Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 05, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | CITIZENS & NORTHERN CORPORATION | |
Entity Central Index Key | 0000810958 | |
Trading Symbol | CZNC | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding (in shares) | 15,890,353 | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Title of 12(b) Security | Common Stock Par Value $1.00 | |
City Area Code | 570 | |
Security Exchange Name | NASDAQ | |
Local Phone Number | 724-3411 | |
Entity Address, Postal Zip Code | 16901 | |
Entity Address, State or Province | PA | |
Entity Address, City or Town | WELLSBORO | |
Entity Address, Address Line One | 90-92 MAIN STREET | |
Entity Tax Identification Number | 23-2451943 | |
Entity Incorporation, State or Country Code | PA | |
Entity File Number | 000-16084 | |
Document Transition Report | false | |
Document Quarterly Report | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Noninterest-bearing | $ 30,968,000 | $ 17,667,000 |
Interest-bearing | 143,510,000 | 17,535,000 |
Total cash and due from banks | 174,478,000 | 35,202,000 |
Available-for-sale debt securities, at fair value | 340,545,000 | 346,723,000 |
Marketable equity security | 1,003,000 | 979,000 |
Loans held for sale | 1,200,000 | 767,000 |
Loans receivable | 1,691,370,000 | 1,182,222,000 |
Allowance for loan losses | (10,753,000) | (9,836,000) |
Loans, net | 1,680,617,000 | 1,172,386,000 |
Bank-owned life insurance | 29,942,000 | 18,641,000 |
Accrued interest receivable | 8,296,000 | 5,001,000 |
Bank premises and equipment, net | 21,504,000 | 17,170,000 |
Foreclosed assets held for sale | 2,369,000 | 2,886,000 |
Deferred tax asset, net | 1,335,000 | 2,618,000 |
Goodwill | 52,526,000 | 28,388,000 |
Core deposit intangibles, net | 4,059,000 | 1,247,000 |
Other assets | 34,919,000 | 22,137,000 |
TOTAL ASSETS | 2,352,793,000 | 1,654,145,000 |
LIABILITIES | ||
Noninterest-bearing | 467,544,000 | 285,904,000 |
Interest-bearing | 1,403,970,000 | 966,756,000 |
Total deposits | 1,871,514,000 | 1,252,660,000 |
Short-term borrowings | 40,870,000 | 86,220,000 |
Long-term borrowings | 102,787,000 | 52,127,000 |
Subordinated debt | 16,572,000 | 6,500,000 |
Accrued interest and other liabilities | 24,734,000 | 12,186,000 |
TOTAL LIABILITIES | 2,056,477,000 | 1,409,693,000 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $1,000 par value; authorized 30,000 shares; $1,000 liquidation preference per share; no shares issued | 0 | 0 |
Common stock, par value $1.00 per share; authorized 20,000,000 shares, issued 15,982,815 and outstanding 15,890,353 at September 30, 2020; issued 13,934,996 and outstanding 13,716,445 at December 31, 2019 | 15,983,000 | 13,935,000 |
Paid-in capital | 143,286,000 | 104,519,000 |
Retained earnings | 127,224,000 | 126,480,000 |
Treasury stock, at cost; 92,462 shares at September 30, 2020 and 218,551 shares at December 31, 2019 | (1,786,000) | (4,173,000) |
Accumulated other comprehensive income | 11,609,000 | 3,691,000 |
TOTAL STOCKHOLDERS' EQUITY | 296,316,000 | 244,452,000 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 2,352,793,000 | $ 1,654,145,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, authorized shares (in shares) | 30,000 | 30,000 |
Preferred stock, liquidation preference per share (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 15,982,815 | 13,934,996 |
Common stock, shares outstanding (in shares) | 15,890,353 | 13,716,445 |
Treasury stock, shares (in shares) | 92,462 | 218,551 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest and fees on loans: | ||||
Taxable | $ 19,158,000 | $ 14,400,000 | $ 47,745,000 | $ 38,446,000 |
Tax-exempt | 450,000 | 509,000 | 1,348,000 | 1,597,000 |
Interest on mortgages held for sale | 26,000 | 5,000 | 47,000 | 14,000 |
Interest on balances with depository institutions | 69,000 | 159,000 | 191,000 | 424,000 |
Income from available-for-sale debt securities: | ||||
Taxable | 1,483,000 | 1,732,000 | 4,451,000 | 5,392,000 |
Tax-exempt | 561,000 | 466,000 | 1,505,000 | 1,591,000 |
Dividends on marketable equity security | 4,000 | 6,000 | 14,000 | 17,000 |
Total interest and dividend income | 21,751,000 | 17,277,000 | 55,301,000 | 47,481,000 |
INTEREST EXPENSE | ||||
Interest on deposits | 1,787,000 | 2,461,000 | 5,726,000 | 5,877,000 |
Interest on short-term borrowings | 73,000 | 146,000 | 335,000 | 453,000 |
Interest on long-term borrowings | 362,000 | 277,000 | 970,000 | 723,000 |
Interest on subordinated debt | 247,000 | 116,000 | 460,000 | 231,000 |
Total interest expense | 2,469,000 | 3,000,000 | 7,491,000 | 7,284,000 |
Net interest income | 19,282,000 | 14,277,000 | 47,810,000 | 40,197,000 |
Provision for loan losses | 1,941,000 | 1,158,000 | 3,293,000 | 197,000 |
Net interest income after provision for loan losses | 17,341,000 | 13,119,000 | 44,517,000 | 40,000,000 |
NONINTEREST INCOME | ||||
Brokerage revenue | 351,000 | 333,000 | 1,027,000 | 1,001,000 |
Insurance commissions, fees and premiums | 41,000 | 71,000 | 126,000 | 149,000 |
Net gains from sale of loans | 2,052,000 | 310,000 | 3,931,000 | 618,000 |
Increase in cash surrender value of life insurance | 159,000 | 105,000 | 361,000 | 296,000 |
Other noninterest income | 903,000 | 470,000 | 2,321,000 | 1,437,000 |
Sub-total | 6,970,000 | 4,963,000 | 17,779,000 | 14,218,000 |
Realized gains on available-for-sale debt securities, net | 25,000 | 13,000 | 25,000 | 20,000 |
Total noninterest income | 6,995,000 | 4,976,000 | 17,804,000 | 14,238,000 |
NONINTEREST EXPENSE | ||||
Salaries and wages | 6,833,000 | 5,480,000 | 17,537,000 | 15,249,000 |
Pensions and other employee benefits | 1,870,000 | 1,449,000 | 5,527,000 | 4,292,000 |
Occupancy expense, net | 806,000 | 654,000 | 2,215,000 | 1,976,000 |
Furniture and equipment expense | 383,000 | 333,000 | 1,052,000 | 967,000 |
Data processing expenses | 1,251,000 | 802,000 | 3,309,000 | 2,567,000 |
Automated teller machine and interchange expense | 340,000 | 297,000 | 912,000 | 763,000 |
Pennsylvania shares tax | 422,000 | 341,000 | 1,267,000 | 1,035,000 |
Professional fees | 422,000 | 242,000 | 1,265,000 | 795,000 |
Telecommunications | 231,000 | 197,000 | 650,000 | 537,000 |
Directors' fees | 175,000 | 162,000 | 523,000 | 486,000 |
Merger-related expenses | 6,402,000 | 206,000 | 7,526,000 | 3,818,000 |
Other noninterest expense | 1,915,000 | 1,529,000 | 5,577,000 | 4,937,000 |
Total noninterest expense | 21,050,000 | 11,692,000 | 47,360,000 | 37,422,000 |
Income before income tax provision | 3,286,000 | 6,403,000 | 14,961,000 | 16,816,000 |
Income tax provision | 438,000 | 1,096,000 | 2,509,000 | 2,770,000 |
NET INCOME | $ 2,848,000 | $ 5,307,000 | $ 12,452,000 | $ 14,046,000 |
EARNINGS PER COMMON SHARE - BASIC (in dollars per share) | $ 0.18 | $ 0.39 | $ 0.86 | $ 1.06 |
EARNINGS PER COMMON SHARE - DILUTED (in dollars per share) | $ 0.18 | $ 0.39 | $ 0.86 | $ 1.06 |
Trust and Asset Management [Member] | ||||
NONINTEREST INCOME | ||||
Revenue | $ 1,595,000 | $ 1,479,000 | $ 4,639,000 | $ 4,422,000 |
Deposit Account [Member] | ||||
NONINTEREST INCOME | ||||
Revenue | 1,045,000 | 1,436,000 | 3,126,000 | 3,963,000 |
Service Charges and Fees [Member] | ||||
NONINTEREST INCOME | ||||
Revenue | 83,000 | 91,000 | 230,000 | 259,000 |
Debit Card [Member] | ||||
NONINTEREST INCOME | ||||
Revenue | 828,000 | 722,000 | 2,277,000 | 2,064,000 |
Bank Servicing [Member] | ||||
NONINTEREST INCOME | ||||
Revenue | $ (87,000) | $ (54,000) | $ (259,000) | $ 9,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 2,848 | $ 5,307 | $ 12,452 | $ 14,046 |
Unrealized holding (losses) gains on available-for-sale debt securities | (95) | 1,323 | 9,980 | 10,754 |
Reclassification adjustment for gains realized in income | (25) | (13) | (25) | (20) |
Other comprehensive (loss) income on available-for-sale debt securities | (120) | 1,310 | 9,955 | 10,734 |
Changes from plan amendments and actuarial gains and losses | 0 | 0 | 88 | 214 |
Amortization of prior service cost and net actuarial loss included in net periodic benefit cost | (8) | (8) | (22) | (23) |
Other comprehensive (loss) income on unfunded retirement obligations | (8) | (8) | 66 | 191 |
Other comprehensive (loss) income before income tax | (128) | 1,302 | 10,021 | 10,925 |
Income tax related to other comprehensive loss (income) | 26 | (274) | (2,103) | (2,295) |
Net other comprehensive (loss) income | (102) | 1,028 | 7,918 | 8,630 |
Comprehensive income | $ 2,746 | $ 6,335 | $ 20,370 | $ 22,676 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 12,452,000 | $ 14,046,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 3,293,000 | 197,000 |
Realized gains on available-for-sale debt securities, net | (25,000) | (20,000) |
Accretion and amortization on securities, net | 1,020,000 | 880,000 |
Increase in cash surrender value of life insurance | (361,000) | (296,000) |
Depreciation and amortization of bank premises and equipment | 1,429,000 | 1,315,000 |
Other accretion and amortization, net | (1,547,000) | (265,000) |
Stock-based compensation | 672,000 | 646,000 |
Deferred income taxes | 649,000 | 187,000 |
Decrease in fair value of servicing rights | 617,000 | 312,000 |
Gains on sales of loans, net | (3,931,000) | (618,000) |
Origination of loans held for sale | (123,547,000) | (20,663,000) |
Proceeds from sales of loans held for sale | 126,268,000 | 19,325,000 |
(Decrease) increase in accrued interest receivable and other assets | (1,194,000) | 895,000 |
(Decrease) increase in accrued interest payable and other liabilities | (856,000) | 236,000 |
Other | (339,000) | 99,000 |
Net Cash Provided by Operating Activities | 14,600,000 | 16,276,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net cash and cash equivalents provided by (used in) business combination | 75,955,000 | (1,778,000) |
Proceeds from maturities of certificates of deposit | 250,000 | 100,000 |
Purchase of certificates of deposit | (2,500,000) | 0 |
Proceeds from sales of available-for-sale debt securities | 20,535,000 | 95,640,000 |
Proceeds from calls and maturities of available-for-sale debt securities | 71,009,000 | 61,241,000 |
Purchase of available-for-sale debt securities | (65,853,000) | (48,776,000) |
Redemption of Federal Home Loan Bank of Pittsburgh stock | 5,712,000 | 8,275,000 |
Purchase of Federal Home Loan Bank of Pittsburgh stock | (4,571,000) | (4,911,000) |
Net increase in loans | (45,564,000) | (53,859,000) |
Proceeds from bank owned life insurance | 0 | 796,000 |
Purchase of premises and equipment | (2,550,000) | (1,300,000) |
Proceeds from sale of foreclosed assets | 1,347,000 | 1,740,000 |
Other | 178,000 | 120,000 |
Net Cash Provided by Investing Activities | 53,948,000 | 57,288,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase in deposits | 137,543,000 | 37,532,000 |
Net decrease in short-term borrowings | (79,213,000) | (103,246,000) |
Proceeds from long-term borrowings | 25,891,000 | 48,500,000 |
Repayments of long-term borrowings and subordinated debt | (5,136,000) | (31,590,000) |
Sale of treasury stock | 124,000 | 198,000 |
Purchase of vested restricted stock | (163,000) | (189,000) |
Common dividends paid | (10,568,000) | (10,713,000) |
Net Cash Provided by (Used in) Financing Activities | 68,478,000 | (59,508,000) |
INCREASE IN CASH AND CASH EQUIVALENTS | 137,026,000 | 14,056,000 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 31,122,000 | 32,827,000 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 168,148,000 | 46,883,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Right-of-use assets recognized at adoption of ASU 2016-02 | 0 | 1,132,000 |
Leased assets obtained in exchange for new operating lease liabilities | 167,000 | 745,000 |
Accrued purchase of available-for-sale debt securities | 287,000 | 3,857,000 |
Accrued sale of available-for-sale securities | 488,000 | 0 |
Accrued income from life insurance claim | 279,000 | 0 |
Assets acquired through foreclosure of real estate loans | 0 | 1,863,000 |
Interest paid | 7,635,000 | 6,721,000 |
Income taxes paid | $ 2,975,000 | $ 1,500,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent | Total |
Balance (in shares) at Dec. 31, 2018 | 12,655,171 | 335,841 | ||||
Balance at Dec. 31, 2018 | $ 12,655 | $ (6,362) | $ 72,602 | $ 122,643 | $ (4,170) | $ 197,368 |
Net income | 14,046 | 14,046 | ||||
Other comprehensive (loss) income | 8,630 | 8,630 | ||||
Cash dividends declared on common stock | (11,966) | (11,966) | ||||
Shares issued for dividend reinvestment plan (in shares) | (48,195) | |||||
Shares issued for dividend reinvestment plan | $ 920 | 333 | 1,253 | |||
Share issued from treasury and redeemed related to exercise of stock options (in shares) | (18,071) | |||||
Shares issued from treasury and redeemed related to exercise of stock options | $ 344 | (146) | 198 | |||
Restricted stock granted (in shares) | (48,137) | |||||
Restricted stock granted | $ 918 | (918) | 0 | |||
Forfeiture of restricted stock (in shares) | 3,144 | |||||
Forfeiture of restricted stock | $ (60) | 60 | 0 | |||
Stock-based compensation expense | 646 | 646 | ||||
Purchase of restricted stock for tax withholding (in shares) | 7,392 | |||||
Purchase of restricted stock for tax withholding | $ (189) | (189) | ||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs (in shares) | 1,279,825 | |||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs | $ 1,280 | 31,673 | 32,953 | |||
Balance (in shares) at Sep. 30, 2019 | 13,934,996 | 231,974 | ||||
Balance at Sep. 30, 2019 | $ 13,935 | $ (4,429) | 104,250 | 124,723 | 4,460 | 242,939 |
Balance (in shares) at Jun. 30, 2019 | 13,934,996 | 246,997 | ||||
Balance at Jun. 30, 2019 | $ 13,935 | $ (4,716) | 103,953 | 123,112 | 3,432 | 239,716 |
Net income | 5,307 | 5,307 | ||||
Other comprehensive (loss) income | 1,028 | 1,028 | ||||
Cash dividends declared on common stock | (3,696) | (3,696) | ||||
Shares issued for dividend reinvestment plan (in shares) | (15,023) | |||||
Shares issued for dividend reinvestment plan | $ 287 | 82 | 369 | |||
Stock-based compensation expense | 215 | 215 | ||||
Balance (in shares) at Sep. 30, 2019 | 13,934,996 | 231,974 | ||||
Balance at Sep. 30, 2019 | $ 13,935 | $ (4,429) | 104,250 | 124,723 | 4,460 | 242,939 |
Balance (in shares) at Dec. 31, 2019 | 13,934,996 | 218,551 | ||||
Balance at Dec. 31, 2019 | $ 13,935 | $ (4,173) | 104,519 | 126,480 | 3,691 | 244,452 |
Net income | 12,452 | 12,452 | ||||
Other comprehensive (loss) income | 7,918 | 7,918 | ||||
Cash dividends declared on common stock | (11,708) | (11,708) | ||||
Shares issued for dividend reinvestment plan (in shares) | (56,649) | |||||
Shares issued for dividend reinvestment plan | $ 1,094 | 46 | 1,140 | |||
Share issued from treasury and redeemed related to exercise of stock options (in shares) | (9,652) | |||||
Shares issued from treasury and redeemed related to exercise of stock options | $ 186 | (62) | 124 | |||
Restricted stock granted (in shares) | (70,940) | |||||
Restricted stock granted | $ 1,370 | (1,370) | 0 | |||
Forfeiture of restricted stock (in shares) | 5,290 | |||||
Forfeiture of restricted stock | $ (100) | 100 | 0 | |||
Stock-based compensation expense | 672 | 672 | ||||
Purchase of restricted stock for tax withholding (in shares) | 5,862 | |||||
Purchase of restricted stock for tax withholding | $ (163) | (163) | ||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs (in shares) | 2,047,819 | |||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs | $ 2,048 | 39,381 | 41,429 | |||
Balance (in shares) at Sep. 30, 2020 | 15,982,815 | 92,462 | ||||
Balance at Sep. 30, 2020 | $ 15,983 | $ (1,786) | 143,286 | 127,224 | 11,609 | 296,316 |
Balance (in shares) at Jun. 30, 2020 | 13,934,996 | 127,839 | ||||
Balance at Jun. 30, 2020 | $ 13,935 | $ (2,470) | 103,954 | 128,661 | 11,711 | 255,791 |
Net income | 2,848 | 2,848 | ||||
Other comprehensive (loss) income | (102) | (102) | ||||
Cash dividends declared on common stock | (4,285) | (4,285) | ||||
Shares issued for dividend reinvestment plan (in shares) | (21,949) | |||||
Shares issued for dividend reinvestment plan | $ 423 | (36) | 387 | |||
Restricted stock granted (in shares) | (15,076) | |||||
Restricted stock granted | $ 291 | (291) | 0 | |||
Forfeiture of restricted stock (in shares) | 1,648 | |||||
Forfeiture of restricted stock | $ (30) | 30 | 0 | |||
Stock-based compensation expense | 248 | 248 | ||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs (in shares) | 2,047,819 | |||||
Shares issued for acquisition of Covenant Financial, Inc., net of equity issuance costs | $ 2,048 | 39,381 | 41,429 | |||
Balance (in shares) at Sep. 30, 2020 | 15,982,815 | 92,462 | ||||
Balance at Sep. 30, 2020 | $ 15,983 | $ (1,786) | $ 143,286 | $ 127,224 | $ 11,609 | $ 296,316 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Retained Earnings [Member] | ||||
Common stock, dividends, per share (in dollars per share) | $ 0.27 | $ 0.27 | $ 0.81 | $ 0.91 |
BASIS OF INTERIM PRESENTATION A
BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS | |
BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS | 1. BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS The consolidated financial statements include the accounts of Citizens & Northern Corporation and its subsidiaries, Citizens & Northern Bank (“C&N Bank”), Bucktail Life Insurance Company and Citizens & Northern Investment Corporation (collectively, “Corporation”). The consolidated financial statements also include C&N Bank’s wholly-owned subsidiaries, C&N Financial Services Corporation and Northern Tier Holding LLC. C&N Bank is the sole member of Northern Tier Holding LLC. All material intercompany balances and transactions have been eliminated in consolidation. The consolidated financial information included herein, except the consolidated balance sheet dated December 31, 2019, is unaudited. Such information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity for the interim periods; however, the information does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for a complete set of financial statements. Certain 2019 information has been reclassified for consistency with the 2020 presentation. Operating results reported for the nine-month period ended September 30, 2020 might not be indicative of the results for the year ending December 31, 2020. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission. RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future. Recent Accounting Pronouncements - Adopted ASU 2018-13, Fair Value Measurement (Topic 820) modifies disclosure requirements on fair value measurements. This ASU removes requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. ASU 2018-13 clarifies that disclosure regarding measurement uncertainty is intended to communicate information about the uncertainty in measurement as of the reporting date. ASU 2018-13 adds certain disclosure requirements, including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU became effective for the Corporation beginning in the first quarter 2020. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively, while all other amendments should be applied retrospectively for all periods presented. Note 13 provides disclosure regarding fair value measurements of the Corporation’s financial instruments. Adoption of this ASU did not have a material impact on the Corporation’s consolidated financial position or results of operations. Recently Issued But Not Yet Effective Accounting Pronouncements ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), as modified by subsequent ASUs, changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. The effect of implementing this ASU is recorded through a cumulative-effect adjustment to retained earnings. The Corporation has formed a cross functional management team and is working with an outside vendor assessing alternative loss estimation methodologies and the Corporation’s data and system needs to evaluate the impact that adoption of this standard will have on the Corporation’s financial condition and results of operations. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Corporation, resulting in a required implementation date for the Corporation of January 1, 2023. ASU 2020-04, Reference Rate Reform (Topic 848) provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The guidance includes a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. Some specific optional expedients are as follows: ● Simplifies accounting for contract modifications, including modifications to loans receivable and debt, by prospectively adjusting the effective interest rate. ● Simplifies the assessment of hedge effectiveness and allows hedging relationships affected by reference rate reform to continue. The amendments in ASU 2020-04 are effective as of March 12, 2020 through December 31, 2022. The Corporation expects to apply the amendments prospectively for applicable loan and other contracts within the effective period of ASU 2020-04. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2020 | |
BUSINESS COMBINATIONS | |
