Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-21344 | |
Document Period End Date | Sep. 30, 2022 | |
Entity Registrant Name | FIRST KEYSTONE CORPORATION | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 23-2249083 | |
Entity Address, Address Line One | 111 West Front Street | |
Entity Address, City or Town | Berwick | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 18603 | |
City Area Code | 570 | |
Local Phone Number | 752-3671 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Title of 12(b) Security | Common stock | |
Trading Symbol | FKYS | |
Entity Common Stock, Shares Outstanding | 6,000,445 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Central Index Key | 0000737875 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and due from banks | $ 8,677,000 | $ 9,600,000 |
Interest-bearing deposits in other banks | 1,803,000 | 51,738,000 |
Total cash and cash equivalents | 10,480,000 | 61,338,000 |
Time deposits with other banks | 247,000 | |
Debt securities available-for-sale, at fair value | 386,569,000 | 437,916,000 |
Marketable equity securities, at fair value | 1,612,000 | 1,962,000 |
Restricted investment in bank stocks, at cost | 4,408,000 | 1,919,000 |
Loans | 844,984,000 | 746,835,000 |
Loans held for sale | 691,000 | 6,006,000 |
Allowance for loan losses | (9,211,000) | (8,680,000) |
Net loans | 836,464,000 | 744,161,000 |
Premises and equipment, net | 17,823,000 | 18,158,000 |
Operating lease right-of-use assets | 999,000 | 1,025,000 |
Accrued interest receivable | 4,479,000 | 4,361,000 |
Cash surrender value of bank owned life insurance | 25,239,000 | 24,792,000 |
Investments in low-income housing partnerships | 2,905,000 | 1,530,000 |
Goodwill | 19,133,000 | 19,133,000 |
Deferred income taxes | 10,227,000 | |
Other assets | 3,912,000 | 3,808,000 |
TOTAL ASSETS | 1,324,250,000 | 1,320,350,000 |
LIABILITIES | ||
Non-interest bearing | 251,894,000 | 249,040,000 |
Interest bearing | 806,415,000 | 828,929,000 |
Total deposits | 1,058,309,000 | 1,077,969,000 |
Short-term borrowings | 94,748,000 | 27,377,000 |
Long-term borrowings | 25,000,000 | 35,000,000 |
Subordinated debentures | 25,000,000 | 25,000,000 |
Operating lease liabilities | 1,484,000 | 1,499,000 |
Accrued interest payable | 573,000 | 251,000 |
Deferred income taxes | 631,000 | |
Other liabilities | 3,713,000 | 4,068,000 |
TOTAL LIABILITIES | 1,208,827,000 | 1,171,795,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $2.00 per share; authorized 1,000,000 shares as of September 30, 2022 and December 31, 2021; issued 0 as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, par value $2.00 per share; authorized 20,000,000 shares as of September 30, 2022 and December 31, 2021; issued 6,232,056 as of September 30, 2022 and 6,178,835 as of December 31, 2021; outstanding 6,000,445 as of September 30, 2022 and 5,947,223 as of December 31, 2021 | 12,464,000 | 12,358,000 |
Surplus | 42,072,000 | 40,940,000 |
Retained earnings | 99,238,000 | 93,378,000 |
Accumulated other comprehensive (loss) income | (32,642,000) | 7,588,000 |
Treasury stock, at cost, 231,611 shares as of September 30, 2022 and 231,612 shares as of December 31, 2021 | (5,709,000) | (5,709,000) |
TOTAL STOCKHOLDERS' EQUITY | 115,423,000 | 148,555,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,324,250,000 | $ 1,320,350,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 2 | $ 2 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 2 | $ 2 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,232,056 | 6,178,835 |
Common stock, shares outstanding | 6,000,445 | 5,947,223 |
Treasury stock, shares | 231,611 | 231,612 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
INTEREST INCOME | ||||
Interest and fees on loans | $ 8,986 | $ 8,331 | $ 25,648 | $ 24,474 |
Interest and dividend income on securities: | ||||
Taxable | 1,960 | 1,455 | 5,247 | 4,055 |
Tax-exempt | 842 | 854 | 2,527 | 2,556 |
Dividends | 19 | 25 | 43 | 49 |
Dividend income on restricted investment in bank stocks | 88 | 20 | 158 | 73 |
Interest on interest-bearing deposits in other banks | 2 | 31 | 14 | 43 |
Total interest income | 11,897 | 10,716 | 33,637 | 31,250 |
INTEREST EXPENSE | ||||
Interest on deposits | 1,350 | 790 | 2,741 | 2,368 |
Interest on short-term borrowings | 620 | 25 | 830 | 65 |
Interest on long-term borrowings | 135 | 195 | 493 | 623 |
Interest on subordinated debt | 273 | 273 | 817 | 820 |
Total interest expense | 2,378 | 1,283 | 4,881 | 3,876 |
Net interest income | 9,519 | 9,433 | 28,756 | 27,374 |
Provision for loan losses | 219 | 185 | 656 | 455 |
Net interest income after provision for loan losses | 9,300 | 9,248 | 28,100 | 26,919 |
NON-INTEREST INCOME | ||||
Trust department | 236 | 243 | 754 | 761 |
Service charges and fees | 573 | 496 | 1,631 | 1,352 |
Increase in cash surrender value of life insurance | 151 | 149 | 447 | 448 |
ATM fees and debit card income | 531 | 555 | 1,598 | 1,639 |
Net (losses) gains on sales of mortgage loans | (4) | 139 | (38) | 801 |
Net securities (losses) gains | (50) | 22 | (181) | 165 |
Other | 56 | 93 | 185 | 271 |
Total non-interest income | 1,493 | 1,697 | 4,396 | 5,437 |
NON-INTEREST EXPENSE | ||||
Salaries and employee benefits | 3,677 | 3,303 | 10,693 | 10,064 |
Occupancy, net | 467 | 448 | 1,437 | 1,428 |
Furniture and equipment expense | 137 | 150 | 439 | 430 |
Computer expense | 373 | 315 | 1,101 | 900 |
Professional services | 295 | 244 | 963 | 776 |
Pennsylvania shares tax | 312 | 309 | 960 | 935 |
FDIC insurance, net | 116 | 103 | 373 | 310 |
ATM and debit card fees | 274 | 281 | 644 | 764 |
Data processing fees | 205 | 295 | 714 | 912 |
Foreclosed assets held for resale expense, net | 3 | |||
Advertising | 96 | 101 | 286 | 282 |
Other | 759 | 718 | 2,212 | 2,207 |
Total non-interest expense | 6,711 | 6,267 | 19,822 | 19,011 |
Income before income tax expense | 4,082 | 4,678 | 12,674 | 13,345 |
Income tax expense | 578 | 655 | 1,805 | 1,839 |
NET INCOME | $ 3,504 | $ 4,023 | $ 10,869 | $ 11,506 |
Net income per share: | ||||
Basic | $ 0.58 | $ 0.68 | $ 1.82 | $ 1.95 |
Diluted | 0.58 | 0.68 | 1.82 | 1.95 |
Dividends per share | $ 0.28 | $ 0.28 | $ 0.84 | $ 0.83 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | |||||
Net Income | $ 3,504 | $ 4,023 | $ 10,869 | $ 11,506 | |
Other comprehensive loss: | |||||
Unrealized net holding losses on debt securities available-for-sale arising during the period, net of income taxes | (12,204) | (2,460) | (40,209) | (4,185) | |
Less reclassification adjustment for net gains included in net income, net of income taxes | [1],[2] | (3) | (21) | (3) | |
Total other comprehensive loss | (12,204) | (2,463) | (40,230) | (4,188) | |
Total Comprehensive (Loss) Income | $ (8,700) | $ 1,560 | $ (29,361) | $ 7,318 | |
[1] Gross amounts are included in net securities (losses) gains on the consolidated statements of income in non-interest income. Income tax amounts are included in income tax expense on the consolidated statements of income. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ (3,243) | $ (654) | $ (10,688) | $ (1,113) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | $ 0 | $ (1) | $ (6) | $ (1) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total |
Balance at Dec. 31, 2020 | $ 12,231 | $ 39,543 | $ 85,307 | $ 12,870 | $ (5,709) | $ 144,242 |
Balance (in shares) at Dec. 31, 2020 | 6,115,281 | |||||
Net Income | 3,878 | 3,878 | ||||
Other comprehensive (loss) income, net of taxes | (3,923) | (3,923) | ||||
Issuance of common stock under dividend reinvestment plan | $ 32 | 351 | 383 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 16,304 | |||||
Dividends | (1,647) | (1,647) | ||||
Balance at Mar. 31, 2021 | $ 12,263 | 39,894 | 87,538 | 8,947 | (5,709) | 142,933 |
Balance (in shares) at Mar. 31, 2021 | 6,131,585 | |||||
Balance at Dec. 31, 2020 | $ 12,231 | 39,543 | 85,307 | 12,870 | (5,709) | 144,242 |
Balance (in shares) at Dec. 31, 2020 | 6,115,281 | |||||
Net Income | 11,506 | |||||
Other comprehensive (loss) income, net of taxes | (4,188) | |||||
Balance at Sep. 30, 2021 | $ 12,324 | 40,575 | 91,916 | 8,682 | (5,709) | 147,788 |
Balance (in shares) at Sep. 30, 2021 | 6,162,075 | |||||
Balance at Mar. 31, 2021 | $ 12,263 | 39,894 | 87,538 | 8,947 | (5,709) | 142,933 |
Balance (in shares) at Mar. 31, 2021 | 6,131,585 | |||||
Net Income | 3,605 | 3,605 | ||||
Other comprehensive (loss) income, net of taxes | 2,198 | 2,198 | ||||
Issuance of common stock under dividend reinvestment plan | $ 30 | 329 | 359 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 14,976 | |||||
Dividends | (1,593) | (1,593) | ||||
Balance at Jun. 30, 2021 | $ 12,293 | 40,223 | 89,550 | 11,145 | (5,709) | 147,502 |
Balance (in shares) at Jun. 30, 2021 | 6,146,561 | |||||
Net Income | 4,023 | 4,023 | ||||
Other comprehensive (loss) income, net of taxes | (2,463) | (2,463) | ||||
Issuance of common stock under dividend reinvestment plan | $ 31 | 352 | 383 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 15,514 | |||||
Dividends | (1,657) | (1,657) | ||||
Balance at Sep. 30, 2021 | $ 12,324 | 40,575 | 91,916 | 8,682 | (5,709) | 147,788 |
Balance (in shares) at Sep. 30, 2021 | 6,162,075 | |||||
Balance at Dec. 31, 2021 | $ 12,358 | 40,940 | 93,378 | 7,588 | (5,709) | 148,555 |
Balance (in shares) at Dec. 31, 2021 | 6,178,835 | |||||
Net Income | 3,543 | 3,543 | ||||
Other comprehensive (loss) income, net of taxes | (17,282) | (17,282) | ||||
Issuance of common stock under dividend reinvestment plan | $ 32 | 372 | 404 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 16,297 | |||||
Dividends | (1,665) | (1,665) | ||||
Balance at Mar. 31, 2022 | $ 12,390 | 41,312 | 95,256 | (9,694) | (5,709) | 133,555 |
Balance (in shares) at Mar. 31, 2022 | 6,195,132 | |||||
Balance at Dec. 31, 2021 | $ 12,358 | 40,940 | 93,378 | 7,588 | (5,709) | 148,555 |
Balance (in shares) at Dec. 31, 2021 | 6,178,835 | |||||
Net Income | 10,869 | |||||
Other comprehensive (loss) income, net of taxes | (40,230) | |||||
Balance at Sep. 30, 2022 | $ 12,464 | 42,072 | 99,238 | (32,642) | (5,709) | 115,423 |
Balance (in shares) at Sep. 30, 2022 | 6,232,056 | |||||
Balance at Mar. 31, 2022 | $ 12,390 | 41,312 | 95,256 | (9,694) | (5,709) | 133,555 |
Balance (in shares) at Mar. 31, 2022 | 6,195,132 | |||||
Net Income | 3,822 | 3,822 | ||||
Other comprehensive (loss) income, net of taxes | (10,744) | (10,744) | ||||
Issuance of common stock under dividend reinvestment plan | $ 36 | 379 | 415 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 17,840 | |||||
Dividends | (1,669) | (1,669) | ||||
Balance at Jun. 30, 2022 | $ 12,426 | 41,691 | 97,409 | (20,438) | (5,709) | 125,379 |
Balance (in shares) at Jun. 30, 2022 | 6,212,972 | |||||
Net Income | 3,504 | 3,504 | ||||
Other comprehensive (loss) income, net of taxes | (12,204) | (12,204) | ||||
Issuance of common stock under dividend reinvestment plan | $ 38 | 381 | 419 | |||
Issuance of common stock under dividend reinvestment plan (in shares) | 19,084 | |||||
Dividends | (1,675) | (1,675) | ||||
Balance at Sep. 30, 2022 | $ 12,464 | $ 42,072 | $ 99,238 | $ (32,642) | $ (5,709) | $ 115,423 |
Balance (in shares) at Sep. 30, 2022 | 6,232,056 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||
Cash dividends, per share | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.28 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,869,000 | $ 11,506,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 656,000 | 455,000 |
Depreciation and amortization | 792,000 | 775,000 |
Net premium amortization on securities | 2,346,000 | 2,124,000 |
Deferred income tax benefit | (164,000) | (101,000) |
Net losses (gains) on sales of mortgage loans | 38,000 | (801,000) |
Proceeds from sales of mortgage loans originated for sale | 4,426,000 | 24,820,000 |
Originations of mortgage loans originated for sale | (7,245,000) | (26,203,000) |
Net securities losses (gains) | 181,000 | (165,000) |
(Increase) decrease in accrued interest receivable | (118,000) | 261,000 |
Increase in cash surrender value of bank owned life insurance | (447,000) | (448,000) |
Net losses on disposals of premises and equipment | 11,000 | 3,000 |
Increase in other assets | (85,000) | (1,422,000) |
Amortization of investment in low-income housing partnerships | 173,000 | 278,000 |
Increase in accrued interest payable | 322,000 | 135,000 |
(Decrease) increase in other liabilities | (363,000) | 44,000 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 11,392,000 | 11,261,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of equity securities and debt securities available-for-sale | 170,000 | 6,000 |
Proceeds from maturities and redemptions of debt securities available-for-sale | 36,400,000 | 42,974,000 |
Purchases of debt securities available-for-sale | (38,324,000) | (116,522,000) |
Net decrease in time deposits with other banks | 247,000 | |
Net change in restricted investment in bank stocks | (2,489,000) | (57,000) |
Net increase in loans | (90,178,000) | (34,091,000) |
Purchase of premises and equipment | (445,000) | (308,000) |
Purchase of investment in real estate venture | (1,548,000) | |
Proceeds from sales of foreclosed assets held for resale | 28,000 | |
NET CASH USED IN INVESTING ACTIVITIES | (96,167,000) | (107,970,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net (decrease) increase in deposits | (19,660,000) | 208,016,000 |
Net increase in short-term borrowings | 67,371,000 | 10,359,000 |
Repayment of finance lease obligations | (7,000) | (7,000) |
Repayment of long-term borrowings | (10,000,000) | (10,000,000) |
Common stock issued | 1,222,000 | 1,106,000 |
Dividends paid | (5,009,000) | (4,897,000) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 33,917,000 | 204,577,000 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (50,858,000) | 107,868,000 |
CASH AND CASH EQUIVALENTS, BEGINNING | 61,338,000 | 24,180,000 |
CASH AND CASH EQUIVALENTS, ENDING | 10,480,000 | 132,048,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 4,559,000 | 3,741,000 |
Income taxes paid | 1,486,000 | 1,949,000 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Loans transferred from held for sale to held for investment portfolio | (7,900,000) | |
Common stock subscription receivable | 16,000 | 19,000 |
Right-of-use assets obtained in exchange for lease liabilities | $ 35,000 | $ 33,000 |
BASIS OF PRESENTATION, SUMMARY
BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS | |
BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS | NOTE 1 ― BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS The consolidated financial statements include the accounts of First Keystone Corporation (the “Corporation”) and its wholly owned subsidiary First Keystone Community Bank (the “Bank”) (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. Operating results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results for the year ending December 31, 2022. For further information, refer to the consolidated financial statements and notes thereto included in First Keystone Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021. Subsequent Events The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2022 for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued. On October 21, 2022, the Company completed the purchase of an office building located in Bethlehem, Pennsylvania, with a total cost of $1,107,000. The Company intends to complete property renovations and utilize the building as a full-service banking facility. |
RECENT ACCOUNTING STANDARDS UPD
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | 9 Months Ended |
Sep. 30, 2022 | |
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | |
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | NOTE 2 ― RECENT ACCOUNTING STANDARDS UPDATES (“ASU”) Recently adopted ASUs: Pending ASUs: In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures , which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) by creditors that have adopted the current expected credit losses (“CECL”) model and enhances disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The ASU also amends the guidance on “vintage disclosures” to require disclosure of current-period gross charge-offs by year of origination. For entities that have not yet adopted ASU 2016-13, the amendments in ASU 2022-02 are effective upon adoption of ASU 2016-13. Entities may elect to apply the guidance on TDR recognition and measurement by using a modified retrospective transition method, which would result in a cumulative-effect adjustment to retained earnings, or to adopt the amendments prospectively. If an entity elects to adopt the updated guidance on TDR recognition and measurement prospectively, the guidance should be applied to modifications occurring after the date of adoption. The amendments on TDR disclosures and vintage disclosures should be adopted prospectively. The Company plans to adopt ASU 2022-02 upon the adoption of ASU 2016-13 and is currently evaluating the provisions of ASU 2022-02 and ASU 2016-13 to determine the potential impact the new standard will have on the Company’s consolidated financial statements. |
SECURITIES
SECURITIES | 9 Months Ended |
Sep. 30, 2022 | |
SECURITIES | |
