Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
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 | Jun. 30, 2023 | |
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 | 6,064,772 | |
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 | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and due from banks | $ 12,597,000 | $ 9,441,000 |
Interest-bearing deposits in other banks | 1,178,000 | 1,297,000 |
Total cash and cash equivalents | 13,775,000 | 10,738,000 |
Debt securities available-for-sale, at fair value | 331,580,000 | 373,444,000 |
Marketable equity securities, at fair value | 1,476,000 | 1,699,000 |
Restricted investment in bank stocks, at cost | 8,617,000 | 7,136,000 |
Loans | 871,239,000 | 858,398,000 |
Loans held for sale | 0 | 71,000 |
Allowance for credit losses | (7,157,000) | (8,274,000) |
Net loans | 864,082,000 | 850,195,000 |
Premises and equipment, net | 19,764,000 | 19,024,000 |
Operating lease right-of-use assets | 1,523,000 | 1,541,000 |
Accrued interest receivable | 4,173,000 | 4,391,000 |
Cash surrender value of bank owned life insurance | 25,691,000 | 25,389,000 |
Investments in low-income housing partnerships | 5,491,000 | 3,763,000 |
Goodwill | 19,133,000 | 19,133,000 |
Deferred income taxes | 8,879,000 | 9,129,000 |
Other assets | 3,715,000 | 3,612,000 |
TOTAL ASSETS | 1,307,899,000 | 1,329,194,000 |
LIABILITIES | ||
Non-interest bearing | 220,519,000 | 231,754,000 |
Interest bearing | 715,322,000 | 761,745,000 |
Total deposits | 935,841,000 | 993,499,000 |
Short-term borrowings | 193,359,000 | 153,418,000 |
Long-term borrowings | 25,000,000 | 25,000,000 |
Subordinated debentures | 25,000,000 | 25,000,000 |
Operating lease liabilities | 2,019,000 | 2,029,000 |
Accrued interest payable | 1,171,000 | 563,000 |
Other liabilities | 4,324,000 | 9,299,000 |
TOTAL LIABILITIES | 1,186,714,000 | 1,208,808,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $2.00 per share; authorized 1,000,000 shares as of June 30, 2023 and December 31, 2022; issued 0 as of June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, par value $2.00 per share; authorized 20,000,000 shares as of June 30, 2023 and December 31, 2022; issued 6,296,383 as of June 30, 2023 and 6,250,763 as of December 31, 2022; outstanding 6,064,772 as of June 30, 2023 and 6,019,152 as of December 31, 2022 | 12,593,000 | 12,502,000 |
Surplus | 43,217,000 | 42,439,000 |
Retained earnings | 100,600,000 | 100,712,000 |
Accumulated other comprehensive loss | (29,516,000) | (29,558,000) |
Treasury stock, at cost, 231,611 shares as of June 30, 2023 and December 31, 2022 | (5,709,000) | (5,709,000) |
TOTAL STOCKHOLDERS' EQUITY | 121,185,000 | 120,386,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,307,899,000 | $ 1,329,194,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
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 | 6,296,383 | 6,250,763 |
Common stock, shares outstanding | 6,064,772 | 6,019,152 |
Treasury stock, shares | 231,611 | 231,611 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INTEREST INCOME | ||||
Interest and fees on loans | $ 10,379 | $ 8,486 | $ 20,290 | $ 16,662 |
Interest and dividend income on securities: | ||||
Taxable | 2,833 | 1,716 | 5,701 | 3,287 |
Tax-exempt | 261 | 849 | 611 | 1,685 |
Dividends | 12 | 11 | 24 | 24 |
Dividend income on restricted investment in bank stocks | 162 | 49 | 326 | 70 |
Interest on interest-bearing deposits in other banks | 4 | 6 | 12 | |
Total interest income | 13,651 | 11,111 | 26,958 | 21,740 |
INTEREST EXPENSE | ||||
Interest on deposits | 3,833 | 706 | 6,884 | 1,391 |
Interest on short-term borrowings | 2,302 | 182 | 4,349 | 210 |
Interest on long-term borrowings | 134 | 168 | 266 | 358 |
Interest on subordinated debt | 274 | 274 | 547 | 544 |
Total interest expense | 6,543 | 1,330 | 12,046 | 2,503 |
Net interest income | 7,108 | 9,781 | 14,912 | 19,237 |
Provision for credit losses | 34 | 218 | 34 | 437 |
Net interest income after provision for credit losses | 7,074 | 9,563 | 14,878 | 18,800 |
NON-INTEREST INCOME | ||||
Trust department | 248 | 268 | 478 | 518 |
Service charges and fees | 571 | 549 | 1,096 | 1,058 |
Increase in cash surrender value of life insurance | 153 | 148 | 302 | 296 |
ATM fees and debit card income | 566 | 558 | 1,098 | 1,067 |
Net gains (losses) on sales of mortgage loans | 17 | 34 | (34) | |
Net securities losses | (69) | (68) | (125) | (131) |
Other | 53 | 59 | 108 | 129 |
Total non-interest income | 1,539 | 1,514 | 2,991 | 2,903 |
NON-INTEREST EXPENSE | ||||
Salaries and employee benefits | 3,733 | 3,462 | 8,119 | 7,016 |
Occupancy, net | 559 | 478 | 1,087 | 970 |
Furniture and equipment expense | 156 | 147 | 308 | 302 |
Computer expense | 406 | 358 | 769 | 728 |
Professional services | 346 | 370 | 781 | 668 |
Pennsylvania shares tax | 241 | 324 | 482 | 648 |
FDIC insurance, net | 178 | 120 | 354 | 257 |
ATM and debit card fees | 278 | 242 | 585 | 370 |
Data processing fees | 357 | 251 | 669 | 509 |
Advertising | 154 | 118 | 228 | 190 |
Other | 749 | 725 | 1,528 | 1,453 |
Total non-interest expense | 7,157 | 6,595 | 14,910 | 13,111 |
Income before income tax expense | 1,456 | 4,482 | 2,959 | 8,592 |
Income tax expense | 317 | 660 | 463 | 1,227 |
NET INCOME | $ 1,139 | $ 3,822 | $ 2,496 | $ 7,365 |
Net income per share: | ||||
Basic | $ 0.19 | $ 0.64 | $ 0.41 | $ 1.24 |
Diluted | 0.19 | 0.64 | 0.41 | 1.24 |
Dividends per share | $ 0.28 | $ 0.28 | $ 0.56 | $ 0.56 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | |||||
Net income | $ 1,139 | $ 3,822 | $ 2,496 | $ 7,365 | |
Other comprehensive income (loss): | |||||
Unrealized net holding gains (losses) on debt securities available-for-sale arising during the period, net of income taxes | (3,736) | (10,723) | 120 | (28,006) | |
Less reclassification adjustment for net gains included in net income, net of income taxes | (21) | [1] | (78) | (21) | |
Total other comprehensive income (loss) | (3,736) | (10,744) | 42 | (28,027) | |
Total Comprehensive Income (Loss) | $ (2,597) | $ (6,922) | $ 2,538 | $ (20,662) | |
[1] 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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ (993) | $ (2,850) | $ 32 | $ (7,445) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | $ 0 | $ (6) | $ (21) | $ (6) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Surplus | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Cumulative Effect, Period of Adoption, Adjustment [Member] | Total |
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, 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 | 7,365 | |||||||
Other comprehensive loss, net of taxes | (28,027) | |||||||
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 | |||||||
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, 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 | |||||||
Balance at Dec. 31, 2022 | $ 12,502 | 42,439 | $ 768 | 100,712 | (29,558) | (5,709) | $ 768 | 120,386 |
Balance (in shares) at Dec. 31, 2022 | 6,250,763 | |||||||
Net income | 1,357 | 1,357 | ||||||
Other comprehensive loss, net of taxes | 3,778 | 3,778 | ||||||
Issuance of common stock under dividend reinvestment plan | $ 41 | 381 | 422 | |||||
Issuance of common stock under dividend reinvestment plan (in shares) | 20,787 | |||||||
Dividends | (1,685) | (1,685) | ||||||
Balance at Mar. 31, 2023 | $ 12,543 | 42,820 | 101,152 | (25,780) | (5,709) | 125,026 | ||
Balance (in shares) at Mar. 31, 2023 | 6,271,550 | |||||||
Balance at Dec. 31, 2022 | $ 12,502 | 42,439 | $ 768 | 100,712 | (29,558) | (5,709) | $ 768 | 120,386 |
Balance (in shares) at Dec. 31, 2022 | 6,250,763 | |||||||
Net income | 2,496 | |||||||
Other comprehensive loss, net of taxes | 42 | |||||||
Balance at Jun. 30, 2023 | $ 12,593 | 43,217 | 100,600 | (29,516) | (5,709) | 121,185 | ||
Balance (in shares) at Jun. 30, 2023 | 6,296,383 | |||||||
Balance at Mar. 31, 2023 | $ 12,543 | 42,820 | 101,152 | (25,780) | (5,709) | 125,026 | ||
Balance (in shares) at Mar. 31, 2023 | 6,271,550 | |||||||
Net income | 1,139 | 1,139 | ||||||
Other comprehensive loss, net of taxes | (3,736) | (3,736) | ||||||
Issuance of common stock under dividend reinvestment plan | $ 50 | 397 | 447 | |||||
Issuance of common stock under dividend reinvestment plan (in shares) | 24,833 | |||||||
Dividends | (1,691) | (1,691) | ||||||
Balance at Jun. 30, 2023 | $ 12,593 | $ 43,217 | $ 100,600 | $ (29,516) | $ (5,709) | $ 121,185 | ||
Balance (in shares) at Jun. 30, 2023 | 6,296,383 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||
Cash dividends, per share | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,496,000 | $ 7,365,000 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Provision for credit losses | 34,000 | 437,000 |
Provision (credit) for credit losses on unfunded commitments | 45,000 | (60,000) |
Depreciation and amortization | 540,000 | 528,000 |
Net premium amortization on securities | 799,000 | 1,633,000 |
Deferred income tax expense (benefit) | 34,000 | (25,000) |
Common stock issued | 856,000 | 805,000 |
Net (gains) losses on sales of mortgage loans | (34,000) | 34,000 |
Proceeds from sales of mortgage loans originated for sale | 1,121,000 | 4,429,000 |
Originations of mortgage loans originated for sale | (1,016,000) | (6,068,000) |
Net securities losses | 125,000 | 131,000 |
Decrease (increase) in accrued interest receivable | 218,000 | (112,000) |
Increase in cash surrender value of bank owned life insurance | (302,000) | (296,000) |
Net losses on disposals of premises and equipment | 2,000 | 10,000 |
Increase in other assets | (87,000) | (639,000) |
Amortization of investment in low-income housing partnerships | 106,000 | 120,000 |
Increase in accrued interest payable | 608,000 | 22,000 |
(Decrease) increase in other liabilities | (5,188,000) | 97,000 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 357,000 | 8,411,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of equity securities and debt securities available-for-sale | 23,230,000 | 170,000 |
Proceeds from maturities and redemptions of debt securities available-for-sale | 17,987,000 | 28,871,000 |
Purchases of debt securities available-for-sale | 0 | (38,324,000) |
Net decrease in time deposits with other banks | 0 | 247,000 |
Net change in restricted investment in bank stocks | (1,481,000) | (3,834,000) |
Net increase in loans | (12,873,000) | (50,331,000) |
Purchase of premises and equipment | (1,251,000) | (325,000) |
Purchase of investment in real estate venture | (1,834,000) | (645,000) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 23,778,000 | (64,171,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net decrease in deposits | (57,658,000) | (84,361,000) |
Net increase in short-term borrowings | 39,941,000 | 102,346,000 |
Repayment of finance lease obligations | (5,000) | (5,000) |
Repayment of long-term borrowings | 0 | (10,000,000) |
Dividends paid | (3,376,000) | (3,334,000) |
NET CASH USED IN (PROVIDED BY) FINANCING ACTIVITIES | (21,098,000) | 4,646,000 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,037,000 | (51,114,000) |
CASH AND CASH EQUIVALENTS, BEGINNING | 10,738,000 | 61,338,000 |
CASH AND CASH EQUIVALENTS, ENDING | 13,775,000 | 10,224,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 11,438,000 | 2,481,000 |
Income taxes paid | 209,000 | 949,000 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Loans transferred from held for sale to held for investment portfolio | 0 | (6,652,000) |
Common stock subscription receivable | 13,000 | 14,000 |
Right-of-use assets obtained in exchange for lease liabilities | $ 33,000 | $ 35,000 |
BASIS OF PRESENTATION, SUMMARY
BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
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 six months ended June 30, 2023, are not necessarily indicative of the results for the year ending December 31, 2023. 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, 2022. Subsequent Events The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of June 30, 2023 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. |
RECENT ACCOUNTING STANDARDS UPD
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | 6 Months Ended |
Jun. 30, 2023 | |
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | |
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | NOTE 2 ― RECENT ACCOUNTING STANDARDS UPDATES (“ASU”) Adopted ASUs: In January of 2023, the Corporation adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU No. 2016-13 required financial assets measured at amortized cost to be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Corporation took steps to prepare for the implementation over the past several years, such as: forming an internal committee, gathering pertinent data, consulting with outside professionals, subscribing to a new software system, and running existing and new methodologies concurrently through the period of implementation. The Corporation also completed a data and model validation analysis and prepared policies related to the adoption process. The Corporation adopted the ASU’s provisions using the modified retrospective method and evaluated the impact the current expected credit loss (“CECL”) model had on the accounting for credit losses, and recognized a one-time, cumulative-effect adjustment to retained earnings at the beginning of the first reporting period in which the new standard became effective. The cumulative-effect adjustment resulted in an increase to retained earnings of , as outlined in the table on the next page. There was no impact on the securities portfolio upon adoption. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of and reason for the change, which is solely a result of the adoption of the required standard. January 1, 2023 As Reported Under ASU Pre- Impact of Assets: Allowance For Credit Losses $ (7,155) $ (8,274) $ 1,119 Deferred Income Taxes 8,925 9,129 (204) A Liabilities: Other Liabilities 9,446 9,299 147 B Equity: Retained Earnings 101,480 100,712 768 C A. Effect on deferred tax assets related to the adjustment to the allowance for credit losses and reserve for unfunded lending commitments from the adoption of ASU 2016-13 using a 21% tax rate B. Adjustment to the reserve for unfunded lending commitments related to the adoption of ASU 2016-13 C. Adjustment to undistributed profits related to the adoption of ASU 2016-13 In January of 2023, the Corporation adopted ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures , which eliminated the accounting guidance on troubled debt restructurings (“TDRs”) by creditors that have adopted the CECL model and enhances disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The ASU also amended the guidance on “vintage disclosures” to require disclosure of current-period gross charge-offs by year of origination. The Corporation adopted the ASU’s provisions using the modified retrospective method in conjunction with the CECL adoption. The adoption of ASU 2022-02 did not have a material impact on the Corporation’s consolidated financial statements. Pending ASUs: In March of 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-02, Investments- Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method . ASU 2023-02 allows for standardization of accounting methodology for tax credit equity investments when certain requirements are met. The standard provides the ability for both current and prospective tax credit investors to avoid the complexities of accounting for tax credits outside of the proportional amortization method. To qualify for the proportional amortization method, the following conditions must be met: 1. it is probable that the income tax credits allocable to the investor will be available, 2. the investor does not have the ability to exercise significant influence over the operating and financial policies of the underlying project, 3. substantially all of the projected benefits are from income tax credits and other income tax benefits, 4. the investor’s projected yield based solely on the cash flows from the income tax credits and other income tax benefits is positive, and 5. the investor is a limited liability investor in the limited liability entity for both legal and tax purposes and the investor’s liability is limited to its capital investment. The amendments in this ASU will be applied either on a modified retrospective basis or a retrospective basis. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years beginning after December 15, 2023. Early adoption is permitted for all entities in any interim period. The Corporation is currently evaluating the provisions of ASU 2023-02 and does not expect the adoption of the standard to have a material impact on the Corporation’s financial statements. |
SECURITIES
SECURITIES | 6 Months Ended |
Jun. 30, 2023 | |
SECURITIES | |
