured with the subject property. Terms of construction loans depend on the specifics of the project such as estimated absorption rates, estimated time to complete, etc. In underwriting commercial real estate construction loans, the Bank performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate construction loans originated by the Bank are performed by independent appraisers. Commercial real estate construction loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and uncertainties of construction costs. Residential Real Estate Lending: The Bank offers fixed-rate loans with terms up to a maximum of 30 years for both permanent structures and those under construction. The Bank’s one- to four-family residential real estate loan originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Bank’s residential real estate loans originate with a loan-to-value of 80% or less. Loans in excess of 80% are required to have private mortgage insurance. In underwriting one- to four-family residential real estate loans, the Bank evaluates both the borrower’s ability to make monthly payments and the value of the property securing the loan. Properties securing real estate loans made by the Bank are appraised by independent appraisers. The Bank generally requires borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Bank has not engaged in sub- prime residential mortgage originations. Residential real estate loans generally present a lower level of risk than other types of loans because they are secured by the borrower’s primary residence. Home Equity Lending: Home equity lines and loans are secured by the borrower’s primary residence with a maximum loan-to-value of 85% and a maximum term of 15 years on home equity loans and a 10-year 15-year In underwriting home equity lines and loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay shall be determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security. Home equity lines and loans generally present a lower level of risk than other types of consumer loans because they are secured by the borrower’s primary residence. The subordinate nature of some home equity lines and loans may make these loans of higher risk than other residential real estate loans. Consumer Lending: Consumer loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting consumer loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay shall be determined by the borrower’s employment history, current financial conditions, and credit background. Consumer loans may entail greater credit risk than do residential real estate loans particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. Transfers of Financial Assets: Foreclosed Assets: Premises and Equipment: Trust and Investment Advisory Income: Included in other assets on the balance sheet is a receivable for trust fees and advisory fees that have been earned but not yet collected. Federal Home Loan Bank (FHLB) Stock: Federal Reserve Bank (FRB) Stock: Bank Owned Life Insurance: The Bank has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Goodwill and Other Intangible Assets: Intangible assets consist of acquired customer relationship intangible assets arising from wealth management acquisitions and are amortized on a straight lined basis over their estimated useful lives. Loan Commitments and Related Financial Instruments: Stock-Based Compensation: Compensation cost is recognized over the required 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. The Company’s accounting policy is to recognize forfeitures as they occur. Income Taxes: A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in other expense. Retirement Plans: Earnings per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities for this calculation. As of December 31, 2022 and 2021, there are approximately in participating securities for these periods. Earnings and dividends per share are restated for any stock splits and stock dividends through the date of issuance of the financial statements. The Company currently maintains a simple capital structure, which includes restricted stock with participation rights to dividends, thus there are no dilutive effects on earnings per share. Comprehensive Income(Loss): changes in the funded status of the pension plan and deferred compensation, which are also recognized as separate components of equity. Loss Contingencies: Restrictions on Cash: Dividend Restriction: Fair Value of Financial Instruments: Segment Disclosure: Reclassifications: Recent Accounting Pronouncements: In June, 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Topic 326: Measurement of Credit Losses on Financial Instruments. The objective of the ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. In November 2019, the FASB adopted changes to delay the effective date of ASU 2016-13 to January 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a result, the Company is eligible for the delay and will adopt CECL effective January 1, 2023. The Company has selected a third-party firm to assist in the development of a CECL model to assist in the calculation of the allowance for loan and lease losses in preparation for the change to the expected loss model. The Company has also engaged a third-party firm to perform a model validation of our CECL model. The Company is also in the process of updating its policies and internal controls accordingly. The Company expects to recognize a one-time cumulative-effect adjustment to our ALLL as of January 1, 2023, in order to bring our allowance for credit losses (ACL) into conformity with the ASU, consistent with regulatory expectations set forth in interagency guidance. The Company estimates that under the ACL framework, the allowance for loan losses will remain flat or increase by up to million, after tax, when compared to the amount being carried on the consolidated balance sheet at December 31, 2022. The Company expects the impact of the creation of an allowance for unfunded commitments to be an increase of up to an additional adjustment related to the securities portfolio. The Company is finalizing the assumptions built into its model as well as the related internal controls therein. This increase encompasses loans that the Company currently evaluates for impairment on an individual basis, loans evaluated collectively by pooled segment, and unfunded commitments made by the Company not currently carried on the balance sheet. Based on the composition and quality of the Company’s debt securities portfolio, management has determined there to be a zero loss estimate on securities that are backed by the U.S. governmental agencies. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2022 | |
Investment Securities | |
Investment Securities | Note 2 — Investment Securities The amortized cost and fair value of investment securities at December 31, 2022 and 2021 were as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available-for-sale December 31, 2022 U.S. government agencies and treasuries $ 104,734 $ 25 $ (11,009) $ 93,750 Mortgage-backed securities 364,690 17 (47,792) 316,915 Corporate Securities 28,559 — (2,901) 25,658 Obligations of states and political subdivisions 111,971 48 (14,881) 97,138 Total debt securities $ 609,954 $ 90 $ (76,583) $ 533,461 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available-for-sale December 31, 2021 U.S. government agencies $ 80,596 $ 440 $ (1,330) $ 79,706 Mortgage-backed securities 272,931 1,285 (3,784) 270,432 Corporate Securities 20,081 278 (148) 20,211 Obligations of states and political subdivisions 92,545 2,149 (246) 94,448 Total debt securities $ 466,153 $ 4,152 $ (5,508) $ 464,797 There were no proceeds from sales of securities and associated gains and losses during 2022 and 2021. The amortized cost and fair value of debt securities as of December 31, 2022 are shown by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available-for-sale Amortized Fair Cost Value Due in one year or less $ 3,146 $ 3,161 Due after one through five years 26,075 25,112 Due after five through ten years 70,970 62,609 Due after ten years 145,073 125,664 245,264 216,546 Mortgage-backed securities 364,690 316,915 Total debt securities $ 609,954 $ 533,461 Securities pledged at year-end 2022 and 2021 had a carrying amount of $323,674 and $233,907 and were pledged to secure public deposits. Mortgage-backed securities are issued by FNMA, FHLMC, or GNMA. Obligations of states and political subdivisions consist of general obligations of municipalities in the state of New York. At year-end 2022 and 2021, there were no holdings of securities of any one issuer, other than the US Government and its agencies, in an amount greater than 10% of shareholders’ equity. The following table summarizes securities with unrealized losses at December 31, 2022 and 2021, aggregated by major security types and length of time in continuous loss position: Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-sale December 31, 2022 U.S. government agencies and treasuries $ 47,064 $ (2,414) $ 41,718 $ (8,595) $ 88,782 $ (11,009) Mortgage-backed securities 150,542 (12,139) 165,336 (35,653) 315,878 (47,792) Corporate Securities 12,503 (1,007) 13,155 (1,894) 25,658 (2,901) Obligations of states and political subdivisions 57,287 (6,763) 32,479 (8,118) 89,766 (14,881) Total debt securities $ 267,396 $ (22,323) $ 252,688 $ (54,260) $ 520,084 $ (76,583) Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-sale December 31, 2021 U.S. government agencies $ 10,337 $ (121) $ 32,210 $ (1,209) $ 42,547 $ (1,330) Mortgage-backed securities 177,506 (3,273) 14,134 (511) 191,640 (3,784) Corporate Securities 9,354 (148) — — 9,354 (148) Obligations of states and political subdivisions 13,349 (138) 3,298 (108) 16,647 (246) Total debt securities $ 210,546 $ (3,680) $ 49,642 $ (1,828) $ 260,188 $ (5,508) There was no other than temporary impairment loss recognized on any securities at December 31, 2022 or 2021. As of December 31, 2022, the Company’s security portfolio consisted of 296 securities, 264 of which were in an unrealized loss position. As of December 31, 2021, the Company’s security portfolio consisted of 252 securities, 78 of which were in an unrealized loss position. Unrealized losses are related to the Company’s mortgage backed and U.S. government agency securities as discussed below. At December 31, 2022, mortgage-backed securities held by the company were issued by U.S. government sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at December 31, 2022. The Company’s unrealized losses on U.S. government agency securities relate primarily to its investment in SBA issued securities. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at December 31, 2022. At December 31, 2022, the company held various corporate securities within the investment portfolio. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at December 31, 2022. At December 31, 2022, the company held obligations of states and political subdivisions within the investment portfolio. This segment of the investment portfolio is comprised mainly of New York based municipalities and school systems. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other than temporarily impaired at December 31, 2022. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2022 | |
Loans | |
Loans | Note 3 — Loans Loans at year-end were as follows: December 31, 2022 December 31, 2021 Commercial and industrial $ 258,901 $ 268,508 Commercial real estate 1,098,054 852,707 Commercial real estate construction 109,570 72,250 Residential real estate 74,277 65,248 Home equity 12,329 13,638 Consumer 16,299 19,077 Total $ 1,569,430 $ 1,291,428 Included in commercial and industrial loans as of December 31, 2022 and 2021 were PPP loans of $1.7 million and The following table presents the activity in the allowance for loan losses by portfolio segment for each of the years ending December 31, 2022 and 2021: Year Ended December 31, 2022 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total Allowance for loan losses: Beginning balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 Provision for loan losses 5,505 3,129 288 138 (17) 474 9,517 Charge-offs (4,962) — — (65) — (479) (5,506) Recoveries 66 52 — — — 42 160 Ending balance $ 5,510 $ 14,364 $ 1,252 $ 345 $ 63 $ 298 $ 21,832 Year Ended December 31, 2021 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total Allowance for loan losses: Beginning balance $ 4,795 $ 9,782 $ 801 $ 381 $ 77 $ 336 $ 16,172 Provision for loan losses 828 1,326 163 (98) 3 206 2,428 Charge-offs (942) — — (11) — (314) (1,267) Recoveries 220 75 — — — 33 328 Ending balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2022 and 2021: Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total December 31, 2022 Allowance for loan losses: Ending balance: individually evaluated for impairment $ 653 $ 380 $ — $ — $ — $ — $ 1,033 collectively evaluated for impairment 4,857 13,984 1,252 345 63 298 20,799 Total ending allowance balance $ 5,510 $ 14,364 $ 1,252 $ 345 $ 63 $ 298 $ 21,832 Loans: Ending balance: individually evaluated for impairment $ 1,003 $ 22,956 $ — $ 1,254 $ 51 $ 104 $ 25,368 collectively evaluated for impairment 257,898 1,075,098 109,570 73,023 12,278 16,195 1,544,062 Total ending loans balance $ 258,901 $ 1,098,054 $ 109,570 $ 74,277 $ 12,329 $ 16,299 $ 1,569,430 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total December 31, 2021 Allowance for loan losses: Ending balance: individually evaluated for impairment $ 137 $ 1,272 $ — $ — $ — $ 24 $ 1,433 collectively evaluated for impairment 4,764 9,911 964 272 80 237 16,228 Total ending allowance balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 Loans: Ending balance: individually evaluated for impairment $ 952 $ 23,523 $ — $ 1,227 $ 50 $ 114 $ 25,866 collectively evaluated for impairment 267,556 829,184 72,250 64,021 13,588 18,963 1,265,562 Total ending loans balance $ 268,508 $ 852,707 $ 72,250 $ 65,248 $ 13,638 $ 19,077 $ 1,291,428 Included in the commercial and industrial loans collectively evaluated for impaired are PPP loans of $1.7 million and $38.1 million as of December 31, 2022 and 2021. PPP loans receivable are guaranteed by the SBA and have no allocation of the allowance for loan losses. The following table presents information related to impaired loans by class of loans as of and for the year ended December 31, 2022 and 2021: Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized December 31, 2022 With no related allowance recorded Commercial and industrial $ — $ — $ — $ — $ — $ — Commercial real estate 17,884 17,316 — 17,622 633 633 Commercial real estate construction — — — 578 — — Residential real estate 1,266 1,254 — 739 20 20 Home equity 55 51 — — — — Consumer — — — — — — Total $ 19,205 $ 18,621 $ — $ 18,939 $ 653 $ 653 With an allowance recorded: Commercial and industrial $ 1,011 $ 1,003 $ 653 $ 7,516 $ 209 $ 209 Commercial real estate 5,665 5,640 380 2,274 119 119 Commercial real estate construction — — — — — — Residential real estate — — — — — — Home equity — — — — — — Consumer 104 104 — 109 6 6 Total $ 6,780 $ 6,747 $ 1,033 $ 9,899 $ 334 $ 334 Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized December 31, 2021 With no related allowance recorded Commercial and industrial $ 1 $ 1 $ — $ 187 $ 11 $ 11 Commercial real estate 14,291 13,953 — 12,053 555 555 Commercial real estate construction — — — 578 — — Residential real estate 1,155 1,155 — 639 33 33 Home equity 50 50 — 25 — — Consumer — — — — — — Total $ 15,497 $ 15,159 $ — $ 13,482 $ 599 $ 599 With an allowance recorded: Commercial and industrial $ 951 $ 951 $ 137 $ 1,420 $ 82 $ 82 Commercial real estate 9,593 9,570 1,272 9,587 357 357 Commercial real estate construction — — — — — — Residential real estate 84 72 — 76 3 3 Home equity — — — — — — Consumer 114 114 24 119 6 6 Total $ 10,742 $ 10,707 $ 1,433 $ 11,202 $ 448 $ 448 The following tables present the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2022 and December 31, 2021. Loans Past Due Over 90 Days Non-accrual Still Accruing December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Commercial and industrial $ 1,003 $ — $ 1,850 $ 720 Commercial real estate 3,882 3,928 — 465 Commercial real estate construction — — — — Residential real estate 1,188 578 — — Home equity 51 50 — — Consumer — 4 477 208 Total $ 6,124 $ 4,560 $ 2,327 $ 1,393 The following table presents the aging of the recorded investment in past-due loans as of December 31, 2022 and 2021 by class of loans: 30-59 Days 60-89 Days Greater Than Total Loans Past Due Past Due 90 Days Past Due Not Past Due December 31, 2022 Commercial and industrial $ 1,497 $ 1,583 $ 2,854 $ 5,934 $ 252,967 Commercial real estate 563 — 952 1,515 1,096,539 Commercial real estate construction — — — — 109,570 Residential real estate 2 — 1,188 1,190 73,087 Home equity — — — — 12,329 Consumer 584 634 476 1,694 14,605 Total $ 2,646 $ 2,217 $ 5,470 $ 10,333 $ 1,559,097 30-59 Days 60-89 Days Greater Than Total Loans Past Due Past Due 90 Days Past Due Not Past Due December 31, 2021 Commercial and industrial $ 541 $ 1,519 $ 720 $ 2,780 $ 265,728 Commercial real estate — 2,873 1,161 4,034 848,673 Commercial real estate construction — — — — 72,250 Residential real estate 26 — 578 604 64,644 Home equity — 58 50 108 13,530 Consumer 1,134 292 212 1,638 17,439 Total $ 1,701 $ 4,742 $ 2,721 $ 9,164 $ 1,282,264 As of December 31, 2022, loans in the process of foreclosure were $2,016 of which $578 were secured by residential real estate. As of December 31, 2021, loans in the process of foreclosure were $2,024 of which $578 were secured by residential real estate. Troubled Debt Restructuring: As of December 31, 2022 and 2021, the Company has a recorded investment in TDRs of $14,068 and $14,500 respectively. The Company has allocated $173 and $687 of specific allowance for these loans at December 31, 2022 and 2021, respectively, and there were no commitments to lend additional funds to borrowers whose loans were classified as TDRs. There were no restructured loans that defaulted within twelve months of restructure during 2022 or 2021. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. There were no loans whose terms were modified resulting in TDRs during the year ending December 31, 2022 and 2021. Credit Quality Indicators: Special Mention . Substandard . Doubtful. