Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 001-13349 | |
Entity Registrant Name | BAR HARBOR BANKSHARES | |
Entity Incorporation, State or Country Code | ME | |
Entity Tax Identification Number | 01-0393663 | |
Entity Address, Address Line One | PO Box 400 | |
Entity Address, Address Line Two | 82 Main Street | |
Entity Address, City or Town | Bar Harbor | |
Entity Address, State or Province | ME | |
Entity Address, Postal Zip Code | 04609-0400 | |
City Area Code | 207 | |
Local Phone Number | 288-3314 | |
Title of 12(b) Security | Common Stock, par value $2.00 per share | |
Trading Symbol | BHB | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,065,620 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000743367 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 50,760 | $ 33,508 |
Interest-earning deposits with other banks | 31,305 | 216,881 |
Total cash and cash equivalents | 82,065 | 250,389 |
Securities: | ||
Securities available for sale | 556,752 | 618,276 |
Federal Home Loan Bank stock | 9,035 | 7,384 |
Total securities | 565,787 | 625,660 |
Loans held for sale | 982 | 5,523 |
Loans: | ||
Total loans | 2,850,364 | 2,531,910 |
Less: Allowance for credit losses | (25,018) | (22,718) |
Net loans | 2,825,346 | 2,509,192 |
Premises and equipment, net | 48,010 | 49,382 |
Goodwill | 119,477 | 119,477 |
Other intangible assets | 6,034 | 6,733 |
Cash surrender value of bank-owned life insurance | 80,758 | 79,020 |
Deferred tax assets, net | 25,288 | 5,547 |
Other assets | 86,499 | 58,310 |
Total assets | 3,840,246 | 3,709,233 |
Deposits: | ||
Demand | 700,218 | 664,420 |
NOW | 918,822 | 940,631 |
Savings | 669,317 | 628,670 |
Money market | 513,075 | 389,291 |
Time | 334,248 | 425,532 |
Total deposits | 3,135,680 | 3,048,544 |
Borrowings: | ||
Senior | 188,757 | 118,400 |
Subordinated | 60,248 | 60,124 |
Total borrowings | 249,005 | 178,524 |
Other liabilities | 75,596 | 58,018 |
Total liabilities | 3,460,281 | 3,285,086 |
Shareholders' equity | ||
Capital stock, par value $2.00; authorized 20,000,000 shares; issued 16,428,388 shares at September 30, 2022 and December 31, 2021 | 32,857 | 32,857 |
Additional paid-in capital | 191,438 | 190,876 |
Retained earnings | 235,218 | 215,592 |
Accumulated other comprehensive (loss) income | (62,589) | 2,303 |
Less: 1,362,768 and 1,427,059 shares of treasury stock at September 30, 2022 and December 31, 2021, respectively | (16,959) | (17,481) |
Total shareholders' equity | 379,965 | 424,147 |
Total liabilities and shareholders' equity | $ 3,840,246 | $ 3,709,233 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Capital stock, par value (in dollars per share) | $ 2 | $ 2 |
Capital stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Capital stock, shares issued (in shares) | 16,428,388 | 16,428,388 |
Treasury stock (in shares) | 1,362,768 | 1,427,059 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest and dividend income | ||||
Loans | $ 27,940 | $ 25,094 | $ 75,192 | $ 72,490 |
Securities and other | 5,145 | 3,821 | 13,178 | 11,792 |
Total interest and dividend income | 33,085 | 28,915 | 88,370 | 84,282 |
Interest expense | ||||
Deposits | 1,801 | 1,555 | 4,185 | 7,109 |
Borrowings | 1,374 | 1,778 | 3,458 | 5,415 |
Total interest expense | 3,175 | 3,333 | 7,643 | 12,524 |
Net interest income | 29,910 | 25,582 | 80,727 | 71,758 |
Provision for credit losses | 1,306 | (174) | 2,217 | (1,428) |
Net interest income after provision for credit losses | 28,604 | 25,756 | 78,510 | 73,186 |
Non-interest income | ||||
Trust and investment management fee income | 3,548 | 3,868 | 11,131 | 11,335 |
Customer service fees | 3,836 | 3,515 | 11,108 | 9,742 |
Gain on sales of securities, net | 44 | 1,930 | 53 | 1,980 |
Mortgage banking income | 315 | 850 | 1,427 | 4,973 |
Bank-owned life insurance income | 496 | 494 | 1,501 | 1,510 |
Customer derivative income | 58 | 341 | 213 | 837 |
Other income | 526 | 352 | 1,660 | 726 |
Total non-interest income | 8,823 | 11,350 | 27,093 | 31,103 |
Non-interest expense | ||||
Salaries and employee benefits | 12,242 | 11,743 | 35,757 | 35,275 |
Occupancy and equipment | 4,458 | 4,029 | 13,254 | 12,251 |
Gain on sales of premises and equipment, net | (146) | (65) | (137) | |
Outside services | 393 | 547 | 1,143 | 1,512 |
Professional services | 421 | 491 | 1,122 | 1,200 |
Communication | 204 | 188 | 617 | 707 |
Marketing | 518 | 339 | 1,150 | 1,163 |
Amortization of intangible assets | 233 | 233 | 699 | 707 |
Loss on debt extinguishment | 1,768 | 1,768 | ||
Acquisition, conversion and other expenses | 31 | 318 | 356 | 1,759 |
Other expenses | 4,532 | 3,862 | 12,585 | 11,382 |
Total non-interest expense | 23,032 | 23,372 | 66,618 | 67,587 |
Income before income taxes | 14,395 | 13,734 | 38,985 | 36,702 |
Income tax expense | 2,965 | 2,706 | 7,940 | 7,169 |
Net income | $ 11,430 | $ 11,028 | $ 31,045 | $ 29,533 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.76 | $ 0.74 | $ 2.07 | $ 1.97 |
Diluted (in dollars per share) | $ 0.76 | $ 0.73 | $ 2.06 | $ 1.96 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 15,057,598 | 14,982,766 | 15,028,963 | 14,960,753 |
Diluted (in shares) | 15,113,355 | 15,050,756 | 15,100,280 | 15,034,582 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 11,430 | $ 11,028 | $ 31,045 | $ 29,533 |
Other comprehensive (loss) income, before tax: | ||||
Changes in unrealized loss on securities available for sale | (26,933) | (3,700) | (79,186) | (7,328) |
Changes in unrealized (loss) gain on hedging derivatives | (1,568) | (203) | (5,446) | 2,311 |
Income taxes related to other comprehensive income: | ||||
Changes in unrealized loss on securities available for sale | 6,522 | 861 | 18,486 | 1,703 |
Changes in unrealized loss (gain) on hedging derivatives | 361 | 48 | 1,254 | (538) |
Total other comprehensive loss | (21,618) | (2,994) | (64,892) | (3,852) |
Total comprehensive (loss) income | $ (10,188) | $ 8,034 | $ (33,847) | $ 25,681 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common stock amount | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | Total |
Balance at beginning of period (Accounting Standards Update 2016-13) at Dec. 31, 2020 | $ (5,242) | $ (5,242) | ||||
Balance at beginning of period at Dec. 31, 2020 | $ 32,857 | $ 190,084 | 195,607 | $ 6,740 | $ (18,223) | 407,065 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 18,505 | 18,505 | ||||
Other comprehensive loss | (858) | (858) | ||||
Cash dividends declared | (6,876) | (6,876) | ||||
Net issuance to employee stock plans, including related tax effects | (280) | 449 | 169 | |||
Recognition of stock based compensation | 997 | 997 | ||||
Balance at end of period at Jun. 30, 2021 | 32,857 | 190,801 | 201,994 | 5,882 | (17,774) | 413,760 |
Balance at beginning of period (Accounting Standards Update 2016-13) at Dec. 31, 2020 | (5,242) | (5,242) | ||||
Balance at beginning of period at Dec. 31, 2020 | 32,857 | 190,084 | 195,607 | 6,740 | (18,223) | 407,065 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 29,533 | |||||
Other comprehensive loss | (3,852) | (3,852) | ||||
Balance at end of period at Sep. 30, 2021 | 32,857 | 190,892 | 209,426 | 2,888 | (17,628) | 418,435 |
Balance at beginning of period at Jun. 30, 2021 | 32,857 | 190,801 | 201,994 | 5,882 | (17,774) | 413,760 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 11,028 | 11,028 | ||||
Other comprehensive loss | (2,994) | (2,994) | ||||
Cash dividends declared | (3,596) | (3,596) | ||||
Net issuance to employee stock plans, including related tax effects | (276) | 146 | (130) | |||
Recognition of stock based compensation | 367 | 367 | ||||
Balance at end of period at Sep. 30, 2021 | 32,857 | 190,892 | 209,426 | 2,888 | (17,628) | 418,435 |
Balance at beginning of period at Dec. 31, 2021 | 32,857 | 190,876 | 215,592 | 2,303 | (17,481) | 424,147 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 19,615 | 19,615 | ||||
Other comprehensive loss | (43,274) | (43,274) | ||||
Cash dividends declared | (7,509) | (7,509) | ||||
Net issuance to employee stock plans, including related tax effects | 376 | 148 | 524 | |||
Recognition of stock based compensation | 94 | 94 | ||||
Balance at end of period at Jun. 30, 2022 | 32,857 | 191,346 | 227,698 | (40,971) | (17,333) | 393,597 |
Balance at beginning of period at Dec. 31, 2021 | 32,857 | 190,876 | 215,592 | 2,303 | (17,481) | 424,147 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 31,045 | |||||
Other comprehensive loss | (64,892) | (64,892) | ||||
Balance at end of period at Sep. 30, 2022 | 32,857 | 191,438 | 235,218 | (62,589) | (16,959) | 379,965 |
Balance at beginning of period at Jun. 30, 2022 | 32,857 | 191,346 | 227,698 | (40,971) | (17,333) | 393,597 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 11,430 | 11,430 | ||||
Other comprehensive loss | (21,618) | (21,618) | ||||
Cash dividends declared | (3,910) | (3,910) | ||||
Net issuance to employee stock plans, including related tax effects | (530) | 374 | (156) | |||
Recognition of stock based compensation | 622 | 622 | ||||
Balance at end of period at Sep. 30, 2022 | $ 32,857 | $ 191,438 | $ 235,218 | $ (62,589) | $ (16,959) | $ 379,965 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.26 | $ 0.24 | $ 0.50 | $ 0.46 |
Net issuance (in shares) | 39,523 | 14,412 | 24,768 | 56,290 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 31,045 | $ 29,533 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Originations of loans held for sale | (33,919) | (149,948) |
Proceeds from loan sales | 38,184 | 153,832 |
Loss on sale of loans | 281 | 3,621 |
Provision for credit losses | 2,217 | (1,428) |
Net amortization of securities | 2,287 | 3,788 |
Change in unamortized net loan costs and premiums | 353 | (2,739) |
Premises and equipment depreciation | 3,186 | 3,466 |
Stock-based compensation expense | 716 | 1,364 |
Accretion of purchase accounting entries, net | 10 | |
Amortization of other intangibles | 699 | 704 |
Income from cash surrender value of bank-owned life insurance policies | (1,501) | (1,510) |
Gain on sales of securities, net | (53) | (1,980) |
Amortization of right-of-use lease assets | 893 | 851 |
Decrease in lease liabilities | (851) | (786) |
Gain on premises and equipment, net | (65) | (137) |
Net change in other assets and liabilities | (2,954) | (7,878) |
Net cash provided by operating activities | 40,518 | 30,763 |
Cash flows from investing activities: | ||
Proceeds from sales of securities available for sale | 19,591 | 54,388 |
Proceeds from maturities, calls and prepayments of securities available for sale | 48,073 | 99,580 |
Purchases of securities available for sale | (99,294) | (123,335) |
Net change in loans | (319,036) | 47,360 |
Recoveries of previously charged off loans | 312 | 159 |
Purchase of FHLB stock | (2,924) | (790) |
Proceeds from sale of FHLB stock | 1,273 | 4,634 |
Purchase of premises and equipment, net | (1,842) | (1,216) |
Net investment in community limited partnerships | (1,430) | (1,112) |
Net cash (used in) provided by investing activities | (355,277) | 79,668 |
Cash flows from financing activities: | ||
Net change in deposits | 87,136 | 101,050 |
Net change in short-term senior borrowings | 92,250 | 9,324 |
Repayments of long-term senior borrowings | (21,014) | |
Net change in short-term other borrowings | (886) | (89,018) |
Net issuance to employee stock plans | 368 | (6,073) |
Cash dividends paid on common stock | (11,419) | (10,472) |
Net cash provided by (used in) financing activities | 146,435 | 4,811 |
Net change in cash and cash equivalents | (168,324) | 115,242 |
Cash and cash equivalents at beginning of year | 250,389 | 226,007 |
Cash and cash equivalents at end of period | 82,065 | 341,249 |
Supplemental cash flow information: | ||
Interest paid | 7,028 | 13,052 |
Income taxes paid, net | $ 6,781 | $ 7,755 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION The consolidated financial statements (unaudited) (the “financial statements”) of Bar Harbor Bankshares and its subsidiaries (the “Company,” “we,” “our” or “us” or similar terms) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Maine Financial Institution Holding Company for the purposes of the laws of the State of Maine, and as such is subject to the jurisdiction of the Superintendent of the Maine Bureau of Financial Institutions. These financial statements include our accounts, the accounts of our wholly owned subsidiary Bar Harbor Bank & Trust (the “Bank”) and the Bank’s consolidated subsidiaries. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly owned and majority owned subsidiaries are consolidated unless GAAP requires otherwise. In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted. The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 previously filed with the Securities and Exchange Commission (the "SEC"). In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented. Reclassifications: Recent Accounting Pronouncements The following table provides a brief description of recent accounting standards updates (“ASU”) that could have a material impact to the Company’s consolidated financial statements upon adoption: Standard Description Required Date of Adoption Effect on financial statements Standards Not Yet Adopted ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures The amendments in this update eliminate TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an exisiting loan. The amendments enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. January 1, 2023 We do not expect adoption of this ASU to have a material impact on our consolidated financial statements. |
SECURITIES AVAILABLE FOR SALE
SECURITIES AVAILABLE FOR SALE | 9 Months Ended |
Sep. 30, 2022 | |
SECURITIES AVAILABLE FOR SALE | |
SECURITIES AVAILABLE FOR SALE | NOTE 2. SECURITIES AVAILABLE FOR SALE The following is a summary of securities available for sale (“AFS”): Gross Gross Unrealized Unrealized (in thousands) Amortized Cost Gains Losses Fair Value September 30, 2022 Mortgage-backed securities: US Government-sponsored enterprises $ 252,369 $ 4 $ (36,349) $ 216,024 US Government agency 93,643 11 (10,128) 83,526 Private label 72,484 34 (5,749) 66,769 Obligations of states and political subdivisions thereof 123,350 9,205 (27,903) 104,652 Corporate bonds 91,512 26 (5,757) 85,781 Total securities available for sale $ 633,358 $ 9,280 $ (85,886) $ 556,752 Gross Gross Unrealized Unrealized (in thousands) Amortized Cost Gains Losses Fair Value December 31, 2021 Mortgage-backed securities: US Government-sponsored enterprises $ 237,283 $ 2,289 $ (3,455) $ 236,117 US Government agency 79,143 1,016 (522) 79,637 Private label 68,691 142 (138) 68,695 Obligations of states and political subdivisions thereof 140,585 1,489 (298) 141,776 Corporate bonds 89,994 2,479 (422) 92,051 Total securities available for sale $ 615,696 $ 7,415 $ (4,835) $ 618,276 Credit Quality Information We monitor the credit quality of available for sale debt securities through credit ratings from various rating agencies and substantial price changes. Credit ratings express opinions about the credit quality of a security and are utilized us to make informed decisions. Securities are triggered for further review in the quarter if the security has significant fluctuations in ratings, drops below investment grade, or significant pricing changes. For securities without credit ratings, we utilize other financial information indicating the financial health of the underlying municipality, agency, or organization associated with the underlying security. As of September 30, 2022 and December 31, 2021, we carried no allowance on available for sale debt securities in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The amortized cost and estimated fair value of available for sale securities segregated by contractual maturity at September 30, 2022 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. Available for sale (in thousands) Amortized Cost Fair Value Within 1 year $ 195 $ 196 Over 1 year to 5 years 30,292 28,426 Over 5 years to 10 years 49,666 55,025 Over 10 years 134,709 106,786 Total bonds and obligations 214,862 190,433 Mortgage-backed securities 418,496 366,319 Total securities available for sale $ 633,358 $ 556,752 The following table presents the gains and losses from the sale of AFS securities for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Gross gains on sales of available for sale securities $ 142 $ 1,980 $ 151 $ 2,030 Gross losses on sales of available for sale securities (98) (50) (98) (50) Net gains on sale of available for sale securities $ 44 $ 1,930 $ 53 $ 1,980 Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows: Less Than Twelve Months Over Twelve Months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in thousands) Losses Value Losses Value Losses Value September 30, 2022 Mortgage-backed securities: US Government-sponsored enterprises $ 18,262 $ 139,219 $ 18,087 $ 76,291 $ 36,349 $ 215,510 US Government agency 6,591 64,575 3,537 17,021 10,128 81,596 Private label 3,466 35,740 2,283 30,994 5,749 66,734 Obligations of states and political subdivisions thereof 20,425 78,085 7,478 21,373 27,903 99,458 Corporate bonds 3,770 65,251 1,987 16,763 5,757 82,014 Total securities available for sale $ 52,514 $ 382,870 $ 33,372 $ 162,442 $ 85,886 $ 545,312 Less Than Twelve Months Over Twelve Months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in thousands) Losses Value Losses Value Losses Value December 31, 2021 Mortgage-backed securities: US Government-sponsored enterprises $ 1,589 $ 127,780 $ 1,866 $ 39,717 $ 3,455 $ 167,497 US Government agency 381 32,628 141 4,548 522 37,176 Private label 133 44,372 5 16 138 44,388 Obligations of states and political subdivisions thereof 187 36,878 111 6,129 298 43,007 Corporate bonds 94 21,358 328 11,922 422 33,280 Total securities available for sale $ 2,384 $ 263,016 $ 2,451 $ 62,332 $ 4,835 $ 325,348 We expect to recover the amortized cost basis on all securities in our AFS portfolio. Furthermore, we do not intend to sell nor do we anticipate that we will be required to sell any securities in an unrealized loss position as of September 30, 2022, prior to this recovery. Our ability and intent to hold these securities until recovery is supported by our capital and liquidity positions as well as historically low portfolio turnover. The following summarizes, by investment security type, the impact of securities in an unrealized loss position for greater than 12 months at September 30, 2022: US Government-sponsored enterprises 489 out of the total 521 securities in our portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 14.55% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association and Federal Home Loan Mortgage Corporation guarantee the contractual cash flows of all of our US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. US Government agency 139 out of the total 161 securities in our portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 11.04% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association guarantees the contractual cash flows of all of our US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. Private label 33 of the total 35 securities in our portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 7.93% of the amortized cost of securities in unrealized loss positions. We expect to receive all of the future contractual cash flows related to the amortized cost on these securities. Obligations of states and political subdivisions thereof 68 of the total 83 securities in our portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 22.06% of the amortized cost of securities in unrealized loss positions. We continually monitor the municipal bond sector of the market carefully and periodically evaluate the appropriate level of exposure to the market. At this time, we feel the bonds in this portfolio carry minimal risk of default, and we are appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. Corporate bonds 26 out of the total 31 securities in our portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 7.07% of the amortized cost of bonds in unrealized loss positions. We review the financial strength of all of these bonds, and we have concluded that the amortized cost remains supported by the expected future cash flows of these securities. The most recent review includes all bond issuers and their current credit ratings, financial performance and capitalization. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 9 Months Ended |