SECURITIES | NOTE 3 — SECURITIES The Company classifies its securities as either “Held-to-Maturity” or “Available-for-Sale” at the time of purchase. Securities are accounted for on a trade date basis. Debt securities are classified as Held-to-Maturity when the Company has the ability and positive intent to hold the securities to maturity. Securities classified as Held-to-Maturity are carried at cost adjusted for amortization of premium and accretion of discount to maturity. Debt securities not classified as Held-to-Maturity are included in the Available-for-Sale category and are carried at fair value. The amount of any unrealized gain or loss, net of the effect of deferred income taxes, is reported as accumulated other comprehensive (loss) income (AOCI) in the consolidated balance sheets and consolidated statements of changes in stockholders’ equity. Management’s decision to sell Available-for-Sale securities is based on changes in economic conditions, controlling the sources and applications of funds, terms, availability of and yield of alternative investments, interest rate risk and the need for liquidity. Equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. Equity securities without readily determinable fair values are recorded at cost less impairment, if any. The cost of debt securities classified as Held-to-Maturity or Available-for-Sale is adjusted for amortization of premiums to the earliest call date and accretion of discounts to expected maturity. Such amortization and accretion, as well as interest and dividends, are included in interest and dividend income from securities. Realized gains and losses are included in net securities gains and losses. The cost of securities sold, redeemed or matured is based on the specific identification method. The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as Available-For-Sale were as follows at September 30, 2022 and December 31, 2021: Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair September 30, 2022: Cost Gains Losses Value U.S. Treasury securities $ 20,243 $ — $ (1,887) $ 18,356 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 109,574 1 (13,901) 95,674 Other 5,603 3 (39) 5,567 Other mortgage backed securities 39,378 — (3,038) 36,340 Obligations of state and political subdivisions 174,338 44 (19,060) 155,322 Asset backed securities 30,834 — (967) 29,867 Corporate debt securities 47,917 170 (2,644) 45,443 Total $ 427,887 $ 218 $ (41,536) $ 386,569 Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2021: Cost Gains Losses Value U.S. Treasury securities $ 7,825 $ — $ (96) $ 7,729 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 116,039 560 (1,688) 114,911 Other 7,636 5 (65) 7,576 Other mortgage backed securities 39,881 99 (430) 39,550 Obligations of state and political subdivisions 175,021 11,709 (554) 186,176 Asset backed securities 36,555 143 (156) 36,542 Corporate debt securities 45,354 448 (370) 45,432 Total $ 428,311 $ 12,964 $ (3,359) $ 437,916 Securities Available-for-Sale with an aggregate fair value of $355,786,000 at September 30, 2022 and $401,861,000 at December 31, 2021, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and the Federal Discount Window aggregating $300,452,000 at September 30, 2022 and $318,074,000 at December 31, 2021. The amortized cost and estimated fair value of debt securities, by contractual maturity, are shown below at September 30, 2022. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2022 Debt Securities Available-For-Sale (Dollars in thousands) U.S. Government Other Obligations Agency & Mortgage of State Asset Corporate U.S. Treasury Sponsored Agency Backed Debt & Political Backed Debt Securities Obligations 1 Securities 1 Subdivisions Securities Securities Within 1 Year: Amortized cost $ — $ — $ — $ 2,244 $ — $ 5,511 Fair value — — — 2,237 — 5,560 1 - 5 Years: Amortized cost 12,397 285 9,146 21,637 — 9,177 Fair value 11,628 283 8,813 20,800 — 9,101 5 - 10 Years: Amortized cost 7,846 12,959 1,255 38,430 — 33,229 Fair value 6,728 12,894 1,217 35,558 — 30,782 After 10 Years: Amortized cost — 101,933 28,977 112,027 30,834 — Fair value — 88,064 26,310 96,727 29,867 — Total: Amortized cost $ 20,243 $ 115,177 $ 39,378 $ 174,338 $ 30,834 $ 47,917 Fair value 18,356 101,241 36,340 155,322 29,867 45,443 1 Mortgage-backed securities are allocated for maturity reporting at their original maturity date. There were no proceeds from sales of Debt Securities Available-For-Sale for the three months ended September 30, 2022 and 2021. Therefore, there were no gains or losses realized during these periods. There were no impairment losses realized on Debt Securities Available-For-Sale during the three months ended September 30, 2022 or 2021. There were no proceeds from sales of Debt Securities Available-For-Sale for the nine months ended September 30, 2022 and 2021. Therefore, there were no gains or losses realized during these periods. There were no impairment losses realized on Debt Securities Available-For-Sale during the nine months ended September 30, 2022 or 2021. At September 30, 2022 and December 31, 2021, the Company had $1,612,000 and $1,962,000, respectively, in equity securities recorded at fair value. The following is a summary of realized gains and losses recognized in net income on equity securities during the nine months ended September 30, 2022 and 2021: (Dollars in thousands) Nine months ended Nine months ended September 30, 2022 September 30, 2021 Net (losses) and gains recognized during the period on equity securities $ (181) $ 165 Less: Net gains recognized during the period on equity securities sold during the period 27 4 Net (losses) and gains recognized during the reporting period on equity securities still held at the reporting date $ (208) $ 161 There were no proceeds from sales of investments in Held-to-Maturity debt securities during the three and nine months ended September 30, 2022 or 2021. Therefore, there were no gains or losses realized during these periods. Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Securities classified as Available-for-Sale or Held-to-Maturity are generally evaluated for OTTI under FASB ASC 320, Investments - Debt and Equity Securities When OTTI occurs on debt securities, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected, and the realized loss is recognized as impairment charges on securities on the consolidated statements of income. The amount of the total OTTI related to the other factors shall be recognized in other comprehensive (loss) income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the security. The Company and its investment advisors monitor the entire portfolio monthly with particular attention given to securities in a continuous loss position of at least ten percent for over twelve months. Based on the factors described above, management did not consider any securities to be other-than-temporarily impaired at September 30, 2022 or December 31, 2021. The summary below shows the gross unrealized losses and fair value of the Company’s debt securities. Totals are aggregated by investment category where individual securities have been in a continuous loss position for less than 12 months or 12 months or more as of September 30, 2022 and December 31, 2021: September 30, 2022 (Dollars in thousands) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale: Value Loss Value Loss Value Loss U.S. Treasury securities $ 11,628 $ (769) $ 6,728 $ (1,118) $ 18,356 $ (1,887) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 38,062 (2,875) 54,908 (11,026) 92,970 (13,901) Other 190 (1) 3,415 (38) 3,605 (39) Other mortgage-backed debt securities 24,694 (1,566) 11,646 (1,472) 36,340 (3,038) Obligations of state and political subdivisions 131,635 (13,551) 16,791 (5,509) 148,426 (19,060) Asset backed securities 21,510 (306) 8,356 (661) 29,866 (967) Corporate debt securities 19,160 (1,057) 17,463 (1,587) 36,623 (2,644) Total $ 246,879 $ (20,125) $ 119,307 $ (21,411) $ 366,186 $ (41,536) December 31, 2021 (Dollars in thousands) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale: Value Loss Value Loss Value Loss U.S. Treasury securities $ 7,729 $ (96) $ — $ — $ 7,729 $ (96) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 66,195 (1,271) 11,697 (417) 77,892 (1,688) Other — — 6,687 (65) 6,687 (65) Other mortgage-backed debt securities 11,036 (225) 7,362 (205) 18,398 (430) Obligations of state and political subdivisions 25,867 (362) 3,931 (192) 29,798 (554) Asset backed securities 11,232 (49) 6,315 (107) 17,547 (156) Corporate debt securities 19,485 (315) 3,445 (55) 22,930 (370) Total $ 141,544 $ (2,318) $ 39,437 $ (1,041) $ 180,981 $ (3,359) The Company invests in various forms of agency debt including residential and commercial mortgage-backed securities and callable debt. The mortgage-backed agency securities are issued by Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”) or Small Business Administration (“SBA”). The other mortgage-backed securities consist of private (non-agency) residential and commercial mortgage backed securities. The municipal securities consist of general obligations and revenue bonds. Asset backed securities consist of bonds backed by consumer loans. Corporate debt securities consist of senior debt and subordinated debt holdings. The fair market value of the above securities is influenced by market interest rates, prepayment speeds on mortgage securities, bid-offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the market value of these securities may be higher or lower than the Company’s carrying value at any measurement date. Management does not believe any of their 156 debt securities with a less than one year unrealized loss position, or any of their 61 debt securities with a one year or greater unrealized loss position as of September 30, 2022, represent an other-than-temporary impairment, as the unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. The Company expects to collect all principal and interest payments defined under the original terms as all contracted payments on securities in the portfolio are current as of September 30, 2022. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended |
Sep. 30, 2022 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 4 — LOANS AND ALLOWANCE FOR LOAN LOSSES Loans Net loans are stated at their outstanding recorded investment, net of deferred fees and costs, unearned income and the allowance for loan losses. Interest on loans is recognized as income over the term of each loan, generally, by the accrual method. Loan origination fees and certain direct loan origination costs have been deferred with the net amount amortized using the straight line method or the interest method over the contractual life of the related loans as an interest yield adjustment. The loans receivable portfolio is segmented into commercial, residential and consumer loans. Commercial loans consist of the following classes: Commercial and Industrial, and Commercial Real Estate. Commercial and Industrial Lending The Company originates commercial and industrial loans principally to businesses located in its primary market area and surrounding areas. These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Most business lines of credit are written on demand and are reviewed annually. 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 thresholds have been established by the Company and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, business financial statements, collateral appraisals or internal evaluations, etc. Commercial and industrial loans are typically supported by personal guarantees of the borrower. In underwriting commercial and industrial loans, an analysis is performed to evaluate the borrower’s character and capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as the conditions affecting the borrower. Evaluation of the borrower’s past, present and future cash flows is also an important aspect of the Company’s analysis of the borrower’s ability to repay. SBA Paycheck Protection Program (“PPP”) loans that have been issued by the Company as a result of the enactment of the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) in response to the economic impact of the COVID-19 pandemic are included in the Company’s Commercial and Industrial portfolio and are underwritten according to all terms and conditions pursuant to the PPP as administered by the SBA under the CARES Act. See the Coronavirus Pandemic Impact on the Loan Portfolio section on page 16 for more information regarding the Company’s underwriting of these loans. Commercial and industrial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. Commercial and industrial loans are typically made on the basis of the borrower’s ability to make repayment from cash flows from the borrower’s primary business activities. As a result, the availability of funds for the repayment of commercial and industrial loans is dependent on the success of the business itself, which in turn, is likely to be dependent upon the general economic environment. As an addition to the commercial loans receivable portfolio, the Company may purchase the guaranteed portion of loans secured by the U.S. Government. The originating bank retains the unguaranteed portion of the loan. The loans are sponsored by one of the various government agencies including the SBA, United States Department of Agriculture (“USDA”), and the Farm Service Agency (“FSA”). Government Guaranteed Loans ("GGLs") carry no credit risk due to an unconditional and irrevocable guarantee (which is supported by the full faith and credit of the U.S. Government) on all principal and the balance of interest accruing through ninety days beyond the date that demand is made to the originating bank for repurchase of the loan. As of September 30, 2022, the Company's balance of GGLs was $4,660,000, compared to $3,829,000 at December 31, 2021. Commercial Real Estate Lending The Company engages in commercial real estate lending in its primary market area and surrounding areas. The Company’s Commercial Real Estate portfolio is secured primarily by commercial retail space, commercial office buildings, residential housing and hotels. Generally, commercial real estate loans have terms that do not exceed twenty years, have loan-to-value ratios of up to eighty In underwriting these loans, the Company 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. The value of the property is determined by either independent appraisers or internal evaluations performed by Bank officers. Commercial real estate loans generally present a higher level of risk than residential real estate secured loans. Repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate project and/or the effect of the general economic conditions on income producing properties. Residential Real Estate Lending (Including Home Equity) The Company’s Residential Real Estate portfolio is comprised of one-to-four family residential mortgage loan originations, home equity term loans and home equity lines of credit. These loans are generated by the Company’s marketing efforts, its present customers, walk-in customers and referrals. These loans are originated primarily with customers from the Company’s market area. The Company’s one-to-four family residential mortgage originations are secured principally by properties located in its primary market area and surrounding areas. The Company offers fixed-rate mortgage loans with terms up to a maximum of thirty years for both permanent structures and those under construction. Loans with terms of thirty years are normally held for sale and sold without recourse; most of the residential mortgages held in the Company’s residential real estate portfolio have maximum terms of twenty years. Generally, the majority of the Company’s residential mortgage loans originate with a loan-to-value of eighty eighty eighty In underwriting one-to-four family residential mortgage loans, the Company evaluates the borrower’s ability to make monthly payments, the borrower’s prior loan repayment history and the value of the property securing the loan. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial conditions and credit background. A majority of the properties securing residential real estate loans made by the Company are appraised by independent appraisers. The Company generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance and fire and property insurance, including flood insurance, if applicable. Residential mortgage loans, home equity term loans and home equity lines of credit generally present a lower level of risk than consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Company is in a subordinate position, especially to another lender, for the loan collateral. Residential mortgage loans held for sale are carried at the lower of cost or market on an aggregate basis determined by independent pricing from appropriate federal or state agency investors. These loans are sold without recourse. Loans held for sale amounted to $691,000 and $6,006,000 at September 30, 2022 and December 31, 2021, respectively. Consumer Lending The Company offers a variety of secured and unsecured consumer loans, including vehicle loans, stock secured loans and loans secured by financial institution deposits. These loans originate primarily within or with customers from the Company’s market area. Consumer loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis is performed regarding the borrower’s willingness and financial ability to repay the loan as agreed. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial condition and credit background. Consumer loans may entail greater credit risk than residential real estate loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, repossessed collateral for a defaulted personal 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, personal loan collections are dependent on the borrower’s continuing financial stability and therefore, 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. Coronavirus Pandemic Impact on the Loan Portfolio As a result of the economic impact of the COVID-19 coronavirus pandemic, the CARES Act was enacted in the United States on March 27, 2020. The Company was approved by the SBA to fund loans under the SBA’s Paycheck Protection Program created as part of the CARES Act. The PPP loans have 1.00% interest rates, lender fees, two An additional provision of the CARES Act, Section 4013 provides financial institutions the option to suspend requirements to categorize certain loan modifications as troubled debt restructurings as long as specific criteria are met. To qualify, the loan modifications must have been made on a good-faith basis in response to the COVID-19 pandemic, must have occurred between March 1, 2020 and the earlier of September 30, 2021 or the termination date of the national emergency related to the COVID-19 pandemic as declared by the President of the United States, and the loans must have been paid current (less than 30 days past due prior to any relief) as of December 31, 2019. In compliance with Section 4013 of the CARES Act, the Company granted modification requests to defer principal and/or interest payments or modify interest rates on various loans across all portfolio segments. Of the loan modifications that were granted in compliance with Section 4013 of the CARES Act, there were no loan modifications still actively on deferral as of September 30, 2022, compared to December 31, 2021 when there was 1 loan modification still actively on deferral carrying a balance of $9,423,000. See page 25 for additional information regarding the Section 4013 CARES Act modifications. Delinquent Loans Generally, a loan is considered to be past-due when scheduled loan payments are in arrears 10 days or more. Delinquent notices are generated automatically when a loan is 10 or 15 days past-due, depending on loan type. Collection efforts continue on past-due loans that have not been brought current, when it is believed that some chance exists for improvement in the status of the loan. Past-due loans are continually evaluated with the determination for charge-off being made when no reasonable chance remains that the status of the loan can be improved. Commercial and industrial and commercial real estate loans are charged off in whole or in part when they become sufficiently delinquent based upon the terms of the underlying loan contract and when a collateral deficiency exists. Because all or part of the contractual cash flows are not expected to be collected, the loan is considered to be impaired, and the Company estimates the impairment based on its analysis of the cash flows or collateral estimated at fair value less cost to sell. Should a GGL default, demand is made to the originating bank for repurchase of the loan. If the originating bank does not repurchase the loan, demand for repurchase is then made to the appropriate government agency which has provided the guarantee for the loan. Residential real estate and consumer loans are charged off when they become sufficiently delinquent based upon the terms of the underlying loan contract and when the value of the underlying collateral is not sufficient to support the loan balance and a loss is expected. At that time, the amount of estimated collateral deficiency, if any, is charged off for loans secured by collateral, and all other loans are charged off in full. Loans with collateral are written down to the estimated fair value of the collateral less cost to sell. Existing loans in which the borrower has declared bankruptcy are considered on a case by case basis to determine whether repayment is likely to occur (eg. reaffirmation by the borrower with demonstrated repayment ability). Otherwise, loans are charged off in full or written down to the estimated fair value of collateral less cost to sell. Generally, a loan is classified as non-accrual and the accrual of interest on such a loan is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest. A loan may remain on accrual status if it is well secured (or supported by a strong guarantee) and in the process of collection. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against interest income. Certain non-accrual loans may continue to perform; that is, payments are still being received. Generally, the payments are applied to principal. These loans remain under constant scrutiny, and if performance continues, interest income may be recorded on a cash basis based on management's judgment regarding the collectability of principal. Allowance for Loan Losses The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses and subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is maintained at a level estimated by management to be adequate to absorb potential loan losses. Management’s periodic evaluation of the adequacy of the allowance for loan losses is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are individually classified as impaired. Select loans are not aggregated for collective impairment evaluation, as such; all loans are subject to individual impairment evaluation should the facts and circumstances pertinent to a particular loan suggest that such evaluation is necessary. Factors considered by management in determining impairment include payment status 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. If a loan is impaired, a portion of the allowance may be 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 collateral. TDRs are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s contractual rate at inception. If a TDR is considered to be a collateral dependent loan, the loan may be reported at the net realizable value of the collateral. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component covers all other loans not identified as impaired (aside from GGLs, which do not require an allowance) and is based on historical losses and qualitative factors. The historical loss component of the allowance is determined by losses recognized by portfolio segment over an eight quarter lookback period that management has determined best represents the current credit cycle. Qualitative factors impacting each portfolio segment may include: delinquency trends, loan volume trends, Bank policy changes, management processes and oversight, economic trends (including change in consumer and business disposable incomes, unemployment and under-employment levels, and other conditions), concentrations by industry or product, internal and external loan review processes, collateral value and market conditions, and external factors including regulatory issues and competition. GGLs do not require an associated allowance for loan losses due to the underlying irrevocable and unconditional guarantee, which is supported by the full faith and credit of the U.S. Government. Should a GGL default, the loan will be repurchased by the originating bank or the appropriate government agency that has provided the guarantee for the loan. Although PPP loans do not require an associated allowance for loan losses due to the program’s call for a full guarantee by the SBA, the Company has calculated a qualitative allocation for the PPP loans under the general component of the allowance for the Commercial and Industrial portfolio. The unallocated component of the allowance is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A reserve for unfunded lending commitments is provided for possible credit losses on off-balance sheet credit exposures. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and, if necessary, is recorded in other liabilities on the consolidated balance sheets. As of September 30, 2022 and December 31, 2021, the amount of the reserve for unfunded lending commitments was $75,000 and $177,000, respectively. The Company is subject to periodic examination by its federal and state examiners, and may be required by such regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. A loan is considered 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 existing loan agreement. Under current accounting standards, the allowance for loan losses related to impaired loans is based on discounted cash flows using the loan’s contractual interest rate at inception or the net realizable value of the collateral for certain collateral dependent loans. From time to time, the Company may agree to modify/restructure the contractual terms of a borrower's loan. The restructuring of a loan is considered a TDR if both the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the Company has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, and (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan. A less common concession is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower were a concession not granted. Similarly, the determination of whether a concession has been granted is subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. Loans modified in a TDR are considered impaired and may or may not be placed on non-accrual status until the Company determines the future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrates a period of performance according to the restructured terms of six months. Any loan modifications that were made in response to the COVID-19 pandemic were not considered TDRs as long as the criteria set forth in Section 4013 of the CARES Act were met. See page 25 for further discussion of the Section 4013 CARES Act modifications. The Company utilizes a risk grading matrix as a tool for managing credit risk in the loan portfolio and assigns an asset quality rating (risk grade) to all commercial and industrial, commercial real estate, residential real estate and consumer loans. An asset quality rating is assigned using the guidance provided in the Company’s loan policy. Primary responsibility for assigning the asset quality rating rests with the credit department. The asset quality rating is validated periodically by both an internal and external loan review process. The commercial loan grading system focuses on a borrower’s financial strength and performance, experience and depth of management, primary and secondary sources of repayment, the nature of the business and the outlook for the particular industry. Primary emphasis is placed on financial condition and trends. The grade also reflects current economic and industry conditions; as well as other variables such as liquidity, cash flow, revenue/earnings trends, management strengths or weaknesses, quality of financial information, and credit history. The loan grading system for Residential Real Estate and Consumer loans focuses on the borrower’s credit score and credit history, debt-to-income ratio and income sources, collateral position and loan-to-value ratio. Risk grade characteristics are as follows: Risk Grade 1 – MINIMAL RISK through Risk Grade 6 – MANAGEMENT ATTENTION (Pass Grade Categories) Risk is evaluated via examination of several attributes including but not limited to financial trends, strengths and weaknesses, likelihood of repayment when considering both cash flow and collateral, sources of repayment, leverage position, management expertise, and repayment history. At the low-risk end of the rating scale, a risk grade of 1 – Minimal Risk is the grade reserved for loans with exceptional credit fundamentals and virtually no risk of default or loss. Loan grades then progress through escalating ratings of 2 through 6 based upon risk. Risk Grade 2 – Modest Risk are loans with sufficient cash flows; Risk Grade 3 – Average Risk are loans with key balance sheet ratios slightly above the borrower’s peers; Risk Grade 4 – Acceptable Risk are loans with key balance sheet ratios usually near the borrower’s peers, but one or more ratios may be higher; and Risk Grade 5 – Marginally Acceptable are loans with strained cash flow, increasing leverage and/or weakening markets. Risk Grade 6 – Management Attention are loans with weaknesses resulting from declining performance trends and the borrower’s cash flows may be temporarily strained. Loans in this category are performing according to terms, but present some type of potential concern. Risk Grade 7 − SPECIAL MENTION (Non-Pass Category) Assets in this category are adequately collateralized but have potential weakness which may, if not checked or corrected, weaken the asset or inadequately protect the Company’s credit position at some future date. The loans may constitute increased credit risk, but not to the point of justifying a classification of substandard. No loss of principal or interest is envisioned, but risk is increasing beyond that at which the loan originally would have been granted. Historically, cash flows are inconsistent; financial trends show some deterioration. Liquidity and leverage are above industry averages. Financial information could be incomplete or inadequate. A Special Mention asset has potential weaknesses that deserve management’s close attention. Risk Grade 8 − SUBSTANDARD (Non-Pass Category) Generally, these assets are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have “well-defined” weaknesses that jeopardize the full liquidation of the debt. These loans are characterized by the distinct possibility that the Company will sustain some loss if the aggregate amount of substandard assets is not fully covered by the liquidation of the collateral used as security. Substandard loans have a high probability of payment default and require more intensive supervision by Company management. Risk Grade 9 − DOUBTFUL (Non-Pass Category) Generally, loans graded doubtful have all the weaknesses inherent in a substandard loan with the added factor that the weaknesses are pronounced to a point whereby the basis of current information, conditions, and values, collection or liquidation in full is deemed to be highly improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to strengthen the asset, its classification is deferred until, for example, a proposed merger, acquisition, liquidation procedure, capital injection, perfection of liens on additional collateral and/or refinancing plan is completed. Loans are graded doubtful if they contain weaknesses so serious that collection or liquidation in full is questionable. The following table presents the classes of the loan portfolio summarized by risk rating as of September 30, 2022 and December 31, 2021: Commercial and (Dollars in thousands) Industrial Commercial Real Estate September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Grade: 1-6 Pass $ 84,683 $ 81,561 $ 578,976 $ 498,565 7 Special Mention — — 837 1,098 8 Substandard 736 796 19,387 21,248 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs 436 169 868 743 Total loans $ 85,855 $ 82,526 $ 600,068 $ 521,654 Residential Real Estate Including Home Equity Consumer September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Grade: 1-6 Pass $ 153,535 $ 141,983 $ 5,304 $ 5,210 7 Special Mention — 570 58 — 8 Substandard 979 1,020 — 5 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs (190) (190) 66 63 Total loans $ 154,324 $ 143,383 $ 5,428 $ 5,278 Total Loans September 30, December 31, 2022 2021 Grade: 1-6 Pass $ 822,498 $ 727,319 7 Special Mention 895 1,668 8 Substandard 21,102 23,069 9 Doubtful — — Add (deduct): Unearned discount and — — Net deferred loan fees and costs 1,180 785 Total loans $ 845,675 $ 752,841 Commercial and Industrial and Commercial Real Estate include loans categorized as tax-free in the amounts of $28,995,000 and $1,538,000 at September 30, 2022 and $24,647,000 and $1,671,000 at December 31, 2021. Commercial and industrial loans also included $4,660,000 and $3,829,000 of GGLs and $125,000 and $4,894,000 of PPP loans as of September 30, 2022 and December 31, 2021, respectively. Loans held for sale amounted to $691,000 at September 30, 2022 and $6,006,000 at December 31, 2021. During the nine months ended September 30, 2022, $7,900,000 in loans that had previously been classified as held for sale were transferred to held for investment status, as the Company no longer had the intent to sell these loans. The activity in the allowance for loan losses, by loan class, is summarized below for the periods indicated. (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the three months ended September 30, 2022: Allowance for Loan Losses: Beginning balance $ 675 $ 5,954 $ 1,609 $ 79 $ 843 $ 9,160 Charge-offs (149) — (12) (10) — (171) Recoveries — — 2 1 — 3 Provision (credit) 192 93 11 5 (82) 219 Ending Balance $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the nine months ended September 30, 2022: Allowance for Loan Losses: Beginning balance $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Charge-offs (158) — (12) (16) — (186) Recoveries 2 38 16 5 — 61 Provision (credit) 193 601 67 2 (207) 656 Ending Balance $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 Loans Receivable: Ending Balance $ 85,855 $ 600,068 $ 154,324 $ 5,428 $ — $ 845,675 Ending balance: individually evaluated for impairment $ 979 $ 10,357 $ 841 $ — $ — $ 12,177 Ending balance: collectively evaluated for impairment $ 84,876 $ 589,711 $ 153,483 $ 5,428 $ — $ 833,498 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the three months ended September 30, 2021: Allowance for Loan Losses: Beginning balance $ 851 $ 4,930 $ 1,539 $ 95 $ 709 $ 8,124 Charge-offs — — (10) (13) — (23) Recoveries — — 1 1 — 2 (Credit) provision (84) 280 (16) 11 (6) 185 Ending Balance $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the nine months ended September 30, 2021: Allowance for Loan Losses: Beginning balance $ 787 $ 4,762 $ 1,643 $ 94 $ 647 $ 7,933 Charge-offs (13) (29) (65) (33) — (140) Recoveries — 30 2 8 — 40 (Credit) provision (7) 447 (66) 25 56 455 Ending Balance $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2022 | |
DEPOSITS | |
DEPOSITS | NOTE 5 — DEPOSITS Major classifications of deposits at September 30, 2022 and December 31, 2021 consisted of: (Dollars in thousands) September 30, December 31, 2022 2021 Non-interest bearing demand $ 251,894 $ 249,040 Interest bearing demand 373,604 395,033 Savings 273,769 260,804 Time certificates of deposits less than $250,000 146,943 158,914 Time certificates of deposits $250,000 or greater 10,362 13,030 Other time 1,737 1,148 Total deposits $ 1,058,309 $ 1,077,969 Total deposits decreased $19,660,000 to $1,058,309,000 as of September 30, 2022 due to decreases in interest bearing demand and time deposits. The decrease in deposits was mainly the result of a $84,608,000 decrease in municipal deposits and other normal fluctuations in deposits during the nine months ended September 30, 2022. |
BORROWINGS
BORROWINGS | 9 Months Ended |
Sep. 30, 2022 | |
BORROWINGS | |
BORROWINGS | NOTE 6 — BORROWINGS Short-Term Borrowings Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, the Federal Discount Window, and Federal Home Loan Bank of Pittsburgh (“FHLB”) advances, which generally represent overnight or less than 30-day borrowings. Short-term borrowings and weighted–average interest rates at September 30, 2022 and December 31, 2021 are as follows: (Dollars in thousands) September 30, 2022 December 31, 2021 Average Average Amount Rate Amount Rate Federal funds purchased $ — — % $ — 0.36 % Securities sold under agreements to repurchase 28,519 0.56 % 27,377 0.35 % Federal Discount Window — 2.21 % — 0.36 % Federal Home Loan Bank of Pittsburgh 66,229 1.94 % — 0.34 % Total $ 94,748 1.44 % $ 27,377 0.35 % Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”) The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability on the Company’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is not offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Company does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., fails to make an interest payment to the counterparty). The collateral is held by a correspondent bank in the counterparty’s custodial account. The counterparty has the right to sell or repledge the investment securities. The following table presents the short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements as of September 30, 2022 and December 31, 2021. (Dollars in thousands) Gross Net Amounts Amounts of Liabilities Offset Presented Gross in the in the Amounts of Consolidated Consolidated Cash Recognized Balance Balance Financial Collateral Net Liabilities Sheet Sheet Instruments Pledge Amount September 30, 2022 Repurchase agreements (a) $ 28,519 $ — $ 28,519 $ (28,519) $ — $ — December 31, 2021 Repurchase agreements (a) $ 27,377 $ — $ 27,377 $ (27,377) $ — $ — (a) As of September 30, 2022 and December 31, 2021, the fair value of securities pledged in connection with repurchase agreements was $36,062,000 and $37,735,000 , respectively. The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of September 30, 2022: (Dollars in thousands) Remaining Contractual Maturity of the Agreements Overnight Greater Greater and Up to 30 -90 than Continuous 30 days Days 90 Days Total September 30, 2022: Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 28,519 $ — $ — $ — $ 28,519 Total $ 28,519 $ — $ — $ — $ 28,519 Long-Term Borrowings and Letters of Credit Long-term borrowings are comprised of advances from the FHLB. Irrevocable standby letters of credit may be issued to a customer/beneficiary by the FHLB on the Company’s behalf in order to secure public/municipal unit deposits, provide credit enhancement to certain transaction types, or to support payment obligations to third parties. These irrevocable standby letters of credit are supported by an irrevocable and independent guarantee by the FHLB for the Company’s pledging obligation to secure public/municipal unit deposits which eliminates the need for the Company to pledge collateral in the amount necessary to secure these funds. The Company began utilizing this service offered by the FHLB during the second quarter of 2021. There were Under terms of a blanket agreement, collateral for the FHLB loans and letters of credit consists of certain qualifying assets of the Corporation’s banking subsidiary. Principal qualifying assets are certain real estate mortgages and investment securities. As of September 30, 2022, loans of $664,778,000 were pledged to FHLB which resulted in a FHLB maximum borrowing capacity of $468,873,000. As of September 30, 2022, no securities were pledged as collateral to FHLB to secure FHLB loans and letters of credit. |