BUSINESS COMBINATION AND PENDING ACQUISITION | 2. BUSINESS COMBINATIONS Acquisition of Covenant Financial, Inc. On July 1, 2020, the Corporation completed its acquisition of Covenant Financial, Inc. (“Covenant”). Covenant was the holding company for Covenant Bank, which operated banking offices in Bucks and Chester Counties of Pennsylvania. Management believes the acquisition provides an opportunity to expand the Corporation’s presence in a higher growth market and further leverage the Corporation’s capital to enhance long-term shareholder value. The unaudited consolidated financial statements include the formerly separate Covenant operations from July 1, 2020 through September 30, 2020. Since the activities of the former Covenant operations have been combined with those of the Corporation, separate disclosure of Covenant-related financial information included in the unaudited consolidated financial statements is not practicable. Total purchase consideration was $63,266,000, including cash paid to former Covenant shareholders totaling $21,654,000 and 2,047,819 shares of Corporation common stock issued with a value of $41,612,000. In the table below, the cash portion of merger consideration includes $183,000 of costs directly related to issuance of stock, and the equity portion of merger consideration has been reduced by these costs. The merger was accounted for using the acquisition method of accounting and, accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. The preliminary fair value of assets acquired, excluding goodwill, totaled $608,631,000, while the preliminary fair value of liabilities assumed totaled $569,503,000. Goodwill represents consideration transferred in excess of the fair value of the net assets acquired. At July 1, 2020, the Corporation recognized preliminary goodwill of $24,138,000 associated with the acquisition. The goodwill resulting from the acquisition represents the value expected from the further expansion of the Corporation’s market penetration into Southeastern Pennsylvania, adding to the base established in the acquisition of Monument Bancorp, Inc. in 2019. Goodwill acquired in the Covenant merger is not deductible for tax purposes as the acquisition is accounted for as a tax-free exchange for tax purposes. The following table summarizes the consideration paid for Covenant and the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date: (In Thousands) Fair value of consideration transferred: Cash $ 21,837 Common stock issued 41,429 Total consideration transferred $ 63,266 Estimated fair value of assets acquired and (liabilities) assumed: Cash and cash equivalents $ 97,792 Available-for-sale debt securities 10,754 Loans receivable 464,792 Bank-owned life insurance 11,170 Accrued interest receivable 1,922 Bank premises and equipment 3,250 Foreclosed assets held for sale 860 Deferred tax asset, net 1,469 Core deposit intangible 3,144 Goodwill 24,138 Other assets 13,478 Deposits (481,796) Short-term borrowings (33,950) Long-term borrowings (30,025) Subordinated debt (10,091) Accrued interest and other liabilities (13,641) Estimated excess fair value of assets acquired over liabilities assumed $ 63,266 In the consolidated statements of cash flows, noncash investing and financing activities include the issuance of common stock as part of the merger consideration as well as the following categories of assets acquired and liabilities assumed from Covenant as reflected in the table above: available-for-sale debt securities, loans receivable, bank-owned life insurance, bank premises and equipment, foreclosed assets held for sale, core deposit intangible, goodwill, other assets (including Federal Home Loan Bank of Pittsburgh stock of $2,939,000), deposits, short-term borrowings, long-term borrowings, subordinated debt and accrued interest and other liabilities. Acquisition date fair values for available-for-sale securities were determined using Level 1 inputs consistent with the methods discussed further in Note 13. The determination of estimated fair values of the acquired loans required the Corporation to make certain estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. Based on such factors as past due status, nonaccrual status, bankruptcy status, and credit risk ratings, the acquired loans were evaluated, and twenty-four loans displayed evidence of credit quality deterioration. These loans are accounted for under ASC 310-30 (purchased credit impaired, or “PCI”). The majority of the purchased loans did not display evidence of impairment, and thus are accounted for under ASC 310-20. Expected cash flows, both principal and interest, were estimated based on key assumptions covering such factors as prepayments, default rates and severity of loss given default. These assumptions were developed using both Covenant’s historical experience and the portfolio characteristics as of the acquisition date as well as available market research. The fair value estimates for acquired loans were based on the amount and timing of expected principal, interest and other cash flows, including expected prepayments, discounted at prevailing market interest rates applicable to the types of acquired loans, which the Corporation considers Level 3 fair value measurements. Loans acquired from Covenant were measured at fair value at the acquisition date with no carryover of an allowance for loan losses. (In Thousands) Performing PCI Total Residential mortgage: Residential mortgage loans - first liens $ 65,883 $ 0 $ 65,883 Residential mortgage loans - junior liens 4,141 75 4,216 Home equity lines of credit 8,368 0 8,368 1-4 Family residential construction 11,437 0 11,437 Total residential mortgage 89,829 75 89,904 Commercial: Commercial loans secured by real estate 240,482 4,152 244,634 Commercial and industrial 39,068 806 39,874 Small Business Adminstration - Paycheck Protection Program 63,740 0 63,740 Loans secured by farmland 73 0 73 Multi-family (5 or more) residential 23,065 2,171 25,236 Other commercial loans 952 0 952 Total commercial 367,380 7,129 374,509 Consumer 379 0 379 Total $ 457,588 $ 7,204 464,792 The following table presents the preliminary fair value adjustments made to the amortized cost basis of loans acquired on July 1, 2020: (In Thousands) Gross amortized cost at acquisition $ 472,012 Fair value adjustments: Market rates 2,909 Credit adjustment on non-impaired loans (7,219) Credit adjustment on impaired loans (2,910) Fair value at acquisition $ 464,792 The market rate adjustment represents the movement in interest rates, irrespective of credit adjustments, compared to the contractual rates of the acquired loans. The credit adjustment made on non-PCI loans represents changes in credit quality of the underlying borrowers from loan inception to the acquisition date. The credit adjustment on PCI loans is derived in accordance with ASC 310-30 and represents the portion of the loan balances that have been deemed uncollectible for each loan. The PCI loans are secured by real estate or other collateral, and the fair value of each loan was determined based on the estimated proceeds to be derived from selling the collateral, net of selling costs. The PCI loans were placed into nonaccrual status upon acquisition (and remained in nonaccrual status at September 30, 2020) as the Corporation cannot reasonably estimate cash flows expected to be collected in order to compute yield on the loans. The Corporation recognized a core deposit intangible of $3,144,000. The core deposit intangible represents the estimated value of lower-cost funding provided by the nonmaturity deposits assumed in comparison with the Corporation’s estimated cost of borrowing funds in the market. The valuation assumptions to determine the core deposit intangible were comprised of level 2 and level 3 inputs. The core deposit intangible will be amortized over a weighted-average life of 5.4 years. Deposit liabilities assumed were segregated into two categories: (1) nonmaturity deposits (checking, savings and money market), and (2) time deposits (deposit accounts with a stated maturity). The fair values of both categories of deposits were determined using level 2 fair value measurements. For nonmaturity deposits, the acquisition date outstanding balance of the assumed demand deposit accounts approximates fair value. In determining the fair value of time deposits, the Corporation discounted the contractual cash flows of the deposit accounts using prevailing market interest rates for time deposit accounts of similar type and duration. Short-term and long-term borrowings assumed consisted of advances from the Federal Home Loan Bank of Pittsburgh. The fair value of borrowings was determined using Level 2 measurements by discounting the contractual cash flows of the borrowings using Federal Home Loan Bank interest rates available July 1, 2020 for advances to the same maturities as those of the deposits assumed. Subordinated debt assumed included two issues: (1) agreements with par values totaling $8,000,000, maturing in June 2021, redeemable at par beginning in June 2021 and bearing interest at 6.25%; and (2) an agreement with a par value of $2,000,000, maturing in July 2027, redeemable at par beginning in July 2022 and bearing interest at 6.50%. The fair value of subordinated debt was determined using Level 2 measurements by comparing the interest rates on the debt to the rates on similar recent issues of comparable size by other similar-sized banking companies. The Corporation incurred merger-related expenses associated with the Covenant transaction of $6,402,000 in the third quarter 2020. For the nine months ended September 30, 2020, merger-related expenses totaled . Merger-related expenses include severance and similar expenses, costs associated with termination of data processing contracts and conversion of Covenant’s customer accounting data into the Corporation’s core system, legal and other professional fees and various other costs. The following table presents pro forma information as if the merger between the Corporation and Covenant had been completed on January 1, 2019. The pro forma information does not necessarily reflect the results of operations that would have occurred had the merger taken place at the beginning of 2019. The supplemental pro forma information excludes merger-related expenses totaling net of tax. Similarly, the pro forma information excludes merger-related expenses totaling incurred by Covenant). The pro forma also excludes a tax benefit of (In Thousands Except Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Interest income $ 21,632 $ 23,142 $ 66,564 $ 64,800 Interest expense 3,091 4,367 10,727 10,747 Net interest income 18,541 18,775 55,837 54,053 Provision for loan losses 1,941 1,208 3,393 1,047 Net interest after provision for loan losses 16,600 17,567 52,444 53,006 Noninterest income 6,970 5,523 18,092 15,546 Net gains on securities 25 13 25 20 Other noninterest expenses 14,572 14,530 45,604 46,198 Income before income tax provision 9,023 8,573 24,957 22,374 Income tax provision 1,605 1,511 4,610 3,886 Net income $ 7,418 $ 7,062 $ 20,347 $ 18,488 Earnings per common share - basic $ 0.47 $ 0.45 $ 1.28 $ 1.21 Earnings per common share - diluted $ 0.47 $ 0.45 $ 1.28 $ 1.21 Business Combination – Acquisition of Monument Bancorp, Inc. On April 1, 2019, the Corporation completed its acquisition of 100% of the common stock of Monument Bancorp, Inc. (“Monument”). Monument was the parent company of Monument Bank, a commercial bank which operated two community bank offices and one lending office in Bucks County, Pennsylvania. Pursuant to the merger, Monument was merged into Citizens & Northern Corporation and Monument Bank was merged into C&N Bank. Total purchase consideration was $42.7 million, including cash paid to former Monument shareholders totaling $9.6 million and 1,279,825 shares of Corporation common stock issued with a value of $33.1 million, net of costs directly related to stock issuance of $181,000. In connection with the transaction, the Corporation recorded goodwill of $16.4 million and a core deposit intangible asset of $1.5 million. Total loans acquired on April 1, 2019 were valued at $259.3 million, while total deposits assumed were valued at $223.3 million, borrowings were valued at $111.6 million and subordinated debt was valued at $12.4 million. The subordinated debt included an instrument with a fair value of $5.4 million that was redeemed on April 1, 2019 with no realized gain or loss. The Corporation acquired available-for-sale debt securities valued at $94.6 million and sold the securities in early April for approximately no realized gain or loss. The assets purchased and liabilities assumed in the merger were recorded at their estimated fair values at the time of closing, subject to refinement for up to one year after the closing date. There were no adjustments to the fair value measurements of assets or liabilities in 2020. Merger-related expenses, including legal and professional expenses and conversion of Monument’s customer accounting data into the Corporation’s core system, were $206,000 in the third quarter 2019 and $3,818,000 in the nine-month period ended September 30, 2019. |
PER SHARE DATA
PER SHARE DATA | 9 Months Ended |
Sep. 30, 2020 | |
PER SHARE DATA | |
PER SHARE DATA | 3. PER SHARE DATA Basic earnings per common share are calculated using the two-class method to determine income attributable to common shareholders. Unvested restricted stock awards that contain nonforfeitable rights to dividends are considered participating securities under the two-class method. Distributed dividends and an allocation of undistributed net income to participating securities reduce the amount of income attributable to common shareholders. Income attributable to common shareholders is then divided by weighted-average common shares outstanding for the period to determine basic earnings per common share. Diluted earnings per common share are calculated under the more dilutive of either the treasury method or the two-class method. Diluted earnings per common share is computed using weighted-average common shares outstanding, plus weighted-average common shares available from the exercise of all dilutive stock options, less the number of shares that could be repurchased with the proceeds of stock option exercises based on the average share price of the Corporation’s common stock during the period. (In Thousands, Except Share and Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Basic Net income $ 2,848 $ 5,307 $ 12,452 $ 14,046 Less: Dividends and undistributed earnings allocated to participating securities (18) (26) (74) (72) Net income attributable to common shares $ 2,830 $ 5,281 $ 12,378 $ 13,974 Basic weighted-average common shares outstanding 15,778,391 13,627,676 14,388,797 13,182,960 Basic earnings per common share (a) $ 0.18 $ 0.39 $ 0.86 $ 1.06 Diluted Net income attributable to common shares $ 2,830 $ 5,281 $ 12,378 $ 13,974 Basic weighted-average common shares outstanding 15,778,391 13,627,676 14,388,797 13,182,960 Dilutive effect of potential common stock arising from stock options 1,330 19,142 4,632 23,284 Diluted weighted-average common shares outstanding 15,779,721 13,646,818 14,393,429 13,206,244 Diluted earnings per common share (a) $ 0.18 $ 0.39 $ 0.86 $ 1.06 Weighted-average nonvested restricted shares outstanding 102,629 68,814 85,611 68,284 (a) Basic and diluted earnings per share under the two-class method are determined on net income reported on the consolidated statements of income, less earnings allocated to non-vested restricted shares with nonforfeitable dividends (participating securities). Anti-dilutive stock options are excluded from net income per share calculations. Weighted-average common shares available from anti-dilutive instruments totaled 39,012 shares in the three-month period ended September 30, 2020 and 19,506 shares in the nine-month period ended September 30, 2020. There were no anti-dilutive instruments in the three-month and nine-month periods ended September 30, 2019. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 9 Months Ended |
Sep. 30, 2020 | |
COMPREHENSIVE INCOME | |
COMPREHENSIVE INCOME | 4. COMPREHENSIVE INCOME Comprehensive income is the total of (1) net income, and (2) all other changes in equity from non-stockholder sources, which are referred to as other comprehensive income (loss). The components of other comprehensive income (loss), and the related tax effects, are as follows: (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Nine Months Ended September 30, 2020 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 9,980 $ (2,095) $ 7,885 Reclassification adjustment for (gains) realized in income (25) 5 (20) Other comprehensive income on available-for-sale debt securities 9,955 (2,090) 7,865 Unfunded pension and postretirement obligations: Changes from plan amendments and actuarial gains and losses included in other comprehensive income 88 (18) 70 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (22) 5 (17) Other comprehensive income on unfunded retirement obligations 66 (13) 53 Total other comprehensive income $ 10,021 $ (2,103) $ 7,918 (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Nine Months Ended September 30, 2019 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 10,754 $ (2,258) $ 8,496 Reclassification adjustment for (gains) realized in income (20) 4 (16) Other comprehensive income on available-for-sale debt securities 10,734 (2,254) 8,480 Unfunded pension and postretirement obligations: Changes from plan amendments and actuarial gains and losses included in other comprehensive income 214 (45) 169 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (23) 4 (19) Other comprehensive income on unfunded retirement obligations 191 (41) 150 Total other comprehensive income $ 10,925 $ (2,295) $ 8,630 (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Three Months Ended September 30, 2020 Unrealized gains on available-for-sale debt securities: Unrealized holding losses on available-for-sale debt securities $ (95) $ 19 $ (76) Reclassification adjustment for (gains) realized in income (25) 5 (20) Other comprehensive loss on available-for-sale debt securities (120) 24 (96) Unfunded pension and postretirement obligations, Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (8) 2 (6) Total other comprehensive loss $ (128) $ 26 $ (102) (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Three Months Ended September 30, 2019 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 1,323 $ (278) $ 1,045 Reclassification adjustment for (gains) realized in income (13) 3 (10) Other comprehensive income on available-for-sale debt securities 1,310 (275) 1,035 Unfunded pension and postretirement obligations, Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (8) 1 (7) Total other comprehensive income $ 1,302 $ (274) $ 1,028 The amounts shown in the table immediately above are included in the following line items in the consolidated statements of income: Affected Line Item in the Description Consolidated Statements of Income Amortization of prior service cost and Other noninterest expense net actuarial loss included in net periodic benefit cost (before-tax) Reclassification adjustment for (gains) Realized gains on available-for-sale realized in income (before-tax) debt securities, net Income tax effect Income tax provision Changes in the components of accumulated other comprehensive income (loss) are as follows and are presented net of tax: (In Thousands) Accumulated Unrealized Unfunded Other Gains Retirement Comprehensive on Securities Obligations Income (Loss) Nine Months Ended September 30, 2020 Balance, beginning of period $ 3,511 $ 180 $ 3,691 Other comprehensive income during nine months ended September 30, 2020 7,865 53 7,918 Balance, end of period $ 11,376 $ 233 $ 11,609 Nine Months Ended September 30, 2019 Balance, beginning of period $ (4,307) $ 137 $ (4,170) Other comprehensive income during nine months ended September 30, 2019 8,480 150 8,630 Balance, end of period $ 4,173 $ 287 $ 4,460 (In Thousands) Unrealized Accumulated Gains Unfunded Other (Losses) Retirement Comprehensive on Securities Obligations Income Three Months Ended September 30, 2020 Balance, beginning of period $ 11,472 $ 239 $ 11,711 Other comprehensive loss during three months ended September 30, 2020 (96) (6) (102) Balance, end of period $ 11,376 $ 233 $ 11,609 Three Months Ended September 30, 2019 Balance, beginning of period $ 3,138 $ 294 $ 3,432 Other comprehensive income during three months ended September 30, 2019 1,035 (7) 1,028 Balance, end of period $ 4,173 $ 287 $ 4,460 |
CASH AND DUE FROM BANKS
CASH AND DUE FROM BANKS | 9 Months Ended |
Sep. 30, 2020 | |
CASH AND DUE FROM BANKS | |
CASH AND DUE FROM BANKS | 5. CASH AND DUE FROM BANKS Cash and due from banks at September 30, 2020 and December 31, 2019 include the following: (In Thousands) September 30, December 31, 2020 2019 Cash and cash equivalents $ 168,148 $ 31,122 Certificates of deposit 6,330 4,080 Total cash and due from banks $ 174,478 $ 35,202 Certificates of deposit are issues by U.S. banks with original maturities greater than three months. Each certificate of deposit is fully FDIC-insured. The Corporation maintains cash and cash equivalents with certain financial institutions in excess of the FDIC insurance limit. Historically, C&N Bank has been required to maintain reserves against deposit liabilities in the form of cash and balances with the Federal Reserve Bank of Philadelphia. The reserves are based on deposit levels, account activity, and other services provided by the Federal Reserve Bank. In March 2020, the Federal Reserve Board reduced reserve requirements for U.S. banks to 0%. Accordingly, C&N Bank had no required reserves at September 30, 2020. Required reserves were $20,148,000 at December 31, 2019. |
SECURITIES
SECURITIES | 9 Months Ended |
Sep. 30, 2020 | |
SECURITIES | |
SECURITIES | 6. SECURITIES Amortized cost and fair value of available-for-sale debt securities at September 30, 2020 and December 31, 2019 are summarized as follows: (In Thousands) September 30, 2020 Gross Gross Unrealized Unrealized Amortized Holding Holding Fair Cost Gains Losses Value Obligations of the U.S. Treasury $ 12,228 $ 0 $ (2) $ 12,226 Obligations of U.S. Government agencies 15,348 1,007 0 16,355 Obligations of states and political subdivisions: Tax-exempt 104,821 5,057 (210) 109,668 Taxable 42,079 2,161 (45) 44,195 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 44,697 1,514 0 46,211 Residential collateralized mortgage obligations 67,635 1,726 (24) 69,337 Commercial mortgage-backed securities 39,337 3,216 0 42,553 Total available-for-sale debt securities $ 326,145 $ 14,681 $ (281) $ 340,545 (In Thousands) December 31, 2019 Gross Gross Unrealized Unrealized Amortized Holding Holding Fair Cost Gains Losses Value Obligations of U.S. Government agencies $ 16,380 $ 620 $ 0 $ 17,000 Obligations of states and political subdivisions: Tax-exempt 68,787 2,011 (38) 70,760 Taxable 35,446 927 (70) 36,303 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 58,875 472 (137) 59,210 Residential collateralized mortgage obligations 115,025 308 (610) 114,723 Commercial mortgage-backed securities 47,765 1,069 (107) 48,727 Total available-for-sale debt securities $ 342,278 $ 5,407 $ (962) $ 346,723 The following table presents gross unrealized losses and fair value of available-for-sale debt securities with unrealized loss positions that are not deemed to be other-than-temporarily impaired, aggregated by length of time that individual securities have been in a continuous unrealized loss position at September 30, 2020 and December 31, 2019: September 30, 2020 Less Than 12 Months 12 Months or More Total (In Thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Obligations of the U.S. Treasury $ 12,226 $ (2) $ 0 $ 0 $ 12,226 $ (2) Obligations of states and political subdivisions: Tax-exempt 17,061 (210) 0 0 17,061 (210) Taxable 4,856 (45) 0 0 4,856 (45) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, Residential collateralized mortgage obligations 4,165 (24) 0 0 4,165 (24) Total temporary impaired available for sale debt securities $ 38,308 $ (281) $ 0 $ 0 $ 38,308 $ (281) December 31, 2019 Less Than 12 Months 12 Months or More Total (In Thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Obligations of states and political subdivisions: Tax-exempt $ 6,429 $ (38) $ 0 $ 0 $ 6,429 $ (38) Taxable 5,624 (68) 161 (2) 5,785 (70) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 9,771 (35) 14,787 (102) 24,558 (137) Residential collateralized mortgage obligations 31,409 (195) 30,535 (415) 61,944 (610) Commercial mortgage-backed securities 0 0 8,507 (107) 8,507 (107) Total temporarily impaired available-for-sale debt securities $ 53,233 $ (336) $ 53,990 $ (626) $ 107,223 $ (962) Gross realized gains and losses from available-for-sale debt securities were as follows: (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Gross realized gains from sales $ 26 $ 14 $ 78 $ 21 Gross realized losses from sales (1) (1) (53) (1) Net realized gains $ 25 $ 13 $ 25 $ 20 The amortized cost and fair value of available-for-sale debt securities by contractual maturity are shown in the following table as of September 30, 2020. Actual maturities may differ from contractual maturities because counterparties may have the right to call or prepay obligations with or without call or prepayment penalties. (In Thousands) September 30, 2020 Amortized Fair Cost Value Due in one year or less $ 14,411 $ 14,469 Due from one year through five years 45,804 47,460 Due from five years through ten years 37,479 40,088 Due after ten years 76,782 80,427 Sub-total 174,476 182,444 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 44,697 46,211 Residential collateralized mortgage obligations 67,635 69,337 Commercial mortgage-backed securities 39,337 42,553 Total $ 326,145 $ 340,545 The Corporation’s mortgage-backed securities and collateralized mortgage obligations have stated maturities that may differ from actual maturities due to borrowers’ ability to prepay obligations. Cash flows from such investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of interest rates. In the table above, mortgage-backed securities and collateralized mortgage obligations are shown in one period. Investment securities carried at $255,312,000 at September 30, 2020 and $215,270,000 at December 31, 2019 were pledged as collateral for public deposits, trusts and certain other deposits as provided by law. See Note 9 for information concerning securities pledged to secure borrowing arrangements. Management evaluates securities for other-than-temporary impairment (OTTI) at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether the Corporation intends to sell the security or more likely than not will be required to sell the security before its anticipated recovery. A summary of information management considered in evaluating debt and equity securities for other-than-temporary impairment (“OTTI”) at September 30, 2020 is provided below. Debt Securities At September 30, 2020 and December 31, 2019, management performed an assessment for possible OTTI of the Corporation’s debt securities on an issue-by-issue basis, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. The extent of individual analysis applied to each security depended on the size of the Corporation’s investment, as well as management’s perception of the credit risk associated with each security. Based on the results of the assessment, management believes impairment of debt securities at September 30, 2020 and December 31, 2019 to be temporary. Equity Securities C&N Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB-Pittsburgh), which is one of 11 regional Federal Home Loan Banks. As a member, C&N Bank is required to purchase and maintain stock in FHLB-Pittsburgh. There is no active market for FHLB-Pittsburgh stock, and it must ordinarily be redeemed by FHLB-Pittsburgh in order to be liquidated. C&N Bank’s investment in FHLB-Pittsburgh stock, included in Other Assets in the consolidated balance sheets, was $11,929,000 at September 30, 2020 and $10,131,000 at December 31, 2019. The Corporation evaluated its holding of FHLB-Pittsburgh stock for impairment and deemed the stock to not be impaired at September 30, 2020 and December 31, 2019. In making this determination, management concluded that recovery of total outstanding par value, which equals the carrying value, is expected. The decision was based on review of financial information that FHLB-Pittsburgh has made publicly available. The Corporation’s marketable equity security, with a carrying value of $1,003,000 at September 30, 2020 and $979,000 at December 31, 2019, consisted exclusively of one mutual fund. There was an unrealized gain on the mutual fund of $3,000 at September 30, 2020 and an unrealized loss of $21,000 at December 31, 2019. Changes in the unrealized gains or losses on this security are included in other noninterest income in the consolidated statements of income. |