Sep. 30, 2022 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES We evaluate risk characteristics of loans based on regulatory call report code with segmentation based on the underlying collateral for certain loan types. The following is a summary of total loans by regulatory call report code segmentation based on underlying collateral for certain loan types: September 30, December 31, (in thousands) 2022 2021 Commercial construction $ 97,156 $ 56,263 Commercial real estate owner occupied 256,475 257,122 Commercial real estate non-owner occupied 1,081,924 887,092 Tax exempt 41,622 41,280 Commercial and industrial 319,645 307,112 Residential real estate 953,113 888,263 Home equity 92,296 86,657 Consumer other 8,133 8,121 Total loans 2,850,364 2,531,910 Allowance for credit losses 25,018 22,718 Net loans $ 2,825,346 $ 2,509,192 Total unamortized net costs and premiums included in loan totals were as follows: September 30, December 31, (in thousands) 2022 2021 Net unamortized loan origination costs $ 3,367 $ 3,014 Net unamortized fair value discount on acquired loans (3,898) (4,758) Total $ (531) $ (1,744) We exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2022 and December 31, 2021, accrued interest receivable for loans totaled $8.8 million and $6.3 million, respectively, and is included in the “other assets” line item on the consolidated balance sheets. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and subsequent legislation established the Payroll Protection Program (“PPP”) are administered directly by the Small Business Administration (“SBA”). As of September 30, 2022, we had no remaining PPP loans and as of December 31, 2021, we had 61 PPP loans outstanding, with an outstanding principal balance of $6.7 million. PPP loans are included in the commercial and industrial portfolio segment. Characteristics of each loan portfolio segment are as follows: Commercial construction Commercial real estate owner occupied and non-owner occupied Tax Exempt Commercial and industrial loans Residential real estate Home equity - Consumer other Allowance for Credit Losses The Allowance for Credit Losses (“ACL”) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged off. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, generally larger non-accruing commercial loans and TDRs. The activity in the allowance for credit losses for the periods ended are as follows: At or for the Three Months Ended September 30, 2022 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 1,010 $ — $ — $ 213 $ 1,223 Commercial real estate owner occupied 2,722 — 7 132 2,861 Commercial real estate non-owner occupied 7,361 — — 610 7,971 Tax exempt 105 — — (11) 94 Commercial and industrial 4,820 (8) 20 290 5,122 Residential real estate 6,806 (11) 6 85 6,886 Home equity 865 — 2 (76) 791 Consumer other 67 (66) 6 63 70 Total $ 23,756 $ (85) $ 41 $ 1,306 $ 25,018 At or for the Nine Months Ended September 30, 2022 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 2,111 $ — $ — $ (888) $ 1,223 Commercial real estate owner occupied 2,751 — 120 (10) 2,861 Commercial real estate non-owner occupied 5,650 — — 2,321 7,971 Tax exempt 86 — — 8 94 Commercial and industrial 5,369 (14) 56 (289) 5,122 Residential real estate 5,862 (26) 103 947 6,886 Home equity 814 (6) 22 (39) 791 Consumer other 75 (181) 9 167 70 Total $ 22,718 $ (227) $ 310 $ 2,217 $ 25,018 At or for the Three Months Ended September 30, 2021 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 2,372 $ — $ — $ (286) $ 2,086 Commercial real estate owner occupied 2,552 (142) 72 237 2,719 Commercial real estate non-owner occupied 5,604 — — (22) 5,582 Tax exempt 91 — — (6) 85 Commercial and industrial 5,225 (24) — 105 5,306 Residential real estate 6,069 (6) 19 (290) 5,792 Home equity 822 (49) 1 30 804 Consumer other 80 (65) 1 58 74 Total $ 22,815 $ (286) $ 93 $ (174) $ 22,448 At or for the Nine Months Ended September 30, 2021 Balance at Beginning of Impact of ASC Balance at (in thousands) Period 326 Charge Offs Recoveries Provision End of Period Commercial construction $ 824 $ 1,196 $ — $ 18 $ 48 $ 2,086 Commercial real estate owner occupied 1,783 708 (403) 72 559 2,719 Commercial real estate non-owner occupied 7,864 (2,008) — 4 (278) 5,582 Tax exempt 58 40 — — (13) 85 Commercial and industrial 3,137 2,996 (44) 14 (797) 5,306 Residential real estate 5,010 1,732 (67) 141 (1,024) 5,792 Home equity 285 603 (108) 48 (24) 804 Consumer other 121 (39) (119) 10 101 74 Total $ 19,082 $ 5,228 $ (741) $ 307 $ (1,428) $ 22,448 Unfunded Commitments The allowance for credit losses on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheet), with adjustments to the reserve recognized in other non-interest expense in the consolidated statement of operations. The activity in the allowance for credit losses on unfunded commitments for the periods ended was as follows: (in thousands) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Beginning Balance $ 2,523 $ 2,152 Provision for credit losses (26) 345 Ending Balance $ 2,497 $ 2,497 (in thousands) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Beginning Balance $ 1,921 $ 359 Impact of ASC 326 — 1,616 Provision for credit losses 280 226 Ending Balance $ 2,201 $ 2,201 Loan Origination/Risk Management: Credit Quality Indicators: The following are the definitions of our credit quality indicators: Pass: Special Mention: Substandard: liquidation of the debt. Substandard loans include those loans where there is the distinct possibility of some loss of principal, if the deficiencies are not corrected. Doubtful: Loss: The following table presents our loans by year of origination, loan segmentation and risk indicator as of September 30, 2022: (in thousands) 2022 2021 2020 2019 2018 Prior Total Commercial construction Risk rating: Pass $ 34,032 $ 32,179 $ 5,928 $ 1,011 $ 973 $ — $ 74,123 Special mention — — 23,033 — — — 23,033 Substandard — — — — — — — Total $ 34,032 $ 32,179 $ 28,961 $ 1,011 $ 973 $ — $ 97,156 Commercial real estate owner occupied Risk rating: Pass $ 20,248 $ 12,973 $ 23,785 $ 31,795 $ 47,090 $ 110,306 $ 246,197 Special mention — — 245 672 1,145 1,711 3,773 Substandard — — — — 931 5,276 6,207 Doubtful — — — — 151 147 298 Total $ 20,248 $ 12,973 $ 24,030 $ 32,467 $ 49,317 $ 117,440 $ 256,475 Commercial real estate non-owner occupied Risk rating: Pass $ 283,316 $ 249,574 $ 146,764 $ 89,252 $ 35,671 $ 259,250 $ 1,063,827 Special mention — — — 139 918 14,665 15,722 Substandard — — — 173 — 2,048 2,221 Doubtful — — — — — 154 154 Total $ 283,316 $ 249,574 $ 146,764 $ 89,564 $ 36,589 $ 276,117 $ 1,081,924 Tax exempt Risk rating: Pass $ 6,944 $ 1,044 $ 256 $ 778 $ 13,276 $ 19,324 $ 41,622 Special mention — — — — — — — Substandard — — — — — — — Total $ 6,944 $ 1,044 $ 256 $ 778 $ 13,276 $ 19,324 $ 41,622 Commercial and industrial Risk rating: Pass $ 56,222 $ 70,975 $ 60,338 $ 29,867 $ 11,053 $ 84,792 $ 313,247 Special mention 1,497 — 155 1,083 516 2,432 5,683 Substandard — 55 12 70 — 514 651 Doubtful — — — — — 64 64 Total $ 57,719 $ 71,030 $ 60,505 $ 31,020 $ 11,569 $ 87,802 $ 319,645 Residential real estate Performing $ 170,291 $ 178,875 $ 113,573 $ 71,869 $ 51,588 $ 361,823 $ 948,019 Nonperforming — 48 — 50 643 4,353 5,094 Total $ 170,291 $ 178,923 $ 113,573 $ 71,919 $ 52,231 $ 366,176 $ 953,113 Home equity Performing $ 11,839 $ 12,152 $ 8,965 $ 7,796 $ 7,326 $ 43,173 $ 91,251 Nonperforming — — — — — 1,045 1,045 Total $ 11,839 $ 12,152 $ 8,965 $ 7,796 $ 7,326 $ 44,218 $ 92,296 Consumer other Performing $ 3,833 $ 1,596 $ 1,029 $ 362 $ 328 $ 980 $ 8,128 Nonperforming — — 5 — — — 5 Total $ 3,833 $ 1,596 $ 1,034 $ 362 $ 328 $ 980 $ 8,133 Total Loans $ 588,222 $ 559,471 $ 384,088 $ 234,917 $ 171,609 $ 912,057 $ 2,850,364 The following table presents our loans by year of origination, loan segmentation and risk indicator as of December 31, 2021: (in thousands) 2021 2020 2019 2018 2017 Prior Total Commercial construction Risk rating: Pass $ 22,866 $ 4,787 $ 19,211 $ 9,399 $ — $ — $ 56,263 Special mention — — — — — — — Substandard — — — — — — — Total $ 22,866 $ 4,787 $ 19,211 $ 9,399 $ — $ — $ 56,263 Commercial real estate owner occupied Risk rating: Pass $ 12,940 $ 25,240 $ 34,782 $ 49,136 $ 19,292 $ 103,144 $ 244,534 Special mention — — 760 — — 2,659 3,419 Substandard — — 1 853 247 7,737 8,838 Doubtful — — — 167 — 164 331 Total $ 12,940 $ 25,240 $ 35,543 $ 50,156 $ 19,539 $ 113,704 $ 257,122 Commercial real estate non-owner occupied Risk rating: Pass $ 235,646 $ 172,785 $ 119,326 $ 39,663 $ 136,120 $ 165,329 $ 868,869 Special mention — — 174 — — 14,789 14,963 Substandard — — — — — 3,097 3,097 Doubtful — — — — — 163 163 Total $ 235,646 $ 172,785 $ 119,500 $ 39,663 $ 136,120 $ 183,378 $ 887,092 Tax exempt Risk rating: Pass $ 1,249 $ 299 $ 968 $ 14,408 $ 5,329 $ 19,027 $ 41,280 Special mention — — — — — — — Substandard — — — — — — — Total $ 1,249 $ 299 $ 968 $ 14,408 $ 5,329 $ 19,027 $ 41,280 Commercial and industrial Risk rating: Pass $ 77,608 $ 80,569 $ 33,405 $ 16,457 $ 33,413 $ 61,594 $ 303,046 Special mention — — 584 468 172 1,396 2,620 Substandard 58 3 512 — 48 578 1,199 Doubtful — — — — 92 155 247 Total $ 77,666 $ 80,572 $ 34,501 $ 16,925 $ 33,725 $ 63,723 $ 307,112 Residential real estate Performing $ 191,466 $ 120,495 $ 83,044 $ 62,299 $ 59,642 $ 364,482 $ 881,428 Nonperforming — — — 286 178 6,371 6,835 Total $ 191,466 $ 120,495 $ 83,044 $ 62,585 $ 59,820 $ 370,853 $ 888,263 Home equity Performing $ 12,770 $ 10,461 $ 9,005 $ 7,855 $ 6,474 $ 38,823 $ 85,388 Nonperforming — — — — — 1,269 1,269 Total $ 12,770 $ 10,461 $ 9,005 $ 7,855 $ 6,474 $ 40,092 $ 86,657 Consumer other Performing $ 2,525 $ 1,659 $ 792 $ 669 $ 92 $ 2,379 $ 8,116 Nonperforming — — — — — 5 5 Total $ 2,525 $ 1,659 $ 792 $ 669 $ 92 $ 2,384 $ 8,121 Total Loans $ 557,128 $ 416,298 $ 302,564 $ 201,660 $ 261,099 $ 793,161 $ 2,531,910 Past Dues The following is a summary of past due loans for the periods ended: September 30, 2022 (in thousands) 30-59 60-89 90+ Total Past Due Current Total Loans Commercial construction $ — $ — $ — $ — $ 97,156 $ 97,156 Commercial real estate owner occupied 84 — — 84 256,391 256,475 Commercial real estate non-owner occupied 298 — 173 471 1,081,453 1,081,924 Tax exempt — — — — 41,622 41,622 Commercial and industrial 200 100 12 312 319,333 319,645 Residential real estate 565 928 1,882 3,375 949,738 953,113 Home equity 269 236 204 709 91,587 92,296 Consumer other 11 4 — 15 8,118 8,133 Total $ 1,427 $ 1,268 $ 2,271 $ 4,966 $ 2,845,398 $ 2,850,364 December 31, 2021 (in thousands) 30-59 60-89 90+ Total Past Due Current Total Loans Commercial construction $ — $ — $ — $ — $ 56,263 $ 56,263 Commercial real estate owner occupied 1,190 7 1 1,198 255,924 257,122 Commercial real estate non-owner occupied — — — — 887,092 887,092 Tax exempt — — — — 41,280 41,280 Commercial and industrial 31 318 185 534 306,578 307,112 Residential real estate 5,010 1,238 1,416 7,664 880,599 888,263 Home equity 699 149 101 949 85,708 86,657 Consumer other 29 — 2 31 8,090 8,121 Total $ 6,959 $ 1,712 $ 1,705 $ 10,376 $ 2,521,534 $ 2,531,910 Non-Accrual Loans The following is a summary of non-accrual loans for the periods ended: September 30, 2022 Nonaccrual With No 90+ Days Past (in thousands) Nonaccrual Related Allowance Due and Accruing Commercial construction $ — $ — $ — Commercial real estate owner occupied 604 371 — Commercial real estate non-owner occupied 747 430 — Tax exempt — — — Commercial and industrial 279 187 2 Residential real estate 5,094 1,539 242 Home equity 1,044 70 15 Consumer other 5 — — Total $ 7,773 $ 2,597 $ 259 December 31, 2021 Nonaccrual With No 90+ Days Past (in thousands) Nonaccrual Related Allowance Due and Accruing Commercial construction $ — $ — $ — Commercial real estate owner occupied 783 424 — Commercial real estate non-owner occupied 622 459 — Tax exempt — — — Commercial and industrial 677 542 30 Residential real estate 6,835 2,537 41 Home equity 1,269 305 63 Consumer other 5 — — Total $ 10,191 $ 4,267 $ 134 Collateral Dependent Loans Loans that do not share risk characteristics are evaluated on an individual basis. For loans that are individually evaluated and collateral dependent, financial loans where we have determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment for the periods ended. September 30, 2022 December 31, 2021 (in thousands) Real Estate Other Real Estate Other Commercial construction $ — $ — $ — $ — Commercial real estate owner occupied 604 — 783 — Commercial real estate non-owner occupied 747 — 622 — Tax exempt — — — — Commercial and industrial 122 157 385 292 Residential real estate 5,094 — 6,835 — Home equity 1,044 — 1,269 — Consumer other 5 — 5 — Total $ 7,616 $ 157 $ 9,899 $ 292 Troubled Debt Restructuring Loans The loan portfolio also includes certain loans that have been modified in a TDR, where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as non-performing at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan. There were no modifications qualifying as TDR’s for the three and nine months ended September 30, 2022 and 2021. Foreclosure Residential mortgage loans collateralized by real estate that are in the process of foreclosure as of September 30, 2022 and December 31, 2021 totaled $249 thousand and $574 thousand, respectively. Mortgage Banking Loans held for sale had at September 30, 2022 and December 31, 2021 had an unpaid principal balance of $987 thousand and $5.4 million, respectively. The interest rate exposure on loans held for sale are mitigated through forward delivery commitments with certain approved secondary market investors. Forward delivery commitments had a notional amount of $200 thousand, and $14.8 million at September 30, 2022 and December 31, 2021, respectively. Refer to Note 8 for further discussion of forward delivery commitments. For the three months ended September 30, 2022 and 2021, we sold $5.2 million and $28.5 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net loss on sale of loans (net of costs, including direct and indirect origination costs) of $52 thousand and a gain of $682 thousand, respectively. For the nine months ended September 30, 2022 and 2021, we sold $38.2 million and $153.8 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $281 thousand and $3.6 million, respectively. We sell residential loans on the secondary market while primarily retaining the servicing of these loans. Servicing sold loans helps to maintain customer relationships and earn fees over the servicing period. Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to level of prepayments that result from shifts in interest rates. We obtain third-party valuations of our servicing assets portfolio quarterly, and the assumptions are reflected in Fair Value disclosures. |
BORROWED FUNDS
BORROWED FUNDS | 9 Months Ended |
Sep. 30, 2022 | |
BORROWED FUNDS | |
BORROWED FUNDS | NOTE 4. BORROWED FUNDS Borrowed funds at September 30, 2022 and December 31, 2021 are summarized, as follows: September 30, 2022 December 31, 2021 Weighted Weighted (dollars in thousands) Carrying Value Average Rate Carrying Value Average Rate Short-term borrowings Advances from the FHLB $ 167,250 2.95 % $ 75,000 0.30 % Other borrowings 18,916 0.14 19,802 0.17 Total short-term borrowings 186,166 1.27 94,802 0.21 Long-term borrowings Advances from the FHLB 2,591 0.39 23,598 1.08 Subordinated borrowings 60,248 5.05 60,124 4.34 Total long-term borrowings 62,839 4.86 83,722 3.42 Total $ 249,005 1.74 % $ 178,524 0.91 % Short-term debt includes Federal Home Loan Bank of Boston (“FHLB”) advances with a remaining maturity of less than one year. We also maintain a $1.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended September 30, 2022 and December 31, 2021. We have the capacity to borrow funds on a secured basis utilizing the Borrower in Custody program and the Discount Window at the Federal Reserve Bank of Boston (the “FRB”). At September 30, 2022, our available secured line of credit at the FRB was $84.1 million. We have pledged certain loans and securities to the FRB to support this arrangement. There were no borrowings with the FRB for the periods ended December 31, 2021. We maintain, with a correspondent bank, an unused unsecured federal funds line of credit that has an aggregate overnight borrowing capacity of $50.0 million as of September 30, 2022 and December 31, 2021. There was no outstanding balance on the line of credit as of September 30, 2022 and December 31, 2021. Long-term FHLB advances consist of advances with a remaining maturity of more than one year. The advances outstanding at September 30, 2022 include no callable advances and amortizing advances of $291 thousand. The advances outstanding at December 31, 2021 included $20.0 million of callable advances and $298 thousand of amortizing advances. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities. A summary of maturities of FHLB advances as of September 30, 2022 is, as follows: Weighted Average (in thousands, except rates) Amount Rate 2022 $ 166,250 2.97 % 2023 1,000 — 2024 2,300 — 2025 — — 2026 — — 2027 and thereafter 291 3.45 Total FHLB advances $ 169,841 2.92 % On November 26, 2019, we entered into Subordinated Note Purchase Agreements with certain qualified institutional buyers and accredited investors pursuant to which we sold and issued $40.0 million in aggregate principal amount of subordinated notes due 2029 (the “Notes”). The Notes have a maturity date of December 1, 2029 and bear a fixed interest rate of 4.63% through December 1, 2024 payable semi-annually in arrears. From December 1, 2024 and thereafter the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (SOFR) plus 3.27%. We have the option beginning with the interest payment date of December 1, 2024, and on any scheduled payment date thereafter, to redeem the Notes, in whole or in part upon prior approval of the Federal Reserve. The transaction included debt issuance costs of $372 thousand as of September 30, 2022 and $496 thousand net of amortization as of December 31, 2021, that are netted against the subordinated debt. We also have $20.6 million in floating Junior Subordinated Deferrable Interest Debentures (“Debentures”) issued by NHTB Capital Trust II (“Trust II”) and NHTB Capital Trust III (“Trust III”), which are both Connecticut statutory trusts. The Debentures were issued on March 30, 2004, carry a variable interest rate of three-month LIBOR plus 2.79%, and mature in 2034. The debt is callable by us at the time when any interest payment is made. Trust II and Trust III are considered variable interest entities for which we are not the primary beneficiary. Accordingly, Trust II and Trust III are not consolidated into our financial statements. Repurchase Agreements We can raise additional liquidity by entering into repurchase agreements at our discretion. In a security repurchase agreement transaction, we will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement, we are subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, we either deal with established firms when entering into these transactions or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by our safekeeping agents. (in thousands) September 30, 2022 December 31, 2021 Customer Repurchase Agreements US Government-sponsored enterprises $ 18,916 $ 19,802 Total $ 18,916 $ 19,802 |
DEPOSITS
DEPOSITS | 9 Months Ended |
Sep. 30, 2022 | |
DEPOSITS. | |
DEPOSITS | NOTE 5. DEPOSITS A summary of time deposits is, as follows: (in thousands) September 30, 2022 December 31, 2021 Time less than $100,000 $ 167,056 $ 181,586 Time $100,000 through $250,000 113,168 169,645 Time $250,000 or more 54,024 74,301 Total $ 334,248 $ 425,532 At September 30, 2022 and December 31, 2021, the scheduled maturities by year for time deposits are, as follows: (in thousands) September 30, 2022 December 31, 2021 Within 1 year $ 262,787 $ 318,692 Over 1 year to 2 years 46,867 71,247 Over 2 years to 3 years 12,626 18,201 Over 3 years to 4 years 5,971 8,498 Over 4 years to 5 years 5,302 6,751 Over 5 years 695 2,143 Total $ 334,248 $ 425,532 Included in time deposits are brokered deposits of $15.1 million and $16.1 million at September 30, 2022 and December 31, 2021, respectively. Also included in time deposits are reciprocal deposits of $12.7 million and $17.3 million at September 30, 2022 and December 31, 2021, respectively. |
CAPITAL RATIOS AND SHAREHOLDERS
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | |
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | NOTE 6. CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY The actual and required capital ratios are, as follows: September 30, 2022 Minimum Regulatory Actual Capital Requirements (in thousands, except ratios) Amount Ratio Amount Ratio Company (consolidated) Total capital to risk-weighted assets $ 404,804 13.42 % $ 241,314 8.00 % Common equity tier 1 capital to risk-weighted assets 317,043 10.51 135,740 4.50 Tier 1 capital to risk-weighted assets 337,663 11.19 180,986 6.00 Tier 1 capital to average assets (leverage ratio) 337,663 9.13 147,908 4.00 Bank Total capital to risk-weighted assets $ 398,292 13.22 % $ 241,079 8.00 % Common equity tier 1 capital to risk-weighted assets 371,151 12.32 135,606 4.50 Tier 1 capital to risk-weighted assets 371,151 12.32 180,808 6.00 Tier 1 capital to average assets (leverage ratio) 371,151 10.05 147,791 4.00 December 31, 2021 Minimum Regulatory Actual Capital Requirements (in thousands, except ratios) Amount Ratio Amount Ratio Company (consolidated) Total capital to risk-weighted assets $ 380,690 14.31 % $ 212,798 8.00 % Common equity tier 1 capital to risk-weighted assets 295,635 11.11 119,699 4.50 Tier 1 capital to risk-weighted assets 316,255 11.89 159,598 6.00 Tier 1 capital to average assets (leverage ratio) 316,255 8.66 146,029 4.00 Bank Total capital to risk-weighted assets $ 375,435 14.13 % $ 220,425 8.00 % Common equity tier 1 capital to risk-weighted assets 351,000 13.21 123,812 4.50 Tier 1 capital to risk-weighted assets 351,000 13.21 165,082 6.00 Tier 1 capital to average assets (leverage ratio) 351,000 9.62 151,082 4.00 In order to be classified as “well-capitalized” under the relevant regulatory framework, the Company must, on a consolidated basis, maintain a total risk-based capital ratio of 10.00% or greater and a Tier 1 risk-based capital ratio of 6.00% or greater; and the Bank must maintain a total risk-based capital ratio of 10.00% or greater, a Tier 1 risk-based capital ratio of 8.00% or greater, a common equity Tier 1 capital ratio of 6.50% or greater, and a leverage ratio of 5.00% or greater. At each date shown in the tables above, the Company and the Bank met the conditions to be classified as “well-capitalized” under the relevant regulatory framework. Accumulated other comprehensive (loss) income Components of accumulated other comprehensive income is, as follows: (in thousands) September 30, 2022 December 31, 2021 Accumulated other comprehensive income, before tax: Net unrealized (loss) gain on AFS securities $ (76,606) $ 2,580 Net unrealized (loss) gain on hedging derivatives (4,316) 1,130 Net unrealized loss on post-retirement plans (718) (718) Income taxes related to items of accumulated other comprehensive income: Net unrealized loss (gain) on AFS securities 17,891 (595) Net unrealized loss (gain) on hedging derivatives 994 (260) Net unrealized loss on post-retirement plans 166 166 Accumulated other comprehensive (loss) income $ (62,589) $ 2,303 The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021: (in thousands) Before Tax Tax Effect Net of Tax Three Months Ended September 30, 2022 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (26,889) $ 6,512 $ (20,377) Less: reclassification adjustment for gains (losses) realized in net income 44 (10) 34 Net unrealized loss on AFS securities (26,933) 6,522 (20,411) Net unrealized loss on hedging derivatives: Net unrealized loss arising during the period (1,568) 361 (1,207) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on cash flow hedging derivatives (1,568) 361 (1,207) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive loss $ (28,501) $ 6,883 $ (21,618) Three Months Ended September 30, 2021 Net unrealized gain on AFS securities: Net unrealized gain arising during the period $ (1,770) $ 403 $ (1,367) Less: reclassification adjustment for gains (losses) realized in net income 1,930 (458) 1,472 Net unrealized gain on AFS securities (3,700) 861 (2,839) Net unrealized gain on derivative hedgess: Net unrealized gain arising during the period (203) 48 (155) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on cash flow derivative hedges (203) 48 (155) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive (loss) income $ (3,903) $ 909 $ (2,994) (in thousands) Before Tax Tax Effect Net of Tax Nine Months Ended September 30, 2022 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (79,133) $ 18,474 $ (60,659) Less: reclassification adjustment for gains (losses) realized in net income 53 (12) 41 Net unrealized loss on AFS securities (79,186) 18,486 (60,700) Net unrealized loss on hedging derivatives: Net unrealized loss arising during the period (5,446) 1,254 (4,192) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on hedging derivatives (5,446) 1,254 (4,192) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive loss $ (84,632) $ 19,740 $ (64,892) Nine Months Ended September 30, 2021 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (5,348) $ 1,234 $ (4,114) Less: reclassification adjustment for gains realized in net income 1,980 (469) 1,511 Net unrealized loss on AFS securities (7,328) 1,703 (5,625) Net unrealized gain on hedging derivatives: Net unrealized gain arising during the period 2,311 (538) 1,773 Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on cash flow hedging derivatives 2,311 (538) 1,773 Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive (loss) income $ (5,017) $ 1,165 $ (3,852) The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax impacts, for the three and nine months ended September 30, 2022 and 2021: Net unrealized Net gain (loss) on Net unrealized gain (loss) effective cash loss on AFS flow hedging on pension (in thousands) Securities derivatives plans Total Three Months Ended September 30, 2022 Balance at beginning of period $ (38,304) $ (2,115) $ (552) $ (40,971) Other comprehensive loss before reclassifications (20,377) (1,207) — (21,584) Less: amounts reclassified from accumulated other comprehensive income 34 — — 34 Total other comprehensive income (20,411) (1,207) — (21,618) Balance at end of period $ (58,715) $ (3,322) $ (552) $ (62,589) Three Months Ended September 30, 2021 Balance at beginning of period $ 7,237 $ 63 $ (1,418) $ 5,882 Other comprehensive gain before reclassifications (1,367) (155) — (1,522) Less: amounts reclassified from accumulated other comprehensive income 1,472 — — 1,472 Total other comprehensive income (2,839) (155) — (2,994) Balance at end of period $ 4,398 $ (92) $ (1,418) $ 2,888 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1,985 $ 870 $ (552) $ 2,303 Other comprehensive loss before reclassifications (60,659) (4,192) — (64,851) Less: amounts reclassified from accumulated other comprehensive income 41 — — 41 Total other comprehensive loss (60,700) (4,192) — (64,892) Balance at end of period $ (58,715) $ (3,322) $ (552) $ (62,589) Nine Months Ended September 30, 2021 Balance at beginning of period $ 10,023 $ (1,865) $ (1,418) $ 6,740 Other comprehensive (loss) gain before reclassifications (4,114) 1,773 — (2,341) Less: amounts reclassified from accumulated other comprehensive income 1,511 — — 1,511 Total other comprehensive (loss) gain (5,625) 1,773 — (3,852) Balance at end of period $ 4,398 $ (92) $ (1,418) $ 2,888 The following tables presents the amounts reclassified out of each component of accumulated other comprehensive income for three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, Affected Line Item where (in thousands) 2022 2021 2022 2021 Net Income is Presented Net realized gains on AFS securities: Before tax (1) $ 44 $ 1,930 $ 53 $ 1,980 Non-interest income Tax effect (10) (458) (12) (469) Tax expense Total reclassifications for the period $ 34 $ 1,472 $ 41 $ 1,511 (1) Net realized gains before tax include $141 thousand realized gains for the three months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $150 thousand realized gains for the nine months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $1.9 million realized gains for the three months ended September 30, 2021 and $97 thousand of gross realized losses. Net realized gains before tax include $2.0 million realized gains for the nine months ended September 30, 2021 and $50 thousand of gross realized losses. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 7. EARNINGS PER SHARE The following table presents the calculation of earnings per share: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share and share data) 2022 2021 2022 2021 Net income $ 11,430 $ 11,028 $ 31,045 $ 29,533 Average number of basic common shares outstanding 15,057,598 14,982,766 15,028,963 14,960,753 Plus: dilutive effect of stock options and awards outstanding 55,757 67,990 71,317 73,829 Average number of diluted common shares outstanding (1) 15,113,355 15,050,756 15,100,280 15,034,582 Earnings per share: Basic $ 0.76 $ 0.74 $ 2.07 $ 1.97 Diluted $ 0.76 $ 0.73 $ 2.06 $ 1.96 (1) Average diluted shares outstanding are computed using the treasury stock method. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES We use derivative instruments to minimize fluctuations in earnings and cash flows caused by interest rate volatility. Our interest rate risk management strategy involves modifying the re-pricing characteristics of certain assets or liabilities so the changes in interest rates do not have a significant effect on net interest income. Thus, all of our derivative contracts are considered to be interest rate contracts. We recognize our derivative instruments on the consolidated balance sheet at fair value. On the date the derivative instrument is entered into, we designate whether the derivative is part of a hedging relationship (i.e., cash flow or fair value hedge). We formally document relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking hedge transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting the changes in cash flows or fair values of hedged items. Changes in fair value of derivative instruments that are highly effective and qualify as cash flow hedges are recorded in other comprehensive income or loss. We offer derivative products in the form of interest rate swaps, to commercial loan customers to facilitate their risk management strategies. These instruments are executed through Master Netting Arrangements (“MNA”) with financial institution counterparties or Risk Participation Agreements (“RPA”) with commercial bank counterparties, for which we assumes a pro rata share of the credit exposure associated with a borrower's performance related to the derivative contract with the counterparty. The following tables present information about derivative assets and liabilities at September 30, 2022 and December 31, 2021: September 30, 2022 Weighted Notional Average Fair Value Location Fair Amount Maturity Asset (Liability) Value Asset (in thousands) (in years) (in thousands) (Liability) Cash flow hedges: Interest rate swap on wholesale fundings $ 75,000 2.3 $ 5,153 Other assets Interest rate swap on variable rate loans 50,000 3.5 (5,289) Other liabilities Total cash flow hedges 125,000 (136) Fair value hedges: Interest rate swap on securities 37,190 6.8 5,017 Other assets Total fair value hedges 37,190 5,017 Economic hedges: Forward sale commitments 200 — 8 Other assets Customer Loan Swaps-MNA Counterparty 193,743 6.0 (21,795) Other liabilities Customer Loan Swaps-RPA Counterparty 110,317 6.3 — Other liabilities Customer Loan Swaps-Customer 304,060 6.1 21,795 Other assets Total economic hedges 608,320 8 Non-hedging derivatives: Interest rate lock commitments — — — Other assets Total non-hedging derivatives — — Total $ 770,510 $ 4,889 December 31, 2021 Weighted Notional Average Fair Value Location Fair Amount Maturity Asset (Liability) Value Asset (in thousands) (in years) (in thousands) (Liability) Cash flow hedges: Interest rate swap on wholesale fundings $ 75,000 3.0 $ (121) Other liabilities Interest rate swap on variable rate loans 50,000 4.2 (756) Other liabilities Total cash flow hedges 125,000 (877) Fair value hedges: Interest rate swap on securities 37,190 7.6 (530) Other liabilities Total fair value hedges 37,190 (530) Economic hedges: Forward sale commitments 16,600 0.1 15 Other assets Customer Loan Swaps-MNA Counterparty 260,102 6.2 (9,429) Other liabilities Customer Loan Swaps-RPA Counterparty 115,285 6.7 (4,421) Other liabilities Customer Loan Swaps-Customer 375,387 6.4 13,850 Other assets Total economic hedges 767,374 15 Non-hedging derivatives: Interest rate lock commitments 14,059 0.1 283 Other assets Total non-hedging derivatives 14,059 283 Total $ 943,623 $ (1,109) As of September 30, 2022 and December 31, 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges: Cumulative Amount of Fair Location of Hedged Item on Carrying Amount of Hedged Value Hedging Adjustment in Balance Sheet Assets Carrying Amount September 30, 2022 Interest rate swap on securities Securities Available for Sale $ 27,993 $ (9,197) December 31, 2021 Interest rate swap on securities Securities Available for Sale $ 39,726 $ 2,536 Information about derivative assets and liabilities for the three and nine months eneded September 30, 2022 and 2021, follows: Three Months Ended September 30, 2022 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 1,262 Interest expense $ — Interest expense $ 140 Interest rate swap on variable rate loans (1,181) Interest income — Interest income (238) Total cash flow hedges 81 — (98) Fair value hedges: Interest rate swap on securities (1,287) Interest income — Interest income 155 Total fair value hedges (1,287) — 155 Economic hedges: Forward commitments — Other income — Mortgage banking income 19 Total economic hedges — — 19 Non-hedging derivatives: Interest rate lock commitments — Other expense — Mortgage banking income (50) Total non-hedging derivatives — — (50) Total $ (1,206) $ — $ 26 Nine Months Ended September 30, 2022 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 4,058 Interest expense $ — Interest expense $ (1) Interest rate swap on variable rate loans (3,489) Interest income — Interest income (239) Total cash flow hedges 569 — (240) Fair value hedges: Interest rate swap on securities (4,761) Interest income — Interest income (48) Total fair value hedges (4,761) — (48) Economic hedges: Forward commitments — Other income — Mortgage banking income (7) Total economic hedges — — (7) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income (283) Total non-hedging derivatives — — (283) Total $ (4,192) $ — $ (578) Three Months Ended September 30, 2021 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 167 Interest expense $ — Interest expense $ (205) Interest rate swap on variable rate loans (101) Interest income Interest income 92 Total cash flow hedges 66 — (113) Fair value hedges: Interest rate swap on securities (221) Interest income — Interest income (144) Total economic hedges (221) — (144) Economic hedges: Forward commitments — Other income — Mortgage banking income (96) Total economic hedges — — (96) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income 22 Total non-hedging derivatives — — 22 Total $ (155) $ — $ (331) Nine Months Ended September 30, 2021 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income (1) Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 1,148 Interest expense $ — Interest expense $ (589) Interest rate swap on variable rate loans (93) Interest income Interest income 189 Total cash flow hedges 1,055 — (400) Fair value hedges: Interest rate swap on securities 720 Interest income — Interest income (421) Total economic hedges 720 — (421) Economic hedges: Forward commitments — Other income — Mortgage banking income (45) Total economic hedges — — (45) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income 26 Total non-hedging derivatives — — 26 Total $ 1,775 $ — $ (840) The effect of cash flow hedging and fair value accounting on the consolidated statements of income for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 27,940 $ 5,145 $ 1,801 $ 1,374 $ 8,823 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — 140 — Interest rate swap on variable rate loans (238) — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — 155 — — — Three Months Ended September 30, 2021 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 25,094 $ 3,821 $ 1,555 $ 1,778 $ 11,350 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (205) — Interest rate swap on variable rate loans 92 — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (144) — — — Nine Months Ended September 30, 2022 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 75,192 $ 13,178 $ 4,185 $ 3,458 $ 27,093 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (1) — Interest rate swap on variable rate loans (239) — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (48) — — — Nine Months Ended September 30, 2021 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 72,490 11,792 $ 7,109 5,415 $ 31,103 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (589) — Interest rate swap on variable rate loans 189 — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (421) — — — Cash flow hedges Interest rate swaps on wholesale funding As of September 30, 2022, we have two interest rate swaps on wholesale borrowings to limit our exposure to rising interest rates over a five-year term on 3-month FHLB borrowings or brokered certificates, or a combination thereof at each maturity date. The first of the two agreements was entered into in November 2019 with a $50.0 million notional amount and pays a fixed interest rate of 1.53%. A second agreement was entered into in April 2020 with a $25.0 million notional amount and pays a fixed rate of 0.59%. The financial institution counterparty pays us interest on the three-month LIBOR rate. We designated the swaps as cash flow hedges. Interest rate swap on variable rate loans We have an interest rate swap that effectively fixes our interest rate on $50 million of 1 month USD-LIBOR-BBA (or LIBOR less two days) based loan assets at 0.806% plus the credit spread on the loans that reprices on weighted average basis. The instrument is specifically designed to hedge the risk of changes in its cash flows from interest receipts attributable to changes in a contractually specified interest rate, on an amount of our variable rate loan assets equal to $50 million. We designated the swap as a cash flow hedge. Fair value hedges Interest rate swap on securities For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. We utilize interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable securities available-for-sale. The hedging strategy on securities converts the fixed interest rates to LIBOR-based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the call dates of the hedged securities. During 2019, we entered into eight swap transactions with a notional amount of $37.2 million designated as fair value hedges. These derivatives are intended to protect against the effects of changing interest rates on the fair values of fixed rate securities. The fixed rates on the transactions have a weighted average of 1.696%. Economic hedges Forward sale commitments We utilize forward sale commitments on residential mortgage loans to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives. We typically use a combination of best efforts and mandatory delivery contracts. The contracts are loan sale agreements where we commit to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, we enter into contracts just prior to the loan closing with a customer. Customer loan derivatives We enter into customer loan derivatives to facilitate the risk management strategies for commercial banking customers. We mitigate this risk by entering into equal and offsetting loan swap agreements with highly rated third-party financial institutions. The loan swap agreements are free standing derivatives and are recorded at fair value in our consolidated balance sheet. We are party to master netting arrangements with our financial institutional counterparties; however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all loan swap agreements, as well as collateral or cash funds, in the event of default on, or termination of, any one contract. Collateral is provided by cash or securities received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds. Gross Amounts Offset in the Consolidated Balance Sheet Derivative Cash Collateral (in thousands) Liabilities Derivative Assets Pledged Net Amount As of September 30, 2022 Customer Loan Derivatives: MNA counterparty $ (21,795) $ 21,795 $ — $ — RPA counterparty — — — — Total $ (21,795) $ 21,795 $ — $ — Gross Amounts Offset in the Consolidated Balance Sheet Derivative Cash Collateral (in thousands) Liabilities Derivative Assets Pledged Net Amount As of December 31, 2021 Customer Loan Derivatives: MNA counterparty $ (9,429) $ 9,429 $ 12,000 $ 12,000 RPA counterparty (4,421) 4,421 — — Total $ (13,850) $ 13,850 $ 12,000 $ 12,000 Non-hedging derivatives Interest rate lock commitments We enter into interest rate lock commitments (“IRLCs”) for residential mortgage loans, which commit us to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs relate to the origination of residential mortgage loans that are held for sale and are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose us to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free standing derivatives, which are carried at fair value with changes recorded in non-interest income in our Consolidated Statements of Income. Changes in the fair value of IRLCs subsequent to inception are based on (i) changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and (ii) changes in the probability when the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: September 30, 2022 Level 1 Level 2 Level 3 Total (in thousands) Inputs Inputs Inputs Fair Value Available for sale securities: Mortgage-backed securities: US Government-sponsored enterprises $ — $ 216,024 $ — $ 216,024 US Government agency — 83,526 — 83,526 Private label — 66,769 — 66,769 Obligations of states and political subdivisions thereof — 104,652 — 104,652 Corporate bonds — 85,781 — 85,781 Loans held for sale — 982 — 982 Derivative assets — 31,964 8 31,972 Derivative liabilities — (27,084) — (27,084) December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Inputs Inputs Inputs Fair Value Available for sale securities: Mortgage-backed securities: US Government-sponsored enterprises $ — $ 236,117 $ — $ 236,117 US Government agency — 79,637 — 79,637 Private label — 68,695 — 68,695 Obligations of states and political subdivisions thereof — 141,776 — 141,776 Corporate bonds — 92,051 — 92,051 Loans held for sale — 5,523 — 5,523 Derivative assets — 13,850 298 14,148 Derivative liabilities — (15,257) — (15,257) Securities Available for Sale: Loans Held for Sale: Derivative Assets and Liabilities Cash Flow Hedges. Interest Rate Lock Commitments. Forward Sale Commitments . Customer Loan Derivatives. Although we have determined that the majority of the inputs used to value customer loan derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and counterparties. However, as of September 30, 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and nine months ended September 30, 2022 and 2021: Assets (Liabilities) Interest Rate Lock Forward (in thousands) Commitments Commitments Three Months Ended September 30, 2022 Balance at beginning of period $ 50 $ (11) Realized gain (loss) recognized in non-interest income (50) 19 Balance at end of period $ — $ 8 Three Months Ended September 30, 2021 Balance at beginning of period $ 25 $ (45) Realized (loss) gain recognized in non-interest income 22 (95) Balance at end of period $ 47 $ (140) Nine Months Ended September 30, 2022 Balance at beginning of period $ 283 $ 15 Realized loss recognized in non-interest income (283) (7) Balance at end of period $ — $ 8 Nine Months Ended September 30, 2021 Balance at beginning of period $ 22 $ (95) Realized gain recognized in non-interest income 25 (45) Balance at end of period $ 47 $ (140) Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is, as follows: Fair Value Significant September 30, Valuation Unobservable Unobservable (in thousands, except ratios) 2022 Techniques Inputs Input Value Assets (Liabilities) Interest Rate Lock Commitment $ — Pull-through Rate Analysis Closing Ratio — % Pricing Model Origination Costs, per loan $ — Discount Cash Flows Mortgage Servicing Asset — % Forward Commitments 8 Quoted prices for similar loans in active markets Freddie Mac pricing system $97.2 to $101.4 Total $ 8 Fair Value Significant December 31, Valuation Unobservable Unobservable (in thousands, except ratios) 2021 Techniques Inputs Input Value Assets (Liabilities) Interest Rate Lock Commitment $ 283 Pull-through Rate Analysis Closing Ratio 85 % Pricing Model Origination Costs, per loan $ 1.7 Discount Cash Flows Mortgage Servicing Asset 1.0 % Forward Commitments 15 Quoted prices for similar loans in active markets Freddie Mac pricing system $99.8 to $103.2 Total $ 298 Non-Recurring Fair Value Measurements We are required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements: September 30, 2022 December 31, 2021 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Fair Value Measurement Date as of September 30, 2022 Level 3 Level 3 Total Total Level 3 (in thousands) Inputs Inputs Gains (Losses) Gains (Losses) Inputs Assets Individually evaluated loans $ 15,388 $ 17,932 $ 1,778 $ (2,544) September 2022 Capitalized servicing rights 7,127 5,263 84 1,864 September 2022 Premises held for sale 327 226 — 101 February 2022 Total $ 22,842 $ 23,421 $ 1,862 $ (579) There are no liabilities measured at fair value on a non-recurring basis in 2022 and 2021. Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is, as follows: (in thousands, except ratios) Fair Value September 30, 2022 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) Assets Individually evaluated loans $ 10,903 Fair value of collateral-appraised value Loss severity 10% to 70% Appraised value $80 to $1,175 Individually evaluated loans 4,485 Discount cash flow Discount rate 2.88% to 6.45% Cash flows $4 to $925 Capitalized servicing rights 7,127 Discounted cash flow Constant prepayment rate (CPR) 7.10% Discount rate 9.54% Premises held for sale 327 Fair value of asset less selling costs Appraised value $347 Selling Costs 6% Total $ 22,842 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. (in thousands, except ratios) Fair Value December 31, 2021 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) Assets Individually evaluated loans $ 12,127 Fair value of collateral-appraised value Loss severity 10% to 70% Appraised value $71 to $1,792 Individually evaluated loans 5,805 Discount cash flow Discount rate 2.88% to 9.50% Cash flows $6 to $931 Capitalized servicing rights 5,263 Discounted cash flow Constant prepayment rate (CPR) 12.47% Discount rate 9.53% Premises held for sale 226 Fair value of asset less selling costs Appraised value $240 Selling Costs 6% Total $ 23,421 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. There were no Level 1 or Level 2 non-recurring fair value measurements for the periods ended September 30, 2022 and December 31, 2021. Individually evaluated loans. Capitalized loan servicing rights . Other real estate owned or OREO. Premises held for sale. Summary of Estimated Fair Values of Financial Instruments The estimated fair values, and related carrying amounts, of our financial instruments are included in the table below. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. September 30, 2022 Carrying Fair (in thousands) Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 82,065 $ 82,065 $ 82,065 $ — $ — Securities available for sale 556,752 556,752 — 556,752 — FHLB stock 9,035 9,035 — 9,035 — Loans held for sale 987 982 — 982 — Net loans 2,850,364 2,783,612 — — 2,783,612 Accrued interest receivable 4,053 4,053 — 4,053 — Cash surrender value of bank-owned life insurance policies 80,758 80,758 — 80,758 — Derivative assets 31,973 31,973 — 31,973 8 Financial Liabilities Non-maturity deposits $ 2,801,432 $ 2,616,000 $ — $ 2,616,000 $ — Time deposits 334,248 330,059 — 330,059 — Securities sold under agreements to repurchase 18,916 18,916 — 18,916 — FHLB advances 169,841 169,459 — 169,459 — Subordinated borrowings 60,248 57,744 — 57,744 — Derivative liabilities 27,084 27,084 — 27,084 — December 31, 2021 Carrying Fair (in thousands) Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 250,389 $ 250,389 $ 250,389 $ — $ — Securities available for sale 618,276 618,276 — 618,276 — FHLB stock 7,384 7,384 — 7,384 — Loans held for sale 5,523 5,523 — 5,523 — Net loans 2,509,192 2,442,741 — — 2,442,741 Accrued interest receivable 2,712 2,712 — 2,712 — Cash surrender value of bank-owned life insurance policies 79,020 79,020 — 79,020 — Derivative assets 14,148 14,148 — 13,850 298 Financial Liabilities Non-maturity deposits $ 2,623,012 $ 2,853,000 $ — $ 2,853,000 $ — Time deposits 425,532 424,000 — 424,000 — Securities sold under agreements to repurchase 19,802 19,802 — 19,802 — FHLB advances 98,598 98,439 — 98,439 — Subordinated borrowings 60,124 61,884 — 61,884 — Derivative liabilities 15,257 15,257 — 15,257 — |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 10. REVENUE FROM CONTRACTS WITH CUSTOMERS We account for our various non-interest revenue streams and related contracts under ASC 606. Revenue from contracts with customers is based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognized when we satisfy our performance obligation, which is generally when services are rendered and can be either satisfied at a point in time or over time. We recognize revenue at a point in time that is transactional in nature. We recognize revenue over time that is earned as services are performed and performance obligations are satisfied over time. A substantial portion of our revenue is specifically excluded from the scope of ASC 606. This exclusion is associated with financial instruments, including interst income on loans and investment securities, in addition to loan derivative income and gains on loan and investment sales. Disaggregation of Revenue The following tables present disaggregation of our non-interest revenue by major business line and timing of revenue recognition for the transfer of products or services: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Major Products/Service Lines Trust management fees $ 3,077 $ 3,403 $ 9,941 $ 10,052 Financial services fees 471 465 1,190 1,283 Interchange fees 1,953 1,882 5,849 5,509 Customer deposit fees 1,578 1,363 4,418 3,542 Other customer service fees 305 270 841 691 Total $ 7,384 $ 7,383 $ 22,239 $ 21,077 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Timing of Revenue Recognition Products and services transferred at a point in time $ 4,020 $ 3,737 $ 11,755 $ 10,593 Products and services transferred over time 3,364 3,646 10,484 10,484 Total $ 7,384 $ 7,383 $ 22,239 $ 21,077 Trust Management Fees The trust management business generates revenue through a range of fiduciary services including trust and estate administration, financial advice, and investment management to individuals, businesses, not-for-profit organizations, and municipalities. These fees are primarily earned over time as we charge our customers on a monthly or quarterly basis in accordance with investment advisory agreements. Fees are generally assessed based on a tiered scale of the market value of assets under management at month end. Certain fees, such as bill paying fees, distribution fees, real estate sale fees, and supplemental tax service fees, are recorded as revenue at a point in time upon the completion of the service. Financial Services Fees Bar Harbor Financial Services is a branch office of Infinex, an independent registered broker dealer offering securities and insurance products not affiliated with the Company or its subsidiaries. We have a revenue sharing agreement with Infinex for any financial service fee income generated. Financial services fees are recognized at a point in time upon the completion of service requirements. Interchange Fees We earn interchange fees from transaction fees that merchants pay whenever a customer uses a debit card to make a purchase from their store. The fees are paid to the card-issuing bank to cover handling costs, fraud, bad debt costs and the risk involved in approving the payment. Interchange fees are generally recognized as revenue at a point in time upon the completion of a debit card transaction. Customer Deposit Fees The Customer Deposit business offers a variety of deposit accounts with a range of interest rates, fee schedules and other terms, which are designed to meet the customer's financial needs. Additional depositor-related services provided to customers include ATM, bank-by-phone, internet banking, internet bill pay, mobile banking, and other cash management services which include remote deposit capture, ACH origination, and wire transfers. These customer deposit fees are generally recognized at a point in time upon the completion of the service. Other Customer Service Fees We have certain incentive and referral fee arrangements with independent third parties in which fees are earned for new account activity, product sales, or transaction volume generated for the respective third parties. We also earn a percentage of the fees generated from third-party credit card plans promoted through the Bank. Revenue from these incentive and referral fee arrangements are recognized over time using the right to invoice measure of progress. Contract Balances from Contracts with Customers The following table provides information about contract assets or receivables and contract liabilities or deferred revenues from contracts with customers: (in thousands) September 30, 2022 December 31, 2021 Balances from contracts with customers only: Other Assets $ 1,325 $ 1,184 Other Liabilities 2,535 2,324 The timing of revenue recognition, billings and cash collections results in contract assets or receivables and contract liabilities or deferred revenue on the consolidated balance sheets. For most customer contracts, fees are deducted directly from customer accounts and, therefore, there is no associated impact on the accounts receivable balance. For certain types of service contracts, we have an unconditional right to consideration under the service contract and an accounts receivable balance is recorded for services completed. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Costs to Obtain and Fulfill a Contract We currently expense contract costs for processing and administrative fees for debit card transactions. We also expense custody fees and transactional costs associated with securities transactions as well as third party tax preparation fees. We have elected the practical expedient in ASC 340-40-25-4, whereby we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets we otherwise would have recognized is one year or less. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
LEASES | NOTE 11. LEASES A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Most of our leases are for branches, ATM locations, and office space and have terms extending through 2040. All leases are classified as operating leases, and are recognized on the consolidated balance sheets as a right- of-use (“ROU”) asset with a corresponding lease liability. The following table presents the consolidated statements of condition classification of the ROU assets and lease liabilities: (in thousands) Classification September 30, 2022 December 31, 2021 Lease Right-of-Use Assets Operating lease right-of-use assets Other assets $ 8,381 $ 9,274 Lease Liabilities Operating lease liabilities Other liabilities 8,791 9,643 The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. The lease agreements often include one or more options to renew at our discretion. If at lease inception, we consider the exercising of a renewal option to be reasonably certain, we will include the extended term in the calculation of the ROU asset and lease liability. The following table presents the weighted average lease term and discount rate of the leases: September 30, 2022 December 31, 2021 Weighted-average remaining lease term (in years) Operating leases 7.42 8.03 Weighted-average discount rate Operating leases 3.09 % 3.07 % The following table represents lease costs and other lease information. As we have elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as real estate taxes, common area maintenance and utilities. Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Lease Costs Operating lease cost $ 338 $ 324 $ 994 $ 966 Variable lease cost 71 43 345 179 Total lease cost $ 409 $ 367 $ 1,339 $ 1,145 Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2022 are, as follows: (in thousands) Payments Twelve Months Ended: September 30, 2023 $ 1,343 September 30, 2024 1,344 September 30, 2025 1,129 September 30, 2026 1,032 September 30, 2027 889 Thereafter 3,411 Total future minimum lease payments 9,148 Amounts representing interest (357) Present value of net future minimum lease payments $ 8,791 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION | |
Reclassifications | Reclassifications: |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following table provides a brief description of recent accounting standards updates (“ASU”) that could have a material impact to the Company’s consolidated financial statements upon adoption: Standard Description Required Date of Adoption Effect on financial statements Standards Not Yet Adopted ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) and Vintage Disclosures The amendments in this update eliminate TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an exisiting loan. The amendments enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. January 1, 2023 We do not expect adoption of this ASU to have a material impact on our consolidated financial statements. |
SECURITIES AVAILABLE FOR SALE (
SECURITIES AVAILABLE FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
SECURITIES AVAILABLE FOR SALE | |
Summary of Securities Available for Sale | Gross Gross Unrealized Unrealized (in thousands) Amortized Cost Gains Losses Fair Value September 30, 2022 Mortgage-backed securities: US Government-sponsored enterprises $ 252,369 $ 4 $ (36,349) $ 216,024 US Government agency 93,643 11 (10,128) 83,526 Private label 72,484 34 (5,749) 66,769 Obligations of states and political subdivisions thereof 123,350 9,205 (27,903) 104,652 Corporate bonds 91,512 26 (5,757) 85,781 Total securities available for sale $ 633,358 $ 9,280 $ (85,886) $ 556,752 Gross Gross Unrealized Unrealized (in thousands) Amortized Cost Gains Losses Fair Value December 31, 2021 Mortgage-backed securities: US Government-sponsored enterprises $ 237,283 $ 2,289 $ (3,455) $ 236,117 US Government agency 79,143 1,016 (522) 79,637 Private label 68,691 142 (138) 68,695 Obligations of states and political subdivisions thereof 140,585 1,489 (298) 141,776 Corporate bonds 89,994 2,479 (422) 92,051 Total securities available for sale $ 615,696 $ 7,415 $ (4,835) $ 618,276 |
Schedule of Amortized Cost and Estimated Fair Value of Available for Sale (AFS) Securities, Segregated by Contractual Maturity | Available for sale (in thousands) Amortized Cost Fair Value Within 1 year $ 195 $ 196 Over 1 year to 5 years 30,292 28,426 Over 5 years to 10 years 49,666 55,025 Over 10 years 134,709 106,786 Total bonds and obligations 214,862 190,433 Mortgage-backed securities 418,496 366,319 Total securities available for sale $ 633,358 $ 556,752 |
Schedule of Gains and Losses from Sale of AFS Securities | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Gross gains on sales of available for sale securities $ 142 $ 1,980 $ 151 $ 2,030 Gross losses on sales of available for sale securities (98) (50) (98) (50) Net gains on sale of available for sale securities $ 44 $ 1,930 $ 53 $ 1,980 |
Schedule of Securities with Unrealized Losses, Segregated by the Duration of Continuous Unrealized Loss Positions | Less Than Twelve Months Over Twelve Months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in thousands) Losses Value Losses Value Losses Value September 30, 2022 Mortgage-backed securities: US Government-sponsored enterprises $ 18,262 $ 139,219 $ 18,087 $ 76,291 $ 36,349 $ 215,510 US Government agency 6,591 64,575 3,537 17,021 10,128 81,596 Private label 3,466 35,740 2,283 30,994 5,749 66,734 Obligations of states and political subdivisions thereof 20,425 78,085 7,478 21,373 27,903 99,458 Corporate bonds 3,770 65,251 1,987 16,763 5,757 82,014 Total securities available for sale $ 52,514 $ 382,870 $ 33,372 $ 162,442 $ 85,886 $ 545,312 Less Than Twelve Months Over Twelve Months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (in thousands) Losses Value Losses Value Losses Value December 31, 2021 Mortgage-backed securities: US Government-sponsored enterprises $ 1,589 $ 127,780 $ 1,866 $ 39,717 $ 3,455 $ 167,497 US Government agency 381 32,628 141 4,548 522 37,176 Private label 133 44,372 5 16 138 44,388 Obligations of states and political subdivisions thereof 187 36,878 111 6,129 298 43,007 Corporate bonds 94 21,358 328 11,922 422 33,280 Total securities available for sale $ 2,384 $ 263,016 $ 2,451 $ 62,332 $ 4,835 $ 325,348 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Loans | September 30, December 31, (in thousands) 2022 2021 Commercial construction $ 97,156 $ 56,263 Commercial real estate owner occupied 256,475 257,122 Commercial real estate non-owner occupied 1,081,924 887,092 Tax exempt 41,622 41,280 Commercial and industrial 319,645 307,112 Residential real estate 953,113 888,263 Home equity 92,296 86,657 Consumer other 8,133 8,121 Total loans 2,850,364 2,531,910 Allowance for credit losses 25,018 22,718 Net loans $ 2,825,346 $ 2,509,192 |
Summary of Unamortized Net Costs and Premiums | September 30, December 31, (in thousands) 2022 2021 Net unamortized loan origination costs $ 3,367 $ 3,014 Net unamortized fair value discount on acquired loans (3,898) (4,758) Total $ (531) $ (1,744) |
Schedule of Activity in the Allowance for Credit Losses | At or for the Three Months Ended September 30, 2022 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 1,010 $ — $ — $ 213 $ 1,223 Commercial real estate owner occupied 2,722 — 7 132 2,861 Commercial real estate non-owner occupied 7,361 — — 610 7,971 Tax exempt 105 — — (11) 94 Commercial and industrial 4,820 (8) 20 290 5,122 Residential real estate 6,806 (11) 6 85 6,886 Home equity 865 — 2 (76) 791 Consumer other 67 (66) 6 63 70 Total $ 23,756 $ (85) $ 41 $ 1,306 $ 25,018 At or for the Nine Months Ended September 30, 2022 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 2,111 $ — $ — $ (888) $ 1,223 Commercial real estate owner occupied 2,751 — 120 (10) 2,861 Commercial real estate non-owner occupied 5,650 — — 2,321 7,971 Tax exempt 86 — — 8 94 Commercial and industrial 5,369 (14) 56 (289) 5,122 Residential real estate 5,862 (26) 103 947 6,886 Home equity 814 (6) 22 (39) 791 Consumer other 75 (181) 9 167 70 Total $ 22,718 $ (227) $ 310 $ 2,217 $ 25,018 At or for the Three Months Ended September 30, 2021 Balance at Beginning of Balance at (in thousands) Period Charge Offs Recoveries Provision End of Period Commercial construction $ 2,372 $ — $ — $ (286) $ 2,086 Commercial real estate owner occupied 2,552 (142) 72 237 2,719 Commercial real estate non-owner occupied 5,604 — — (22) 5,582 Tax exempt 91 — — (6) 85 Commercial and industrial 5,225 (24) — 105 5,306 Residential real estate 6,069 (6) 19 (290) 5,792 Home equity 822 (49) 1 30 804 Consumer other 80 (65) 1 58 74 Total $ 22,815 $ (286) $ 93 $ (174) $ 22,448 At or for the Nine Months Ended September 30, 2021 Balance at Beginning of Impact of ASC Balance at (in thousands) Period 326 Charge Offs Recoveries Provision End of Period Commercial construction $ 824 $ 1,196 $ — $ 18 $ 48 $ 2,086 Commercial real estate owner occupied 1,783 708 (403) 72 559 2,719 Commercial real estate non-owner occupied 7,864 (2,008) — 4 (278) 5,582 Tax exempt 58 40 — — (13) 85 Commercial and industrial 3,137 2,996 (44) 14 (797) 5,306 Residential real estate 5,010 1,732 (67) 141 (1,024) 5,792 Home equity 285 603 (108) 48 (24) 804 Consumer other 121 (39) (119) 10 101 74 Total $ 19,082 $ 5,228 $ (741) $ 307 $ (1,428) $ 22,448 |
Schedule of Loans by Risk Rating | (in thousands) 2022 2021 2020 2019 2018 Prior Total Commercial construction Risk rating: Pass $ 34,032 $ 32,179 $ 5,928 $ 1,011 $ 973 $ — $ 74,123 Special mention — — 23,033 — — — 23,033 Substandard — — — — — — — Total $ 34,032 $ 32,179 $ 28,961 $ 1,011 $ 973 $ — $ 97,156 Commercial real estate owner occupied Risk rating: Pass $ 20,248 $ 12,973 $ 23,785 $ 31,795 $ 47,090 $ 110,306 $ 246,197 Special mention — — 245 672 1,145 1,711 3,773 Substandard — — — — 931 5,276 6,207 Doubtful — — — — 151 147 298 Total $ 20,248 $ 12,973 $ 24,030 $ 32,467 $ 49,317 $ 117,440 $ 256,475 Commercial real estate non-owner occupied Risk rating: Pass $ 283,316 $ 249,574 $ 146,764 $ 89,252 $ 35,671 $ 259,250 $ 1,063,827 Special mention — — — 139 918 14,665 15,722 Substandard — — — 173 — 2,048 2,221 Doubtful — — — — — 154 154 Total $ 283,316 $ 249,574 $ 146,764 $ 89,564 $ 36,589 $ 276,117 $ 1,081,924 Tax exempt Risk rating: Pass $ 6,944 $ 1,044 $ 256 $ 778 $ 13,276 $ 19,324 $ 41,622 Special mention — — — — — — — Substandard — — — — — — — Total $ 6,944 $ 1,044 $ 256 $ 778 $ 13,276 $ 19,324 $ 41,622 Commercial and industrial Risk rating: Pass $ 56,222 $ 70,975 $ 60,338 $ 29,867 $ 11,053 $ 84,792 $ 313,247 Special mention 1,497 — 155 1,083 516 2,432 5,683 Substandard — 55 12 70 — 514 651 Doubtful — — — — — 64 64 Total $ 57,719 $ 71,030 $ 60,505 $ 31,020 $ 11,569 $ 87,802 $ 319,645 Residential real estate Performing $ 170,291 $ 178,875 $ 113,573 $ 71,869 $ 51,588 $ 361,823 $ 948,019 Nonperforming — 48 — 50 643 4,353 5,094 Total $ 170,291 $ 178,923 $ 113,573 $ 71,919 $ 52,231 $ 366,176 $ 953,113 Home equity Performing $ 11,839 $ 12,152 $ 8,965 $ 7,796 $ 7,326 $ 43,173 $ 91,251 Nonperforming — — — — — 1,045 1,045 Total $ 11,839 $ 12,152 $ 8,965 $ 7,796 $ 7,326 $ 44,218 $ 92,296 Consumer other Performing $ 3,833 $ 1,596 $ 1,029 $ 362 $ 328 $ 980 $ 8,128 Nonperforming — — 5 — — — 5 Total $ 3,833 $ 1,596 $ 1,034 $ 362 $ 328 $ 980 $ 8,133 Total Loans $ 588,222 $ 559,471 $ 384,088 $ 234,917 $ 171,609 $ 912,057 $ 2,850,364 The following table presents our loans by year of origination, loan segmentation and risk indicator as of December 31, 2021: (in thousands) 2021 2020 2019 2018 2017 Prior Total Commercial construction Risk rating: Pass $ 22,866 $ 4,787 $ 19,211 $ 9,399 $ — $ — $ 56,263 Special mention — — — — — — — Substandard — — — — — — — Total $ 22,866 $ 4,787 $ 19,211 $ 9,399 $ — $ — $ 56,263 Commercial real estate owner occupied Risk rating: Pass $ 12,940 $ 25,240 $ 34,782 $ 49,136 $ 19,292 $ 103,144 $ 244,534 Special mention — — 760 — — 2,659 3,419 Substandard — — 1 853 247 7,737 8,838 Doubtful — — — 167 — 164 331 Total $ 12,940 $ 25,240 $ 35,543 $ 50,156 $ 19,539 $ 113,704 $ 257,122 Commercial real estate non-owner occupied Risk rating: Pass $ 235,646 $ 172,785 $ 119,326 $ 39,663 $ 136,120 $ 165,329 $ 868,869 Special mention — — 174 — — 14,789 14,963 Substandard — — — — — 3,097 3,097 Doubtful — — — — — 163 163 Total $ 235,646 $ 172,785 $ 119,500 $ 39,663 $ 136,120 $ 183,378 $ 887,092 Tax exempt Risk rating: Pass $ 1,249 $ 299 $ 968 $ 14,408 $ 5,329 $ 19,027 $ 41,280 Special mention — — — — — — — Substandard — — — — — — — Total $ 1,249 $ 299 $ 968 $ 14,408 $ 5,329 $ 19,027 $ 41,280 Commercial and industrial Risk rating: Pass $ 77,608 $ 80,569 $ 33,405 $ 16,457 $ 33,413 $ 61,594 $ 303,046 Special mention — — 584 468 172 1,396 2,620 Substandard 58 3 512 — 48 578 1,199 Doubtful — — — — 92 155 247 Total $ 77,666 $ 80,572 $ 34,501 $ 16,925 $ 33,725 $ 63,723 $ 307,112 Residential real estate Performing $ 191,466 $ 120,495 $ 83,044 $ 62,299 $ 59,642 $ 364,482 $ 881,428 Nonperforming — — — 286 178 6,371 6,835 Total $ 191,466 $ 120,495 $ 83,044 $ 62,585 $ 59,820 $ 370,853 $ 888,263 Home equity Performing $ 12,770 $ 10,461 $ 9,005 $ 7,855 $ 6,474 $ 38,823 $ 85,388 Nonperforming — — — — — 1,269 1,269 Total $ 12,770 $ 10,461 $ 9,005 $ 7,855 $ 6,474 $ 40,092 $ 86,657 Consumer other Performing $ 2,525 $ 1,659 $ 792 $ 669 $ 92 $ 2,379 $ 8,116 Nonperforming — — — — — 5 5 Total $ 2,525 $ 1,659 $ 792 $ 669 $ 92 $ 2,384 $ 8,121 Total Loans $ 557,128 $ 416,298 $ 302,564 $ 201,660 $ 261,099 $ 793,161 $ 2,531,910 |
Summary of Past Due Loans | September 30, 2022 (in thousands) 30-59 60-89 90+ Total Past Due Current Total Loans Commercial construction $ — $ — $ — $ — $ 97,156 $ 97,156 Commercial real estate owner occupied 84 — — 84 256,391 256,475 Commercial real estate non-owner occupied 298 — 173 471 1,081,453 1,081,924 Tax exempt — — — — 41,622 41,622 Commercial and industrial 200 100 12 312 319,333 319,645 Residential real estate 565 928 1,882 3,375 949,738 953,113 Home equity 269 236 204 709 91,587 92,296 Consumer other 11 4 — 15 8,118 8,133 Total $ 1,427 $ 1,268 $ 2,271 $ 4,966 $ 2,845,398 $ 2,850,364 December 31, 2021 (in thousands) 30-59 60-89 90+ Total Past Due Current Total Loans Commercial construction $ — $ — $ — $ — $ 56,263 $ 56,263 Commercial real estate owner occupied 1,190 7 1 1,198 255,924 257,122 Commercial real estate non-owner occupied — — — — 887,092 887,092 Tax exempt — — — — 41,280 41,280 Commercial and industrial 31 318 185 534 306,578 307,112 Residential real estate 5,010 1,238 1,416 7,664 880,599 888,263 Home equity 699 149 101 949 85,708 86,657 Consumer other 29 — 2 31 8,090 8,121 Total $ 6,959 $ 1,712 $ 1,705 $ 10,376 $ 2,521,534 $ 2,531,910 |
Summary of Non-Accrual Loans | September 30, 2022 Nonaccrual With No 90+ Days Past (in thousands) Nonaccrual Related Allowance Due and Accruing Commercial construction $ — $ — $ — Commercial real estate owner occupied 604 371 — Commercial real estate non-owner occupied 747 430 — Tax exempt — — — Commercial and industrial 279 187 2 Residential real estate 5,094 1,539 242 Home equity 1,044 70 15 Consumer other 5 — — Total $ 7,773 $ 2,597 $ 259 December 31, 2021 Nonaccrual With No 90+ Days Past (in thousands) Nonaccrual Related Allowance Due and Accruing Commercial construction $ — $ — $ — Commercial real estate owner occupied 783 424 — Commercial real estate non-owner occupied 622 459 — Tax exempt — — — Commercial and industrial 677 542 30 Residential real estate 6,835 2,537 41 Home equity 1,269 305 63 Consumer other 5 — — Total $ 10,191 $ 4,267 $ 134 |
Schedule of amortized cost basis of collateral-dependent loans | September 30, 2022 December 31, 2021 (in thousands) Real Estate Other Real Estate Other Commercial construction $ — $ — $ — $ — Commercial real estate owner occupied 604 — 783 — Commercial real estate non-owner occupied 747 — 622 — Tax exempt — — — — Commercial and industrial 122 157 385 292 Residential real estate 5,094 — 6,835 — Home equity 1,044 — 1,269 — Consumer other 5 — 5 — Total $ 7,616 $ 157 $ 9,899 $ 292 |
Unfunded Loan Commitment | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of Activity in the Allowance for Credit Losses | (in thousands) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Beginning Balance $ 2,523 $ 2,152 Provision for credit losses (26) 345 Ending Balance $ 2,497 $ 2,497 (in thousands) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Beginning Balance $ 1,921 $ 359 Impact of ASC 326 — 1,616 Provision for credit losses 280 226 Ending Balance $ 2,201 $ 2,201 |
BORROWED FUNDS (Tables)
BORROWED FUNDS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
BORROWED FUNDS | |
Schedule of Borrowed Funds | September 30, 2022 December 31, 2021 Weighted Weighted (dollars in thousands) Carrying Value Average Rate Carrying Value Average Rate Short-term borrowings Advances from the FHLB $ 167,250 2.95 % $ 75,000 0.30 % Other borrowings 18,916 0.14 19,802 0.17 Total short-term borrowings 186,166 1.27 94,802 0.21 Long-term borrowings Advances from the FHLB 2,591 0.39 23,598 1.08 Subordinated borrowings 60,248 5.05 60,124 4.34 Total long-term borrowings 62,839 4.86 83,722 3.42 Total $ 249,005 1.74 % $ 178,524 0.91 % |