SUBORDINATED DEBT
SUBORDINATED DEBT | 9 Months Ended |
Sep. 30, 2022 | |
SUBORDINATED DEBT | |
SUBORDINATED DEBT | NOTE 7 — SUBORDINATED DEBT On December 10, 2020, the Corporation issued $25,000,000 aggregate principal amount of Subordinated Notes due 2030 (the “2020 Notes”) to accredited investors. The 2020 Notes are intended to be treated as Tier 2 capital for regulatory capital purposes. The Company utilized the net proceeds it received from the sale of the 2020 Notes to support organic growth and for general corporate purposes. The 2020 Notes bear a fixed interest rate of 4.375% per year for the first five years and then float based on a benchmark rate (as defined). Interest is payable semi-annually in arrears on June 30 and December 31 of each year, which began on June 30, 2021, for the first five years after issuance and will be payable quarterly in arrears thereafter on March 31, June 30, September 30 and December 31. The 2020 Notes will mature on December 31, 2030 and are redeemable in whole or in part, without premium or penalty, at any time on or after December 31, 2025 and prior to December 31, 2030. Additionally, if all or any portion of the 2020 Notes cease to be deemed Tier 2 capital, the Corporation may redeem, in whole and not in part, at any time upon giving not less than ten days’ notice, an amount equal to one hundred percent (100%) of the principal amount outstanding plus accrued but unpaid interest to but excluding the date fixed for redemption. Holders of the 2020 Notes may not accelerate the maturity of the 2020 Notes, except upon the bankruptcy, insolvency, liquidation, receivership or similar law of the Corporation or the Bank. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 — COMMITMENTS AND CONTINGENCIES In the normal course of business, there are various pending legal actions and proceedings that are not reflected in the consolidated financial statements. Management does not believe the outcome of these actions and proceedings will have a material effect on the consolidated financial position or results of operations of the Company. The Company currently leases four branch banking facilities and one parcel of land under operating leases. At September 30, 2022, right-of-use assets and lease liabilities were recorded related to these operating leases totaling $999,000 and $1,484,000, respectively. At December 31, 2021, right-of-use assets and lease liabilities stood at $1,025,000 and $1,499,000, respectively. Further options to extend or terminate the lease are not applicable for any of the five leases. No significant assumptions or judgements were made in determining whether a contract contained a lease or in the consideration of lease versus non-lease components. None of the leases contained an implicit rate; therefore, our incremental borrowing rate was used for each of the leases. The Company recognized total operating lease costs for the nine months ended September 30, 2022 and 2021 of $135,000 and $133,000, respectively. Operating lease costs are included in occupancy, net in the accompanying statements of income. Cash payments totaled $125,000 and $116,000, respectively, for the nine months ended September 30, 2022 and 2021. The Company currently has one finance lease for equipment. At September 30, 2022, right-of-use assets and lease liabilities were recorded related to the finance lease totaling $34,000 and $9,000, respectively. At December 31, 2021, right-of-use assets and lease liabilities stood at $34,000 and $16,000, respectively. Amounts recognized as right-of-use assets and lease liabilities related to finance leases are included in premises and equipment, net and other liabilities, respectively, in the accompanying balance sheet. Further options to extend or terminate the lease are not applicable for the lease. No significant assumptions or judgements were made in determining whether a contract contained a lease or in the consideration of lease versus non-lease components. The lease did not contain an implicit rate; therefore, our incremental borrowing rate was used. Total finance lease costs that were recognized by the Company for the nine months ended September 30, 2022 and 2021 were immaterial. Cash payments totaled $7,000 for the nine months ended September 30, 2022 and 2021. The following table displays the weighted-average term and discount rates for operating and finance leases outstanding as of September 30, 2022 and December 31, 2021. September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Operating Operating Finance Finance Weighted-average term (years) 24.13 24.51 0.92 1.67 Weighted-average discount rate 3.93% 3.89% 0.68% 0.68% A maturity analysis of operating and finance lease liabilities and reconciliation of the undiscounted cash flows to the total operating or finance lease liability is as follows: (Dollars in thousands) September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Minimum Lease Payments due: Operating Operating Finance Finance Within one year $ 80 $ 120 $ 9 $ 10 After one but within two years 68 68 — 7 After two but within three years 68 68 — — After three but within four years 68 68 — — After four but within five years 78 68 — — After five years 2,129 2,190 — — Total undiscounted cash flows 2,491 2,582 9 17 Discount on cash flows (1,007) (1,083) — (1) Total lease liability $ 1,484 $ 1,499 $ 9 $ 16 |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | 9 Months Ended |
Sep. 30, 2022 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | NOTE 9 — FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company does not engage in trading activities with respect to any of its financial instruments with off-balance sheet risk. The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Company may require collateral or other security to support financial instruments with off-balance sheet credit risk. The contract or notional amounts at September 30, 2022 and December 31, 2021 were as follows: (Dollars in thousands) September 30, 2022 December 31, 2021 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 123,282 $ 142,335 Financial standby letters of credit $ 2,779 $ 2,000 Performance standby letters of credit $ 3,073 $ 3,727 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses that may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, owner-occupied income-producing commercial properties, and residential real estate. Standby letters of credit are conditional commitments issued by the Company to guarantee payment to a third party when a customer either fails to repay an obligation or fails to perform some non-financial obligation. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company may hold collateral (similar to the items held as collateral for commitments to extend credit) to support standby letters of credit for which collateral is deemed necessary. Financial Instruments with Concentrations of Credit Risk The Company originates primarily commercial and residential real estate loans to customers in northeastern Pennsylvania. The ability of the majority of the Company’s customers to honor their contractual loan obligations is dependent on the economy and real estate market in this area. At September 30, 2022, the Company had $754,392,000 in loans secured by real estate, which represented 89.2% of total loans. The real estate loan portfolio is largely secured by lessors of residential buildings and dwellings, lessors of non-residential buildings, and lessors of hotels/motels. As of September 30, 2022 and December 31, 2021, management is of the opinion that there were no concentrations exceeding 10% of total loans with regard to loans to borrowers who were engaged in similar activities that were similarly impacted by economic or other conditions. As all financial instruments are subject to some level of credit risk, the Company requires collateral and/or guarantees for all loans. Collateral may include, but is not limited to property, plant, and equipment, commercial and/or residential real estate property, land, and pledge of securities. In the event of a borrower’s default, the collateral supporting the loan may be seized in order to recoup losses associated with the loan. The Company also establishes an allowance for loan losses that constitutes the amount available to absorb losses within the loan portfolio that may exist due to deficiencies in collateral values. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 10 — FAIR VALUE MEASUREMENTS Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This guidance provides additional information on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes information on identifying circumstances when a transaction may not be considered orderly. Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with the fair value measurement and disclosure guidance. This guidance clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own belief about the assumptions market participants would use in pricing the asset or liability based upon the best information available. Fair value measurement and disclosure guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs Level 2 Inputs Level 3 Inputs A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth as follows. Financial Assets Measured at Fair Value on a Recurring Basis At September 30, 2022 and December 31, 2021, securities measured at fair value on a recurring basis and the valuation methods used are as follows: (Dollars in thousands) September 30, 2022 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 18,356 $ — $ — $ 18,356 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 95,674 — 95,674 Other — 5,567 — 5,567 Other mortgage backed debt securities — 36,340 — 36,340 Obligations of state and political subdivisions — 155,322 — 155,322 Asset backed securities — 29,867 — 29,867 Corporate debt securities — 45,443 — 45,443 Total debt securities available-for-sale 18,356 368,213 — 386,569 Marketable equity securities 1,612 — — 1,612 Total recurring fair value measurements $ 19,968 $ 368,213 $ — $ 388,181 (Dollars in thousands) December 31, 2021 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 7,729 $ — $ — $ 7,729 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 114,911 — 114,911 Other — 7,576 — 7,576 Other mortgage backed debt securities — 39,550 — 39,550 Obligations of state and political subdivisions — 186,176 — 186,176 Asset backed securities — 36,542 — 36,542 Corporate debt securities — 45,432 — 45,432 Total debt securities available-for-sale 7,729 430,187 — 437,916 Marketable equity securities 1,962 — — 1,962 Total recurring fair value measurements $ 9,691 $ 430,187 $ — $ 439,878 The estimated fair values of equity securities and US Treasury debt securities classified as Level 1 are derived from quoted market prices in active markets; the equity securities consist mainly of stocks held in other banks. The estimated fair values of all debt securities classified as Level 2 are obtained from nationally-recognized third-party pricing agencies. The estimated fair values are derived primarily from cash flow models, which include assumptions for interest rates, credit losses, and prepayment speeds. The significant inputs utilized in the cash flow models are based on market data obtained from sources independent of the Company (observable inputs), and are therefore classified as Level 2 within the fair value hierarchy. The Company does not have any Level 3 inputs for securities. There were no transfers between Level 1 and Level 2 during 2022 or 2021. Financial Assets Measured at Fair Value on a Nonrecurring Basis At September 30, 2022 and December 31, 2021, impaired loans measured at fair value on a nonrecurring basis are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at September 30, 2022 Impaired loans: Commercial Real Estate $ — $ — $ 5,902 $ 5,902 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,932 $ 5,932 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2021 Impaired loans: Commercial Real Estate $ — $ — $ 5,954 $ 5,954 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,984 $ 5,984 The Company’s impaired loan valuation procedure for any loans greater than $250,000 requires an appraisal to be obtained and reviewed annually at year end unless the Board of Directors waives such requirement for a specific loan, in favor of obtaining a Certificate of Inspection instead, defined as an internal evaluation completed by the Company. A quarterly collateral evaluation is performed which may include a site visit, property pictures and discussions with realtors and other similar business professionals to ascertain current values. For impaired loans less than $250,000 upon classification and annually at year end, the Company completes a Certificate of Inspection, which includes an onsite inspection, and considers value indicators such as insured values, tax assessed values, recent sales comparisons and a review of the previous evaluations.These assets are included as Level 3 fair values, based upon the lowest level that is significant to the fair value measurements. The fair value consists of the impaired loan balances less the valuation allowance and/or charge-offs. There were no transfers between valuation levels in 2022 and 2021. Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis There were no foreclosed assets held for resale measured at fair value on a nonrecurring basis at September 30, 2022 and December 31, 2021. The Company’s foreclosed asset valuation procedure requires an appraisal or a Certificate of Inspection, which considers the sales prices of similar properties in the proximate vicinity, to be completed periodically with the exception of those cases in which the Bank has obtained a sales agreement. These assets are included as Level 3 fair values, based upon the lowest level that is significant to the fair value measurements. There were no transfers between valuation levels in 2022 and 2021. The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine the fair value: (Dollars in thousands) Quantitative Information about Level 3 Fair Value Measurements Fair Value Weighted September 30, 2022 Estimate Valuation Technique Unobservable Input Range Average Impaired loans - collateral dependent $ 3,120 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 ( 15% ) – ( 26% ) (15%) Impaired loans - other $ 2,812 Discounted cash flow Discount rate ( 7% ) – ( 7% ) (7%) December 31, 2021 Impaired loans - collateral dependent $ 3,120 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 ( 15% ) – ( 44% ) (15%) Impaired loans - other $ 2,864 Discounted cash flow Discount rate ( 7% ) – ( 7% ) (7%) 1. Fair value is generally determined through independent appraisals or Certificates of Inspection of the underlying collateral, as defined by Bank regulators. 2. Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value. 3. Includes qualitative adjustments by management and estimated liquidation expenses. 4. Collateral values may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. Fair Value of Financial Instruments Measured on a Nonrecurring Basis (Dollars in thousands) Carrying Fair Value Measurements at September 30, 2022 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 8,677 $ 8,677 $ — $ — $ 8,677 Interest-bearing deposits in other banks 1,803 — 1,803 — 1,803 Time deposits with other banks — — — — — Restricted investment in bank stocks 4,408 — 4,408 — 4,408 Net loans 836,464 — — 792,912 792,912 Mortgage servicing rights 327 — — 327 327 Accrued interest receivable 4,479 — 4,479 — 4,479 FINANCIAL LIABILITIES: Demand, savings and other deposits 899,267 — 899,267 — 899,267 Time deposits 159,042 — 153,246 — 153,246 Short-term borrowings 94,748 — 94,410 — 94,410 Long-term borrowings 25,000 — 24,058 — 24,058 Subordinated debentures 25,000 — 22,019 — 22,019 Accrued interest payable 573 — 573 — 573 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — (Dollars in thousands) Carrying Fair Value Measurements at December 31, 2021 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,600 $ 9,600 $ — $ — $ 9,600 Interest-bearing deposits in other banks 51,738 — 51,738 — 51,738 Time deposits with other banks 247 — 247 — 247 Restricted investment in bank stocks 1,919 — 1,919 — 1,919 Net loans 744,161 — — 762,914 762,914 Mortgage servicing rights 367 — — 367 367 Accrued interest receivable 4,361 — 4,361 — 4,361 FINANCIAL LIABILITIES: Demand, savings and other deposits 904,877 — 904,877 — 904,877 Time deposits 173,092 — 172,897 — 172,897 Short-term borrowings 27,377 — 27,380 — 27,380 Long-term borrowings 35,000 — 35,987 — 35,987 Subordinated debentures 25,000 — 24,384 — 24,384 Accrued interest payable 251 — 251 — 251 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 11 — REVENUE RECOGNITION In accordance with ASU 2014-09 Revenue from Contracts with Customers – Topic 606, Deposits related fees and service charges Service charges and fees on deposits, which are included as liabilities in the consolidated balance sheets, consist of fees related to monthly fees for various retail and business checking accounts, automated teller machine (“ATM”) fees (charged for withdrawals by our deposit customers from other bank ATMs) and insufficient funds fees (“NSF”) (which are charged when customers overdraw their accounts beyond available funds). All deposit liabilities are considered to have one-day terms and therefore related fees are recognized in income at the time when the services are provided to the customers. The Company elected to adopt practical expedient related to incremental costs of obtaining deposit contracts. As such, any costs associated with acquiring the deposits, except for time deposits with maturities in excess of one year, are recognized as an expense within non-interest expense in the consolidated statements of income when incurred as the amortization period of the deposit liabilities that otherwise would have been recognized is one year or less. Wealth/Asset/Trust Management Fees Wealth management services are delivered to individuals, corporations and retirement funds located primarily within our geographic markets. The Trust Department of the Company conducts the wealth management operations, which provides a broad range of personal and corporate fiduciary services, including the administration of estates. Assets held in a fiduciary capacity by the Trust Department are not assets of the Company and, therefore, are not included in our consolidated financial statements. Wealth management fees, which are contractually agreed with each customer, are earned each month and recognized on a cash basis based on average fair value of the trust assets under management. The services provided under such a contract are considered a single performance obligation under ASC 606 because they embody a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Wealth management fees charged by the Trust Department follow a tiered structure based on the type and size of the assets under management. Wealth management fees are included within non-interest income in the consolidated statements of income. As of September 30, 2022 and December 31, 2021, the fair value of trust assets under management was $114,030,000 and $108,339,000, respectively. The costs of acquiring asset management customers are incremental and recognized within non-interest expense in the consolidated statements of income. Interchange Fees and Surcharges Interchange fees are related to the acceptance and settlement of debit card transactions, both point-of-sale and ATM, to cover operating costs and risks associated with the approval and settlement of the transactions. Interchange fees vary by type of transaction and each merchant sector. Net income recognized from interchange fees is included in non-interest income on the consolidated statements of income. A surcharge is assessed for use of the Company’s ATMs by non-customers. All interchange fees and surcharges are recognized as received on a daily basis for the prior business day’s transactions. All expenses related to the settlement of debit card transactions (both point-of-sale and ATM) are recognized on a monthly basis and included in non-interest expense on the consolidated statements of income. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 12 — EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Corporation. At September 30, 2022 and 2021, there were no potential common shares outstanding. The following table sets forth the computation of basic and diluted earnings per share. (In thousands, except earnings per share) Three Months Ended September 30, 2022 2021 Net income $ 3,504 $ 4,023 Weighted-average common shares outstanding 5,982 5,915 Basic and diluted earnings per share $ 0.58 $ 0.68 (In thousands, except earnings per share) Nine Months Ended September 30, 2022 2021 Net income $ 10,869 $ 11,506 Weighted-average common shares outstanding 5,964 5,890 Basic and diluted earnings per share $ 1.82 $ 1.95 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL. | |
GOODWILL | NOTE 13 — GOODWILL Goodwill resulted from the acquisition of the Pocono Community Bank in November 2007 and of certain fixed and operating assets acquired and deposit liabilities assumed of the branch of another financial institution in Danville, Pennsylvania, in January 2004. Such goodwill represents the excess cost of the acquired assets relative to the assets’ fair value at the dates of acquisition. In accordance with current accounting standards, goodwill is not amortized. Goodwill totaled $19,133,000 at September 30, 2022 and December 31, 2021. Impairment testing is performed on an annual basis, using either a qualitative or quantitative approach. The assumptions used in the impairment test of goodwill are susceptible to change based on changes in economic conditions and other factors, including our stock price. Any change in the assumptions utilized to determine the carrying value of goodwill could adversely affect our results of operations. Goodwill was evaluated for impairment at December 31, 2021, and it was determined that goodwill was not impaired. Management evaluated the need for an interim goodwill impairment analysis and determined that there were no triggering events or negative factors affecting goodwill since the previous test that would indicate goodwill was impaired as of September 30, 2022. |
SECURITIES (Tables)
SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
SECURITIES | |
Schedule of amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as Available-For-Sale | Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair September 30, 2022: Cost Gains Losses Value U.S. Treasury securities $ 20,243 $ — $ (1,887) $ 18,356 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 109,574 1 (13,901) 95,674 Other 5,603 3 (39) 5,567 Other mortgage backed securities 39,378 — (3,038) 36,340 Obligations of state and political subdivisions 174,338 44 (19,060) 155,322 Asset backed securities 30,834 — (967) 29,867 Corporate debt securities 47,917 170 (2,644) 45,443 Total $ 427,887 $ 218 $ (41,536) $ 386,569 Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2021: Cost Gains Losses Value U.S. Treasury securities $ 7,825 $ — $ (96) $ 7,729 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 116,039 560 (1,688) 114,911 Other 7,636 5 (65) 7,576 Other mortgage backed securities 39,881 99 (430) 39,550 Obligations of state and political subdivisions 175,021 11,709 (554) 186,176 Asset backed securities 36,555 143 (156) 36,542 Corporate debt securities 45,354 448 (370) 45,432 Total $ 428,311 $ 12,964 $ (3,359) $ 437,916 |
Schedule of amortized cost and estimated fair value of debt securities, by contractual maturity | September 30, 2022 Debt Securities Available-For-Sale (Dollars in thousands) U.S. Government Other Obligations Agency & Mortgage of State Asset Corporate U.S. Treasury Sponsored Agency Backed Debt & Political Backed Debt Securities Obligations 1 Securities 1 Subdivisions Securities Securities Within 1 Year: Amortized cost $ — $ — $ — $ 2,244 $ — $ 5,511 Fair value — — — 2,237 — 5,560 1 - 5 Years: Amortized cost 12,397 285 9,146 21,637 — 9,177 Fair value 11,628 283 8,813 20,800 — 9,101 5 - 10 Years: Amortized cost 7,846 12,959 1,255 38,430 — 33,229 Fair value 6,728 12,894 1,217 35,558 — 30,782 After 10 Years: Amortized cost — 101,933 28,977 112,027 30,834 — Fair value — 88,064 26,310 96,727 29,867 — Total: Amortized cost $ 20,243 $ 115,177 $ 39,378 $ 174,338 $ 30,834 $ 47,917 Fair value 18,356 101,241 36,340 155,322 29,867 45,443 1 Mortgage-backed securities are allocated for maturity reporting at their original maturity date. |
Schedule of realized gains and losses recognized in net income on equity securities | (Dollars in thousands) Nine months ended Nine months ended September 30, 2022 September 30, 2021 Net (losses) and gains recognized during the period on equity securities $ (181) $ 165 Less: Net gains recognized during the period on equity securities sold during the period 27 4 Net (losses) and gains recognized during the reporting period on equity securities still held at the reporting date $ (208) $ 161 |
Schedule of gross unrealized losses and fair value of the corporations debt securities | September 30, 2022 (Dollars in thousands) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale: Value Loss Value Loss Value Loss U.S. Treasury securities $ 11,628 $ (769) $ 6,728 $ (1,118) $ 18,356 $ (1,887) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 38,062 (2,875) 54,908 (11,026) 92,970 (13,901) Other 190 (1) 3,415 (38) 3,605 (39) Other mortgage-backed debt securities 24,694 (1,566) 11,646 (1,472) 36,340 (3,038) Obligations of state and political subdivisions 131,635 (13,551) 16,791 (5,509) 148,426 (19,060) Asset backed securities 21,510 (306) 8,356 (661) 29,866 (967) Corporate debt securities 19,160 (1,057) 17,463 (1,587) 36,623 (2,644) Total $ 246,879 $ (20,125) $ 119,307 $ (21,411) $ 366,186 $ (41,536) December 31, 2021 (Dollars in thousands) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Available-for-Sale: Value Loss Value Loss Value Loss U.S. Treasury securities $ 7,729 $ (96) $ — $ — $ 7,729 $ (96) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 66,195 (1,271) 11,697 (417) 77,892 (1,688) Other — — 6,687 (65) 6,687 (65) Other mortgage-backed debt securities 11,036 (225) 7,362 (205) 18,398 (430) Obligations of state and political subdivisions 25,867 (362) 3,931 (192) 29,798 (554) Asset backed securities 11,232 (49) 6,315 (107) 17,547 (156) Corporate debt securities 19,485 (315) 3,445 (55) 22,930 (370) Total $ 141,544 $ (2,318) $ 39,437 $ (1,041) $ 180,981 $ (3,359) |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
Schedule of classes of the loan portfolio summarized by risk rating | Commercial and (Dollars in thousands) Industrial Commercial Real Estate September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Grade: 1-6 Pass $ 84,683 $ 81,561 $ 578,976 $ 498,565 7 Special Mention — — 837 1,098 8 Substandard 736 796 19,387 21,248 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs 436 169 868 743 Total loans $ 85,855 $ 82,526 $ 600,068 $ 521,654 Residential Real Estate Including Home Equity Consumer September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Grade: 1-6 Pass $ 153,535 $ 141,983 $ 5,304 $ 5,210 7 Special Mention — 570 58 — 8 Substandard 979 1,020 — 5 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs (190) (190) 66 63 Total loans $ 154,324 $ 143,383 $ 5,428 $ 5,278 Total Loans September 30, December 31, 2022 2021 Grade: 1-6 Pass $ 822,498 $ 727,319 7 Special Mention 895 1,668 8 Substandard 21,102 23,069 9 Doubtful — — Add (deduct): Unearned discount and — — Net deferred loan fees and costs 1,180 785 Total loans $ 845,675 $ 752,841 |
Schedule of the allowance for loan losses, by loan class | (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the three months ended September 30, 2022: Allowance for Loan Losses: Beginning balance $ 675 $ 5,954 $ 1,609 $ 79 $ 843 $ 9,160 Charge-offs (149) — (12) (10) — (171) Recoveries — — 2 1 — 3 Provision (credit) 192 93 11 5 (82) 219 Ending Balance $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the nine months ended September 30, 2022: Allowance for Loan Losses: Beginning balance $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Charge-offs (158) — (12) (16) — (186) Recoveries 2 38 16 5 — 61 Provision (credit) 193 601 67 2 (207) 656 Ending Balance $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 718 $ 6,047 $ 1,610 $ 75 $ 761 $ 9,211 Loans Receivable: Ending Balance $ 85,855 $ 600,068 $ 154,324 $ 5,428 $ — $ 845,675 Ending balance: individually evaluated for impairment $ 979 $ 10,357 $ 841 $ — $ — $ 12,177 Ending balance: collectively evaluated for impairment $ 84,876 $ 589,711 $ 153,483 $ 5,428 $ — $ 833,498 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the three months ended September 30, 2021: Allowance for Loan Losses: Beginning balance $ 851 $ 4,930 $ 1,539 $ 95 $ 709 $ 8,124 Charge-offs — — (10) (13) — (23) Recoveries — — 1 1 — 2 (Credit) provision (84) 280 (16) 11 (6) 185 Ending Balance $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the nine months ended September 30, 2021: Allowance for Loan Losses: Beginning balance $ 787 $ 4,762 $ 1,643 $ 94 $ 647 $ 7,933 Charge-offs (13) (29) (65) (33) — (140) Recoveries — 30 2 8 — 40 (Credit) provision (7) 447 (66) 25 56 455 Ending Balance $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 767 $ 5,210 $ 1,514 $ 94 $ 703 $ 8,288 Loans Receivable: Ending Balance $ 94,791 $ 513,001 $ 143,747 $ 5,246 $ — $ 756,785 Ending balance: individually evaluated for impairment $ 1,035 $ 12,685 $ 1,169 $ — $ — $ 14,889 Ending balance: collectively evaluated for impairment $ 93,756 $ 500,316 $ 142,578 $ 5,246 $ — $ 741,896 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the year ended December 31, 2021: Allowance for Loan Losses: Beginning balance $ 787 $ 4,762 $ 1,643 $ 94 $ 647 $ 7,933 Charge-offs (13) (29) (80) (36) — (158) Recoveries — 30 4 11 — 45 (Credit) provision (93) 645 (28) 15 321 860 Ending Balance $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Loans Receivable: Ending Balance $ 82,526 $ 521,654 $ 143,383 $ 5,278 $ — $ 752,841 Ending balance: individually evaluated for impairment $ 1,017 $ 11,803 $ 853 $ — $ — $ 13,673 Ending balance: collectively evaluated for impairment $ 81,509 $ 509,851 $ 142,530 $ 5,278 $ — $ 739,168 |
Schedule of the outstanding recorded investment of TDRs | (Dollars in thousands) September 30, December 31, 2022 2021 Non-accrual TDRs $ 1,329 $ 1,413 Accruing TDRs 6,260 6,607 Total $ 7,589 $ 8,020 |
Schedule of the loan modifications categorized as TDRs | (Dollars in thousands) For the Three Months Ended September 30, 2022 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 1 $ 134 $ 143 $ 143 Total 1 $ 134 $ 143 $ 143 (Dollars in thousands) For the Nine Months Ended September 30, 2022 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 2 $ 481 $ 515 $ 507 Total 2 $ 481 $ 515 $ 507 (Dollars in thousands) For the Three Months Ended September 30, 2021 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 1 $ 59 $ 59 $ 59 Total 1 $ 59 $ 59 $ 59 (Dollars in thousands) For the Nine Months Ended September 30, 2021 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 4 $ 360 $ 360 $ 350 Total 4 $ 360 $ 360 $ 350 For the Three Months Ended September 30, 2022 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — — 1 1 Total — — 1 1 For the Nine Months Ended September 30, 2022 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — — 2 2 Total — — 2 2 For the Three Months Ended September 30, 2021 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — — 1 1 Total — — 1 1 For the Nine Months Ended September 30, 2021 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — 2 2 4 Total — 2 2 4 |
Schedule of recorded investment, unpaid principal balance, related allowance, average recorded investment, and interest income recognized with respect to the Corporation's impaired loans | (Dollars in thousands) September 30, 2022 December 31, 2021 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded: Commercial and Industrial $ 979 $ 979 $ — $ 1,017 $ 1,017 $ — Commercial Real Estate 10,357 13,289 — 11,803 14,735 — Residential Real Estate 841 874 — 853 885 — With an allowance recorded: Commercial and Industrial — — — — — — Commercial Real Estate — — — — — — Residential Real Estate — — — — — — Total $ 12,177 $ 15,142 $ — $ 13,673 $ 16,637 $ — Total consists of: Commercial and Industrial $ 979 $ 979 $ — $ 1,017 $ 1,017 $ — Commercial Real Estate $ 10,357 $ 13,289 $ — $ 11,803 $ 14,735 $ — Residential Real Estate $ 841 $ 874 $ — $ 853 $ 885 $ — (Dollars in thousands) For the Three Months Ended For the Three Months Ended September 30, 2022 September 30, 2021 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related allowance recorded: Commercial and Industrial $ 987 $ 4 $ 1,042 $ 2 Commercial Real Estate 10,400 71 12,890 82 Residential Real Estate 843 — 1,181 — With an allowance recorded: Commercial and Industrial — — — — Commercial Real Estate — — — — Residential Real Estate — — — — Total $ 12,230 $ 75 $ 15,113 $ 84 Total consists of: Commercial and Industrial $ 987 $ 4 $ 1,042 $ 2 Commercial Real Estate $ 10,400 $ 71 $ 12,890 $ 82 Residential Real Estate $ 843 $ — $ 1,181 $ — (Dollars in thousands) For the Nine Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related allowance recorded: Commercial and Industrial $ 997 $ 9 $ 1,061 $ 7 Commercial Real Estate 10,962 213 12,673 270 Residential Real Estate 847 — 1,155 1 With an allowance recorded: Commercial and Industrial — — — — Commercial Real Estate — — 322 — Residential Real Estate — — — — Total $ 12,806 $ 222 $ 15,211 $ 278 Total consists of: Commercial and Industrial $ 997 $ 9 $ 1,061 $ 7 Commercial Real Estate $ 10,962 $ 213 $ 12,995 $ 270 Residential Real Estate $ 847 $ — $ 1,155 $ 1 |
Schedule of total non-performing assets | (Dollars in thousands) September 30, December 31, 2022 2021 Commercial and Industrial $ 670 $ 708 Commercial Real Estate 4,417 5,519 Residential Real Estate 830 839 Total non-accrual loans 5,917 7,066 Foreclosed assets held for resale — — Loans past-due 90 days or more and still accruing interest 165 — Total non-performing assets $ 6,082 $ 7,066 |
Schedule of the classes of the loan portfolio, including non-accrual loans and TDRs, summarized by past-due status | (Dollars in thousands) 90 Days Or Greater Past Due 90 Days Current- and Still 30-59 Days 60-89 Days or Greater Total 29 Days Total Accruing Past Due Past Due Past Due Past Due Past Due Loans Interest September 30, 2022: Commercial and Industrial $ — $ — $ 645 $ 645 $ 85,210 $ 85,855 $ — Commercial Real Estate 486 146 3,834 4,466 595,602 600,068 — Residential Real Estate 122 195 995 1,312 153,012 154,324 165 Consumer 3 4 — 7 5,421 5,428 — Total $ 611 $ 345 $ 5,474 $ 6,430 $ 839,245 $ 845,675 $ 165 (Dollars in thousands) 90 Days Or Greater Past Due 90 Days Current- and Still 30-59 Days 60-89 Days or Greater Total 29 Days Total Accruing Past Due Past Due Past Due Past Due Past Due Loans Interest December 31, 2021: Commercial and Industrial $ 47 $ — $ 678 $ 725 $ 81,801 $ 82,526 $ — Commercial Real Estate 116 189 4,891 5,196 516,458 521,654 — Residential Real Estate 553 191 839 1,583 141,800 143,383 — Consumer 14 — — 14 5,264 5,278 — Total $ 730 $ 380 $ 6,408 $ 7,518 $ 745,323 $ 752,841 $ — |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
DEPOSITS | |
Schedule of major classifications of deposits | (Dollars in thousands) September 30, December 31, 2022 2021 Non-interest bearing demand $ 251,894 $ 249,040 Interest bearing demand 373,604 395,033 Savings 273,769 260,804 Time certificates of deposits less than $250,000 146,943 158,914 Time certificates of deposits $250,000 or greater 10,362 13,030 Other time 1,737 1,148 Total deposits $ 1,058,309 $ 1,077,969 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
BORROWINGS | |
Schedule of short-term borrowings and weighted-average interest rates | (Dollars in thousands) September 30, 2022 December 31, 2021 Average Average Amount Rate Amount Rate Federal funds purchased $ — — % $ — 0.36 % Securities sold under agreements to repurchase 28,519 0.56 % 27,377 0.35 % Federal Discount Window — 2.21 % — 0.36 % Federal Home Loan Bank of Pittsburgh 66,229 1.94 % — 0.34 % Total $ 94,748 1.44 % $ 27,377 0.35 % |
Schedule of short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements | (Dollars in thousands) Gross Net Amounts Amounts of Liabilities Offset Presented Gross in the in the Amounts of Consolidated Consolidated Cash Recognized Balance Balance Financial Collateral Net Liabilities Sheet Sheet Instruments Pledge Amount September 30, 2022 Repurchase agreements (a) $ 28,519 $ — $ 28,519 $ (28,519) $ — $ — December 31, 2021 Repurchase agreements (a) $ 27,377 $ — $ 27,377 $ (27,377) $ — $ — (a) As of September 30, 2022 and December 31, 2021, the fair value of securities pledged in connection with repurchase agreements was $36,062,000 and $37,735,000 , respectively. |