LOANS
LOANS | 9 Months Ended |
Sep. 30, 2020 | |
LOANS | |
LOANS | 7. LOANS The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at September 30, 2020 and December 31, 2019 are summarized by segment, and by classes within each segment, as follows: Summary of Loans by Type (In Thousands) September 30, December 31, 2020 2019 Residential mortgage: Residential mortgage loans - first liens $ 541,827 $ 510,641 Residential mortgage loans - junior liens 27,907 27,503 Home equity lines of credit 40,143 33,638 1-4 Family residential construction 29,146 14,798 Total residential mortgage 639,023 586,580 Commercial: Commercial loans secured by real estate 530,874 301,227 Commercial and industrial 156,169 126,374 Small Business Administration - Paycheck Protection Program 163,050 0 Political subdivisions 47,883 53,570 Commercial construction and land 41,906 33,555 Loans secured by farmland 11,913 12,251 Multi-family (5 or more) residential 62,330 31,070 Agricultural loans 3,561 4,319 Other commercial loans 17,385 16,535 Total commercial 1,035,071 578,901 Consumer 17,276 16,741 Total 1,691,370 1,182,222 Less: allowance for loan losses (10,753) (9,836) Loans, net $ 1,680,617 $ 1,172,386 In the table above, outstanding loan balances are presented net of deferred loan origination fees, net, of $7,620,000 at September 30, 2020 and $2,482,000 at December 31, 2019. The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in northcentral Pennsylvania, the southern tier of New York State and southeastern Pennsylvania. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. There is no concentration of loans to borrowers engaged in similar businesses or activities that exceed 10% of total loans at either September 30, 2020 or December 31, 2019. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act is a $2 trillion stimulus package designed to provide relief to U.S. businesses and consumers struggling as a result of the pandemic. A provision in the CARES Act includes creation of the Paycheck Protection Program (“PPP”) through the Small Business Administration (“SBA”) and Treasury Department. Under the PPP, the Corporation, as an SBA-certified lender, provides SBA-guaranteed loans to small businesses to pay their employees, rent, mortgage interest, and utilities. PPP loans will be forgiven subject to clients’ providing documentation evidencing their compliant use of funds and otherwise complying with the terms of the program. The maximum term of PPP loans is five years, though most of the Corporation’s PPP loans have two-year terms, and the Corporation will be repaid sooner to the extent the loans are forgiven. The interest rate on PPP loans is 1%, and the Corporation has received fees from the SBA ranging between 1% and 5% per loan, depending on the size of the loan. Fees on PPP loans, net of origination costs and a market rate adjustment on PPP loans acquired from Covenant, are recognized in interest income as a yield adjustment over the term of the loans. The Corporation began accepting and processing applications for loans under the PPP on April 3, 2020. Covenant also engaged in PPP lending starting in early April 2020. As of September 30, 2020, the recorded investment in PPP loans was $163,050,000, including contractual principal balances of $166,690,000, increased by a market rate adjustment on PPP loans acquired from Covenant of $762,000 and reduced by net deferred origination fees of $4,402,000. Net deferred origination fees and the market rate adjustment on PPP loans are recognized in interest income as yield adjustments (net accretion over the term of the loans). Accretion of fees received on PPP loans, net of amortization of the market rate adjustment on PPP loans acquired from Covenant, was $467,000 in the three-month period ended September 30, 2020 and $804,000 in the nine-month period ended September 30, 2020. Section 4013 of the CARES Act provides that, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the coronavirus (COVID-19) pandemic declared by the President of the United States under the National Emergencies Act terminates (the “applicable period”), the Corporation may elect to suspend U.S. GAAP for loan modifications related to the pandemic that would otherwise be categorized as troubled debt restructurings (TDRs) and suspend any determination of a loan modified as a result of the effects of the pandemic as being a TDR, including impairment for accounting purposes. The suspension is applicable for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. The suspension is not applicable to any adverse impact on the credit of a borrower that is not related to the pandemic. In addition, the banking regulators and other financial regulators, on March 22, 2020 and revised April 7, 2020, issued a joint interagency statement titled the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. Pursuant to the interagency statement, loan modifications that do not meet the conditions of Section 4013 of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. Specifically, the agencies confirmed with the FASB staff that short-term modifications made in good faith in response to the pandemic to borrowers who were current prior to any relief are not TDRs under U.S. GAAP. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. Appropriate allowances for loan and lease losses are expected to be maintained. With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to the pandemic as past due because of the deferral. The interagency statement also states that during short-term pandemic-related loan modifications, these loans generally should not be reported as nonaccrual. To work with clients impacted by COVID-19, the Corporation is offering short-term loan modifications on a case-by-case basis to borrowers who were current in their payments at the inception of the loan modification program. Prior to the merger, Covenant had a similar program in place, and these modified loans have been incorporated into the Corporation’s program. These efforts have been designed to assist borrowers as they deal with the current crisis and help the Corporation mitigate credit risk. For loans subject to the program, each borrower is required to resume making regularly scheduled loan payments at the end of the modification period and the deferred amounts will be moved to the end of the loan term. Consistent with Section 4013 of the CARES Act, the modified loans have not been reported as past due, nonaccrual or as TDRs at September 30, 2020. Most of the modifications under the program became effective in March and the second quarter 2020 and provided a deferral of interest or principal and interest for 90-to-180 days. Accordingly, many of the loans for which deferrals were granted returned to full payment status prior to September 30, 2020. The quantity and balances of modifications outstanding under the program at September 30, 2020 are as follows: Deferrals Remaining As of September 30, 2020 (Dollars in Thousands) Number of Recorded Loans Investment COVID-19-related loan modifications: Residential mortgage 16 $ 1,727 Commercial 28 39,912 Total 44 $ 41,639 The ultimate effect of COVID-19 on the local or broader economy is not known. In the first nine months of 2020, the Corporation increased the allowance for loan losses $725,000, including $79,000 in the third quarter, based on an increase in qualitative factors related to potential deterioration in economic conditions. Further, in June and September 2020, the Corporation’s credit administration and commercial lending staffs performed a review of commercial credits with “Pass” ratings in an effort to reduce the risk of failing to identify loans that should be evaluated for risk rating downgrade or a specific allowance. Updated risk ratings and specific allowances based on that review have been included in the September 30, 2020 information presented below. Because of the significant uncertainties related to the ultimate duration of the COVID-19 pandemic and its economic impact, the total impact on the Corporation’s loan portfolio is not determinable. As described in Note 2, effective July 1, 2020, the Corporation acquired loans pursuant to its acquisition of Covenant, and effective April 1, 2019, the Corporation acquired loans pursuant to the acquisition of Monument. The acquired loans were recorded at their initial fair value, with adjustments made to the gross amortized cost of loans based on movements in interest rates (market rate adjustment) and based on credit fair value adjustments on non-impaired loans and impaired loans. In the last three quarters of 2019 and first nine months of 2020, the Corporation recognized amortization and accretion of a portion of the market rate adjustments and credit adjustments on non-impaired (performing) loans, and a partial recovery of purchased credit impaired (PCI) loans. For the three-month and nine-month periods ended September 30, 2020 and 2019, adjustments to the initial market rate and credit fair value adjustments of performing loans were recognized as follows: (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Market Rate Adjustment Adjustments to gross amortized cost of loans at beginning of period $ (1,103) $ (1,658) $ (1,415) $ 0 Market rate adjustment recorded in acquisition 2,909 0 2,909 (1,807) (Amortization) accretion recognized in interest income (452) 110 (140) 259 Adjustments to gross amortized cost of loans at end of period $ 1,354 $ (1,548) $ 1,354 $ (1,548) Credit Adjustment on Non-impaired Loans Adjustments to gross amortized cost of loans at beginning of period $ (878) $ (1,653) $ (1,216) $ 0 Credit adjustment recorded in acquisition (7,219) 0 (7,219) (1,914) Accretion recognized in interest income 970 260 1,308 521 Adjustments to gross amortized cost of loans at end of period $ (7,127) $ (1,393) $ (7,127) $ (1,393) The following table presents the components of the purchase accounting adjustments related to the PCI loans acquired from Covenant as of July 1, 2020: (In Thousands) July 1, 2020 Contractually required principal at acquisition $ 10,114 Non-accretable discount (2,910) Expected cash flows $ 7,204 A summary of PCI loans held at September 30, 2020 and December 31, 2019 is as follows: (In Thousands) September 30, December 31, 2020 2019 Outstanding balance $ 10,453 $ 759 Carrying amount 7,447 441 In the first nine months of 2020, the Corporation recorded interest income of $120,000, including $7,000 in the third quarter 2020, from the excess of proceeds received on the pay-off of PCI loans acquired from Monument in 2019 over their carrying amounts. The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and recorded as a reduction of the investment in loans. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. In the process of evaluating the loan portfolio, management also considers the Corporation’s exposure to losses from unfunded loan commitments. As of September 30, 2020, and December 31, 2019, management determined that no allowance for credit losses related to unfunded loan commitments was required. Transactions within the allowance for loan losses, summarized by segment and class, for the three-month and nine-month periods ended September 30, 2020 and 2019 were as follows: Three Months Ended September 30, 2020 June 30, 2020 September 30, 2020 (In Thousands) Balance Charge-offs Recoveries Provision (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,531 $ 0 $ 26 $ (92) $ 3,465 Residential mortgage loans - junior liens 365 0 0 (7) 358 Home equity lines of credit 287 0 1 1 289 1-4 Family residential construction 137 0 0 32 169 Total residential mortgage 4,320 0 27 (66) 4,281 Commercial: Commercial loans secured by real estate 2,426 0 0 (40) 2,386 Commercial and industrial 2,496 (2,219) 0 1,974 2,251 Commercial construction and land 420 0 0 20 440 Loans secured by farmland 146 0 0 (25) 121 Multi-family (5 or more) residential 163 0 0 64 227 Agricultural loans 40 0 0 (3) 37 Other commercial loans 167 0 0 0 167 Total commercial 5,858 (2,219) 0 1,990 5,629 Consumer 263 (30) 8 17 258 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 11,026 $ (2,249) $ 35 $ 1,941 $ 10,753 Three Months Ended September 30, 2019 June 30, 2020 September 30, 2020 (In Thousands) Balance Charge-offs Recoveries Provision (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,130 $ (50) $ 1 $ 83 $ 3,164 Residential mortgage loans - junior liens 333 0 1 16 350 Home equity lines of credit 280 0 1 1 282 1-4 Family residential construction 220 0 0 38 258 Total residential mortgage 3,963 (50) 3 138 4,054 Commercial: Commercial loans secured by real estate 1,577 0 0 928 2,505 Commercial and industrial 1,246 0 3 7 1,256 Commercial construction and land 152 0 0 6 158 Loans secured by farmland 102 0 0 (1) 101 Multi-family (5 or more) residential 150 0 0 5 155 Agricultural loans 42 0 0 7 49 Other commercial loans 119 0 0 1 120 Total commercial 3,388 0 3 953 4,344 Consumer 264 (66) 9 67 274 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 8,200 $ (116) $ 15 $ 1,158 $ 9,257 December 31, September 30, Nine Months Ended September 30, 2020 2019 Provision 2020 (In Thousands) Balance Charge-offs Recoveries (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,405 $ 0 $ 28 $ 32 $ 3,465 Residential mortgage loans - junior liens 384 0 1 (27) 358 Home equity lines of credit 276 0 3 10 289 1-4 Family residential construction 117 0 0 52 169 Total residential mortgage 4,182 0 32 67 4,281 Commercial: Commercial loans secured by real estate 1,921 0 0 465 2,386 Commercial and industrial 1,391 (2,236) 0 3,096 2,251 Commercial construction and land 966 (107) 0 (419) 440 Loans secured by farmland 158 0 0 (37) 121 Multi-family (5 or more) residential 156 0 0 71 227 Agricultural loans 41 0 0 (4) 37 Other commercial loans 155 0 0 12 167 Total commercial 4,788 (2,343) 0 3,184 5,629 Consumer 281 (100) 35 42 258 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 9,836 $ (2,443) $ 67 $ 3,293 $ 10,753 December 31, September 30, Nine Months Ended September 30, 2019 2018 Provision 2019 (In Thousands) Balance Charge-offs Recoveries (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,156 $ (133) $ 3 $ 138 $ 3,164 Residential mortgage loans - junior liens 325 (24) 1 48 350 Home equity lines of credit 302 0 5 (25) 282 1-4 Family residential construction 203 0 0 55 258 Total residential mortgage 3,986 (157) 9 216 4,054 Commercial: Commercial loans secured by real estate 2,538 0 0 (33) 2,505 Commercial and industrial 1,553 (6) 6 (297) 1,256 Commercial construction and land 110 0 0 48 158 Loans secured by farmland 102 0 0 (1) 101 Multi-family (5 or more) residential 114 0 0 41 155 Agricultural loans 46 0 0 3 49 Other commercial loans 128 0 0 (8) 120 Total commercial 4,591 (6) 6 (247) 4,344 Consumer 233 (132) 31 142 274 Unallocated 499 0 0 86 585 Total Allowance for Loan Losses $ 9,309 $ (295) $ 46 $ 197 $ 9,257 In the evaluation of the loan portfolio, management determines two major components for the allowance for loan losses – (1) a specific component based on an assessment of certain larger relationships, mainly commercial purpose loans, on a loan-by-loan basis; and (2) a general component for the remainder of the portfolio, except for performing loans purchased from Covenant and Monument, based on a collective evaluation of pools of loans with similar risk characteristics. The general component is assigned to each pool of loans based on both historical net charge-off experience, and an evaluation of certain qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the above methodologies for estimating specific and general losses in the portfolio. Performing loans acquired from Covenant and Monument are presented net of a discount for credit losses totaling $7,127,000 at September 30, 2020. Performing loans acquired from Monument are presented net of a discount of $1,216,000 at December 31, 2019. The discounts reflect estimates of the present value of credit losses based on market expectations at the acquisition dates, subsequently reduced as accretion has been recognized based on estimated and actual principal pay-downs. Purchased performing loans were excluded from the loan pools for which the general component of the allowance for loan losses was calculated. The provision for loan losses was $1,941,000 in the third quarter 2020. The provision for loan losses in the third quarter 2020 included the net impact of a charge-off of $2,219,000 on a commercial loan of $3,500,000 for which the previously-established allowance had been $1,193,000. In total, the third quarter 2020 provision included: a net charge of $909,000 related to specific loans (net charge-offs of $2,214,000 partially offset by a decrease in specific allowances on loans of $1,305,000); a charge of $834,000 from an increase in the net charge-off experience factors used to estimate the allowance; a charge of $119,000 from the impact of loan growth, excluding loans purchased from Covenant and PPP loans; and a charge of $79,000 attributable to increases in qualitative factors. There was no provision for loan losses recorded on PPP loans because the SBA guarantees the loans, subject to compliance with program requirements. In comparison, the provision in the third quarter 2019 was $1,158,000, including recognition of a specific allowance of $678,000 on a commercial real estate secured loan and a charge of $373,000 attributable to loan growth. For the first nine months of 2020, the provision for loan losses was $3,293,000, an increase in expense of $3,096,000 as compared to $197,000 recorded in the first nine months of 2019. The provision included the impact of the $2,219,000 charge-off of a commercial loan referenced above. In total, the provision for the first nine months of 2020 included a net charge of $1,976,000 related to specific loans (net decrease in specific allowances on loans of $400,000 and net charge-offs of $2,376,000); a charge of $745,000 from an increase in the net charge-off experience factors used to estimate the allowance; a charge of $725,000 attributable to increases in qualitative factors; and a credit of $153,000 from the impact of a reduction in outstanding loans, excluding PPP and recently purchased loans. The comparative provision for loan losses in the first nine months of 2019 included a benefit from eliminating specific allowances on commercial loans that were no longer considered impaired and a net credit of $347,000 related to changes in net charge-off experience factors used to calculate the allowance. In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table that follows. The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of September 30, 2020 and December 31, 2019: September 30, 2020 (In Thousands) Purchased Special Credit Pass Mention Substandard Doubtful Impaired Total Residential Mortgage: Residential Mortgage loans - first liens $ 525,833 $ 6,331 $ 9,586 $ 0 $ 77 $ 541,827 Residential Mortgage loans - junior liens 27,078 124 570 63 72 27,907 Home Equity lines of credit 39,408 59 676 0 0 40,143 1-4 Family residential construction 29,146 0 0 0 0 29,146 Total residential mortgage 621,465 6,514 10,832 63 149 639,023 Commercial: Commercial loans secured by real estate 508,540 7,920 10,072 0 4,342 530,874 Commercial and Industrial 142,181 9,495 2,905 802 786 156,169 Small Business Administration - Paycheck Protection Program 163,050 0 0 0 0 163,050 Political subdivisions 47,883 0 0 0 0 47,883 Commercial construction and land 41,659 198 49 0 0 41,906 Loans secured by farmland 10,231 453 1,229 0 0 11,913 Multi-family (5 or more) residential 56,507 2,420 1,233 0 2,170 62,330 Agricultural loans 2,959 0 602 0 0 3,561 Other commercial loans 17,385 0 0 0 0 17,385 Total commercial 990,395 20,486 16,090 802 7,298 1,035,071 Consumer 17,184 0 92 0 0 17,276 Totals $ 1,629,044 $ 27,000 $ 27,014 $ 865 $ 7,447 $ 1,691,370 December 31, 2019 (In Thousands) Purchased Special Credit Pass Mention Substandard Doubtful Impaired Total Residential Mortgage: Residential Mortgage loans - first liens $ 500,963 $ 193 $ 9,324 $ 84 $ 77 $ 510,641 Residential Mortgage loans - junior liens 26,953 79 471 0 0 27,503 Home equity lines of credit 33,170 59 409 0 0 33,638 1-4 Family residential construction 14,798 0 0 0 0 14,798 Total residential mortgage 575,884 331 10,204 84 77 586,580 Commercial: Commercial loans secured by real estate 294,397 4,773 1,693 0 364 301,227 Commercial and Industrial 114,293 9,538 2,543 0 0 126,374 Political subdivisions 53,570 0 0 0 0 53,570 Commercial construction and land 32,224 0 1,331 0 0 33,555 Loans secured by farmland 6,528 4,681 1,042 0 0 12,251 Multi-family (5 or