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Special Pass Mention Substandard Doubtful Loss Total December 31, 2022 Commercial and industrial $ 256,939 $ 575 $ 1,387 $ — $ — $ 258,901 Commercial real estate 1,074,952 7,399 15,703 — — 1,098,054 Commercial real estate construction 109,570 — — — — 109,570 Residential real estate 73,089 — 1,188 — — 74,277 Home equity 12,278 — 51 — — 12,329 Consumer 16,195 — 104 — — 16,299 Total $ 1,543,023 $ 7,974 $ 18,433 $ — $ — $ 1,569,430 Special Pass Mention Substandard Doubtful Loss Total December 31, 2021 Commercial and industrial $ 252,268 $ 4,156 $ 12,084 $ — $ — $ 268,508 Commercial real estate 835,787 679 16,241 — — 852,707 Commercial real estate construction 72,250 — — — — 72,250 Residential real estate 64,094 — 1,154 — — 65,248 Home equity 13,588 50 — — — 13,638 Consumer 18,963 — 114 — — 19,077 Total $ 1,256,950 $ 4,885 $ 29,593 $ — $ — $ 1,291,428 Loans to certain directors and principal officers of the Company, including their immediate families and companies in which they are affiliated, had the following activity for the years ended December 31, 2022 and 2021 are as follows: 2022 2021 Balance, beginning of year $ 5,076 $ 5,392 Additions 11,876 — Repayments (61) (316) Balance, end of year $ 16,891 $ 5,076 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Fair Value | Note 4 — Fair Value Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 Level 2 Level 3 The Company used the following methods and significant assumptions to estimate fair value: Investment Securities: Impaired Loans and Other Real Estate Owned: Appraisals are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by a third-party appraisal management company that the Company has engaged in accordance with internal vendor management policies and approval of the Company’s Board of Directors. Once received, the appraisal review function is conducted by the appraisal management company and consists of a review of the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Through this review, the appraisal management company evaluates the validity of the appraised value and the strength of the conclusions; which are subsequently confirmed by a member of the Credit Department. Discounts to the appraised value are then applied to recognize the carrying costs incurred until disposition, realtor fees, deterioration in the quality of the asset, and the age of the appraisal. The net effect of these adjustments were included in the charge-off to the allowance upon acquisition of the foreclosed property and/or upon partial charge-off of the impaired loan. The most recent analysis of property appraisals including the appropriate discount rates are incorporated into the allowance methodology for the respective loan portfolio segments. Assets and liabilities measured at fair value on a recurring basis, are summarized below: Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) U.S. government agencies and treasuries $ 93,750 $ — $ 93,750 $ — Mortgage-backed securities 316,915 — 316,915 — Corporate securities 25,658 — 25,658 — Obligations of states and political subdivisions 97,138 — 97,138 — Total securities available-for-sale $ 533,461 $ — $ 533,461 $ — Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) U.S. government agencies 79,706 $ — $ 79,706 $ — Mortgage-backed securities 270,432 — 270,432 — Corporate securities 20,211 — 20,211 — Obligations of states and political subdivisions 94,448 — 94,448 — Total securities available-for-sale $ 464,797 $ — $ 464,797 $ — There were no transfers between Level 1 and Level 2 during 2022 or 2021. Assets measured at fair value on a non-recurring basis as of December 31, 2022 and 2021 are summarized below: Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) Impaired loans $ 204 $ — $ — $ 204 Fair Value Measurements Using: Quoted Prices Significant in Active Other Significant Total at Markets for Observable Unobservable December 31, 2021 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Impaired loans $ 6,689 $ — $ — $ 6,689 The fair value amounts shown in the above table are impaired loans net of reserves allocated to said loans. The total reserves allocated to these impaired loans are $112 for December 31, 2022 and $409 for December 31, 2021. The following table presents additional quantitative information about level 3 fair value measured at fair value on a non-recurring basis at December31, 2022: Fair Value Range December 31, 2022 Value Valuation Technique Unobservable Input (Weighted Average) Impaired loans - $ 204 Appraisal of collateral (1) Appraisal and liquidation 20% adjustments (2) (20%) Fair Value Range December 31, 2021 Value Valuation Technique Unobservable Input (Weighted Average) Impaired loans - $ 6,689 Appraisal of collateral (1) Appraisal and liquidation 20%-56% adjustments (2) (39%) (1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable. (2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. The carrying amounts and estimated fair values of the Company’s financial instruments not carried at fair value are as follows at December 31, 2022 and 2021: December 31, 2022 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 86,081 $ 86,081 $ 86,081 $ — $ — Loans, net 1,547,598 1,503,543 — — 1,503,543 Accrued interest receivable 6,320 6,320 — 2,448 3,872 Restricted investment in bank stocks 9,562 NA — — — Financial liabilities: Deposits 1,974,387 1,972,387 1,881,354 91,033 — Subordinated notes, net of issuance costs 19,447 19,682 — 19,682 — Accrued interest payable 267 267 — 267 — December 31, 2021 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 306,179 $ 306,179 $ 306,179 $ — $ — Loans, net 1,273,767 1,260,146 — — 1,260,146 Accrued interest receivable 6,643 6,643 — 1,603 5,040 Restricted investment in bank stocks 2,217 NA — — — Financial liabilities: Deposits 1,914,384 1,914,271 1,831,944 82,327 — Note payable 3,000 3,030 — 3,030 — Subordinated notes, net of issuance costs 19,376 18,867 — 18,867 — Accrued interest payable 250 250 — 250 — |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment | |
Premises and Equipment | Note 5 — Premises and Equipment Year-end premises and equipment were as follows: 2022 2021 Land $ 3,152 $ 3,152 Buildings and improvements 13,741 12,714 Furniture and equipment 7,436 7,053 Leasehold improvements 6,874 6,737 31,203 29,656 Accumulated depreciation and amortization (16,464) (15,055) Premises and equipment, net $ 14,739 $ 14,601 Depreciation included in occupancy expense on the Consolidated Statements of Income amounted to $1,407 in 2022 and $1,375 in 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 6 — Goodwill and Intangible Assets Goodwill: 2022 2021 Beginning of year $ 5,359 $ 5,359 Acquired goodwill impairment — — End of year $ 5,359 $ 5,359 Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2022, the Company’s reporting unit had positive equity and the Company elected to perform a Step 0 qualitative analysis and concluded that there was no goodwill impairment. Acquired Intangible Assets: Gross Intangible Accumulated Asset Amortization December 31, 2022 Customer lists and intangible assets $ 4,284 (2,892) $ 4,284 (2,892) December 31, 2021 Customer lists and intangible assets $ 4,284 (2,606) $ 4,284 (2,606) Aggregate amortization expense was $286 for 2022 and $285 for 2021. Estimated amortization expense for each of the next four years is in the fifth year. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Deposits | Note 7 — Deposits A summarized analysis of the Bank’s deposits at December 31, 2022 and 2021 follows: December 31, 2022 December 31, 2021 Non-interest bearing demand accounts $ 723,228 $ 701,645 Interest-bearing demand accounts 284,747 301,596 Money market accounts 615,149 615,111 Savings accounts 258,230 213,592 Certificates of Deposit 93,033 82,440 Total deposits $ 1,974,387 $ 1,914,384 Time deposits that meet or exceed the FDIC insurance limit of $250 at year-end 2022 and 2021 were $17,015 and $23,859, respectively. Scheduled maturities of time deposits for the next five years are as follows: 2023 $ 80,728 2024 4,326 2025 7,979 $ 93,033 Deposits of executive officers, directors and principal officers of the Company, including their immediate families and companies in which they are affiliated, amounted to $15,648 and $6,109 at December 31, 2022 and 2021, respectively. |
FHLB Advances
FHLB Advances | 12 Months Ended |
Dec. 31, 2022 | |
FHLB Advances | |
FHLB Advances | Note 8 — FHLB Advances At December 31, 2022 the full amount of FHLB advances represents borrowing under the overnight line of credit facility as follows: 2022 2021 Amount Rate Amount Rate Federal Home Loan Bank (FHLB) advances $ 131,500 4.61 % $ — — % Additionally, the Company has outstanding municipal letters of credit (“MULOC”) outstanding with FHLB for purposes of securing public funds held by the Company. MULOC outstanding were $153,000 and $135,000 as of December 31, 2022 and 2021, respectively. At December 31, 2022 the Bank has no securities and $866,014 of loans pledged to FHLB under a blanket lien arrangement. At December 31, 2021 the Bank had no securities and $657,788 of loans pledged to FHLB under a blanket agreement. Based on the collateral and the Company’s holding of FHLB stock, the Company was eligible to borrow up to an additional total of $441,511 at year-end 2022 and $358,759 at year-end 2021. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Borrowings | |
Borrowings | Note 9 — Borrowings At year-end, the Note Payable was as follows: 2022 2021 Amount Rate Amount Rate Note payable $ — — % $ 3,000 5.60 % As part of the acquisition of HVIA, the Company maintained a note payable for an interest only term loan. The loan interest was payable in monthly installments of $14 thousand, was unsecured and was paid off as scheduled with a balloon payment on November 16, 2022. On September 24, 2020, the Company completed a private placement of $20 million in aggregate principal amount of fixed-to-floating rate subordinated notes (“Subordinated Notes”) to certain qualified institutional buyers and accredited institutional investors. In conjunction with the issuance, the Company incurred costs of $694, which are amortized over the life of the borrowings on a level yield basis and are included in interest on subordinated notes on the Consolidated Statements of Income. At December 31, 2022, there were $19.4 million of Subordinated Notes outstanding, which is net of the unamortized issuance costs. The Subordinated Notes have a maturity date of September 30, 2030 and bear interest, payable semi- annually, at the rate of 4.25% per annum, until September 30, 2025. Commencing on that date, the interest rate applicable to the outstanding principal amount due will reset quarterly to an interest rate per annum equal to the then current three-month secured overnight financing rate plus 413 basis points, payable quarterly until maturity. The Company may, at its option, beginning on September 30, 2025, but not prior thereto except upon the occurrence of certain events specified in the Subordinated Notes agreements, redeem the Subordinated Notes, in whole or in part, subject to obtaining any required regulatory approvals. |
Pension and other Post Retireme
Pension and other Post Retirement Plans | 12 Months Ended |
Dec. 31, 2022 | |
Pension and other Post Retirement Plans | |
Pension and other Post Retirement Plans | Note 10 — Pension and other Post Retirement Plans The Bank has a funded noncontributory defined benefit pension plan that covers substantially all employees meeting certain eligibility requirements. The pension plan was closed to new participants and benefit accruals were frozen as of December 31, 2015. The plan provides defined benefits based on years of service and final average salary. The Company uses December 31 as the measurement date for its pension plans. Information about changes in obligations and plan assets of the defined benefit pension plan follows: 2022 2021 Change in projected benefit obligation: Beginning of year $ 28,221 $ 29,428 Service cost — 189 Interest cost 808 760 Benefits paid (1,438) (1,556) Actuarial loss (6,302) (600) End of year $ 21,289 $ 28,221 Change in fair value of assets: Beginning of year $ 42,867 $ 39,963 Contributions 1,453 2,000 Actual return on plan assets (10,888) 2,501 Benefits paid and expenses (1,654) (1,597) End of year $ 31,778 $ 42,867 2022 2021 Funded status at end of year (plan assets less benefit obligation) $ 10,489 $ 14,646 Amounts recognized in accumulated other comprehensive income (loss) at December 31 consist of: 2022 2021 Total net actuarial loss $ (10,308) $ (3,521) Transition asset — 28 $ (10,308) $ (3,493) The accumulated benefit obligation was $21,288 and $28,221 at year-end 2022 and 2021. Components of net periodic benefit cost and other amounts recognized in other comprehensive income: Year Ended December 31, 2022 2021 Service cost $ — $ 189 Interest cost 808 760 Expected return on plan assets (1,985) (2,058) Amortization of transition cost (28) (48) Amortization of net loss — 21 Net periodic benefit cost/(income) $ (1,205) $ (1,136) Net gain/(loss) $ 6,786 $ (1,002) Amortization of transition asset 28 48 Amortization of prior service cost — (21) Total recognized in other comprehensive income $ 6,814 (975) Total recognized in net periodic benefit cost and other comprehensive income $ 5,609 $ (2,111) The components of net periodic benefit cost other than the service cost component are included in employee benefits in the Consolidated Statements of Income. Assumptions Weighted-average assumptions used to determine the benefit obligations at year-end: 2022 2021 Discount rate 5.44 % 2.94 % Rate of compensation increase — % — % Weighted-average assumptions used to determine net periodic pension cost: 2022 2021 Discount rate 2.94 % 2.65 % Expected long-term rate of return on plan assets 5.25 % 5.25 % Rate of compensation increase — % — % Investment Strategy and Allocation The Company is a participant in the New York State Bankers Retirement System (the “System”). The System’s overall investment strategy is to achieve a mix of approximately 97% of investments for long-term growth and 3% for near-term benefit payments with a wide diversification of asset types, fund strategies, and fund managers. The target allocations for the System assets are shown in the table below. Cash equivalents consist primarily of government issues (maturing in less than three months) and short term investment funds. Equity securities primarily include investments in common stock, depository receipts, preferred stock, commingled pension trust funds, exchange traded funds and real estate investment trusts. Fixed income securities include corporate bonds, government issues, credit card receivables, mortgage backed securities, municipals, commingled pension trust funds and other asset backed securities. Other investments are real estate interests and related investments held within a commingled pension trust fund. The weighted average expected long-term rate of return is estimated based on current trends in the System’s assets as well as projected future rates of return on those assets and reasonable actuarial assumptions based on the guidance provided by Actuarial Standard of Practice (“ASOP”) No. 27 “Selection of Economic Assumptions for Measuring Pension Obligations” for long term inflation, and the real and nominal rate of investment return for a specific mix of asset classes. The following assumptions were used in determining the long-term rate of return: Equity securities Dividend discount model, the smoothed earnings yield model and the equity risk premium model Fixed income securities Current yield-to-maturity and forecasts of future yields Other financial instruments Comparison of the specific investment’s risk to that of fixed income and equity instruments and other judgments The long-term rate of return considers historical returns. Adjustments were made to historical returns in order to reflect expectations of future returns. These adjustments were due to factor forecasts by economists and long-term U.S. Treasury yields to forecast long-term inflation. In addition, forecasts by economists and others for long-term GDP growth were factored into the development of assumptions for earnings growth and per capita income. The System currently prohibits its investment managers from purchasing any security greater than 5% of the portfolio at the time of purchase or greater than 8% at market value in any one issuer. Effective June 25, 2013, the issuer of any security purchased must be located in a country in the MSCI (Morgan Stanley Capital International) World Index. In addition, the following are prohibited: short sales, unregistered stocks and margin purchases of equity securities, mortgage backed derivatives that have an inverse floating rate coupon or that are interest only securities, any asset backed security that is not issued by the U.S. Government or its agencies or its instrumentalities, securities of less than Baa2/BBB quality may not be purchased, securities of less than A-quality may not in the aggregate exceed 13% of the investment manager’s portfolio. An investment manager’s portfolio of commercial mortgage- backed securities and asset backed securities shall not exceed 10% of the portfolio at the time of purchase. In addition, unhedged currency exposure in countries not defined as “high income economies” by the World Bank is prohibited. The Company’s pension plan asset allocation at year-end 2022 and 2021, target allocation and expected long-term rate of return by asset class are as follows: 2022 2021 Target Actual Target Actual Allocation Allocation Allocation Allocation Asset category: Cash equivalents — % 16.59 % — % — % Equity securities 30.00 % 25.05 % 30.00 % 35.65 % Fixed income securities 15.00 % 21.70 % 15.00 % 34.98 % Other financial instruments 55.00 % 36.66 % 55.00 % 29.37 % Total 100.00 % 100.00 % Fair Value of Plan Assets The Company used the following valuation methods and assumptions to estimate the fair value of assets held by the plan: Commingled Pension Trust Funds (CPTF): The fair value of the plan assets at December 31, 2022, by asset class, is as follows: Fair Value Measurements at December 31, 2022 Using: Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Commingled pension trust funds-realty 31,778 — 31,778 — Total plan assets $ 31,778 $ — $ 31,778 $ — The fair value of the plan assets at December 31, 2021, by asset class, is as follows: Fair Value Measurements at December 31, 2021 Using: Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Commingled pension trust funds-realty 42,867 — 42,867 — Total plan assets $ 42,867 $ — $ 42,867 $ — Contributions: Estimated Future Payments: Pension Benefits 2023 $ 1,603 2024 1,635 2025 1,617 2026 1,617 2027 1,572 Following 5 years $ 7,617 Supplemental Executive Retirement Plans The Bank maintains a Supplemental Executive Retirement Plan for two former Chief Executive Officers to restore pension benefits that are limited due to Internal Revenue Service regulations. The benefits accrued under this plan, which are included in accrued expenses and other liabilities in the Consolidated Statements of Condition, were $665 and $687 as of December 31, 2022 and 2021, respectively. The Bank recorded expense of $57 and $58 for the years ended December 31, 2022 and 2021, respectively, in relation to this plan. Supplemental benefits for this plan expected to be paid in each year from 2023 2026 each The Bank also maintains a performance based Supplemental Executive Retirement Plan for the Chief Executive Officer and two Executive Vice Presidents. Contributions to this plan are based on achieving certain growth and profitability targets. The Bank recorded expense of $93 and $9 for the years ended December 31, 2022 and 2021, respectively. Deferred Directors’ Fee Plan The Bank and the Company maintain unfunded Deferred Director’s Fee Plans within which each director may defer the receipt of meeting fees. The benefits accrued under these plans totaled $6,959 and $6,955 at December 31, 2022 and 2021, respectively, which are included in accrued expenses and other liabilities in the Consolidated Statements of Condition. The Bank and the Company recorded an expense of $420 and $541 in 2022 and 2021 in relation to these plans. Deferred Compensation Plan The Bank and HVIA maintain unfunded Deferred Compensation Plans for certain officers. The benefits accrued under these plans totaled $32 and $75 at December 31, 2022 and 2021, respectively, which are included in accrued expenses and other liabilities in the Consolidated Statements of Condition. The Bank and HVIA recorded an expense of $2 and $6 in 2022 and 2021, respectively. Deferred Incentive Retirement Plan The Bank maintains an unfunded Deferred Incentive Retirement Plan for certain executive officers. The benefits accrued under this plan totaled $517 and $567 at December 31, 2022 and 2021, respectively, which are included in accrued expenses and other liabilities in the Consolidated Statements of Condition. The Bank recorded an expense of $24 and $26 in 2021 and 2020, respectively. 