SECURITIES | NOTE 3 — SECURITIES Debt 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 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. 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 Corporation invests in various forms of agency debt including residential and commercial mortgage-backed 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 private (non-agency) student loan pools backed by the Federal Family Education LoanProgram (“FFELP”) which carry a 97% federal government guarantee. Corporate debt securities consist of senior debt and subordinated debt holdings. There was no allowance for credit losses for Available-For-Sale debt securities as of June 30, 2023; therefore, it is not present in the table below. The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as Available-For-Sale were as follows at June 30, 2023 and December 31, 2022: Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair June 30, 2023: Cost Gains Losses Value U.S. Treasury securities $ 7,867 $ — $ (1,021) $ 6,846 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 140,777 — (15,648) 125,129 Other 9,224 176 (45) 9,355 Other mortgage backed securities 32,341 — (3,258) 29,083 Obligations of state and political subdivisions 100,161 9 (12,110) 88,060 Asset-backed securities 32,831 7 (794) 32,044 Corporate debt securities 45,741 129 (4,807) 41,063 Total $ 368,942 $ 321 $ (37,683) $ 331,580 Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2022: Cost Gains Losses Value U.S. Treasury securities $ 7,853 $ — $ (1,052) $ 6,801 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 146,707 — (15,032) 131,675 Other 10,992 233 (45) 11,180 Other mortgage backed securities 36,767 — (3,079) 33,688 Obligations of state and political subdivisions 125,176 266 (14,753) 110,689 Asset-backed securities 37,526 — (1,108) 36,418 Corporate debt securities 45,838 183 (3,028) 42,993 Total $ 410,859 $ 682 $ (38,097) $ 373,444 Securities Available-for-Sale with an aggregate fair value of $247,027,000 at June 30, 2023 and $315,836,000 at December 31, 2022, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and the Federal Discount Window aggregating $195,838,000 at June 30, 2023 and $241,385,000 at December 31, 2022. The amortized cost and estimated fair value of debt securities, by contractual maturity, are shown below at June 30, 2023. 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. June 30, 2023 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 $ — $ — $ 6,245 $ 1,922 $ — $ 12,562 Fair value — — 6,119 1,911 — 12,587 1 - 5 Years: Amortized cost 2,898 736 1,746 17,995 — — Fair value 2,560 726 1,627 17,231 — — 5 - 10 Years: Amortized cost 4,969 14,225 — 22,139 2,049 33,179 Fair value 4,286 14,307 — 19,203 2,039 28,476 After 10 Years: Amortized cost — 135,040 24,350 58,105 30,782 — Fair value — 119,451 21,337 49,715 30,005 — Total: Amortized cost $ 7,867 $ 150,001 $ 32,341 $ 100,161 $ 32,831 $ 45,741 Fair value 6,846 134,484 29,083 88,060 32,044 41,063 1 Mortgage-backed securities are allocated for maturity reporting at their original maturity date. Corporations) which exceeded ten percent of consolidated stockholders’ equity at June 30, 2022. The quality rating of the obligations of state and political subdivisions are generally investment grade, as rated by Moody’s, Standard and Poor’s or Fitch. The typical exceptions are local issues which are not rated, but are secured by the full faith and credit obligations of the communities that issued these securities. There were no proceeds from sales of Debt Securities Available-For-Sale for the three months ended June 30, 2023 and 2022. Therefore, there were no gains or losses realized during these periods. Proceeds from sales of Debt Securities Available-For-Sale for the six months ended June 30, 2023 and 2022 were $23,230,000 and $0, respectively. Gross gains realized on these sales were $447,000 and $0, respectively. Gross losses on these sales were $348,000 and $0 respectively. 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 June 30, 2023 and December 31, 2022: June 30, 2023 (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 $ — $ — $ 6,846 $ (1,021) $ 6,846 $ (1,021) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 41,155 (1,097) 83,974 (14,551) 125,129 (15,648) Other 1,271 (6) 2,623 (39) 3,894 (45) Other mortgage-backed debt securities — — 29,083 (3,258) 29,083 (3,258) Obligations of state and political subdivisions 3,903 (36) 80,153 (12,074) 84,056 (12,110) Asset-backed securities 6,302 (5) 21,544 (789) 27,846 (794) Corporate debt securities 2,812 (298) 32,622 (4,509) 35,434 (4,807) Total $ 55,443 $ (1,442) $ 256,845 $ (36,241) $ 312,288 $ (37,683) December 31, 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 $ — $ — $ 6,801 $ (1,052) $ 6,801 $ (1,052) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 61,067 (2,184) 65,174 (12,848) 126,241 (15,032) Other 1,589 (2) 3,168 (43) 4,757 (45) Other mortgage-backed debt securities 16,167 (962) 17,521 (2,117) 33,688 (3,079) Obligations of state and political subdivisions 56,565 (5,881) 35,704 (8,872) 92,269 (14,753) Asset-backed securities 24,136 (405) 12,282 (703) 36,418 (1,108) Corporate debt securities 15,827 (1,073) 18,345 (1,955) 34,172 (3,028) Total $ 175,351 $ (10,507) $ 158,995 $ (27,590) $ 334,346 $ (38,097) There were 173 individual debt securities in an unrealized loss position as of June 30, 2023, with a combined decline in value representing 10.13% of the debt securities portfolio. There were 183 individual debt securities in an unrealized loss position as of December 31, 2022, with their combined decline in value representing 9.11% of the debt securities portfolio. Available-for-sale debt securities are required to be individually evaluated for impairment in accordance with ASC 326, Financial Instruments – Credit Losses. Management evaluates debt securities for impairment where there has been a decline in fair value below the amortized cost basis of a debt security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby Management compares the present value of expected cash flows with the amortized cost basis of the debt security. The credit loss component would be recognized through the provision for credit losses and the creation of an allowance for credit losses. Consideration is given to (1) the financial condition and near-term prospects of the issuer, (2) the outlook for receiving the contractual cash flows of the investments, (3) the length of time and the extent to which the fair value has been less than cost, (4) our intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value or whether it is more-likely-than-not that we will be required to sell the debt security prior to recovering its fair value, (5) the anticipated outlook for changes in the general level of interest rates, (6) credit ratings, (7) third party guarantees, and (8) collateral values. In analyzing an issuer’s financial condition, management considers whether the debt securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the debt securities. All issues of U.S. Treasury and Agency-Backed debt securities have the full faith and credit backing of the United States Government or one of its agencies. All other debt securities that do not have a zero expected credit loss are evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value. The Company made a policy election to exclude accrued interest receivable from the amortized cost basis of debt securities available for sale. Accrued interest receivable on debt securities available for sale is reported as a component of accrued interest receivable on the Company’s consolidated balance sheet and totaled $2,108,000 as of June 30, 2023. Accrued interest receivable on debt securities available for sale is excluded from the estimate of credit losses. All debt securities available for sale in an unrealized loss position, as of June 30, 2023, continue to perform as scheduled and we do not believe that there is a credit loss or that a provision for credit losses is necessary. Also, as part of our evaluation of our intent and ability to hold debt securities for a period of time sufficient to allow for any anticipated recovery in the market, we consider our investment strategies, cash flow needs, liquidity position, capital adequacy and interest rate risk position. We do not currently intend to sell the debt securities within the portfolio and it is not more-likely-than-not that we will be required to sell the debt securities. Management continues to monitor all of our debt securities with a high degree of scrutiny. There can be no assurance that we will not conclude in future periods that conditions existing at that time indicate some or all of its debt securities may be sold or would require a charge to earnings as a provision for credit losses in such periods. Equity Securities 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. At June 30, 2023 and December 31, 2022, the Company had $1,476,000 and $1,699,000, 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 six months ended June 30, 2023 and 2022: (Dollars in thousands) Six months ended Six months ended June 30, 2023 June 30, 2022 Net losses from market value fluctuations recognized during the period on equity securities $ (224) $ (158) Less: Net gains recognized during the period on equity securities sold during the period — 27 Net losses recognized during the reporting period on equity securities still held at the reporting date $ (224) $ (131) Management evaluates equity 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. Equity securities are generally evaluated for OTTI under FASB ASC 320, Investments - Debt and Equity Securities. In determining OTTI under the FASB ASC 320 model, management considers many factors, including (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the equity security or more likely than not will be required to sell the equity security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. If an impairment loss on an equity security is considered to be other-than-temporary, a loss in the amount of the difference between the cost and fair value of the security is recognized. Once the impairment is recorded, this becomes the new cost basis of the equity security and cannot be adjusted upward if there is a subsequent recovery in the fair value of the security. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended |
Jun. 30, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE 4 — LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans Net loans are stated at their outstanding recorded investment, net of deferred fees and costs, unearned income and the allowance for credit 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 the following segments: Real Estate (including both commercial and residential loans), Agricultural, Commercial and Industrial, Consumer, and State and Political Subdivisions. Real Estate Lending The Company engages in real estate lending to commercial borrowers in its primary market area and surrounding areas. The commercial component of the Company’s Real Estate portfolio is secured primarily by commercial retail space, commercial office buildings, residential housing and hotels. Generally, these 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. Real estate loans secured by commercial properties generally present a higher level of risk than loans secured by residential real estate. 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. The residential component of the Company’s 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 $0 and $71,000 at June 30, 2023 and December 31, 2022, respectively. Agricultural Lending The Company originates agricultural loans to individuals in the farming industry for funding the production of crops or to purchase or refinance capital assets such as farmland, livestock, machinery, equipment, and farm real estate improvements. Agricultural loans are typical secured by collateral related to the farming activities. These loans originate from customers within the Company’s primary market area or the surrounding areas. In underwriting agricultural loans, an analysis is performed regarding the borrower’s ability to repay the loan, the borrower’s capital and collateral, and the past, present, and future cash flows of the borrower, as well as the agricultural industry as a whole. In general, these loans would be secured by cropland, pastureland, orchardland, or timberland that is committed to ongoing management and agricultural production, with a maximum loan-to-value ratio of 70% and a maximum term of ten years. 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. 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 June 30, 2023, the Company's balance of GGLs was $4,542,000, compared to $4,631,000 at December 31, 2022. 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 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. State and Political Subdivisions Lending The Company, from time to time, may originate loans to state and political subdivisions that are within the Company’s primary market area or surrounding areas. These loans may be either taxable or tax-free. These loans may be issued for the purpose of land improvement, infrastructure changes, bond refinances, or the purchase of equipment. State and political loans are typically secured by the taxing power of the borrowing entity. In some cases, the loans may also be secured by the property/item being purchased. Audited financial statements are required as part of the underwriting for all state and political loans and a full analysis of all components of the audited statements is performed. If the loan is to be classified as tax-free, a letter from the entity’s solicitor stating such is required, as well. The risk associated with these types of loans is considerably less than commercial loan transactions. Repayment is based on the full faith, credit, and ability of the borrowing entity to tax and then collect the payments. Delinquency or loss on these types of loans is de minimus. 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 loans and real estate loans issued for commercial purpose 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. Real estate loans issued for residential purposes 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 (e.g. 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 Credit Losses - Loans The allowance for credit losses (“ACL”) is an estimate of losses arising from borrowers’ inability to make loan payments as required, which is calculated via a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loan portfolio. The Company completed a one-time adjustment to decrease the ACL at the adoption of ASU 2016-13 through retained earnings, but all subsequent adjustments will be established through provisions for credit losses charged against income. Loans deemed to be uncollectible are charged against the ACL and subsequent recoveries, if any, are credited to the allowance. The ACL 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 ACL is based on specific expectations for the future economic environment that are incorporated in the projection, with loss expectations to revert to the long-run historical mean after such time as management can make or obtain a reasonable and supportable forecast. Management also considers the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may impact the borrower’s ability to repay (including the timing of future payments), the estimated value of any underlying collateral (if the loan is collateral dependent), composition of the loan portfolio, and other relevant factors. This evaluation is inherently subjective as it requires material estimates based on management’s judgment regarding the projection of expected credit losses over the contractual lifetime of the loans. Modeling of the ACL uses sophisticated statistical techniques to arrive at reasonable and supportable forecasts of expected losses. The Company has contracted with a third-party vendor to assist in developing models for the ACL related to the Company’s loan portfolio under ASU 2016-13. The Company has opted to utilize the Weighted Average Remaining Maturity (“WARM”) method to calculate the ACL which uses an average annual charge-off rate. This average annual charge-off rate contains loss content over several vintages and is used as a foundation for estimating the credit loss content for loans by segmented pools at the balance sheet date and is used to determine a historical charge-off rate. When estimating expected credit losses, the Company considers forward-looking information that is both reasonable, supportable, and relevant to assessing the collectability of cash flows. Reasonable and supportable forecasts may extend over the entire contractual term of a loan or a period shorter than the contractual term. Reasonable and supportable forecasts may vary by portfolio segment or individual forecast input. These forecasts may include data from internal sources, external sources, or a combination of both. When the contractual term of a loan extends beyond the reasonable and supportable period, ASC Topic 326 requires reverting to historical loss information, or an appropriate proxy, for those periods beyond the reasonable and supportable forecast period (often referred to as the reversion period). The Company may revert to historical loss information for each individual forecast input or based on the entire estimate of loss. Reversion to historical loss information may be immediate, occur on a straight-line basis, or use any systematic/rational method. Management may apply different reversion techniques depending on the economic environment or applicable loan