more) residential 30,160 0 910 0 0 31,070 Agricultural loans 3,343 335 641 0 0 4,319 Other commercial loans 16,416 0 119 0 0 16,535 Total commercial 550,931 19,327 8,279 0 364 578,901 Consumer 16,720 0 21 0 0 16,741 Totals $ 1,143,535 $ 19,658 $ 18,504 $ 84 $ 441 $ 1,182,222 The general component of the allowance for loan losses covers pools of loans including commercial loans not considered individually impaired, as well as smaller balance homogeneous classes of loans, such as residential real estate, home equity lines of credit and other consumer loans. Accordingly, the Corporation generally does not separately identify individual consumer and residential loans for impairment disclosures, unless such a loan: (1) is subject to a restructuring agreement, or (2) has an outstanding balance of $400,000 or more and a credit grade of Special Mention, Substandard or Doubtful. The pools of loans are evaluated for loss exposure based upon average historical net charge-off rates for each loan class, adjusted for qualitative factors (described in the following paragraphs). The time period used in determining the average historical net charge-off rate for each loan class is based on management’s evaluation of an appropriate time period that captures an historical loss experience relevant to the current portfolio. At September 30, 2020 and December 31, 2019, a five-year average net charge-off rate was used for commercial loans secured by real estate and for multi-family residential loans, while a three-year average net charge-off rate was used for all other loan classes. Qualitative risk factors are evaluated for the impact on each of the three segments (residential mortgage, commercial and consumer) within the loan portfolio. Each qualitative factor is assigned a value to reflect improving, stable or declining conditions based on management’s judgment using relevant information available at the time of the evaluation. The adjustment for qualitative factors is applied as an increase or decrease to the average net charge-off rate for each loan class within each segment. The qualitative factors used in the general component calculations are designed to address credit risk characteristics associated with each segment. The Corporation’s credit risk associated with all of the segments is significantly impacted by these factors, which include economic conditions within its market area, the Corporation’s lending policies, changes or trends in the portfolio, risk profile, competition, regulatory requirements and other factors. Loans are classified as impaired, when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans, by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price. The scope of loans reviewed individually each quarter to determine if they are impaired include all commercial loan relationships greater than $200,000 and any residential mortgage or consumer loans of $400,000 or more for which there is at least one extension of credit graded Special Mention, Substandard or Doubtful. Loans that are individually reviewed, but which are determined to not be impaired, are combined with all remaining loans that are not reviewed on a specific basis, and such loans are included within larger pools of loans based on similar risk and loss characteristics for purposes of determining the general component of the allowance. The loans that have been individually reviewed, but which have been determined to not be impaired, are included in the “Collectively Evaluated” column in the table summarizing the allowance and associated loan balances as of September 30, 2020 and December 31, 2019. All loans classified as troubled debt restructurings (discussed in more detail below), all PCI loans and all commercial loan relationships less than $200,000 or other loan relationships less than $400,000 in the aggregate, but with an estimated loss of $100,000 or more, are individually evaluated for impairment. The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of September 30, 2020 and December 31, 2019. September 30, 2020 (In Thousands) Loans: Allowance for Loan Losses: Purchased Individually Collectively Performing Individually Collectively Evaluated Evaluated Loans Totals Evaluated Evaluated Totals Residential mortgage: Residential mortgage loans - first liens $ 2,238 $ 380,348 $ 159,241 $ 541,827 $ 9 $ 3,456 $ 3,465 Residential mortgage loans - junior liens 424 21,777 5,706 27,907 161 197 358 Home equity lines of credit 85 30,368 9,690 40,143 0 289 289 1-4 Family residential construction 0 18,946 10,200 29,146 0 169 169 Total residential mortgage 2,747 451,439 184,837 639,023 170 4,111 4,281 Commercial: Commercial loans secured by real estate 12,242 190,045 328,587 530,874 410 1,976 2,386 Commercial and industrial 1,367 119,401 35,401 156, |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 8. GOODWILL AND OTHER INTANGIBLE ASSETS Information related to core deposit intangibles, net are as follows: (In Thousands) September 30, December 31, 2020 2019 Gross amount $ 6,639 $ 3,495 Accumulated amortization (2,580) (2,248) Net $ 4,059 $ 1,247 Amortization expense related to core deposit intangibles is included in other noninterest expense in the consolidated statements of income, as follows: (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Amortization expense $ 208 $ 74 $ 332 $ 149 Amortization expense of $208,000 in the third quarter 2020 and $332,000 in the nine-month period ended September 30, 2020 included $146,000 related to the Covenant acquisition as described in Note 2. Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired. Changes in the carrying amount of goodwill are summarized in the following table: (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Balance, beginning of period $ 28,388 $ 28,618 $ 28,388 $ 11,942 Goodwill arising in business combination 24,138 0 24,138 16,676 Balance, end of period $ 52,526 $ 28,618 $ 52,526 $ 28,618 Goodwill is tested at least annually at December 31 for impairment, or more often if events or circumstances indicate there may be impairment. In 2020, the COVID-19 pandemic led to government-imposed emergency restrictions that have had significant adverse effects on macroeconomic conditions. The ultimate effect of COVID-19 on the local or broader economy is not known nor is the ultimate length of the restrictions described and any accompanying effects. Broader US stock market valuations decreased significantly in the latter part of the first quarter and early second quarter 2020 but have bounced back to levels consistent with, or higher than, pre-COVID-19 levels. Bank stock valuations have lagged, reflecting market concerns about potential credit losses and the effects of a substantial drop in interest rates. The closing price (last trade) of the Corporation’s common stock on September 30, 2020 was $16.24 per share. The average closing price for the last 10 trading days of the third quarter 2020 (September 17 through September 30, 2020) was $15.96 per share. In comparison, the average closing price of the Corporation’s common stock in the fourth quarter 2019 was $26.05 per share and the book value of the Corporation’s common stock at September 30, 2020 was $18.65 per share. In light of the decline in the Corporation’s stock price triggered by the adverse circumstances resulting from COVID-19, management determined it necessary to evaluate goodwill for impairment at September 30, 2020. In evaluating goodwill for impairment, the Corporation performed a quantitative assessment and determined that the fair value of its reporting unit, its community banking operation, exceeded its carrying amount, including goodwill, at September 30, 2020. In reaching this conclusion, management estimated the fair value of the reporting unit to be $352.7 million, which exceeded the Corporation’s stockholders’ equity (book value) of $296.3 million by 19%. Management calculated the estimated fair value of the reporting unit based on the weighted average of values determined using the following valuation approaches: ● Income approach - This approach was given a weighting of 60% , and resulted in a value of $375.3 million, which was the mid-point of a range of $340.0 million to $410.7 million. This approach is based on estimated cash flows to an acquirer based on anticipated future results assuming a change of control transaction. This approach assumes an acquirer will achieve an expected base level of earnings, achieve integration cost savings and incur certain transaction costs. The analysis then calculates the present value of all excess cash flows generated (above a minimum tangible capital ratio), plus the present value of a terminal value, to determine the fair value. ● Change of control premium to the Corporation’s September 30, 2020 market price – This approach was given a weighting of 20% , and resulted in a valuation of $329.0 million, which was the mid-point of a range of $322.6 million to $335.5 million. The premium to market approach calculates the change of control price a market participant would pay for a firm by adding a change of control premium to the Corporation’s recent trading value. Management used a subjectively determined range of control premiums from 25% to 30% . This range of control premiums was in line with data for publicly traded banks and thrifts comparing control premiums paid, as compared to target valuations one-month and three-months prior to deal announcements, for the annual periods 2017 through 2019 and the nine months ended September 30, 2020. ● Change of control premium to the Corporation’s volume-weighted average market price – Similar to the approach described immediately above, management applied a subjectively determined 25% to 30% range of control premiums to the 5-day average volume-weighted average trading price for the period September 23, 2020 through September 29, 2020. This approach was given a weighting of 20% , and resulted in a valuation of $319.2 million, which was the mid-point of a range of $312.7 million to $325.7 million. Key assumptions used in the calculation of estimated fair value include: ● The valuation techniques utilized. Management used the valuation techniques identified above, which represent a range of techniques commonly used to estimate the value of a company using either an income-based or a market-based approach. ● The weighting assigned to each of the valuation approaches considered. Management believes a market participant would apply a significant weighting to the income approach ( 60% ) since it incorporates specific expected operating cash flows and merger synergies to be generated by the reporting unit. Management assigned equal ( 20% ) weightings to the comparison of change of control premiums from comparable transactions to the Corporation’s recent trading price. Management believes market participants would typically consider current trading values, and recent pricing of comparable transactions, in considering an acquisition price, but that the weighting should be lower than the income approach because it does not incorporate company-specific cash flow projections or merger synergies. Management considered use of a guideline market-based approach based on recent, selected sale transactions with consideration of relevant price-to-tangible book value and price-to-earnings multiples; however, given the general lack of bank merger and acquisition transactions since the COVID-19 epidemic started, and in particular, lack of transactions in which the seller’s total assets exceeded $2 billion, management did not believe this method would produce a relevant indication of value for the goodwill impairment analysis at September 30, 2020. ● In applying the income approach, key assumptions included: estimated earnings for each of the next 5 years , which reflected the effects of assumptions related to deposit and loan growth, loan losses, changes in noninterest revenues and expenses and other cash flows; reduction in operating expenses to be realized by an acquirer (integration synergies) of 20% ; the level of post-acquisition capital the acquirer would be required to maintain, of 9% of tangible assets; the discount rates applied to projected cash flows, which ranged from 12% to 14% with a midpoint of 13% used in determining the midpoint valuation; and the capitalization rates applied to terminal cash flows, which ranged from 9% to 11% with a midpoint of 10% used in determining the midpoint valuation. All of the key assumptions identified above are significant and subjective, and changes in those assumptions would result in a different calculation of estimated fair value of the reporting unit. Based on the results of its impairment analysis, the Corporation determined that the fair value of its only reporting unit, its community banking operation, exceeded its book value, and there was no goodwill impairment as of September 30, 2020. |
BORROWED FUNDS AND SUBORDINATED
BORROWED FUNDS AND SUBORDINATED DEBT | 9 Months Ended |
Sep. 30, 2020 | |
BORROWED FUNDS AND SUBORDINATED DEBT | |
BORROWED FUNDS AND SUBORDINATED DEBT | 9. BORROWED FUNDS AND SUBORDINATED DEBT Short-term borrowings (initial maturity within one year) include the following: (In Thousands) September 30, December 31, 2020 2019 FHLB-Pittsburgh borrowings $ 38,557 $ 84,292 Customer repurchase agreements 2,313 1,928 Total short-term borrowings $ 40,870 $ 86,220 Short-term borrowings from FHLB-Pittsburgh are as follows: (In Thousands) September 30, December 31, 2020 2019 Overnight borrowing $ 0 $ 64,000 Other short-term advances 38,557 20,292 Total short-term FHLB-Pittsburgh borrowings $ 38,557 $ 84,292 At September 30, 2020, other short-term advances included ten advances totaling $38,400,000 which are presented in the table inclusive of the unaccreted purchase accounting adjustment, with a weighted-average effective interest rate of 0.58%. The Corporation had available credit with other correspondent banks totaling $45,000,000 at September 30, 2020 and December 31, 2019. These lines of credit are primarily unsecured. No amounts were outstanding at September 30, 2020 or December 31, 2019. The Corporation has a line of credit with the Federal Reserve Bank of Philadelphia’s Discount Window. At September 30, 2020, the Corporation had available credit in the amount of $14,654,000 on this line with no outstanding advances. At December 31, 2019, the Corporation had available credit in the amount of $14,244,000 on this line with no outstanding advances. As collateral for this line, the Corporation has pledged available-for-sale securities with a carrying value of $15,124,000 at September 30, 2020 and $14,728,000 at December 31, 2019. The Corporation engages in repurchase agreements with certain commercial customers. These agreements provide that the Corporation sells specified investment securities to the customers on an overnight basis and repurchases them on the following business day. The weighted average rate paid by the Corporation on customer repurchase agreements was 0.10% at September 30, 2020 and December 31, 2019. The carrying value of the underlying securities was $2,350,000 at September 30, 2020 and $1,951,000 at December 31, 2019. The FHLB-Pittsburgh loan facility is collateralized by qualifying loans secured by real estate with a book value totaling $1,062,779,000 at September 30, 2020 and $778,877,000 at December 31, 2019. Also, the FHLB-Pittsburgh loan facility requires the Corporation to invest in established amounts of FHLB-Pittsburgh stock. The carrying values of the Corporation’s holdings of FHLB-Pittsburgh stock (included in other assets in the consolidated balance sheets) were $11,929,000 at September 30, 2020 and $10,131,000 at December 31, 2019. In addition to the short-term and long-term borrowings shown in these tables, there was a $400,000 letter of credit from FHLB-Pittsburgh outstanding at September 30, 2020. The Corporation’s total credit facility with FHLB-Pittsburgh was $782,434,000 at September 30, 2020, including an unused (available) amount of $641,753,000. At December 31, 2019, the Corporation’s total credit facility with FHLB-Pittsburgh was $552,546,000, including an unused (available) amount of $416,122,000. LONG-TERM BORROWINGS Long-term borrowings from FHLB-Pittsburgh are as follows: (In Thousands) September 30, December 31, 2020 2019 Loans matured in 2020 with a weighted-average rate of 2.71% $ 0 $ 5,069 Loans maturing in 2021 with a weighted-average effective rate of 1.36% 26,124 6,000 Loans maturing in 2022 with a weighted-average effective rate of 1.40% 35,740 20,000 Loans maturing in 2023 with a weighted-average effective rate of 27,750 20,500 Loans maturing in 2024 with a weighted-average effective rate of 1.06% 12,683 0 Loan maturing in 2025 with a rate of 4.91% 490 558 Total long-term FHLB-Pittsburgh borrowings $ 102,787 $ 52,127 SUBORDINATED DEBT At September 30, 2020 and December 31, 2019, outstanding subordinated debt agreements are as follows: (In Thousands) September 30, December 31, 2020 2019 Agreements with an aggregate par value of $8,000,000; bearing interest at 6.25%; maturing in June 2026 and redeemable at par in June 2021 $ 8,042 $ 0 Agreements with an aggregate par value of $6,500,000; bearing interest at 6.50%; maturing in April 2027 and redeemable at par in April 2022 6,500 6,500 Agreement with a par value of $2,000,000; bearing interest at 6.50%; maturing in July 2027 and redeemable at par in July 2022 2,030 0 Total carrying value $ 16,572 $ 6,500 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2020 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | 10. STOCK-BASED COMPENSATION PLANS The Corporation has a Stock Incentive Plan for a selected group of officers and an Independent Directors Stock Incentive Plan. The 2020 restricted stock awards under the Stock Incentive Plan vest ratably over three years, and the 2020 restricted stock issued under the Independent Directors Stock Incentive Plan vests over one year. Following is a summary of restricted stock awards granted in the nine-month period ended September 30, 2020: (Dollars in Thousands) Aggregate Grant Date Number of Fair Shares Value 1st quarter 2020 awards: Time-based awards to independent directors 7,580 $ 200 Time-based awards to employees 30,381 801 Performance-based awards to employees 17,903 343 3rd quarter 2020 awards, Time-based awards to employees 15,076 300 Total 70,940 $ 1,644 Compensation cost related to restricted stock is recognized based on the fair value of the stock at the grant date over the vesting period, adjusted for estimated and actual forfeitures. Total annual stock-based compensation for the year ending December 31, 2020 is estimated to total $920,000. Total stock-based compensation expense attributable to restricted stock awards amounted to $248,000 in the third quarter 2020 and $215,000 in the third quarter 2019. Total stock-based compensation expense attributable to restricted stock awards amounted to $672,000 in the nine-month period ended September 30, 2020 and $646,000 in the nine-month period ended September 30, 2019. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
CONTINGENCIES | |
CONTINGENCIES | 11. CONTINGENCIES In the normal course of business, the Corporation may be subject to pending and threatened lawsuits in which claims for monetary damages could be asserted. In management’s opinion, the Corporation’s financial position and results of operations would not be materially affected by the outcome of such pending legal proceedings. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 12. DERIVATIVE FINANCIAL INSTRUMENTS In connection with the acquisition of Covenant, the Corporation became a party to derivative financial instruments. These financial instruments consist of interest rate swap agreements which contain master netting and collateral provisions designed to protect the party at risk. At July 1, 2020, the aggregate notional amount of commercial loans subject to interest rate swaps was $137,176,000, and the Corporation recorded the fair value of the derivative asset of $7,932,000 and the fair value of the derivative liability of $7,932,000. Interest rate swaps with commercial banking customers were executed to facilitate their respective risk management strategies. Under the terms of these arrangements, the commercial banking customers effectively exchanged their floating interest rate exposures on loans from Covenant (acquired by the Corporation) into fixed interest rate exposures. Those interest rate swaps have been simultaneously economically hedged by offsetting interest rate swaps that Covenant had in place with a third party (assumed by the Corporation), such that the Corporation has effectively exchanged its fixed interest rate exposures for floating rate exposures. These derivatives are not designated as hedges and are not speculative. Rather, these derivatives result from a service provided to certain customers. As the interest rate swaps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. At September 30, 2020, the aggregate notional amount of interest rate swaps was $136,620,000. There were no interest rate swaps originated in the third quarter 2020. There were no gross amounts of interest rate swap-related assets and liabilities not offset in the consolidated balance sheets at September 30, 2020. In the third quarter 2020, the net impact on the consolidated statements of income from interest rate swaps was a reduction in interest income on loans of $351,000. The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the consolidated balance sheets at September 30, 2020: (In Thousands) At September 30, 2020 Asset Derivatives Liability Derivatives Notional Fair Notional Fair Amount Value (1) Amount Value (2) Interest rate swap agreements $ 68,310 $ 7,478 $ 68,310 $ 7,478 (1) Included in other assets in the consolidated balance sheets. (2) Included in accrued interest and other liabilities in the consolidated balance sheets. The Corporation’s agreement with its derivative counterparty provides that if the Corporation defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Corporation could also be declared in default on its derivative obligations. Further, if the Corporation were to fail to maintain its status as a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Corporation would be required to settle its obligations under the agreements. Available-for-sale securities with a carrying value of $12,226,000 were pledged as collateral against the Corporation’s liability related to the interest rate swaps at September 30, 2020. |
FAIR VALUE MEASUREMENTS AND FAI
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS | |
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS | 13. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS The Corporation measures certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB topic 820, “Fair Value Measurements and Disclosures” establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Corporation for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Level 2 – Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities and other observable inputs. Level 3 – Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows and other similar techniques. The Corporation monitors and evaluates available data relating to fair value measurements on an ongoing basis and recognizes transfers among the levels of the fair value hierarchy as of the date of an event or change in circumstances that affects the valuation method chosen. Examples of such changes may include the market for a particular asset or liability becoming active or inactive, changes in the availability of quoted prices, or changes in the availability of other market data. At September 30, 2020 and December 31, 2019, assets and liabilities measured at fair value and the valuation methods used are as follows: September 30, 2020 Quoted Prices Other in Active Observable Unobservable Total Markets Inputs Inputs Fair (In Thousands) (Level 1) (Level 2) (Level 3) Value Recurring fair value measurements, assets: AVAILABLE-FOR-SALE DEBT SECURITIES: Obligations of the U.S. Treasury $ 0 $ 12,226 $ 0 $ 12,226 Obligations of U.S. Government agencies 0 16,355 0 16,355 Obligations of states and political subdivisions: Tax-exempt 0 109,668 0 109,668 Taxable 0 44,195 0 44,195 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 0 46,211 0 46,211 Residential collateralized mortgage obligations 0 69,337 0 69,337 Commercial mortgage-backed securities 0 42,553 0 42,553 Total available for sale debt Securities 0 340,545 0 340,545 Marketable equity security 1,003 0 0 1,003 Servicing rights 0 0 1,437 1,437 Interest rate swap agreements, assets 0 7,478 0 7,478 Total recurring fair value measurements, assets $ 1,003 $ 348,023 $ 1,437 $ 350,463 Recurring fair value measurements, liabilities, Interest rate swap agreements, liabilities $ 0 $ 7,478 $ 0 $ 7,478 Nonrecurring fair value measurements, assets: Impaired loans with a valuation allowance 0 0 8,085 8,085 Valuation allowance 0 0 (651) (651) Impaired loans, net 0 0 7,434 7,434 Foreclosed assets held for sale 0 0 2,369 2,369 Total nonrecurring fair value measurements, assets $ 0 $ 0 $ 9,803 $ 9,803 December 31, 2019 Quoted Prices Other in Active Observable Unobservable Total Markets Inputs Inputs Fair (In Thousands) (Level 1) (Level 2) (Level 3) Value Recurring fair value measurements, assets: AVAILABLE-FOR-SALE DEBT SECURITIES: Obligations of U.S. Government agencies $ 0 $ 17,000 $ 0 $ 17,000 Obligations of states and political subdivisions: Tax-exempt 0 70,760 0 70,760 Taxable 0 36,303 0 36,303 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 0 59,210 0 59,210 Residential collateralized mortgage obligations 0 114,723 0 114,723 Commercial mortgage-backed securities 0 48,727 0 48,727 Total available-for-sale debt securities 0 346,723 0 346,723 Marketable equity security 979 0 0 979 Servicing rights 0 0 1,277 1,277 Total recurring fair value measurements $ 979 $ 346,723 $ 1,277 $ 348,979 Nonrecurring fair value measurements, assets Impaired loans with a valuation allowance $ 0 $ 0 $ 3,375 $ 3,375 Valuation allowance 0 0 (1,051) (1,051) Impaired loans, net 0 0 2,324 2,324 Foreclosed assets held for sale 0 0 2,886 2,886 Total nonrecurring fair value measurements, assets $ 0 $ 0 $ 5,210 $ 5,210 Management’s evaluation and selection of valuation techniques and the unobservable inputs used in determining the fair values of assets valued using Level 3 methodologies include sensitive assumptions. Other market participants might use substantially different assumptions, which could result in calculations of fair values that would be substantially different than the amount calculated by management. At September 30, 2020 and December 31, 2019, quantitative information regarding valuation techniques and the significant unobservable inputs used for assets measured on a recurring basis using unobservable inputs (Level 3 methodologies) are as follows: Fair Value at 9/30/2020 Valuation Unobservable Method or Value As of Asset (In Thousands) Technique Input(s) 9/30/2020 Servicing rights $ 1,437 Discounted cash flow Discount rate 12.50 % Rate used through modeling period Loan prepayment speeds 354.00 % Weighted-average PSA Servicing fees 0.25 % of loan balances 4.00 % of payments are late 5.00 % late fees assessed $ 1.94 Miscellaneous fees per account per month Servicing costs $ 6.00 Monthly servicing cost per account $ 24.00 Additional monthly servicing cost per loan on loans more than 30 days delinquent 1.50 % of loans more than 30 days delinquent 3.00 % annual increase in servicing costs Fair Value at 12/31/2019 Valuation Unobservable Method or Value As of Asset (In Thousands) Technique Input(s) 12/31/2019 Servicing rights $ 1,277 Discounted cash flow Discount rate 12.50 % Rate used through modeling period Loan prepayment speeds 183.00 % Weighted-average PSA Servicing fees 0.25 % of loan balances 4.00 % of payments are late 5.00 % late fees assessed $ 1.94 Miscellaneous fees per account per month Servicing costs $ 6.00 Monthly servicing cost per account $ 24.00 Additional monthly servicing cost per loan on loans more than 30 days delinquent 1.50 % of loans more than 30 days delinquent 3.00 % annual increase in servicing costs The fair value of servicing rights is affected by expected future interest rates. Increases (decreases) in future expected interest rates tend to increase (decrease) the fair value of the Corporation’s servicing rights because of changes in expected prepayment behavior by the borrowers on the underlying loans. Unrealized gains (losses) in fair value of servicing rights are included in Loan servicing fees, net, in the unaudited consolidated statements of income. Following is a reconciliation of activity for Level 3 assets measured at fair value on a recurring basis: (In Thousands) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Servicing rights balance, beginning of period $ 1,284 $ 1,322 $ 1,277 $ 1,404 Originations of servicing rights 374 70 777 136 Unrealized losses included in earnings (221) (164) (617) (312) Servicing rights balance, end of period $ 1,437 $ 1,228 $ 1,437 $ 1,228 Loans are classified as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Foreclosed assets held for sale consist of real estate acquired by foreclosure. For impaired commercial loans secured by real estate and foreclosed assets held for sale, estimated fair values are determined primarily using values from third-party appraisals. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. For commercial and industrial and agricultural loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging data or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. At September 30, 2020 and December 31, 2019, quantitative information regarding valuation techniques and the significant unobservable inputs used for nonrecurring fair value measurements using Level 3 methodologies are as follows: (In Thousands, Except Weighted Percentages) Valuation Average Balance at Allowance at Fair Value at Valuation Unobservable Discount at Asset 9/30/2020 9/30/2020 9/30/2020 Technique Inputs 9/30/2020 Impaired loans: Residential mortgage loans - first and junior liens $ 1,516 $ 170 $ 1,346 Sales comparison Discount to appraised value 31 % Commercial: Commercial loans secured by real estate 6,497 409 6,088 Sales comparison Discount to appraised value 38 % Commercial and industrial 72 72 0 Liquidation of assets Discount to appraised value 100 % Total impaired loans $ 8,085 $ 651 $ 7,434 Foreclosed assets held for sale - real estate: Residential (1-4 family) $ 104 $ 0 $ 104 Sales comparison Discount to appraised value 47 % Commercial real estate 2,265 0 2,265 Sales comparison Discount to appraised value 34 % Total foreclosed assets held for sale $ 2,369 $ 0 $ 2,369 (In Thousands, Except Weighted Percentages) Valuation Average Balance at Allowance at Fair Value at Valuation Unobservable Discount at Asset 12/31/2019 12/31/2019 12/31/2019 Technique Inputs 12/31/2019 Impaired loans: Residential mortgage loans - first and junior liens $ 732 $ 176 $ 556 Sales comparison Discount to appraised value 30 % Commercial: Commercial and industrial 106 89 17 Sales comparison Discount to appraised value 69 % Commercial and industrial 798 60 738 Liquidation of accounts receivable Discount to borrower's financial statement value 15 % Commercial construction and land 1,261 678 583 Sales comparison Discount to appraised value 47 % Loans secured by farmland 478 48 430 Sales comparison Discount to appraised value 46 % Total impaired loans $ 3,375 $ 1,051 $ 2,324 Foreclosed assets held for sale - real estate: Residential (1-4 family) $ 292 $ 0 $ 292 Sales comparison Discount to appraised value 46 % Land 70 0 70 Sales comparison Discount to appraised value 53 % Commercial real estate 2,524 0 2,524 Sales comparison Discount to appraised value 39 % Total foreclosed assets held for sale $ 2,886 $ 0 $ 2,886 Certain of the Corporation’s financial instruments are not measured at fair value in the consolidated financial statements. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Therefore, the aggregate fair value amounts presented may not represent the underlying fair value of the Corporation. The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments that are not recorded at fair value are as follows: (In Thousands) Fair Value September 30, 2020 December 31, 2019 Hierarchy Carrying Fair Carrying Fair Level Amount Value Amount Value Financial assets: Cash and cash equivalents Level 1 $ 168,148 $ 168,148 $ 31,122 $ 31,122 Certificates of deposit Level 2 6,330 6,567 4,080 4,227 Restricted equity securities (included in Other Assets) Level 2 12,179 12,179 10,321 10,321 Loans, net Level 3 1,680,617 1,686,087 1,172,386 1,181,000 Accrued interest receivable Level 2 8,296 8,296 5,001 5,001 Financial liabilities: Deposits with no stated maturity Level 2 1,440,602 1,440,602 877,965 877,965 Time deposits Level 2 430,912 434,978 374,695 376,738 Short-term borrowings Level 2 40,870 40,902 86,220 86,166 Long-term borrowings Level 2 102,787 105,336 52,127 52,040 Subordinated debt Level 2 16,572 16,680 6,500 6,499 Accrued interest payable Level 2 563 563 311 311 The Corporation has commitments to extend credit and has issued standby letters of credit. Standby letters of credit are conditional guarantees of performance by a customer to a third party. Estimates of the fair value of these off-balance sheet items were not made because of the short-term nature of these arrangements and the credit standing of the counterparties. |
BASIS OF INTERIM PRESENTATION_2
BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
BASIS OF INTERIM PRESENTATION AND STATUS OF RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future. Recent Accounting Pronouncements - Adopted ASU 2018-13, Fair Value Measurement (Topic 820) modifies disclosure requirements on fair value measurements. This ASU removes requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. ASU 2018-13 clarifies that disclosure regarding measurement uncertainty is intended to communicate information about the uncertainty in measurement as of the reporting date. ASU 2018-13 adds certain disclosure requirements, including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU became effective for the Corporation beginning in the first quarter 2020. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively, while all other amendments should be applied retrospectively for all periods presented. Note 13 provides disclosure regarding fair value measurements of the Corporation’s financial instruments. Adoption of this ASU did not have a material impact on the Corporation’s consolidated financial position or results of operations. Recently Issued But Not Yet Effective Accounting Pronouncements ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), as modified by subsequent ASUs, changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, though the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. The effect of implementing this ASU is recorded through a cumulative-effect adjustment to retained earnings. The Corporation has formed a cross functional management team and is working with an outside vendor assessing alternative loss estimation methodologies and the Corporation’s data and system needs to evaluate the impact that adoption of this standard will have on the Corporation’s financial condition and results of operations. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Corporation, resulting in a required implementation date for the Corporation of January 1, 2023. ASU 2020-04, Reference Rate Reform (Topic 848) provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The guidance includes a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. Some specific optional expedients are as follows: ● Simplifies accounting for contract modifications, including modifications to loans receivable and debt, by prospectively adjusting the effective interest rate. ● Simplifies the assessment of hedge effectiveness and allows hedging relationships affected by reference rate reform to continue. The amendments in ASU 2020-04 are effective as of March 12, 2020 through December 31, 2022. The Corporation expects to apply the amendments prospectively for applicable loan and other contracts within the effective period of ASU 2020-04. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
BUSINESS COMBINATIONS | |
Summary of consideration paid and assets acquired and liabilities assumed | (In Thousands) Fair value of consideration transferred: Cash $ 21,837 Common stock issued 41,429 Total consideration transferred $ 63,266 Estimated fair value of assets acquired and (liabilities) assumed: Cash and cash equivalents $ 97,792 Available-for-sale debt securities 10,754 Loans receivable 464,792 Bank-owned life insurance 11,170 Accrued interest receivable 1,922 Bank premises and equipment 3,250 Foreclosed assets held for sale 860 Deferred tax asset, net 1,469 Core deposit intangible 3,144 Goodwill 24,138 Other assets 13,478 Deposits (481,796) Short-term borrowings (33,950) Long-term borrowings (30,025) Subordinated debt (10,091) Accrued interest and other liabilities (13,641) Estimated excess fair value of assets acquired over liabilities assumed $ 63,266 |
Loans acquired on business acquisition | (In Thousands) Performing PCI Total Residential mortgage: Residential mortgage loans - first liens $ 65,883 $ 0 $ 65,883 Residential mortgage loans - junior liens 4,141 75 4,216 Home equity lines of credit 8,368 0 8,368 1-4 Family residential construction 11,437 0 11,437 Total residential mortgage 89,829 75 89,904 Commercial: Commercial loans secured by real estate 240,482 4,152 244,634 Commercial and industrial 39,068 806 39,874 Small Business Adminstration - Paycheck Protection Program 63,740 0 63,740 Loans secured by farmland 73 0 73 Multi-family (5 or more) residential 23,065 2,171 25,236 Other commercial loans 952 0 952 Total commercial 367,380 7,129 374,509 Consumer 379 0 379 Total $ 457,588 $ 7,204 464,792 |
Fair Value adjustments of loans acquired on business acquisition | (In Thousands) Gross amortized cost at acquisition $ 472,012 Fair value adjustments: Market rates 2,909 Credit adjustment on non-impaired loans (7,219) Credit adjustment on impaired loans (2,910) Fair value at acquisition $ 464,792 |
Pro forma information as if the merger had been completed on January 1, 2019 | (In Thousands Except Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Interest income $ 21,632 $ 23,142 $ 66,564 $ 64,800 Interest expense 3,091 4,367 10,727 10,747 Net interest income 18,541 18,775 55,837 54,053 Provision for loan losses 1,941 1,208 3,393 1,047 Net interest after provision for loan losses 16,600 17,567 52,444 53,006 Noninterest income 6,970 5,523 18,092 15,546 Net gains on securities 25 13 25 20 Other noninterest expenses 14,572 14,530 45,604 46,198 Income before income tax provision 9,023 8,573 24,957 22,374 Income tax provision 1,605 1,511 4,610 3,886 Net income $ 7,418 $ 7,062 $ 20,347 $ 18,488 Earnings per common share - basic $ 0.47 $ 0.45 $ 1.28 $ 1.21 Earnings per common share - diluted $ 0.47 $ 0.45 $ 1.28 $ 1.21 |
PER SHARE DATA (Tables)
PER SHARE DATA (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
PER SHARE DATA | |
Schedule of Basic and Diluted earnings per share | (In Thousands, Except Share and Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Basic Net income $ 2,848 $ 5,307 $ 12,452 $ 14,046 Less: Dividends and undistributed earnings allocated to participating securities (18) (26) (74) (72) Net income attributable to common shares $ 2,830 $ 5,281 $ 12,378 $ 13,974 Basic weighted-average common shares outstanding 15,778,391 13,627,676 14,388,797 13,182,960 Basic earnings per common share (a) $ 0.18 $ 0.39 $ 0.86 $ 1.06 Diluted Net income attributable to common shares $ 2,830 $ 5,281 $ 12,378 $ 13,974 Basic weighted-average common shares outstanding 15,778,391 13,627,676 14,388,797 13,182,960 Dilutive effect of potential common stock arising from stock options 1,330 19,142 4,632 23,284 Diluted weighted-average common shares outstanding 15,779,721 13,646,818 14,393,429 13,206,244 Diluted earnings per common share (a) $ 0.18 $ 0.39 $ 0.86 $ 1.06 Weighted-average nonvested restricted shares outstanding 102,629 68,814 85,611 68,284 (a) Basic and diluted earnings per share under the two-class method are determined on net income reported on the consolidated statements of income, less earnings allocated to non-vested restricted shares with nonforfeitable dividends (participating securities). |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
COMPREHENSIVE INCOME | |
Schedule of the components of other comprehensive income (loss), and the related tax effects | (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Nine Months Ended September 30, 2020 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 9,980 $ (2,095) $ 7,885 Reclassification adjustment for (gains) realized in income (25) 5 (20) Other comprehensive income on available-for-sale debt securities 9,955 (2,090) 7,865 Unfunded pension and postretirement obligations: Changes from plan amendments and actuarial gains and losses included in other comprehensive income 88 (18) 70 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (22) 5 (17) Other comprehensive income on unfunded retirement obligations 66 (13) 53 Total other comprehensive income $ 10,021 $ (2,103) $ 7,918 (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Nine Months Ended September 30, 2019 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 10,754 $ (2,258) $ 8,496 Reclassification adjustment for (gains) realized in income (20) 4 (16) Other comprehensive income on available-for-sale debt securities 10,734 (2,254) 8,480 Unfunded pension and postretirement obligations: Changes from plan amendments and actuarial gains and losses included in other comprehensive income 214 (45) 169 Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (23) 4 (19) Other comprehensive income on unfunded retirement obligations 191 (41) 150 Total other comprehensive income $ 10,925 $ (2,295) $ 8,630 (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Three Months Ended September 30, 2020 Unrealized gains on available-for-sale debt securities: Unrealized holding losses on available-for-sale debt securities $ (95) $ 19 $ (76) Reclassification adjustment for (gains) realized in income (25) 5 (20) Other comprehensive loss on available-for-sale debt securities (120) 24 (96) Unfunded pension and postretirement obligations, Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (8) 2 (6) Total other comprehensive loss $ (128) $ 26 $ (102) (In Thousands) Before-Tax Income Tax Net-of-Tax Amount Effect Amount Three Months Ended September 30, 2019 Unrealized gains on available-for-sale debt securities: Unrealized holding gains on available-for-sale debt securities $ 1,323 $ (278) $ 1,045 Reclassification adjustment for (gains) realized in income (13) 3 (10) Other comprehensive income on available-for-sale debt securities 1,310 (275) 1,035 Unfunded pension and postretirement obligations, Amortization of prior service cost and net actuarial loss included in net periodic benefit cost (8) 1 (7) Total other comprehensive income $ 1,302 $ (274) $ 1,028 |
Schedule components of other comprehensive income and affected line item in the consolidated statements of income | Affected Line Item in the Description Consolidated Statements of Income Amortization of prior service cost and Other noninterest expense net actuarial loss included in net periodic benefit cost (before-tax) Reclassification adjustment for (gains) Realized gains on available-for-sale realized in income (before-tax) debt securities, net Income tax effect Income tax provision |
Schedule of changes in the components of accumulated other comprehensive income (loss) | (In Thousands) Accumulated Unrealized Unfunded Other Gains Retirement Comprehensive on Securities Obligations Income (Loss) Nine Months Ended September 30, 2020 Balance, beginning of period $ 3,511 $ 180 $ 3,691 Other comprehensive income during nine months ended September 30, 2020 7,865 53 7,918 Balance, end of period $ 11,376 $ 233 $ 11,609 Nine Months Ended September 30, 2019 Balance, beginning of period $ (4,307) $ 137 $ (4,170) Other comprehensive income during nine months ended September 30, 2019 8,480 150 8,630 Balance, end of period $ 4,173 $ 287 $ 4,460 (In Thousands) Unrealized Accumulated Gains Unfunded Other (Losses) Retirement Comprehensive on Securities Obligations Income Three Months Ended September 30, 2020 Balance, beginning of period $ 11,472 $ 239 $ 11,711 Other comprehensive loss during three months ended September 30, 2020 (96) (6) (102) Balance, end of period $ 11,376 $ 233 $ 11,609 Three Months Ended September 30, 2019 Balance, beginning of period $ 3,138 $ 294 $ 3,432 Other comprehensive income during three months ended September 30, 2019 1,035 (7) 1,028 Balance, end of period $ 4,173 $ 287 $ 4,460 |
CASH AND DUE FROM BANKS (Tables
CASH AND DUE FROM BANKS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CASH AND DUE FROM BANKS | |
Schedule of cash and due from banks | (In Thousands) September 30, December 31, 2020 2019 Cash and cash equivalents $ 168,148 $ 31,122 Certificates of deposit 6,330 4,080 Total cash and due from banks $ 174,478 $ 35,202 |
SECURITIES (Tables)
SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SECURITIES | |
Schedule of amortized cost and fair value of available-for-sale debt securities at | (In Thousands) September 30, 2020 Gross Gross Unrealized Unrealized Amortized Holding Holding Fair Cost Gains Losses Value Obligations of the U.S. Treasury $ 12,228 $ 0 $ (2) $ 12,226 Obligations of U.S. Government agencies 15,348 1,007 0 16,355 Obligations of states and political subdivisions: Tax-exempt 104,821 5,057 (210) 109,668 Taxable 42,079 2,161 (45) 44,195 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 44,697 1,514 0 46,211 Residential collateralized mortgage obligations 67,635 1,726 (24) 69,337 Commercial mortgage-backed securities 39,337 3,216 0 42,553 Total available-for-sale debt securities $ 326,145 $ 14,681 $ (281) $ 340,545 (In Thousands) December 31, 2019 Gross Gross Unrealized Unrealized Amortized Holding Holding Fair Cost Gains Losses Value Obligations of U.S. Government agencies $ 16,380 $ 620 $ 0 $ 17,000 Obligations of states and political subdivisions: Tax-exempt 68,787 2,011 (38) 70,760 Taxable 35,446 927 (70) 36,303 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 58,875 472 (137) 59,210 Residential collateralized mortgage obligations 115,025 308 (610) 114,723 Commercial mortgage-backed securities 47,765 1,069 (107) 48,727 Total available-for-sale debt securities $ 342,278 $ 5,407 $ (962) $ 346,723 |