Schedule of the remaining contractual maturity of the master netting arrangement or repurchase agreements | (Dollars in thousands) Remaining Contractual Maturity of the Agreements Overnight Greater Greater and Up to 30 -90 than Continuous 30 days Days 90 Days Total September 30, 2022: Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 28,519 $ — $ — $ — $ 28,519 Total $ 28,519 $ — $ — $ — $ 28,519 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of weighted-average term and discount rates for operating and finance leases | September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Operating Operating Finance Finance Weighted-average term (years) 24.13 24.51 0.92 1.67 Weighted-average discount rate 3.93% 3.89% 0.68% 0.68% |
Schedule of maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows | (Dollars in thousands) September 30, December 31, September 30, December 31, 2022 2021 2022 2021 Minimum Lease Payments due: Operating Operating Finance Finance Within one year $ 80 $ 120 $ 9 $ 10 After one but within two years 68 68 — 7 After two but within three years 68 68 — — After three but within four years 68 68 — — After four but within five years 78 68 — — After five years 2,129 2,190 — — Total undiscounted cash flows 2,491 2,582 9 17 Discount on cash flows (1,007) (1,083) — (1) Total lease liability $ 1,484 $ 1,499 $ 9 $ 16 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | |
Schedule of Financial instruments whose contract amounts representing credit risk | (Dollars in thousands) September 30, 2022 December 31, 2021 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 123,282 $ 142,335 Financial standby letters of credit $ 2,779 $ 2,000 Performance standby letters of credit $ 3,073 $ 3,727 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of securities measured at fair value on a recurring basis | (Dollars in thousands) September 30, 2022 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 18,356 $ — $ — $ 18,356 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 95,674 — 95,674 Other — 5,567 — 5,567 Other mortgage backed debt securities — 36,340 — 36,340 Obligations of state and political subdivisions — 155,322 — 155,322 Asset backed securities — 29,867 — 29,867 Corporate debt securities — 45,443 — 45,443 Total debt securities available-for-sale 18,356 368,213 — 386,569 Marketable equity securities 1,612 — — 1,612 Total recurring fair value measurements $ 19,968 $ 368,213 $ — $ 388,181 (Dollars in thousands) December 31, 2021 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 7,729 $ — $ — $ 7,729 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 114,911 — 114,911 Other — 7,576 — 7,576 Other mortgage backed debt securities — 39,550 — 39,550 Obligations of state and political subdivisions — 186,176 — 186,176 Asset backed securities — 36,542 — 36,542 Corporate debt securities — 45,432 — 45,432 Total debt securities available-for-sale 7,729 430,187 — 437,916 Marketable equity securities 1,962 — — 1,962 Total recurring fair value measurements $ 9,691 $ 430,187 $ — $ 439,878 |
Schedule of impaired loans measured at fair value on a nonrecurring basis | (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at September 30, 2022 Impaired loans: Commercial Real Estate $ — $ — $ 5,902 $ 5,902 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,932 $ 5,932 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2021 Impaired loans: Commercial Real Estate $ — $ — $ 5,954 $ 5,954 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,984 $ 5,984 |
Schedule of fair value measurement inputs and valuation techniques | (Dollars in thousands) Quantitative Information about Level 3 Fair Value Measurements Fair Value Weighted September 30, 2022 Estimate Valuation Technique Unobservable Input Range Average Impaired loans - collateral dependent $ 3,120 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 ( 15% ) – ( 26% ) (15%) Impaired loans - other $ 2,812 Discounted cash flow Discount rate ( 7% ) – ( 7% ) (7%) December 31, 2021 Impaired loans - collateral dependent $ 3,120 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 ( 15% ) – ( 44% ) (15%) Impaired loans - other $ 2,864 Discounted cash flow Discount rate ( 7% ) – ( 7% ) (7%) 1. Fair value is generally determined through independent appraisals or Certificates of Inspection of the underlying collateral, as defined by Bank regulators. 2. Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value. 3. Includes qualitative adjustments by management and estimated liquidation expenses. 4. Collateral values may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. |
Schedule of fair value of financial instruments, including financial assets and financial liabilities | (Dollars in thousands) Carrying Fair Value Measurements at September 30, 2022 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 8,677 $ 8,677 $ — $ — $ 8,677 Interest-bearing deposits in other banks 1,803 — 1,803 — 1,803 Time deposits with other banks — — — — — Restricted investment in bank stocks 4,408 — 4,408 — 4,408 Net loans 836,464 — — 792,912 792,912 Mortgage servicing rights 327 — — 327 327 Accrued interest receivable 4,479 — 4,479 — 4,479 FINANCIAL LIABILITIES: Demand, savings and other deposits 899,267 — 899,267 — 899,267 Time deposits 159,042 — 153,246 — 153,246 Short-term borrowings 94,748 — 94,410 — 94,410 Long-term borrowings 25,000 — 24,058 — 24,058 Subordinated debentures 25,000 — 22,019 — 22,019 Accrued interest payable 573 — 573 — 573 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — (Dollars in thousands) Carrying Fair Value Measurements at December 31, 2021 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,600 $ 9,600 $ — $ — $ 9,600 Interest-bearing deposits in other banks 51,738 — 51,738 — 51,738 Time deposits with other banks 247 — 247 — 247 Restricted investment in bank stocks 1,919 — 1,919 — 1,919 Net loans 744,161 — — 762,914 762,914 Mortgage servicing rights 367 — — 367 367 Accrued interest receivable 4,361 — 4,361 — 4,361 FINANCIAL LIABILITIES: Demand, savings and other deposits 904,877 — 904,877 — 904,877 Time deposits 173,092 — 172,897 — 172,897 Short-term borrowings 27,377 — 27,380 — 27,380 Long-term borrowings 35,000 — 35,987 — 35,987 Subordinated debentures 25,000 — 24,384 — 24,384 Accrued interest payable 251 — 251 — 251 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | (In thousands, except earnings per share) Three Months Ended September 30, 2022 2021 Net income $ 3,504 $ 4,023 Weighted-average common shares outstanding 5,982 5,915 Basic and diluted earnings per share $ 0.58 $ 0.68 (In thousands, except earnings per share) Nine Months Ended September 30, 2022 2021 Net income $ 10,869 $ 11,506 Weighted-average common shares outstanding 5,964 5,890 Basic and diluted earnings per share $ 1.82 $ 1.95 |
BASIS OF PRESENTATION , SUMMARY
BASIS OF PRESENTATION , SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 21, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | |||
Purchase of premises | $ 445 | $ 308 | |
Subsequent Event | Office Building | Bethlehem, Pennsylvania | |||
Subsequent Event [Line Items] | |||
Purchase of premises | $ 1,107 |
SECURITIES - Amortized cost, re
SECURITIES - Amortized cost, related estimated fair value, and unrealized gains and losses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Available-for-Sale Securities | ||
Amortized Cost | $ 427,887 | $ 428,311 |
Gross Unrealized Gains | 218 | 12,964 |
Gross Unrealized Losses | (41,536) | (3,359) |
Total | 386,569 | 437,916 |
Other mortgage backed debt securities [Member] | ||
Available-for-Sale Securities | ||
Amortized Cost | 39,378 | 39,881 |
Gross Unrealized Gains | 99 | |
Gross Unrealized Losses | (3,038) | (430) |
Total | 36,340 | 39,550 |
U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 20,243 | 7,825 |
Gross Unrealized Losses | (1,887) | (96) |
Total | 18,356 | 7,729 |
Obligations of U.S. Government Agencies and Sponsored Agencies Mortgage-Backed | ||
Available-for-Sale Securities | ||
Amortized Cost | 109,574 | 116,039 |
Gross Unrealized Gains | 1 | 560 |
Gross Unrealized Losses | (13,901) | (1,688) |
Total | 95,674 | 114,911 |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities | ||
Amortized Cost | 5,603 | 7,636 |
Gross Unrealized Gains | 3 | 5 |
Gross Unrealized Losses | (39) | (65) |
Total | 5,567 | 7,576 |
Obligations of state and political subdivisions | ||
Available-for-Sale Securities | ||
Amortized Cost | 174,338 | 175,021 |
Gross Unrealized Gains | 44 | 11,709 |
Gross Unrealized Losses | (19,060) | (554) |
Total | 155,322 | 186,176 |
Asset backed securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 30,834 | 36,555 |
Gross Unrealized Gains | 143 | |
Gross Unrealized Losses | (967) | (156) |
Total | 29,867 | 36,542 |
Corporate debt securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 47,917 | 45,354 |
Gross Unrealized Gains | 170 | 448 |
Gross Unrealized Losses | (2,644) | (370) |
Total | $ 45,443 | $ 45,432 |
SECURITIES - Amortized cost and
SECURITIES - Amortized cost and fair value of debt securities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Other mortgage backed debt securities [Member] | |
Available-For-Sale - Amortized cost | |
1 - 5 Years | $ 9,146 |
5 - 10 Years | 1,255 |
After 10 Years | 28,977 |
Total | 39,378 |
Available-For-Sale - Estimated fair value | |
1 - 5 Years | 8,813 |
5 - 10 Years | 1,217 |
After 10 Years | 26,310 |
Total | 36,340 |
U.S. Treasury and/or agency securities | |
Available-For-Sale - Amortized cost | |
1 - 5 Years | 12,397 |
5 - 10 Years | 7,846 |
Total | 20,243 |
Available-For-Sale - Estimated fair value | |
1 - 5 Years | 11,628 |
5 - 10 Years | 6,728 |
Total | 18,356 |
U.S. Government Corporations & Agencies Obligations | |
Available-For-Sale - Amortized cost | |
1 - 5 Years | 285 |
5 - 10 Years | 12,959 |
After 10 Years | 101,933 |
Total | 115,177 |
Available-For-Sale - Estimated fair value | |
1 - 5 Years | 283 |
5 - 10 Years | 12,894 |
After 10 Years | 88,064 |
Total | 101,241 |
Obligations of state and political subdivisions | |
Available-For-Sale - Amortized cost | |
Within 1 Year | 2,244 |
1 - 5 Years | 21,637 |
5 - 10 Years | 38,430 |
After 10 Years | 112,027 |
Total | 174,338 |
Available-For-Sale - Estimated fair value | |
Within 1 Year | 2,237 |
1 - 5 Years | 20,800 |
5 - 10 Years | 35,558 |
After 10 Years | 96,727 |
Total | 155,322 |
Asset backed securities | |
Available-For-Sale - Amortized cost | |
After 10 Years | 30,834 |
Total | 30,834 |
Available-For-Sale - Estimated fair value | |
After 10 Years | 29,867 |
Total | 29,867 |
Corporate debt securities | |
Available-For-Sale - Amortized cost | |
Within 1 Year | 5,511 |
1 - 5 Years | 9,177 |
5 - 10 Years | 33,229 |
Total | 47,917 |
Available-For-Sale - Estimated fair value | |
Within 1 Year | 5,560 |
1 - 5 Years | 9,101 |
5 - 10 Years | 30,782 |
Total | $ 45,443 |
SECURITIES - Unrealized and rea
SECURITIES - Unrealized and realized gains (losses) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
SECURITIES | ||
Net (losses) and gains recognized during the period on equity securities | $ (181) | $ 165 |
Less: Net gains recognized during the period on equity securities sold during the period | 27 | 4 |
Net (losses) and gains recognized during the reporting period on equity securities still held at the reporting date | $ (208) | $ 161 |
SECURITIES - Continuous unreali
SECURITIES - Continuous unrealized loss position (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Less Than 12 Months | ||
Fair Value | $ 246,879 | $ 141,544 |
Unrealized Loss | (20,125) | (2,318) |
12 Months or More | ||
Fair Value | 119,307 | 39,437 |
Unrealized Loss | (21,411) | (1,041) |
Total | ||
Fair Value | 366,186 | 180,981 |
Unrealized Loss | (41,536) | (3,359) |
Other mortgage backed debt securities | ||
Less Than 12 Months | ||
Fair Value | 24,694 | 11,036 |
Unrealized Loss | (1,566) | (225) |
12 Months or More | ||
Fair Value | 11,646 | 7,362 |
Unrealized Loss | (1,472) | (205) |
Total | ||
Fair Value | 36,340 | 18,398 |
Unrealized Loss | (3,038) | (430) |
U.S. Treasury and/or agency securities | ||
Less Than 12 Months | ||
Fair Value | 11,628 | 7,729 |
Unrealized Loss | (769) | (96) |
12 Months or More | ||
Fair Value | 6,728 | |
Unrealized Loss | (1,118) | |
Total | ||
Fair Value | 18,356 | 7,729 |
Unrealized Loss | (1,887) | (96) |
Obligations of U.S. Government Agencies and Sponsored Agencies Mortgage-Backed | ||
Less Than 12 Months | ||
Fair Value | 38,062 | 66,195 |
Unrealized Loss | (2,875) | (1,271) |
12 Months or More | ||
Fair Value | 54,908 | 11,697 |
Unrealized Loss | (11,026) | (417) |
Total | ||
Fair Value | 92,970 | 77,892 |
Unrealized Loss | (13,901) | (1,688) |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Less Than 12 Months | ||
Fair Value | 190 | |
Unrealized Loss | (1) | |
12 Months or More | ||
Fair Value | 3,415 | 6,687 |
Unrealized Loss | (38) | (65) |
Total | ||
Fair Value | 3,605 | 6,687 |
Unrealized Loss | (39) | (65) |
Obligations of state and political subdivisions | ||
Less Than 12 Months | ||
Fair Value | 131,635 | 25,867 |
Unrealized Loss | (13,551) | (362) |
12 Months or More | ||
Fair Value | 16,791 | 3,931 |
Unrealized Loss | (5,509) | (192) |
Total | ||
Fair Value | 148,426 | 29,798 |
Unrealized Loss | (19,060) | (554) |
Asset backed securities | ||
Less Than 12 Months | ||
Fair Value | 21,510 | 11,232 |
Unrealized Loss | (306) | (49) |
12 Months or More | ||
Fair Value | 8,356 | 6,315 |
Unrealized Loss | (661) | (107) |
Total | ||
Fair Value | 29,866 | 17,547 |
Unrealized Loss | (967) | (156) |
Corporate debt securities | ||
Less Than 12 Months | ||
Fair Value | 19,160 | 19,485 |
Unrealized Loss | (1,057) | (315) |
12 Months or More | ||
Fair Value | 17,463 | 3,445 |
Unrealized Loss | (1,587) | (55) |
Total | ||
Fair Value | 36,623 | 22,930 |
Unrealized Loss | $ (2,644) | $ (370) |
SECURITIES - Additional Informa
SECURITIES - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Total | $ 386,569,000 | $ 386,569,000 | $ 437,916,000 | ||
Aggregate carrying value | 300,452,000 | 300,452,000 | 318,074,000 | ||
Proceeds from sales of debt securities available-for-sale | 0 | $ 0 | 0 | $ 0 | |
Impairment losses realized on available-for-sale debt securities | 0 | 0 | 0 | 0 | |
Marketable equity securities, at fair value | 1,612,000 | 1,612,000 | 1,962,000 | ||
Accumulated other comprehensive income (loss) | (32,642,000) | (32,642,000) | 7,588,000 | ||
Proceeds from sale of securities held-to-maturity | 0 | 0 | 0 | 0 | |
Realized gain (loss) on held to maturity securities sold | 0 | 0 | |||
Net gains and losses on debt securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions Less Than Or Equal To One Year | item | 156 | 156 | |||
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions Greater Than One Year | item | 61 | 61 | |||
Asset Pledged as Collateral | |||||
Total | $ 355,786,000 | $ 355,786,000 | 401,861,000 | ||
Marketable Equity Securities | |||||
Marketable equity securities, at fair value | $ 1,612,000 | $ 1,612,000 | $ 1,962,000 |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Financing Receivable, Recorded Investment [Line Items] | |||
Add (deduct): Unearned discount | $ 0 | $ 0 | |
Net deferred loan fees and costs | 1,180,000 | 785,000 | |
Total loans | 845,675,000 | 752,841,000 | $ 756,785,000 |
GGLs | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 4,660,000 | 3,829,000 | |
Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 822,498,000 | 727,319,000 | |
Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 895,000 | 1,668,000 | |
Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 21,102,000 | 23,069,000 | |
Doubtful | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 0 | 0 | |
Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Net deferred loan fees and costs | 436,000 | 169,000 | |
Total loans | 85,855,000 | 82,526,000 | 94,791,000 |
Commercial and industrial | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 84,683,000 | 81,561,000 | |
Commercial and industrial | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 736,000 | 796,000 | |
commercial real estate | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Net deferred loan fees and costs | 868,000 | 743,000 | |
Total loans | 600,068,000 | 521,654,000 | 513,001,000 |
commercial real estate | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 578,976,000 | 498,565,000 | |
commercial real estate | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 837,000 | 1,098,000 | |
commercial real estate | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 19,387,000 | 21,248,000 | |
residential real estate | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Net deferred loan fees and costs | (190,000) | (190,000) | |
Total loans | 154,324,000 | 143,383,000 | 143,747,000 |
residential real estate | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 153,535,000 | 141,983,000 | |
residential real estate | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 570,000 | ||
residential real estate | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 979,000 | 1,020,000 | |
Consumer | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Net deferred loan fees and costs | 66,000 | 63,000 | |
Total loans | 5,428,000 | 5,278,000 | $ 5,246,000 |
Consumer | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | 5,304,000 | 5,210,000 | |
Consumer | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | $ 58,000 | ||
Consumer | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans | $ 5,000 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES - Activity in allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Beginning balance | $ 9,160 | $ 8,124 | $ 8,680 | $ 7,933 | $ 7,933 |
Charge-offs | (171) | (23) | (186) | (140) | (158) |
Recoveries | 3 | 2 | 61 | 40 | 45 |
(Credit) provision | 219 | 185 | 656 | 455 | 860 |
Ending Balance | 9,211 | 8,288 | 9,211 | 8,288 | 8,680 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 9,211 | 8,288 | 9,211 | 8,288 | 8,680 |
Ending Balance | 845,675 | 756,785 | 845,675 | 756,785 | 752,841 |
Ending balance: individually evaluated for impairment | 12,177 | 14,889 | 12,177 | 14,889 | 13,673 |
Ending balance: collectively evaluated for impairment | 833,498 | 741,896 | 833,498 | 741,896 | 739,168 |
Commercial and industrial | |||||
Beginning balance | 675 | 851 | 681 | 787 | 787 |
Charge-offs | (149) | (158) | (13) | (13) | |
Recoveries | 2 | 0 | |||
(Credit) provision | 192 | (84) | 193 | (7) | (93) |
Ending Balance | 718 | 767 | 718 | 767 | 681 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 718 | 767 | 718 | 767 | 681 |
Ending Balance | 85,855 | 94,791 | 85,855 | 94,791 | 82,526 |
Ending balance: individually evaluated for impairment | 979 | 1,035 | 979 | 1,035 | 1,017 |