Summary of Maturities of FHLB Advances | Weighted Average (in thousands, except rates) Amount Rate 2022 $ 166,250 2.97 % 2023 1,000 — 2024 2,300 — 2025 — — 2026 — — 2027 and thereafter 291 3.45 Total FHLB advances $ 169,841 2.92 % |
Schedule of Repurchase Agreements | (in thousands) September 30, 2022 December 31, 2021 Customer Repurchase Agreements US Government-sponsored enterprises $ 18,916 $ 19,802 Total $ 18,916 $ 19,802 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
DEPOSITS. | |
Summary of Time Deposits | (in thousands) September 30, 2022 December 31, 2021 Time less than $100,000 $ 167,056 $ 181,586 Time $100,000 through $250,000 113,168 169,645 Time $250,000 or more 54,024 74,301 Total $ 334,248 $ 425,532 |
Time Deposit Maturities | (in thousands) September 30, 2022 December 31, 2021 Within 1 year $ 262,787 $ 318,692 Over 1 year to 2 years 46,867 71,247 Over 2 years to 3 years 12,626 18,201 Over 3 years to 4 years 5,971 8,498 Over 4 years to 5 years 5,302 6,751 Over 5 years 695 2,143 Total $ 334,248 $ 425,532 |
CAPITAL RATIOS AND SHAREHOLDE_2
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY | |
Schedule of Actual and Required Capital Ratios | September 30, 2022 Minimum Regulatory Actual Capital Requirements (in thousands, except ratios) Amount Ratio Amount Ratio Company (consolidated) Total capital to risk-weighted assets $ 404,804 13.42 % $ 241,314 8.00 % Common equity tier 1 capital to risk-weighted assets 317,043 10.51 135,740 4.50 Tier 1 capital to risk-weighted assets 337,663 11.19 180,986 6.00 Tier 1 capital to average assets (leverage ratio) 337,663 9.13 147,908 4.00 Bank Total capital to risk-weighted assets $ 398,292 13.22 % $ 241,079 8.00 % Common equity tier 1 capital to risk-weighted assets 371,151 12.32 135,606 4.50 Tier 1 capital to risk-weighted assets 371,151 12.32 180,808 6.00 Tier 1 capital to average assets (leverage ratio) 371,151 10.05 147,791 4.00 December 31, 2021 Minimum Regulatory Actual Capital Requirements (in thousands, except ratios) Amount Ratio Amount Ratio Company (consolidated) Total capital to risk-weighted assets $ 380,690 14.31 % $ 212,798 8.00 % Common equity tier 1 capital to risk-weighted assets 295,635 11.11 119,699 4.50 Tier 1 capital to risk-weighted assets 316,255 11.89 159,598 6.00 Tier 1 capital to average assets (leverage ratio) 316,255 8.66 146,029 4.00 Bank Total capital to risk-weighted assets $ 375,435 14.13 % $ 220,425 8.00 % Common equity tier 1 capital to risk-weighted assets 351,000 13.21 123,812 4.50 Tier 1 capital to risk-weighted assets 351,000 13.21 165,082 6.00 Tier 1 capital to average assets (leverage ratio) 351,000 9.62 151,082 4.00 |
Schedule of Components of Accumulated Other Comprehensive Income | (in thousands) September 30, 2022 December 31, 2021 Accumulated other comprehensive income, before tax: Net unrealized (loss) gain on AFS securities $ (76,606) $ 2,580 Net unrealized (loss) gain on hedging derivatives (4,316) 1,130 Net unrealized loss on post-retirement plans (718) (718) Income taxes related to items of accumulated other comprehensive income: Net unrealized loss (gain) on AFS securities 17,891 (595) Net unrealized loss (gain) on hedging derivatives 994 (260) Net unrealized loss on post-retirement plans 166 166 Accumulated other comprehensive (loss) income $ (62,589) $ 2,303 |
Schedule of Components of Other Comprehensive Income (Loss) | The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021: (in thousands) Before Tax Tax Effect Net of Tax Three Months Ended September 30, 2022 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (26,889) $ 6,512 $ (20,377) Less: reclassification adjustment for gains (losses) realized in net income 44 (10) 34 Net unrealized loss on AFS securities (26,933) 6,522 (20,411) Net unrealized loss on hedging derivatives: Net unrealized loss arising during the period (1,568) 361 (1,207) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on cash flow hedging derivatives (1,568) 361 (1,207) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive loss $ (28,501) $ 6,883 $ (21,618) Three Months Ended September 30, 2021 Net unrealized gain on AFS securities: Net unrealized gain arising during the period $ (1,770) $ 403 $ (1,367) Less: reclassification adjustment for gains (losses) realized in net income 1,930 (458) 1,472 Net unrealized gain on AFS securities (3,700) 861 (2,839) Net unrealized gain on derivative hedgess: Net unrealized gain arising during the period (203) 48 (155) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on cash flow derivative hedges (203) 48 (155) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive (loss) income $ (3,903) $ 909 $ (2,994) (in thousands) Before Tax Tax Effect Net of Tax Nine Months Ended September 30, 2022 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (79,133) $ 18,474 $ (60,659) Less: reclassification adjustment for gains (losses) realized in net income 53 (12) 41 Net unrealized loss on AFS securities (79,186) 18,486 (60,700) Net unrealized loss on hedging derivatives: Net unrealized loss arising during the period (5,446) 1,254 (4,192) Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on hedging derivatives (5,446) 1,254 (4,192) Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive loss $ (84,632) $ 19,740 $ (64,892) Nine Months Ended September 30, 2021 Net unrealized loss on AFS securities: Net unrealized loss arising during the period $ (5,348) $ 1,234 $ (4,114) Less: reclassification adjustment for gains realized in net income 1,980 (469) 1,511 Net unrealized loss on AFS securities (7,328) 1,703 (5,625) Net unrealized gain on hedging derivatives: Net unrealized gain arising during the period 2,311 (538) 1,773 Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized gain on cash flow hedging derivatives 2,311 (538) 1,773 Net unrealized loss on post-retirement plans: Net unrealized loss arising during the period — — — Less: reclassification adjustment for gains (losses) realized in net income — — — Net unrealized loss on post-retirement plans — — — Other comprehensive (loss) income $ (5,017) $ 1,165 $ (3,852) |
Schedule of Changes in Components of Accumulated Other Comprehensive Income (Loss) | Net unrealized Net gain (loss) on Net unrealized gain (loss) effective cash loss on AFS flow hedging on pension (in thousands) Securities derivatives plans Total Three Months Ended September 30, 2022 Balance at beginning of period $ (38,304) $ (2,115) $ (552) $ (40,971) Other comprehensive loss before reclassifications (20,377) (1,207) — (21,584) Less: amounts reclassified from accumulated other comprehensive income 34 — — 34 Total other comprehensive income (20,411) (1,207) — (21,618) Balance at end of period $ (58,715) $ (3,322) $ (552) $ (62,589) Three Months Ended September 30, 2021 Balance at beginning of period $ 7,237 $ 63 $ (1,418) $ 5,882 Other comprehensive gain before reclassifications (1,367) (155) — (1,522) Less: amounts reclassified from accumulated other comprehensive income 1,472 — — 1,472 Total other comprehensive income (2,839) (155) — (2,994) Balance at end of period $ 4,398 $ (92) $ (1,418) $ 2,888 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1,985 $ 870 $ (552) $ 2,303 Other comprehensive loss before reclassifications (60,659) (4,192) — (64,851) Less: amounts reclassified from accumulated other comprehensive income 41 — — 41 Total other comprehensive loss (60,700) (4,192) — (64,892) Balance at end of period $ (58,715) $ (3,322) $ (552) $ (62,589) Nine Months Ended September 30, 2021 Balance at beginning of period $ 10,023 $ (1,865) $ (1,418) $ 6,740 Other comprehensive (loss) gain before reclassifications (4,114) 1,773 — (2,341) Less: amounts reclassified from accumulated other comprehensive income 1,511 — — 1,511 Total other comprehensive (loss) gain (5,625) 1,773 — (3,852) Balance at end of period $ 4,398 $ (92) $ (1,418) $ 2,888 |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Three Months Ended September 30, Nine Months Ended September 30, Affected Line Item where (in thousands) 2022 2021 2022 2021 Net Income is Presented Net realized gains on AFS securities: Before tax (1) $ 44 $ 1,930 $ 53 $ 1,980 Non-interest income Tax effect (10) (458) (12) (469) Tax expense Total reclassifications for the period $ 34 $ 1,472 $ 41 $ 1,511 (1) Net realized gains before tax include $141 thousand realized gains for the three months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $150 thousand realized gains for the nine months ended September 30, 2022 and $97 thousand of gross realized losses. Net realized gains before tax include $1.9 million realized gains for the three months ended September 30, 2021 and $97 thousand of gross realized losses. Net realized gains before tax include $2.0 million realized gains for the nine months ended September 30, 2021 and $50 thousand of gross realized losses. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
Schedule of Earnings Per Share | Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share and share data) 2022 2021 2022 2021 Net income $ 11,430 $ 11,028 $ 31,045 $ 29,533 Average number of basic common shares outstanding 15,057,598 14,982,766 15,028,963 14,960,753 Plus: dilutive effect of stock options and awards outstanding 55,757 67,990 71,317 73,829 Average number of diluted common shares outstanding (1) 15,113,355 15,050,756 15,100,280 15,034,582 Earnings per share: Basic $ 0.76 $ 0.74 $ 2.07 $ 1.97 Diluted $ 0.76 $ 0.73 $ 2.06 $ 1.96 (1) Average diluted shares outstanding are computed using the treasury stock method. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of Information About Derivative Assets and Liabilities | September 30, 2022 Weighted Notional Average Fair Value Location Fair Amount Maturity Asset (Liability) Value Asset (in thousands) (in years) (in thousands) (Liability) Cash flow hedges: Interest rate swap on wholesale fundings $ 75,000 2.3 $ 5,153 Other assets Interest rate swap on variable rate loans 50,000 3.5 (5,289) Other liabilities Total cash flow hedges 125,000 (136) Fair value hedges: Interest rate swap on securities 37,190 6.8 5,017 Other assets Total fair value hedges 37,190 5,017 Economic hedges: Forward sale commitments 200 — 8 Other assets Customer Loan Swaps-MNA Counterparty 193,743 6.0 (21,795) Other liabilities Customer Loan Swaps-RPA Counterparty 110,317 6.3 — Other liabilities Customer Loan Swaps-Customer 304,060 6.1 21,795 Other assets Total economic hedges 608,320 8 Non-hedging derivatives: Interest rate lock commitments — — — Other assets Total non-hedging derivatives — — Total $ 770,510 $ 4,889 December 31, 2021 Weighted Notional Average Fair Value Location Fair Amount Maturity Asset (Liability) Value Asset (in thousands) (in years) (in thousands) (Liability) Cash flow hedges: Interest rate swap on wholesale fundings $ 75,000 3.0 $ (121) Other liabilities Interest rate swap on variable rate loans 50,000 4.2 (756) Other liabilities Total cash flow hedges 125,000 (877) Fair value hedges: Interest rate swap on securities 37,190 7.6 (530) Other liabilities Total fair value hedges 37,190 (530) Economic hedges: Forward sale commitments 16,600 0.1 15 Other assets Customer Loan Swaps-MNA Counterparty 260,102 6.2 (9,429) Other liabilities Customer Loan Swaps-RPA Counterparty 115,285 6.7 (4,421) Other liabilities Customer Loan Swaps-Customer 375,387 6.4 13,850 Other assets Total economic hedges 767,374 15 Non-hedging derivatives: Interest rate lock commitments 14,059 0.1 283 Other assets Total non-hedging derivatives 14,059 283 Total $ 943,623 $ (1,109) |
Schedule of Amounts Recorded On The Balance Sheet | Cumulative Amount of Fair Location of Hedged Item on Carrying Amount of Hedged Value Hedging Adjustment in Balance Sheet Assets Carrying Amount September 30, 2022 Interest rate swap on securities Securities Available for Sale $ 27,993 $ (9,197) December 31, 2021 Interest rate swap on securities Securities Available for Sale $ 39,726 $ 2,536 |
Schedule of Derivative Instruments Gain (Loss) | Three Months Ended September 30, 2022 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 1,262 Interest expense $ — Interest expense $ 140 Interest rate swap on variable rate loans (1,181) Interest income — Interest income (238) Total cash flow hedges 81 — (98) Fair value hedges: Interest rate swap on securities (1,287) Interest income — Interest income 155 Total fair value hedges (1,287) — 155 Economic hedges: Forward commitments — Other income — Mortgage banking income 19 Total economic hedges — — 19 Non-hedging derivatives: Interest rate lock commitments — Other expense — Mortgage banking income (50) Total non-hedging derivatives — — (50) Total $ (1,206) $ — $ 26 Nine Months Ended September 30, 2022 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 4,058 Interest expense $ — Interest expense $ (1) Interest rate swap on variable rate loans (3,489) Interest income — Interest income (239) Total cash flow hedges 569 — (240) Fair value hedges: Interest rate swap on securities (4,761) Interest income — Interest income (48) Total fair value hedges (4,761) — (48) Economic hedges: Forward commitments — Other income — Mortgage banking income (7) Total economic hedges — — (7) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income (283) Total non-hedging derivatives — — (283) Total $ (4,192) $ — $ (578) Three Months Ended September 30, 2021 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 167 Interest expense $ — Interest expense $ (205) Interest rate swap on variable rate loans (101) Interest income Interest income 92 Total cash flow hedges 66 — (113) Fair value hedges: Interest rate swap on securities (221) Interest income — Interest income (144) Total economic hedges (221) — (144) Economic hedges: Forward commitments — Other income — Mortgage banking income (96) Total economic hedges — — (96) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income 22 Total non-hedging derivatives — — 22 Total $ (155) $ — $ (331) Nine Months Ended September 30, 2021 Amount of Amount of Gain (Loss) Gain (Loss) Recognized in Reclassified Location of Amount of Other Location of Gain (Loss) from Other Gain (Loss) Gain (Loss) Comprehensive Reclassified from Other Comprehensive Recognized in Recognized (in thousands) Income (1) Comprehensive Income Income Income in Income Cash flow hedges: Interest rate swap on wholesale funding $ 1,148 Interest expense $ — Interest expense $ (589) Interest rate swap on variable rate loans (93) Interest income Interest income 189 Total cash flow hedges 1,055 — (400) Fair value hedges: Interest rate swap on securities 720 Interest income — Interest income (421) Total economic hedges 720 — (421) Economic hedges: Forward commitments — Other income — Mortgage banking income (45) Total economic hedges — — (45) Non-hedging derivatives: Interest rate lock commitments — Other income — Mortgage banking income 26 Total non-hedging derivatives — — 26 Total $ 1,775 $ — $ (840) |
Schedule of Gain Loss in Statement of Income | Three Months Ended September 30, 2022 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 27,940 $ 5,145 $ 1,801 $ 1,374 $ 8,823 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — 140 — Interest rate swap on variable rate loans (238) — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — 155 — — — Three Months Ended September 30, 2021 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 25,094 $ 3,821 $ 1,555 $ 1,778 $ 11,350 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (205) — Interest rate swap on variable rate loans 92 — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (144) — — — Nine Months Ended September 30, 2022 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 75,192 $ 13,178 $ 4,185 $ 3,458 $ 27,093 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (1) — Interest rate swap on variable rate loans (239) — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (48) — — — Nine Months Ended September 30, 2021 Interest and Dividend Income Interest Expense (in thousands) Loans Securities and other Deposits Borrowings Non-interest Income Income and expense line items presented in the consolidated statements of income $ 72,490 11,792 $ 7,109 5,415 $ 31,103 The effects of cash flow and fair value hedging: Gain (loss) on cash flow hedges: Interest rate swap on wholesale funding — — — (589) — Interest rate swap on variable rate loans 189 — — — — Gain (loss) on fair value hedges: Interest rate swap on securities — (421) — — — |
Schedule of Offsetting Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet Derivative Cash Collateral (in thousands) Liabilities Derivative Assets Pledged Net Amount As of September 30, 2022 Customer Loan Derivatives: MNA counterparty $ (21,795) $ 21,795 $ — $ — RPA counterparty — — — — Total $ (21,795) $ 21,795 $ — $ — Gross Amounts Offset in the Consolidated Balance Sheet Derivative Cash Collateral (in thousands) Liabilities Derivative Assets Pledged Net Amount As of December 31, 2021 Customer Loan Derivatives: MNA counterparty $ (9,429) $ 9,429 $ 12,000 $ 12,000 RPA counterparty (4,421) 4,421 — — Total $ (13,850) $ 13,850 $ 12,000 $ 12,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | September 30, 2022 Level 1 Level 2 Level 3 Total (in thousands) Inputs Inputs Inputs Fair Value Available for sale securities: Mortgage-backed securities: US Government-sponsored enterprises $ — $ 216,024 $ — $ 216,024 US Government agency — 83,526 — 83,526 Private label — 66,769 — 66,769 Obligations of states and political subdivisions thereof — 104,652 — 104,652 Corporate bonds — 85,781 — 85,781 Loans held for sale — 982 — 982 Derivative assets — 31,964 8 31,972 Derivative liabilities — (27,084) — (27,084) December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Inputs Inputs Inputs Fair Value Available for sale securities: Mortgage-backed securities: US Government-sponsored enterprises $ — $ 236,117 $ — $ 236,117 US Government agency — 79,637 — 79,637 Private label — 68,695 — 68,695 Obligations of states and political subdivisions thereof — 141,776 — 141,776 Corporate bonds — 92,051 — 92,051 Loans held for sale — 5,523 — 5,523 Derivative assets — 13,850 298 14,148 Derivative liabilities — (15,257) — (15,257) |
Schedule of Changes in Level 3 Assets Measured on a Recurring Basis | Assets (Liabilities) Interest Rate Lock Forward (in thousands) Commitments Commitments Three Months Ended September 30, 2022 Balance at beginning of period $ 50 $ (11) Realized gain (loss) recognized in non-interest income (50) 19 Balance at end of period $ — $ 8 Three Months Ended September 30, 2021 Balance at beginning of period $ 25 $ (45) Realized (loss) gain recognized in non-interest income 22 (95) Balance at end of period $ 47 $ (140) Nine Months Ended September 30, 2022 Balance at beginning of period $ 283 $ 15 Realized loss recognized in non-interest income (283) (7) Balance at end of period $ — $ 8 Nine Months Ended September 30, 2021 Balance at beginning of period $ 22 $ (95) Realized gain recognized in non-interest income 25 (45) Balance at end of period $ 47 $ (140) |
Schedule of Changes in Level 3 Liabilities Measured on a Recurring Basis | Assets (Liabilities) Interest Rate Lock Forward (in thousands) Commitments Commitments Three Months Ended September 30, 2022 Balance at beginning of period $ 50 $ (11) Realized gain (loss) recognized in non-interest income (50) 19 Balance at end of period $ — $ 8 Three Months Ended September 30, 2021 Balance at beginning of period $ 25 $ (45) Realized (loss) gain recognized in non-interest income 22 (95) Balance at end of period $ 47 $ (140) Nine Months Ended September 30, 2022 Balance at beginning of period $ 283 $ 15 Realized loss recognized in non-interest income (283) (7) Balance at end of period $ — $ 8 Nine Months Ended September 30, 2021 Balance at beginning of period $ 22 $ (95) Realized gain recognized in non-interest income 25 (45) Balance at end of period $ 47 $ (140) |
Schedule of Quantitative Information, Valuation, Recurring | Fair Value Significant September 30, Valuation Unobservable Unobservable (in thousands, except ratios) 2022 Techniques Inputs Input Value Assets (Liabilities) Interest Rate Lock Commitment $ — Pull-through Rate Analysis Closing Ratio — % Pricing Model Origination Costs, per loan $ — Discount Cash Flows Mortgage Servicing Asset — % Forward Commitments 8 Quoted prices for similar loans in active markets Freddie Mac pricing system $97.2 to $101.4 Total $ 8 Fair Value Significant December 31, Valuation Unobservable Unobservable (in thousands, except ratios) 2021 Techniques Inputs Input Value Assets (Liabilities) Interest Rate Lock Commitment $ 283 Pull-through Rate Analysis Closing Ratio 85 % Pricing Model Origination Costs, per loan $ 1.7 Discount Cash Flows Mortgage Servicing Asset 1.0 % Forward Commitments 15 Quoted prices for similar loans in active markets Freddie Mac pricing system $99.8 to $103.2 Total $ 298 |
Summary of Applicable Non-Recurring Fair Value Measurements | September 30, 2022 December 31, 2021 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Fair Value Measurement Date as of September 30, 2022 Level 3 Level 3 Total Total Level 3 (in thousands) Inputs Inputs Gains (Losses) Gains (Losses) Inputs Assets Individually evaluated loans $ 15,388 $ 17,932 $ 1,778 $ (2,544) September 2022 Capitalized servicing rights 7,127 5,263 84 1,864 September 2022 Premises held for sale 327 226 — 101 February 2022 Total $ 22,842 $ 23,421 $ 1,862 $ (579) |
Schedule of Quantitative Information, Valuation, Non-recurring | (in thousands, except ratios) Fair Value September 30, 2022 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) Assets Individually evaluated loans $ 10,903 Fair value of collateral-appraised value Loss severity 10% to 70% Appraised value $80 to $1,175 Individually evaluated loans 4,485 Discount cash flow Discount rate 2.88% to 6.45% Cash flows $4 to $925 Capitalized servicing rights 7,127 Discounted cash flow Constant prepayment rate (CPR) 7.10% Discount rate 9.54% Premises held for sale 327 Fair value of asset less selling costs Appraised value $347 Selling Costs 6% Total $ 22,842 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. (in thousands, except ratios) Fair Value December 31, 2021 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) Assets Individually evaluated loans $ 12,127 Fair value of collateral-appraised value Loss severity 10% to 70% Appraised value $71 to $1,792 Individually evaluated loans 5,805 Discount cash flow Discount rate 2.88% to 9.50% Cash flows $6 to $931 Capitalized servicing rights 5,263 Discounted cash flow Constant prepayment rate (CPR) 12.47% Discount rate 9.53% Premises held for sale 226 Fair value of asset less selling costs Appraised value $240 Selling Costs 6% Total $ 23,421 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. |
Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments | September 30, 2022 Carrying Fair (in thousands) Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 82,065 $ 82,065 $ 82,065 $ — $ — Securities available for sale 556,752 556,752 — 556,752 — FHLB stock 9,035 9,035 — 9,035 — Loans held for sale 987 982 — 982 — Net loans 2,850,364 2,783,612 — — 2,783,612 Accrued interest receivable 4,053 4,053 — 4,053 — Cash surrender value of bank-owned life insurance policies 80,758 80,758 — 80,758 — Derivative assets 31,973 31,973 — 31,973 8 Financial Liabilities Non-maturity deposits $ 2,801,432 $ 2,616,000 $ — $ 2,616,000 $ — Time deposits 334,248 330,059 — 330,059 — Securities sold under agreements to repurchase 18,916 18,916 — 18,916 — FHLB advances 169,841 169,459 — 169,459 — Subordinated borrowings 60,248 57,744 — 57,744 — Derivative liabilities 27,084 27,084 — 27,084 — December 31, 2021 Carrying Fair (in thousands) Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 250,389 $ 250,389 $ 250,389 $ — $ — Securities available for sale 618,276 618,276 — 618,276 — FHLB stock 7,384 7,384 — 7,384 — Loans held for sale 5,523 5,523 — 5,523 — Net loans 2,509,192 2,442,741 — — 2,442,741 Accrued interest receivable 2,712 2,712 — 2,712 — Cash surrender value of bank-owned life insurance policies 79,020 79,020 — 79,020 — Derivative assets 14,148 14,148 — 13,850 298 Financial Liabilities Non-maturity deposits $ 2,623,012 $ 2,853,000 $ — $ 2,853,000 $ — Time deposits 425,532 424,000 — 424,000 — Securities sold under agreements to repurchase 19,802 19,802 — 19,802 — FHLB advances 98,598 98,439 — 98,439 — Subordinated borrowings 60,124 61,884 — 61,884 — Derivative liabilities 15,257 15,257 — 15,257 — |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Disaggregation of Revenue | Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Major Products/Service Lines Trust management fees $ 3,077 $ 3,403 $ 9,941 $ 10,052 Financial services fees 471 465 1,190 1,283 Interchange fees 1,953 1,882 5,849 5,509 Customer deposit fees 1,578 1,363 4,418 3,542 Other customer service fees 305 270 841 691 Total $ 7,384 $ 7,383 $ 22,239 $ 21,077 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Timing of Revenue Recognition Products and services transferred at a point in time $ 4,020 $ 3,737 $ 11,755 $ 10,593 Products and services transferred over time 3,364 3,646 10,484 10,484 Total $ 7,384 $ 7,383 $ 22,239 $ 21,077 |
Contract Balances from Contracts with Customers | (in thousands) September 30, 2022 December 31, 2021 Balances from contracts with customers only: Other Assets $ 1,325 $ 1,184 Other Liabilities 2,535 2,324 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
ROU Assets and Liabilities | (in thousands) Classification September 30, 2022 December 31, 2021 Lease Right-of-Use Assets Operating lease right-of-use assets Other assets $ 8,381 $ 9,274 Lease Liabilities Operating lease liabilities Other liabilities 8,791 9,643 |
Additional Information Regarding Leases | September 30, 2022 December 31, 2021 Weighted-average remaining lease term (in years) Operating leases 7.42 8.03 Weighted-average discount rate Operating leases 3.09 % 3.07 % Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Lease Costs Operating lease cost $ 338 $ 324 $ 994 $ 966 Variable lease cost 71 43 345 179 Total lease cost $ 409 $ 367 $ 1,339 $ 1,145 |
Future Minimum Payments for Leases | (in thousands) Payments Twelve Months Ended: September 30, 2023 $ 1,343 September 30, 2024 1,344 September 30, 2025 1,129 September 30, 2026 1,032 September 30, 2027 889 Thereafter 3,411 Total future minimum lease payments 9,148 Amounts representing interest (357) Present value of net future minimum lease payments $ 8,791 |
SECURITIES AVAILABLE FOR SALE -
SECURITIES AVAILABLE FOR SALE - Summary of Securities Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investment Holdings [Line Items] | ||
Amortized Cost | $ 633,358 | $ 615,696 |
Gross Unrealized Gains | 9,280 | 7,415 |
Gross Unrealized Losses | (85,886) | (4,835) |
Fair Value | 556,752 | 618,276 |
US Government-sponsored enterprises | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 252,369 | 237,283 |
Gross Unrealized Gains | 4 | 2,289 |
Gross Unrealized Losses | (36,349) | (3,455) |
Fair Value | 216,024 | 236,117 |
US Government agency | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 93,643 | 79,143 |
Gross Unrealized Gains | 11 | 1,016 |
Gross Unrealized Losses | (10,128) | (522) |
Fair Value | 83,526 | 79,637 |
Private label | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 72,484 | 68,691 |
Gross Unrealized Gains | 34 | 142 |
Gross Unrealized Losses | (5,749) | (138) |
Fair Value | 66,769 | 68,695 |
Obligations of states and political subdivisions thereof | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 123,350 | 140,585 |
Gross Unrealized Gains | 9,205 | 1,489 |
Gross Unrealized Losses | (27,903) | (298) |
Fair Value | 104,652 | 141,776 |
Corporate bonds | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 91,512 | 89,994 |
Gross Unrealized Gains | 26 | 2,479 |
Gross Unrealized Losses | (5,757) | (422) |
Fair Value | $ 85,781 | $ 92,051 |
SECURITIES AVAILABLE FOR SALE_2
SECURITIES AVAILABLE FOR SALE - Maturity of Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Within 1 year | $ 195 | |
Over 1 year to 5 years | 30,292 | |
Over 5 years to 10 years | 49,666 | |
Over 10 years | 134,709 | |
Total bonds and obligations | 214,862 | |
Mortgage-backed securities | 418,496 | |
Amortized Cost | 633,358 | $ 615,696 |
Fair Value | ||
Within 1 year | 196 | |
Over 1 year to 5 years | 28,426 | |
Over 5 years to 10 years | 55,025 | |
Over 10 years | 106,786 | |
Total bonds and obligations | 190,433 | |
Mortgage-backed securities | 366,319 | |
Total securities available for sale | $ 556,752 | $ 618,276 |
SECURITIES AVAILABLE FOR SALE_3
SECURITIES AVAILABLE FOR SALE - Gains and Losses from AFS Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
SECURITIES AVAILABLE FOR SALE | ||||
Gross gains on sales of available for sale securities | $ 142 | $ 1,980 | $ 151 | $ 2,030 |
Gross losses on sales of available for sale securities | (98) | (50) | (98) | (50) |
Net gains on sale of available for sale securities | $ 44 | $ 1,930 | $ 53 | $ 1,980 |
SECURITIES AVAILABLE FOR SALE_4
SECURITIES AVAILABLE FOR SALE - Summary of Securities with Unrealized Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Gross Unrealized Losses | ||
Less Than Twelve Months | $ 52,514 | $ 2,384 |
Over Twelve Months | 33,372 | 2,451 |
Total | 85,886 | 4,835 |
Fair Value | ||
Less Than Twelve Months | 382,870 | 263,016 |
Over Twelve Months | 162,442 | 62,332 |
Total | 545,312 | 325,348 |
US Government-sponsored enterprises | ||
Gross Unrealized Losses | ||
Less Than Twelve Months | 18,262 | 1,589 |
Over Twelve Months | 18,087 | 1,866 |
Total | 36,349 | 3,455 |
Fair Value | ||
Less Than Twelve Months | 139,219 | 127,780 |
Over Twelve Months | 76,291 | 39,717 |
Total | 215,510 | 167,497 |
US Government agency | ||
Gross Unrealized Losses | ||
Less Than Twelve Months | 6,591 | 381 |
Over Twelve Months | 3,537 | 141 |
Total | 10,128 | 522 |
Fair Value | ||
Less Than Twelve Months | 64,575 | 32,628 |
Over Twelve Months | 17,021 | 4,548 |
Total | 81,596 | 37,176 |
Private label | ||
Gross Unrealized Losses | ||
Less Than Twelve Months | 3,466 | 133 |
Over Twelve Months | 2,283 | 5 |
Total | 5,749 | 138 |
Fair Value | ||
Less Than Twelve Months | 35,740 | 44,372 |
Over Twelve Months | 30,994 | 16 |
Total | 66,734 | 44,388 |
Obligations of states and political subdivisions thereof | ||
Gross Unrealized Losses | ||
Less Than Twelve Months | 20,425 | 187 |
Over Twelve Months | 7,478 | 111 |
Total | 27,903 | 298 |
Fair Value | ||
Less Than Twelve Months | 78,085 | 36,878 |
Over Twelve Months | 21,373 | 6,129 |
Total | 99,458 | 43,007 |
Corporate bonds | ||
Gross Unrealized Losses | ||
Less Than Twelve Months | 3,770 | 94 |
Over Twelve Months | 1,987 | 328 |
Total | 5,757 | 422 |
Fair Value | ||
Less Than Twelve Months | 65,251 | 21,358 |
Over Twelve Months | 16,763 | 11,922 |
Total | $ 82,014 | $ 33,280 |
SECURITIES AVAILABLE FOR SALE_5
SECURITIES AVAILABLE FOR SALE - Basis for Impairment Conclusion (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) security | Dec. 31, 2021 USD ($) | |
Accounting Standards Update 2016-13 | ||
Investment Holdings [Line Items] | ||
Allowance on AFS debt securities | $ | $ 0 | $ 0 |
US Government-sponsored enterprises | ||
Investment Holdings [Line Items] | ||
Available-for-sale, securities in unrealized loss positions (security) | 489 | |
Available for sale securities portfolio, number of securities (security) | 521 | |
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses (percentage) | 14.55% | |
US Government agency | ||
Investment Holdings [Line Items] | ||
Available-for-sale, securities in unrealized loss positions (security) | 139 | |
Available for sale securities portfolio, number of securities (security) | 161 | |
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses (percentage) | 11.04% | |
Private label | ||
Investment Holdings [Line Items] | ||
Available-for-sale, securities in unrealized loss positions (security) | 33 | |
Available for sale securities portfolio, number of securities (security) | 35 | |
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses (percentage) | 7.93% | |
Obligations of states and political subdivisions thereof | ||
Investment Holdings [Line Items] | ||
Available-for-sale, securities in unrealized loss positions (security) | 68 | |
Available for sale securities portfolio, number of securities (security) | 83 | |
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses (percentage) | 22.06% | |
Corporate bonds | ||
Investment Holdings [Line Items] | ||
Available-for-sale, securities in unrealized loss positions (security) | 26 | |
Available for sale securities portfolio, number of securities (security) | 31 | |
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses (percentage) | 7.07% |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Total Loans (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | $ 2,850,364 | $ 2,531,910 | ||||
Allowance for credit losses | 25,018 | 22,718 | $ 23,756 | $ 22,448 | $ 22,815 | $ 19,082 |
Net loans | 2,825,346 | 2,509,192 | ||||
Accrued interest receivable for loans | 8,800 | 6,300 | ||||
Tax exempt | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 41,622 | 41,280 | ||||
Allowance for credit losses | 94 | 86 | 105 | 85 | 91 | 58 |
Net loans | 41,622 | 41,280 | ||||
Home equity | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 92,296 | 86,657 | ||||
Allowance for credit losses | 791 | 814 | 865 | 804 | 822 | 285 |
Net loans | $ 92,296 | $ 86,657 | ||||
Paycheck Protection Program [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of loans outstanding | loan | 0 | 61 | ||||
Outstanding principal balance | $ 6,700 | |||||
Total commercial loans | Construction and land development | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | $ 97,156 | 56,263 | ||||
Allowance for credit losses | 1,223 | 2,111 | 1,010 | 2,086 | 2,372 | 824 |
Net loans | 97,156 | 56,263 | ||||
Total commercial real estate | Commercial real estate owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 256,475 | 257,122 | ||||
Allowance for credit losses | 2,861 | 2,751 | 2,722 | 2,719 | 2,552 | 1,783 |
Net loans | 256,475 | 257,122 | ||||
Total commercial real estate | Commercial real estate non-owner occupied | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 1,081,924 | 887,092 | ||||
Allowance for credit losses | 7,971 | 5,650 | 7,361 | 5,582 | 5,604 | 7,864 |
Net loans | 1,081,924 | 887,092 | ||||
Total commercial and industrial | Commercial and industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 319,645 | 307,112 | ||||
Allowance for credit losses | 5,122 | 5,369 | 4,820 | 5,306 | 5,225 | 3,137 |
Net loans | 319,645 | 307,112 | ||||
Total residential real estate | Residential mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 953,113 | 888,263 | ||||
Allowance for credit losses | 6,886 | 5,862 | 6,806 | 5,792 | 6,069 | 5,010 |
Total consumer | Other consumer | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Total loans | 8,133 | 8,121 | ||||
Allowance for credit losses | $ 70 | $ 75 | $ 67 | $ 74 | $ 80 | $ 121 |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Unamortized Net Costs and Premiums (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | ||
Net unamortized loan origination costs | $ 3,367 | $ 3,014 |
Net unamortized fair value discount on acquired loans | (3,898) | (4,758) |
Total | $ (531) | $ (1,744) |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Activity in the allowance for loan losses | ||||
Balance at beginning of period | $ 23,756 | $ 22,815 | $ 22,718 | $ 19,082 |
Charged-off loans | (85) | (286) | (227) | (741) |
Recoveries on charged-off loans | 41 | 93 | 310 | 307 |
Provision for credit losses | 1,306 | (174) | 2,217 | (1,428) |
Balance at end of period | 25,018 | 22,448 | 25,018 | 22,448 |
impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 5,228 | |||
Construction and land development | Total commercial loans | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 1,010 | 2,372 | 2,111 | 824 |
Recoveries on charged-off loans | 18 | |||
Provision for credit losses | 213 | (286) | (888) | 48 |
Balance at end of period | 1,223 | 2,086 | 1,223 | 2,086 |
Construction and land development | Total commercial loans | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 1,196 | |||
Commercial real estate owner occupied | Total commercial real estate | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 2,722 | 2,552 | 2,751 | 1,783 |
Charged-off loans | (142) | (403) | ||
Recoveries on charged-off loans | 7 | 72 | 120 | 72 |
Provision for credit losses | 132 | 237 | (10) | 559 |
Balance at end of period | 2,861 | 2,719 | 2,861 | 2,719 |
Commercial real estate owner occupied | Total commercial real estate | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 708 | |||
Commercial real estate non-owner occupied | Total commercial real estate | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 7,361 | 5,604 | 5,650 | 7,864 |
Recoveries on charged-off loans | 4 | |||
Provision for credit losses | 610 | (22) | 2,321 | (278) |
Balance at end of period | 7,971 | 5,582 | 7,971 | 5,582 |
Commercial real estate non-owner occupied | Total commercial real estate | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | (2,008) | |||
Tax exempt | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 105 | 91 | 86 | 58 |
Provision for credit losses | (11) | (6) | 8 | (13) |
Balance at end of period | 94 | 85 | 94 | 85 |
Tax exempt | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 40 | |||
Commercial and industrial | Total commercial and industrial | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 4,820 | 5,225 | 5,369 | 3,137 |
Charged-off loans | (8) | (24) | (14) | (44) |
Recoveries on charged-off loans | 20 | 56 | 14 | |
Provision for credit losses | 290 | 105 | (289) | (797) |
Balance at end of period | 5,122 | 5,306 | 5,122 | 5,306 |
Commercial and industrial | Total commercial and industrial | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 2,996 | |||
Residential mortgages | Total residential real estate | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 6,806 | 6,069 | 5,862 | 5,010 |
Charged-off loans | (11) | (6) | (26) | (67) |
Recoveries on charged-off loans | 6 | 19 | 103 | 141 |
Provision for credit losses | 85 | (290) | 947 | (1,024) |
Balance at end of period | 6,886 | 5,792 | 6,886 | 5,792 |
Residential mortgages | Total residential real estate | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 1,732 | |||
Home equity | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 865 | 822 | 814 | 285 |
Charged-off loans | (49) | (6) | (108) | |
Recoveries on charged-off loans | 2 | 1 | 22 | 48 |
Provision for credit losses | (76) | 30 | (39) | (24) |
Balance at end of period | 791 | 804 | 791 | 804 |
Home equity | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 603 | |||
Other consumer | Total consumer | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 67 | 80 | 75 | 121 |
Charged-off loans | (66) | (65) | (181) | (119) |
Recoveries on charged-off loans | 6 | 1 | 9 | 10 |
Provision for credit losses | 63 | 58 | 167 | 101 |
Balance at end of period | 70 | 74 | 70 | 74 |
Other consumer | Total consumer | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | (39) | |||
Unfunded Loan Commitment | ||||
Activity in the allowance for loan losses | ||||
Balance at beginning of period | 2,523 | 1,921 | 2,152 | 359 |
Provision for credit losses | (26) | 280 | 345 | 226 |
Balance at end of period | $ 2,497 | 2,201 | $ 2,497 | 2,201 |
Unfunded Loan Commitment | impact of ASC 326 | ||||
Activity in the allowance for loan losses | ||||
Balance at end of period | $ 1,616 | $ 1,616 |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loans by Credit Risk Rating (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Credit quality information | ||
2022 | $ 588,222 | $ 557,128 |
2021 | 559,471 | 416,298 |
2020 | 384,088 | 302,564 |
2019 | 234,917 | 201,660 |
2018 | 171,609 | 261,099 |
Prior | 912,057 | 793,161 |
Total | 2,825,346 | 2,509,192 |
Total | 2,850,364 | 2,531,910 |
Construction and land development | Total commercial loans | ||
Credit quality information | ||
2022 | 34,032 | 22,866 |
2021 | 32,179 | 4,787 |
2020 | 28,961 | 19,211 |
2019 | 1,011 | 9,399 |
2018 | 973 | |
Total | 97,156 | 56,263 |
Total | 97,156 | 56,263 |
Construction and land development | Pass | Total commercial loans | ||
Credit quality information | ||
2022 | 34,032 | 22,866 |
2021 | 32,179 | 4,787 |
2020 | 5,928 | 19,211 |
2019 | 1,011 | 9,399 |
2018 | 973 | |
Total | 74,123 | 56,263 |
Construction and land development | Special mention | Total commercial loans | ||
Credit quality information | ||
2020 | 23,033 | |
Total | 23,033 | |
Commercial real estate owner occupied | Total commercial real estate | ||
Credit quality information | ||
2022 | 20,248 | 12,940 |
2021 | 12,973 | 25,240 |
2020 | 24,030 | 35,543 |
2019 | 32,467 | 50,156 |
2018 | 49,317 | 19,539 |
Prior | 117,440 | 113,704 |
Total | 256,475 | 257,122 |
Total | 256,475 | 257,122 |
Commercial real estate owner occupied | Pass | Total commercial real estate | ||
Credit quality information | ||
2022 | 20,248 | 12,940 |
2021 | 12,973 | 25,240 |
2020 | 23,785 | 34,782 |
2019 | 31,795 | 49,136 |
2018 | 47,090 | 19,292 |
Prior | 110,306 | 103,144 |
Total | 246,197 | 244,534 |
Commercial real estate owner occupied | Special mention | Total commercial real estate | ||
Credit quality information | ||
2020 | 245 | 760 |
2019 | 672 | |
2018 | 1,145 | |
Prior | 1,711 | 2,659 |
Total | 3,773 | 3,419 |
Commercial real estate owner occupied | Substandard | Total commercial real estate | ||
Credit quality information | ||
2020 | 1 | |
2019 | 853 | |
2018 | 931 | 247 |
Prior | 5,276 | 7,737 |
Total | 6,207 | 8,838 |
Commercial real estate owner occupied | Doubtful | Total commercial real estate | ||
Credit quality information | ||
2019 | 167 | |
2018 | 151 | |
Prior | 147 | 164 |
Total | 298 | 331 |
Commercial real estate non-owner occupied | Total commercial real estate | ||
Credit quality information | ||
2022 | 283,316 | 235,646 |
2021 | 249,574 | 172,785 |
2020 | 146,764 | 119,500 |
2019 | 89,564 | 39,663 |
2018 | 36,589 | 136,120 |
Prior | 276,117 | 183,378 |
Total | 1,081,924 | 887,092 |
Total | 1,081,924 | 887,092 |
Commercial real estate non-owner occupied | Pass | Total commercial real estate | ||
Credit quality information | ||
2022 | 283,316 | 235,646 |
2021 | 249,574 | 172,785 |
2020 | 146,764 | 119,326 |
2019 | 89,252 | 39,663 |
2018 | 35,671 | 136,120 |
Prior | 259,250 | 165,329 |
Total | 1,063,827 | 868,869 |
Commercial real estate non-owner occupied | Special mention | Total commercial real estate | ||
Credit quality information | ||
2020 | 174 | |
2019 | 139 | |
2018 | 918 | |
Prior | 14,665 | 14,789 |
Total | 15,722 | 14,963 |
Commercial real estate non-owner occupied | Substandard | Total commercial real estate | ||
Credit quality information | ||
2019 | 173 | |
Prior | 2,048 | 3,097 |
Total | 2,221 | 3,097 |
Commercial real estate non-owner occupied | Doubtful | Total commercial real estate | ||
Credit quality information | ||
Prior | 154 | 163 |
Total | 154 | 163 |
Tax exempt | ||
Credit quality information | ||
2022 | 6,944 | 1,249 |
2021 | 1,044 | 299 |
2020 | 256 | 968 |
2019 | 778 | 14,408 |
2018 | 13,276 | 5,329 |
Prior | 19,324 | 19,027 |
Total | 41,622 | 41,280 |
Total | 41,622 | 41,280 |
Tax exempt | Pass | ||
Credit quality information | ||
2022 | 6,944 | 1,249 |
2021 | 1,044 | 299 |
2020 | 256 | 968 |
2019 | 778 | 14,408 |
2018 | 13,276 | 5,329 |
Prior | 19,324 | 19,027 |
Total | 41,622 | 41,280 |
Commercial and industrial | Total commercial and industrial | ||
Credit quality information | ||
2022 | 57,719 | 77,666 |
2021 | 71,030 | 80,572 |
2020 | 60,505 | 34,501 |
2019 | 31,020 | 16,925 |
2018 | 11,569 | 33,725 |
Prior | 87,802 | 63,723 |
Total | 319,645 | 307,112 |
Total | 319,645 | 307,112 |
Commercial and industrial | Pass | Total commercial and industrial | ||
Credit quality information | ||
2022 | 56,222 | 77,608 |
2021 | 70,975 | 80,569 |
2020 | 60,338 | 33,405 |
2019 | 29,867 | 16,457 |
2018 | 11,053 | 33,413 |
Prior | 84,792 | 61,594 |
Total | 313,247 | 303,046 |
Commercial and industrial | Special mention | Total commercial and industrial | ||
Credit quality information | ||
2022 | 1,497 | |
2020 | 155 | 584 |
2019 | 1,083 | 468 |
2018 | 516 | 172 |
Prior | 2,432 | 1,396 |
Total | 5,683 | 2,620 |
Commercial and industrial | Substandard | Total commercial and industrial | ||
Credit quality information | ||
2022 | 58 | |
2021 | 55 | 3 |
2020 | 12 | 512 |
2019 | 70 | |
2018 | 48 | |
Prior | 514 | 578 |
Total | 651 | 1,199 |
Commercial and industrial | Doubtful | Total commercial and industrial | ||
Credit quality information | ||
2018 | 92 | |
Prior | 64 | 155 |
Total | 64 | 247 |
Residential mortgages | Residential real estate | ||
Credit quality information | ||
2022 | 170,291 | 191,466 |
2021 | 178,923 | 120,495 |
2020 | 113,573 | 83,044 |
2019 | 71,919 | 62,585 |
2018 | 52,231 | 59,820 |
Prior | 366,176 | 370,853 |
Total | 953,113 | 888,263 |
Residential mortgages | Performing | Residential real estate | ||
Credit quality information | ||
2022 | 170,291 | 191,466 |
2021 | 178,875 | 120,495 |
2020 | 113,573 | 83,044 |
2019 | 71,869 | 62,299 |
2018 | 51,588 | 59,642 |
Prior | 361,823 | 364,482 |
Total | 948,019 | 881,428 |
Residential mortgages | Nonperforming | Residential real estate | ||
Credit quality information | ||
2021 | 48 | |
2019 | 50 | 286 |
2018 | 643 | 178 |
Prior | 4,353 | 6,371 |
Total | 5,094 | 6,835 |
Home equity | ||
Credit quality information | ||
2022 | 11,839 | 12,770 |
2021 | 12,152 | 10,461 |
2020 | 8,965 | 9,005 |
2019 | 7,796 | 7,855 |
2018 | 7,326 | 6,474 |
Prior | 44,218 | 40,092 |
Total | 92,296 | 86,657 |
Total | 92,296 | 86,657 |
Home equity | Performing | ||
Credit quality information | ||
2022 | 11,839 | 12,770 |
2021 | 12,152 | 10,461 |
2020 | 8,965 | 9,005 |
2019 | 7,796 | 7,855 |
2018 | 7,326 | 6,474 |
Prior | 43,173 | 38,823 |
Total | 91,251 | 85,388 |
Home equity | Nonperforming | ||
Credit quality information | ||
Prior | 1,045 | 1,269 |
Total | 1,045 | 1,269 |
Other consumer | Consumer | ||
Credit quality information | ||
2022 | 3,833 | 2,525 |
2021 | 1,596 | 1,659 |
2020 | 1,034 | 792 |
2019 | 362 | 669 |