Schedule of gross unrealized losses and fair value of available-for-sale debt securities | September 30, 2020 Less Than 12 Months 12 Months or More Total (In Thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Obligations of the U.S. Treasury $ 12,226 $ (2) $ 0 $ 0 $ 12,226 $ (2) Obligations of states and political subdivisions: Tax-exempt 17,061 (210) 0 0 17,061 (210) Taxable 4,856 (45) 0 0 4,856 (45) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, Residential collateralized mortgage obligations 4,165 (24) 0 0 4,165 (24) Total temporary impaired available for sale debt securities $ 38,308 $ (281) $ 0 $ 0 $ 38,308 $ (281) December 31, 2019 Less Than 12 Months 12 Months or More Total (In Thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Obligations of states and political subdivisions: Tax-exempt $ 6,429 $ (38) $ 0 $ 0 $ 6,429 $ (38) Taxable 5,624 (68) 161 (2) 5,785 (70) Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 9,771 (35) 14,787 (102) 24,558 (137) Residential collateralized mortgage obligations 31,409 (195) 30,535 (415) 61,944 (610) Commercial mortgage-backed securities 0 0 8,507 (107) 8,507 (107) Total temporarily impaired available-for-sale debt securities $ 53,233 $ (336) $ 53,990 $ (626) $ 107,223 $ (962) |
Schedule of gross realized gains and losses from available-for-sale | (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Gross realized gains from sales $ 26 $ 14 $ 78 $ 21 Gross realized losses from sales (1) (1) (53) (1) Net realized gains $ 25 $ 13 $ 25 $ 20 |
Schedule of the amortized cost and fair value of available-for-sale debt securities by contractual maturity | (In Thousands) September 30, 2020 Amortized Fair Cost Value Due in one year or less $ 14,411 $ 14,469 Due from one year through five years 45,804 47,460 Due from five years through ten years 37,479 40,088 Due after ten years 76,782 80,427 Sub-total 174,476 182,444 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 44,697 46,211 Residential collateralized mortgage obligations 67,635 69,337 Commercial mortgage-backed securities 39,337 42,553 Total $ 326,145 $ 340,545 |
LOANS (Tables)
LOANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LOANS | |
Summary of loans | Summary of Loans by Type (In Thousands) September 30, December 31, 2020 2019 Residential mortgage: Residential mortgage loans - first liens $ 541,827 $ 510,641 Residential mortgage loans - junior liens 27,907 27,503 Home equity lines of credit 40,143 33,638 1-4 Family residential construction 29,146 14,798 Total residential mortgage 639,023 586,580 Commercial: Commercial loans secured by real estate 530,874 301,227 Commercial and industrial 156,169 126,374 Small Business Administration - Paycheck Protection Program 163,050 0 Political subdivisions 47,883 53,570 Commercial construction and land 41,906 33,555 Loans secured by farmland 11,913 12,251 Multi-family (5 or more) residential 62,330 31,070 Agricultural loans 3,561 4,319 Other commercial loans 17,385 16,535 Total commercial 1,035,071 578,901 Consumer 17,276 16,741 Total 1,691,370 1,182,222 Less: allowance for loan losses (10,753) (9,836) Loans, net $ 1,680,617 $ 1,172,386 |
Schedule of quantity and balances of modification | Deferrals Remaining As of September 30, 2020 (Dollars in Thousands) Number of Recorded Loans Investment COVID-19-related loan modifications: Residential mortgage 16 $ 1,727 Commercial 28 39,912 Total 44 $ 41,639 |
Schedule of adjustments to the initial market rate and credit fair value adjustments recognized | (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Market Rate Adjustment Adjustments to gross amortized cost of loans at beginning of period $ (1,103) $ (1,658) $ (1,415) $ 0 Market rate adjustment recorded in acquisition 2,909 0 2,909 (1,807) (Amortization) accretion recognized in interest income (452) 110 (140) 259 Adjustments to gross amortized cost of loans at end of period $ 1,354 $ (1,548) $ 1,354 $ (1,548) Credit Adjustment on Non-impaired Loans Adjustments to gross amortized cost of loans at beginning of period $ (878) $ (1,653) $ (1,216) $ 0 Credit adjustment recorded in acquisition (7,219) 0 (7,219) (1,914) Accretion recognized in interest income 970 260 1,308 521 Adjustments to gross amortized cost of loans at end of period $ (7,127) $ (1,393) $ (7,127) $ (1,393) |
Schedule of components of the purchase account adjustments related to the PCI loans | (In Thousands) July 1, 2020 Contractually required principal at acquisition $ 10,114 Non-accretable discount (2,910) Expected cash flows $ 7,204 |
Schedule of PCI loans | (In Thousands) September 30, December 31, 2020 2019 Outstanding balance $ 10,453 $ 759 Carrying amount 7,447 441 |
Schedule of transactions within the allowance for loan losses | Three Months Ended September 30, 2020 June 30, 2020 September 30, 2020 (In Thousands) Balance Charge-offs Recoveries Provision (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,531 $ 0 $ 26 $ (92) $ 3,465 Residential mortgage loans - junior liens 365 0 0 (7) 358 Home equity lines of credit 287 0 1 1 289 1-4 Family residential construction 137 0 0 32 169 Total residential mortgage 4,320 0 27 (66) 4,281 Commercial: Commercial loans secured by real estate 2,426 0 0 (40) 2,386 Commercial and industrial 2,496 (2,219) 0 1,974 2,251 Commercial construction and land 420 0 0 20 440 Loans secured by farmland 146 0 0 (25) 121 Multi-family (5 or more) residential 163 0 0 64 227 Agricultural loans 40 0 0 (3) 37 Other commercial loans 167 0 0 0 167 Total commercial 5,858 (2,219) 0 1,990 5,629 Consumer 263 (30) 8 17 258 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 11,026 $ (2,249) $ 35 $ 1,941 $ 10,753 Three Months Ended September 30, 2019 June 30, 2020 September 30, 2020 (In Thousands) Balance Charge-offs Recoveries Provision (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,130 $ (50) $ 1 $ 83 $ 3,164 Residential mortgage loans - junior liens 333 0 1 16 350 Home equity lines of credit 280 0 1 1 282 1-4 Family residential construction 220 0 0 38 258 Total residential mortgage 3,963 (50) 3 138 4,054 Commercial: Commercial loans secured by real estate 1,577 0 0 928 2,505 Commercial and industrial 1,246 0 3 7 1,256 Commercial construction and land 152 0 0 6 158 Loans secured by farmland 102 0 0 (1) 101 Multi-family (5 or more) residential 150 0 0 5 155 Agricultural loans 42 0 0 7 49 Other commercial loans 119 0 0 1 120 Total commercial 3,388 0 3 953 4,344 Consumer 264 (66) 9 67 274 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 8,200 $ (116) $ 15 $ 1,158 $ 9,257 December 31, September 30, Nine Months Ended September 30, 2020 2019 Provision 2020 (In Thousands) Balance Charge-offs Recoveries (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,405 $ 0 $ 28 $ 32 $ 3,465 Residential mortgage loans - junior liens 384 0 1 (27) 358 Home equity lines of credit 276 0 3 10 289 1-4 Family residential construction 117 0 0 52 169 Total residential mortgage 4,182 0 32 67 4,281 Commercial: Commercial loans secured by real estate 1,921 0 0 465 2,386 Commercial and industrial 1,391 (2,236) 0 3,096 2,251 Commercial construction and land 966 (107) 0 (419) 440 Loans secured by farmland 158 0 0 (37) 121 Multi-family (5 or more) residential 156 0 0 71 227 Agricultural loans 41 0 0 (4) 37 Other commercial loans 155 0 0 12 167 Total commercial 4,788 (2,343) 0 3,184 5,629 Consumer 281 (100) 35 42 258 Unallocated 585 0 0 0 585 Total Allowance for Loan Losses $ 9,836 $ (2,443) $ 67 $ 3,293 $ 10,753 December 31, September 30, Nine Months Ended September 30, 2019 2018 Provision 2019 (In Thousands) Balance Charge-offs Recoveries (Credit) Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,156 $ (133) $ 3 $ 138 $ 3,164 Residential mortgage loans - junior liens 325 (24) 1 48 350 Home equity lines of credit 302 0 5 (25) 282 1-4 Family residential construction 203 0 0 55 258 Total residential mortgage 3,986 (157) 9 216 4,054 Commercial: Commercial loans secured by real estate 2,538 0 0 (33) 2,505 Commercial and industrial 1,553 (6) 6 (297) 1,256 Commercial construction and land 110 0 0 48 158 Loans secured by farmland 102 0 0 (1) 101 Multi-family (5 or more) residential 114 0 0 41 155 Agricultural loans 46 0 0 3 49 Other commercial loans 128 0 0 (8) 120 Total commercial 4,591 (6) 6 (247) 4,344 Consumer 233 (132) 31 142 274 Unallocated 499 0 0 86 585 Total Allowance for Loan Losses $ 9,309 $ (295) $ 46 $ 197 $ 9,257 |
Schedule of aggregate credit quality classification of outstanding loans by risk | September 30, 2020 (In Thousands) Purchased Special Credit Pass Mention Substandard Doubtful Impaired Total Residential Mortgage: Residential Mortgage loans - first liens $ 525,833 $ 6,331 $ 9,586 $ 0 $ 77 $ 541,827 Residential Mortgage loans - junior liens 27,078 124 570 63 72 27,907 Home Equity lines of credit 39,408 59 676 0 0 40,143 1-4 Family residential construction 29,146 0 0 0 0 29,146 Total residential mortgage 621,465 6,514 10,832 63 149 639,023 Commercial: Commercial loans secured by real estate 508,540 7,920 10,072 0 4,342 530,874 Commercial and Industrial 142,181 9,495 2,905 802 786 156,169 Small Business Administration - Paycheck Protection Program 163,050 0 0 0 0 163,050 Political subdivisions 47,883 0 0 0 0 47,883 Commercial construction and land 41,659 198 49 0 0 41,906 Loans secured by farmland 10,231 453 1,229 0 0 11,913 Multi-family (5 or more) residential 56,507 2,420 1,233 0 2,170 62,330 Agricultural loans 2,959 0 602 0 0 3,561 Other commercial loans 17,385 0 0 0 0 17,385 Total commercial 990,395 20,486 16,090 802 7,298 1,035,071 Consumer 17,184 0 92 0 0 17,276 Totals $ 1,629,044 $ 27,000 $ 27,014 $ 865 $ 7,447 $ 1,691,370 |
Summary of loan balances and the related allowance for loan losses | September 30, 2020 (In Thousands) Loans: Allowance for Loan Losses: Purchased Individually Collectively Performing Individually Collectively Evaluated Evaluated Loans Totals Evaluated Evaluated Totals Residential mortgage: Residential mortgage loans - first liens $ 2,238 $ 380,348 $ 159,241 $ 541,827 $ 9 $ 3,456 $ 3,465 Residential mortgage loans - junior liens 424 21,777 5,706 27,907 161 197 358 Home equity lines of credit 85 30,368 9,690 40,143 0 289 289 1-4 Family residential construction 0 18,946 10,200 29,146 0 169 169 Total residential mortgage 2,747 451,439 184,837 639,023 170 4,111 4,281 Commercial: Commercial loans secured by real estate 12,242 190,045 328,587 530,874 410 1,976 2,386 Commercial and industrial 1,367 119,401 35,401 156,169 71 2,180 2,251 Small Business Administration - Paycheck Protection Program 0 99,310 63,740 163,050 0 0 0 Political subdivisions 0 47,883 0 47,883 0 0 0 Commercial construction and land 0 41,906 0 41,906 0 440 440 Loans secured by farmland 85 11,505 323 11,913 0 121 121 Multi-family (5 or more) residential 2,171 16,754 43,405 62,330 0 227 227 Agricultural loans 0 3,561 0 3,561 0 37 37 Other commercial loans 0 15,895 1,490 17,385 0 167 167 Total commercial 15,865 546,260 472,946 1,035,071 481 5,148 5,629 Consumer 0 16,918 358 17,276 0 258 258 Unallocated 585 Total $ 18,612 $ 1,014,617 $ 658,141 $ 1,691,370 $ 651 $ 9,517 $ 10,753 December 31, 2019 (In Thousands) Loans: Allowance for Loan Losses: Purchased Individually Collectively Performing Individually Collectively Evaluated Evaluated Loans Totals Evaluated Evaluated Totals Residential mortgage: Residential mortgage loans - first liens $ 1,023 $ 405,186 $ 104,432 $ 510,641 $ 0 $ 3,405 $ 3,405 Residential mortgage loans - junior liens 368 24,730 2,405 27,503 176 208 384 Home equity lines of credit 0 32,147 1,491 33,638 0 276 276 1-4 Family residential construction 0 14,640 158 14,798 0 117 117 Total residential mortgage 1,391 476,703 108,486 586,580 176 4,006 4,182 Commercial: Commercial loans secured by real estate 684 198,532 102,011 301,227 0 1,921 1,921 Commercial and industrial 1,467 122,313 2,594 126,374 149 1,242 1,391 Political subdivisions 0 53,570 0 53,570 0 0 0 Commercial construction and land 1,261 29,710 2,584 33,555 678 288 966 Loans secured by farmland 607 11,386 258 12,251 48 110 158 Multi-family (5 or more) residential 0 10,617 20,453 31,070 0 156 156 Agricultural loans 76 4,243 0 4,319 0 41 41 Other commercial loans 0 15,947 588 16,535 0 155 155 Total commercial 4,095 446,318 128,488 578,901 875 3,913 4,788 Consumer 0 16,741 0 16,741 0 281 281 Unallocated 585 Total $ 5,486 $ 939,762 $ 236,974 $ 1,182,222 $ 1,051 $ 8,200 $ 9,836 |
Summary of information related to purchased credit impaired loans | (In Thousands) September 30, 2020 December 31, 2019 Unpaid Unpaid Principal Recorded Related Principal Recorded Related Balance Investment Allowance Balance Investment Allowance With no related allowance recorded: Residential mortgage loans - first liens $ 1,084 $ 1,034 $ 0 $ 645 $ 617 $ 0 Residential mortgage loans - junior liens 167 112 0 42 42 0 Home equity lines of credit 151 85 0 0 0 0 Commercial loans secured by real estate 7,570 5,745 0 684 684 0 Commercial and industrial 1,732 1,295 0 563 563 0 Loans secured by farmland 85 85 0 129 129 0 Multi-family (5 or more) residential 2,771 2,171 0 0 0 0 Agricultural loans 0 0 0 76 76 0 Total with no related allowance recorded 13,560 10,527 0 2,139 2,111 0 With a related allowance recorded: Residential mortgage loans - first liens 1,204 1,204 9 406 406 0 Residential mortgage loans - junior liens 312 312 161 326 326 176 Commercial loans secured by real estate 6,497 6,497 409 0 0 0 Commercial and industrial 72 72 72 904 904 149 Construction and other land loans 0 0 0 1,261 1,261 678 Loans secured by farmland 0 0 0 478 478 48 Total with a related allowance recorded 8,085 8,085 651 3,375 3,375 1,051 Total $ 21,645 $ 18,612 $ 651 $ 5,514 $ 5,486 $ 1,051 |
Schedule of average balances of impaired loans, excluding purchased credit impaired loans, and interest income recognized | (In Thousands) Interest Income Recognized on Average Investment in Impaired Loans Impaired Loans on a Cash Basis Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 2020 2019 2020 2019 Residential mortgage: Residential mortgage loans - first lien $ 2,159 $ 1,057 $ 1,579 $ 997 $ 27 $ 21 $ 70 $ 39 Residential mortgage loans - junior lien 384 285 386 289 5 8 18 10 Home equity lines of credit 65 65 65 16 0 3 2 3 Total residential mortgage 2,608 1,407 2,030 1,302 32 32 90 52 Commercial: Commercial loans secured by real estate 7,298 1,738 3,779 2,371 65 49 81 66 Commercial and industrial 2,235 1,202 3,178 1,460 1 4 21 38 Commercial construction and land 49 0 678 0 1 0 14 0 Loans secured by farmland 253 1,359 397 1,443 2 23 26 42 Agricultural loans 76 6 76 481 2 0 4 24 Other commercial loans 0 50 25 13 0 2 1 2 Total commercial 9,911 4,355 8,133 5,768 71 78 147 172 Consumer 0 0 0 4 0 0 0 0 Total $ 12,519 $ 5,762 $ 10,163 $ 7,074 $ 103 $ 110 $ 237 $ 224 |
Schedule of breakdown by portfolio segment and class of non accrual loans | (In Thousands) September 30, 2020 December 31, 2019 Past Due Past Due 90+ Days and 90+ Days and Accruing Nonaccrual Accruing Nonaccrual Residential mortgage: Residential mortgage loans - first liens $ 1,336 $ 6,354 $ 878 $ 4,679 Residential mortgage loans - junior liens 56 383 53 326 Home equity lines of credit 213 255 71 73 1-4 Family residential construction 0 39 0 0 Total residential mortgage 1,605 7,031 1,002 5,078 Commercial: Commercial loans secured by real estate 381 12,414 107 1,148 Commercial and industrial 112 955 15 1,051 Commercial construction and land 0 49 0 1,311 Loans secured by farmland 188 85 43 565 Multi-family (5 or more) residential 0 2,170 0 0 Other commercial 0 0 0 49 Total commercial 681 15,673 165 4,124 Consumer 22 92 40 16 Totals $ 2,308 $ 22,796 $ 1,207 $ 9,218 |
Schedule of amounts shown in the table immediately above include loans classified as debt restructurings and contractual aging of loans | (In Thousands) As of September 30, 2020 As of December 31, 2019 Current & Current & Past Due Past Due Past Due Past Due Past Due Past Due Less than 30-89 90+ Less than 30-89 90+ 30 Days Days Days Total 30 Days Days Days Total Residential mortgage: Residential mortgage loans - first liens $ 534,303 $ 2,819 $ 4,705 $ 541,827 $ 499,024 $ 7,839 $ 3,778 $ 510,641 Residential mortgage loans - junior liens 27,660 44 203 27,907 27,041 83 379 27,503 Home equity lines of credit 39,737 145 261 40,143 33,115 452 71 33,638 1-4 Family residential construction 28,629 517 0 29,146 14,758 40 0 14,798 Total residential mortgage 630,329 3,525 5,169 639,023 573,938 8,414 4,228 586,580 Commercial: Commercial loans secured by real estate 525,211 867 4,796 530,874 299,640 737 850 301,227 Commercial and industrial 155,140 57 972 156,169 126,221 16 137 126,374 Small Business Administration - Paycheck Protection Program 163,050 0 0 163,050 0 0 0 0 Political subdivisions 47,883 0 0 47,883 53,570 0 0 53,570 Commercial construction and land 41,857 49 0 41,906 33,505 0 50 33,555 Loans secured by farmland 11,654 37 222 11,913 11,455 666 130 12,251 Multi-family (5 or more) residential 62,330 0 0 62,330 31,070 0 0 31,070 Agricultural loans 3,456 105 0 3,561 4,318 1 0 4,319 Other commercial loans 17,385 0 0 17,385 16,535 0 0 16,535 Total commercial 1,027,966 1,115 5,990 1,035,071 576,314 1,420 1,167 578,901 Consumer 17,077 87 112 17,276 16,496 189 56 16,741 Totals $ 1,675,372 $ 4,727 $ 11,271 $ 1,691,370 $ 1,166,748 $ 10,023 $ 5,451 $ 1,182,222 |
Schedule of non accrual loans are included in the contractual aging | (In Thousands) Current & Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Total September 30, 2020 Nonaccrual Totals $ 12,605 $ 1,228 $ 8,963 $ 22,796 December 31, 2019 Nonaccrual Totals $ 3,840 $ 1,134 $ 4,244 $ 9,218 |
Schedule of outstanding balance of loans as troubled debt restructurings | (In Thousands) Current & Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Nonaccrual Total September 30, 2020 Totals $ 167 $ 91 $ 338 $ 7,441 $ 8,037 December 31, 2019 Totals $ 889 $ 0 $ 0 $ 1,737 $ 2,626 |
Schedule of loan modifications considered as TDRs | (Balances in Thousands) Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Number Number of Recorded of Recorded Loans Investment Loans Investment Residential mortgage - junior liens 0 $ 0 1 $ 18 Commercial loans secured by real estate 1 240 0 0 Commercial and industrial 0 0 9 431 Agricultural loans 0 0 1 81 Total 1 $ 240 12 $ 530 (Balances in Thousands) Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 Number Number of Recorded of Recorded Loans Investment Loans Investment Residential mortgage - junior liens 0 $ 0 1 $ 18 Commercial loans secured by real estate 1 240 0 0 Commercial and industrial 0 0 9 431 Agricultural loans 0 0 1 81 Total 1 $ 240 12 $ 530 |
Schedule of residential real estate properties as a result of obtaining physical possession | (In Thousands) September 30, December 31, 2020 2019 Foreclosed residential real estate $ 104 $ 292 |
Schedule of mortgage loans secured by residential real properties | (In Thousands) September 30, December 31, 2020 2019 Residential real estate in process of foreclosure $ 1,719 $ 1,717 |
Troubled Debt Restructuring | |
LOANS | |
Schedule of outstanding balance of loans as troubled debt restructurings | Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Post- Post- Number Modification Number Modification of Recorded of Recorded (Balances in Thousands) Loans Investment Loans Investment Commercial loans secured by real estate: Principal and interest payment deferral non-COVID related 2 $ 4,831 0 $ 0 Extended interest only payments and reduced monthly payments with a balloon payment at maturity 0 0 1 1,261 Multi-family (5 or more) residential: Principal and interest payment deferral non-COVID related 3 2,170 0 0 Total 5 $ 7,001 1 $ 1,261 (Balances in Thousands) Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 Post- Post- Number Modification Number Modification of Recorded of Recorded Loans Investment Loans Investment Residential mortgage - junior liens: Reduced monthly payments and extended maturity date 0 $ 0 1 $ 18 New loan at lower than risk-adjusted market rate to borrower from whom short sale of other collateral was accepted 1 30 0 0 Commerical loans secured by real estate: Interest only payments for a nine-month period 1 240 0 0 Principal and interest payment deferral non-COVID related 2 4,831 0 0 Extended interest only payments and reduced monthly payments with a balloon payment at maturity 0 0 1 1,261 Commercial and industrial, Reduced monthly payments and extended maturity date 0 0 9 448 Multi-family (5 or more) residential, Principal and interest payment deferral non-COVID related 3 2,170 0 0 Agricultural loans, Reduced monthly payments and extended maturity date 0 0 1 84 Total 7 $ 7,271 12 $ 1,811 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of Goodwill and Intangible Assets | (In Thousands) September 30, December 31, 2020 2019 Gross amount $ 6,639 $ 3,495 Accumulated amortization (2,580) (2,248) Net $ 4,059 $ 1,247 |
Schedule of amortization expense related to core deposit intangibles is included in other noninterest expense in the consolidated statements of income | (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Amortization expense $ 208 $ 74 $ 332 $ 149 |
Schedule of Goodwill | (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Balance, beginning of period $ 28,388 $ 28,618 $ 28,388 $ 11,942 Goodwill arising in business combination 24,138 0 24,138 16,676 Balance, end of period $ 52,526 $ 28,618 $ 52,526 $ 28,618 |
BORROWED FUNDS AND SUBORDINAT_2
BORROWED FUNDS AND SUBORDINATED DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
BORROWED FUNDS AND SUBORDINATED DEBT | |
Schedule of short term borrowings | (In Thousands) September 30, December 31, 2020 2019 FHLB-Pittsburgh borrowings $ 38,557 $ 84,292 Customer repurchase agreements 2,313 1,928 Total short-term borrowings $ 40,870 $ 86,220 (In Thousands) September 30, December 31, 2020 2019 Overnight borrowing $ 0 $ 64,000 Other short-term advances 38,557 20,292 Total short-term FHLB-Pittsburgh borrowings $ 38,557 $ 84,292 |
Schedule of long term borrowings | (In Thousands) September 30, December 31, 2020 2019 Loans matured in 2020 with a weighted-average rate of 2.71% $ 0 $ 5,069 Loans maturing in 2021 with a weighted-average effective rate of 1.36% 26,124 6,000 Loans maturing in 2022 with a weighted-average effective rate of 1.40% 35,740 20,000 Loans maturing in 2023 with a weighted-average effective rate of 27,750 20,500 Loans maturing in 2024 with a weighted-average effective rate of 1.06% 12,683 0 Loan maturing in 2025 with a rate of 4.91% 490 558 Total long-term FHLB-Pittsburgh borrowings $ 102,787 $ 52,127 |
Schedule of outstanding subordinated debt | (In Thousands) September 30, December 31, 2020 2019 Agreements with an aggregate par value of $8,000,000; bearing interest at 6.25%; maturing in June 2026 and redeemable at par in June 2021 $ 8,042 $ 0 Agreements with an aggregate par value of $6,500,000; bearing interest at 6.50%; maturing in April 2027 and redeemable at par in April 2022 6,500 6,500 Agreement with a par value of $2,000,000; bearing interest at 6.50%; maturing in July 2027 and redeemable at par in July 2022 2,030 0 Total carrying value $ 16,572 $ 6,500 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCK-BASED COMPENSATION PLANS | |
Summary of restricted stock awards granted | (Dollars in Thousands) Aggregate Grant Date Number of Fair Shares Value 1st quarter 2020 awards: Time-based awards to independent directors 7,580 $ 200 Time-based awards to employees 30,381 801 Performance-based awards to employees 17,903 343 3rd quarter 2020 awards, Time-based awards to employees 15,076 300 Total 70,940 $ 1,644 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Summary of fair value of the Corporation's derivative financial instruments as well as their classification on the consolidated balance sheet | (In Thousands) At September 30, 2020 Asset Derivatives Liability Derivatives Notional Fair Notional Fair Amount Value (1) Amount Value (2) Interest rate swap agreements $ 68,310 $ 7,478 $ 68,310 $ 7,478 |