401(k) Savings Plan The Company has a 401(k) Plan (Plan) to provide retirement and incidental benefits for its employees. Employees may contribute up to 100% of their annual compensation to the Plan, limited to a maximum annual amount as set periodically by the Internal Revenue Service. Effective for Plan Years beginning January 1, 2016, the Company makes a safe harbor non-elective contribution equal to 3% of annual compensation for each eligible employee whether or not the employee elects to defer compensation to the plan. All safe harbor non-elective contributions vest immediately. In addition, effective for Plan Years beginning January 1, 2016, for those employees hired before April 1, 2016, the Plan provides for discretionary contributions according to the following schedule: Percentage of Participant Age Range Compensation 1.0 % Under age 35 2.0 % 35 years 5.0 % 45 years 8.5 % 55 years of age or older Employees are eligible for the discretionary contribution after completing one year Discretionary contributions were $440 and $457 for 2022 and 2021, respectively. Restricted Stock Grants The Company has a time based restricted stock plan. For the years ended December 31, 2022 and 2021 the Company recognized stock-based compensation costs of $166 and $475, respectively. The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock unit awards. Compensation cost is recognized over the vesting period of the award using the straight line method. There were no restricted stock units granted for year ended December 31, 2022 and 15,162 restricted stock units granted for the year ended December 31, 2021. The grants generally vest at the rate of 33% per year with full vesting on the third anniversary date of the grant. Unamortized expense at December 31, 2022 was $57. A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2022, and changes during the year ended December 31, 2022. There were no restricted stock awards during 2022. Accordingly, the table below presents vesting during the year: Weighted Average Fair Shares Value Non-vested at beginning of period 22,922 $ 28.92 Granted — $ Vested (11,245) $ 28.59 Forfeited — $ Non-vested at end of period 11,677 $ 29.24 On September 22, 2021 restricted stock units (RSUs) were granted in the amount of 48,004 from the Company’s 2019 Equity Incentive Plan to directors of the Company and officers of Orange Bank & Trust Company (“Bank”) and Hudson Valley Investment Advisors (“HVIA”) in connection with the successful completion of the Company’s initial public stock offering and listing on the NASDAQ Capital Market. Non-employee directors received 16,500 restricted stock units while officers received 31,504 restricted stock units. The restricted stock units granted to officers will vest over three years in approximately 33% increments on the first, second third The following table summarizes the activity of RSUs during the year ended December 31, 2022: Restricted Stock Units Non-vested RSUs at beginning of period 48,004 Granted 26,255 Vested (11,637) Forfeited (2,875) Non-vested RSUs at end of period 59,747 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 11 — Income Taxes Income tax expense was as follows: 2022 2021 Current expense Federal $ 6,488 $ 5,353 State 384 440 Total 6,872 5,793 Deferred expense (benefit) Federal (934) (326) State (410) (630) Total (1,344) (956) Change in valuation allowance 386 553 Total provision for income taxes $ 5,914 $ 5,390 Effective tax rates differ from the federal statutory rate of 21% for 2022 and 2021 applied to income before taxes due to the following: 2022 2021 Tax expense at statutory rate $ 6,356 $ 5,602 (Decrease) increase in taxes resulting from: Net earnings on bank-owned life insurance (200) (167) Tax-exempt municipal bond income, net of disallowed interest expense (465) (329) State income tax, net of federal tax benefit (26) 209 Valuation allowance 386 553 Other (137) (478) Total provision for income tax $ 5,914 $ 5,390 Year-end deferred tax assets and liabilities were due to the following: 2022 2021 Deferred tax assets: Allowance for loan losses $ 5,991 $ 4,824 Reserve for unfunded commitments 55 55 Deferred loan fees, net of costs 1,130 962 Deferred compensation 2,420 2,431 Available for sale securities 16,063 293 Non-accrual interest 298 336 State NOL 2,476 2,284 Pension/deferred compensation OCI 2,463 894 30,896 12,079 2022 2021 Deferred tax liabilities: Intangible assets (1,004) (902) Organization costs – holding company (24) (22) Organization costs – HVIA (26) (23) Pension (2,797) (2,717) Accumulated depreciation (517) (681) Accretion (39) (16) (4,407) (4,361) Net deferred tax asset before valuation allowance 27,089 7,718 Valuation allowance (7,993) (3,629) Net deferred tax asset $ 19,096 $ 4,089 The Company has recorded a federal deferred tax asset that based upon an analysis of the evidence, it expects such federal deferred tax asset to be recoverable. The federal deferred tax asset is included in other assets on the balance sheet. However, due to the change in New York State tax legislation passed in March 2014, management has determined that a full valuation allowance, totaling $7,993, against the New York State portion of the deferred tax asset, which includes state net operating losses, at December 31, 2022 and 2021 is appropriate. At December 31, 2022, the Company has net operating loss carryforwards available for state income tax purposes of approximately $34.2 million, with expiration dates through 2031. The Company did not have any uncertain tax positions at December 31, 2022 and 2021. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the states of New York and New Jersey. The Company is no longer subject to examination by taxing authorities for years before 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | Note 12 — Accumulated Other Comprehensive Income (Loss) The following is changes in accumulated other comprehensive income (loss) by component, net of tax, for the years ending December 31, 2022 and 2021. Year Ended December 31, 2022 Unrealized Gains and Losses on Deferred Available-for- Defined Benefit Compensation Sale Securities Pension Items Liability Total Beginning balance $ (1,072) $ (2,506) $ 135 $ (3,443) Other comprehensive income/(loss) before reclassification (59,358) (5,361) (12) (64,731) Less amounts reclassified from accumulated other comprehensive income — 22 — 22 Net current period other comprehensive income/(loss) (59,358) (5,383) (12) (64,753) Ending balance $ (60,430) $ (7,889) $ 123 $ (68,196) Year Ended December 31, 2021 Unrealized Gains and Losses on Deferred Available-for- Defined Benefit Compensation Sale Securities Pension Items Liability Total Beginning balance $ 4,949 $ (3,277) $ 147 $ 1,819 Other comprehensive income/(loss) before reclassification (6,021) 792 (12) (5,241) Less amounts reclassified from accumulated other comprehensive income — 21 — 21 Net current period other comprehensive income/(loss) (6,021) 771 (12) (5,262) Ending balance $ (1,072) $ (2,506) $ 135 $ (3,443) The following is significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ending December 31, 2022 and 2021. Amount Reclassified from Details about Accumulated Other Accumulated Other Comprehensive Affected Line Item in the Statement Comprehensive Income Components Income where Net Income is Presented 2022 2021 Amortization of defined benefit pension items Transition asset (28) (48) Employee benefits Actuarial gains $ — $ 21 Employee benefits Total before tax (28) (27) Tax effect (6) (6) Provision for income taxes Net of tax $ (22) $ (21) Total reclassifications for the period, net of tax $ (22) $ (21) |
Regulatory Capital Matters
Regulatory Capital Matters | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Capital Matters | |
Regulatory Capital Matters | Note 13 — Regulatory Capital Matters The Bank is subject to regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and prompt corrective regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet the minimum capital requirements can initiate regulatory action. Under the Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on available for sale securities is included in computing regulatory capital. Management believes as of December 31, 2022, the Bank meets all capital adequacy requirements to which it is subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion and capital restoration plans are required. At year-end 2022 and 2021, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes changed that category. Actual and required capital amounts and ratios are presented below at year-end. To be Well Capitalized For Capital Adequacy For Capital Adequacy under Prompt Actual Purposes Purposes with Capital Buffer Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2022 Total capital to risk weighted assets $ 235,346 13.95 % $ 134,986 8.00 % $ 166,624 9.875 % $ 168,733 10.00 % Tier 1 (Core) capital to risk weighted assets 214,243 12.70 % 101,240 6.00 % 132,877 7.875 % 134,986 8.00 % Common Tier 1 (CET1) to risk weighted assets 214,243 12.70 % 75,930 4.50 % 107,567 6.375 % 109,677 6.50 % Tier 1 (Core) Capital to average assets 214,243 9.09 % 94,250 4.00 % N/A N/A 117,813 5.00 % December 31, 2021 Total capital to risk weighted assets $ 192,359 14.12 % $ 109,000 8.00 % $ 134,546 9.875 % $ 136,250 10.00 % Tier 1 (Core) capital to risk weighted assets 175,318 12.87 % 81,750 6.00 % 107,296 7.875 % 109,000 8.00 % Common Tier 1 (CET1) to risk weighted assets 175,318 12.87 % 61,312 4.50 % 86,859 6.375 % 88,562 6.50 % Tier 1 (Core) Capital to average assets 175,318 8.15 % 86,093 4.00 % N/A N/A 107,616 5.00 % |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | Note 14 — Leases The Company enters into leases in the normal course of business primarily for financial centers, back office operations locations, business development offices, and information technology equipment. The Company’s leases have remaining terms from one ten years five years The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected to not recognize leases with original lease terms of twelve months or less (short-term leases) on the Company’s balance sheet. Leases are classified as operating or financing leases at the lease commencement date. Currently, the Company does not have any leases classified as financing leases. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company’s incremental borrowing rate is based on the FHLB advance rates, adjusted for the lease term and other factors. Right-of-use assets and lease liabilities are included in other assets and accrued expenses and other liabilities, respectively, in the Consolidated Statements of Condition. The right-of-use assets as of December 31, 2022 and 2021 were $4,029 and $3,038, respectively. Lease liabilities as of December 31, 2022 and 2021 were $4,029 and $3,038, respectively. Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2022 are as follows: Years Ending December 31, 2023 $ 878 2024 831 2025 762 2026 711 2027 497 Thereafter 515 Total undiscounted lease payments $ 4,194 Discount $ 165 Total discounted lease payments $ 4,029 Operating lease weighted average remaining lease term (years) 5.46 years Operating lease weighted average discount rate 3.38 % Rent expense for all operating leases was $911 in 2022 and $792 in 2021. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 15 — Revenue from Contracts with Customers All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within Noninterest Income. The following table presents the Company’s gross sources of noninterest income for the twelve months ended December 31, 2022 and 2021. Year Ended December 31, 2022 2021 Noninterest Income Service charges on deposit accounts Overdraft fees $ 328 $ 279 Other 365 359 Trust income 4,764 4,788 Investment advisory income 4,537 4,853 Earnings on bank owned life insurance (a) 950 793 Other (b) 1,052 1,030 Total Noninterest Income $ 11,996 $ 12,102 (a) Not within the scope of ASC 606. (b) The Other category includes safe deposit income, checkbook fees, and debit card fee income, totaling $913 and $805 for 2022 and 2021, respectively, that are within the scope of ASC 606 and loan related fee income and miscellaneous income, totaling $139 and $225 for 2022 and 2021, respectively, which are outside the scope of ASC 606. A description of the Company’s revenue streams accounted for under ASC 606 follows: Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Wealth Management Fees (Gross): The Company earns wealth management fees, which includes trust income and investment advisory income, from its contracts with trust and brokerage customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted services and are generally assessed based on a tiered scale of the market value of the assets under management at month-end or quarter-end. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | Note 16 — Financial Instruments with Off-Balance Sheet Risk The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing need of its customers. These financial instruments consist primarily of commitments to extend credit (typically mortgages and commercial loans) and, to a lesser extent, standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligation as it does for on balance sheet instruments. The Bank does not anticipate any material losses from these commitments. Commitments to extend credit, including commitments to grant loans and unfunded commitments under lines of credit, are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extensions of credit, is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, property and equipment and income-producing commercial properties. On loans secured by real estate, the Bank generally requires loan to value ratios of no greater than 80%. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and similar transactions. The terms of the letters of credit vary and may have renewal features. The credit risk involved in using letters of credit is essentially the same as that involved in extending loans to customers. The Bank holds collateral supporting those commitments for which collateral is 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. The Bank has not been required to perform on any financial guarantees, and has not incurred any losses on its commitments, during the past two years. A summary of the Bank’s Commitments at December 31, 2022 and 2021 were as follows: 2022 2021 Commitments to extend credit $ 389,062 $ 373,268 Standby letters of credit 13,552 11,501 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Contingencies | |
Contingencies | Note 17 — Contingencies The Company is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Company in connection with any such claims and lawsuits, it is the opinion of management that the disposition or ultimate determination of any such claims and lawsuits will not have a material effect on the consolidated financial position, consolidated results or liquidity of the Company. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | Note 18 — Subsequent Events On February 16, 2023 the Company’s board of director’s declared a quarterly cash dividend of $0.23 per share on the Company’s common stock. The dividend was paid on March 15, 2023 to shareholders of record as of March 3 On March 12, 2023, Signature Bank was closed by the New York State Department of Financial Services and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver. On March 20, 2023, the FDIC entered into a purchase and assumption agreement with Flagstar Bank, a wholly owned subsidiary of New York Community Bancorp, for certain deposits and certain loans of Signature Bank. As a result of that agreement, the subordinated debt related to Signature Bank was not assumed. The Company owns approximately |
Parent Company Information
Parent Company Information | 12 Months Ended |
Dec. 31, 2022 | |
Parent Company Information | |
Parent Company Information | Note 19 — Parent Company Information Financial Information for the Company only is presented in the following tables: Condensed Statements of Condition December 31, 2022 2021 Assets Cash and due from banks $ 4,596 $ 24,441 Investment in subsidiaries 152,214 179,487 Goodwill and intangible assets 1,564 1,850 Other assets 366 211 Total assets $ 158,740 $ 205,989 December 31, 2022 2021 Liabilities and stockholders’ equity Subordinated notes, net of issuance costs $ 19,447 $ 19,376 Note payable — 3,000 Other liabilities 1,155 777 Total liabilities 20,602 23,153 Total stockholders’ equity 138,138 182,836 Total liabilities and stockholders’ equity $ 158,740 $ 205,989 Condensed Statements of Income and Comprehensive Income (Loss) Years ended December 31, 2022 2021 Operating Income Dividend income from operating subsidiaries $ 6,792 $ 5,329 Servicing Fee 553 372 Total operating income 7,345 5,701 Operating Expenses Interest on borrowings 1,077 1,087 Salaries and employee benefits 553 372 Professional fees 413 172 Directors’ fees and expenses 162 189 Intangible amortization 286 286 Other expenses and income taxes (28) 59 Total operating expenses 2,463 2,165 Equity in undistributed earnings of subsidiary 19,481 17,751 Net income $ 24,363 $ 21,287 Comprehensive income $ (40,390) $ 16,025 Condensed Statements of Cash Flows Years ended December 31, 2022 2021 Cash flows from operating activities Net income after equity in undistributed earnings of subsidiary $ 24,363 $ 21,287 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed earnings of subsidiary companies (19,481) (17,751) Stock-based compensation 503 69 Amortization of intangibles 286 286 Restricted stock expense 166 475 Other, net 295 (198) Net cash provided by (used in) operating activities 6,132 4,168 Cash flows from investing activities Investment in operating subsidiary (18,000) (21,500) Net cash used in investing activities (18,000) (21,500) Cash flows from financing activities Proceeds from the issuance of common stock (net of costs) — 35,252 Repayment of note payable (3,000) — Issuance of subordinated notes, net of issuance costs — Dividends paid, common stock (4,669) (4,029) Purchases of treasury stock (308) (379) Net cash (used in) provided by financing activities (7,977) 30,844 Net increase in cash and cash equivalents (19,845) 13,512 Cash and cash equivalents at beginning of year 24,441 10,929 Cash and cash equivalents at end of year $ 4,596 $ 24,441 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Segment Information | Note 20 — Segment Information The reportable segments are determined by the products and services offered by the Company, primarily distinguished between banking and wealth management. Loans, investments, and deposits provide the revenues in the banking operation, and trust fees and investment management fees provide the revenues in wealth management. All operations are domestic. Significant segment totals are reconciled to the financial statements as follows: For the twelve months ended December 31, 2022 Banking Wealth Management Total Segments Net interest income $ 78,088 $ — $ 78,088 Noninterest income 2,695 9,301 11,996 Provision for loan loss (9,517) — (9,517) Noninterest expenses (42,898) (7,392) (50,290) Income tax expense (5,513) (401) (5,914) Net income $ 22,855 $ 1,508 $ 24,363 Total assets $ 2,279,469 $ 7,865 $ 2,287,334 For the twelve months ended December 31, 2021 Banking Wealth Management Total Segments Net interest income $ 60,461 $ — $ 60,461 Noninterest income 2,461 9,641 12,102 Provision for loan loss (2,428) — (2,428) Noninterest expenses (36,736) (6,722) (43,458) Income tax expense (4,777) (613) (5,390) Net income $ 18,981 $ 2,306 $ 21,287 Total assets $ 2,133,440 9,143 $ 2,142,583 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation: The Company provides commercial and consumer banking services to individuals, small businesses and local municipal governments as well as trust and investment services through the Bank and HVIA. The Company is headquartered in Middletown, New York, with eight locations in Orange County, New York, seven in Westchester County, New York, two in Rockland County, New York and one in Bronx County, New York. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial & industrial and residential mortgage loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial & industrial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans is dependent on the real estate and general economic conditions in the areas in which they operate. Assets held by the Company in an agency or fiduciary capacity for its customers are excluded from the consolidated financial statements since they do not constitute assets of the Company. Assets held by the Company amounted to $1,272,498 and $1,325,894 at December 31, 2022 and 2021, respectively. |