portfolio. The methodology used to determine the ACL also includes a qualitative component in which the Company adjusts expected credit loss estimates for information not already captured in the loss estimation process. These qualitative factor adjustments may increase or decrease management’s estimate of expected credit losses. Changes in the level of the Company’s ACL may not always be directionally consistent with changes in the level of qualitative factor adjustments due to the incorporation of reasonable and supportable forecasts in estimating expected losses. Management considers qualitative factors that are relevant to the Company as of the reporting date, which may include but are not limited to: 1) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere; 2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio, including the condition of various market segments; 3) changes in the nature and volume of the loan portfolio; 4) changes in the experience, ability, and depth of management and other relevant staff; 5) changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans; 6) changes in the quality of the Company’s loan review system; 7) changes in the value of underlying collateral for collateral dependent loans; 8) the existence and effect of any concentrations of credit and changes in the level of such concentrations; and 9) the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing loan portfolio. The Company’s ACL is calculated by collectively evaluating and individually evaluating loans. The Company collectively evaluates applicable loans based on segments according to their homogeneous characteristics, aligned with the segmentation of the FDIC Bank Call Report. The Company collectively evaluates loans and determines applicable loss rates based on the following segments/classes: Real Estate ◾ Construction, land development, and other land loans ◾ Residential construction (loans to build homes, both speculative and owner-occupied, and 1-4 family lot loans) ◾ Agribusiness, farmland, or secured by farmland ◾ Revolving, open-end, 1-4 family residential properties (and extended under lines of credit) ◾ Loans secured by first liens ◾ Loans secured by junior liens ◾ Secured by multifamily (5 or more) residential properties ◾ Loans secured by owner occupied, non-farm, non-residential properties ◾ Loans secured by other non-farm, non-residential properties Agricultural ◾ Loans to finance agricultural production and other loans for farmers Commercial and Industrial ◾ Commercial and industrial loans Consumer ◾ Other revolving credit plans ◾ Automobile loans ◾ Other consumer loans State and Political Subdivisions ◾ Obligations (other than securities or leases) of states and political subdivisions in the U.S. In accordance with ASC 326-20-30-2, the Company will evaluate individual loans for expected credit losses when the loans do not share similar risk characteristics with loans evaluated using the collective method. Management may evaluate loans on an individual basis even when no specific expectation of collectability is in place. Loans deemed to be impaired are specifically identified and measured for impairment. A loan is deemed to be 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 loan agreement. Loans to be considered for impairment include all non-accrual loans or any other selected loans where full collection is unlikely. 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. Once identified as impaired, the loans are measured individually for impairment based on one of the following methods: • The present value of expected cash flows, discounted at the loan’s effective interest rate (i.e. the contractual interest rate adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or acquisition of the loan) • The loan’s observable market price • The fair value of the collateral if the loan is deemed to be collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the liquidation of the underlying collateral and there are no other available and reliable sources of repayment. Management will consider estimated costs to sell, on a discounted basis, in the measurement of impairment if these costs are expected to reduce the cash flows available to repay the loan. Any portion of the recorded investment for a collateral dependent loan (including any capitalized accrued interest, net deferred loan fees or costs, and unamortized premium or discount) exceeding the fair value of the collateral that can be identified as uncollectible is deemed a confirmed loss and will be charged off against the ACL Loans that have been individually measured for impairment may have a portion of the allowance allocated to cover the calculated amount of impairment as determined by the methods listed above, referred to as a specific allocation. Loans individually evaluated for impairment may also have a zero specific allocation if the loans are deemed to have no impairment, or if the amount of the impairment will be charged off. ASU 2022-02, Loan Modifications Experiencing Financial Difficulty, The most common types of concessions granted upon modification of a loan to a borrower experiencing financial difficulties include: (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 for the remaining term of the loan. A less common concession would be forgiveness of a portion of the loan’s principal. Loans so modified remain collectively evaluated for determination of expected credit losses, unless, during the process of evaluation, it is determined that the loan should be placed on non-accrual status until the Company determines that future collection of principal and interest is reasonably assured or the loan is otherwise deemed to be collateral dependent. There may be certain types of loans for which the expectation of credit loss is zero after evaluating historical loss information, making necessary adjustments for current conditions and reasonable and supportable forecasts, and considering any collateral or guarantee arrangements that are not free-standing contracts. Factors considered by management when evaluating whether expectations of zero credit loss are appropriate may include, but are not limited to: 1) a long history of zero credit loss; 2) full securitization by cash or cash equivalents; 3) high credit ratings from rating agencies with no expected future downgrade; 4) principal and interest payments that are guaranteed by the U.S. government; 5) the issuer, guarantor, or sponsor can print its own currency and the currency is held by other central banks as reserve currency; and 6) the interest rate on the security is recognized as a risk-free rate. A loan that is fully secured by cash or cash equivalents, such as a certificate of deposit issued by the lending institution, would likely have zero credit loss expectations. Similarly, the guaranteed portion of an SBA loan purchased on the secondary market through the SBA’s fiscal and transfer agent would likely have zero credit loss expectations because these financial assets are unconditionally guaranteed by the U.S. government. ASC Topic 326 introduces the concept of purchased credit deteriorated (“PCD”) assets. PCD assets are acquired financial assets that, at acquisition, have experienced more-than-insignificant deterioration in credit quality since origination, as determined by the Company’s assessment. The Company does not possess loans classified as purchased credit deterioration at this time. Should the Company acquire purchased loans, these loans will be evaluated to determine if they are PCD. A reserve for unfunded lending commitments is provided for possible credit losses on off-balance sheet credit exposures. Off-balance sheet credit exposures primarily include undrawn portions of revolving lines of credit and standby letters of credit. 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 June 30, 2023 and December 31, 2022, the amount of the reserve for unfunded lending commitments was The Company made a policy election to exclude accrued interest receivable from the amortized cost basis of loans. Accrued interest receivable on loans is reported as a component of accrued interest receivable on the Company’s consolidated balance sheet and totaled $1,906,000 as of June 30, 2023. Accrued interest receivable on loans is excluded from the estimate of credit losses. 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 ACL based on their assessment of credit information available to them at the time of their examinations. 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 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 secured 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 seriou |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
DEPOSITS | NOTE 5 — DEPOSITS Major classifications of deposits at June 30, 2023 and December 31, 2022 consisted of: (Dollars in thousands) June 30, December 31, 2023 2022 Non-interest bearing demand $ 220,519 $ 231,754 Interest bearing demand 280,929 335,559 Savings 225,631 260,086 Time certificates of deposits less than $250,000 179,202 151,575 Time certificates of deposits $250,000 or greater 28,044 13,400 Other time 1,516 1,125 Total deposits $ 935,841 $ 993,499 Total deposits decreased $57,658,000 to $935,841,000 as of June 30, 2023 due to decreases in non-interest bearing demand, interest bearing demand and savings deposits. The decrease in deposits was mainly the result of a $39,273,000 decrease in municipal deposits and other normal fluctuations in deposits during the six months ended June 30, 2023. |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022 are as follows: (Dollars in thousands) June 30, 2023 December 31, 2022 Average Average Amount Rate Amount Rate Federal funds purchased $ — — % $ — — % Securities sold under agreements to repurchase 19,308 2.90 % 20,368 0.84 % Federal Discount Window — 4.82 % — 2.78 % Federal Home Loan Bank of Pittsburgh 174,051 5.18 % 133,050 2.82 % Total $ 193,359 4.95 % $ 153,418 2.21 % 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 June 30, 2023 and December 31, 2022. (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 June 30, 2023 Repurchase agreements (a) $ 19,308 $ — $ 19,308 $ (19,308) $ — $ — December 31, 2022 Repurchase agreements (a) $ 20,368 $ — $ 20,368 $ (20,368) $ — $ — (a) As of June 30, 2023 and December 31, 2022, the fair value of securities pledged in connection with repurchase agreements was $24,285,000 and $34,160,000 , respectively. The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of June 30, 2023: (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 June 30, 2023: Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 19,308 $ — $ — $ — $ 19,308 Total $ 19,308 $ — $ — $ — $ 19,308 Long-Term Borrowings and Letters of Credit Long-term borrowings are comprised of advances from the FHLB. The Company’s long-term borrowings consist of notes at fixed interest rates. Upon any default, under the terms of a master agreement, FHLB may declare all indebtedness of the Company immediately due. In addition, FHLB shall not be required to fund advances under any outstanding commitments. As of June 30, 2023 and December 31, 2022, the Company had 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 no irrevocable standby letters of credit which could be drawn on through FHLB’s close of business on June 30, 2023. Any irrevocable standby letters of credit are issued as necessary in an amount appropriate to secure specific public/municipal unit deposits. 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 June 30, 2023, loans of $716,188,000 were pledged to FHLB which resulted in a FHLB maximum borrowing capacity of $505,628,000. As of June 30, 2023, no securities were pledged as collateral to FHLB to secure FHLB loans and letters of credit. |
SUBORDINATED DEBT
SUBORDINATED DEBT | 6 Months Ended |
Jun. 30, 2023 | |
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 | 6 Months Ended |
Jun. 30, 2023 | |
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 two branch banking facilities and one parcel of land under operating leases. At June 30, 2023, right-of-use assets and lease liabilities were recorded related to these operating leases totaling $1,523,000 and $2,019,000, respectively. At December 31, 2022, right-of-use assets and lease liabilities stood at $1,541,000 and $2,029,000, respectively, in the consolidated balance sheets. Options to extend or terminate a lease may be included in our lease agreements. When it is reasonably certain that we will exercise those options, the right-of-use asset and lease liability will reflect the renewal or termination option. 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 six months ended June 30, 2023 and 2022 of $113,000 and $90,000, respectively. Operating lease costs are included in occupancy, net in the accompanying statements of income. Cash payments totaled $106,000 and $83,000, respectively, for the six months ended June 30, 2023 and 2022. The Company currently has one finance lease for equipment. At June 30, 2023, right-of-use assets and lease liabilities were recorded related to the finance lease totaling $34,000 and $1,000, respectively. At December 31, 2022, right-of-use assets and lease liabilities stood at $34,000 and $6,000, 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 six months ended June 30, 2023 and 2022 were immaterial. Cash payments totaled $5,000 for the six months ended June 30, 2023 and 2022. The following table displays the weighted-average term and discount rates for operating and finance leases outstanding as of June 30, 2023 and December 31, 2022. June 30, December 31, June 30, December 31, 2023 2022 2023 2022 Operating Operating Finance Finance Weighted-average term (years) 20.25 20.56 0.17 0.67 Weighted-average discount rate 4.22% 4.23% 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) June 30, December 31, June 30, December 31, 2023 2022 2023 2022 Minimum Lease Payments due: Operating Operating Finance Finance Within one year $ 158 $ 175 $ 2 $ 7 After one but within two years 140 140 — — After two but within three years 140 140 — — After three but within four years 147 140 — — After four but within five years 156 154 — — After five years 2,395 2,474 — — Total undiscounted cash flows 3,136 3,223 2 7 Discount on cash flows (1,117) (1,194) (1) (1) Total lease liability $ 2,019 $ 2,029 $ 1 $ 6 |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022 were as follows: (Dollars in thousands) June 30, 2023 December 31, 2022 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 143,998 $ 121,938 Financial standby letters of credit $ 2,130 $ 2,124 Performance standby letters of credit $ 3,551 $ 3,472 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 predominately in the Company’s primary five county, Pennsylvania market area. 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 June 30, 2023, the Company had $774,688,000 in loans secured by real estate, which represented 88.9% 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 June 30, 2023 and December 31, 2022, 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 credit 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022, securities measured at fair value on a recurring basis and the valuation methods used are as follows: (Dollars in thousands) June 30, 2023 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 6,846 $ — $ — $ 6,846 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 125,129 — 125,129 Other — 9,355 — 9,355 Other mortgage backed debt securities — 29,083 — 29,083 Obligations of state and political subdivisions — 88,060 — 88,060 Asset-backed securities — 32,044 — 32,044 Corporate debt securities — 41,063 — 41,063 Total debt securities available-for-sale 6,846 324,734 — 331,580 Marketable equity securities 1,476 — — 1,476 Total recurring fair value measurements $ 8,322 $ 324,734 $ — $ 333,056 (Dollars in thousands) December 31, 2022 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 6,801 $ — $ — $ 6,801 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 131,675 — 131,675 Other — 11,180 — 11,180 Other mortgage backed debt securities — 33,688 — 33,688 Obligations of state and political subdivisions — 110,689 — 110,689 Asset-backed securities — 36,418 — 36,418 Corporate debt securities — 42,993 — 42,993 Total debt securities available-for-sale 6,801 366,643 — 373,444 Marketable equity securities 1,699 — — 1,699 Total recurring fair value measurements $ 8,500 $ 366,643 $ — $ 375,143 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 2023 or 2022. Financial Assets Measured at Fair Value on a Nonrecurring Basis Periodically, non-recurring adjustments may be applied to the carrying value of loans based on the fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain specific allocation amounts for individually evaluated collateral-dependent loans as calculated when establishing the allowance for credit losses. The Company’s valuation procedure for any individually evaluated 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 individually evaluated 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 individually evaluated loan balances less the valuation allowance and/or charge-offs. There were no transfers between valuation levels in 2023 and 2022. Following the adoption of ASU No. 2016-13, at June 30, 2023 measured at fair value on a nonrecurring basis are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at June 30, 2023 Individually evaluated loans: Real Estate $ — $ — $ 2,370 $ 2,370 Total individually evaluated loans $ — $ — $ 2,370 $ 2,370 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2022 Impaired loans: Commercial Real Estate $ — $ — $ 5,167 $ 5,167 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,197 $ 5,197 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 June 30, 2023 and December 31, 2022. 