FAIR VALUE MEASUREMENTS AND F_2
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS | |
Schedule of fair Value, by Balance Sheet Grouping | September 30, 2020 Quoted Prices Other in Active Observable Unobservable Total Markets Inputs Inputs Fair (In Thousands) (Level 1) (Level 2) (Level 3) Value Recurring fair value measurements, assets: AVAILABLE-FOR-SALE DEBT SECURITIES: Obligations of the U.S. Treasury $ 0 $ 12,226 $ 0 $ 12,226 Obligations of U.S. Government agencies 0 16,355 0 16,355 Obligations of states and political subdivisions: Tax-exempt 0 109,668 0 109,668 Taxable 0 44,195 0 44,195 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 0 46,211 0 46,211 Residential collateralized mortgage obligations 0 69,337 0 69,337 Commercial mortgage-backed securities 0 42,553 0 42,553 Total available for sale debt Securities 0 340,545 0 340,545 Marketable equity security 1,003 0 0 1,003 Servicing rights 0 0 1,437 1,437 Interest rate swap agreements, assets 0 7,478 0 7,478 Total recurring fair value measurements, assets $ 1,003 $ 348,023 $ 1,437 $ 350,463 Recurring fair value measurements, liabilities, Interest rate swap agreements, liabilities $ 0 $ 7,478 $ 0 $ 7,478 Nonrecurring fair value measurements, assets: Impaired loans with a valuation allowance 0 0 8,085 8,085 Valuation allowance 0 0 (651) (651) Impaired loans, net 0 0 7,434 7,434 Foreclosed assets held for sale 0 0 2,369 2,369 Total nonrecurring fair value measurements, assets $ 0 $ 0 $ 9,803 $ 9,803 December 31, 2019 Quoted Prices Other in Active Observable Unobservable Total Markets Inputs Inputs Fair (In Thousands) (Level 1) (Level 2) (Level 3) Value Recurring fair value measurements, assets: AVAILABLE-FOR-SALE DEBT SECURITIES: Obligations of U.S. Government agencies $ 0 $ 17,000 $ 0 $ 17,000 Obligations of states and political subdivisions: Tax-exempt 0 70,760 0 70,760 Taxable 0 36,303 0 36,303 Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: Residential pass-through securities 0 59,210 0 59,210 Residential collateralized mortgage obligations 0 114,723 0 114,723 Commercial mortgage-backed securities 0 48,727 0 48,727 Total available-for-sale debt securities 0 346,723 0 346,723 Marketable equity security 979 0 0 979 Servicing rights 0 0 1,277 1,277 Total recurring fair value measurements $ 979 $ 346,723 $ 1,277 $ 348,979 Nonrecurring fair value measurements, assets Impaired loans with a valuation allowance $ 0 $ 0 $ 3,375 $ 3,375 Valuation allowance 0 0 (1,051) (1,051) Impaired loans, net 0 0 2,324 2,324 Foreclosed assets held for sale 0 0 2,886 2,886 Total nonrecurring fair value measurements, assets $ 0 $ 0 $ 5,210 $ 5,210 |
Schedule of fair Value Measurement Inputs and Valuation Techniques | Fair Value at 9/30/2020 Valuation Unobservable Method or Value As of Asset (In Thousands) Technique Input(s) 9/30/2020 Servicing rights $ 1,437 Discounted cash flow Discount rate 12.50 % Rate used through modeling period Loan prepayment speeds 354.00 % Weighted-average PSA Servicing fees 0.25 % of loan balances 4.00 % of payments are late 5.00 % late fees assessed $ 1.94 Miscellaneous fees per account per month Servicing costs $ 6.00 Monthly servicing cost per account $ 24.00 Additional monthly servicing cost per loan on loans more than 30 days delinquent 1.50 % of loans more than 30 days delinquent 3.00 % annual increase in servicing costs Fair Value at 12/31/2019 Valuation Unobservable Method or Value As of Asset (In Thousands) Technique Input(s) 12/31/2019 Servicing rights $ 1,277 Discounted cash flow Discount rate 12.50 % Rate used through modeling period Loan prepayment speeds 183.00 % Weighted-average PSA Servicing fees 0.25 % of loan balances 4.00 % of payments are late 5.00 % late fees assessed $ 1.94 Miscellaneous fees per account per month Servicing costs $ 6.00 Monthly servicing cost per account $ 24.00 Additional monthly servicing cost per loan on loans more than 30 days delinquent 1.50 % of loans more than 30 days delinquent 3.00 % annual increase in servicing costs |
Schedule of fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | (In Thousands) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Servicing rights balance, beginning of period $ 1,284 $ 1,322 $ 1,277 $ 1,404 Originations of servicing rights 374 70 777 136 Unrealized losses included in earnings (221) (164) (617) (312) Servicing rights balance, end of period $ 1,437 $ 1,228 $ 1,437 $ 1,228 |
Schedule of fair Value Measurements, Recurring and Nonrecurring | (In Thousands) Fair Value September 30, 2020 December 31, 2019 Hierarchy Carrying Fair Carrying Fair Level Amount Value Amount Value Financial assets: Cash and cash equivalents Level 1 $ 168,148 $ 168,148 $ 31,122 $ 31,122 Certificates of deposit Level 2 6,330 6,567 4,080 4,227 Restricted equity securities (included in Other Assets) Level 2 12,179 12,179 10,321 10,321 Loans, net Level 3 1,680,617 1,686,087 1,172,386 1,181,000 Accrued interest receivable Level 2 8,296 8,296 5,001 5,001 Financial liabilities: Deposits with no stated maturity Level 2 1,440,602 1,440,602 877,965 877,965 Time deposits Level 2 430,912 434,978 374,695 376,738 Short-term borrowings Level 2 40,870 40,902 86,220 86,166 Long-term borrowings Level 2 102,787 105,336 52,127 52,040 Subordinated debt Level 2 16,572 16,680 6,500 6,499 Accrued interest payable Level 2 563 563 311 311 |
Recurring fair value measurements | |
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS | |
Schedule of fair Value Measurement Inputs and Valuation Techniques | (In Thousands, Except Weighted Percentages) Valuation Average Balance at Allowance at Fair Value at Valuation Unobservable Discount at Asset 9/30/2020 9/30/2020 9/30/2020 Technique Inputs 9/30/2020 Impaired loans: Residential mortgage loans - first and junior liens $ 1,516 $ 170 $ 1,346 Sales comparison Discount to appraised value 31 % Commercial: Commercial loans secured by real estate 6,497 409 6,088 Sales comparison Discount to appraised value 38 % Commercial and industrial 72 72 0 Liquidation of assets Discount to appraised value 100 % Total impaired loans $ 8,085 $ 651 $ 7,434 Foreclosed assets held for sale - real estate: Residential (1-4 family) $ 104 $ 0 $ 104 Sales comparison Discount to appraised value 47 % Commercial real estate 2,265 0 2,265 Sales comparison Discount to appraised value 34 % Total foreclosed assets held for sale $ 2,369 $ 0 $ 2,369 (In Thousands, Except Weighted Percentages) Valuation Average Balance at Allowance at Fair Value at Valuation Unobservable Discount at Asset 12/31/2019 12/31/2019 12/31/2019 Technique Inputs 12/31/2019 Impaired loans: Residential mortgage loans - first and junior liens $ 732 $ 176 $ 556 Sales comparison Discount to appraised value 30 % Commercial: Commercial and industrial 106 89 17 Sales comparison Discount to appraised value 69 % Commercial and industrial 798 60 738 Liquidation of accounts receivable Discount to borrower's financial statement value 15 % Commercial construction and land 1,261 678 583 Sales comparison Discount to appraised value 47 % Loans secured by farmland 478 48 430 Sales comparison Discount to appraised value 46 % Total impaired loans $ 3,375 $ 1,051 $ 2,324 Foreclosed assets held for sale - real estate: Residential (1-4 family) $ 292 $ 0 $ 292 Sales comparison Discount to appraised value 46 % Land 70 0 70 Sales comparison Discount to appraised value 53 % Commercial real estate 2,524 0 2,524 Sales comparison Discount to appraised value 39 % Total foreclosed assets held for sale $ 2,886 $ 0 $ 2,886 |
BUSINESS COMBINATIONS - Covenan
BUSINESS COMBINATIONS - Covenant Financial (Details) - USD ($) | Jul. 01, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
BUSINESS COMBINATIONS | |||||||
Goodwill | $ 52,526,000 | $ 28,388,000 | $ 28,388,000 | $ 28,618,000 | $ 28,618,000 | $ 11,942,000 | |
Covenant Financial Inc. | |||||||
BUSINESS COMBINATIONS | |||||||
Total purchase consideration | $ 63,266,000 | ||||||
Cash paid | $ 21,654,000 | ||||||
Shares of common stock issued | 2,047,819 | ||||||
Value of common stock issued | $ 41,612,000 | ||||||
Stock issuance cost | 183,000 | ||||||
Fair value of assets acquired | 608,631,000 | ||||||
Fair value of liabilities assumed | 569,503,000 | ||||||
Goodwill | $ 24,138,000 | ||||||
Refinement term of assets and liabilities | 1 year |
BUSINESS COMBINATIONS - Coven_2
BUSINESS COMBINATIONS - Covenant Financial Consideration (Details) - Covenant Financial Inc. | Jul. 01, 2020USD ($) |
Fair value of consideration transferred: | |
Cash | $ 21,837,000 |
Common stock issued | 41,429,000 |
Total consideration transferred | $ 63,266,000 |
BUSINESS COMBINATIONS - Coven_3
BUSINESS COMBINATIONS - Covenant Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
BUSINESS COMBINATIONS | |||||||
Goodwill | $ 52,526,000 | $ 28,388,000 | $ 28,388,000 | $ 28,618,000 | $ 28,618,000 | $ 11,942,000 | |
Covenant Financial Inc. | |||||||
BUSINESS COMBINATIONS | |||||||
Cash and cash equivalents | $ 97,792,000 | ||||||
Available-for-sale debt securities | 10,754,000 | ||||||
Loans receivable | 464,792,000 | ||||||
Bank-owned life insurance | 11,170,000 | ||||||
Accrued interest receivable | 1,922,000 | ||||||
Bank premises and equipment | 3,250,000 | ||||||
Foreclosed assets held for sale | 860,000 | ||||||
Deferred tax asset, net | 1,469,000 | ||||||
Core deposit intangible | 3,144,000 | ||||||
Goodwill | 24,138,000 | ||||||
Other assets | 13,478,000 | ||||||
Deposits | (481,796,000) | ||||||
Short-term borrowings | (33,950,000) | ||||||
Long-term borrowings | (30,025,000) | ||||||
Subordinated debt | (10,091,000) | ||||||
Accrued interest and other liabilities | (13,641,000) | ||||||
Estimated excess fair value of assets acquired over liabilities assumed | 63,266,000 | ||||||
Federal Home Loan Bank of Pittsburgh stock | 2,939,000 | ||||||
Covenant Financial Inc. | Core Deposits | |||||||
BUSINESS COMBINATIONS | |||||||
Core deposit intangible | $ 3,144,000 |
BUSINESS COMBINATIONS - Coven_4
BUSINESS COMBINATIONS - Covenant Financial Loans (Details) $ in Thousands | Jul. 01, 2020USD ($)loan |
BUSINESS COMBINATIONS | |
Loans acquired | $ 464,792 |
Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 457,588 |
PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 7,204 |
Home equity lines of credit | |
BUSINESS COMBINATIONS | |
Loans acquired | 8,368 |
Home equity lines of credit | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 8,368 |
Home equity lines of credit | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Construction Loans | |
BUSINESS COMBINATIONS | |
Loans acquired | 11,437 |
Construction Loans | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 11,437 |
Construction Loans | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Commercial and industrial | |
BUSINESS COMBINATIONS | |
Loans acquired | 39,874 |
Commercial and industrial | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 39,068 |
Commercial and industrial | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 806 |
Small Business Administration - Paycheck Protection Program | |
BUSINESS COMBINATIONS | |
Loans acquired | 63,740 |
Small Business Administration - Paycheck Protection Program | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 63,740 |
Small Business Administration - Paycheck Protection Program | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Loans secured by farm land | |
BUSINESS COMBINATIONS | |
Loans acquired | 73 |
Loans secured by farm land | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 73 |
Loans secured by farm land | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Multi-family (5 or more) residential | |
BUSINESS COMBINATIONS | |
Loans acquired | 25,236 |
Multi-family (5 or more) residential | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 23,065 |
Multi-family (5 or more) residential | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 2,171 |
Other commercial loans | |
BUSINESS COMBINATIONS | |
Loans acquired | 952 |
Other commercial loans | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 952 |
Other commercial loans | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Residential mortgage | |
BUSINESS COMBINATIONS | |
Loans acquired | 89,904 |
Residential mortgage | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 89,829 |
Residential mortgage | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 75 |
Residential mortgage | first liens | Real estate loan | |
BUSINESS COMBINATIONS | |
Loans acquired | 65,883 |
Residential mortgage | first liens | Real estate loan | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 65,883 |
Residential mortgage | first liens | Real estate loan | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 0 |
Residential mortgage | junior liens | Real estate loan | |
BUSINESS COMBINATIONS | |
Loans acquired | 4,216 |
Residential mortgage | junior liens | Real estate loan | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 4,141 |
Residential mortgage | junior liens | Real estate loan | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 75 |
Commercial | |
BUSINESS COMBINATIONS | |
Loans acquired | 374,509 |
Commercial | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 367,380 |
Commercial | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 7,129 |
Commercial | Loans secured by Real Estate | |
BUSINESS COMBINATIONS | |
Loans acquired | 244,634 |
Commercial | Loans secured by Real Estate | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 240,482 |
Commercial | Loans secured by Real Estate | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | 4,152 |
Consumer | |
BUSINESS COMBINATIONS | |
Loans acquired | 379 |
Consumer | Performing | |
BUSINESS COMBINATIONS | |
Loans acquired | 379 |
Consumer | PCI | |
BUSINESS COMBINATIONS | |
Loans acquired | $ 0 |
Covenant Financial Inc. | |
BUSINESS COMBINATIONS | |
Number acquired loans that displayed evidence of credit quality deterioration | loan | 24 |
BUSINESS COMBINATIONS - Coven_5
BUSINESS COMBINATIONS - Covenant Financial Loans Fair Value Adjustments (Details) - Covenant Financial Inc. $ in Thousands | Jul. 01, 2020USD ($) |
BUSINESS COMBINATIONS | |
Gross amortized cost at acquisition | $ 472,012 |
Fair value adjustments: | |
Market rates | 2,909 |
Credit adjustment on non-impaired loans | (7,219) |
Credit adjustment on impaired loans | (2,910) |
Fair value at acquisition | $ 464,792 |
BUSINESS COMBINATIONS - Coven_6
BUSINESS COMBINATIONS - Covenant Financial Other Information (Details) - Covenant Financial Inc. - USD ($) | Jul. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
BUSINESS COMBINATIONS | |||
Core deposit intangible | $ 3,144,000 | ||
Merger related expenses | $ 6,402,000 | $ 7,526,000 | |
Subordinated debt, maturity June 2021, interest at 6.25% | |||
BUSINESS COMBINATIONS | |||
Debt par value | 8,000,000 | ||
Stated interest rate | 6.25% | 6.25% | |
Subordinated debt, maturity July 2027, interest 6.50% | |||
BUSINESS COMBINATIONS | |||
Debt par value | $ 2,000,000 | ||
Stated interest rate | 6.50% | ||
Core Deposits | |||
BUSINESS COMBINATIONS | |||
Core deposit intangible | $ 3,144,000 | ||
Weighted-average life | 5 years 4 months 24 days |
BUSINESS COMBINATIONS - Coven_7
BUSINESS COMBINATIONS - Covenant Financial Pro Forma (Details) - Covenant Financial Inc. - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
BUSINESS COMBINATIONS | ||||
Merger related expenses | $ 6,402,000 | $ 8,879,000 | ||
Merger-related expenses, net of tax | 5,095,000 | 7,101,000 | ||
Merger-related expenses, including Covenant's expense | 1,353,000 | |||
Merger-related expenses, including Covenant's expense, net of tax | 1,111,000 | |||
Tax benefits excluded from pro-forma realized from stock-based compensation vested | 600,000 | |||
Interest income | 21,632,000 | $ 23,142,000 | 66,564,000 | $ 64,800,000 |
Interest expense | 3,091,000 | 4,367,000 | 10,727,000 | 10,747,000 |
Net interest income | 18,541,000 | 18,775,000 | 55,837,000 | 54,053,000 |
Provision for loan losses | 1,941,000 | 1,208,000 | 3,393,000 | 1,047,000 |
Net interest income after provision for loan losses | 16,600,000 | 17,567,000 | 52,444,000 | 53,006,000 |
Noninterest income | 6,970,000 | 5,523,000 | 18,092,000 | 15,546,000 |
Net gains on securities | 25,000 | 13,000 | 25,000 | 20,000 |
Other noninterest expenses | 14,572,000 | 14,530,000 | 45,604,000 | 46,198,000 |
Income before income tax provision | 9,023,000 | 8,573,000 | 24,957,000 | 22,374,000 |
Income tax provision | 1,605,000 | 1,511,000 | 4,610,000 | 3,886,000 |
Net income | $ 7,418,000 | $ 7,062,000 | $ 20,347,000 | $ 18,488,000 |
Earnings per common share - basic (in dollars per share) | $ 0.47 | $ 0.45 | $ 1.28 | $ 1.21 |
Earnings per common share - diluted (in dollars per share) | $ 0.47 | $ 0.45 | $ 1.28 | $ 1.21 |
BUSINESS COMBINATIONS - Monumen
BUSINESS COMBINATIONS - Monument Bancorp (Details) | Apr. 01, 2019USD ($)Officeshares | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
BUSINESS COMBINATIONS | |||||||||
Goodwill | $ 52,526,000 | $ 28,618,000 | $ 52,526,000 | $ 28,618,000 | $ 28,388,000 | $ 28,388,000 | $ 28,618,000 | $ 11,942,000 | |
Realized gains on available-for-sale debt securities, net | 25,000 | 13,000 | 25,000 | 20,000 | |||||
Business Combination, Acquisition Related Costs | $ 6,402,000 | 206,000 | $ 7,526,000 | 3,818,000 | |||||
Monument Bancorp, Inc | |||||||||
BUSINESS COMBINATIONS | |||||||||
Common stock acquired (as a percent) | 100.00% | ||||||||
Number of bank offices | Office | 2 | ||||||||
Number of lending office | Office | 1 | ||||||||
Total purchase consideration | $ 42,700,000 | ||||||||
Payments to Acquire Businesses, Cash, Net of Stock Issuance Costs | $ 9,600,000 | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | shares | 1,279,825 | ||||||||
Common stock issued | $ 33,100,000 | ||||||||
Business Combination, Consideration Transferred, Equity Interest Issuance Costs | 181,000 | ||||||||
Goodwill | 16,400,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans Receivable | 259,300,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deposits | 223,300,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Short-term Borrowing | 111,600,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Subordinated Debt | 12,400,000 | ||||||||
Available-for-sale debt securities | 94,600,000 | ||||||||
Realized gains on available-for-sale debt securities, net | $ 0 | ||||||||
Refinement term of assets and liabilities | 1 year | ||||||||
Business Combination, Acquisition Related Costs | $ 206,000 | $ 3,818,000 | |||||||
Monument Bancorp, Inc | Subordinated debt, Redeemed April 1, 2019 | |||||||||
BUSINESS COMBINATIONS | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Subordinated Debt | $ 5,400,000 | ||||||||
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net, Total | 0 | ||||||||
Monument Bancorp, Inc | Core Deposits | |||||||||
BUSINESS COMBINATIONS | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total | $ 1,500,000 |
PER SHARE DATA (Details)
PER SHARE DATA (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
PER SHARE DATA | ||||
Net income | $ 2,848 | $ 5,307 | $ 12,452 | $ 14,046 |
Less: Dividends and undistributed earnings allocated to participating securities | (18) | (26) | (74) | (72) |
Net income attributable to common shares | $ 2,830 | $ 5,281 | $ 12,378 | $ 13,974 |
Basic weighted-average common shares outstanding (in shares) | 15,778,391 | 13,627,676 | 14,388,797 | 13,182,960 |
Basic earnings per common share (a) (in dollars per share) | $ 0.18 | $ 0.39 | $ 0.86 | $ 1.06 |
Net income attributable to common shares | $ 2,830 | $ 5,281 | $ 12,378 | $ 13,974 |
Dilutive effect of potential common stock arising from stock options (in shares) | 1,330 | 19,142 | 4,632 | 23,284 |
Diluted weighted-average common shares outstanding (in shares) | 15,779,721 | 13,646,818 | 14,393,429 | 13,206,244 |
Diluted earnings per common share (a) (in dollars per share) | $ 0.18 | $ 0.39 | $ 0.86 | $ 1.06 |
Weighted-average nonvested restricted shares outstanding (in shares) | 102,629 | 68,814 | 85,611 | 68,284 |
PER SHARE DATA - Additional Inf
PER SHARE DATA - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
PER SHARE DATA | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 39,012 | 0 | 19,506 | 0 |
COMPREHENSIVE INCOME - Componen
COMPREHENSIVE INCOME - Components of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
COMPREHENSIVE INCOME | ||||
Unrealized holding gains on available-for-sale debt securities | $ (95) | $ 1,323 | $ 9,980 | $ 10,754 |
Unrealized holding gains on available-for-sale debt securities, income tax effect | 19 | (278) | (2,095) | (2,258) |
Unrealized holding gains on available-for-sale debt securities, Net of Tax Amount | (76) | 1,045 | 7,885 | 8,496 |
Reclassification adjustment for gains realized in income | (25) | (13) | (25) | (20) |
Reclassification adjustment for (gains) realized in income, Income Tax Effect | 5 | 3 | 5 | 4 |
Reclassification adjustment for (gains) realized in income. Net of Tax Amount | (20) | (10) | (20) | (16) |
Other comprehensive income on available-for-sale debt securities | (120) | 1,310 | 9,955 | 10,734 |
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax, Portion Attributable to Parent | (24) | 275 | 2,090 | 2,254 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent | (96) | 1,035 | 7,865 | 8,480 |
Changes from plan amendments and actuarial gains and losses, before tax amount | 0 | 0 | 88 | 214 |
Changes from plan amendments and actuarial gains and losses, income tax effect | (18) | (45) | ||
Changes from plan amendments and actuarial gains and losses, net of tax amount | 70 | 169 | ||
Amortization of prior service cost and net actuarial gain included in net periodic benefit cost, before tax amount | (8) | (8) | (22) | (23) |
Amortization of prior service cost and net actuarial gain included in net periodic benefit cost, income tax effect | 5 | 4 | ||
Amortization of prior service cost and net actuarial gain included in net periodic benefit cost, net of tax amount | (17) | (19) | ||
Other comprehensive (loss) income on unfunded retirement obligations | (8) | (8) | 66 | 191 |
Other comprehensive income (loss) on unfunded retirement obligations, income tax effect | 2 | 1 | (13) | (41) |
Other comprehensive income (loss) on unfunded retirement obligations, net of tax amount | (6) | (7) | 53 | 150 |
Other comprehensive (loss) income before income tax | (128) | 1,302 | 10,021 | 10,925 |
Total other comprehensive income (loss), income tax effect | 26 | (274) | (2,103) | (2,295) |
Total other comprehensive income, net of tax amount | $ (102) | $ 1,028 | $ 7,918 | $ 8,630 |
COMPREHENSIVE INCOME - Changes
COMPREHENSIVE INCOME - Changes in the Components of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Balance | $ 255,791 | $ 239,716 | $ 244,452 | $ 197,368 |
Other comprehensive income, net | (102) | 1,028 | 7,918 | 8,630 |
Balance | 296,316 | 242,939 | 296,316 | 242,939 |
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent | ||||
Balance | 11,472 | 3,138 | 3,511 | (4,307) |
Other comprehensive income, net | (96) | 1,035 | 7,865 | 8,480 |
Balance | 11,376 | 4,173 | 11,376 | 4,173 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||||
Balance | 239 | 294 | 180 | 137 |
Other comprehensive income, net | (6) | (7) | 53 | 150 |
Balance | 233 | 287 | 233 | 287 |
AOCI Attributable to Parent | ||||
Balance | 11,711 | 3,432 | 3,691 | (4,170) |
Other comprehensive income, net | (102) | 1,028 | 7,918 | 8,630 |
Balance | $ 11,609 | $ 4,460 | $ 11,609 | $ 4,460 |
CASH AND DUE FROM BANKS (Detail
CASH AND DUE FROM BANKS (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CASH AND DUE FROM BANKS | ||