Use of Estimates | Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. |
Cash Flows | Cash Flows: |
Securities | Securities: Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. |
Loans | Loans: Interest income on loans is discontinued and placed on non-accrual status at the time the loan is 120 days (in the case of residential mortgage loans) or 90 days (in the case of commercial loans) delinquent unless the loan is well-secured and in process of collection. Loans are charged off to the extent principal or interest is deemed uncollectible. Secured consumer loans, except those secured by the borrower’s primary or secondary residence, are charged off upon becoming 180 days past due, or whenever collection is doubtful, whichever occurs first. All unsecured consumer loans are charged off when they become 180 days delinquent or if it is determined that the debt is uncollectible, whichever occurs first. Past-due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Concentration of Credit Risk | Concentration of Credit Risk: |
Allowance for Loan Losses | Allowance for Loan Losses: The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. 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. All criticized and classified consumer mortgages, commercial loans, and commercial real estate loans are reviewed to determine impairment status. Minimally, loans in which the borrower has filed bankruptcy; loans in non-accrual status; or loans that are considered TDRs would be considered impaired. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. A specific allocation within the allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. For commercial loans secured by real estate, estimated fair values of collateral are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging reports, equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The Company incorporates recent historical experience related to TDRs including the performance of TDRs that subsequently default into the calculation of the allowance by loan portfolio segment. The general component covers loans that are collectively evaluated for impairment. Large groups of smaller balance homogeneous loans, such as consumer, are collectively evaluated for impairment, and accordingly, they are not included in the separately identified impairment disclosures. The general allowance component also includes loans that are not individually identified for impairment evaluation, such as those loans that are individually evaluated but are not considered impaired. The general component is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 4 years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans (including TDRs); levels of and trends in charge-offs and recoveries; migration of loans to the classification of special mention, substandard, or doubtful; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentration. In addition, federal regulatory agencies and the New York State Department of Financial Services, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses and may require the Bank 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 loan portfolio is segmented into commercial and industrial, commercial real estate, commercial real estate construction, residential real estate, home equity, and consumer loans. |
Commercial and Industrial Lending | Commercial and Industrial Lending: Commercial and industrial loans are generally secured with short-term assets; however, in many cases, additional collateral such as real estate is provided as additional security for the loan. Loan-to-value maximum values have been established by the Bank and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, collateral appraisals, etc. In underwriting commercial and industrial loans, an analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral as well as an evaluation of conditions affecting the borrower is performed. Analysis of the borrower’s past, present and future cash flows is also an important aspect of the Bank’s analysis. Commercial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. |
Commercial Real Estate Lending | Commercial Real Estate Lending — In underwriting these loans, the Bank performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. Appraisals on properties securing commercial real estate loans originated by the Bank are performed by independent appraisers. Commercial real estate loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. |
Commercial Real Estate Construction Lending | Commercial Real Estate Construction Lending: The Bank’s commercial real estate construction loans are generally secured with the subject property. Terms of construction loans depend on the specifics of the project such as estimated absorption rates, estimated time to complete, etc. In underwriting commercial real estate construction loans, the Bank performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, the reliability and predictability of the cash flow generated by the project using feasibility studies, market data, etc. Appraisals on properties securing commercial real estate construction loans originated by the Bank are performed by independent appraisers. Commercial real estate construction loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions and uncertainties of construction costs. |
Residential Real Estate Lending | Residential Real Estate Lending: The Bank offers fixed-rate loans with terms up to a maximum of 30 years for both permanent structures and those under construction. The Bank’s one- to four-family residential real estate loan originations are secured primarily by properties located in its primary market area and surrounding areas. The majority of the Bank’s residential real estate loans originate with a loan-to-value of 80% or less. Loans in excess of 80% are required to have private mortgage insurance. In underwriting one- to four-family residential real estate loans, the Bank evaluates both the borrower’s ability to make monthly payments and the value of the property securing the loan. Properties securing real estate loans made by the Bank are appraised by independent appraisers. The Bank generally requires borrowers to obtain an attorney’s title opinion or title insurance, and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. The Bank has not engaged in sub- prime residential mortgage originations. Residential real estate loans generally present a lower level of risk than other types of loans because they are secured by the borrower’s primary residence. |
Home Equity Lending | Home Equity Lending: Home equity lines and loans are secured by the borrower’s primary residence with a maximum loan-to-value of 85% and a maximum term of 15 years on home equity loans and a 10-year 15-year In underwriting home equity lines and loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay shall be determined by the borrower’s employment history, current financial conditions, and credit background. The analysis is based primarily on the customer’s ability to repay and secondarily on the collateral or security. Home equity lines and loans generally present a lower level of risk than other types of consumer loans because they are secured by the borrower’s primary residence. The subordinate nature of some home equity lines and loans may make these loans of higher risk than other residential real estate loans. |
Consumer Lending | Consumer Lending: Consumer loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting consumer loans, a thorough analysis of the borrower’s financial ability to repay the loan as agreed is performed. The ability to repay shall be determined by the borrower’s employment history, current financial conditions, and credit background. Consumer loans may entail greater credit risk than do residential real estate loans particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. |
Transfers of Financial Assets | Transfers of Financial Assets: |
Foreclosed Assets | Foreclosed Assets: |
Premises and Equipment | Premises and Equipment: |
Trust and Investment Advisory Income | Trust and Investment Advisory Income: Included in other assets on the balance sheet is a receivable for trust fees and advisory fees that have been earned but not yet collected. |
Federal Home Loan Bank (FHLB) Stock | Federal Home Loan Bank (FHLB) Stock: |
Federal Reserve Bank (FRB) Stock | Federal Reserve Bank (FRB) Stock: |
Bank Owned Life Insurance | Bank Owned Life Insurance: The Bank has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: Intangible assets consist of acquired customer relationship intangible assets arising from wealth management acquisitions and are amortized on a straight lined basis over their estimated useful lives. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments: |
Stock-Based Compensation | Stock-Based Compensation: Compensation cost is recognized over the required 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. The Company’s accounting policy is to recognize forfeitures as they occur. |
Income Taxes | Income Taxes: A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in other expense. |
Retirement Plans | Retirement Plans: |
Earnings per Common Share | Earnings per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities for this calculation. As of December 31, 2022 and 2021, there are approximately in participating securities for these periods. Earnings and dividends per share are restated for any stock splits and stock dividends through the date of issuance of the financial statements. The Company currently maintains a simple capital structure, which includes restricted stock with participation rights to dividends, thus there are no dilutive effects on earnings per share. |
Comprehensive Income(Loss): | Comprehensive Income(Loss): changes in the funded status of the pension plan and deferred compensation, which are also recognized as separate components of equity. |
Loss Contingencies | Loss Contingencies: |
Restrictions on Cash | Restrictions on Cash: |
Dividend Restriction | Dividend Restriction: |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: |
Segment Disclosure | Segment Disclosure: |
Reclassifications | Reclassifications: |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In June, 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Topic 326: Measurement of Credit Losses on Financial Instruments. The objective of the ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. In November 2019, the FASB adopted changes to delay the effective date of ASU 2016-13 to January 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As a result, the Company is eligible for the delay and will adopt CECL effective January 1, 2023. The Company has selected a third-party firm to assist in the development of a CECL model to assist in the calculation of the allowance for loan and lease losses in preparation for the change to the expected loss model. The Company has also engaged a third-party firm to perform a model validation of our CECL model. The Company is also in the process of updating its policies and internal controls accordingly. The Company expects to recognize a one-time cumulative-effect adjustment to our ALLL as of January 1, 2023, in order to bring our allowance for credit losses (ACL) into conformity with the ASU, consistent with regulatory expectations set forth in interagency guidance. The Company estimates that under the ACL framework, the allowance for loan losses will remain flat or increase by up to million, after tax, when compared to the amount being carried on the consolidated balance sheet at December 31, 2022. The Company expects the impact of the creation of an allowance for unfunded commitments to be an increase of up to an additional adjustment related to the securities portfolio. The Company is finalizing the assumptions built into its model as well as the related internal controls therein. This increase encompasses loans that the Company currently evaluates for impairment on an individual basis, loans evaluated collectively by pooled segment, and unfunded commitments made by the Company not currently carried on the balance sheet. Based on the composition and quality of the Company’s debt securities portfolio, management has determined there to be a zero loss estimate on securities that are backed by the U.S. governmental agencies. |
Risk and Uncertainties | Risks and Uncertainties: Both banks appear to have had high ratios of uninsured deposits to total deposits, when compared to industry average. These failures underscore the importance of maintaining access to diverse sources of funding. The Company’s deposit base includes a combination of consumer, commercial, and public funds deposits. The Company’s largest depositors include a mixture of government-related organizations, attorney trust accounts, various escrow account relationships, and commercial clients without a high level of industry concentration. Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking industry. Additionally, the rising interest rate environment has increased competition for liquidity and the premium at which liquidity is available to meet funding needs. The Company believes the sources of liquidity presented in the Audited Consolidated Financial Statements and the Notes to the Audited Consolidated Financial Statements are sufficient to meet its needs on the balance sheet date. An unexpected influx of withdrawals of deposits could adversely impact the Company's ability to rely on organic deposits to primarily fund its operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawal demands or to fund continuing operations. These sources may include proceeds from Federal Home Loan Bank advances, sales of investment securities and loans, federal funds lines of credit from correspondent banks, and out-of-market time deposits. Important Accounting Policy ramifications of such events are outlined in the previous sections of Note 1, and subsequently, in the relevant Notes to the Consolidated Financial Statements. In response to these events, the Treasury Department, Federal Reserve, and FDIC jointly announced the Bank Term Funding Program (BTFP) on March 12, 2023. This program aims to enhance liquidity by allowing institutions to pledge certain securities at the par value of the securities, and at a borrowing rate of ten basis points over the one-year overnight index swap rate. The BTFP is available to eligible U.S. federally insured depository institutions, with advances having a term of up to one year and no prepayment penalties. As of the date of the release of the Audited Consolidated Financial Statements, the Company has not accessed the BTFP. Such reliance on secondary funding sources could increase the Company's overall cost of funding and thereby reduce net income. While the Company believes its current sources of liquidity are adequate to fund operations, there is no guarantee they will suffice to meet future liquidity demands. This may necessitate slowing or discontinuing loan growth, capital expenditures, or other investments, or liquidating assets. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investment Securities | |
Schedule of amortized cost and fair value of investment securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available-for-sale December 31, 2022 U.S. government agencies and treasuries $ 104,734 $ 25 $ (11,009) $ 93,750 Mortgage-backed securities 364,690 17 (47,792) 316,915 Corporate Securities 28,559 — (2,901) 25,658 Obligations of states and political subdivisions 111,971 48 (14,881) 97,138 Total debt securities $ 609,954 $ 90 $ (76,583) $ 533,461 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available-for-sale December 31, 2021 U.S. government agencies $ 80,596 $ 440 $ (1,330) $ 79,706 Mortgage-backed securities 272,931 1,285 (3,784) 270,432 Corporate Securities 20,081 278 (148) 20,211 Obligations of states and political subdivisions 92,545 2,149 (246) 94,448 Total debt securities $ 466,153 $ 4,152 $ (5,508) $ 464,797 |
Schedule of contractual maturities of debt securities | Available-for-sale Amortized Fair Cost Value Due in one year or less $ 3,146 $ 3,161 Due after one through five years 26,075 25,112 Due after five through ten years 70,970 62,609 Due after ten years 145,073 125,664 245,264 216,546 Mortgage-backed securities 364,690 316,915 Total debt securities $ 609,954 $ 533,461 |
Schedule of securities with unrealized and unrecognized losses | Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-sale December 31, 2022 U.S. government agencies and treasuries $ 47,064 $ (2,414) $ 41,718 $ (8,595) $ 88,782 $ (11,009) Mortgage-backed securities 150,542 (12,139) 165,336 (35,653) 315,878 (47,792) Corporate Securities 12,503 (1,007) 13,155 (1,894) 25,658 (2,901) Obligations of states and political subdivisions 57,287 (6,763) 32,479 (8,118) 89,766 (14,881) Total debt securities $ 267,396 $ (22,323) $ 252,688 $ (54,260) $ 520,084 $ (76,583) Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-sale December 31, 2021 U.S. government agencies $ 10,337 $ (121) $ 32,210 $ (1,209) $ 42,547 $ (1,330) Mortgage-backed securities 177,506 (3,273) 14,134 (511) 191,640 (3,784) Corporate Securities 9,354 (148) — — 9,354 (148) Obligations of states and political subdivisions 13,349 (138) 3,298 (108) 16,647 (246) Total debt securities $ 210,546 $ (3,680) $ 49,642 $ (1,828) $ 260,188 $ (5,508) |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans | |
Schedule of loans | December 31, 2022 December 31, 2021 Commercial and industrial $ 258,901 $ 268,508 Commercial real estate 1,098,054 852,707 Commercial real estate construction 109,570 72,250 Residential real estate 74,277 65,248 Home equity 12,329 13,638 Consumer 16,299 19,077 Total $ 1,569,430 $ 1,291,428 |
Schedule of activity in the allowance for loan losses and recorded investment in loans by portfolio segment and based on impairment method | The following table presents the activity in the allowance for loan losses by portfolio segment for each of the years ending December 31, 2022 and 2021: Year Ended December 31, 2022 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total Allowance for loan losses: Beginning balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 Provision for loan losses 5,505 3,129 288 138 (17) 474 9,517 Charge-offs (4,962) — — (65) — (479) (5,506) Recoveries 66 52 — — — 42 160 Ending balance $ 5,510 $ 14,364 $ 1,252 $ 345 $ 63 $ 298 $ 21,832 Year Ended December 31, 2021 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total Allowance for loan losses: Beginning balance $ 4,795 $ 9,782 $ 801 $ 381 $ 77 $ 336 $ 16,172 Provision for loan losses 828 1,326 163 (98) 3 206 2,428 Charge-offs (942) — — (11) — (314) (1,267) Recoveries 220 75 — — — 33 328 Ending balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2022 and 2021: Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total December 31, 2022 Allowance for loan losses: Ending balance: individually evaluated for impairment $ 653 $ 380 $ — $ — $ — $ — $ 1,033 collectively evaluated for impairment 4,857 13,984 1,252 345 63 298 20,799 Total ending allowance balance $ 5,510 $ 14,364 $ 1,252 $ 345 $ 63 $ 298 $ 21,832 Loans: Ending balance: individually evaluated for impairment $ 1,003 $ 22,956 $ — $ 1,254 $ 51 $ 104 $ 25,368 collectively evaluated for impairment 257,898 1,075,098 109,570 73,023 12,278 16,195 1,544,062 Total ending loans balance $ 258,901 $ 1,098,054 $ 109,570 $ 74,277 $ 12,329 $ 16,299 $ 1,569,430 Commercial Commercial and Commercial Real Estate Residential Home Industrial Real Estate Construction Real Estate Equity Consumer Total December 31, 2021 Allowance for loan losses: Ending balance: individually evaluated for impairment $ 137 $ 1,272 $ — $ — $ — $ 24 $ 1,433 collectively evaluated for impairment 4,764 9,911 964 272 80 237 16,228 Total ending allowance balance $ 4,901 $ 11,183 $ 964 $ 272 $ 80 $ 261 $ 17,661 Loans: Ending balance: individually evaluated for impairment $ 952 $ 23,523 $ — $ 1,227 $ 50 $ 114 $ 25,866 collectively evaluated for impairment 267,556 829,184 72,250 64,021 13,588 18,963 1,265,562 Total ending loans balance $ 268,508 $ 852,707 $ 72,250 $ 65,248 $ 13,638 $ 19,077 $ 1,291,428 |