2018 | 328 | 92 |
Prior | 980 | 2,384 |
Total | 8,133 | 8,121 |
Other consumer | Performing | Consumer | ||
Credit quality information | ||
2022 | 3,833 | 2,525 |
2021 | 1,596 | 1,659 |
2020 | 1,029 | 792 |
2019 | 362 | 669 |
2018 | 328 | 92 |
Prior | 980 | 2,379 |
Total | 8,128 | 8,116 |
Other consumer | Nonperforming | Consumer | ||
Credit quality information | ||
2020 | 5 | |
Prior | 5 | |
Total | $ 5 | $ 5 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Past Due Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Total loans | $ 2,850,364 | $ 2,531,910 |
Past Due More Than 90 days and Accruing | 259 | 134 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 1,427 | 6,959 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 1,268 | 1,712 |
90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 2,271 | 1,705 |
Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 4,966 | 10,376 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 2,845,398 | 2,521,534 |
Construction and land development | Total commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 97,156 | 56,263 |
Construction and land development | Total commercial loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 97,156 | 56,263 |
Commercial real estate owner occupied | Total commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 256,475 | 257,122 |
Commercial real estate owner occupied | Total commercial real estate | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 84 | 1,190 |
Commercial real estate owner occupied | Total commercial real estate | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 7 | |
Commercial real estate owner occupied | Total commercial real estate | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 1 | |
Commercial real estate owner occupied | Total commercial real estate | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 84 | 1,198 |
Commercial real estate owner occupied | Total commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 256,391 | 255,924 |
Commercial real estate non-owner occupied | Total commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,081,924 | 887,092 |
Commercial real estate non-owner occupied | Total commercial real estate | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 298 | |
Commercial real estate non-owner occupied | Total commercial real estate | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 173 | |
Commercial real estate non-owner occupied | Total commercial real estate | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 471 | |
Commercial real estate non-owner occupied | Total commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 1,081,453 | 887,092 |
Tax exempt | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 41,622 | 41,280 |
Tax exempt | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 41,622 | 41,280 |
Commercial and industrial | Total commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 319,645 | 307,112 |
Past Due More Than 90 days and Accruing | 2 | 30 |
Commercial and industrial | Total commercial and industrial | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 200 | 31 |
Commercial and industrial | Total commercial and industrial | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 100 | 318 |
Commercial and industrial | Total commercial and industrial | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 12 | 185 |
Commercial and industrial | Total commercial and industrial | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 312 | 534 |
Commercial and industrial | Total commercial and industrial | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 319,333 | 306,578 |
Residential mortgages | Total residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 953,113 | 888,263 |
Past Due More Than 90 days and Accruing | 242 | 41 |
Residential mortgages | Total residential real estate | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 565 | 5,010 |
Residential mortgages | Total residential real estate | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 928 | 1,238 |
Residential mortgages | Total residential real estate | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 1,882 | 1,416 |
Residential mortgages | Total residential real estate | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 3,375 | 7,664 |
Residential mortgages | Total residential real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 949,738 | 880,599 |
Home equity | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 92,296 | 86,657 |
Past Due More Than 90 days and Accruing | 15 | 63 |
Home equity | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 269 | 699 |
Home equity | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 236 | 149 |
Home equity | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 204 | 101 |
Home equity | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 709 | 949 |
Home equity | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 91,587 | 85,708 |
Other consumer | Total consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 8,133 | 8,121 |
Other consumer | Total consumer | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 11 | 29 |
Other consumer | Total consumer | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 4 | |
Other consumer | Total consumer | 90 Days or Greater Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 2 | |
Other consumer | Total consumer | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | 15 | 31 |
Other consumer | Total consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans: | $ 8,118 | $ 8,090 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Non-accrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Non-accrual loans | ||
Total loans | $ 7,773 | $ 10,191 |
Nonaccrual With No Related Allowance | 2,597 | 4,267 |
Nonaccrual, Past Due 90 days and Accruing | 259 | 134 |
Commercial real estate owner occupied | Total commercial real estate | ||
Non-accrual loans | ||
Total loans | 604 | 783 |
Nonaccrual With No Related Allowance | 371 | 424 |
Commercial real estate non-owner occupied | Total commercial real estate | ||
Non-accrual loans | ||
Total loans | 747 | 622 |
Nonaccrual With No Related Allowance | 430 | 459 |
Commercial and industrial | Total commercial and industrial | ||
Non-accrual loans | ||
Total loans | 279 | 677 |
Nonaccrual With No Related Allowance | 187 | 542 |
Nonaccrual, Past Due 90 days and Accruing | 2 | 30 |
Residential mortgages | Total residential real estate | ||
Non-accrual loans | ||
Total loans | 5,094 | 6,835 |
Nonaccrual With No Related Allowance | 1,539 | 2,537 |
Nonaccrual, Past Due 90 days and Accruing | 242 | 41 |
Home equity | ||
Non-accrual loans | ||
Total loans | 1,044 | 1,269 |
Nonaccrual With No Related Allowance | 70 | 305 |
Nonaccrual, Past Due 90 days and Accruing | 15 | 63 |
Other consumer | Total consumer | ||
Non-accrual loans | ||
Total loans | $ 5 | $ 5 |
LOANS AND ALLOWANCE FOR CREDI_9
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loans Evaluated for Impairment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | $ 2,825,346 | $ 2,509,192 |
Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 7,616 | 9,899 |
Other Collateral Loans | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 157 | 292 |
Construction and land development | Total commercial loans | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 97,156 | 56,263 |
Commercial real estate owner occupied | Total commercial real estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 256,475 | 257,122 |
Commercial real estate owner occupied | Total commercial real estate | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 604 | 783 |
Commercial real estate non-owner occupied | Total commercial real estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 1,081,924 | 887,092 |
Commercial real estate non-owner occupied | Total commercial real estate | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 747 | 622 |
Tax exempt | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 41,622 | 41,280 |
Commercial and industrial | Total commercial and industrial | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 319,645 | 307,112 |
Commercial and industrial | Total commercial and industrial | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 122 | 385 |
Commercial and industrial | Total commercial and industrial | Other Collateral Loans | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 157 | 292 |
Residential mortgages | Total residential real estate | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 5,094 | 6,835 |
Home equity | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 92,296 | 86,657 |
Home equity | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | 1,044 | 1,269 |
Other consumer | Total consumer | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Net Amount | $ 5 | $ 5 |
LOANS AND ALLOWANCE FOR CRED_10
LOANS AND ALLOWANCE FOR CREDIT LOSSES - TDR, Recorded Investment and Number of Modifications (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 loan | Sep. 30, 2021 loan | Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 loan | Dec. 31, 2021 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Borrower's sustained repayment performance period | 6 months | ||||
Number of Modifications | loan | 0 | 0 | 0 | 0 | |
Total residential real estate | Residential mortgages | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Residential mortgage loans collateralized by real estate property in the process of foreclosure | $ | $ 249 | $ 574 |
LOANS AND ALLOWANCE FOR CRED_11
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Mortgage Banking (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans held for sale, unpaid principal balance | $ 987 | $ 987 | $ 5,400 | ||
Residential mortgages | Total residential real estate | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Forward delivery commitments | 200 | 200 | $ 14,800 | ||
Sale of loans | 5,200 | $ 28,500 | 38,200 | $ 153,800 | |
Net gains on sales of loans | $ 52 | $ 682 | $ 281 | $ 3,600 |
BORROWED FUNDS - Summary of Bor
BORROWED FUNDS - Summary of Borrowed Funds (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Short-term borrowings | ||
Carrying Value | $ 186,166 | $ 94,802 |
Weighted Average Rate | 1.27% | 0.21% |
Long-term borrowings | ||
Carrying Value | $ 62,839 | $ 83,722 |
Weighted Average Rate | 4.86% | 3.42% |
Total borrowings | $ 249,005 | $ 178,524 |
Weighted Average Rate | 1.74% | 0.91% |
Advances from the FHLB | ||
Short-term borrowings | ||
Carrying Value | $ 167,250 | $ 75,000 |
Weighted Average Rate | 2.95% | 0.30% |
Long-term borrowings | ||
Carrying Value | $ 2,591 | $ 23,598 |
Weighted Average Rate | 0.39% | 1.08% |
Other borrowings | ||
Short-term borrowings | ||
Carrying Value | $ 18,916 | $ 19,802 |
Weighted Average Rate | 0.14% | 0.17% |
Subordinated borrowings | ||
Long-term borrowings | ||
Carrying Value | $ 60,248 | $ 60,124 |
Weighted Average Rate | 5.05% | 4.34% |
BORROWED FUNDS - Additional Inf
BORROWED FUNDS - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Outstanding advances of FRB | $ 186,166 | $ 94,802 |
Outstanding amount | 62,839 | 83,722 |
Financial Guarantee | NHTB Capital Trust II and NHTB Capital Trust III | ||
Debt Instrument [Line Items] | ||
Debentures issued by variable interest entities | $ 20,600 | |
LIBOR | Financial Guarantee | ||
Debt Instrument [Line Items] | ||
Interest rate margin | 2.79% | |
Callable Advances | ||
Debt Instrument [Line Items] | ||
Outstanding amount | $ 0 | 20,000 |
Amortizing Advances | ||
Debt Instrument [Line Items] | ||
Outstanding amount | 291 | 298 |
Advances from the FHLB | ||
Debt Instrument [Line Items] | ||
Line of credit maintained | 1,000 | |
Outstanding balance on the FHLB line of credit | 0 | 0 |
Outstanding advances of FRB | 167,250 | 75,000 |
Outstanding amount | 2,591 | 23,598 |
Federal Reserve Bank Advances | ||
Debt Instrument [Line Items] | ||
Line of credit maintained | 84,100 | |
Outstanding advances of FRB | 0 | |
Credit Facility, Unsecured, Federal Funds [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit maintained | 50,000 | 50,000 |
Outstanding balance on unused unsecured federal funds line of credit | $ 0 | $ 0 |
BORROWED FUNDS - Maturities of
BORROWED FUNDS - Maturities of FHLB Advances (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Amount | |
2022 | $ 166,250 |
2023 | 1,000 |
2024 | 2,300 |
2027 and thereafter | 291 |
Total FHLB advances | $ 169,841 |
Weighted Average Rate | |
2022 | 2.97% |
2027 and thereafter | 3.45% |
Total FHLB advances | 2.92% |
BORROWED FUNDS - Subordinated a
BORROWED FUNDS - Subordinated and Junior Subordinated Borrowings (Details) - Subordinated borrowings private placement - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Nov. 26, 2019 | |
Debt Instrument [Line Items] | |||
Principal amount of debt issued | $ 40,000 | ||
Fixed interest rate | 4.63% | ||
Debt issuance costs | $ 372 | $ 496 | |
SOFR | |||
Debt Instrument [Line Items] | |||
Interest rate margin | 3.27% |
BORROWED FUNDS - Repurchase Agr
BORROWED FUNDS - Repurchase Agreements (Details) - Customer Repurchase Agreements - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total secured borrowings | $ 18,916 | $ 19,802 |
US Government sponsored enterprises | ||
Debt Instrument [Line Items] | ||
Total secured borrowings | $ 18,916 | $ 19,802 |
DEPOSITS - Components (Details)
DEPOSITS - Components (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
DEPOSITS. | ||
Time less than $100,000 | $ 167,056 | $ 181,586 |
Time $100,000 through $250,000 | 113,168 | 169,645 |
Time $250,000 or more | 54,024 | 74,301 |
Total | $ 334,248 | $ 425,532 |
DEPOSITS - Maturities, Brokered
DEPOSITS - Maturities, Brokered, Reciprocal (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Time Deposits, Fiscal Year Maturity [Abstract] | ||
Within 1 year | $ 262,787 | $ 318,692 |
Over 1 years to 2 years | 46,867 | 71,247 |
Over 2 years to 3 years | 12,626 | 18,201 |
Over 3 years to 4 years | 5,971 | 8,498 |
Over 4 years to 5 years | 5,302 | 6,751 |
Over 5 years | 695 | 2,143 |
Total | 334,248 | 425,532 |
Brokered deposits | 15,100 | 16,100 |
Reciprocal deposits | $ 12,700 | $ 17,300 |
CAPITAL RATIOS AND SHAREHOLDE_3
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Actual and Required Capital Ratios (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Actual | ||
Total capital to risk-weighted assets | $ 404,804 | $ 380,690 |
Common equity tier 1 capital to risk-weighted assets | 317,043 | 295,635 |
Tier 1 capital to risk-weighted assets | 337,663 | 316,255 |
Tier 1 capital to average assets | $ 337,663 | $ 316,255 |
Total capital to risk-weighted assets, ratio | 0.1342 | 0.1431 |
Common equity tier 1 capital to risk-weighted assets, ratio | 0.1051 | 0.1111 |
Tier 1 capital to risk-weighted assets, ratio | 0.1119 | 0.1189 |
Tier 1 capital to average assets (leverage ratio) | 0.0913 | 0.0866 |
Minimum Regulatory Capital Requirements | ||
Total capital to risk-weighted assets | $ 241,314 | $ 212,798 |
Common equity tier 1 capital to risk-weighted assets | 135,740 | 119,699 |
Tier 1 capital to risk-weighted assets | 180,986 | 159,598 |
Tier 1 capital to average assets (leverage ratio) | $ 147,908 | $ 146,029 |
Minimum regulatory capital requirements, Total capital to risk-weighted assets, ratio | 0.0800 | 0.0800 |
Minimum regulatory capital requirements, Common equity tier 1 capital to risk-weighted assets, ratio | 4.50% | 4.50% |
Minimum regulatory capital requirements, Tier 1 capital to risk-weighted assets, ratio | 0.0600 | 0.0600 |
Minimum regulatory capital requirements, Tier 1 capital to average assets, ratio | 0.0400 | 0.0400 |
Bank | ||
Actual | ||
Total capital to risk-weighted assets | $ 398,292 | $ 375,435 |
Common equity tier 1 capital to risk-weighted assets | 371,151 | 351,000 |
Tier 1 capital to risk-weighted assets | 371,151 | 351,000 |
Tier 1 capital to average assets | $ 371,151 | $ 351,000 |
Total capital to risk-weighted assets, ratio | 0.1322 | 0.1413 |
Common equity tier 1 capital to risk-weighted assets, ratio | 0.1232 | 0.1321 |
Tier 1 capital to risk-weighted assets, ratio | 0.1232 | 0.1321 |
Tier 1 capital to average assets (leverage ratio) | 0.1005 | 0.0962 |
Minimum Regulatory Capital Requirements | ||
Total capital to risk-weighted assets | $ 241,079 | $ 220,425 |
Common equity tier 1 capital to risk-weighted assets | 135,606 | 123,812 |
Tier 1 capital to risk-weighted assets | 180,808 | 165,082 |
Tier 1 capital to average assets (leverage ratio) | $ 147,791 | $ 151,082 |
Minimum regulatory capital requirements, Total capital to risk-weighted assets, ratio | 0.0800 | 0.0800 |
Minimum regulatory capital requirements, Common equity tier 1 capital to risk-weighted assets, ratio | 4.50% | 4.50% |
Minimum regulatory capital requirements, Tier 1 capital to risk-weighted assets, ratio | 0.0600 | 0.0600 |
Minimum regulatory capital requirements, Tier 1 capital to average assets, ratio | 0.0400 | 0.0400 |
CAPITAL RATIOS AND SHAREHOLDE_4
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Components of AOCI (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income | $ (62,589) | $ 2,303 | ||||
Net unrealized gain (loss) on AFS securities | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income, before tax: | (76,606) | 2,580 | ||||
Income taxes related to items of accumulated other comprehensive income: | 17,891 | (595) | ||||
Accumulated other comprehensive income | (58,715) | $ (38,304) | 1,985 | $ 4,398 | $ 7,237 | $ 10,023 |
Net unrealized gain (loss) on hedging derivatives | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income, before tax: | (4,316) | 1,130 | ||||
Income taxes related to items of accumulated other comprehensive income: | 994 | (260) | ||||
Accumulated other comprehensive income | (3,322) | (2,115) | 870 | (92) | 63 | (1,865) |
Net unrealized gain (loss) on post-retirement plans | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income, before tax: | (718) | (718) | ||||
Income taxes related to items of accumulated other comprehensive income: | 166 | 166 | ||||
Accumulated other comprehensive income | $ (552) | $ (552) | $ (552) | $ (1,418) | $ (1,418) | $ (1,418) |
CAPITAL RATIOS AND SHAREHOLDE_5
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Components of OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net unrealized gain (loss) arising during the period | ||||||
Before Tax | $ (1,206) | $ (155) | $ (4,192) | $ 1,775 | ||
Other comprehensive (loss) income | ||||||
Before Tax | (28,501) | (3,903) | (84,632) | (5,017) | ||
Tax Effect | 6,883 | 909 | 19,740 | 1,165 | ||
Total other comprehensive loss | (21,618) | (2,994) | $ (43,274) | $ (858) | (64,892) | (3,852) |
Net unrealized gain (loss) on AFS securities | ||||||
Net unrealized gain (loss) arising during the period | ||||||
Before Tax | (26,889) | (1,770) | (79,133) | (5,348) | ||
Tax Effect | 6,512 | 403 | 18,474 | 1,234 | ||
Net of Tax | (20,377) | (1,367) | (60,659) | (4,114) | ||
Less: reclassification adjustment for gains (losses) realized in net income | ||||||
Before Tax | 44 | 1,930 | 53 | 1,980 | ||
Tax Effect | (10) | (458) | (12) | (469) | ||
Net of Tax | 34 | 1,472 | 41 | 1,511 | ||
Other comprehensive (loss) income | ||||||
Before Tax | (26,933) | (3,700) | (79,186) | (7,328) | ||
Tax Effect | 6,522 | 861 | 18,486 | 1,703 | ||
Total other comprehensive loss | (20,411) | (2,839) | (60,700) | (5,625) | ||
Net unrealized gain (loss) on hedging derivatives | ||||||
Net unrealized gain (loss) arising during the period | ||||||
Before Tax | (1,568) | (203) | (5,446) | 2,311 | ||
Tax Effect | 361 | 48 | 1,254 | (538) | ||
Net of Tax | (1,207) | (155) | (4,192) | 1,773 | ||
Less: reclassification adjustment for gains (losses) realized in net income | ||||||
Net of Tax | 0 | 0 | 0 | 0 | ||
Other comprehensive (loss) income | ||||||
Before Tax | (1,568) | (203) | (5,446) | 2,311 | ||
Tax Effect | 361 | 48 | 1,254 | (538) | ||
Total other comprehensive loss | (1,207) | (155) | (4,192) | 1,773 | ||
Net unrealized gain (loss) on post-retirement plans | ||||||
Net unrealized gain (loss) arising during the period | ||||||
Net of Tax | 0 | 0 | 0 | 0 | ||
Less: reclassification adjustment for gains (losses) realized in net income | ||||||
Net of Tax | 0 | 0 | 0 | 0 | ||
Other comprehensive (loss) income | ||||||
Total other comprehensive loss | $ 0 | $ 0 | $ 0 | $ 0 |
CAPITAL RATIOS AND SHAREHOLDE_6
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Beginning accumulated other comprehensive income | $ 2,303 | $ 2,303 | ||||
Total other comprehensive loss | $ (21,618) | $ (2,994) | (43,274) | $ (858) | (64,892) | $ (3,852) |
Ending accumulated other comprehensive income | (62,589) | (62,589) | ||||
Net unrealized gain (loss) on AFS securities | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Beginning accumulated other comprehensive income | (38,304) | 7,237 | 1,985 | 10,023 | 1,985 | 10,023 |
Other comprehensive gain (loss) before reclassifications | (20,377) | (1,367) | (60,659) | (4,114) | ||
Less: amounts reclassified from accumulated other comprehensive income | 34 | 1,472 | 41 | 1,511 | ||
Total other comprehensive loss | (20,411) | (2,839) | (60,700) | (5,625) | ||
Ending accumulated other comprehensive income | (58,715) | 4,398 | (38,304) | 7,237 | (58,715) | 4,398 |
Net unrealized gain (loss) on hedging derivatives | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Beginning accumulated other comprehensive income | (2,115) | 63 | 870 | (1,865) | 870 | (1,865) |
Other comprehensive gain (loss) before reclassifications | (1,207) | (155) | (4,192) | 1,773 | ||
Less: amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 | ||
Total other comprehensive loss | (1,207) | (155) | (4,192) | 1,773 | ||
Ending accumulated other comprehensive income | (3,322) | (92) | (2,115) | 63 | (3,322) | (92) |
Net unrealized gain (loss) on post-retirement plans | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Beginning accumulated other comprehensive income | (552) | (1,418) | (552) | (1,418) | (552) | (1,418) |
Other comprehensive gain (loss) before reclassifications | 0 | 0 | 0 | 0 | ||
Less: amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 | ||
Total other comprehensive loss | 0 | 0 | 0 | 0 | ||
Ending accumulated other comprehensive income | (552) | (1,418) | (552) | (1,418) | (552) | (1,418) |
Accumulated other comprehensive income (loss) | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Beginning accumulated other comprehensive income | (40,971) | 5,882 | 2,303 | 6,740 | 2,303 | 6,740 |
Other comprehensive gain (loss) before reclassifications | (21,584) | (1,522) | (64,851) | (2,341) | ||
Less: amounts reclassified from accumulated other comprehensive income | 34 | 1,472 | 41 | 1,511 | ||
Total other comprehensive loss | (21,618) | (2,994) | (43,274) | (858) | (64,892) | (3,852) |
Ending accumulated other comprehensive income | $ (62,589) | $ 2,888 | $ (40,971) | $ 5,882 | $ (62,589) | $ 2,888 |
CAPITAL RATIOS AND SHAREHOLDE_7
CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Amounts Reclassified Out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Non-interest income | $ 8,823 | $ 11,350 | $ 27,093 | $ 31,103 |
Non-interest expense | 23,032 | 23,372 | 66,618 | 67,587 |