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 2023 and 2022. 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 Post-ASU No. 2016-13 Adoption: Fair Value Weighted June 30, 2023 Estimate Valuation Technique Unobservable Input Range Average Individually evaluated loans - collateral dependent $ 2,340 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 (0%) – (5%) (5%) Pre-ASU No. 2016-13 Adoption: December 31, 2022 Impaired loans - collateral dependent $ 2,370 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 (0%) – (5%) (5%) Impaired loans - other $ 2,827 Discounted cash flow Discount rate (4%) – (7%) (6%) 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 June 30, 2023 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 12,597 $ 12,597 $ — $ — $ 12,597 Interest-bearing deposits in other banks 1,178 — 1,178 — 1,178 Restricted investment in bank stocks 8,617 — 8,617 — 8,617 Net loans 864,082 — — 827,402 827,402 Mortgage servicing rights 292 — — 292 292 Accrued interest receivable 4,173 — 4,173 — 4,173 FINANCIAL LIABILITIES: Demand, savings and other deposits 727,079 — 727,079 — 727,079 Time deposits 208,762 — 204,384 — 204,384 Short-term borrowings 193,359 — 193,403 — 193,403 Long-term borrowings 25,000 — 24,328 — 24,328 Subordinated debentures 25,000 — 22,821 — 22,821 Accrued interest payable 1,171 — 1,171 — 1,171 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — (Dollars in thousands) Carrying Fair Value Measurements at December 31, 2022 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,441 $ 9,441 $ — $ — $ 9,441 Interest-bearing deposits in other banks 1,297 — 1,297 — 1,297 Restricted investment in bank stocks 7,136 — 7,136 — 7,136 Net loans 850,195 — — 810,104 810,104 Mortgage servicing rights 319 — — 319 319 Accrued interest receivable 4,391 — 4,391 — 4,391 FINANCIAL LIABILITIES: Demand, savings and other deposits 827,399 — 827,399 — 827,399 Time deposits 166,100 — 160,472 — 160,472 Short-term borrowings 153,418 — 153,209 — 153,209 Long-term borrowings 25,000 — 24,090 — 24,090 Subordinated debentures 25,000 — 22,365 — 22,365 Accrued interest payable 563 — 563 — 563 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022, the fair value of trust assets under management was $114,166,000 and $111,172,000, 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and 2022, 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 June 30, 2023 2022 Net income $ 1,139 $ 3,822 Weighted-average common shares outstanding 6,040 5,964 Basic and diluted earnings per share $ 0.19 $ 0.64 (In thousands, except earnings per share) Six Months Ended June 30, 2023 2022 Net income $ 2,496 $ 7,365 Weighted-average common shares outstanding 6,030 5,956 Basic and diluted earnings per share $ 0.41 $ 1.24 |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 and December 31, 2022. 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, 2022, 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 June 30, 2023. |
RECENT ACCOUNTING STANDARDS U_2
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") | |
Schedule of the effect of the adoption of the ASU | January 1, 2023 As Reported Under ASU Pre- Impact of Assets: Allowance For Credit Losses $ (7,155) $ (8,274) $ 1,119 Deferred Income Taxes 8,925 9,129 (204) A Liabilities: Other Liabilities 9,446 9,299 147 B Equity: Retained Earnings 101,480 100,712 768 C A. Effect on deferred tax assets related to the adjustment to the allowance for credit losses and reserve for unfunded lending commitments from the adoption of ASU 2016-13 using a 21% tax rate B. Adjustment to the reserve for unfunded lending commitments related to the adoption of ASU 2016-13 C. Adjustment to undistributed profits related to the adoption of ASU 2016-13 |
SECURITIES (Tables)
SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023: Cost Gains Losses Value U.S. Treasury securities $ 7,867 $ — $ (1,021) $ 6,846 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 140,777 — (15,648) 125,129 Other 9,224 176 (45) 9,355 Other mortgage backed securities 32,341 — (3,258) 29,083 Obligations of state and political subdivisions 100,161 9 (12,110) 88,060 Asset-backed securities 32,831 7 (794) 32,044 Corporate debt securities 45,741 129 (4,807) 41,063 Total $ 368,942 $ 321 $ (37,683) $ 331,580 Debt Securities Available-for-Sale (Dollars in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2022: Cost Gains Losses Value U.S. Treasury securities $ 7,853 $ — $ (1,052) $ 6,801 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 146,707 — (15,032) 131,675 Other 10,992 233 (45) 11,180 Other mortgage backed securities 36,767 — (3,079) 33,688 Obligations of state and political subdivisions 125,176 266 (14,753) 110,689 Asset-backed securities 37,526 — (1,108) 36,418 Corporate debt securities 45,838 183 (3,028) 42,993 Total $ 410,859 $ 682 $ (38,097) $ 373,444 |
Schedule of amortized cost and estimated fair value of debt securities, by contractual maturity | June 30, 2023 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 $ — $ — $ 6,245 $ 1,922 $ — $ 12,562 Fair value — — 6,119 1,911 — 12,587 1 - 5 Years: Amortized cost 2,898 736 1,746 17,995 — — Fair value 2,560 726 1,627 17,231 — — 5 - 10 Years: Amortized cost 4,969 14,225 — 22,139 2,049 33,179 Fair value 4,286 14,307 — 19,203 2,039 28,476 After 10 Years: Amortized cost — 135,040 24,350 58,105 30,782 — Fair value — 119,451 21,337 49,715 30,005 — Total: Amortized cost $ 7,867 $ 150,001 $ 32,341 $ 100,161 $ 32,831 $ 45,741 Fair value 6,846 134,484 29,083 88,060 32,044 41,063 1 Mortgage-backed securities are allocated for maturity reporting at their original maturity date. |
Schedule of gross unrealized losses and fair value of the corporations debt securities | (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 $ — $ — $ 6,846 $ (1,021) $ 6,846 $ (1,021) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 41,155 (1,097) 83,974 (14,551) 125,129 (15,648) Other 1,271 (6) 2,623 (39) 3,894 (45) Other mortgage-backed debt securities — — 29,083 (3,258) 29,083 (3,258) Obligations of state and political subdivisions 3,903 (36) 80,153 (12,074) 84,056 (12,110) Asset-backed securities 6,302 (5) 21,544 (789) 27,846 (794) Corporate debt securities 2,812 (298) 32,622 (4,509) 35,434 (4,807) Total $ 55,443 $ (1,442) $ 256,845 $ (36,241) $ 312,288 $ (37,683) December 31, 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 $ — $ — $ 6,801 $ (1,052) $ 6,801 $ (1,052) Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgage-backed 61,067 (2,184) 65,174 (12,848) 126,241 (15,032) Other 1,589 (2) 3,168 (43) 4,757 (45) Other mortgage-backed debt securities 16,167 (962) 17,521 (2,117) 33,688 (3,079) Obligations of state and political subdivisions 56,565 (5,881) 35,704 (8,872) 92,269 (14,753) Asset-backed securities 24,136 (405) 12,282 (703) 36,418 (1,108) Corporate debt securities 15,827 (1,073) 18,345 (1,955) 34,172 (3,028) Total $ 175,351 $ (10,507) $ 158,995 $ (27,590) $ 334,346 $ (38,097) |
Schedule of realized gains and losses recognized in net income on equity securities | (Dollars in thousands) Six months ended Six months ended June 30, 2023 June 30, 2022 Net losses from market value fluctuations recognized during the period on equity securities $ (224) $ (158) Less: Net gains recognized during the period on equity securities sold during the period — 27 Net losses recognized during the reporting period on equity securities still held at the reporting date $ (224) $ (131) |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Schedule of classes of the loan portfolio summarized by risk rating | (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Total Real Estate: 1-6 Pass $ 41,847 $ 192,228 $ 142,849 $ 117,438 $ 56,819 $ 202,536 $ 753,717 7 Special Mention — — — — — 631 631 8 Substandard — 86 888 — 9,287 9,424 19,685 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs 148 226 171 124 (14) — 655 Total Real Estate Loans $ 41,995 $ 192,540 $ 143,908 $ 117,562 $ 66,092 $ 212,591 $ 774,688 Agricultural: 1-6 Pass $ — $ 66 $ — $ — $ 1 $ 793 $ 860 7 Special Mention — — — — — — — 8 Substandard — — — — — — — 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs — 1 — — — 1 2 Total Agricultural Loans $ — $ 67 $ — $ — $ 1 $ 794 $ 862 Commercial and Industrial: 1-6 Pass $ 6,191 $ 10,954 $ 5,790 $ 7,762 $ 6,822 $ 22,681 $ 60,200 7 Special Mention — — — — — — — 8 Substandard — — — — — 692 692 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs 50 103 32 19 216 1 421 Total Commercial and Industrial Loans $ 6,241 $ 11,057 $ 5,822 $ 7,781 $ 7,038 $ 23,374 $ 61,313 Consumer: 1-6 Pass $ 1,626 $ 1,590 $ 1,296 $ 308 $ 248 $ 982 $ 6,050 7 Special Mention 10 — — — — — 10 8 Substandard — — — — — — — 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs 24 27 11 4 3 — 69 Total Consumer Loans $ 1,660 $ 1,617 $ 1,307 $ 312 $ 251 $ 982 $ 6,129 State and Political Subdivisions: 1-6 Pass $ 50 $ 5,442 $ 15,098 $ 1,953 $ — $ 5,697 $ 28,240 7 Special Mention — — — — — — — 8 Substandard — — — — — — — 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs 1 2 4 1 — (1) 7 Total State and Political Subdivision Loans $ 51 $ 5,444 $ 15,102 $ 1,954 $ — $ 5,696 $ 28,247 Total Loans: 1-6 Pass $ 49,714 $ 210,280 $ 165,033 $ 127,461 $ 63,890 $ 232,689 $ 849,067 7 Special Mention 10 — — — — 631 641 8 Substandard — 86 888 — 9,287 10,116 20,377 9 Doubtful — — — — — — — Unearned discount — — — — — — — Net deferred loan fees and costs 223 359 218 148 205 1 1,154 Total Loans $ 49,947 $ 210,725 $ 166,139 $ 127,609 $ 73,382 $ 243,437 $ 871,239 2023 2022 2021 2020 2019 Prior Total Gross Charge Offs: Real Estate $ — $ — $ — $ — $ — $ — $ — Agricultural — — — — — — — Commercial and Industrial — — — — — — — Consumer — 23 8 — 4 3 38 State and Political Subdivisions — — — — — — — Total Gross Charge Offs $ — $ 23 $ 8 $ — $ 4 $ 3 $ 38 Commercial and (Dollars in thousands) Industrial Commercial Real Estate December 31, December 31, 2022 2022 Grade: 1-6 Pass $ 85,845 $ 591,309 7 Special Mention — 634 8 Substandard 725 18,781 9 Doubtful — — Add (deduct): Unearned discount — — Net deferred loan fees and costs 429 825 Total loans $ 86,999 $ 611,549 Residential Real Estate Including Home Equity Consumer December 31, December 31, 2022 2022 Grade: 1-6 Pass $ 153,902 $ 5,349 7 Special Mention — — 8 Substandard 795 — 9 Doubtful — — Add (deduct): Unearned discount — — Net deferred loan fees and costs (191) 66 Total loans $ 154,506 $ 5,415 Total Loans December 31, 2022 Grade: 1-6 Pass $ 836,405 7 Special Mention 634 8 Substandard 20,301 9 Doubtful — Add (deduct): Unearned discount — Net deferred loan fees and costs 1,129 Total loans $ 858,469 |
Loans individually or collectively evaluated for their impairment and related allowance, by loan class | (Dollars in thousands) State and Real Commercial Political Estate Agricultural and Industrial Consumer Subdivisions Total As of and for the three months ended June 30, 2023: Allowance for Credit Losses: Beginning balance 6,735 1 265 93 48 7,142 Charge-offs — — — (21) — (21) Recoveries 1 — 1 — — 2 Provision (credit) 18 — 2 17 (3) 34 Ending Balance $ 6,754 $ 1 $ 268 $ 89 $ 45 $ 7,157 (Dollars in thousands) State and Real Commercial Political Estate Agricultural and Industrial Consumer Subdivisions Total As of and for the six months ended June 30, 2023: Allowance for Credit Losses: Balance at December 31, 2022 $ 7,483 $ 6 $ 504 $ 84 $ 197 $ 8,274 CECL adoption adjustment (717) (4) (261) 11 (148) (1,119) Beginning balance January 1, 2023 6,766 2 243 95 49 7,155 Charge-offs — — — (38) — (38) Recoveries 2 — 2 2 — 6 (Credit) Provision (14) (1) 23 30 (4) 34 Ending Balance $ 6,754 $ 1 $ 268 $ 89 $ 45 $ 7,157 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 6,754 $ 1 $ 268 $ 89 $ 45 $ 7,157 Reserve for Unfunded Lending Commitments $ 225 $ — $ 35 $ — $ — $ 260 Loans Receivable: Ending Balance $ 774,688 $ 862 $ 61,313 $ 6,129 $ 28,247 $ 871,239 Ending balance: individually evaluated for impairment $ 4,445 $ 309 $ 644 $ — $ — $ 5,398 Ending balance: collectively evaluated for impairment $ 770,243 $ 553 $ 60,669 $ 6,129 $ 28,247 $ 865,841 (Dollars in thousands) 2023 Balance at December 31, 2022 $ 68 CECL adoption adjustment 147 Provision for credit losses on unfunded commitments 45 Balance at June 30, 2023 $ 260 (Dollars in thousands) June 30, 2023 Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Real Estate $ 4,445 $ 6,466 $ — Agricultural 309 309 — Commercial and Industrial 644 644 — With an allowance recorded: Real Estate — — — Agricultural — — — Commercial and Industrial — — — Total $ 5,398 $ 7,419 $ — Total consists of: Real Estate $ 4,445 $ 6,466 $ — Agricultural $ 309 $ 309 $ — Commercial and Industrial $ 644 $ 644 $ — (Dollars in thousands) For the Three Months Ended June 30, 2023 Average Interest Recorded Income Investment Recognized With no related allowance recorded: Real Estate $ 4,367 $ — Agricultural 309 6 Commercial and Industrial 653 — With an allowance recorded: Real Estate — — Agricultural — — Commercial and Industrial — — Total $ 5,329 $ 6 Total consists of: Real Estate $ 4,367 $ — Agricultural $ 309 $ 6 Commercial and Industrial $ 653 $ — (Dollars in thousands) For the Six Months Ended June 30, 2023 Average Interest Recorded Income Investment Recognized With no related allowance recorded: Real Estate $ 4,390 $ — Agricultural 309 12 Commercial and Industrial 659 — With an allowance recorded: Real Estate — — Agricultural — — Commercial and Industrial — — Total $ 5,358 $ 12 Total consists of: Real Estate $ 4,390 $ — Agricultural $ 309 $ 12 Commercial and Industrial $ 659 $ — (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the three months ended June 30, 2022: Allowance for Loan Losses: Beginning balance $ 665 $ 5,759 $ 1,538 $ 78 $ 897 $ 8,937 Charge-offs (9) — — (4) — (13) Recoveries 1 — 13 4 $ — 18 Provision (credit) 18 195 58 1 (54) 218 Ending Balance $ 675 $ 5,954 $ 1,609 $ 79 $ 843 $ 9,160 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the six months ended June 30, 2022: Allowance for Credit Losses: Beginning balance $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Charge-offs (9) — — (6) — (15) Recoveries 2 38 14 4 — 58 Provision (credit) 1 508 56 (3) (125) 437 Ending Balance $ 675 $ 5,954 $ 1,609 $ 79 $ 843 $ 9,160 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 675 $ 5,954 $ 1,609 $ 79 $ 843 $ 9,160 Loans Receivable: Ending Balance $ 82,539 $ 568,258 $ 148,621 $ 5,402 $ — $ 804,820 Ending balance: individually evaluated for impairment $ 991 $ 10,448 $ 845 $ — $ — $ 12,284 Ending balance: collectively evaluated for impairment $ 81,548 $ 557,810 $ 147,776 $ 5,402 $ — $ 792,536 (Dollars in thousands) Commercial Commercial Residential and Industrial Real Estate Real Estate Consumer Unallocated Total As of and for the year ended December 31, 2022: Allowance for Credit Losses: Beginning balance $ 681 $ 5,408 $ 1,539 $ 84 $ 968 $ 8,680 Charge-offs (158) (3) (12) (33) — (206) Recoveries 3 40 16 5 — 64 Proviion (credit) 178 487 14 25 (968) (264) Ending Balance $ 704 $ 5,932 $ 1,557 $ 81 $ — $ 8,274 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 704 $ 5,932 $ 1,557 $ 81 $ — $ 8,274 Loans Receivable: Ending Balance $ 86,999 $ 611,549 $ 154,506 $ 5,415 $ — $ 858,469 Ending balance: individually evaluated for impairment $ 973 $ 9,495 $ 739 $ — $ — $ 11,207 Ending balance: collectively evaluated for impairment $ 86,026 $ 602,054 $ 153,767 $ 5,415 $ — $ 847,262 |
Schedule of financial receivables that are collateral-dependent loans | (Dollars in thousands) June 30, 2023 Real Estate Other Real Estate $ 4,445 $ — Agricultural — 309 Commercial and Industrial — 644 Total $ 4,445 $ 953 |
Schedule of total non-performing assets | (Dollars in thousands) June 30, December 31, 2023 2022 Real Estate $ 4,445 $ 4,387 Agricultural — — Commercial and Industrial 644 664 Consumer — — State and Political Subdivisions — — Total non-accrual loans 5,089 5,051 Foreclosed assets held for resale — — Loans past-due 90 days or more and still accruing interest 584 308 Total non-performing assets $ 5,673 $ 5,359 |
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 June 30, 2023: Real Estate $ 1,433 $ 631 $ 5,029 $ 7,093 $ 767,595 $ 774,688 $ 584 Agricultural — — — — 862 862 — Commercial and Industrial — — 621 621 60,692 61,313 — Consumer 5 5 — 10 6,119 6,129 — State and Political Subdivisions — — — — 28,247 28,247 — Total $ 1,438 $ 636 $ 5,650 $ 7,724 $ 863,515 $ 871,239 $ 584 (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, 2022: Real Estate $ 2,682 $ 59 $ 4,694 $ 7,435 $ 757,445 $ 764,880 $ 308 Agricultural — — — — 860 860 — Commercial and Industrial 62 63 639 764 55,313 56,077 — Consumer 11 2 — 13 5,694 5,707 — State and Political Subdivisions — — — — 30,945 30,945 — Total $ 2,755 $ 124 $ 5,333 $ 8,212 $ 850,257 $ 858,469 $ 308 |