Schedule of average recorded investment and interest income of loans individually evaluated for impairment recognized by class of loans | Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized December 31, 2022 With no related allowance recorded Commercial and industrial $ — $ — $ — $ — $ — $ — Commercial real estate 17,884 17,316 — 17,622 633 633 Commercial real estate construction — — — 578 — — Residential real estate 1,266 1,254 — 739 20 20 Home equity 55 51 — — — — Consumer — — — — — — Total $ 19,205 $ 18,621 $ — $ 18,939 $ 653 $ 653 With an allowance recorded: Commercial and industrial $ 1,011 $ 1,003 $ 653 $ 7,516 $ 209 $ 209 Commercial real estate 5,665 5,640 380 2,274 119 119 Commercial real estate construction — — — — — — Residential real estate — — — — — — Home equity — — — — — — Consumer 104 104 — 109 6 6 Total $ 6,780 $ 6,747 $ 1,033 $ 9,899 $ 334 $ 334 Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized December 31, 2021 With no related allowance recorded Commercial and industrial $ 1 $ 1 $ — $ 187 $ 11 $ 11 Commercial real estate 14,291 13,953 — 12,053 555 555 Commercial real estate construction — — — 578 — — Residential real estate 1,155 1,155 — 639 33 33 Home equity 50 50 — 25 — — Consumer — — — — — — Total $ 15,497 $ 15,159 $ — $ 13,482 $ 599 $ 599 With an allowance recorded: Commercial and industrial $ 951 $ 951 $ 137 $ 1,420 $ 82 $ 82 Commercial real estate 9,593 9,570 1,272 9,587 357 357 Commercial real estate construction — — — — — — Residential real estate 84 72 — 76 3 3 Home equity — — — — — — Consumer 114 114 24 119 6 6 Total $ 10,742 $ 10,707 $ 1,433 $ 11,202 $ 448 $ 448 |
Schedule of recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans | Loans Past Due Over 90 Days Non-accrual Still Accruing December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Commercial and industrial $ 1,003 $ — $ 1,850 $ 720 Commercial real estate 3,882 3,928 — 465 Commercial real estate construction — — — — Residential real estate 1,188 578 — — Home equity 51 50 — — Consumer — 4 477 208 Total $ 6,124 $ 4,560 $ 2,327 $ 1,393 |
Schedule of aging of the recorded investment in past-due loans | 30-59 Days 60-89 Days Greater Than Total Loans Past Due Past Due 90 Days Past Due Not Past Due December 31, 2022 Commercial and industrial $ 1,497 $ 1,583 $ 2,854 $ 5,934 $ 252,967 Commercial real estate 563 — 952 1,515 1,096,539 Commercial real estate construction — — — — 109,570 Residential real estate 2 — 1,188 1,190 73,087 Home equity — — — — 12,329 Consumer 584 634 476 1,694 14,605 Total $ 2,646 $ 2,217 $ 5,470 $ 10,333 $ 1,559,097 30-59 Days 60-89 Days Greater Than Total Loans Past Due Past Due 90 Days Past Due Not Past Due December 31, 2021 Commercial and industrial $ 541 $ 1,519 $ 720 $ 2,780 $ 265,728 Commercial real estate — 2,873 1,161 4,034 848,673 Commercial real estate construction — — — — 72,250 Residential real estate 26 — 578 604 64,644 Home equity — 58 50 108 13,530 Consumer 1,134 292 212 1,638 17,439 Total $ 1,701 $ 4,742 $ 2,721 $ 9,164 $ 1,282,264 |
Schedule of risk category of loans by class of loans | Special Pass Mention Substandard Doubtful Loss Total December 31, 2022 Commercial and industrial $ 256,939 $ 575 $ 1,387 $ — $ — $ 258,901 Commercial real estate 1,074,952 7,399 15,703 — — 1,098,054 Commercial real estate construction 109,570 — — — — 109,570 Residential real estate 73,089 — 1,188 — — 74,277 Home equity 12,278 — 51 — — 12,329 Consumer 16,195 — 104 — — 16,299 Total $ 1,543,023 $ 7,974 $ 18,433 $ — $ — $ 1,569,430 Special Pass Mention Substandard Doubtful Loss Total December 31, 2021 Commercial and industrial $ 252,268 $ 4,156 $ 12,084 $ — $ — $ 268,508 Commercial real estate 835,787 679 16,241 — — 852,707 Commercial real estate construction 72,250 — — — — 72,250 Residential real estate 64,094 — 1,154 — — 65,248 Home equity 13,588 50 — — — 13,638 Consumer 18,963 — 114 — — 19,077 Total $ 1,256,950 $ 4,885 $ 29,593 $ — $ — $ 1,291,428 |
Schedule of loans to certain directors and principal officers | 2022 2021 Balance, beginning of year $ 5,076 $ 5,392 Additions 11,876 — Repayments (61) (316) Balance, end of year $ 16,891 $ 5,076 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Summary of assets and liabilities measured at fair value | Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) U.S. government agencies and treasuries $ 93,750 $ — $ 93,750 $ — Mortgage-backed securities 316,915 — 316,915 — Corporate securities 25,658 — 25,658 — Obligations of states and political subdivisions 97,138 — 97,138 — Total securities available-for-sale $ 533,461 $ — $ 533,461 $ — Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) U.S. government agencies 79,706 $ — $ 79,706 $ — Mortgage-backed securities 270,432 — 270,432 — Corporate securities 20,211 — 20,211 — Obligations of states and political subdivisions 94,448 — 94,448 — Total securities available-for-sale $ 464,797 $ — $ 464,797 $ — |
Schedule of assets measured at fair value on a non-recurring | Fair Value Measurements Using: Quoted Prices in Active Markets Significant Other Significant Total at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2022 (Level 1) (Level 2) (Level 3) Impaired loans $ 204 $ — $ — $ 204 Fair Value Measurements Using: Quoted Prices Significant in Active Other Significant Total at Markets for Observable Unobservable December 31, 2021 Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Impaired loans $ 6,689 $ — $ — $ 6,689 |
Schedule of level 3 fair value measured at fair value on a non-recurring | Fair Value Range December 31, 2022 Value Valuation Technique Unobservable Input (Weighted Average) Impaired loans - $ 204 Appraisal of collateral (1) Appraisal and liquidation 20% adjustments (2) (20%) Fair Value Range December 31, 2021 Value Valuation Technique Unobservable Input (Weighted Average) Impaired loans - $ 6,689 Appraisal of collateral (1) Appraisal and liquidation 20%-56% adjustments (2) (39%) (1) Fair value is generally determined through independent appraisals of the underlying collateral that generally include various level 3 inputs which are not identifiable. (2) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. |
Summary of carrying amounts and estimated fair values of financial instruments | December 31, 2022 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 86,081 $ 86,081 $ 86,081 $ — $ — Loans, net 1,547,598 1,503,543 — — 1,503,543 Accrued interest receivable 6,320 6,320 — 2,448 3,872 Restricted investment in bank stocks 9,562 NA — — — Financial liabilities: Deposits 1,974,387 1,972,387 1,881,354 91,033 — Subordinated notes, net of issuance costs 19,447 19,682 — 19,682 — Accrued interest payable 267 267 — 267 — December 31, 2021 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 306,179 $ 306,179 $ 306,179 $ — $ — Loans, net 1,273,767 1,260,146 — — 1,260,146 Accrued interest receivable 6,643 6,643 — 1,603 5,040 Restricted investment in bank stocks 2,217 NA — — — Financial liabilities: Deposits 1,914,384 1,914,271 1,831,944 82,327 — Note payable 3,000 3,030 — 3,030 — Subordinated notes, net of issuance costs 19,376 18,867 — 18,867 — Accrued interest payable 250 250 — 250 — |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment | |
Schedule of premises and equipment | 2022 2021 Land $ 3,152 $ 3,152 Buildings and improvements 13,741 12,714 Furniture and equipment 7,436 7,053 Leasehold improvements 6,874 6,737 31,203 29,656 Accumulated depreciation and amortization (16,464) (15,055) Premises and equipment, net $ 14,739 $ 14,601 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Schedule of changes in Goodwill | 2022 2021 Beginning of year $ 5,359 $ 5,359 Acquired goodwill impairment — — End of year $ 5,359 $ 5,359 |
Schedule of acquired intangible assets | Gross Intangible Accumulated Asset Amortization December 31, 2022 Customer lists and intangible assets $ 4,284 (2,892) $ 4,284 (2,892) December 31, 2021 Customer lists and intangible assets $ 4,284 (2,606) $ 4,284 (2,606) |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Summary of analysis of deposits | December 31, 2022 December 31, 2021 Non-interest bearing demand accounts $ 723,228 $ 701,645 Interest-bearing demand accounts 284,747 301,596 Money market accounts 615,149 615,111 Savings accounts 258,230 213,592 Certificates of Deposit 93,033 82,440 Total deposits $ 1,974,387 $ 1,914,384 |
Schedule of maturities of time deposits | 2023 $ 80,728 2024 4,326 2025 7,979 $ 93,033 |
FHLB Advances (Tables)
FHLB Advances (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FHLB Advances | |
Schedule of FHLB Advances | 2022 2021 Amount Rate Amount Rate Federal Home Loan Bank (FHLB) advances $ 131,500 4.61 % $ — — % |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Borrowings | |
Schedule of notes payable | 2022 2021 Amount Rate Amount Rate Note payable $ — — % $ 3,000 5.60 % |
Pension and other Post Retire_2
Pension and other Post Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Pension and other Post Retirement Plans | |
Schedule of discretionary contributions | Percentage of Participant Age Range Compensation 1.0 % Under age 35 2.0 % 35 years 5.0 % 45 years 8.5 % 55 years of age or older |
Restricted Stock Awards | |
Pension and other Post Retirement Plans | |
Summary of restricted stock awards activity | Weighted Average Fair Shares Value Non-vested at beginning of period 22,922 $ 28.92 Granted — $ Vested (11,245) $ 28.59 Forfeited — $ Non-vested at end of period 11,677 $ 29.24 |
Restricted Stock Units (RSUs) | |
Pension and other Post Retirement Plans | |
Summary of restricted stock awards activity | Restricted Stock Units Non-vested RSUs at beginning of period 48,004 Granted 26,255 Vested (11,637) Forfeited (2,875) Non-vested RSUs at end of period 59,747 |
Defined benefit pension plan | |
Pension and other Post Retirement Plans | |
Schedule of changes in obligations and plan assets | 2022 2021 Change in projected benefit obligation: Beginning of year $ 28,221 $ 29,428 Service cost — 189 Interest cost 808 760 Benefits paid (1,438) (1,556) Actuarial loss (6,302) (600) End of year $ 21,289 $ 28,221 Change in fair value of assets: Beginning of year $ 42,867 $ 39,963 Contributions 1,453 2,000 Actual return on plan assets (10,888) 2,501 Benefits paid and expenses (1,654) (1,597) End of year $ 31,778 $ 42,867 2022 2021 Funded status at end of year (plan assets less benefit obligation) $ 10,489 $ 14,646 |
Schedule of amounts recognized in accumulated other comprehensive income (loss) | 2022 2021 Total net actuarial loss $ (10,308) $ (3,521) Transition asset — 28 $ (10,308) $ (3,493) |
Schedule of components of net periodic benefit cost and other amounts recognized in other comprehensive income | Year Ended December 31, 2022 2021 Service cost $ — $ 189 Interest cost 808 760 Expected return on plan assets (1,985) (2,058) Amortization of transition cost (28) (48) Amortization of net loss — 21 Net periodic benefit cost/(income) $ (1,205) $ (1,136) Net gain/(loss) $ 6,786 $ (1,002) Amortization of transition asset 28 48 Amortization of prior service cost — (21) Total recognized in other comprehensive income $ 6,814 (975) Total recognized in net periodic benefit cost and other comprehensive income $ 5,609 $ (2,111) |
Schedule of assumptions | 2022 2021 Discount rate 5.44 % 2.94 % Rate of compensation increase — % — % 2022 2021 Discount rate 2.94 % 2.65 % Expected long-term rate of return on plan assets 5.25 % 5.25 % Rate of compensation increase — % — % |
Schedule of plan asset allocation | 2022 2021 Target Actual Target Actual Allocation Allocation Allocation Allocation Asset category: Cash equivalents — % 16.59 % — % — % Equity securities 30.00 % 25.05 % 30.00 % 35.65 % Fixed income securities 15.00 % 21.70 % 15.00 % 34.98 % Other financial instruments 55.00 % 36.66 % 55.00 % 29.37 % Total 100.00 % 100.00 % |
Schedule of fair value of plan assets | Fair Value Measurements at December 31, 2022 Using: Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Commingled pension trust funds-realty 31,778 — 31,778 — Total plan assets $ 31,778 $ — $ 31,778 $ — Fair Value Measurements at December 31, 2021 Using: Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Commingled pension trust funds-realty 42,867 — 42,867 — Total plan assets $ 42,867 $ — $ 42,867 $ — |
Schedule of future benefit payments | Pension Benefits 2023 $ 1,603 2024 1,635 2025 1,617 2026 1,617 2027 1,572 Following 5 years $ 7,617 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of income tax expense | 2022 2021 Current expense Federal $ 6,488 $ 5,353 State 384 440 Total 6,872 5,793 Deferred expense (benefit) Federal (934) (326) State (410) (630) Total (1,344) (956) Change in valuation allowance 386 553 Total provision for income taxes $ 5,914 $ 5,390 |
Schedule of income tax reconciliation | 2022 2021 Tax expense at statutory rate $ 6,356 $ 5,602 (Decrease) increase in taxes resulting from: Net earnings on bank-owned life insurance (200) (167) Tax-exempt municipal bond income, net of disallowed interest expense (465) (329) State income tax, net of federal tax benefit (26) 209 Valuation allowance 386 553 Other (137) (478) Total provision for income tax $ 5,914 $ 5,390 |
Schedule of deferred tax assets and liabilities | 2022 2021 Deferred tax assets: Allowance for loan losses $ 5,991 $ 4,824 Reserve for unfunded commitments 55 55 Deferred loan fees, net of costs 1,130 962 Deferred compensation 2,420 2,431 Available for sale securities 16,063 293 Non-accrual interest 298 336 State NOL 2,476 2,284 Pension/deferred compensation OCI 2,463 894 30,896 12,079 2022 2021 Deferred tax liabilities: Intangible assets (1,004) (902) Organization costs – holding company (24) (22) Organization costs – HVIA (26) (23) Pension (2,797) (2,717) Accumulated depreciation (517) (681) Accretion (39) (16) (4,407) (4,361) Net deferred tax asset before valuation allowance 27,089 7,718 Valuation allowance (7,993) (3,629) Net deferred tax asset $ 19,096 $ 4,089 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Summary of changes in accumulated other comprehensive income (loss) | Year Ended December 31, 2022 Unrealized Gains and Losses on Deferred Available-for- Defined Benefit Compensation Sale Securities Pension Items Liability Total Beginning balance $ (1,072) $ (2,506) $ 135 $ (3,443) Other comprehensive income/(loss) before reclassification (59,358) (5,361) (12) (64,731) Less amounts reclassified from accumulated other comprehensive income — 22 — 22 Net current period other comprehensive income/(loss) (59,358) (5,383) (12) (64,753) Ending balance $ (60,430) $ (7,889) $ 123 $ (68,196) Year Ended December 31, 2021 Unrealized Gains and Losses on Deferred Available-for- Defined Benefit Compensation Sale Securities Pension Items Liability Total Beginning balance $ 4,949 $ (3,277) $ 147 $ 1,819 Other comprehensive income/(loss) before reclassification (6,021) 792 (12) (5,241) Less amounts reclassified from accumulated other comprehensive income — 21 — 21 Net current period other comprehensive income/(loss) (6,021) 771 (12) (5,262) Ending balance $ (1,072) $ (2,506) $ 135 $ (3,443) |
Summary of significant amounts reclassified out of each component of accumulated other comprehensive income (loss) | Amount Reclassified from Details about Accumulated Other Accumulated Other Comprehensive Affected Line Item in the Statement Comprehensive Income Components Income where Net Income is Presented 2022 2021 Amortization of defined benefit pension items Transition asset (28) (48) Employee benefits Actuarial gains $ — $ 21 Employee benefits Total before tax (28) (27) Tax effect (6) (6) Provision for income taxes Net of tax $ (22) $ (21) Total reclassifications for the period, net of tax $ (22) $ (21) |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Capital Matters | |
Schedule of actual and required capital amounts and ratios | Actual and required capital amounts and ratios are presented below at year-end. To be Well Capitalized For Capital Adequacy For Capital Adequacy under Prompt Actual Purposes Purposes with Capital Buffer Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2022 Total capital to risk weighted assets $ 235,346 13.95 % $ 134,986 8.00 % $ 166,624 9.875 % $ 168,733 10.00 % Tier 1 (Core) capital to risk weighted assets 214,243 12.70 % 101,240 6.00 % 132,877 7.875 % 134,986 8.00 % Common Tier 1 (CET1) to risk weighted assets 214,243 12.70 % 75,930 4.50 % 107,567 6.375 % 109,677 6.50 % Tier 1 (Core) Capital to average assets 214,243 9.09 % 94,250 4.00 % N/A N/A 117,813 5.00 % December 31, 2021 Total capital to risk weighted assets $ 192,359 14.12 % $ 109,000 8.00 % $ 134,546 9.875 % $ 136,250 10.00 % Tier 1 (Core) capital to risk weighted assets 175,318 12.87 % 81,750 6.00 % 107,296 7.875 % 109,000 8.00 % Common Tier 1 (CET1) to risk weighted assets 175,318 12.87 % 61,312 4.50 % 86,859 6.375 % 88,562 6.50 % Tier 1 (Core) Capital to average assets 175,318 8.15 % 86,093 4.00 % N/A N/A 107,616 5.00 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of future minimum lease payments under lease agreements | Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2022 are as follows: Years Ending December 31, 2023 $ 878 2024 831 2025 762 2026 711 2027 497 Thereafter 515 Total undiscounted lease payments $ 4,194 Discount $ 165 Total discounted lease payments $ 4,029 Operating lease weighted average remaining lease term (years) 5.46 years Operating lease weighted average discount rate 3.38 % |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contracts with Customers | |
Schedule of noninterest income | Year Ended December 31, 2022 2021 Noninterest Income Service charges on deposit accounts Overdraft fees $ 328 $ 279 Other 365 359 Trust income 4,764 4,788 Investment advisory income 4,537 4,853 Earnings on bank owned life insurance (a) 950 793 Other (b) 1,052 1,030 Total Noninterest Income $ 11,996 $ 12,102 (a) Not within the scope of ASC 606. (b) The Other category includes safe deposit income, checkbook fees, and debit card fee income, totaling $913 and $805 for 2022 and 2021, respectively, that are within the scope of ASC 606 and loan related fee income and miscellaneous income, totaling $139 and $225 for 2022 and 2021, respectively, which are outside the scope of ASC 606. |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Financial Instruments with Off-Balance Sheet Risk | |
Summary of Bank's Commitments | 2022 2021 Commitments to extend credit $ 389,062 $ 373,268 Standby letters of credit 13,552 11,501 |
Parent Company Information (Tab
Parent Company Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Parent Company Information | |
Schedule of Condensed Statements of Condition | December 31, 2022 2021 Assets Cash and due from banks $ 4,596 $ 24,441 Investment in subsidiaries 152,214 179,487 Goodwill and intangible assets 1,564 1,850 Other assets 366 211 Total assets $ 158,740 $ 205,989 December 31, 2022 2021 Liabilities and stockholders’ equity Subordinated notes, net of issuance costs $ 19,447 $ 19,376 Note payable — 3,000 Other liabilities 1,155 777 Total liabilities 20,602 23,153 Total stockholders’ equity 138,138 182,836 Total liabilities and stockholders’ equity $ 158,740 $ 205,989 |
Schedule of Condensed Statements of Income and Comprehensive Income | Years ended December 31, 2022 2021 Operating Income Dividend income from operating subsidiaries $ 6,792 $ 5,329 Servicing Fee 553 372 Total operating income 7,345 5,701 Operating Expenses Interest on borrowings 1,077 1,087 Salaries and employee benefits 553 372 Professional fees 413 172 Directors’ fees and expenses 162 189 Intangible amortization 286 286 Other expenses and income taxes (28) 59 Total operating expenses 2,463 2,165 Equity in undistributed earnings of subsidiary 19,481 17,751 Net income $ 24,363 $ 21,287 Comprehensive income $ (40,390) $ 16,025 |