Ending balance: collectively evaluated for impairment | 84,876 | 93,756 | 84,876 | 93,756 | 81,509 |
commercial real estate | |||||
Beginning balance | 5,954 | 4,930 | 5,408 | 4,762 | 4,762 |
Charge-offs | (29) | (29) | |||
Recoveries | 38 | 30 | 30 | ||
(Credit) provision | 93 | 280 | 601 | 447 | 645 |
Ending Balance | 6,047 | 5,210 | 6,047 | 5,210 | 5,408 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 6,047 | 5,210 | 6,047 | 5,210 | 5,408 |
Ending Balance | 600,068 | 513,001 | 600,068 | 513,001 | 521,654 |
Ending balance: individually evaluated for impairment | 10,357 | 12,685 | 10,357 | 12,685 | 11,803 |
Ending balance: collectively evaluated for impairment | 589,711 | 500,316 | 589,711 | 500,316 | 509,851 |
residential real estate | |||||
Beginning balance | 1,609 | 1,539 | 1,539 | 1,643 | 1,643 |
Charge-offs | (12) | (10) | (12) | (65) | (80) |
Recoveries | 2 | 1 | 16 | 2 | 4 |
(Credit) provision | 11 | (16) | 67 | (66) | (28) |
Ending Balance | 1,610 | 1,514 | 1,610 | 1,514 | 1,539 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 1,610 | 1,514 | 1,610 | 1,514 | 1,539 |
Ending Balance | 154,324 | 143,747 | 154,324 | 143,747 | 143,383 |
Ending balance: individually evaluated for impairment | 841 | 1,169 | 841 | 1,169 | 853 |
Ending balance: collectively evaluated for impairment | 153,483 | 142,578 | 153,483 | 142,578 | 142,530 |
Consumer | |||||
Beginning balance | 79 | 95 | 84 | 94 | 94 |
Charge-offs | (10) | (13) | (16) | (33) | (36) |
Recoveries | 1 | 1 | 5 | 8 | 11 |
(Credit) provision | 5 | 11 | 2 | 25 | 15 |
Ending Balance | 75 | 94 | 75 | 94 | 84 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 75 | 94 | 75 | 94 | 84 |
Ending Balance | 5,428 | 5,246 | 5,428 | 5,246 | 5,278 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | 5,428 | 5,246 | 5,428 | 5,246 | 5,278 |
Unallocated Financing Receivables | |||||
Beginning balance | 843 | 709 | 968 | 647 | 647 |
Charge-offs | 0 | ||||
Recoveries | 0 | ||||
(Credit) provision | (82) | (6) | (207) | 56 | 321 |
Ending Balance | 761 | 703 | 761 | 703 | 968 |
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | $ 761 | $ 703 | $ 761 | $ 703 | 968 |
Ending Balance | 0 | ||||
Ending balance: individually evaluated for impairment | 0 | ||||
Ending balance: collectively evaluated for impairment | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES - Outstanding recorded investment of TDRs (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Modifications, Recorded Investment | $ 7,589,000 | $ 8,020,000 |
Non-accrual TDRs | ||
Financing Receivable, Modifications, Recorded Investment | 1,329,000 | 1,413,000 |
Accruing TDRs | ||
Financing Receivable, Modifications, Recorded Investment | $ 6,260,000 | $ 6,607,000 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loan modifications categorized as TDRs (Details) | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2022 contract | Sep. 30, 2022 USD ($) | Sep. 30, 2022 loan | Sep. 30, 2021 contract | Sep. 30, 2021 USD ($) | Sep. 30, 2021 loan | Sep. 30, 2022 contract | Sep. 30, 2022 USD ($) | Sep. 30, 2022 loan | Sep. 30, 2021 contract | Sep. 30, 2021 USD ($) | Sep. 30, 2021 loan | |
Number of contracts | 1 | 1 | 1 | 1 | 2 | 2 | 4 | 4 | ||||
Pre-Modification Outstanding Recorded Investment | $ 134,000 | $ 59,000 | $ 481,000 | $ 360,000 | ||||||||
Post-Modification Outstanding Recorded Investment | 143,000 | 59,000 | 515,000 | 360,000 | ||||||||
Recorded Investment | 143,000 | 59,000 | 507,000 | 350,000 | ||||||||
commercial real estate | ||||||||||||
Number of contracts | contract | 1 | 1 | 2 | 4 | ||||||||
Pre-Modification Outstanding Recorded Investment | 134,000 | 59,000 | 481,000 | 360,000 | ||||||||
Post-Modification Outstanding Recorded Investment | 143,000 | 59,000 | 515,000 | 360,000 | ||||||||
Recorded Investment | $ 143,000 | $ 59,000 | $ 507,000 | $ 350,000 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES - Types of loan modifications (Details) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 contract | Sep. 30, 2022 loan | Sep. 30, 2021 contract | Sep. 30, 2021 loan | Sep. 30, 2022 contract | Sep. 30, 2022 loan | Sep. 30, 2021 contract | Sep. 30, 2021 loan | |
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 1 | 1 | 2 | 2 | 4 | 4 |
commercial real estate | ||||||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 2 | 4 | ||||
Term Modification | ||||||||
Financing Receivable, Modifications, Number of Contracts | 2 | 2 | 2 | |||||
Term Modification | commercial real estate | ||||||||
Financing Receivable, Modifications, Number of Contracts | 2 | |||||||
Payment Modification | ||||||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 2 | 2 | 2 | |||
Payment Modification | commercial real estate | ||||||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 2 | 2 | ||||
commercial real estate | ||||||||
Financing Receivable, Modifications, Number of Contracts | contract | 1 | 1 | 2 | 4 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Recorded Investment | |||||
Total | $ 12,177,000 | $ 12,177,000 | $ 13,673,000 | ||
Unpaid Principal Balance | |||||
Total | 15,142,000 | 15,142,000 | 16,637,000 | ||
Related Allowance | |||||
Total | 0 | ||||
Average Recorded Investment | |||||
Total | 12,230,000 | $ 15,113,000 | 12,806,000 | $ 15,211,000 | |
Interest Income Recognized | |||||
Total | 75,000 | 84,000 | 222,000 | 278,000 | |
Commercial and industrial | |||||
Recorded Investment | |||||
With no related allowance recorded | 979,000 | 979,000 | 1,017,000 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | 979,000 | 979,000 | 1,017,000 | ||
Unpaid Principal Balance | |||||
With no related allowance recorded | 979,000 | 979,000 | 1,017,000 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | 979,000 | 979,000 | 1,017,000 | ||
Related Allowance | |||||
With no related allowance recorded | 0 | 0 | 0 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | 0 | 0 | 0 | ||
Average Recorded Investment | |||||
With no related allowance recorded | 987,000 | 1,042,000 | 997,000 | 1,061,000 | |
Total | 987,000 | 1,042,000 | 997,000 | 1,061,000 | |
Interest Income Recognized | |||||
With no related allowance recorded | 4,000 | 2,000 | 9,000 | 7,000 | |
Total | 4,000 | 2,000 | 9,000 | 7,000 | |
commercial real estate | |||||
Recorded Investment | |||||
With no related allowance recorded | 10,357,000 | 10,357,000 | 11,803,000 | ||
Total | 10,357,000 | 10,357,000 | 11,803,000 | ||
Unpaid Principal Balance | |||||
With no related allowance recorded | 13,289,000 | 13,289,000 | 14,735,000 | ||
Total | 13,289,000 | 13,289,000 | 14,735,000 | ||
Related Allowance | |||||
With no related allowance recorded | 0 | 0 | 0 | ||
With an allowance recorded | 0 | ||||
Total | 0 | ||||
Average Recorded Investment | |||||
With no related allowance recorded | 10,400,000 | 12,890,000 | 10,962,000 | 12,673,000 | |
With an allowance recorded | 322,000 | ||||
Total | 10,400,000 | 12,890,000 | 10,962,000 | 12,995,000 | |
Interest Income Recognized | |||||
With no related allowance recorded | 71,000 | 82,000 | 213,000 | 270,000 | |
Total | 71,000 | 82,000 | 213,000 | 270,000 | |
residential real estate | |||||
Recorded Investment | |||||
With no related allowance recorded | 841,000 | 841,000 | 853,000 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | 841,000 | 841,000 | 853,000 | ||
Unpaid Principal Balance | |||||
With no related allowance recorded | 874,000 | 874,000 | 885,000 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | 874,000 | 874,000 | 885,000 | ||
Related Allowance | |||||
With no related allowance recorded | 0 | 0 | 0 | ||
With an allowance recorded | 0 | 0 | 0 | ||
Total | $ 0 | ||||
Average Recorded Investment | |||||
With no related allowance recorded | 843,000 | 1,181,000 | 847,000 | 1,155,000 | |
Total | $ 843,000 | $ 1,181,000 | $ 847,000 | 1,155,000 | |
Interest Income Recognized | |||||
With no related allowance recorded | 1,000 | ||||
Total | $ 1,000 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES - Non-performing assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Total non-accrual loans | $ 5,917 | $ 7,066 |
Loans past-due 90 days or more and still accruing interest | 165 | |
Total non-performing assets | 6,082 | 7,066 |
Commercial and industrial | ||
Total non-accrual loans | 670 | 708 |
Loans past-due 90 days or more and still accruing interest | 0 | |
commercial real estate | ||
Total non-accrual loans | 4,417 | 5,519 |
Loans past-due 90 days or more and still accruing interest | 0 | |
residential real estate | ||
Total non-accrual loans | 830 | $ 839 |
Loans past-due 90 days or more and still accruing interest | $ 165 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES - Past due (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Current - 29 Days Past Due | $ 839,245 | $ 745,323 | |
Total Loans | 845,675 | 752,841 | $ 756,785 |
90 Days or Greater Past Due and Still Accruing Interest | 165 | ||
Financial Asset, Past Due, Equal to or Greater Than 30 Days | |||
Past Due | 6,430 | 7,518 | |
Financial Asset, 30 to 59 Days Past Due | |||
Past Due | 611 | 730 | |
Financing Receivables, 60 to 89 Days Past Due | |||
Past Due | 345 | 380 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Past Due | 5,474 | 6,408 | |
Commercial and industrial | |||
Current - 29 Days Past Due | 85,210 | 81,801 | |
Total Loans | 85,855 | 82,526 | 94,791 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | ||
Commercial and industrial | Financial Asset, Past Due, Equal to or Greater Than 30 Days | |||
Past Due | 645 | 725 | |
Commercial and industrial | Financial Asset, 30 to 59 Days Past Due | |||
Past Due | 0 | 47 | |
Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | |||
Past Due | 0 | ||
Commercial and industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Past Due | 645 | 678 | |
commercial real estate | |||
Current - 29 Days Past Due | 595,602 | 516,458 | |
Total Loans | 600,068 | 521,654 | 513,001 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | ||
commercial real estate | Financial Asset, Past Due, Equal to or Greater Than 30 Days | |||
Past Due | 4,466 | 5,196 | |
commercial real estate | Financial Asset, 30 to 59 Days Past Due | |||
Past Due | 486 | 116 | |
commercial real estate | Financing Receivables, 60 to 89 Days Past Due | |||
Past Due | 146 | 189 | |
commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Past Due | 3,834 | 4,891 | |
residential real estate | |||
Current - 29 Days Past Due | 153,012 | 141,800 | |
Total Loans | 154,324 | 143,383 | 143,747 |
90 Days or Greater Past Due and Still Accruing Interest | 165 | ||
residential real estate | Financial Asset, Past Due, Equal to or Greater Than 30 Days | |||
Past Due | 1,312 | 1,583 | |
residential real estate | Financial Asset, 30 to 59 Days Past Due | |||
Past Due | 122 | 553 | |
residential real estate | Financing Receivables, 60 to 89 Days Past Due | |||
Past Due | 195 | 191 | |
residential real estate | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Past Due | 995 | 839 | |
Consumer | |||
Current - 29 Days Past Due | 5,421 | 5,264 | |
Total Loans | 5,428 | 5,278 | $ 5,246 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | ||
Consumer | Financial Asset, Past Due, Equal to or Greater Than 30 Days | |||
Past Due | 7 | 14 | |
Consumer | Financial Asset, 30 to 59 Days Past Due | |||
Past Due | 3 | 14 | |
Consumer | Financing Receivables, 60 to 89 Days Past Due | |||
Past Due | 4 | 0 | |
Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Past Due | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) contract loan | Sep. 30, 2021 USD ($) contract | Sep. 30, 2021 loan contract | Sep. 30, 2021 contract | Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) loan contract | Sep. 30, 2022 USD ($) contract loan | Sep. 30, 2021 USD ($) contract | Sep. 30, 2021 contract loan | Sep. 30, 2021 contract | Dec. 31, 2021 USD ($) loan | |
Loans Receivable Held-for-sale, Amount | $ 691,000 | $ 691,000 | $ 691,000 | $ 691,000 | $ 691,000 | $ 691,000 | $ 691,000 | $ 691,000 | $ 6,006,000 | ||||||
Interest rate | 1% | ||||||||||||||
Maximum loan to value ratio with PMI | 95% | 95% | 95% | 95% | 95% | 95% | 95% | 95% | |||||||
Loan Payments, Delinquency Period, Beyond Which Loans are Considered Past Due | 10 days | ||||||||||||||
Loan Payments, Delinquency Period, at which time Delinquency Notice is Automatically Generated | 10 or 15 days | ||||||||||||||
Loan Payments, Delinquency Period, Beyond Which Loans are Considered Non-Accrual | 90 days | ||||||||||||||
Transfer of Loans Held-for-sale to Portfolio Loans | $ 7,900,000 | ||||||||||||||
Foreclosed Assets Held For Resale | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | $ 0 | $ 0 | 0 | ||||||
Consumer Mortgage Loans Secured by Residential Real Estate in Process of Foreclosure | 41,000 | 41,000 | 41,000 | 41,000 | 41,000 | 41,000 | 41,000 | 41,000 | 41,000 | ||||||
Financing Receivable, Modifications, Recorded Investment | 7,589,000 | $ 7,589,000 | $ 7,589,000 | 7,589,000 | 7,589,000 | 7,589,000 | $ 7,589,000 | $ 7,589,000 | 8,020,000 | ||||||
Financing Receivable, Modifications, Unfunded Commitments | 0 | 0 | |||||||||||||
Modified value of TDR | 143,000 | $ 59,000 | 515,000 | $ 360,000 | |||||||||||
Number of contracts | 1 | 1 | 1 | 1 | 2 | 2 | 4 | 4 | |||||||
Impaired Financing Receivable Related Allowance Attributable to TDR | 0 | 0 | |||||||||||||
Impaired Financing Receivable, Interest Income, Accrual Method | 75,000 | 84,000 | 222,000 | 278,000 | |||||||||||
Impaired Financing Receivable Interest Income Non-accrual Method | 0 | 0 | 3,000 | ||||||||||||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 143,000 | $ 59,000 | 515,000 | 360,000 | |||||||||||
Number of loans modified as troubled debt restructuring within previous 12 months, with subsequent payment default | loan | 0 | 0 | 0 | ||||||||||||
GGLs | |||||||||||||||
Loans | 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | 4,660,000 | $ 4,660,000 | $ 4,660,000 | 3,829,000 | ||||||
Minimum | |||||||||||||||
Term of loan | 2 years | ||||||||||||||
Maximum | |||||||||||||||
Term of loan | 5 years | ||||||||||||||
commercial real estate | Maximum | |||||||||||||||
Term of loan offering | 20 years | ||||||||||||||
Maximum loan to value ratio | 80% | ||||||||||||||
Irrevocable Letter of credit | Developer of a Residential Sub-Division | |||||||||||||||
Loans and Leases Receivable, Impaired, Commitment to Lend | 1,249,000 | 1,249,000 | 1,249,000 | $ 1,249,000 | $ 1,249,000 | 1,249,000 | 1,249,000 | 1,249,000 | 1,249,000 | ||||||
Unfunded Loan Commitment | |||||||||||||||
Reserve For Unfunded Lending Commitments | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 177,000 | ||||||
CARES Act Section 4013 Program For Loan Modifications | |||||||||||||||
Count | loan | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||
Amount of loan modification that were still actively on deferral | $ 9,423,000 | ||||||||||||||
Loan Restructuring Modification | |||||||||||||||
Count | loan | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | ||||||
Amount of loan modification that were still actively on deferral | $ 9,423,000 | ||||||||||||||
Term Modification | |||||||||||||||
Number of contracts | 2 | 2 | 2 | ||||||||||||
Payment Modification | |||||||||||||||
Number of contracts | 1 | 1 | 2 | 2 | 2 | ||||||||||
Commercial and industrial | |||||||||||||||
Tax free loans | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | $ 28,995,000 | 24,647,000 | ||||||
Financing Receivable Modification Not In Compliance Of Terms | $ 670,000 | $ 724,000 | |||||||||||||
Number of loans not in compliance with restructure | contract | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | |
Impaired Financing Receivable, Interest Income, Accrual Method | $ 4,000 | $ 2,000 | $ 9,000 | $ 7,000 | |||||||||||
Government Guaranteed Loans. | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 4,660,000 | $ 3,829,000 | ||||||
Commercial and industrial | PPP | |||||||||||||||
Number of loans funded | loan | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 122 | ||||||
Loan funded under paycheck protection program | $ 125,000 | $ 125,000 | $ 125,000 | $ 125,000 | $ 125,000 | $ 125,000 | $ 125,000 | $ 125,000 | $ 4,894,000 | ||||||
Commercial and industrial | PPP | First Round of Paycheck Protection Program Loans Issuance | |||||||||||||||
Number of loans funded | loan | 2 | ||||||||||||||
Loan funded under paycheck protection program | $ 160,000 | ||||||||||||||
Commercial and industrial | PPP | Second Round of Paycheck Protection Program Loans Issuance | |||||||||||||||
Number of loans funded | loan | 120 | ||||||||||||||
Loan funded under paycheck protection program | $ 4,734,000 | ||||||||||||||
commercial real estate | |||||||||||||||
Tax free loans | 1,538,000 | $ 1,538,000 | $ 1,538,000 | $ 1,538,000 | $ 1,538,000 | 1,538,000 | $ 1,538,000 | $ 1,538,000 | $ 1,671,000 | ||||||
Modified value of TDR | 143,000 | $ 59,000 | 515,000 | 360,000 | |||||||||||
Number of contracts | contract | 1 | 1 | 2 | 4 | |||||||||||
Financing Receivable Modification Not In Compliance Of Terms | 107,000 | $ 541,000 | |||||||||||||
Number of loans not in compliance with restructure | contract | 8 | 8 | 8 | 8 | 8 | 8 | |||||||||
Financing Receivable Modification Experienced Payment Defaults | $ 291,000 | ||||||||||||||
Impaired Financing Receivable, Interest Income, Accrual Method | 71,000 | 82,000 | 213,000 | $ 270,000 | |||||||||||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 143,000 | $ 59,000 | $ 515,000 | 360,000 | |||||||||||
Number of loans modified as troubled debt restructuring within previous 12 months, with subsequent payment default | loan | 3 | ||||||||||||||
residential real estate | |||||||||||||||
Financing Receivable Modification Not In Compliance Of Terms | $ 15,000 | ||||||||||||||
Number of loans not in compliance with restructure | contract | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||
Impaired Financing Receivable, Interest Income, Accrual Method | $ 1,000 | ||||||||||||||
residential real estate | Maximum | |||||||||||||||
Term of loan offering | 20 years | ||||||||||||||
residential real estate | Home Equity Term Loans | Maximum | |||||||||||||||
Term of loan offering | 15 years | ||||||||||||||
residential real estate | Residential Mortgage | Originated For Resale | |||||||||||||||
Loans held for sale term | 30 years | 30 years | 30 years | 30 years | 30 years | 30 years | 30 years | 30 years | |||||||
residential real estate | Residential Mortgage | Originated For Resale | Maximum | |||||||||||||||
Term of loan offering | 30 years | ||||||||||||||
Maximum loan to value ratio | 80% | ||||||||||||||
residential real estate | Home Equity Loan | Maximum | |||||||||||||||
Maximum loan to value ratio | 80% | ||||||||||||||
residential real estate | Home Equity Line of Credit | Maximum | |||||||||||||||
Maximum loan to value ratio | 80% | ||||||||||||||