Schedule of the outstanding recorded investment of TDRs | (Dollars in thousands) December 31, 2022 Non-accrual TDRs $ 1,324 Accruing TDRs 6,156 Total $ 7,480 |
Schedule of the loan modifications categorized as TDRs | The following table presents information regarding the loan modifications categorized as TDRs during the three and six months ended June 30, 2022. (Dollars in thousands) For the Three Months Ended June 30, 2022 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 1 $ 347 $ 372 $ 372 Total 1 $ 347 $ 372 $ 372 (Dollars in thousands) For the Six Months Ended June 30, 2022 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Recorded Contracts Investment Investment Investment Commercial Real Estate 1 $ 347 $ 372 $ 372 Total 1 $ 347 $ 372 $ 372 |
Schedule of loan modifications made for loans categorized as TDRs | The following table provides detail regarding they types of loan modifications made for loans categorized as TDRs during the three and six months ended June 30, 2022. For the Three Months Ended June 30, 2022 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — — 1 1 Total — — 1 1 For the Six Months Ended June 30, 2022 Rate Term Payment Number Modification Modification Modification Modified Commercial Real Estate — — 1 1 Total — — 1 1 |
Schedule of recorded investment, unpaid principal balance, related allowance, average recorded investment, and interest income recognized with respect to the Corporation's impaired loans, preadoption of ASU | (Dollars in thousands) December 31, 2022 Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and Industrial $ 973 $ 973 $ — Commercial Real Estate 9,495 12,430 — Residential Real Estate 739 771 — With an allowance recorded: Commercial and Industrial — — — Commercial Real Estate — — — Residential Real Estate — — — Total $ 11,207 $ 14,174 $ — Total consists of: Commercial and Industrial $ 973 $ 973 $ — Commercial Real Estate $ 9,495 $ 12,430 $ — Residential Real Estate $ 739 $ 771 $ — (Dollars in thousands) For the Three Months Ended June 30, 2022 Average Interest Recorded Income Investment Recognized With no related allowance recorded: Commercial and Industrial $ 998 $ 3 Commercial Real Estate 10,801 70 Residential Real Estate 847 — With an allowance recorded: Commercial and Industrial — — Commercial Real Estate — — Residential Real Estate — — Total $ 12,646 $ 73 Total consists of: Commercial and Industrial $ 998 $ 3 Commercial Real Estate $ 10,801 $ 70 Residential Real Estate $ 847 $ — (Dollars in thousands) For the Six Months Ended June 30, 2022 Average Interest Recorded Income Investment Recognized With no related allowance recorded: Commercial and Industrial $ 1,004 $ 5 Commercial Real Estate 11,247 142 Residential Real Estate 849 — With an allowance recorded: Commercial and Industrial — — Commercial Real Estate — — Residential Real Estate — — Total $ 13,100 $ 147 Total consists of: Commercial and Industrial $ 1,004 $ 5 Commercial Real Estate $ 11,247 $ 142 Residential Real Estate $ 849 $ — |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
Schedule of major classifications of deposits | (Dollars in thousands) June 30, December 31, 2023 2022 Non-interest bearing demand $ 220,519 $ 231,754 Interest bearing demand 280,929 335,559 Savings 225,631 260,086 Time certificates of deposits less than $250,000 179,202 151,575 Time certificates of deposits $250,000 or greater 28,044 13,400 Other time 1,516 1,125 Total deposits $ 935,841 $ 993,499 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BORROWINGS | |
Schedule of short-term borrowings and weighted-average interest rates | (Dollars in thousands) June 30, 2023 December 31, 2022 Average Average Amount Rate Amount Rate Federal funds purchased $ — — % $ — — % Securities sold under agreements to repurchase 19,308 2.90 % 20,368 0.84 % Federal Discount Window — 4.82 % — 2.78 % Federal Home Loan Bank of Pittsburgh 174,051 5.18 % 133,050 2.82 % Total $ 193,359 4.95 % $ 153,418 2.21 % |
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 June 30, 2023 Repurchase agreements (a) $ 19,308 $ — $ 19,308 $ (19,308) $ — $ — December 31, 2022 Repurchase agreements (a) $ 20,368 $ — $ 20,368 $ (20,368) $ — $ — (a) As of June 30, 2023 and December 31, 2022, the fair value of securities pledged in connection with repurchase agreements was $24,285,000 and $34,160,000 , 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 June 30, 2023: Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 19,308 $ — $ — $ — $ 19,308 Total $ 19,308 $ — $ — $ — $ 19,308 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of weighted-average term and discount rates for operating and finance leases | June 30, December 31, June 30, December 31, 2023 2022 2023 2022 Operating Operating Finance Finance Weighted-average term (years) 20.25 20.56 0.17 0.67 Weighted-average discount rate 4.22% 4.23% 0.68% 0.68% |
Schedule of maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows | (Dollars in thousands) June 30, December 31, June 30, December 31, 2023 2022 2023 2022 Minimum Lease Payments due: Operating Operating Finance Finance Within one year $ 158 $ 175 $ 2 $ 7 After one but within two years 140 140 — — After two but within three years 140 140 — — After three but within four years 147 140 — — After four but within five years 156 154 — — After five years 2,395 2,474 — — Total undiscounted cash flows 3,136 3,223 2 7 Discount on cash flows (1,117) (1,194) (1) (1) Total lease liability $ 2,019 $ 2,029 $ 1 $ 6 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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) June 30, 2023 December 31, 2022 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 143,998 $ 121,938 Financial standby letters of credit $ 2,130 $ 2,124 Performance standby letters of credit $ 3,551 $ 3,472 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of securities measured at fair value on a recurring basis | (Dollars in thousands) June 30, 2023 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 6,846 $ — $ — $ 6,846 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 125,129 — 125,129 Other — 9,355 — 9,355 Other mortgage backed debt securities — 29,083 — 29,083 Obligations of state and political subdivisions — 88,060 — 88,060 Asset-backed securities — 32,044 — 32,044 Corporate debt securities — 41,063 — 41,063 Total debt securities available-for-sale 6,846 324,734 — 331,580 Marketable equity securities 1,476 — — 1,476 Total recurring fair value measurements $ 8,322 $ 324,734 $ — $ 333,056 (Dollars in thousands) December 31, 2022 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ 6,801 $ — $ — $ 6,801 Obligations of U.S. Government Agencies and Sponsored Agencies: Mortgaged-backed — 131,675 — 131,675 Other — 11,180 — 11,180 Other mortgage backed debt securities — 33,688 — 33,688 Obligations of state and political subdivisions — 110,689 — 110,689 Asset-backed securities — 36,418 — 36,418 Corporate debt securities — 42,993 — 42,993 Total debt securities available-for-sale 6,801 366,643 — 373,444 Marketable equity securities 1,699 — — 1,699 Total recurring fair value measurements $ 8,500 $ 366,643 $ — $ 375,143 |
Schedule of impaired loans measured at fair value on a nonrecurring basis | (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at June 30, 2023 Individually evaluated loans: Real Estate $ — $ — $ 2,370 $ 2,370 Total individually evaluated loans $ — $ — $ 2,370 $ 2,370 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2022 Impaired loans: Commercial Real Estate $ — $ — $ 5,167 $ 5,167 Residential Real Estate — — 30 30 Total impaired loans $ — $ — $ 5,197 $ 5,197 |
Schedule of fair value measurement inputs and valuation techniques | (Dollars in thousands) Quantitative Information about Level 3 Fair Value Measurements Post-ASU No. 2016-13 Adoption: Fair Value Weighted June 30, 2023 Estimate Valuation Technique Unobservable Input Range Average Individually evaluated loans - collateral dependent $ 2,340 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 (0%) – (5%) (5%) Pre-ASU No. 2016-13 Adoption: December 31, 2022 Impaired loans - collateral dependent $ 2,370 Appraisal of collateral 1,3 Certificate of Inspection 1,3 Appraisal adjustments 2 Qualitative Adjustments 4 (0%) – (5%) (5%) Impaired loans - other $ 2,827 Discounted cash flow Discount rate (4%) – (7%) (6%) 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 June 30, 2023 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 12,597 $ 12,597 $ — $ — $ 12,597 Interest-bearing deposits in other banks 1,178 — 1,178 — 1,178 Restricted investment in bank stocks 8,617 — 8,617 — 8,617 Net loans 864,082 — — 827,402 827,402 Mortgage servicing rights 292 — — 292 292 Accrued interest receivable 4,173 — 4,173 — 4,173 FINANCIAL LIABILITIES: Demand, savings and other deposits 727,079 — 727,079 — 727,079 Time deposits 208,762 — 204,384 — 204,384 Short-term borrowings 193,359 — 193,403 — 193,403 Long-term borrowings 25,000 — 24,328 — 24,328 Subordinated debentures 25,000 — 22,821 — 22,821 Accrued interest payable 1,171 — 1,171 — 1,171 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — (Dollars in thousands) Carrying Fair Value Measurements at December 31, 2022 Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,441 $ 9,441 $ — $ — $ 9,441 Interest-bearing deposits in other banks 1,297 — 1,297 — 1,297 Restricted investment in bank stocks 7,136 — 7,136 — 7,136 Net loans 850,195 — — 810,104 810,104 Mortgage servicing rights 319 — — 319 319 Accrued interest receivable 4,391 — 4,391 — 4,391 FINANCIAL LIABILITIES: Demand, savings and other deposits 827,399 — 827,399 — 827,399 Time deposits 166,100 — 160,472 — 160,472 Short-term borrowings 153,418 — 153,209 — 153,209 Long-term borrowings 25,000 — 24,090 — 24,090 Subordinated debentures 25,000 — 22,365 — 22,365 Accrued interest payable 563 — 563 — 563 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | (In thousands, except earnings per share) Three Months Ended June 30, 2023 2022 Net income $ 1,139 $ 3,822 Weighted-average common shares outstanding 6,040 5,964 Basic and diluted earnings per share $ 0.19 $ 0.64 (In thousands, except earnings per share) Six Months Ended June 30, 2023 2022 Net income $ 2,496 $ 7,365 Weighted-average common shares outstanding 6,030 5,956 Basic and diluted earnings per share $ 0.41 $ 1.24 |
RECENT ACCOUNTING STANDARDS U_3
RECENT ACCOUNTING STANDARDS UPDATES ("ASU") (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Allowance for credit losses | $ (8,274) | $ (7,157) | $ (7,142) | $ (9,160) | $ (8,937) | $ (8,680) |
Deferred income taxes | 9,129 | 8,879 | ||||
Other Liabilities | 9,299 | 4,324 | ||||
Retained earnings | $ 100,712 | $ 100,600 | ||||
Effective tax rate | 21% | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Allowance for credit losses | $ (7,155) | |||||
Deferred income taxes | 8,925 | |||||
Other Liabilities | 9,446 | |||||
Retained earnings | 101,480 | |||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Allowance for credit losses | 1,119 | |||||
Deferred income taxes | (204) | |||||
Other Liabilities | 147 | |||||
Retained earnings | $ 768 |
SECURITIES - Amortized cost, re
SECURITIES - Amortized cost, related estimated fair value, and unrealized gains and losses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Available-for-Sale Securities | ||
Amortized Cost | $ 368,942 | $ 410,859 |
Gross Unrealized Gains | 321 | 682 |
Gross Unrealized Losses | (37,683) | (38,097) |
Total | 331,580 | 373,444 |
Other mortgage backed securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 32,341 | 36,767 |
Gross Unrealized Losses | (3,258) | (3,079) |
Total | 29,083 | 33,688 |
U.S. Treasury and/or agency securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 7,867 | 7,853 |
Gross Unrealized Losses | (1,021) | (1,052) |
Total | 6,846 | 6,801 |
Obligations of U.S. Government Agencies and Sponsored Agencies Mortgage-Backed | ||
Available-for-Sale Securities | ||
Amortized Cost | 140,777 | 146,707 |
Gross Unrealized Losses | (15,648) | (15,032) |
Total | 125,129 | 131,675 |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Available-for-Sale Securities | ||
Amortized Cost | 9,224 | 10,992 |
Gross Unrealized Gains | 176 | 233 |
Gross Unrealized Losses | (45) | (45) |
Total | 9,355 | 11,180 |
Obligations of state and political subdivisions | ||
Available-for-Sale Securities | ||
Amortized Cost | 100,161 | 125,176 |
Gross Unrealized Gains | 9 | 266 |
Gross Unrealized Losses | (12,110) | (14,753) |
Total | 88,060 | 110,689 |
Asset backed securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 32,831 | 37,526 |
Gross Unrealized Gains | 7 | |
Gross Unrealized Losses | (794) | (1,108) |
Total | 32,044 | 36,418 |
Corporate debt securities | ||
Available-for-Sale Securities | ||
Amortized Cost | 45,741 | 45,838 |
Gross Unrealized Gains | 129 | 183 |
Gross Unrealized Losses | (4,807) | (3,028) |
Total | $ 41,063 | $ 42,993 |
SECURITIES - Aging of amortized
SECURITIES - Aging of amortized cost and fair value of debt securities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Other mortgage backed securities | |
Available-For-Sale - Amortized cost | |
Within 1 Year | $ 6,245 |
1 - 5 Years | 1,746 |
After 10 Years | 24,350 |
Total | 32,341 |
Available-For-Sale - Estimated fair value | |
Within 1 Year | 6,119 |
1 - 5 Years | 1,627 |
After 10 Years | 21,337 |
Total | 29,083 |
U.S. Treasury and/or agency securities | |
Available-For-Sale - Amortized cost | |
1 - 5 Years | 2,898 |
5 - 10 Years | 4,969 |
Total | 7,867 |
Available-For-Sale - Estimated fair value | |
1 - 5 Years | 2,560 |
5 - 10 Years | 4,286 |
Total | 6,846 |
U.S. Government Corporations & Agencies Obligations | |
Available-For-Sale - Amortized cost | |
1 - 5 Years | 736 |
5 - 10 Years | 14,225 |
After 10 Years | 135,040 |
Total | 150,001 |
Available-For-Sale - Estimated fair value | |
1 - 5 Years | 726 |
5 - 10 Years | 14,307 |
After 10 Years | 119,451 |
Total | 134,484 |
Obligations of state and political subdivisions | |
Available-For-Sale - Amortized cost | |
Within 1 Year | 1,922 |
1 - 5 Years | 17,995 |
5 - 10 Years | 22,139 |
After 10 Years | 58,105 |
Total | 100,161 |
Available-For-Sale - Estimated fair value | |
Within 1 Year | 1,911 |
1 - 5 Years | 17,231 |
5 - 10 Years | 19,203 |
After 10 Years | 49,715 |
Total | 88,060 |
Asset backed securities | |
Available-For-Sale - Amortized cost | |
5 - 10 Years | 2,049 |
After 10 Years | 30,782 |
Total | 32,831 |
Available-For-Sale - Estimated fair value | |
5 - 10 Years | 2,039 |
After 10 Years | 30,005 |
Total | 32,044 |
Corporate debt securities | |
Available-For-Sale - Amortized cost | |
Within 1 Year | 12,562 |
5 - 10 Years | 33,179 |
Total | 45,741 |
Available-For-Sale - Estimated fair value | |
Within 1 Year | 12,587 |
5 - 10 Years | 28,476 |
Total | $ 41,063 |
SECURITIES - Unrealized and rea
SECURITIES - Unrealized and realized gains (losses) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
SECURITIES | ||
Net losses from market value fluctuations recognized during the period on equity securities | $ (224) | $ (158) |
Less: Net gains recognized during the period on equity securities sold during the period | 27 | |
Net losses recognized during the reporting period on equity securities still held at the reporting date | $ (224) | $ (131) |
SECURITIES - Continuous unreali
SECURITIES - Continuous unrealized loss position (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Less Than 12 Months | ||
Fair Value | $ 55,443 | $ 175,351 |
Unrealized Loss | (1,442) | (10,507) |
12 Months or More | ||
Fair Value | 256,845 | 158,995 |
Unrealized Loss | (36,241) | (27,590) |
Total | ||
Fair Value | 312,288 | 334,346 |
Unrealized Loss | (37,683) | (38,097) |
Other mortgage backed debt securities | ||
Less Than 12 Months | ||
Fair Value | 16,167 | |
Unrealized Loss | (962) | |
12 Months or More | ||
Fair Value | 29,083 | 17,521 |
Unrealized Loss | (3,258) | (2,117) |
Total | ||
Fair Value | 29,083 | 33,688 |
Unrealized Loss | (3,258) | (3,079) |
U.S. Treasury and/or agency securities | ||
12 Months or More | ||
Fair Value | 6,846 | 6,801 |
Unrealized Loss | (1,021) | (1,052) |
Total | ||
Fair Value | 6,846 | 6,801 |
Unrealized Loss | (1,021) | (1,052) |
Obligations of U.S. Government Agencies and Sponsored Agencies Mortgage-Backed | ||
Less Than 12 Months | ||
Fair Value | 41,155 | 61,067 |
Unrealized Loss | (1,097) | (2,184) |
12 Months or More | ||
Fair Value | 83,974 | 65,174 |
Unrealized Loss | (14,551) | (12,848) |
Total | ||
Fair Value | 125,129 | 126,241 |
Unrealized Loss | (15,648) | (15,032) |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | ||
Less Than 12 Months | ||
Fair Value | 1,271 | 1,589 |
Unrealized Loss | (6) | (2) |
12 Months or More | ||
Fair Value | 2,623 | 3,168 |
Unrealized Loss | (39) | (43) |
Total | ||
Fair Value | 3,894 | 4,757 |
Unrealized Loss | (45) | (45) |
Obligations of state and political subdivisions | ||
Less Than 12 Months | ||
Fair Value | 3,903 | 56,565 |
Unrealized Loss | (36) | (5,881) |
12 Months or More | ||
Fair Value | 80,153 | 35,704 |
Unrealized Loss | (12,074) | (8,872) |
Total | ||
Fair Value | 84,056 | 92,269 |
Unrealized Loss | (12,110) | (14,753) |
Asset backed securities | ||
Less Than 12 Months | ||