Schedule of Condensed Statements of Cash Flows | Years ended December 31, 2022 2021 Cash flows from operating activities Net income after equity in undistributed earnings of subsidiary $ 24,363 $ 21,287 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed earnings of subsidiary companies (19,481) (17,751) Stock-based compensation 503 69 Amortization of intangibles 286 286 Restricted stock expense 166 475 Other, net 295 (198) Net cash provided by (used in) operating activities 6,132 4,168 Cash flows from investing activities Investment in operating subsidiary (18,000) (21,500) Net cash used in investing activities (18,000) (21,500) Cash flows from financing activities Proceeds from the issuance of common stock (net of costs) — 35,252 Repayment of note payable (3,000) — Issuance of subordinated notes, net of issuance costs — Dividends paid, common stock (4,669) (4,029) Purchases of treasury stock (308) (379) Net cash (used in) provided by financing activities (7,977) 30,844 Net increase in cash and cash equivalents (19,845) 13,512 Cash and cash equivalents at beginning of year 24,441 10,929 Cash and cash equivalents at end of year $ 4,596 $ 24,441 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Schedule of segment information | For the twelve months ended December 31, 2022 Banking Wealth Management Total Segments Net interest income $ 78,088 $ — $ 78,088 Noninterest income 2,695 9,301 11,996 Provision for loan loss (9,517) — (9,517) Noninterest expenses (42,898) (7,392) (50,290) Income tax expense (5,513) (401) (5,914) Net income $ 22,855 $ 1,508 $ 24,363 Total assets $ 2,279,469 $ 7,865 $ 2,287,334 For the twelve months ended December 31, 2021 Banking Wealth Management Total Segments Net interest income $ 60,461 $ — $ 60,461 Noninterest income 2,461 9,641 12,102 Provision for loan loss (2,428) — (2,428) Noninterest expenses (36,736) (6,722) (43,458) Income tax expense (4,777) (613) (5,390) Net income $ 18,981 $ 2,306 $ 21,287 Total assets $ 2,133,440 9,143 $ 2,142,583 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Nature of Operations and Principles of Consolidation (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) location | Dec. 31, 2021 USD ($) | |
Loans | ||
Assets held in an agency or fiduciary capacity | $ | $ 1,272,498 | $ 1,325,894 |
Orange County | ||
Loans | ||
Number of offices in New York | 8 | |
Westchester County | ||
Loans | ||
Number of offices in New York | 7 | |
Rockland County | ||
Loans | ||
Number of offices in New York | 2 | |
Bronx County | ||
Loans | ||
Number of offices in New York | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Lending (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Commercial real estate. | Commercial real estate | Maximum | |
Loans | |
Maturity period | 15 years |
Amortization period | 30 years |
Loan To Value ratio | 75% |
Residential real estate. | Residential real estate | |
Loans | |
Threshold percentage for private mortgage insurance | 80% |
Residential real estate. | Residential real estate | Maximum | |
Loans | |
Maturity period | 30 years |
Loan To Value ratio | 80% |
Residential real estate. | Home equity | |
Loans | |
Draw period | 10 years |
Repayment period | 15 years |
Residential real estate. | Home equity | Maximum | |
Loans | |
Maturity period | 15 years |
Loan To Value ratio | 85% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Premises and Equipment (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based payments | ||
Unvested shares | 11,677 | 22,922 |
Buildings and improvements | Minimum | ||
Premises and Equipment | ||
Useful life | 5 years | |
Buildings and improvements | Maximum | ||
Premises and Equipment | ||
Useful life | 50 years | |
Furniture and equipment | Minimum | ||
Premises and Equipment | ||
Useful life | 3 years | |
Furniture and equipment | Maximum | ||
Premises and Equipment | ||
Useful life | 8 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) | Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Recent Accounting Pronouncements | ||||
Operating lease right-of-use assets | $ 4,029,000 | $ 3,038,000 | ||
Operating lease liability | 4,029,000 | 3,038,000 | ||
Financing receivable allowance for credit loss | $ 21,832,000 | $ 17,661,000 | $ 16,172,000 | |
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Recent Accounting Pronouncements | ||||
Financing receivable allowance for credit loss | $ 3,000,000 | |||
Financing receivable allowance for credit loss after tax | 2,400,000 | |||
Allowance for unfunded commitments | 500,000 | |||
Allowance for unfunded commitments after tax | 400,000 | |||
Security allowance for credit loss | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Correction of Prior Period Error (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Total loans | $ 1,569,430 | $ 1,291,428 | |
Total stockholders' equity | 138,138 | 182,836 | $ 135,423 |
Interest and fees on loans | 69,327 | 57,524 | |
Salaries and employee benefits | 22,461 | 19,710 | |
Income tax expense | 5,914 | 5,390 | |
Net Income | $ 24,363 | $ 21,287 | |
Basic earnings per share | $ 4.33 | $ 4.28 | |
Diluted earnings per share | $ 4.33 | $ 4.28 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investment securities | ||
Amortized Cost | $ 609,954 | $ 466,153 |
Unrealized Gains | 90 | 4,152 |
Unrealized Losses | (76,583) | (5,508) |
Fair Value | 533,461 | 464,797 |
U.S. government agencies and treasuries | ||
Investment securities | ||
Amortized Cost | 104,734 | 80,596 |
Unrealized Gains | 25 | 440 |
Unrealized Losses | (11,009) | (1,330) |
Fair Value | 93,750 | 79,706 |
Mortgage-backed securities | ||
Investment securities | ||
Amortized Cost | 364,690 | 272,931 |
Unrealized Gains | 17 | 1,285 |
Unrealized Losses | (47,792) | (3,784) |
Fair Value | 316,915 | 270,432 |
Corporate Bonds | ||
Investment securities | ||
Amortized Cost | 28,559 | 20,081 |
Unrealized Gains | 278 | |
Unrealized Losses | (2,901) | (148) |
Fair Value | 25,658 | 20,211 |
Obligations of states and political subdivisions | ||
Investment securities | ||
Amortized Cost | 111,971 | 92,545 |
Unrealized Gains | 48 | 2,149 |
Unrealized Losses | (14,881) | (246) |
Fair Value | $ 97,138 | $ 94,448 |
Investment Securities - Gains a
Investment Securities - Gains and Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investment Securities | ||
Proceeds | $ 0 | $ 0 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less, Amortized Cost | $ 3,146 | |
Due after one through five years, Amortized Cost | 26,075 | |
Due after five through ten years, Amortized Cost | 70,970 | |
Due after ten years, Amortized Cost | 145,073 | |
Total, Amortized Cost | 245,264 | |
Amortized Cost | 609,954 | $ 466,153 |
Fair Value | ||
Due in one year or less, Fair Value | 3,161 | |
Due after one through five years, Fair Value | 25,112 | |
Due after five through ten years, Fair Value | 62,609 | |
Due after ten years, Fair Value | 125,664 | |
Total, Fair Value | 216,546 | |
Total debt securities, Fair Value | 533,461 | 464,797 |
Mortgage-backed securities | ||
Amortized Cost | ||
Amortized Cost | 364,690 | 272,931 |
Fair Value | ||
Total debt securities, Fair Value | 316,915 | 270,432 |
Debt securities pledged as collateral | $ 323,674 | $ 233,907 |
Investment Securities - Securit
Investment Securities - Securities with unrealized and unrecognized losses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investment securities | ||
Fair Value, Less than 12 Months | $ 267,396 | $ 210,546 |
Fair Value, 12 Months or More | 252,688 | 49,642 |
Fair Value, Total | 520,084 | 260,188 |
Unrealized Losses, Less than 12 Months | (22,323) | (3,680) |
Unrealized Losses, 12 Months or More | (54,260) | (1,828) |
Unrealized Losses, Total | (76,583) | (5,508) |
U.S. government agencies and treasuries | ||
Investment securities | ||
Fair Value, Less than 12 Months | 47,064 | 10,337 |
Fair Value, 12 Months or More | 41,718 | 32,210 |
Fair Value, Total | 88,782 | 42,547 |
Unrealized Losses, Less than 12 Months | (2,414) | (121) |
Unrealized Losses, 12 Months or More | (8,595) | (1,209) |
Unrealized Losses, Total | (11,009) | (1,330) |
Mortgage-backed securities | ||
Investment securities | ||
Fair Value, Less than 12 Months | 150,542 | 177,506 |
Fair Value, 12 Months or More | 165,336 | 14,134 |
Fair Value, Total | 315,878 | 191,640 |
Unrealized Losses, Less than 12 Months | (12,139) | (3,273) |
Unrealized Losses, 12 Months or More | (35,653) | (511) |
Unrealized Losses, Total | (47,792) | (3,784) |
Corporate Bonds | ||
Investment securities | ||
Fair Value, Less than 12 Months | 12,503 | 9,354 |
Fair Value, 12 Months or More | 13,155 | |
Fair Value, Total | 25,658 | 9,354 |
Unrealized Losses, Less than 12 Months | (1,007) | (148) |
Unrealized Losses, 12 Months or More | (1,894) | |
Unrealized Losses, Total | (2,901) | (148) |
Obligations of states and political subdivisions | ||
Investment securities | ||
Fair Value, Less than 12 Months | 57,287 | 13,349 |
Fair Value, 12 Months or More | 32,479 | 3,298 |
Fair Value, Total | 89,766 | 16,647 |
Unrealized Losses, Less than 12 Months | (6,763) | (138) |
Unrealized Losses, 12 Months or More | (8,118) | (108) |
Unrealized Losses, Total | $ (14,881) | $ (246) |
Investment Securities - Narrati
Investment Securities - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) security | |
Investment Securities | ||
Other than temporary impairment loss recognized | $ | $ 0 | $ 0 |
Number of securities in portfolio | 296 | 252 |
Number of unrealized loss positions | 264 | 78 |
Loans (Details)
Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loans | ||
Total loans | $ 1,569,430 | $ 1,291,428 |
Commercial and industrial. | Commercial and industrial | ||
Loans | ||
Total loans | 258,901 | 268,508 |
Commercial and industrial. | Paycheck Protection Program | ||
Loans | ||
Total loans | 1,700 | 38,100 |
Commercial real estate. | Commercial real estate | ||
Loans | ||
Total loans | 1,098,054 | 852,707 |
Commercial real estate. | Commercial real estate construction | ||
Loans | ||
Total loans | 109,570 | 72,250 |
Residential real estate. | Residential real estate | ||
Loans | ||
Total loans | 74,277 | 65,248 |
Residential real estate. | Home equity | ||
Loans | ||
Total loans | 12,329 | 13,638 |
Consumer | ||
Loans | ||
Total loans | $ 16,299 | $ 19,077 |
Loans - Allowance for loan loss
Loans - Allowance for loan losses by portfolio segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for loan losses: | ||
Beginning balance | $ 17,661 | $ 16,172 |
Provision for loan losses | 9,517 | 2,428 |
Charge-offs | (5,506) | (1,267) |
Recoveries | 160 | 328 |
Ending balance | 21,832 | 17,661 |
Allowance for loan losses: | ||
individually evaluated for impairment | 1,033 | 1,433 |
collectively evaluated for impairment | 20,799 | 16,228 |
Total ending allowance balance | 21,832 | 17,661 |
Loans: | ||
individually evaluated for impairment | 25,368 | 25,866 |
collectively evaluated for impairment | 1,544,062 | 1,265,562 |
Total ending loans balance | 1,569,430 | 1,291,428 |
Commercial and industrial. | Commercial and industrial | ||
Allowance for loan losses: | ||
Beginning balance | 4,901 | 4,795 |
Provision for loan losses | 5,505 | 828 |
Charge-offs | (4,962) | (942) |
Recoveries | 66 | 220 |
Ending balance | 5,510 | 4,901 |
Allowance for loan losses: | ||
individually evaluated for impairment | 653 | 137 |
collectively evaluated for impairment | 4,857 | 4,764 |
Total ending allowance balance | 5,510 | 4,901 |
Loans: | ||
individually evaluated for impairment | 1,003 | 952 |
collectively evaluated for impairment | 257,898 | 267,556 |
Total ending loans balance | 258,901 | 268,508 |
Commercial and industrial. | Paycheck Protection Program | ||
Loans: | ||
Total ending loans balance | 1,700 | 38,100 |
Commercial real estate. | Commercial real estate | ||
Allowance for loan losses: | ||
Beginning balance | 11,183 | 9,782 |
Provision for loan losses | 3,129 | 1,326 |
Recoveries | 52 | 75 |
Ending balance | 14,364 | 11,183 |
Allowance for loan losses: | ||
individually evaluated for impairment | 380 | 1,272 |
collectively evaluated for impairment | 13,984 | 9,911 |
Total ending allowance balance | 14,364 | 11,183 |
Loans: | ||
individually evaluated for impairment | 22,956 | 23,523 |
collectively evaluated for impairment | 1,075,098 | 829,184 |
Total ending loans balance | 1,098,054 | 852,707 |
Commercial real estate. | Commercial real estate construction | ||
Allowance for loan losses: | ||
Beginning balance | 964 | 801 |
Provision for loan losses | 288 | 163 |
Ending balance | 1,252 | 964 |
Allowance for loan losses: | ||
collectively evaluated for impairment | 1,252 | 964 |
Total ending allowance balance | 1,252 | 964 |
Loans: | ||
collectively evaluated for impairment | 109,570 | 72,250 |
Total ending loans balance | 109,570 | 72,250 |
Residential real estate. | Residential real estate | ||
Allowance for loan losses: | ||
Beginning balance | 272 | 381 |
Provision for loan losses | 138 | (98) |
Charge-offs | (65) | (11) |
Ending balance | 345 | 272 |
Allowance for loan losses: | ||
collectively evaluated for impairment | 345 | 272 |
Total ending allowance balance | 345 | 272 |
Loans: | ||
individually evaluated for impairment | 1,254 | 1,227 |
collectively evaluated for impairment | 73,023 | 64,021 |
Total ending loans balance | 74,277 | 65,248 |
Residential real estate. | Home equity | ||
Allowance for loan losses: | ||
Beginning balance | 80 | 77 |
Provision for loan losses | (17) | 3 |
Ending balance | 63 | 80 |
Allowance for loan losses: | ||
collectively evaluated for impairment | 63 | 80 |
Total ending allowance balance | 63 | 80 |
Loans: | ||
individually evaluated for impairment | 51 | 50 |
collectively evaluated for impairment | 12,278 | 13,588 |
Total ending loans balance | 12,329 | 13,638 |
Consumer | ||
Allowance for loan losses: | ||
Beginning balance | 261 | 336 |
Provision for loan losses | 474 | 206 |
Charge-offs | (479) | (314) |
Recoveries | 42 | 33 |
Ending balance | 298 | 261 |
Allowance for loan losses: | ||
individually evaluated for impairment | 24 | |
collectively evaluated for impairment | 298 | 237 |
Total ending allowance balance | 298 | 261 |
Loans: | ||
individually evaluated for impairment | 104 | 114 |
collectively evaluated for impairment | 16,195 | 18,963 |
Total ending loans balance | $ 16,299 | $ 19,077 |
Loans - Loans individually eval
Loans - Loans individually evaluated (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unpaid Principal Balance | ||
With no related allowance recorded | $ 19,205 | $ 15,497 |
With an allowance recorded | 6,780 | 10,742 |
Recorded Investment | ||
With no related allowance recorded | 18,621 | 15,159 |
With an allowance recorded | 6,747 | 10,707 |
Allowance for Loan Losses Allocated | 1,033 | 1,433 |
Average Recorded Investment | ||
With no related allowance recorded | 18,939 | 13,482 |
With an allowance recorded | 9,899 | 11,202 |
Interest Income Recognized | ||
With no related allowance recorded | 653 | 599 |
With an allowance recorded | 334 | 448 |
Cash Basis Interest Recognized | ||
With no related allowance recorded | 653 | 599 |
With an allowance recorded | 334 | 448 |
Commercial and industrial. | Commercial and industrial | ||
Unpaid Principal Balance | ||
With no related allowance recorded | 1 | |
With an allowance recorded | 1,011 | 951 |
Recorded Investment | ||
With no related allowance recorded | 1 | |
With an allowance recorded | 1,003 | 951 |
Allowance for Loan Losses Allocated | 653 | 137 |
Average Recorded Investment | ||
With no related allowance recorded | 187 | |
With an allowance recorded | 7,516 | 1,420 |
Interest Income Recognized | ||
With no related allowance recorded | 11 | |
With an allowance recorded | 209 | 82 |
Cash Basis Interest Recognized | ||
With no related allowance recorded | 11 | |
With an allowance recorded | 209 | 82 |
Commercial real estate. | Commercial real estate | ||
Unpaid Principal Balance | ||
With no related allowance recorded | 17,884 | 14,291 |
With an allowance recorded | 5,665 | 9,593 |
Recorded Investment | ||
With no related allowance recorded | 17,316 | 13,953 |
With an allowance recorded | 5,640 | 9,570 |
Allowance for Loan Losses Allocated | 380 | 1,272 |
Average Recorded Investment | ||
With no related allowance recorded | 17,622 | 12,053 |
With an allowance recorded | 2,274 | 9,587 |
Interest Income Recognized | ||
With no related allowance recorded | 633 | 555 |
With an allowance recorded | 119 | 357 |
Cash Basis Interest Recognized | ||
With no related allowance recorded | 633 | 555 |
With an allowance recorded | 119 | 357 |
Commercial real estate. | Commercial real estate construction | ||
Average Recorded Investment | ||
With no related allowance recorded | 578 | 578 |
Residential real estate. | Residential real estate | ||
Unpaid Principal Balance | ||
With no related allowance recorded | 1,266 | 1,155 |
With an allowance recorded | 84 | |
Recorded Investment | ||
With no related allowance recorded | 1,254 | 1,155 |
With an allowance recorded | 72 | |
Average Recorded Investment | ||
With no related allowance recorded | 739 | 639 |
With an allowance recorded | 76 | |
Interest Income Recognized | ||
With no related allowance recorded | 20 | 33 |
With an allowance recorded | 3 | |
Cash Basis Interest Recognized | ||
With no related allowance recorded | 20 | 33 |
With an allowance recorded | 3 | |
Residential real estate. | Home equity | ||
Unpaid Principal Balance | ||
With no related allowance recorded | 55 | 50 |
Recorded Investment | ||
With no related allowance recorded | 51 | 50 |
Average Recorded Investment | ||
With no related allowance recorded | 25 | |
Consumer | ||
Unpaid Principal Balance | ||
With an allowance recorded | 104 | 114 |
Recorded Investment | ||
With an allowance recorded | 104 | 114 |
Allowance for Loan Losses Allocated | 24 | |
Average Recorded Investment | ||
With an allowance recorded | 109 | 119 |
Interest Income Recognized | ||
With an allowance recorded | 6 | 6 |
Cash Basis Interest Recognized | ||
With an allowance recorded | $ 6 | $ 6 |
Loans - Recorded investment in
Loans - Recorded investment in non-accrual and loans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loans | ||
Non-accrual | $ 6,124 | $ 4,560 |
Loans Past Due Over 90 Days Non-accrual Still Accruing | 2,327 | 1,393 |
Commercial and industrial. | Commercial and industrial | ||
Loans | ||
Non-accrual | 1,003 | |
Loans Past Due Over 90 Days Non-accrual Still Accruing | 1,850 | 720 |
Commercial real estate. | Commercial real estate | ||
Loans | ||
Non-accrual | 3,882 | 3,928 |
Loans Past Due Over 90 Days Non-accrual Still Accruing | 465 | |
Residential real estate. | Residential real estate | ||
Loans | ||
Non-accrual | 1,188 | 578 |
Residential real estate. | Home equity | ||
Loans | ||
Non-accrual | 51 | 50 |
Consumer | ||
Loans | ||
Non-accrual | 4 | |
Loans Past Due Over 90 Days Non-accrual Still Accruing | $ 477 | $ 208 |
Loans - Aging of the recorded i
Loans - Aging of the recorded investment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | $ 2,646 | $ 1,701 |
60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 2,217 | 4,742 |
Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 5,470 | 2,721 |
Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 10,333 | 9,164 |
Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,559,097 | 1,282,264 |
Commercial and industrial. | Commercial and industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,497 | 541 |
Commercial and industrial. | Commercial and industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,583 | 1,519 |
Commercial and industrial. | Commercial and industrial | Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 2,854 | 720 |
Commercial and industrial. | Commercial and industrial | Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 5,934 | 2,780 |
Commercial and industrial. | Commercial and industrial | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 252,967 | 265,728 |
Commercial real estate. | Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 563 | |
Commercial real estate. | Commercial real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 2,873 | |
Commercial real estate. | Commercial real estate | Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 952 | 1,161 |