Tax expense | (2,965) | (2,706) | (7,940) | (7,169) |
Available-for-sale Securities, Gross Realized Gains | 141 | 1,900 | 150 | 2,000 |
Available-for-sale Securities, Gross Realized Losses | 97 | 97 | 97 | 50 |
Reclassification out of AOCI | Available-for-sale Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Non-interest income | 44 | 1,930 | 53 | 1,980 |
Tax expense | (10) | (458) | (12) | (469) |
Net of tax | $ 34 | $ 1,472 | $ 41 | $ 1,511 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
EARNINGS PER SHARE | ||||||
Net income | $ 11,430 | $ 11,028 | $ 19,615 | $ 18,505 | $ 31,045 | $ 29,533 |
Average number of basic common shares outstanding (in shares) | 15,057,598 | 14,982,766 | 15,028,963 | 14,960,753 | ||
Plus: dilutive effect of stock options and awards outstanding (in shares) | 55,757 | 67,990 | 71,317 | 73,829 | ||
Average number of diluted common shares outstanding (in shares) | 15,113,355 | 15,050,756 | 15,100,280 | 15,034,582 | ||
Earnings per share: | ||||||
Basic (in dollars per share) | $ 0.76 | $ 0.74 | $ 2.07 | $ 1.97 | ||
Diluted (in dollars per share) | $ 0.76 | $ 0.73 | $ 2.06 | $ 1.96 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | Apr. 30, 2020 | Dec. 31, 2019 | Nov. 30, 2019 | |
Derivative [Line Items] | |||||
Notional Amount | $ 770,510 | $ 943,623 | |||
Fair Value Asset (Liability) | 4,889 | (1,109) | |||
Interest rate swap on deposits | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 25,000 | $ 50,000 | |||
Designated as hedging instrument | Cash flow hedges | |||||
Derivative [Line Items] | |||||
Notional Amount | 125,000 | 125,000 | |||
Fair Value Asset (Liability) | (136) | (877) | |||
Designated as hedging instrument | Cash flow hedges | Interest rate cap agreements | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 75,000 | $ 75,000 | |||
Weighted Average Maturity (in years) | 2 years 3 months 18 days | 3 years | |||
Fair Value Asset (Liability) | $ 5,153 | $ (121) | |||
Designated as hedging instrument | Cash flow hedges | Interest rate swap on variable rate loans | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 50,000 | $ 50,000 | |||
Weighted Average Maturity (in years) | 3 years 6 months | 4 years 2 months 12 days | |||
Fair Value Asset (Liability) | $ (5,289) | $ (756) | |||
Designated as hedging instrument | Fair Value Hedging | |||||
Derivative [Line Items] | |||||
Notional Amount | 37,190 | 37,190 | |||
Fair Value Asset (Liability) | 5,017 | (530) | |||
Designated as hedging instrument | Fair Value Hedging | Interest rate swap on deposits | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 37,190 | $ 37,190 | $ 37,200 | ||
Weighted Average Maturity (in years) | 6 years 9 months 18 days | 7 years 7 months 6 days | |||
Fair Value Asset (Liability) | $ 5,017 | $ (530) | |||
Hedged Asset, Fair Value Hedge | 27,993 | 39,726 | |||
Cumulative amount of fair value hedging adjustment in carrying amount | (9,197) | 2,536 | |||
Designated as hedging instrument | Economic hedges | |||||
Derivative [Line Items] | |||||
Notional Amount | 608,320 | 767,374 | |||
Fair Value Asset (Liability) | 8 | 15 | |||
Designated as hedging instrument | Economic hedges | Forward sale commitments | |||||
Derivative [Line Items] | |||||
Notional Amount | 200 | $ 16,600 | |||
Weighted Average Maturity (in years) | 1 month 6 days | ||||
Fair Value Asset (Liability) | 8 | $ 15 | |||
Designated as hedging instrument | Economic hedges | Customer loan derivative liability | MNA counterparty | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 193,743 | $ 260,102 | |||
Weighted Average Maturity (in years) | 6 years | 6 years 2 months 12 days | |||
Fair Value Asset (Liability) | $ (21,795) | $ (9,429) | |||
Designated as hedging instrument | Economic hedges | Customer loan derivative liability | RPA counterparty | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 110,317 | $ 115,285 | |||
Weighted Average Maturity (in years) | 6 years 3 months 18 days | 6 years 8 months 12 days | |||
Fair Value Asset (Liability) | $ (4,421) | ||||
Designated as hedging instrument | Economic hedges | Customer loan derivative liability | Customer | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 304,060 | $ 375,387 | |||
Weighted Average Maturity (in years) | 6 years 1 month 6 days | 6 years 4 months 24 days | |||
Fair Value Asset (Liability) | $ 21,795 | $ 13,850 | |||
Not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Notional Amount | 14,059 | ||||
Fair Value Asset (Liability) | 283 | ||||
Not designated as hedging instrument | Interest Rate Lock Commitment | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 14,059 | ||||
Weighted Average Maturity (in years) | 1 month 6 days | ||||
Fair Value Asset (Liability) | $ 283 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amount of Gain (Loss) recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ (1,206) | $ (155) | $ (4,192) | $ 1,775 |
Amount of Gain (Loss) Recognized in Income | 26 | (331) | (578) | (840) |
Designated as hedging instrument | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 81 | 66 | 569 | 1,055 |
Amount of Gain (Loss) Recognized in Income | (98) | (113) | (240) | (400) |
Designated as hedging instrument | Cash flow hedges | Interest rate swap on deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 1,262 | 167 | 4,058 | 1,148 |
Amount of Gain (Loss) Recognized in Income | 140 | (205) | (1) | (589) |
Designated as hedging instrument | Cash flow hedges | Interest rate swap on variable rate loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (1,181) | (101) | (3,489) | (93) |
Amount of Gain (Loss) Recognized in Income | (238) | 92 | (239) | 189 |
Designated as hedging instrument | Fair Value Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (1,287) | (221) | (4,761) | 720 |
Amount of Gain (Loss) Recognized in Income | 155 | (144) | (48) | (421) |
Designated as hedging instrument | Fair Value Hedging | Interest rate swap on deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (1,287) | (221) | (4,761) | 720 |
Amount of Gain (Loss) Recognized in Income | 155 | (144) | (48) | (421) |
Designated as hedging instrument | Economic hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 19 | (96) | (7) | (45) |
Designated as hedging instrument | Economic hedges | Forward sale commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 19 | (96) | (7) | (45) |
Not designated as hedging instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (50) | 22 | (283) | 26 |
Not designated as hedging instrument | Interest Rate Lock Commitment | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (50) | $ 22 | $ (283) | $ 26 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Additional information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Apr. 30, 2020 USD ($) | Dec. 31, 2019 USD ($) item | Nov. 30, 2019 USD ($) | |
Derivative [Line Items] | ||||||||
Acquisition, conversion and other expenses | $ 31 | $ 318 | $ 356 | $ 1,759 | ||||
Notional amount of interest rate swap | 770,510 | 770,510 | $ 943,623 | |||||
Interest rate swap on variable rate loans | ||||||||
Derivative [Line Items] | ||||||||
Variable rate loan assets | $ 50,000 | $ 50,000 | ||||||
Interest rate swap on variable rate loans | London Interbank Offered Rate Less Two Days | ||||||||
Derivative [Line Items] | ||||||||
Variable interest rate | 0.806% | 0.806% | ||||||
Interest rate swap on deposits | ||||||||
Derivative [Line Items] | ||||||||
Derivative, Number of Instruments Held | item | 2 | 2 | ||||||
Term of interest rate swap | 5 years | |||||||
Fixed rate of interest rate swap | 0.59% | 1.53% | ||||||
Notional amount of interest rate swap | $ 25,000 | $ 50,000 | ||||||
Designated as hedging instrument | Cash flow hedges | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of interest rate swap | $ 125,000 | $ 125,000 | 125,000 | |||||
Designated as hedging instrument | Cash flow hedges | Interest rate cap agreements | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of interest rate swap | 75,000 | 75,000 | 75,000 | |||||
Designated as hedging instrument | Cash flow hedges | Interest rate swap on variable rate loans | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of interest rate swap | 50,000 | 50,000 | 50,000 | |||||
Designated as hedging instrument | Fair Value Hedging | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of interest rate swap | 37,190 | 37,190 | 37,190 | |||||
Designated as hedging instrument | Fair Value Hedging | Interest rate swap on deposits | ||||||||
Derivative [Line Items] | ||||||||
Derivative, Number of Instruments Held | item | 8 | |||||||
Notional amount of interest rate swap | $ 37,190 | $ 37,190 | $ 37,190 | $ 37,200 | ||||
Fixed interest rate, weighted average | 1.696% |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Effect of cash flow hedging and fair value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income and expense line items presented in the consolidated statements of income | $ 27,940 | $ 25,094 | $ 75,192 | $ 72,490 |
Securities and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income and expense line items presented in the consolidated statements of income | 5,145 | 3,821 | 13,178 | 11,792 |
Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income and expense line items presented in the consolidated statements of income | 1,801 | 1,555 | 4,185 | 7,109 |
Borrowings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income and expense line items presented in the consolidated statements of income | 1,374 | 1,778 | 3,458 | 5,415 |
Non-interest Income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income and expense line items presented in the consolidated statements of income | 8,823 | 11,350 | 27,093 | 31,103 |
Interest rate swap on wholesale funding | Cash flow hedges | Borrowings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on cash flow hedges: | 140 | (205) | (1) | (589) |
Interest rate swap on variable rate loans | Cash flow hedges | Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on cash flow hedges: | (238) | 92 | (239) | 189 |
Interest rate swap on securities | Fair Value Hedging | Securities and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on fair value hedges: | $ 155 | $ (144) | $ (48) | $ (421) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Offsetting Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Cash Collateral Pledged | $ 12,000 | |
Net Amount | 12,000 | |
MNA counterparty | ||
Derivative [Line Items] | ||
Cash Collateral Pledged | 12,000 | |
Net Amount | 12,000 | |
Customer loan derivative liability | ||
Derivative [Line Items] | ||
Derivative liabilities | $ (21,795) | (13,850) |
Customer loan derivative liability | MNA counterparty | ||
Derivative [Line Items] | ||
Derivative liabilities | (21,795) | (9,429) |
Customer loan derivative liability | RPA counterparty | ||
Derivative [Line Items] | ||
Derivative liabilities | (4,421) | |
Customer loan derivative asset | ||
Derivative [Line Items] | ||
Derivative Assets | 21,795 | 13,850 |
Customer loan derivative asset | MNA counterparty | ||
Derivative [Line Items] | ||
Derivative Assets | $ 21,795 | 9,429 |
Customer loan derivative asset | RPA counterparty | ||
Derivative [Line Items] | ||
Derivative Assets | $ 4,421 |
FAIR VALUE MEASUREMENTS - Measu
FAIR VALUE MEASUREMENTS - Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 556,752 | $ 618,276 |
US Government-sponsored enterprises | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 216,024 | 236,117 |
US Government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 83,526 | 79,637 |
Private label | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 66,769 | 68,695 |
Obligations of states and political subdivisions thereof | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 104,652 | 141,776 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 85,781 | 92,051 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 982 | 5,523 |
Derivative assets | 31,972 | 14,148 |
Derivative liabilities | (27,084) | (15,257) |
Recurring | US Government-sponsored enterprises | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 216,024 | 236,117 |
Recurring | US Government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 83,526 | 79,637 |
Recurring | Private label | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 66,769 | 68,695 |
Recurring | Obligations of states and political subdivisions thereof | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 104,652 | 141,776 |
Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 85,781 | 92,051 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | |
Derivative liabilities | 0 | |
Recurring | Level 1 | US Government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 0 | |
Recurring | Level 1 | Obligations of states and political subdivisions thereof | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Recurring | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 982 | 5,523 |
Derivative assets | 31,964 | 13,850 |
Derivative liabilities | (27,084) | (15,257) |
Recurring | Level 2 | US Government-sponsored enterprises | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 216,024 | 236,117 |
Recurring | Level 2 | US Government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 83,526 | 79,637 |
Recurring | Level 2 | Private label | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 66,769 | 68,695 |
Recurring | Level 2 | Obligations of states and political subdivisions thereof | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 104,652 | 141,776 |
Recurring | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 85,781 | 92,051 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 8 | $ 298 |
Derivative liabilities | 0 | |
Recurring | Level 3 | US Government agency | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage-backed securities available for sale | 0 | |
Recurring | Level 3 | Obligations of states and political subdivisions thereof | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Recurring | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 0 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Net Derivative Asset (Liability), Gain (Loss), Statement of Income [Extensible List] | Noninterest Income | Noninterest Income | Noninterest Income | Noninterest Income |
Interest Rate Lock Commitment | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Beginning balance | $ 50 | $ 25 | $ 283 | $ 22 |
Realized (loss) gain recognized in non-interest income | (50) | 22 | (283) | 25 |
Ending balance | 47 | 47 | ||
Forward Commitments | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Beginning balance | (11) | (45) | 15 | (95) |
Realized (loss) gain recognized in non-interest income | 19 | (95) | (7) | (45) |
Ending balance | $ 8 | $ (140) | $ 8 | $ (140) |
FAIR VALUE MEASUREMENTS - Unobs
FAIR VALUE MEASUREMENTS - Unobservable Inputs Recurring (Details) | 12 Months Ended | |
Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability), fair value | $ (1,109,000) | $ 4,889,000 |
Recurring | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Total | 298,000 | 8,000 |
Recurring | Level 3 | Interest Rate Lock Commitment | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability), fair value | $ 283,000 | |
Closing Ratio | 85% | |
Origination Costs, per loan | $ 1,700 | |
Recurring | Level 3 | Interest Rate Lock Commitment | Discount Cash Flows | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability) net, measurement input | 0.010 | |
Recurring | Level 3 | Forward Commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability), fair value | $ 15,000 | $ 8,000 |
Recurring | Level 3 | Forward Commitments | Quoted prices for similar loans in active markets | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability) net, measurement input | 99,800 | 97,200 |
Recurring | Level 3 | Forward Commitments | Quoted prices for similar loans in active markets | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Derivative asset (liability) net, measurement input | 103,200 | 101,400 |
FAIR VALUE MEASUREMENTS - Mea_2
FAIR VALUE MEASUREMENTS - Measured on Non-recurring Basis (Details) - Non-recurring - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Assets | |||
Liabilities measured at fair value | $ 0 | $ 0 | $ 0 |
Level 3 | |||
Assets | |||
Individually evaluated loans | 15,388,000 | 15,388,000 | 17,932,000 |
Capitalized servicing rights | 7,127,000 | 7,127,000 | 5,263,000 |
Premises held for sale | 327,000 | 327,000 | 226,000 |
Total | 22,842,000 | 22,842,000 | 23,421,000 |
Total Gains (Losses) | 1,862,000 | (579,000) | |
Level 3 | Impaired loans | |||
Assets | |||
Total Gains (Losses) | 1,778,000 | (2,544,000) | |
Level 3 | Capitalized servicing rights | |||
Assets | |||
Total Gains (Losses) | 84,000 | 1,864,000 | |
Level 3 | Assets held for sale | |||
Assets | |||
Premises held for sale | 327,000 | 327,000 | $ 226,000 |
Total Gains (Losses) | $ 0 | $ 101,000 |
FAIR VALUE MEASUREMENTS - Uno_2
FAIR VALUE MEASUREMENTS - Unobservable Inputs Non-recurring (Details) - Non-recurring - Level 3 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Individually evaluated loans | $ 15,388 | $ 17,932 |
Capitalized servicing rights | 7,127 | 5,263 |
Premises held for sale | 327 | 226 |
Total | 22,842 | 23,421 |
Quoted prices for similar loans in active markets | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Individually evaluated loans | 10,903 | 12,127 |
Discount Cash Flows | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Individually evaluated loans | $ 4,485 | $ 5,805 |
Impaired loans | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Loss severity | 10% | 10% |
Appraised value | $ 80 | $ 71 |
Cash flows | $ 4 | $ 6 |
Discount rate | 2.88% | 2.88% |
Impaired loans | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Loss severity | 70% | 70% |
Appraised value | $ 1,175 | $ 1,792 |
Cash flows | $ 925 | $ 931 |
Discount rate | 6.45% | 9.50% |
Capitalized servicing rights | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Constant prepayment rate (CPR) | 7.10% | 12.47% |
Discount rate | 9.54% | 9.53% |
Assets held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Premises held for sale | $ 327 | $ 226 |
Selling Costs | 6% | 6% |
Assets held for sale | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items} | ||
Appraised value | $ 347 | $ 240 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Values and Carrying Amounts (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial Assets | ||
Securities available for sale | $ 556,752 | $ 618,276 |
Financial Liabilities | ||
Time deposits | 334,248 | 425,532 |
Carrying Amount | ||
Financial Assets | ||
Cash and cash equivalents | 82,065 | 250,389 |
Securities available for sale | 556,752 | 618,276 |
FHLB stock | 9,035 | 7,384 |
Loans held for sale | 987 | 5,523 |
Net loans | 2,850,364 | 2,509,192 |
Accrued interest receivable | 4,053 | 2,712 |
Cash surrender value of bank-owned life insurance policies | 80,758 | 79,020 |
Derivative assets | 31,973 | 14,148 |
Financial Liabilities | ||
Non-maturity deposits | 2,801,432 | 2,623,012 |
Time deposits | 334,248 | 425,532 |
Securities sold under agreements to repurchase | 18,916 | 19,802 |
FHLB advances | 169,841 | 98,598 |
Subordinated borrowings | 60,248 | 60,124 |
Derivative liabilities | 27,084 | 15,257 |
Total Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 82,065 | 250,389 |
Securities available for sale | 556,752 | 618,276 |
FHLB stock | 9,035 | 7,384 |
Loans held for sale | 982 | 5,523 |
Net loans | 2,783,612 | 2,442,741 |
Accrued interest receivable | 4,053 | 2,712 |
Cash surrender value of bank-owned life insurance policies | 80,758 | 79,020 |
Derivative assets | 31,973 | 14,148 |
Financial Liabilities | ||
Non-maturity deposits | 2,616,000 | 2,853,000 |
Time deposits | 330,059 | 424,000 |
Securities sold under agreements to repurchase | 18,916 | 19,802 |
FHLB advances | 169,459 | 98,439 |
Subordinated borrowings | 57,744 | 61,884 |
Derivative liabilities | 27,084 | 15,257 |
Total Fair Value | Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | 82,065 | 250,389 |
Total Fair Value | Level 2 | ||
Financial Assets | ||
Securities available for sale | 556,752 | 618,276 |
FHLB stock | 9,035 | 7,384 |
Loans held for sale | 982 | 5,523 |
Accrued interest receivable | 4,053 | 2,712 |
Cash surrender value of bank-owned life insurance policies | 80,758 | 79,020 |
Derivative assets | 31,973 | 13,850 |
Financial Liabilities | ||
Non-maturity deposits | 2,616,000 | 2,853,000 |
Time deposits | 330,059 | 424,000 |
Securities sold under agreements to repurchase | 18,916 | 19,802 |
FHLB advances | 169,459 | 98,439 |
Subordinated borrowings | 57,744 | 61,884 |
Derivative liabilities | 27,084 | 15,257 |
Total Fair Value | Level 3 | ||
Financial Assets | ||
Net loans | 2,783,612 | 2,442,741 |
Derivative assets | $ 8 | $ 298 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 7,384 | $ 7,383 | $ 22,239 | $ 21,077 |
Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4,020 | 3,737 | 11,755 | 10,593 |
Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,364 | 3,646 | 10,484 | 10,484 |
Trust management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,077 | 3,403 | 9,941 | 10,052 |
Financial services fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 471 | 465 | 1,190 | 1,283 |
Interchange fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,953 | 1,882 | 5,849 | 5,509 |
Customer deposit fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,578 | 1,363 | 4,418 | 3,542 |
Other customer service fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 305 | $ 270 | $ 841 | $ 691 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances from Contracts with Customers (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Balances from contracts with customers only: | ||
Other Assets | $ 1,325 | $ 1,184 |
Other Liabilities | $ 2,535 | $ 2,324 |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true |
LEASES - Assets and liabilities
LEASES - Assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
LEASES | ||
Operating lease right-of-use assets | $ 8,381 | $ 9,274 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Asset | Other Asset |
Operating lease liabilities | $ 8,791 | $ 9,643 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities |
LEASES - Lease Term and Cost (D
LEASES - Lease Term and Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
LEASES | |||||
Weighted-average remaining lease term (in years) | 7 years 5 months 1 day | 7 years 5 months 1 day | 8 years 10 days | ||
Weighted-average discount rate | 3.09% | 3.09% | 3.07% | ||
Operating lease cost | $ 338 | $ 324 | $ 994 | $ 966 | |
Variable lease cost | 71 | 43 | 345 | 179 | |
Total lease cost | $ 409 | $ 367 | $ 1,339 | $ 1,145 |
LEASES - Future Minimum Payment
LEASES - Future Minimum Payments for Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due, Rolling Maturity [Abstract] | ||
September 30, 2023 | $ 1,343 | |
September 30, 2024 | 1,344 | |
September 30, 2025 | 1,129 | |
September 30, 2026 | 1,032 | |
September 30, 2027 | 889 | |
Thereafter | 3,411 | |
Total future minimum lease payments | 9,148 | |
Amounts representing interest | (357) | |
Operating lease liabilities | $ 8,791 | $ 9,643 |