residential real estate | Home Equity Line of Credit | Home Equity Term Loans | Maximum | |||||||||||||||
Term of loan offering | 20 years |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
DEPOSITS | ||
Non-interest bearing demand | $ 251,894,000 | $ 249,040,000 |
Interest bearing demand | 373,604,000 | 395,033,000 |
Savings | 273,769,000 | 260,804,000 |
Time certificates of deposits less than $250,000 | 146,943,000 | 158,914,000 |
Time certificates of deposits $250,000 or greater | 10,362,000 | 13,030,000 |
Other time | 1,737,000 | 1,148,000 |
Total deposits | $ 1,058,309,000 | $ 1,077,969,000 |
DEPOSITS - Additional Informati
DEPOSITS - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
DEPOSITS | |||
Increase (Decrease) in Deposits | $ (19,660,000) | $ 208,016,000 | |
Deposits. | 1,058,309,000 | $ 1,077,969,000 | |
Increase (decrease) in highly rate sensitive deposits | $ (84,608,000) |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Short-term Debt | $ 94,748 | $ 27,377 |
Debt Instrument, Interest Rate During Period | 1.44% | 0.35% |
Federal Funds Purchased [Member] | ||
Short-term Debt | $ 0 | $ 0 |
Debt Instrument, Interest Rate During Period | 0% | 0.36% |
Securities sold under agreements to repurchase | ||
Short-term Debt | $ 28,519 | $ 27,377 |
Debt Instrument, Interest Rate During Period | 0.56% | 0.35% |
Federal Discount Window | ||
Short-term Debt | $ 0 | $ 0 |
Debt Instrument, Interest Rate During Period | 2.21% | 0.36% |
Federal Home Loan Bank | ||
Short-term Debt | $ 66,229 | $ 0 |
Debt Instrument, Interest Rate During Period | 1.94% | 0.34% |
BORROWINGS - Repurchase agreeme
BORROWINGS - Repurchase agreements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | $ 28,519 | $ 27,377 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 28,519 | 27,377 |
Financial Instruments | (28,519) | (27,377) |
Cash Collateral Pledge | 0 | 0 |
Net Amount | $ 0 | $ 0 |
BORROWINGS - Remaining contract
BORROWINGS - Remaining contractual maturity of the repurchase agreements (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | $ 28,519 |
U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 28,519 |
Overnight and Continuous | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 28,519 |
Overnight and Continuous | U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 28,519 |
Up to 30 days | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Up to 30 days | U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
30 - 90 Days | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
30 - 90 Days | U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Greater than 90 Days | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Greater than 90 Days | U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | $ 0 |
BORROWINGS - Additional Informa
BORROWINGS - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Short-term Debt [Line Items] | ||
Fair value of securities pledged | $ 36,062,000 | $ 37,735,000 |
Advance from FHLB | 25,000,000 | 35,000,000 |
Net loans | 836,464,000 | $ 744,161,000 |
Maximum borrowing capacity | 468,873,000 | |
Investment securities pledged as collateral to FHLB | 0 | |
Irrevocable Standby Letter of Credit | ||
Short-term Debt [Line Items] | ||
Advance from FHLB | 0 | |
Asset Pledged as Collateral | ||
Short-term Debt [Line Items] | ||
Net loans | $ 664,778,000 | |
Maximum | ||
Short-term Debt [Line Items] | ||
Federal funds purchased, securities sold under agreements to repurchase and Federal Home Loan Bank advances, maturity | 30 days |
SUBORDINATED DEBT (Details)
SUBORDINATED DEBT (Details) - Subordinated Debt | Dec. 10, 2020 USD ($) |
Subordinated debt | |
Aggregate principal amount | $ 25,000,000 |
Stated interest rate for first five years | 4.375% |
Period of time for fixed interest rate and semi-annual payments (in years) | 5 years |
Minimum period of time for notice of redemption | 10 days |
Redemption price as a percent of principle amount | 100% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Weighted average term and discount rates (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
COMMITMENTS AND CONTINGENCIES | ||
Operating Lease, Weighted-average term (years) | 24 years 1 month 17 days | 24 years 6 months 3 days |
Operating Lease, Weighted-average discount rate | 3.93% | 3.89% |
Finance Lease, Weighted-average term (years) | 11 months 1 day | 1 year 8 months 1 day |
Finance Lease, Weighted-average discount rate | 0.68% | 0.68% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Maturity analysis of operating lease liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
COMMITMENTS AND CONTINGENCIES | ||
Within one year | $ 80,000 | $ 120,000 |
After one but within two years | 68,000 | 68,000 |
After two but within three years | 68,000 | 68,000 |
After three but within four years | 68,000 | 68,000 |
After four but within five years | 78,000 | 68,000 |
After five years | 2,129,000 | 2,190,000 |
Total undiscounted cash flows | 2,491,000 | 2,582,000 |
Discount on cash flows | (1,007,000) | (1,083,000) |
Total lease liability | 1,484,000 | 1,499,000 |
Finance Lease, Minimum Lease Payments due: | ||
Within one year | 9,000 | 10,000 |
After one but within two years | 7,000 | |
Total undiscounted cash flows | 9,000 | 17,000 |
Discount on cash flows | (1,000) | |
Total lease liability | $ 9,000 | $ 16,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | 9 Months Ended | ||
Sep. 30, 2022 USD ($) lease | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Number of Operating Leases | lease | 5 | ||
Operating Lease, Right-of-Use Asset | $ 999,000 | $ 1,025,000 | |
Operating Lease, Liability | 1,484,000 | 1,499,000 | |
Operating Lease, Cost | 135,000 | $ 133,000 | |
Operating Lease, Payments | $ 125,000 | 116,000 | |
Number of finance leases | lease | 1 | ||
Finance lease, Right-of-Use Asset | $ 34,000 | $ 34,000 | |
Finance lease, Right-of-Use Asset, Balance sheet location | Premises and equipment, net | Premises and equipment, net | |
Finance Lease, Liability | $ 9,000 | $ 16,000 | |
Finance Lease Liability, Balance sheet location | Other Liabilities | Other Liabilities | |
Finance lease principal payments | $ 7,000 | $ 7,000 | |
Banking Facilities | |||
Lessee, Lease, Description [Line Items] | |||
Number of Operating Leases | lease | 4 | ||
Land | |||
Lessee, Lease, Description [Line Items] | |||
Number of Operating Leases | lease | 1 |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | $ 123,282 | $ 142,335 |
Financial standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | 2,779 | 2,000 |
Performance standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | $ 3,073 | $ 3,727 |
FINANCIAL INSTRUMENTS WITH OF_4
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK - Additional Information (Details) - Credit Concentration Risk | Sep. 30, 2022 USD ($) |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Loans Receivable, Secure by Commercial and Residential Real Estate | $ 754,392,000 |
Loans Receivable, Percentage of Loans Secure by Commercial and Residential Real Estate | 89.20% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | $ 386,569,000 | $ 437,916,000 |
Marketable equity securities | 1,612,000 | 1,962,000 |
Transfer in or out of Level 3 | 0 | 0 |
U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,356,000 | 7,729,000 |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 5,567,000 | 7,576,000 |
Asset backed securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 29,867,000 | 36,542,000 |
Corporate debt securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 45,443,000 | 45,432,000 |
Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 1,612,000 | 1,962,000 |
Fair Value, Measurements, Recurring | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 386,569,000 | 437,916,000 |
Total recurring fair value measurements | 388,181,000 | 439,878,000 |
Fair Value, Measurements, Recurring | U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,356,000 | 7,729,000 |
Fair Value, Measurements, Recurring | Mortgage Backed Obligations Of Us Government Corporations And Agencies | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 95,674,000 | 114,911,000 |
Fair Value, Measurements, Recurring | Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 5,567,000 | 7,576,000 |
Fair Value, Measurements, Recurring | Other Mortgage Backed Debt Securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 36,340,000 | 39,550,000 |
Fair Value, Measurements, Recurring | Obligations of state and political subdivisions | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 155,322,000 | 186,176,000 |
Fair Value, Measurements, Recurring | Asset backed securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 29,867,000 | 36,542,000 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 45,443,000 | 45,432,000 |
Fair Value, Measurements, Recurring | Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 1,612,000 | 1,962,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,356,000 | 7,729,000 |
Total recurring fair value measurements | 19,968,000 | 9,691,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,356,000 | 7,729,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Mortgage Backed Obligations Of Us Government Corporations And Agencies | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Other Mortgage Backed Debt Securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Obligations of state and political subdivisions | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Asset backed securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Corporate debt securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 1,612,000 | 1,962,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 368,213,000 | 430,187,000 |
Total recurring fair value measurements | 368,213,000 | 430,187,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Mortgage Backed Obligations Of Us Government Corporations And Agencies | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 95,674,000 | 114,911,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 5,567,000 | 7,576,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Mortgage Backed Debt Securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 36,340,000 | 39,550,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Obligations of state and political subdivisions | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 155,322,000 | 186,176,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Asset backed securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 29,867,000 | 36,542,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 45,443,000 | 45,432,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Total recurring fair value measurements | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Mortgage Backed Obligations Of Us Government Corporations And Agencies | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Mortgage Backed Debt Securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Obligations of state and political subdivisions | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Asset backed securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Corporate debt securities | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Impai
FAIR VALUE MEASUREMENTS - Impaired loans measured at FV (Details) - Fair Value Measurements, Nonrecurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 5,932 | $ 5,984 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 5,932 | 5,984 |
commercial real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 5,902 | 5,954 |
commercial real estate | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
commercial real estate | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
commercial real estate | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 5,902 | 5,954 |
Residential Real Estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 30 | 30 |
Residential Real Estate | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Residential Real Estate | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Residential Real Estate | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 30 | $ 30 |
FAIR VALUE MEASUREMENTS - Quant
FAIR VALUE MEASUREMENTS - Quantitative information about Level 3 FV measurements (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Impaired loans - collateral dependent | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Estimate | $ 3,120 | $ 3,120 |
Valuation Technique | Appraisal of collateral1,3Certificate of Inspection1,3 | Appraisal of collateral1,3Certificate of Inspection1,3 |
Unobservable Input | Appraisal adjustments2Qualitative Adjustments4 | Appraisal adjustments2Qualitative Adjustments4 |
Impaired loans - collateral dependent | Minimum | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (15.00%) | (15.00%) |
Impaired loans - collateral dependent | Maximum | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (26.00%) | (44.00%) |
Impaired loans - collateral dependent | Weighted Average | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (15.00%) | (15.00%) |
Impaired Loans Receivable Discounted Cash Flow | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Valuation Technique | Discounted cash flow | Discounted cash flow |
Unobservable Input | Discount rate | Discount rate |
Impaired loans - other | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Estimate | $ 2,812 | $ 2,864 |
Impaired loans - other | Minimum | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (7.00%) | (7.00%) |
Impaired loans - other | Maximum | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (7.00%) | (7.00%) |
Impaired loans - other | Weighted Average | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | (7.00%) | (7.00%) |
FAIR VALUE MEASUREMENTS - FV of
FAIR VALUE MEASUREMENTS - FV of Financial instruments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
FINANCIAL ASSETS: (Carrying Amount) | ||
Cash and due from banks | $ 8,677 | $ 9,600 |
Interest-bearing deposits in other banks | 1,803 | 51,738 |
Time deposits with other banks | 247 | |
Restricted investment in bank stocks | 4,408 | 1,919 |
Net loans | 836,464 | 744,161 |
Accrued interest receivable | 4,479 | 4,361 |
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Short-term borrowings | 94,748 | 27,377 |
Long-term borrowings | 25,000 | 35,000 |
Subordinated debentures | 25,000 | 25,000 |
Accrued interest payable | 573 | 251 |
Fair Value Measurements, Nonrecurring | ||
FINANCIAL ASSETS: (Carrying Amount) | ||
Cash and due from banks | 8,677 | 9,600 |
Interest-bearing deposits in other banks | 1,803 | 51,738 |
Time deposits with other banks | 0 | 247 |
Restricted investment in bank stocks | 4,408 | 1,919 |
Net loans | 836,464 | 744,161 |
Mortgage servicing rights | 327 | 367 |
Accrued interest receivable | 4,479 | 4,361 |
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Core deposits | 899,267 | 904,877 |
Time deposits | 159,042 | 173,092 |
Short-term borrowings | 94,748 | 27,377 |
Long-term borrowings | 25,000 | 35,000 |
Subordinated debentures | 25,000 | 25,000 |
Accrued interest payable | 573 | 251 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Carrying Amount) | 0 | |
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 8,677 | 9,600 |
Interest-bearing deposits in other banks | 1,803 | 51,738 |
Time deposits with other banks | 0 | 247 |
Restricted investment in bank stocks | 4,408 | 1,919 |
Net loans | 792,912 | 762,914 |
Mortgage servicing rights | 327 | 367 |
Accrued interest receivable | 4,479 | 4,361 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 899,267 | 904,877 |
Time deposits | 153,246 | 172,897 |
Short-term borrowings | 94,410 | 27,380 |
Long-term borrowings | 24,058 | 35,987 |
Subordinated debentures | 22,019 | 24,384 |
Accrued interest payable | 573 | 251 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | 0 |
Fair Value Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Subordinated debentures | 0 | |
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 8,677 | 9,600 |
Interest-bearing deposits in other banks | 0 | 0 |
Time deposits with other banks | 0 | 0 |
Restricted investment in bank stocks | 0 | 0 |
Net loans | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Accrued interest receivable | 0 | 0 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 0 | 0 |
Time deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Subordinated debentures | 0 | |
Accrued interest payable | 0 | 0 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | 0 |
Fair Value Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | ||
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Subordinated debentures | 22,019 | |
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits in other banks | 1,803 | 51,738 |
Time deposits with other banks | 0 | 247 |
Restricted investment in bank stocks | 4,408 | 1,919 |
Net loans | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Accrued interest receivable | 4,479 | 4,361 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 899,267 | 904,877 |
Time deposits | 153,246 | 172,897 |
Short-term borrowings | 94,410 | 27,380 |
Long-term borrowings | 24,058 | 35,987 |
Subordinated debentures | 24,384 | |
Accrued interest payable | 573 | 251 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | 0 |
Fair Value Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Subordinated debentures | 0 | |
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits in other banks | 0 | 0 |
Time deposits with other banks | 0 | 0 |
Restricted investment in bank stocks | 0 | 0 |
Net loans | 792,912 | 762,914 |
Mortgage servicing rights | 327 | 367 |
Accrued interest receivable | 0 | 0 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 0 | 0 |
Time deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Subordinated debentures | 0 | |
Accrued interest payable | 0 | 0 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) | Sep. 30, 2022 USD ($) |
FAIR VALUE MEASUREMENTS | |
Minimum impaired loan balance that requires an appraisal or certificate of inspection to be obtained and reviewed annually for impaired loan valuation procedure | $ 250,000 |
Maximum impaired loan balance for which the bank completes a Certificate of Inspection | $ 250,000 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
REVENUE RECOGNITION | ||
Fair value of trust assets | $ 114,030,000 | $ 108,339,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
EARNINGS PER SHARE | ||||
Net income | $ 3,504 | $ 4,023 | $ 10,869 | $ 11,506 |
Weighted-average common shares outstanding, basic | 5,982,000 | 5,915,000 | 5,964,000 | 5,890,000 |
Weighted-average common shares outstanding, diluted | 5,982,000 | 5,915,000 | 5,964,000 | 5,890,000 |
Basic earnings per share | $ 0.58 | $ 0.68 | $ 1.82 | $ 1.95 |
Diluted earnings per share | $ 0.58 | $ 0.68 | $ 1.82 | $ 1.95 |
Potential common shares outstanding | 0 | 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
GOODWILL. | ||
Goodwill | $ 19,133 | $ 19,133 |