Commercial real estate. | Commercial real estate | Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,515 | 4,034 |
Commercial real estate. | Commercial real estate | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,096,539 | 848,673 |
Commercial real estate. | Commercial real estate construction | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 109,570 | 72,250 |
Residential real estate. | Residential real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 2 | 26 |
Residential real estate. | Residential real estate | Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,188 | 578 |
Residential real estate. | Residential real estate | Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,190 | 604 |
Residential real estate. | Residential real estate | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 73,087 | 64,644 |
Residential real estate. | Home equity | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 58 | |
Residential real estate. | Home equity | Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 50 | |
Residential real estate. | Home equity | Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 108 | |
Residential real estate. | Home equity | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 12,329 | 13,530 |
Consumer | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 584 | 1,134 |
Consumer | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 634 | 292 |
Consumer | Greater Than 90 Days | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 476 | 212 |
Consumer | Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | 1,694 | 1,638 |
Consumer | Not Past Due | ||
Financing Receivable, Recorded Investments, Aging [Abstract] | ||
Loans | $ 14,605 | $ 17,439 |
Loans - Troubled debt restructu
Loans - Troubled debt restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Loans | ||
Loans in process of foreclosure | $ 2,016 | $ 2,024 |
Recorded investment in troubled debt restructurings | 14,068 | 14,500 |
Allocated specific allowance | 173 | 687 |
Commitments to lend additional funds | 0 | 0 |
Loans restructured loans that defaulted | $ 0 | $ 0 |
Loans modified resulting in TDRs | loan | 0 | 0 |
Residential real estate. | Residential real estate | ||
Loans | ||
Loans in process of foreclosure | $ 578 | $ 578 |
Loans - Composition of loans by
Loans - Composition of loans by loan segments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Loans | ||
Number of Loans | loan | 0 | 0 |
Unpaid Principal Balance | $ | $ 14,068 | $ 14,500 |
Loans - Risk category of loans
Loans - Risk category of loans by class of loans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loans | ||
Loans | $ 1,569,430 | $ 1,291,428 |
Pass | ||
Loans | ||
Loans | 1,543,023 | 1,256,950 |
Special Mention | ||
Loans | ||
Loans | 7,974 | 4,885 |
Substandard | ||
Loans | ||
Loans | 18,433 | 29,593 |
Commercial and industrial. | Commercial and industrial | ||
Loans | ||
Loans | 258,901 | 268,508 |
Commercial and industrial. | Commercial and industrial | Pass | ||
Loans | ||
Loans | 256,939 | 252,268 |
Commercial and industrial. | Commercial and industrial | Special Mention | ||
Loans | ||
Loans | 575 | 4,156 |
Commercial and industrial. | Commercial and industrial | Substandard | ||
Loans | ||
Loans | 1,387 | 12,084 |
Commercial real estate. | Commercial real estate | ||
Loans | ||
Loans | 1,098,054 | 852,707 |
Commercial real estate. | Commercial real estate | Pass | ||
Loans | ||
Loans | 1,074,952 | 835,787 |
Commercial real estate. | Commercial real estate | Special Mention | ||
Loans | ||
Loans | 7,399 | 679 |
Commercial real estate. | Commercial real estate | Substandard | ||
Loans | ||
Loans | 15,703 | 16,241 |
Commercial real estate. | Commercial real estate construction | ||
Loans | ||
Loans | 109,570 | 72,250 |
Commercial real estate. | Commercial real estate construction | Pass | ||
Loans | ||
Loans | 109,570 | 72,250 |
Residential real estate. | Residential real estate | ||
Loans | ||
Loans | 74,277 | 65,248 |
Residential real estate. | Residential real estate | Pass | ||
Loans | ||
Loans | 73,089 | 64,094 |
Residential real estate. | Residential real estate | Substandard | ||
Loans | ||
Loans | 1,188 | 1,154 |
Residential real estate. | Home equity | ||
Loans | ||
Loans | 12,329 | 13,638 |
Residential real estate. | Home equity | Pass | ||
Loans | ||
Loans | 12,278 | 13,588 |
Residential real estate. | Home equity | Special Mention | ||
Loans | ||
Loans | 50 | |
Residential real estate. | Home equity | Substandard | ||
Loans | ||
Loans | 51 | |
Consumer | ||
Loans | ||
Loans | 16,299 | 19,077 |
Consumer | Pass | ||
Loans | ||
Loans | 16,195 | 18,963 |
Consumer | Substandard | ||
Loans | ||
Loans | $ 104 | $ 114 |
Loans - Loans to certain direct
Loans - Loans to certain directors and principal officers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loans | ||
Balance, beginning of year | $ 5,076 | $ 5,392 |
Additions | 11,876 | |
Repayments | (61) | (316) |
Balance, end of year | $ 16,891 | $ 5,076 |
Fair Value - Assets and liabili
Fair Value - Assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Transfer of assets, Level 1 to level 2 | $ 0 | $ 0 |
Transfer of assets, Level 2 to level 1 | 0 | 0 |
Transfer of liabilities, Level 1 to level 2 | 0 | 0 |
Transfer of liabilities, Level 2 to level 1 | 0 | 0 |
Recurring | ||
Fair Value | ||
Total securities available for sale | 533,461 | 464,797 |
Recurring | U.S. government agencies and treasuries | ||
Fair Value | ||
Total securities available for sale | 93,750 | 79,706 |
Recurring | Mortgage-backed securities | ||
Fair Value | ||
Total securities available for sale | 316,915 | 270,432 |
Recurring | Corporate Bonds | ||
Fair Value | ||
Total securities available for sale | 25,658 | 20,211 |
Recurring | Obligations of states and political subdivisions | ||
Fair Value | ||
Total securities available for sale | 97,138 | 94,448 |
Recurring | Level 2 | ||
Fair Value | ||
Total securities available for sale | 533,461 | 464,797 |
Recurring | Level 2 | U.S. government agencies and treasuries | ||
Fair Value | ||
Total securities available for sale | 93,750 | 79,706 |
Recurring | Level 2 | Mortgage-backed securities | ||
Fair Value | ||
Total securities available for sale | 316,915 | 270,432 |
Recurring | Level 2 | Corporate Bonds | ||
Fair Value | ||
Total securities available for sale | 25,658 | 20,211 |
Recurring | Level 2 | Obligations of states and political subdivisions | ||
Fair Value | ||
Total securities available for sale | $ 97,138 | $ 94,448 |
Fair Value - Non-recurring (Det
Fair Value - Non-recurring (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Reserves allocated to impaired loans | $ 1,033 | $ 1,433 |
Nonrecurring | ||
Fair Value | ||
Impaired loans | 204 | 6,689 |
Level 3 | Nonrecurring | ||
Fair Value | ||
Impaired loans | 204 | 6,689 |
Reserves allocated to impaired loans | $ 112 | $ 409 |
Fair Value - Level 3 (Details)
Fair Value - Level 3 (Details) - Nonrecurring $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value | ||
Impaired loans | $ 204 | $ 6,689 |
Level 3 | ||
Fair Value | ||
Impaired loans | $ 204 | 6,689 |
Level 3 | Appraisal of collateral | Appraisal and liquidation adjustment | ||
Fair Value | ||
Impaired loans, Measurement input | 20 | |
Level 3 | Appraisal of collateral | Appraisal and liquidation adjustment | Weighted average | ||
Fair Value | ||
Impaired loans, Measurement input | (20) | |
Level 3 | Commercial real estate. | Appraisal of collateral | Appraisal and liquidation adjustment | ||
Fair Value | ||
Impaired loans | $ 204 | $ 6,689 |
Level 3 | Commercial real estate. | Appraisal of collateral | Appraisal and liquidation adjustment | Minimum | ||
Fair Value | ||
Impaired loans, Measurement input | 20 | |
Level 3 | Commercial real estate. | Appraisal of collateral | Appraisal and liquidation adjustment | Maximum | ||
Fair Value | ||
Impaired loans, Measurement input | 56 | |
Level 3 | Commercial real estate. | Appraisal of collateral | Appraisal and liquidation adjustment | Weighted average | ||
Fair Value | ||
Impaired loans, Measurement input | (39) |
Fair Value - Carrying amounts a
Fair Value - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Financial assets: | ||
Cash and due from banks | $ 86,081 | $ 306,179 |
Loans, net | 1,547,598 | 1,273,767 |
Accrued interest receivable | 6,320 | 6,643 |
Restricted investment in bank stocks | 9,562 | 2,217 |
Financial liabilities: | ||
Deposits | 1,974,387 | 1,914,384 |
FHLB advances | 3,000 | |
Note payable | 19,376 | |
Subordinated notes, net of issuance costs | 19,447 | |
Accrued interest payable | 267 | 250 |
Fair Value. | ||
Financial assets: | ||
Cash and due from banks | 86,081 | 306,179 |
Loans, net | 1,503,543 | 1,260,146 |
Accrued interest receivable | 6,320 | 6,643 |
Financial liabilities: | ||
Deposits | 1,972,387 | 1,914,271 |
FHLB advances | 3,030 | |
Note payable | 18,867 | |
Subordinated notes, net of issuance costs | 19,682 | |
Accrued interest payable | 267 | 250 |
Fair Value. | Level 1 | ||
Financial assets: | ||
Cash and due from banks | 86,081 | 306,179 |
Financial liabilities: | ||
Deposits | 1,881,354 | 1,831,944 |
Fair Value. | Level 2 | ||
Financial assets: | ||
Accrued interest receivable | 2,448 | 1,603 |
Financial liabilities: | ||
Deposits | 91,033 | 82,327 |
FHLB advances | 3,030 | |
Note payable | 18,867 | |
Subordinated notes, net of issuance costs | 19,682 | |
Accrued interest payable | 267 | 250 |
Fair Value. | Level 3 | ||
Financial assets: | ||
Loans, net | 1,503,543 | 1,260,146 |
Accrued interest receivable | $ 3,872 | $ 5,040 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Premises and Equipment | ||
Premises and equipment, gross | $ 31,203 | $ 29,656 |
Accumulated depreciation and amortization | (16,464) | (15,055) |
Premises and equipment, net | 14,739 | 14,601 |
Depreciation | 1,407 | 1,375 |
Land | ||
Premises and Equipment | ||
Premises and equipment, gross | 3,152 | 3,152 |
Buildings and improvements | ||
Premises and Equipment | ||
Premises and equipment, gross | 13,741 | 12,714 |
Furniture and equipment | ||
Premises and Equipment | ||
Premises and equipment, gross | 7,436 | 7,053 |
Leasehold improvements | ||
Premises and Equipment | ||
Premises and equipment, gross | $ 6,874 | $ 6,737 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Changes in goodwill | |
Goodwill, Beginning of year | $ 5,359 |
Acquired goodwill impairment | 0 |
Goodwill, End of year | $ 5,359 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Acquired intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired intangible assets | ||
Gross intangible asset | $ 4,284 | $ 4,284 |
Accumulated Amortization | (2,892) | (2,606) |
Intangible amortization | 286 | 285 |
Customer lists and intangible assets | ||
Acquired intangible assets | ||
Gross intangible asset | 4,284 | 4,284 |
Accumulated Amortization | $ (2,892) | $ (2,606) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated amortization expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Estimated amortization expense | |
2023 | $ 286 |
2024 | 286 |
2025 | 286 |
2026 | 286 |
2027 | $ 248 |
Deposits - Analysis of deposits
Deposits - Analysis of deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deposits | ||
Non-interest bearing demand accounts | $ 723,228 | $ 701,645 |
Interest-bearing demand accounts | 284,747 | 301,596 |
Money market accounts | 615,149 | 615,111 |
Savings accounts | 258,230 | 213,592 |
Certificates of Deposit | 93,033 | 82,440 |
Total deposits | 1,974,387 | 1,914,384 |
Time deposits exceeding FDIC insurance limit of $250 | $ 17,015 | $ 23,859 |
Deposits - Scheduled maturities
Deposits - Scheduled maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deposits | ||
2023 | $ 80,728 | |
2024 | 4,326 | |
2025 | 7,979 | |
Total | 93,033 | |
Deposits of executive officers, directors and principal officers | $ 15,648 | $ 6,109 |
FHLB Advances (Details)
FHLB Advances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
FHLB Advances | ||
Federal Home Loan Bank (FHLB) advances | $ 131,500 | |
Interest rate | 4.61% | |
Additional amount available for advance | $ 441,511 | $ 358,759 |
Municipal letters of credit | ||
FHLB Advances | ||
Line of credit outstanding | 153,000 | 135,000 |
Securities | ||
FHLB Advances | ||
Pledge to FHLB | 0 | 0 |
Loans. | ||
FHLB Advances | ||
Pledge to FHLB | $ 866,014 | $ 657,788 |
Borrowings - Notes Payable (Det
Borrowings - Notes Payable (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Borrowings | |
Note payable | $ 3,000 |
Interest rate | 5.60% |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Nov. 16, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 24, 2020 | |
Borrowings | ||||
Note payable | $ 3,000 | |||
Subordinated notes, net of issuance costs | $ 19,447 | $ 19,376 | ||
Interest rate | 5.60% | |||
Term loan | ||||
Borrowings | ||||
Periodic interest payment | $ 14 | |||
Subordinated notes | ||||
Borrowings | ||||
Principal amount | $ 20,000 | |||
Debt issuance costs | $ 694 | |||
Subordinated notes, net of issuance costs | $ 19,400 | |||
Interest rate | 4.25% | |||
Basis points | 4.13% |
Pension and other Post Retire_3
Pension and other Post Retirement Plans - Changes in obligations and plan assets (Details) - Defined benefit pension plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in projected benefit obligation: | ||
Beginning of year | $ 28,221 | $ 29,428 |
Service cost | 189 | |
Interest cost | 808 | 760 |
Benefits paid | (1,438) | (1,556) |
Actuarial loss | (6,302) | (600) |
End of year | 21,289 | 28,221 |
Change in fair value of assets: | ||
Beginning of year | 42,867 | 39,963 |
Contributions | 1,453 | 2,000 |
Actual return on plan assets | (10,888) | 2,501 |
Benefits paid and expenses | (1,654) | (1,597) |
End of year | 31,778 | 42,867 |
Funded status at end of year (plan assets less benefit obligation) | $ 10,489 | $ 14,646 |
Pension and other Post Retire_4
Pension and other Post Retirement Plans - Amounts recognized in accumulated other comprehensive income (loss) (Details) - Defined benefit pension plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amounts recognized in accumulated other comprehensive income (loss) | ||
Total net actuarial loss | $ (10,308) | $ (3,521) |
Transition asset | 28 | |
Amounts recognized in accumulated other comprehensive income (loss) | (10,308) | (3,493) |
Accumulated benefit obligation | $ 21,288 | $ 28,221 |
Pension and other Post Retire_5
Pension and other Post Retirement Plans - Components of net periodic benefit cost and other amounts recognized in other comprehensive income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Pension and other Post Retirement Plans | ||
Net gain/(loss) | $ 6,786 | $ (1,002) |
Defined benefit pension plan | ||
Pension and other Post Retirement Plans | ||
Service cost | 189 | |
Interest cost | 808 | 760 |
Expected return on plan assets | (1,985) | (2,058) |
Amortization of transition cost | (28) | (48) |
Amortization of net loss | 21 | |
Net periodic benefit cost/(income) | (1,205) | (1,136) |
Net gain/(loss) | 6,786 | (1,002) |
Amortization of transition asset | 28 | 48 |
Amortization of prior service cost | (21) | |
Total recognized in other comprehensive income | 6,814 | (975) |
Total recognized in net periodic benefit cost and other comprehensive income | $ 5,609 | $ (2,111) |
Pension and other Post Retire_6
Pension and other Post Retirement Plans - Assumptions (Details) - Defined benefit pension plan | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Pension and other Post Retirement Plans | ||
Benefit obligation, Discount rate | 5.44% | 2.94% |
Net Periodic Benefit Cost, Discount rate | 2.94% | 2.65% |
Net Periodic Benefit Cost, Expected long-term rate of return on plan assets | 5.25% | 5.25% |
Pension and other Post Retire_7
Pension and other Post Retirement Plans - Investment Strategy and Allocation (Details) - Defined benefit pension plan | 12 Months Ended |
Dec. 31, 2022 | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Investments for long-term growth (as a percent) | 97% |
Investments for near term benefit payments (as a percent) | 3% |
Maximum | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Securities purchased in a portfolio (as a percent) | 5% |
Market value of issuer (as a percent) | 8% |
Securities less than A quality (as a percent) | 13% |
Mortgage and asset backed securities (as a percent) | 10% |
Pension and other Post Retire_8
Pension and other Post Retirement Plans - Fair value of the plan assets (Details) - Defined benefit pension plan - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Pension and other Post Retirement Plans | |||
Total plan assets | $ 31,778 | $ 42,867 | $ 39,963 |
Level 2 | |||
Pension and other Post Retirement Plans | |||
Total plan assets | 31,778 | 42,867 | |
Commingled pension trust funds-realty | |||
Pension and other Post Retirement Plans | |||
Total plan assets | 31,778 | 42,867 | |
Commingled pension trust funds-realty | Level 2 | |||
Pension and other Post Retirement Plans | |||
Total plan assets | $ 31,778 | $ 42,867 |
Pension and other Post Retire_9
Pension and other Post Retirement Plans - Contributions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined benefit pension plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions | $ 1,453 | $ 2,000 |
Pension and other Post Retir_10
Pension and other Post Retirement Plans - Pension plan asset allocation (Details) - Defined benefit pension plan | Dec. 31, 2022 | Dec. 31, 2021 |
Pension and other Post Retirement Plans | ||
Actual allocation | 100% | 100% |
Cash equivalents | ||
Pension and other Post Retirement Plans | ||
Actual allocation | 16.59% | |
Equity securities | ||
Pension and other Post Retirement Plans | ||
Target allocation | 30% | 30% |
Actual allocation | 25.05% | 35.65% |
Fixed income securities | ||
Pension and other Post Retirement Plans | ||
Target allocation | 15% | 15% |
Actual allocation | 21.70% | 34.98% |
Other financial instruments | ||
Pension and other Post Retirement Plans | ||
Target allocation | 55% | 55% |
Actual allocation | 36.66% | 29.37% |
Pension and other Post Retir_11
Pension and other Post Retirement Plans - Estimated Future Payments (Details) - Defined benefit pension plan $ in Thousands | Dec. 31, 2022 USD ($) |
Estimated Future Payments | |
2023 | $ 1,603 |
2024 | 1,635 |
2025 | 1,617 |
2026 | 1,617 |
2027 | 1,572 |
Following 5 years | $ 7,617 |
Pension and other Post Retir_12
Pension and other Post Retirement Plans - Other Postretirement Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Supplemental Executive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of Chief Executive Officers | item | 2 | ||
Benefit plan expense | $ 57 | $ 58 | |
Estimated Future Payments | |||
2023 | 79 | ||
2024 | 79 | ||
2025 | 79 | ||
2026 | 79 | ||
Following 5 years | 396 | ||
Supplemental Executive Retirement Plan | Accrued expenses and other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits accrued | 665 | 687 | |
Performance based Supplemental Employee Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit plan expense | $ 93 | 9 | |
Number of vice presidents | item | 2 | ||
Deferred Directors Fee Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit plan expense | $ 420 | 541 | |
Deferred Directors Fee Plan | Accrued expenses and other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits accrued | 6,959 | 6,955 | |
Deferred Compensation Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit plan expense | 2 | 6 | |
Deferred Compensation Plan | Accrued expenses and other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits accrued | 32 | 75 | |
Deferred Incentive Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit plan expense | 24 | $ 26 | |
Deferred Incentive Retirement Plan | Accrued expenses and other liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefits accrued | $ 517 | $ 567 |
Pension and other Post Retir_13
Pension and other Post Retirement Plans - 401(k) Savings Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Pension and other Post Retirement Plans | ||
Maximum annual contribution per employee (in percent) | 100% | |