Fair Value | 6,302 | 24,136 |
Unrealized Loss | (5) | (405) |
12 Months or More | ||
Fair Value | 21,544 | 12,282 |
Unrealized Loss | (789) | (703) |
Total | ||
Fair Value | 27,846 | 36,418 |
Unrealized Loss | (794) | (1,108) |
Corporate debt securities | ||
Less Than 12 Months | ||
Fair Value | 2,812 | 15,827 |
Unrealized Loss | (298) | (1,073) |
12 Months or More | ||
Fair Value | 32,622 | 18,345 |
Unrealized Loss | (4,509) | (1,955) |
Total | ||
Fair Value | 35,434 | 34,172 |
Unrealized Loss | $ (4,807) | $ (3,028) |
SECURITIES - Additional Informa
SECURITIES - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) item | |
Debt securities available-for-sale, at fair value | $ 331,580,000 | $ 331,580,000 | $ 373,444,000 | ||
Aggregate carrying value | 195,838,000 | 195,838,000 | 241,385,000 | ||
Proceeds from sales of debt securities available-for-sale | 0 | $ 0 | 23,230,000 | $ 0 | |
Net gains and losses on debt securities | 0 | $ 0 | |||
Accrued interest receivable on debt securities | 2,108,000 | ||||
Marketable equity securities, at fair value | $ 1,476,000 | 1,476,000 | $ 1,699,000 | ||
Gain on debt securities | 447,000 | 0 | |||
Loss on debt securities | $ 348,000 | $ 0 | |||
Number of securities in loss position | item | 173 | 173 | 183 | ||
Percentage decline in value | 10.13% | 10.13% | 9.11% | ||
Securities Holdings Concentration Risk | Stockholders' Equity | |||||
Number of issuers | item | 1 | ||||
Asset Pledged as Collateral | |||||
Debt securities available-for-sale, at fair value | $ 247,027,000 | $ 247,027,000 | $ 315,836,000 | ||
Marketable Equity Securities | |||||
Marketable equity securities, at fair value | 1,476,000 | 1,476,000 | $ 1,699,000 | ||
Sallie Mae Bank securities | Securities Holdings Concentration Risk | Stockholders' Equity | |||||
Debt securities available-for-sale, at fair value | $ 16,095,000 | $ 16,095,000 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | $ 871,239,000 | $ 804,820,000 | $ 871,239,000 | $ 804,820,000 | $ 858,469,000 |
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2023 | 223,000 | 223,000 | |||
2022 | 359,000 | 359,000 | |||
2021 | 218,000 | 218,000 | |||
2020 | 148,000 | 148,000 | |||
2019 | 205,000 | 205,000 | |||
Prior | 1,000 | 1,000 | |||
Loans and Leases Receivable, Deferred Income, Total | 1,154,000 | 1,154,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2023 | 49,947,000 | 49,947,000 | |||
2022 | 210,725,000 | 210,725,000 | |||
2021 | 166,139,000 | 166,139,000 | |||
2020 | 127,609,000 | 127,609,000 | |||
2019 | 73,382,000 | 73,382,000 | |||
Prior | 243,437,000 | 243,437,000 | |||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 21,000 | 13,000 | 38,000 | 15,000 | 206,000 |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
2022 | 23,000 | ||||
2021 | 8,000 | ||||
2019 | 4,000 | ||||
Prior | 3,000 | ||||
Total Gross Charge Offs | 21,000 | 13,000 | 38,000 | 15,000 | 206,000 |
GGLs | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 4,542,000 | 4,542,000 | 4,631,000 | ||
Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 49,714,000 | 49,714,000 | |||
2022 | 210,280,000 | 210,280,000 | |||
2021 | 165,033,000 | 165,033,000 | |||
2020 | 127,461,000 | 127,461,000 | |||
2019 | 63,890,000 | 63,890,000 | |||
Prior | 232,689,000 | 232,689,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 849,067,000 | 849,067,000 | |||
Special Mention | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 10,000 | 10,000 | |||
Prior | 631,000 | 631,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 641,000 | 641,000 | |||
Substandard | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2022 | 86,000 | 86,000 | |||
2021 | 888,000 | 888,000 | |||
2019 | 9,287,000 | 9,287,000 | |||
Prior | 10,116,000 | 10,116,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 20,377,000 | 20,377,000 | |||
Real Estate | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 774,688,000 | 774,688,000 | 764,880,000 | ||
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2023 | 148,000 | 148,000 | |||
2022 | 226,000 | 226,000 | |||
2021 | 171,000 | 171,000 | |||
2020 | 124,000 | 124,000 | |||
2019 | (14,000) | (14,000) | |||
Loans and Leases Receivable, Deferred Income, Total | 655,000 | 655,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2023 | 41,995,000 | 41,995,000 | |||
2022 | 192,540,000 | 192,540,000 | |||
2021 | 143,908,000 | 143,908,000 | |||
2020 | 117,562,000 | 117,562,000 | |||
2019 | 66,092,000 | 66,092,000 | |||
Prior | 212,591,000 | 212,591,000 | |||
Real Estate | Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 41,847,000 | 41,847,000 | |||
2022 | 192,228,000 | 192,228,000 | |||
2021 | 142,849,000 | 142,849,000 | |||
2020 | 117,438,000 | 117,438,000 | |||
2019 | 56,819,000 | 56,819,000 | |||
Prior | 202,536,000 | 202,536,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 753,717,000 | 753,717,000 | |||
Real Estate | Special Mention | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Prior | 631,000 | 631,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 631,000 | 631,000 | |||
Real Estate | Substandard | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2022 | 86,000 | 86,000 | |||
2021 | 888,000 | 888,000 | |||
2019 | 9,287,000 | 9,287,000 | |||
Prior | 9,424,000 | 9,424,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 19,685,000 | 19,685,000 | |||
Agricultural | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 862,000 | 862,000 | 860,000 | ||
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2022 | 1,000 | 1,000 | |||
Prior | 1,000 | 1,000 | |||
Loans and Leases Receivable, Deferred Income, Total | 2,000 | 2,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2022 | 67,000 | 67,000 | |||
2019 | 1,000 | 1,000 | |||
Prior | 794,000 | 794,000 | |||
Agricultural | Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2022 | 66,000 | 66,000 | |||
2019 | 1,000 | 1,000 | |||
Prior | 793,000 | 793,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 860,000 | 860,000 | |||
Commercial and Industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 61,313,000 | 61,313,000 | 56,077,000 | ||
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2023 | 50,000 | 50,000 | |||
2022 | 103,000 | 103,000 | |||
2021 | 32,000 | 32,000 | |||
2020 | 19,000 | 19,000 | |||
2019 | 216,000 | 216,000 | |||
Prior | 1,000 | 1,000 | |||
Loans and Leases Receivable, Deferred Income, Total | 421,000 | 421,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2023 | 6,241,000 | 6,241,000 | |||
2022 | 11,057,000 | 11,057,000 | |||
2021 | 5,822,000 | 5,822,000 | |||
2020 | 7,781,000 | 7,781,000 | |||
2019 | 7,038,000 | 7,038,000 | |||
Prior | 23,374,000 | 23,374,000 | |||
Commercial and Industrial | Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 6,191,000 | 6,191,000 | |||
2022 | 10,954,000 | 10,954,000 | |||
2021 | 5,790,000 | 5,790,000 | |||
2020 | 7,762,000 | 7,762,000 | |||
2019 | 6,822,000 | 6,822,000 | |||
Prior | 22,681,000 | 22,681,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 60,200,000 | 60,200,000 | |||
Commercial and Industrial | Substandard | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Prior | 692,000 | 692,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 692,000 | 692,000 | |||
Commercial and Industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 82,539,000 | 82,539,000 | 86,999,000 | ||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 9,000 | 9,000 | 158,000 | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 9,000 | 9,000 | 158,000 | ||
Consumer | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 6,129,000 | 6,129,000 | 5,707,000 | ||
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2023 | 24,000 | 24,000 | |||
2022 | 27,000 | 27,000 | |||
2021 | 11,000 | 11,000 | |||
2020 | 4,000 | 4,000 | |||
2019 | 3,000 | 3,000 | |||
Loans and Leases Receivable, Deferred Income, Total | 69,000 | 69,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2023 | 1,660,000 | 1,660,000 | |||
2022 | 1,617,000 | 1,617,000 | |||
2021 | 1,307,000 | 1,307,000 | |||
2020 | 312,000 | 312,000 | |||
2019 | 251,000 | 251,000 | |||
Prior | 982,000 | 982,000 | |||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 21,000 | 38,000 | |||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
2022 | 23,000 | ||||
2021 | 8,000 | ||||
2019 | 4,000 | ||||
Prior | 3,000 | ||||
Total Gross Charge Offs | 21,000 | 38,000 | |||
Consumer | Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 1,626,000 | 1,626,000 | |||
2022 | 1,590,000 | 1,590,000 | |||
2021 | 1,296,000 | 1,296,000 | |||
2020 | 308,000 | 308,000 | |||
2019 | 248,000 | 248,000 | |||
Prior | 982,000 | 982,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 6,050,000 | 6,050,000 | |||
Consumer | Special Mention | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 10,000 | 10,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | 10,000 | 10,000 | |||
Consumer | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 5,402,000 | 5,402,000 | 5,415,000 | ||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 4,000 | 6,000 | 33,000 | ||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 4,000 | 6,000 | 33,000 | ||
State and Political Subdivisions | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 28,247,000 | 28,247,000 | 30,945,000 | ||
Financing Receivable, Deferred Income, by Origination Year [Abstract] | |||||
2023 | 1,000 | 1,000 | |||
2022 | 2,000 | 2,000 | |||
2021 | 4,000 | 4,000 | |||
2020 | 1,000 | 1,000 | |||
Prior | (1,000) | (1,000) | |||
Loans and Leases Receivable, Deferred Income, Total | 7,000 | 7,000 | |||
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss [Abstract] | |||||
2023 | 51,000 | 51,000 | |||
2022 | 5,444,000 | 5,444,000 | |||
2021 | 15,102,000 | 15,102,000 | |||
2020 | 1,954,000 | 1,954,000 | |||
Prior | 5,696,000 | 5,696,000 | |||
State and Political Subdivisions | Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
2023 | 50,000 | 50,000 | |||
2022 | 5,442,000 | 5,442,000 | |||
2021 | 15,098,000 | 15,098,000 | |||
2020 | 1,953,000 | 1,953,000 | |||
Prior | 5,697,000 | 5,697,000 | |||
Financing Receivable, Recorded Investment, Past Due, Total | $ 28,240,000 | $ 28,240,000 | |||
Commercial Real Estate | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | 568,258,000 | 568,258,000 | 611,549,000 | ||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 3,000 | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 3,000 | ||||
Residential Real Estate | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing Receivable, Recorded Investment, Past Due, Total | $ 148,621,000 | $ 148,621,000 | 154,506,000 | ||
Financing Receivable, Gross Charge Offs, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | 12,000 | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract] | |||||
Total Gross Charge Offs | $ 12,000 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Activity in allowance for credit losses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Allowance, Beginning balance | $ 7,142,000 | $ 8,937,000 | $ 8,274,000 | $ 8,680,000 | $ 8,680,000 |
Charge-offs | (21,000) | (13,000) | (38,000) | (15,000) | (206,000) |
Recoveries | 2,000 | 18,000 | 6,000 | 58,000 | 64,000 |
Provision (credit) | 34,000 | 218,000 | 34,000 | 437,000 | (264,000) |
Allowance, Ending Balance | 7,157,000 | 9,160,000 | 7,157,000 | 9,160,000 | 8,274,000 |
Total | 871,239,000 | 804,820,000 | 871,239,000 | 804,820,000 | 858,469,000 |
Ending Balance | 871,239,000 | 804,820,000 | 871,239,000 | 804,820,000 | 858,469,000 |
Unfunded Loan Commitment | |||||
Reserve For Unfunded Lending Commitments | 260,000 | 260,000 | 68,000 | ||
Reserve For Unfunded Lending Commitments | 260,000 | 260,000 | 68,000 | ||
Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 7,155,000 | ||||
Allowance, Ending Balance | 7,155,000 | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | (1,119,000) | ||||
Allowance, Ending Balance | (1,119,000) | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Unfunded Loan Commitment | |||||
Reserve For Unfunded Lending Commitments | 147,000 | 147,000 | |||
Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 5,398,000 | 12,284,000 | 5,398,000 | 12,284,000 | 11,207,000 |
Ending Balance | 5,398,000 | 12,284,000 | 5,398,000 | 12,284,000 | 11,207,000 |
Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 8,274,000 | ||||
Allowance, Ending Balance | 7,157,000 | 9,160,000 | 7,157,000 | 9,160,000 | 8,274,000 |
Total | 865,841,000 | 792,536,000 | 865,841,000 | 792,536,000 | 847,262,000 |
Ending Balance | 865,841,000 | 792,536,000 | 865,841,000 | 792,536,000 | 847,262,000 |
Real Estate | |||||
Allowance, Beginning balance | 6,735,000 | 7,483,000 | |||
Recoveries | 1,000 | 2,000 | |||
Provision (credit) | 18,000 | (14,000) | |||
Allowance, Ending Balance | 6,754,000 | 6,754,000 | 7,483,000 | ||
Total | 774,688,000 | 774,688,000 | 764,880,000 | ||
Ending Balance | 774,688,000 | 774,688,000 | 764,880,000 | ||
Real Estate | Unfunded Loan Commitment | |||||
Reserve For Unfunded Lending Commitments | 225,000 | 225,000 | |||
Real Estate | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 6,766,000 | ||||
Allowance, Ending Balance | 6,766,000 | ||||
Real Estate | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | (717,000) | ||||
Allowance, Ending Balance | (717,000) | ||||
Real Estate | Loans Individually Evaluated For Impairment [Member] | |||||
Total | 4,445,000 | 4,445,000 | |||
Ending Balance | 4,445,000 | 4,445,000 | |||
Real Estate | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | 6,754,000 | 6,754,000 | |||
Total | 770,243,000 | 770,243,000 | |||
Ending Balance | 770,243,000 | 770,243,000 | |||
Agricultural | |||||
Allowance, Beginning balance | 1,000 | 6,000 | |||
Provision (credit) | (1,000) | ||||
Allowance, Ending Balance | 1,000 | 1,000 | 6,000 | ||
Total | 862,000 | 862,000 | 860,000 | ||
Ending Balance | 862,000 | 862,000 | 860,000 | ||
Agricultural | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 2,000 | ||||
Allowance, Ending Balance | 2,000 | ||||
Agricultural | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | (4,000) | ||||
Allowance, Ending Balance | (4,000) | ||||
Agricultural | Loans Individually Evaluated For Impairment [Member] | |||||
Total | 309,000 | 309,000 | |||
Ending Balance | 309,000 | 309,000 | |||
Agricultural | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | 1,000 | 1,000 | |||
Total | 553,000 | 553,000 | |||
Ending Balance | 553,000 | 553,000 | |||
Commercial and industrial | |||||
Allowance, Beginning balance | 665,000 | 704,000 | 681,000 | 681,000 | |
Charge-offs | (9,000) | (9,000) | (158,000) | ||
Recoveries | 1,000 | 2,000 | 3,000 | ||
Provision (credit) | 18,000 | 1,000 | 178,000 | ||
Allowance, Ending Balance | 675,000 | 675,000 | 704,000 | ||
Total | 82,539,000 | 82,539,000 | 86,999,000 | ||
Ending Balance | 82,539,000 | 82,539,000 | 86,999,000 | ||
Commercial and industrial | Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 991,000 | 991,000 | 973,000 | ||
Ending Balance | 991,000 | 991,000 | 973,000 | ||
Commercial and industrial | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 704,000 | ||||
Allowance, Ending Balance | 675,000 | 675,000 | 704,000 | ||
Total | 81,548,000 | 81,548,000 | 86,026,000 | ||
Ending Balance | 81,548,000 | 81,548,000 | 86,026,000 | ||
Commercial and Industrial | |||||
Allowance, Beginning balance | 265,000 | 504,000 | |||
Recoveries | 1,000 | 2,000 | |||
Provision (credit) | 2,000 | 23,000 | |||
Allowance, Ending Balance | 268,000 | 268,000 | 504,000 | ||
Total | 61,313,000 | 61,313,000 | 56,077,000 | ||
Ending Balance | 61,313,000 | 61,313,000 | 56,077,000 | ||
Commercial and Industrial | Unfunded Loan Commitment | |||||
Reserve For Unfunded Lending Commitments | 35,000 | 35,000 | |||
Commercial and Industrial | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 243,000 | ||||
Allowance, Ending Balance | 243,000 | ||||
Commercial and Industrial | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | (261,000) | ||||
Allowance, Ending Balance | (261,000) | ||||
Commercial and Industrial | Loans Individually Evaluated For Impairment [Member] | |||||
Total | 644,000 | 644,000 | |||
Ending Balance | 644,000 | 644,000 | |||
Commercial and Industrial | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | 268,000 | 268,000 | |||
Total | 60,669,000 | 60,669,000 | |||
Ending Balance | 60,669,000 | 60,669,000 | |||
commercial real estate | |||||
Allowance, Beginning balance | 5,759,000 | 5,932,000 | 5,408,000 | 5,408,000 | |
Charge-offs | (3,000) | ||||
Recoveries | 38,000 | 40,000 | |||
Provision (credit) | 195,000 | 508,000 | 487,000 | ||
Allowance, Ending Balance | 5,954,000 | 5,954,000 | 5,932,000 | ||
Total | 568,258,000 | 568,258,000 | 611,549,000 | ||
Ending Balance | 568,258,000 | 568,258,000 | 611,549,000 | ||
commercial real estate | Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 10,448,000 | 10,448,000 | 9,495,000 | ||
Ending Balance | 10,448,000 | 10,448,000 | 9,495,000 | ||
commercial real estate | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 5,932,000 | ||||
Allowance, Ending Balance | 5,954,000 | 5,954,000 | 5,932,000 | ||
Total | 557,810,000 | 557,810,000 | 602,054,000 | ||
Ending Balance | 557,810,000 | 557,810,000 | 602,054,000 | ||
residential real estate | |||||
Allowance, Beginning balance | 1,538,000 | 1,557,000 | 1,539,000 | 1,539,000 | |