Employer safe harbor annual contribution (in percent) | 3% | |
Minimum service eligibility for employee discretionary contribution (in years) | 1 year | |
Discretionary contributions | $ 440 | $ 457 |
Pension and other Post Retir_14
Pension and other Post Retirement Plans - Employee discretionary contribution (Details) | 12 Months Ended |
Dec. 31, 2022 item | |
Under age 35 | |
Pension and other Post Retirement Plans | |
Employee discretionary contribution, Compensation (as a percent) | 1% |
Under age 35 | Maximum | |
Pension and other Post Retirement Plans | |
Age of employees | 35 |
35 years of age, but less than 45 | |
Pension and other Post Retirement Plans | |
Employee discretionary contribution, Compensation (as a percent) | 2% |
35 years of age, but less than 45 | Maximum | |
Pension and other Post Retirement Plans | |
Age of employees | 45 |
35 years of age, but less than 45 | Minimum | |
Pension and other Post Retirement Plans | |
Age of employees | 35 |
45 years of age, but less than 55 | |
Pension and other Post Retirement Plans | |
Employee discretionary contribution, Compensation (as a percent) | 5% |
45 years of age, but less than 55 | Maximum | |
Pension and other Post Retirement Plans | |
Age of employees | 55 |
45 years of age, but less than 55 | Minimum | |
Pension and other Post Retirement Plans | |
Age of employees | 45 |
55 years of age or older | |
Pension and other Post Retirement Plans | |
Employee discretionary contribution, Compensation (as a percent) | 8.50% |
55 years of age or older | Minimum | |
Pension and other Post Retirement Plans | |
Age of employees | 55 |
Pension and other Post Retir_15
Pension and other Post Retirement Plans - Restricted stock awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension Plan and Stock Compensation | |||
Stock-based compensation costs | $ 503 | $ 69 | |
Shares | |||
Non-vested at beginning of period (in shares) | 22,922 | ||
Non-vested at end of period (in shares) | 11,677 | 22,922 | |
Restricted Stock Awards | |||
Pension Plan and Stock Compensation | |||
Granted | 0 | 15,162 | |
Vesting percentage | 33% | ||
Unamortized expense | $ 57 | ||
Shares | |||
Non-vested at beginning of period (in shares) | 22,922 | ||
Granted (in shares) | 48,004 | ||
Vested (in shares) | (11,245) | ||
Non-vested at end of period (in shares) | 11,677 | 22,922 | |
Weighted Average Fair Value | |||
Non-vested at beginning of period (in dollars per share) | $ 28.92 | ||
Vested (in dollars per share) | 28.59 | ||
Non-vested at end of period (in dollars per share) | $ 29.24 | $ 28.92 |
Pension Plan and Stock Compensa
Pension Plan and Stock Compensation - Restricted Stock Units (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 22, 2021 | Dec. 31, 2022 | |
Pension Plan and Stock Compensation | ||
Maximum discretionary contributions to a KSOP trust | $ 200 | |
Restricted Stock Units (RSUs) | ||
Pension Plan and Stock Compensation | ||
Granted (in shares) | 26,255 | |
Restricted Stock Units (RSUs) | Officers | ||
Pension Plan and Stock Compensation | ||
Granted (in shares) | 31,504 | |
Vesting period | 3 years | |
Restricted Stock Units (RSUs) | Officers | First anniversary | ||
Pension Plan and Stock Compensation | ||
Vesting percentage | 33% | |
Restricted Stock Units (RSUs) | Officers | Second anniversary | ||
Pension Plan and Stock Compensation | ||
Vesting percentage | 33% | |
Restricted Stock Units (RSUs) | Officers | Third anniversary | ||
Pension Plan and Stock Compensation | ||
Vesting percentage | 33% | |
Restricted Stock Units (RSUs) | Non-employee directors | ||
Pension Plan and Stock Compensation | ||
Granted (in shares) | 16,500 | |
Vesting percentage | 100% |
Pension Plan and Stock Compen_2
Pension Plan and Stock Compensation - Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension Plan and Stock Compensation | |||
Stock-based compensation costs | $ 503 | $ 69 | |
Restricted stock expense | $ 166 | $ 475 | |
Shares | |||
Non-vested at beginning of period (in shares) | 22,922 | ||
Non-vested at end of period (in shares) | 11,677 | 22,922 | |
Restricted Stock Awards | |||
Pension Plan and Stock Compensation | |||
Restricted stock expense | $ 166 | $ 475 | |
Granted | 0 | 15,162 | |
Vesting percentage | 33% | ||
Unamortized expense | $ 57 | ||
Shares | |||
Non-vested at beginning of period (in shares) | 22,922 | ||
Granted (in shares) | 48,004 | ||
Vested (in shares) | (11,245) | ||
Non-vested at end of period (in shares) | 11,677 | 22,922 | |
Weighted Average Fair Value | |||
Non-vested at beginning of period (in dollars per share) | $ 28.92 | ||
Vested (in dollars per share) | 28.59 | ||
Non-vested at end of period (in dollars per share) | $ 29.24 | $ 28.92 | |
Restricted Stock Units (RSUs) | |||
Shares | |||
Non-vested at beginning of period (in shares) | 48,004 | ||
Granted (in shares) | 26,255 | ||
Vested (in shares) | (11,637) | ||
Forfeited (in shares) | (2,875) | ||
Non-vested at end of period (in shares) | 59,747 | 48,004 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current expense | ||
Federal | $ 6,488 | $ 5,353 |
State | 384 | 440 |
Total | 6,872 | 5,793 |
Deferred expense (benefit) | ||
Federal | (934) | (326) |
State | (410) | (630) |
Total | (1,344) | (956) |
Change in valuation allowance | 386 | 553 |
Total provision for income taxes | $ 5,914 | $ 5,390 |
Income Taxes - Effective income
Income Taxes - Effective income tax reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Tax expense at statutory rate | $ 6,356 | $ 5,602 |
(Decrease) increase in taxes resulting from: | ||
Net earnings on bank-owned life insurance | (200) | (167) |
Tax-exempt municipal bond income, net of disallowed interest expense | (465) | (329) |
State income tax, net of federal tax benefit | (26) | 209 |
Valuation allowance | 386 | 553 |
Other | (137) | (478) |
Total provision for income taxes | $ 5,914 | $ 5,390 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Allowance for loan losses | $ 5,991 | $ 4,824 |
Reserve for unfunded commitments | 55 | 55 |
Deferred loan fees, net of costs | 1,130 | 962 |
Deferred compensation | 2,420 | 2,431 |
Available for sale securities | 16,063 | 293 |
Non accrual interest | 298 | 336 |
State NOL | 2,476 | 2,284 |
Pension/deferred compensation OCI | 2,463 | 894 |
Total deferred tax assets | 30,896 | 12,079 |
Deferred tax liabilities: | ||
Intangible assets | (1,004) | (902) |
Organization costs-holding company | (24) | (22) |
Organization costs-HVIA | (26) | (23) |
Pension | (2,797) | (2,717) |
Accumulated depreciation | (517) | (681) |
Accretion | (39) | (16) |
Total deferred tax liabilities | (4,407) | (4,361) |
Net deferred tax asset before valuation allowance | 27,089 | 7,718 |
Valuation allowance | (7,993) | (3,629) |
Net deferred tax asset | $ 19,096 | $ 4,089 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Federal statutory rate | 21% | 21% |
Valuation allowance | $ 7,993 | $ 3,629 |
State | ||
Income Taxes | ||
Operating loss carry forwards | $ 34,200 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ 182,836 | $ 135,423 |
Net current period other comprehensive income/(loss) | (64,753) | (5,262) |
Ending balance | 138,138 | 182,836 |
Unrealized Gains and Losses on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (1,072) | 4,949 |
Other comprehensive income/(loss) before reclassification | (59,358) | (6,021) |
Net current period other comprehensive income/(loss) | (59,358) | (6,021) |
Ending balance | (60,430) | (1,072) |
Amortization of Defined Benefit Pension | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (2,506) | (3,277) |
Other comprehensive income/(loss) before reclassification | (5,361) | 792 |
Less amounts reclassified from accumulated other comprehensive income | 22 | 21 |
Net current period other comprehensive income/(loss) | (5,383) | 771 |
Ending balance | (7,889) | (2,506) |
Deferred Compensation Liability | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 135 | 147 |
Other comprehensive income/(loss) before reclassification | (12) | (12) |
Net current period other comprehensive income/(loss) | (12) | (12) |
Ending balance | 123 | 135 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (3,443) | 1,819 |
Other comprehensive income/(loss) before reclassification | (64,731) | (5,241) |
Less amounts reclassified from accumulated other comprehensive income | 22 | 21 |
Net current period other comprehensive income/(loss) | (64,753) | (5,262) |
Ending balance | $ (68,196) | $ (3,443) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Amount Reclassified from AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) | ||
Employee benefits transition asset | $ 3,565 | $ 2,783 |
Employee benefits actuarial gains | 1,052 | 1,030 |
Total before tax | 30,277 | 26,677 |
Provision for income taxes | 5,914 | 5,390 |
Net of tax | 24,363 | 21,287 |
Reclassifications out of accumulated other comprehensive income (loss) | Amortization of Defined Benefit Pension | ||
Accumulated Other Comprehensive Income (Loss) | ||
Employee benefits transition asset | (28) | (48) |
Employee benefits actuarial gains | 21 | |
Total before tax | (28) | (27) |
Provision for income taxes | (6) | (6) |
Net of tax | (22) | (21) |
Reclassifications out of accumulated other comprehensive income (loss) | Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) | ||
Net of tax | $ (22) | $ (21) |
Regulatory Capital Matters (Det
Regulatory Capital Matters (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Total capital to risk weighted assets | ||
Total capital to risk weighted assets, Actual amount | $ 235,346 | $ 192,359 |
Total capital to risk weighted assets, Actual ratio | 0.1395 | 0.1412 |
Total capital to risk weighted assets, For Capital Adequacy Purposes | $ 134,986 | $ 109,000 |
Total capital to risk weighted assets, For Capital Adequacy Purposes Ratio | 0.0800 | 0.0800 |
Total capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer | $ 166,624 | $ 134,546 |
Total capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer Ratio | 0.09875 | 0.09875 |
Total capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions | $ 168,733 | $ 136,250 |
Total capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 0.1000 | 0.1000 |
Tier 1 (Core) capital to risk weighted assets | ||
Tier 1 (Core) capital to risk weighted assets, Actual amount | $ 214,243 | $ 175,318 |
Tier 1 (Core) capital to risk weighted assets, Actual ratio | 0.1270 | 0.1287 |
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes | $ 101,240 | $ 81,750 |
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes Ratio | 0.0600 | 0.0600 |
Tier 1 (Core) capital to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer | $ 132,877 | $ 107,296 |
Tier 1 (Core) capital to risk weighted assets, Actual amount | 0.07875 | 0.07875 |
Tier 1 (Core) capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions | $ 134,986 | $ 109,000 |
Tier 1 (Core) capital to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 0.0800 | 0.0800 |
Common Tier 1 (CET1) to risk weighted assets | ||
Common Tier 1 (CET1) to risk weighted assets, Actual amount | $ 214,243 | $ 175,318 |
Common Tier 1 (CET1) to risk weighted assets, Actual ratio | 0.1270 | 0.1287 |
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes | $ 75,930 | $ 61,312 |
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes Ratio | 0.0450 | 0.0450 |
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer | $ 107,567 | $ 86,859 |
Common Tier 1 (CET1) to risk weighted assets, For Capital Adequacy Purposes with Capital Buffer Ratio | 0.06375 | 0.06375 |
Common Tier 1 (CET1) to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions | $ 109,677 | $ 88,562 |
Common Tier 1 (CET1) to risk weighted assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 0.0650 | 0.0650 |
Tier 1 (Core) Capital to average assets | ||
Tier 1 (Core) Capital to average assets, Actual amount | $ 214,243 | $ 175,318 |
Tier 1 (Core) Capital to average assets, Actual ratio | 0.0909 | 0.0815 |
Tier 1 (Core) Capital to average assets, For Capital Adequacy Purposes | $ 94,250 | $ 86,093 |
Tier 1 (Core) Capital to average assets, For Capital Adequacy Purposes Ratio | 0.0400 | 0.0400 |
Tier 1 (Core) Capital to average assets, To be Well Capitalized under Prompt Corrective Action Provisions | $ 117,813 | $ 107,616 |
Tier 1 (Core) Capital to average assets, To be Well Capitalized under Prompt Corrective Action Provisions Ratio | 0.0500 | 0.0500 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Option to extend | true | |
Option to terminate | true | |
Operating lease right-of-use assets | $ 4,029 | $ 3,038 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Operating lease liability | $ 4,029 | $ 3,038 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 10 years | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year |
Leases - Future undiscounted le
Leases - Future undiscounted lease payments for operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Years Ending December 31, | ||
2023 | $ 878 | |
2024 | 831 | |
2025 | 762 | |
2026 | 711 | |
2027 | 497 | |
Thereafter | 515 | |
Total undiscounted lease payments | 4,194 | |
Discount | 165 | |
Total discounted lease payments | $ 4,029 | $ 3,038 |
Operating lease weighted average remaining lease term (years) | 5 years 5 months 15 days | |
Operating lease weighted average discount rate | 3.38% | |
Operating Lease, Expense | $ 911 | $ 792 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Noninterest Income | ||
Service charges on deposit accounts | $ 693 | $ 638 |
Overdraft fees | 328 | 279 |
Other | 365 | 359 |
Trust income | 4,764 | 4,788 |
Investment advisory income | 4,537 | 4,853 |
Earnings on bank owned life insurance | 950 | 793 |
Other | 1,052 | 1,030 |
TOTAL NONINTEREST INCOME | 11,996 | 12,102 |
Other noninterest income within the scope of ASC 606 | 913 | 805 |
Other noninterest income outside the scope of ASC 606 | $ 139 | $ 225 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments to extend credit | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Off-balance sheet liability | $ 389,062 | $ 373,268 |
Standby letters of credit | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Off-balance sheet liability | $ 13,552 | $ 11,501 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Mar. 15, 2023 | Feb. 16, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 12, 2023 | |
Subsequent Event [Line Items] | |||||
Cash dividend paid | $ 0.83 | $ 0.80 | |||
Subsequent Events. | |||||
Subsequent Event [Line Items] | |||||
Dividend declared | $ 0.23 | ||||
Cash dividend paid | $ 0.23 | ||||
Subsequent Events. | Signature Bank [Member] | |||||
Subsequent Event [Line Items] | |||||
Bank notes | $ 5 |
Parent Company Information - Co
Parent Company Information - Condensed Statements of Condition - (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | |||
Cash and due from banks | $ 86,081 | $ 306,179 | |
Other assets | 42,359 | 27,829 | |
Total assets | 2,287,334 | 2,142,583 | |
Liabilities and stockholders' equity | |||
Subordinated notes, net of issuance costs | 19,447 | 19,376 | |
Note payable | 3,000 | ||
Total liabilities | 2,149,196 | 1,959,747 | |
Total stockholders' equity | 138,138 | 182,836 | $ 135,423 |
Total liabilities and stockholders' equity | 2,287,334 | 2,142,583 | |
Parent company | |||
Assets | |||
Cash and due from banks | 4,596 | 24,441 | |
Investment in subsidiaries | 152,214 | 179,487 | |
Goodwill and intangible assets | 1,564 | 1,850 | |
Other assets | 366 | 211 | |
Total assets | 158,740 | 205,989 | |
Liabilities and stockholders' equity | |||
Subordinated notes, net of issuance costs | 19,447 | 19,376 | |
Note payable | 3,000 | ||
Other liabilities | 1,155 | 777 | |
Total liabilities | 20,602 | 23,153 | |
Total stockholders' equity | 138,138 | 182,836 | |
Total liabilities and stockholders' equity | $ 158,740 | $ 205,989 |
Parent Company Information - _2
Parent Company Information - Condensed Statements of Income and Comprehensive Income (Loss) - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Income | ||
Total operating income | $ 84,223 | $ 64,429 |
Operating Expenses | ||
Salaries and employee benefits | 22,461 | 19,710 |
Professional fees | 4,066 | 3,649 |
Directors' fees and expenses | 1,157 | 1,041 |
Intangible amortization | 286 | 285 |
NET INCOME | 24,363 | 21,287 |
Comprehensive income | (40,390) | 16,025 |
Parent company | ||
Operating Income | ||
Dividend income from operating subsidiaries | 6,792 | 5,329 |
Servicing Fee | 553 | 372 |
Total operating income | 7,345 | 5,701 |
Operating Expenses | ||
Interest on borrowings | 1,077 | 1,087 |
Salaries and employee benefits | 553 | 372 |
Professional fees | 413 | 172 |
Directors' fees and expenses | 162 | 189 |
Intangible amortization | 286 | 286 |
Other expenses and income taxes | (28) | 59 |
Total operating expenses | 2,463 | 2,165 |
Equity in undistributed earnings of subsidiary | 19,481 | 17,751 |
NET INCOME | 24,363 | 21,287 |
Comprehensive income | $ (40,390) | $ 16,025 |
Parent Company Information - _3
Parent Company Information - Condensed Statements of Cash Flows - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net income after equity in undistributed earnings of subsidiary | $ 24,363 | $ 21,287 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Stock-based compensation costs | 503 | 69 |
Amortization of intangibles | 286 | 285 |
Restricted stock expense | 166 | 475 |
Net cash provided by (used in) operating activities | 30,483 | 20,320 |
Cash flows from investing activities | ||
Net cash used in investing activities | (434,107) | (291,307) |
Cash flows from financing activities | ||
Proceeds of issuance of stock offering , net of costs | 35,252 | |
Repayments of note payable | (3,000) | |
Purchases of treasury stock | (308) | (379) |
Net cash (used in) provided by financing activities | 183,526 | 455,934 |
Net increase in cash and cash equivalents | (220,098) | 184,947 |
Beginning cash and cash equivalents | 306,179 | 121,232 |
Ending cash and cash equivalents | 86,081 | 306,179 |
Parent company | ||
Cash flows from operating activities | ||
Net income after equity in undistributed earnings of subsidiary | 24,363 | 21,287 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Equity in undistributed earnings of subsidiary companies | (19,481) | (17,751) |
Stock-based compensation costs | 503 | 69 |
Amortization of intangibles | 286 | 286 |
Restricted stock expense | 166 | 475 |
Other, net | 295 | (198) |
Net cash provided by (used in) operating activities | 6,132 | 4,168 |
Cash flows from investing activities | ||
Investment in operating subsidiary | (18,000) | (21,500) |
Net cash used in investing activities | (18,000) | (21,500) |
Cash flows from financing activities | ||
Proceeds of issuance of stock offering , net of costs | 35,252 | |
Repayments of note payable | (3,000) | |
Dividends paid, common stock | (4,669) | (4,029) |
Purchases of treasury stock | (308) | (379) |
Net cash (used in) provided by financing activities | (7,977) | 30,844 |
Net increase in cash and cash equivalents | (19,845) | 13,512 |
Beginning cash and cash equivalents | 24,441 | 10,929 |
Ending cash and cash equivalents | $ 4,596 | $ 24,441 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information | ||
Net interest income | $ 78,088 | $ 60,461 |
Noninterest income | 11,996 | 12,102 |
Provision for loan loss | (9,517) | (2,428) |
Noninterest expenses | (50,290) | (43,458) |
Income tax expense | (5,914) | (5,390) |
NET INCOME | 24,363 | 21,287 |
Total assets | 2,287,334 | 2,142,583 |
Banking | ||
Segment Information | ||
Net interest income | 78,088 | 60,461 |
Noninterest income | 2,695 | 2,461 |
Provision for loan loss | (9,517) | (2,428) |
Noninterest expenses | (42,898) | (36,736) |
Income tax expense | (5,513) | (4,777) |
NET INCOME | 22,855 | 18,981 |
Total assets | 2,279,469 | 2,133,440 |
Wealth Management | ||
Segment Information | ||
Noninterest income | 9,301 | 9,641 |
Noninterest expenses | (7,392) | (6,722) |
Income tax expense | (401) | (613) |
NET INCOME | 1,508 | 2,306 |
Total assets | $ 7,865 | $ 9,143 |