Charge-offs | (12,000) | ||||
Recoveries | 13,000 | 14,000 | 16,000 | ||
Provision (credit) | 58,000 | 56,000 | 14,000 | ||
Allowance, Ending Balance | 1,609,000 | 1,609,000 | 1,557,000 | ||
Total | 148,621,000 | 148,621,000 | 154,506,000 | ||
Ending Balance | 148,621,000 | 148,621,000 | 154,506,000 | ||
residential real estate | Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 845,000 | 845,000 | 739,000 | ||
Ending Balance | 845,000 | 845,000 | 739,000 | ||
residential real estate | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 1,557,000 | ||||
Allowance, Ending Balance | 1,609,000 | 1,609,000 | 1,557,000 | ||
Total | 147,776,000 | 147,776,000 | 153,767,000 | ||
Ending Balance | 147,776,000 | 147,776,000 | 153,767,000 | ||
Consumer | |||||
Allowance, Beginning balance | 93,000 | 84,000 | |||
Charge-offs | (21,000) | (38,000) | |||
Recoveries | 2,000 | ||||
Provision (credit) | 17,000 | 30,000 | |||
Allowance, Ending Balance | 89,000 | 89,000 | 84,000 | ||
Total | 6,129,000 | 6,129,000 | 5,707,000 | ||
Ending Balance | 6,129,000 | 6,129,000 | 5,707,000 | ||
Consumer | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 95,000 | ||||
Allowance, Ending Balance | 95,000 | ||||
Consumer | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | 11,000 | ||||
Allowance, Ending Balance | 11,000 | ||||
Consumer | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | 89,000 | 89,000 | |||
Total | 6,129,000 | 6,129,000 | |||
Ending Balance | 6,129,000 | 6,129,000 | |||
Consumer | |||||
Allowance, Beginning balance | 78,000 | 81,000 | 84,000 | 84,000 | |
Charge-offs | (4,000) | (6,000) | (33,000) | ||
Recoveries | 4,000 | 4,000 | 5,000 | ||
Provision (credit) | 1,000 | (3,000) | 25,000 | ||
Allowance, Ending Balance | 79,000 | 79,000 | 81,000 | ||
Total | 5,402,000 | 5,402,000 | 5,415,000 | ||
Ending Balance | 5,402,000 | 5,402,000 | 5,415,000 | ||
Consumer | Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 0 | ||||
Ending Balance | 0 | ||||
Consumer | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | 81,000 | ||||
Allowance, Ending Balance | 79,000 | 79,000 | 81,000 | ||
Total | 5,402,000 | 5,402,000 | 5,415,000 | ||
Ending Balance | 5,402,000 | 5,402,000 | 5,415,000 | ||
State and Political Subdivisions | |||||
Allowance, Beginning balance | 48,000 | 197,000 | |||
Provision (credit) | (3,000) | (4,000) | |||
Allowance, Ending Balance | 45,000 | 45,000 | 197,000 | ||
Total | 28,247,000 | 28,247,000 | 30,945,000 | ||
Ending Balance | 28,247,000 | 28,247,000 | 30,945,000 | ||
State and Political Subdivisions | Cumulative Effect, Period of Adoption, Adjusted Balance [Member] | |||||
Allowance, Beginning balance | 49,000 | ||||
Allowance, Ending Balance | 49,000 | ||||
State and Political Subdivisions | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||
Allowance, Beginning balance | (148,000) | ||||
Allowance, Ending Balance | (148,000) | ||||
State and Political Subdivisions | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | 45,000 | 45,000 | |||
Total | 28,247,000 | 28,247,000 | |||
Ending Balance | $ 28,247,000 | 28,247,000 | |||
Unallocated Financing Receivables | |||||
Allowance, Beginning balance | 897,000 | 968,000 | 968,000 | ||
Charge-offs | 0 | ||||
Recoveries | 0 | ||||
Provision (credit) | (54,000) | (125,000) | (968,000) | ||
Allowance, Ending Balance | 843,000 | 843,000 | |||
Total | 0 | ||||
Ending Balance | 0 | ||||
Unallocated Financing Receivables | Loans Individually Evaluated For Impairment [Member] | |||||
Allowance, Beginning balance | $ 0 | ||||
Allowance, Ending Balance | 0 | ||||
Total | 0 | ||||
Ending Balance | 0 | ||||
Unallocated Financing Receivables | Loans Collectively Evaluated For Impairment [Member] | |||||
Allowance, Ending Balance | $ 843,000 | $ 843,000 | |||
Total | 0 | ||||
Ending Balance | $ 0 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Activity in allowance for credit losses on unfunded commitments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Provision for credit losses on unfunded commitments | $ 45 | $ (60) |
Unfunded Loan Commitment | ||
Beginning balance | 68 | |
Provision for credit losses on unfunded commitments | 45 | |
Ending balance | 260 | |
Cumulative Effect, Period of Adoption, Adjustment [Member] | Unfunded Loan Commitment | ||
Ending balance | $ 147 |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Impaired loans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Modifications [Line Items] | ||||||||
Financing Receivable, Recorded Investment | $ 7,480,000 | |||||||
Unpaid principal balance | $ 871,239,000 | $ 804,820,000 | $ 871,239,000 | $ 804,820,000 | 858,469,000 | |||
Related allowance | 7,157,000 | 9,160,000 | 7,157,000 | 9,160,000 | $ 7,142,000 | 8,274,000 | $ 8,937,000 | $ 8,680,000 |
Recorded Investment | ||||||||
Total | 5,398,000 | 5,398,000 | 11,207,000 | |||||
Unpaid Principal Balance | ||||||||
With an allowance recorded | 7,419,000 | 7,419,000 | 14,174,000 | |||||
Total | 7,419,000 | 7,419,000 | 14,174,000 | |||||
Average Recorded Investment | ||||||||
Total | 5,329,000 | 5,358,000 | ||||||
Total | 12,646,000 | 13,100,000 | ||||||
Interest Income Recognized | ||||||||
Total | 6,000 | 12,000 | ||||||
Total | 6,000 | 73,000 | 12,000 | 147,000 | ||||
Real Estate | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 774,688,000 | 774,688,000 | 764,880,000 | |||||
Related allowance | 6,754,000 | 6,754,000 | 6,735,000 | 7,483,000 | ||||
Recorded Investment | ||||||||
With no related allowance recorded | 4,445,000 | 4,445,000 | ||||||
Total | 4,445,000 | 4,445,000 | ||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 6,466,000 | 6,466,000 | ||||||
With an allowance recorded | 6,466,000 | 6,466,000 | ||||||
Total | 6,466,000 | 6,466,000 | ||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 4,367,000 | 4,390,000 | ||||||
Total | 4,367,000 | |||||||
Total | 4,390,000 | |||||||
Agricultural | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 862,000 | 862,000 | 860,000 | |||||
Related allowance | 1,000 | 1,000 | 1,000 | 6,000 | ||||
Recorded Investment | ||||||||
With no related allowance recorded | 309,000 | 309,000 | ||||||
Total | 309,000 | 309,000 | ||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 309,000 | 309,000 | ||||||
With an allowance recorded | 309,000 | 309,000 | ||||||
Total | 309,000 | 309,000 | ||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 309,000 | 309,000 | ||||||
Total | 309,000 | 309,000 | ||||||
Interest Income Recognized | ||||||||
With no related allowance recorded | 6,000 | 12,000 | ||||||
Total | 6,000 | 12,000 | ||||||
Commercial and Industrial | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 61,313,000 | 61,313,000 | 56,077,000 | |||||
Related allowance | 268,000 | 268,000 | $ 265,000 | 504,000 | ||||
Recorded Investment | ||||||||
With no related allowance recorded | 644,000 | 644,000 | ||||||
Total | 644,000 | 644,000 | ||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 644,000 | 644,000 | ||||||
With an allowance recorded | 644,000 | 644,000 | ||||||
Total | 644,000 | 644,000 | ||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 653,000 | 659,000 | ||||||
Total | $ 653,000 | $ 659,000 | ||||||
Commercial and industrial | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 82,539,000 | 82,539,000 | 86,999,000 | |||||
Related allowance | 675,000 | 675,000 | 704,000 | 665,000 | 681,000 | |||
Recorded Investment | ||||||||
With no related allowance recorded | 973,000 | |||||||
Total | 973,000 | |||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 973,000 | |||||||
With an allowance recorded | 973,000 | |||||||
Total | 973,000 | |||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 998,000 | 1,004,000 | ||||||
Total | 998,000 | 1,004,000 | ||||||
Interest Income Recognized | ||||||||
With no related allowance recorded | 3,000 | 5,000 | ||||||
Total | 3,000 | 5,000 | ||||||
Commercial Real Estate | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 568,258,000 | 568,258,000 | 611,549,000 | |||||
Related allowance | 5,954,000 | 5,954,000 | 5,932,000 | 5,759,000 | 5,408,000 | |||
Recorded Investment | ||||||||
With no related allowance recorded | 9,495,000 | |||||||
Total | 9,495,000 | |||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 12,430,000 | |||||||
With an allowance recorded | 12,430,000 | |||||||
Total | 12,430,000 | |||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 10,801,000 | 11,247,000 | ||||||
Total | 10,801,000 | 11,247,000 | ||||||
Interest Income Recognized | ||||||||
With no related allowance recorded | 70,000 | 142,000 | ||||||
Total | 70,000 | 142,000 | ||||||
Residential Real Estate | ||||||||
Financing Receivable, Modifications [Line Items] | ||||||||
Unpaid principal balance | 148,621,000 | 148,621,000 | 154,506,000 | |||||
Related allowance | 1,609,000 | 1,609,000 | 1,557,000 | $ 1,538,000 | $ 1,539,000 | |||
Recorded Investment | ||||||||
With no related allowance recorded | 739,000 | |||||||
Total | 739,000 | |||||||
Unpaid Principal Balance | ||||||||
With no related allowance recorded | 771,000 | |||||||
With an allowance recorded | 771,000 | |||||||
Total | $ 771,000 | |||||||
Average Recorded Investment | ||||||||
With no related allowance recorded | 847,000 | 849,000 | ||||||
Total | $ 847,000 | $ 849,000 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Collateral dependent loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Collateral-dependent loans | |||
Total | $ 871,239 | $ 858,469 | $ 804,820 |
Real Estate | |||
Collateral-dependent loans | |||
Total | 4,445 | ||
Other | |||
Collateral-dependent loans | |||
Total | 953 | ||
Real Estate | |||
Collateral-dependent loans | |||
Total | 774,688 | 764,880 | |
Real Estate | Real Estate | |||
Collateral-dependent loans | |||
Total | 4,445 | ||
Agricultural | |||
Collateral-dependent loans | |||
Total | 862 | 860 | |
Agricultural | Other | |||
Collateral-dependent loans | |||
Total | 309 | ||
Commercial and Industrial | |||
Collateral-dependent loans | |||
Total | 61,313 | $ 56,077 | |
Commercial and Industrial | Other | |||
Collateral-dependent loans | |||
Total | $ 644 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Non-performing assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Total non-accrual loans | $ 5,089 | $ 5,051 |
Loans past-due 90 days or more and still accruing interest | 584 | 308 |
Total non-performing assets | 5,673 | 5,359 |
Real Estate | ||
Total non-accrual loans | 4,445 | 4,387 |
Loans past-due 90 days or more and still accruing interest | 584 | 308 |
Commercial and Industrial | ||
Total non-accrual loans | $ 644 | |
Commercial and industrial | ||
Total non-accrual loans | $ 664 |
LOANS AND ALLOWANCE FOR CREDI_9
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Past due (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Current - 29 Days Past Due | $ 863,515 | $ 850,257 | |
Total | 871,239 | 858,469 | $ 804,820 |
90 Days or Greater Past Due and Still Accruing Interest | 584 | 308 | |
Financial Asset, 30 to 59 Days Past Due | |||
Total | 1,438 | 2,755 | |
Financing Receivables, 60 to 89 Days Past Due | |||
Total | 636 | 124 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Total | 5,650 | 5,333 | |
Financial Asset, Past Due | |||
Total | 7,724 | 8,212 | |
Real Estate | |||
Current - 29 Days Past Due | 767,595 | 757,445 | |
Total | 774,688 | 764,880 | |
90 Days or Greater Past Due and Still Accruing Interest | 584 | 308 | |
Real Estate | Financial Asset, 30 to 59 Days Past Due | |||
Total | 1,433 | 2,682 | |
Real Estate | Financing Receivables, 60 to 89 Days Past Due | |||
Total | 631 | 59 | |
Real Estate | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Total | 5,029 | 4,694 | |
Real Estate | Financial Asset, Past Due | |||
Total | 7,093 | 7,435 | |
Agricultural | |||
Current - 29 Days Past Due | 862 | 860 | |
Total | 862 | 860 | |
Commercial and Industrial | |||
Current - 29 Days Past Due | 60,692 | 55,313 | |
Total | 61,313 | 56,077 | |
Commercial and Industrial | Financial Asset, 30 to 59 Days Past Due | |||
Total | 62 | ||
Commercial and Industrial | Financing Receivables, 60 to 89 Days Past Due | |||
Total | 63 | ||
Commercial and Industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Total | 621 | 639 | |
Commercial and Industrial | Financial Asset, Past Due | |||
Total | 621 | 764 | |
Commercial and industrial | |||
Total | 86,999 | 82,539 | |
Consumer | |||
Current - 29 Days Past Due | 6,119 | 5,694 | |
Total | 6,129 | 5,707 | |
Consumer | Financial Asset, 30 to 59 Days Past Due | |||
Total | 5 | 11 | |
Consumer | Financing Receivables, 60 to 89 Days Past Due | |||
Total | 5 | 2 | |
Consumer | Financial Asset, Past Due | |||
Total | 10 | 13 | |
Consumer | |||
Total | 5,415 | 5,402 | |
State and Political Subdivisions | |||
Current - 29 Days Past Due | 28,247 | 30,945 | |
Total | $ 28,247 | 30,945 | |
Commercial Real Estate | |||
Total | 611,549 | 568,258 | |
Residential Real Estate | |||
Total | $ 154,506 | $ 148,621 |
LOANS AND ALLOWANCE FOR CRED_10
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Classes of the loan portfolio summarized by risk rating (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Financing Receivable, Recorded Investment [Line Items] | |
Net deferred loan fees and costs | $ 1,129 |
Total loans | 858,469 |
Pass | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 836,405 |
Special Mention | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 634 |
Substandard | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 20,301 |
Commercial and Industrial | |
Financing Receivable, Recorded Investment [Line Items] | |
Net deferred loan fees and costs | 429 |
Total loans | 86,999 |
Commercial and Industrial | Pass | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 85,845 |
Commercial and Industrial | Substandard | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 725 |
Commercial Real Estate | |
Financing Receivable, Recorded Investment [Line Items] | |
Net deferred loan fees and costs | 825 |
Total loans | 611,549 |
Commercial Real Estate | Pass | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 591,309 |
Commercial Real Estate | Special Mention | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 634 |
Commercial Real Estate | Substandard | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 18,781 |
Residential Real Estate | |
Financing Receivable, Recorded Investment [Line Items] | |
Net deferred loan fees and costs | (191) |
Total loans | 154,506 |
Residential Real Estate | Pass | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 153,902 |
Residential Real Estate | Substandard | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | 795 |
Consumer | |
Financing Receivable, Recorded Investment [Line Items] | |
Net deferred loan fees and costs | 66 |
Total loans | 5,415 |
Consumer | Pass | |
Financing Receivable, Recorded Investment [Line Items] | |
Loans and Leases Receivable, Gross, Total | $ 5,349 |
LOANS AND ALLOWANCE FOR CRED_11
LOANS AND ALLOWANCE FOR CREDIT LOSSES - TDRs recorded investment (Details) | Dec. 31, 2022 USD ($) |
Financing Receivable, Modifications, Recorded Investment | $ 7,480,000 |
Non-accrual TDRs | |
Financing Receivable, Modifications, Recorded Investment | 1,324,000 |
Accruing TDRs | |
Financing Receivable, Modifications, Recorded Investment | $ 6,156,000 |
LOANS AND ALLOWANCE FOR CRED_12
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loan modifications categorized as TDRs (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 USD ($) loan | Mar. 31, 2022 loan | Jun. 30, 2022 USD ($) | |
Number of contracts | 1 | 0 | 1,000 |
Pre-Modification Outstanding Recorded Investment | $ 347,000 | $ 347,000 | |
Post-Modification Outstanding Recorded Investment | 372,000 | 372,000 | |
Recorded Investment | $ 372,000 | $ 372,000 | |
commercial real estate | |||
Number of contracts | 1,000 | 1,000 | |
Pre-Modification Outstanding Recorded Investment | $ 347,000 | $ 347,000 | |
Post-Modification Outstanding Recorded Investment | 372,000 | 372,000 | |
Recorded Investment | $ 372,000 | $ 372,000 |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES - Types of loan modifications (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 loan | Jun. 30, 2022 USD ($) | Mar. 31, 2022 loan | Jun. 30, 2022 item | Jun. 30, 2022 USD ($) | |
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 0 | 1 | |
Payment Modification | |||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | 1 | ||
commercial real estate | |||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 | |||
commercial real estate | Payment Modification | |||||
Financing Receivable, Modifications, Number of Contracts | 1 | 1 |
LOANS AND ALLOWANCE FOR CRED_13
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Additional Information (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) contract loan | Mar. 31, 2022 loan | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) loan contract item | Dec. 31, 2022 USD ($) | |
Loans Receivable Held-for-sale, Amount | $ 0 | $ 0 | $ 71,000 | |||
Loans transferred from held for sale portfolio | $ 0 | $ 6,652,000 | ||||
Maximum loan to value ratio with PMI | 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 | |||||
Accrued interest exclude from the amortized cost basis of loans | $ 1,906,000 | $ 1,906,000 | ||||
Transfer of Loans Held-for-sale to Portfolio Loans | 0 | 6,652,000 | ||||
Foreclosed Assets Held For Resale | 0 | 0 | 0 | |||
Consumer Mortgage Loans Secured by Residential Real Estate in Process of Foreclosure | 138,000 | 138,000 | 41,000 | |||
Financing Receivable, Modifications, Recorded Investment | 7,480,000 | |||||
Financing Receivable, Modifications, Unfunded Commitments | 0 | |||||
Modified value of TDR | $ 372,000 | $ 372,000 | ||||
Number of contracts | 1 | 0 | 1,000 | |||
Impaired Financing Receivable Related Allowance Attributable to TDR | 0 | |||||
Impaired Financing Receivable, Interest Income, Accrual Method | 6,000 | $ 73,000 | 12,000 | $ 147,000 | ||
Impaired Financing Receivable Interest Income Non-accrual Method | 0 | 0 | 0 | 0 | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 372,000 | $ 372,000 | ||||
Unfunded Loan Commitment | ||||||
Reserve For Unfunded Lending Commitments | 260,000 | 260,000 | $ 68,000 | |||
Payment Modification | ||||||
Number of contracts | 1,000 | 1 | ||||
Commercial and Industrial | ||||||
Tax free loans | 10,000 | 10,000 | ||||
Commercial and Industrial | GGLs | ||||||
Government Guaranteed Loans. | 4,542,000 | 4,542,000 | ||||
Commercial and Industrial | Unfunded Loan Commitment | ||||||
Reserve For Unfunded Lending Commitments | 35,000 | 35,000 | ||||
Commercial and industrial | ||||||
Financing Receivable Modification Not In Compliance Of Terms | $ 682,000 | |||||
Number of TDRs not in compliance with restructure | contract | 3 | 3 | ||||
Impaired Financing Receivable, Interest Income, Accrual Method | $ 3,000 | $ 5,000 | ||||
Political Subdivision Loans | ||||||
Tax free loans | $ 28,140,000 | $ 28,140,000 | ||||
Commercial Real Estate | ||||||
Modified value of TDR | $ 372,000 | $ 372,000 | ||||
Number of contracts | 1,000 | 1,000 | ||||
Financing Receivable Modification Not In Compliance Of Terms | $ 318,000 | |||||
Number of TDRs not in compliance with restructure | contract | 6 | 6 | ||||
Impaired Financing Receivable, Interest Income, Accrual Method | $ 70,000 | $ 142,000 | ||||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 372,000 | $ 372,000 | ||||
Number of loans modified as troubled debt restructuring within previous 12 months, with subsequent payment default | loan | 1 | 0 | ||||
Commercial Real Estate | Maximum | ||||||
Term of loan offering | 20 years | |||||
Maximum loan to value ratio | 80% | |||||
Commercial Real Estate | Payment Modification | ||||||
Number of contracts | 1,000 | 1,000 | ||||
Residential Real Estate | ||||||
Financing Receivable Modification Not In Compliance Of Terms | $ 12,000 | |||||
Number of loans not in compliance with restructure | contract | 1 | 1 | ||||
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 | ||||
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 | |||||
Agricultural | Maximum | ||||||
Term of loan offering | 10 years | |||||
Maximum loan to value ratio | 70% |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
DEPOSITS | ||
Non-interest bearing demand | $ 220,519,000 | $ 231,754,000 |
Interest bearing demand | 280,929,000 | 335,559,000 |
Savings | 225,631,000 | 260,086,000 |
Time certificates of deposits less than $250,000 | 179,202,000 | 151,575,000 |
Time certificates of deposits $250,000 or greater | 28,044,000 | 13,400,000 |
Other time | 1,516,000 | 1,125,000 |
Total deposits | $ 935,841,000 | $ 993,499,000 |
DEPOSITS - Additional Informati
DEPOSITS - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
DEPOSITS | |||
Increase (Decrease) in Deposits | $ (57,658,000) | $ (84,361,000) | |
Deposits. | 935,841,000 | $ 993,499,000 | |
Increase (decrease) in municipal deposits | $ (39,273,000) |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Short-term borrowings | $ 193,359 | $ 153,418 |
Debt Instrument, Interest Rate During Period | 4.95% | 2.21% |
Federal Funds Purchased | ||
Short-term borrowings | $ 0 | $ 0 |
Debt Instrument, Interest Rate During Period | 0% | |
Securities sold under agreements to repurchase | ||
Short-term borrowings | $ 19,308 | $ 20,368 |
Debt Instrument, Interest Rate During Period | 2.90% | 0.84% |
Federal Discount Window | ||
Short-term borrowings | $ 0 | $ 0 |
Debt Instrument, Interest Rate During Period | 4.82% | 2.78% |
Federal Home Loan Bank | ||
Short-term borrowings | $ 174,051 | $ 133,050 |
Debt Instrument, Interest Rate During Period | 5.18% | 2.82% |
BORROWINGS - Repurchase agreeme
BORROWINGS - Repurchase agreements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | $ 19,308 | $ 20,368 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 19,308 | 20,368 |
Financial Instruments | (19,308) | (20,368) |
Cash Collateral Pledge | 0 | 0 |
Net Amount | $ 0 | $ 0 |
BORROWINGS - Remaining contract
BORROWINGS - Remaining contractual maturity of the repurchase agreements (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | $ 19,308 |
U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 19,308 |
Overnight and Continuous | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 19,308 |
Overnight and Continuous | U.S. Treasury and/or agency securities | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 19,308 |
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 ($) | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Short-term Debt [Line Items] | ||
Fair value of securities pledged | $ 24,285,000 | $ 34,160,000 |
Advance from FHLB | 25,000,000 | 25,000,000 |
Net loans | 864,082,000 | 850,195,000 |
Long-term borrowings outstanding with the FHLB | 25,000,000 | $ 25,000,000 |
Maximum borrowing capacity | 505,628,000 | |
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 | $ 716,188,000 | |
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) | Jun. 30, 2023 | Dec. 31, 2022 |
COMMITMENTS AND CONTINGENCIES | ||
Operating Lease, Weighted-average term (years) | 20 years 3 months | 20 years 6 months 21 days |
Operating Lease, Weighted-average discount rate | 4.22% | 4.23% |
Finance Lease, Weighted-average term (years) | 2 months 1 day | 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 ($) | Jun. 30, 2023 | Dec. 31, 2022 |
COMMITMENTS AND CONTINGENCIES | ||
Within one year | $ 158,000 | $ 175,000 |
After one but within two years | 140,000 | 140,000 |
After two but within three years | 140,000 | 140,000 |
After three but within four years | 147,000 | 140,000 |
After four but within five years | 156,000 | 154,000 |
After five years | 2,395,000 | 2,474,000 |
Total undiscounted cash flows | 3,136,000 | 3,223,000 |
Discount on cash flows | (1,117,000) | (1,194,000) |
Total lease liability | 2,019,000 | 2,029,000 |
Finance Lease, Minimum Lease Payments due: | ||
Within one year | 2,000 | 7,000 |
Total undiscounted cash flows | 2,000 | 7,000 |
Discount on cash flows | (1,000) | (1,000) |
Total lease liability | $ 1,000 | $ 6,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | 6 Months Ended | ||
Jun. 30, 2023 USD ($) lease | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Right-of-Use Asset | $ 1,523,000 | $ 1,541,000 | |
Operating Lease, Liability | 2,019,000 | 2,029,000 | |
Operating Lease, Cost | 113,000 | $ 90,000 | |
Operating Lease, Payments | $ 106,000 | 83,000 | |
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 | $ 1,000 | $ 6,000 | |
Finance Lease Liability, Balance sheet location | Other Liabilities | Other Liabilities | |
Finance lease principal payments | $ 5,000 | $ 5,000 | |
Banking Facilities | |||
Lessee, Lease, Description [Line Items] | |||
Number of Operating Leases | lease | 2 | ||
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | $ 143,998 | $ 121,938 |
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 | 2,130 | 2,124 |
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 | $ 3,551 | $ 3,472 |
FINANCIAL INSTRUMENTS WITH OF_4
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK - Additional Information (Details) - Credit Concentration Risk | Jun. 30, 2023 USD ($) |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Loans Receivable, Secure by Commercial and Residential Real Estate | $ 774,688,000 |
Loans Receivable, Percentage of Loans Secure by Commercial and Residential Real Estate | 88.90% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | $ 331,580,000 | $ 373,444,000 | |
Marketable equity securities | 1,476,000 | 1,699,000 | |
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: | 6,846,000 | 6,801,000 | |
Obligations of U.S. Government Agencies and Sponsored Agencies Other | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 9,355,000 | 11,180,000 | |
Asset backed securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 32,044,000 | 36,418,000 | |
Corporate debt securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 41,063,000 | 42,993,000 | |
Marketable Equity Securities | |||
Available-for-Sale Securities: | |||
Marketable equity securities | 1,476,000 | 1,699,000 | |
Fair Value, Measurements, Recurring | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 331,580,000 | 373,444,000 | |
Marketable equity securities | 1,476,000 | 1,699,000 | |
Total recurring fair value measurements | 333,056,000 | 375,143,000 | |
Fair Value, Measurements, Recurring | U.S. Treasury and/or agency securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 6,846,000 | 6,801,000 | |
Fair Value, Measurements, Recurring | Mortgage Backed Obligations Of Us Government Corporations And Agencies | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 125,129,000 | 131,675,000 | |
Fair Value, Measurements, Recurring | Obligations of U.S. Government Agencies and Sponsored Agencies Other | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 9,355,000 | 11,180,000 | |
Fair Value, Measurements, Recurring | Other Mortgage Backed Debt Securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 29,083,000 | 33,688,000 | |
Fair Value, Measurements, Recurring | Obligations of state and political subdivisions | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 88,060,000 | 110,689,000 | |
Fair Value, Measurements, Recurring | Asset backed securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 32,044,000 | 36,418,000 | |
Fair Value, Measurements, Recurring | Corporate debt securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 41,063,000 | 42,993,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 6,846,000 | 6,801,000 | |
Marketable equity securities | 1,476,000 | 1,699,000 | |
Total recurring fair value measurements | 8,322,000 | 8,500,000 | |
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: | 6,846,000 | 6,801,000 | |
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 2 | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 324,734,000 | 366,643,000 | |
Marketable equity securities | 0 | 0 | |
Total recurring fair value measurements | 324,734,000 | 366,643,000 | |
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: | 125,129,000 | 131,675,000 | |
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: | 9,355,000 | 11,180,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Mortgage Backed Debt Securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 29,083,000 | 33,688,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Obligations of state and political subdivisions | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 88,060,000 | 110,689,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Asset backed securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 32,044,000 | 36,418,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Corporate debt securities | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 41,063,000 | 42,993,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Available-for-Sale Securities: | |||
Debt Securities Available-for-Sale: | 0 | 0 | |
Marketable equity securities | 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 - Nonre
FAIR VALUE MEASUREMENTS - Nonrecurring - Impaired loans measured at FV (Details) - Fair Value Measurements, Nonrecurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | $ 2,370 | |
Impaired loans | $ 5,197 | |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 0 | |
Impaired loans | 0 | |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 0 | |
Impaired loans | 0 | |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 2,370 | |
Impaired loans | 5,197 | |
Real Estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 2,370 | |
Real Estate | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 0 | |
Real Estate | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | 0 | |
Real Estate | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Individually evaluated loans | $ 2,370 | |
Commercial real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 5,167 | |
Commercial real estate | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 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 | |
Commercial real estate | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 5,167 | |
Residential Real Estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 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 | |
Residential Real Estate | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 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 |
FAIR VALUE MEASUREMENTS - Quant
FAIR VALUE MEASUREMENTS - Quantitative information about Level 3 FV measurements (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Impaired loans - collateral dependent | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Estimate | $ 2,340 | $ 2,370 |
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 | 0% | 0% |
Impaired loans - collateral dependent | Maximum | Appraisal Of Collateral, Certificate of Inspection | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | 5% | 5% |
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 | 5% | 5% |
Impaired loans - other | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Estimate | $ 2,827 | |
Valuation Technique | Discounted cash flow | |
Unobservable Input | Discount rate | |
Impaired loans - other | Minimum | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | 4% | |
Impaired loans - other | Maximum | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | 7% | |
Impaired loans - other | Weighted Average | Discounted Cash Flow | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Comparability Adjustments | 6% |
FAIR VALUE MEASUREMENTS - FV of
FAIR VALUE MEASUREMENTS - FV of Financial instruments., nonrecurring (Details) - Fair Value Measurements, Nonrecurring - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1, Level 2, and Level 3 [Member] | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | $ 12,597 | $ 9,441 |
Interest-bearing deposits in other banks | 1,178 | 1,297 |
Restricted investment in bank stocks | 8,617 | 7,136 |
Net loans | 827,402 | 810,104 |
Mortgage servicing rights | 292 | 319 |
Accrued interest receivable | 4,173 | 4,391 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 727,079 | 827,399 |
Time deposits | 204,384 | 160,472 |
Short-term borrowings | 193,403 | 153,209 |
Long-term borrowings | 24,328 | 24,090 |
Subordinated debentures | 22,821 | 22,365 |
Accrued interest payable | 1,171 | 563 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 12,597 | 9,441 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 | ||
FINANCIAL ASSETS: (Fair Value) | ||
Interest-bearing deposits in other banks | 1,178 | 1,297 |
Restricted investment in bank stocks | 8,617 | 7,136 |
Accrued interest receivable | 4,173 | 4,391 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 727,079 | 827,399 |
Time deposits | 204,384 | 160,472 |
Short-term borrowings | 193,403 | 153,209 |
Long-term borrowings | 24,328 | 24,090 |
Subordinated debentures | 22,821 | 22,365 |
Accrued interest payable | 1,171 | 563 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 | ||
FINANCIAL ASSETS: (Fair Value) | ||
Net loans | 827,402 | 810,104 |
Mortgage servicing rights | 292 | 319 |
Reported Value Measurement [Member] | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 12,597 | 9,441 |
Interest-bearing deposits in other banks | 1,178 | 1,297 |
Restricted investment in bank stocks | 8,617 | 7,136 |
Net loans | 864,082 | 850,195 |
Mortgage servicing rights | 292 | 319 |
Accrued interest receivable | 4,173 | 4,391 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Demand, savings and other deposits | 727,079 | 827,399 |
Time deposits | 208,762 | 166,100 |
Short-term borrowings | 193,359 | 153,418 |
Long-term borrowings | 25,000 | 25,000 |
Subordinated debentures | 25,000 | 25,000 |
Accrued interest payable | $ 1,171 | $ 563 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
REVENUE RECOGNITION | ||
Fair value of trust assets | $ 114,166,000 | $ 111,172,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER SHARE | ||||
Net income | $ 1,139 | $ 3,822 | $ 2,496 | $ 7,365 |
Weighted-average common shares outstanding, basic | 6,040,000 | 5,964,000 | 6,030,000 | 5,956,000 |
Weighted-average common shares outstanding, diluted | 6,040,000 | 5,964,000 | 6,030,000 | 5,956,000 |
Basic earnings per share | $ 0.19 | $ 0.64 | $ 0.41 | $ 1.24 |
Diluted earnings per share | $ 0.19 | $ 0.64 | $ 0.41 | $ 1.24 |
Potential common shares outstanding | 0 | 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
GOODWILL. | ||
Goodwill | $ 19,133 | $ 19,133 |