Cash and cash equivalents | $ 168,148 | $ 31,122 |
Certificates of deposit | 6,330 | 4,080 |
Total cash and due from banks | $ 174,478 | $ 35,202 |
CASH AND DUE FROM BANKS - Addit
CASH AND DUE FROM BANKS - Additional Information (Details) - USD ($) | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
CASH AND DUE FROM BANKS | |||
Cash Reserve Deposit Required and Made | $ 0 | $ 0 | |
Restricted Cash and Cash Equivalents, Current, Total | $ 20,148,000 |
SECURITIES - Available-for-sale
SECURITIES - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | $ 326,145 | $ 342,278 |
Available-for-sale securities, gross unrealized holding gains | 14,681 | 5,407 |
Available-for-sale securities, gross unrealized holding losses | (281) | (962) |
Available-for-sale debt securities, at fair value | 340,545 | 346,723 |
Obligations of the U.S. Treasury | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 12,228 | |
Available-for-sale securities, gross unrealized holding gains | 0 | |
Available-for-sale securities, gross unrealized holding losses | (2) | |
Available-for-sale debt securities, at fair value | 12,226 | |
Obligations of U.S. Government agencies | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 15,348 | 16,380 |
Available-for-sale securities, gross unrealized holding gains | 1,007 | 620 |
Available-for-sale securities, gross unrealized holding losses | 0 | 0 |
Available-for-sale debt securities, at fair value | 16,355 | 17,000 |
Obligations of States and Political Subdivisions Tax Exempt | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 104,821 | 68,787 |
Available-for-sale securities, gross unrealized holding gains | 5,057 | 2,011 |
Available-for-sale securities, gross unrealized holding losses | (210) | (38) |
Available-for-sale debt securities, at fair value | 109,668 | 70,760 |
Obligations of States and Political Subdivisions Taxable | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 42,079 | 35,446 |
Available-for-sale securities, gross unrealized holding gains | 2,161 | 927 |
Available-for-sale securities, gross unrealized holding losses | (45) | (70) |
Available-for-sale debt securities, at fair value | 44,195 | 36,303 |
Residential Pass-Through Securities | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 44,697 | 58,875 |
Available-for-sale securities, gross unrealized holding gains | 1,514 | 472 |
Available-for-sale securities, gross unrealized holding losses | 0 | (137) |
Available-for-sale debt securities, at fair value | 46,211 | 59,210 |
Residential Collateralized Mortgage Obligations | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 67,635 | 115,025 |
Available-for-sale securities, gross unrealized holding gains | 1,726 | 308 |
Available-for-sale securities, gross unrealized holding losses | (24) | (610) |
Available-for-sale debt securities, at fair value | 69,337 | 114,723 |
Commercial Mortgage Backed Securities | ||
Available-for-sale Securities | ||
Available-for-sale securities, amortized cost | 39,337 | 47,765 |
Available-for-sale securities, gross unrealized holding gains | 3,216 | 1,069 |
Available-for-sale securities, gross unrealized holding losses | 0 | (107) |
Available-for-sale debt securities, at fair value | $ 42,553 | $ 48,727 |
SECURITIES - Available-for-sa_2
SECURITIES - Available-for-sale Securities With Unrealized Loss Positions (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | $ 38,308 | $ 53,233 |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (281) | (336) |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 0 | 53,990 |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | 0 | (626) |
Available-for-sale securities with unrealized loss positions, fair value | 38,308 | 107,223 |
Available-for-sale securities, with unrealized loss positions, unrealized losses | (281) | (962) |
Obligations of the U.S. Treasury | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 12,226 | |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (2) | |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 0 | |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | 0 | |
Available-for-sale securities with unrealized loss positions, fair value | 12,226 | |
Available-for-sale securities, with unrealized loss positions, unrealized losses | (2) | |
Obligations of States and Political Subdivisions Tax Exempt | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 17,061 | 6,429 |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (210) | (38) |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 0 | 0 |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | 0 | 0 |
Available-for-sale securities with unrealized loss positions, fair value | 17,061 | 6,429 |
Available-for-sale securities, with unrealized loss positions, unrealized losses | (210) | (38) |
Obligations of States and Political Subdivisions Taxable | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 4,856 | 5,624 |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (45) | (68) |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 0 | 161 |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | 0 | (2) |
Available-for-sale securities with unrealized loss positions, fair value | 4,856 | 5,785 |
Available-for-sale securities, with unrealized loss positions, unrealized losses | (45) | (70) |
Residential Collateralized Mortgage Obligations | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 4,165 | 31,409 |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (24) | (195) |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 0 | 30,535 |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | 0 | (415) |
Available-for-sale securities with unrealized loss positions, fair value | 4,165 | 61,944 |
Available-for-sale securities, with unrealized loss positions, unrealized losses | $ (24) | (610) |
Residential Pass-Through Securities | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 9,771 | |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | (35) | |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 14,787 | |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | (102) | |
Available-for-sale securities with unrealized loss positions, fair value | 24,558 | |
Available-for-sale securities, with unrealized loss positions, unrealized losses | (137) | |
Commercial Mortgage Backed Securities | ||
Available-for-sale securities with unrealized loss positions, less than 12 months, fair value | 0 | |
Available-for-sale securities with unrealized loss positions, less than 12 months, unrealized losses | 0 | |
Available-for-sale securities with unrealized loss positions, 12 months or more, fair value | 8,507 | |
Available-for-sale securities with unrealized loss positions, 12 months or more, unrealized losses | (107) | |
Available-for-sale securities with unrealized loss positions, fair value | 8,507 | |
Available-for-sale securities, with unrealized loss positions, unrealized losses | $ (107) |
SECURITIES - Gross Realized Gai
SECURITIES - Gross Realized Gains and Losses From Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
SECURITIES | ||||
Gross realized gains from sales | $ 26 | $ 14 | $ 78 | $ 21 |
Gross realized losses from sales | (1) | (1) | (53) | (1) |
Net realized gains | $ 25 | $ 13 | $ 25 | $ 20 |
SECURITIES - Available-for-sa_3
SECURITIES - Available-for-sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Available-for-sale Securities | ||
Due in one year or less, amortized cost | $ 14,411 | |
Due in one year or less, fair value | 14,469 | |
Due from one year through five years. amortized cost | 45,804 | |
Due from one year through five years, fair value | 47,460 | |
Due from five years through ten years, amortized cost | 37,479 | |
Due from five years through ten years, fair value | 40,088 | |
Due after ten years, amortized cost | 76,782 | |
Due after ten years, fair value | 80,427 | |
Sub-total, amortized cost | 174,476 | |
Sub-total, fair value | 182,444 | |
Total, amortized cost | 326,145 | $ 342,278 |
Total, fair value | 340,545 | 346,723 |
Residential Pass-Through Securities | ||
Available-for-sale Securities | ||
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, amortized cost | 44,697 | |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, fair value | 46,211 | |
Total, amortized cost | 44,697 | 58,875 |
Total, fair value | 46,211 | 59,210 |
Residential Collateralized Mortgage Obligations | ||
Available-for-sale Securities | ||
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, amortized cost | 67,635 | |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, fair value | 69,337 | |
Total, amortized cost | 67,635 | 115,025 |
Total, fair value | 69,337 | $ 114,723 |
Commercial mortgage-backed securities | ||
Available-for-sale Securities | ||
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, amortized cost | 39,337 | |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies, fair value | $ 42,553 |
SECURITIES - Additional Informa
SECURITIES - Additional Information (Details) | Sep. 30, 2020USD ($)item | Dec. 31, 2019USD ($)item |
Equity Securities, FV-NI | $ 1,003,000 | $ 979,000 |
Number of mutual funds | item | 1 | 1 |
Mutual Fund | ||
Equity Securities Unrealized Gain Cumulative Amount | $ 3,000 | |
Equity Securities Unrealized Loss Cumulative Amount | $ 21,000 | |
Other Assets | Federal Home Loan Bank of Pittsburgh | ||
Federal Home Loan Bank Stock | 11,929,000 | 10,131,000 |
Investment Securities [Member] | ||
Debt Securities, Available-for-sale, Restricted | $ 255,312,000 | $ 215,270,000 |
LOANS (Details)
LOANS (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
LOANS | ||||||
Loans receivable | $ 1,691,370 | $ 1,182,222 | ||||
Allowance for loan losses | (10,753) | $ (11,026) | (9,836) | $ (9,257) | $ (8,200) | $ (9,309) |
Loans, net | 1,680,617 | 1,172,386 | ||||
Residential mortgage | ||||||
LOANS | ||||||
Loans receivable | 639,023 | 586,580 | ||||
Allowance for loan losses | (4,281) | (4,320) | (4,182) | (4,054) | (3,963) | (3,986) |
Residential mortgage | Real estate loan | first liens | ||||||
LOANS | ||||||
Loans receivable | 541,827 | 510,641 | ||||
Allowance for loan losses | (3,465) | (3,531) | (3,405) | (3,164) | (3,130) | (3,156) |
Residential mortgage | Real estate loan | junior liens | ||||||
LOANS | ||||||
Loans receivable | 27,907 | 27,503 | ||||
Allowance for loan losses | (358) | (365) | (384) | (350) | (333) | (325) |
Residential mortgage | Home equity lines of credit | ||||||
LOANS | ||||||
Loans receivable | 40,143 | 33,638 | ||||
Allowance for loan losses | (289) | (287) | (276) | (282) | (280) | (302) |
Residential mortgage | Construction Loans | ||||||
LOANS | ||||||
Loans receivable | 29,146 | 14,798 | ||||
Allowance for loan losses | (169) | (137) | (117) | (258) | (220) | (203) |
Commercial | ||||||
LOANS | ||||||
Loans receivable | 1,035,071 | 578,901 | ||||
Allowance for loan losses | (5,629) | (5,858) | (4,788) | (4,344) | (3,388) | (4,591) |
Commercial | Real estate loan | ||||||
LOANS | ||||||
Loans receivable | 530,874 | 301,227 | ||||
Allowance for loan losses | (2,386) | (2,426) | (1,921) | (2,505) | (1,577) | (2,538) |
Commercial | Construction Loans | ||||||
LOANS | ||||||
Loans receivable | 41,906 | 33,555 | ||||
Allowance for loan losses | (440) | (420) | (966) | (158) | (152) | (110) |
Commercial | Commercial and industrial | ||||||
LOANS | ||||||
Loans receivable | 156,169 | 126,374 | ||||
Allowance for loan losses | (2,251) | (2,496) | (1,391) | (1,256) | (1,246) | (1,553) |
Commercial | Small Business Administration - Paycheck Protection Program | ||||||
LOANS | ||||||
Loans receivable | 163,050 | 0 | ||||
Allowance for loan losses | 0 | |||||
Commercial | Political subdivisions | ||||||
LOANS | ||||||
Loans receivable | 47,883 | 53,570 | ||||
Allowance for loan losses | 0 | 0 | ||||
Commercial | Loans secured by farm land | ||||||
LOANS | ||||||
Loans receivable | 11,913 | 12,251 | ||||
Allowance for loan losses | (121) | (146) | (158) | (101) | (102) | (102) |
Commercial | Multi-family (5 or more) residential | ||||||
LOANS | ||||||
Loans receivable | 62,330 | 31,070 | ||||
Allowance for loan losses | (227) | (163) | (156) | (155) | (150) | (114) |
Commercial | Agricultural loans | ||||||
LOANS | ||||||
Loans receivable | 3,561 | 4,319 | ||||
Allowance for loan losses | (37) | (40) | (41) | (49) | (42) | (46) |
Commercial | Other commercial loans | ||||||
LOANS | ||||||
Loans receivable | 17,385 | 16,535 | ||||
Allowance for loan losses | (167) | (167) | (155) | (120) | (119) | (128) |
Consumer | ||||||
LOANS | ||||||
Loans receivable | 17,276 | 16,741 | ||||
Allowance for loan losses | $ (258) | $ (263) | $ (281) | $ (274) | $ (264) | $ (233) |
LOANS - Loans Modified Under Co
LOANS - Loans Modified Under Covid-19 Program (Details) $ in Thousands | Sep. 30, 2020USD ($)loan |
LOANS | |
Loans Modified, Number of Loans | loan | 44 |
Loans Modified, Recorded Investment | $ | $ 41,639 |
Residential mortgage | |
LOANS | |
Loans Modified, Number of Loans | loan | 16 |
Loans Modified, Recorded Investment | $ | $ 1,727 |
Commercial | |
LOANS | |
Loans Modified, Number of Loans | loan | 28 |
Loans Modified, Recorded Investment | $ | $ 39,912 |
LOANS - Adjustments to Initial
LOANS - Adjustments to Initial Discounts and Carrying Amounts of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Market Rate Adjustment | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Adjustments to gross amortized cost of loans, Beginning balance | $ (1,103) | $ (1,658) | $ (1,415) | $ 0 |
Adjustment recorded in acquisition | 2,909 | 0 | 2,909 | (1,807) |
Accretion recognized in interest income | (452) | 110 | (140) | 259 |
Adjustments to gross amortized cost of loans, Ending balance | 1,354 | (1,548) | 1,354 | (1,548) |
Credit Adjustment on Non-impaired Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Adjustments to gross amortized cost of loans, Beginning balance | (878) | (1,653) | (1,216) | 0 |
Adjustment recorded in acquisition | (7,219) | 0 | (7,219) | (1,914) |
Accretion recognized in interest income | 970 | 260 | 1,308 | 521 |
Adjustments to gross amortized cost of loans, Ending balance | $ (7,127) | $ (1,393) | $ (7,127) | $ (1,393) |
LOANS - Components of Purchase
LOANS - Components of Purchase Account Adjustments on PCI Loans acquired (Details) $ in Thousands | Jul. 01, 2020USD ($) |
LOANS | |
Contractually required principal at acquisition | $ 10,114 |
Non-accretable discount | (2,910) |
Expected cash flows | $ 7,204 |
LOANS - Summary of PCI Loans He
LOANS - Summary of PCI Loans Held (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
LOANS | ||
Outstanding balance | $ 10,453 | $ 759 |
Carrying amount | $ 7,447 | $ 441 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Allowance for Loan losses | $ 11,026 | $ 8,200 | $ 9,836 | $ 9,309 |
Allowance for Loan losses, Charge-offs | (2,249) | (116) | (2,443) | (295) |
Allowance for Loan losses, Recoveries | 35 | 15 | 67 | 46 |
Allowance for Loan losses, Provision (Credit) | 1,941 | 1,158 | 3,293 | 197 |
Allowance for Loan losses | 10,753 | 9,257 | 10,753 | 9,257 |
Residential mortgage | ||||
Allowance for Loan losses | 4,320 | 3,963 | 4,182 | 3,986 |
Allowance for Loan losses, Charge-offs | 0 | (50) | 0 | (157) |
Allowance for Loan losses, Recoveries | 27 | 3 | 32 | 9 |
Allowance for Loan losses, Provision (Credit) | (66) | 138 | 67 | 216 |
Allowance for Loan losses | 4,281 | 4,054 | 4,281 | 4,054 |
Residential mortgage | Real estate loan | first liens | ||||
Allowance for Loan losses | 3,531 | 3,130 | 3,405 | 3,156 |
Allowance for Loan losses, Charge-offs | 0 | (50) | 0 | (133) |
Allowance for Loan losses, Recoveries | 26 | 1 | 28 | 3 |
Allowance for Loan losses, Provision (Credit) | (92) | 83 | 32 | 138 |
Allowance for Loan losses | 3,465 | 3,164 | 3,465 | 3,164 |
Residential mortgage | Real estate loan | junior liens | ||||
Allowance for Loan losses | 365 | 333 | 384 | 325 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | (24) |
Allowance for Loan losses, Recoveries | 0 | 1 | 1 | 1 |
Allowance for Loan losses, Provision (Credit) | (7) | 16 | (27) | 48 |
Allowance for Loan losses | 358 | 350 | 358 | 350 |
Residential mortgage | Home equity lines of credit | ||||
Allowance for Loan losses | 287 | 280 | 276 | 302 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 1 | 1 | 3 | 5 |
Allowance for Loan losses, Provision (Credit) | 1 | 1 | 10 | (25) |
Allowance for Loan losses | 289 | 282 | 289 | 282 |
Residential mortgage | Construction Loans | ||||
Allowance for Loan losses | 137 | 220 | 117 | 203 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | 32 | 38 | 52 | 55 |
Allowance for Loan losses | 169 | 258 | 169 | 258 |
Commercial | ||||
Allowance for Loan losses | 5,858 | 3,388 | 4,788 | 4,591 |
Allowance for Loan losses, Charge-offs | (2,219) | 0 | (2,343) | (6) |
Allowance for Loan losses, Recoveries | 0 | 3 | 0 | 6 |
Allowance for Loan losses, Provision (Credit) | 1,990 | 953 | 3,184 | (247) |
Allowance for Loan losses | 5,629 | 4,344 | 5,629 | 4,344 |
Commercial | Real estate loan | ||||
Allowance for Loan losses | 2,426 | 1,577 | 1,921 | 2,538 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | (40) | 928 | 465 | (33) |
Allowance for Loan losses | 2,386 | 2,505 | 2,386 | 2,505 |
Commercial | Construction Loans | ||||
Allowance for Loan losses | 420 | 152 | 966 | 110 |
Allowance for Loan losses, Charge-offs | 0 | 0 | (107) | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | 20 | 6 | (419) | 48 |
Allowance for Loan losses | 440 | 158 | 440 | 158 |
Commercial | Commercial and industrial | ||||
Allowance for Loan losses | 2,496 | 1,246 | 1,391 | 1,553 |
Allowance for Loan losses, Charge-offs | (2,219) | 0 | (2,236) | (6) |
Allowance for Loan losses, Recoveries | 0 | 3 | 0 | 6 |
Allowance for Loan losses, Provision (Credit) | 1,974 | 7 | 3,096 | (297) |
Allowance for Loan losses | 2,251 | 1,256 | 2,251 | 1,256 |
Commercial | Loans secured by farm land | ||||
Allowance for Loan losses | 146 | 102 | 158 | 102 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | (25) | (1) | (37) | (1) |
Allowance for Loan losses | 121 | 101 | 121 | 101 |
Commercial | Multi-family (5 or more) residential | ||||
Allowance for Loan losses | 163 | 150 | 156 | 114 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | 64 | 5 | 71 | 41 |
Allowance for Loan losses | 227 | 155 | 227 | 155 |
Commercial | Agricultural loans | ||||
Allowance for Loan losses | 40 | 42 | 41 | 46 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | (3) | 7 | (4) | 3 |
Allowance for Loan losses | 37 | 49 | 37 | 49 |
Commercial | Other commercial loans | ||||
Allowance for Loan losses | 167 | 119 | 155 | 128 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | 0 | 1 | 12 | (8) |
Allowance for Loan losses | 167 | 120 | 167 | 120 |
Consumer | ||||
Allowance for Loan losses | 263 | 264 | 281 | 233 |
Allowance for Loan losses, Charge-offs | (30) | (66) | (100) | (132) |
Allowance for Loan losses, Recoveries | 8 | 9 | 35 | 31 |
Allowance for Loan losses, Provision (Credit) | 17 | 67 | 42 | 142 |
Allowance for Loan losses | 258 | 274 | 258 | 274 |
Unallocated | ||||
Allowance for Loan losses | 585 | 585 | 585 | 499 |
Allowance for Loan losses, Charge-offs | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Recoveries | 0 | 0 | 0 | 0 |
Allowance for Loan losses, Provision (Credit) | 0 | 0 | 0 | 86 |
Allowance for Loan losses | $ 585 | $ 585 | $ 585 | $ 585 |
LOANS - Outstanding Loans by Ri
LOANS - Outstanding Loans by Risk Rating (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
LOANS | ||
Loans receivable | $ 1,691,370 | $ 1,182,222 |
Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 7,447 | 441 |
Residential mortgage | ||
LOANS | ||
Loans receivable | 639,023 | 586,580 |
Residential mortgage | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 149 | 77 |
Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans receivable | 541,827 | 510,641 |
Residential mortgage | Real estate loan | first liens | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 77 | 77 |
Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans receivable | 27,907 | 27,503 |
Residential mortgage | Real estate loan | junior liens | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 72 | 0 |
Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans receivable | 40,143 | 33,638 |
Residential mortgage | Home equity lines of credit | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Residential mortgage | Construction Loans | ||
LOANS | ||
Loans receivable | 29,146 | 14,798 |
Residential mortgage | Construction Loans | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Commercial | ||
LOANS | ||
Loans receivable | 1,035,071 | 578,901 |
Commercial | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 7,298 | 364 |
Commercial | Real estate loan | ||
LOANS | ||
Loans receivable | 530,874 | 301,227 |
Commercial | Real estate loan | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 4,342 | 364 |
Commercial | Construction Loans | ||
LOANS | ||
Loans receivable | 41,906 | 33,555 |
Commercial | Construction Loans | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Commercial | Commercial and industrial | ||
LOANS | ||
Loans receivable | 156,169 | 126,374 |
Commercial | Commercial and industrial | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 786 | 0 |
Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans receivable | 163,050 | 0 |
Commercial | Small Business Administration - Paycheck Protection Program | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | |
Commercial | Political subdivisions | ||
LOANS | ||
Loans receivable | 47,883 | 53,570 |
Commercial | Political subdivisions | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Commercial | Loans secured by farm land | ||
LOANS | ||
Loans receivable | 11,913 | 12,251 |
Commercial | Loans secured by farm land | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans receivable | 62,330 | 31,070 |
Commercial | Multi-family (5 or more) residential | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 2,170 | 0 |
Commercial | Agricultural loans | ||
LOANS | ||
Loans receivable | 3,561 | 4,319 |
Commercial | Agricultural loans | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Commercial | Other commercial loans | ||
LOANS | ||
Loans receivable | 17,385 | 16,535 |
Commercial | Other commercial loans | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Consumer | ||
LOANS | ||
Loans receivable | 17,276 | 16,741 |
Consumer | Purchased Credit Impaired | ||
LOANS | ||
Loans receivable | 0 | 0 |
Pass | ||
LOANS | ||
Loans receivable | 1,629,044 | 1,143,535 |
Pass | Residential mortgage | ||
LOANS | ||
Loans receivable | 621,465 | 575,884 |
Pass | Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans receivable | 525,833 | 500,963 |
Pass | Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans receivable | 27,078 | 26,953 |
Pass | Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans receivable | 39,408 | 33,170 |
Pass | Residential mortgage | Construction Loans | ||
LOANS | ||
Loans receivable | 29,146 | 14,798 |
Pass | Commercial | ||
LOANS | ||
Loans receivable | 990,395 | 550,931 |
Pass | Commercial | Real estate loan | ||
LOANS | ||
Loans receivable | 508,540 | 294,397 |
Pass | Commercial | Construction Loans | ||
LOANS | ||
Loans receivable | 41,659 | 32,224 |
Pass | Commercial | Commercial and industrial | ||
LOANS | ||
Loans receivable | 142,181 | 114,293 |
Pass | Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans receivable | 163,050 | |
Pass | Commercial | Political subdivisions | ||
LOANS | ||
Loans receivable | 47,883 | 53,570 |
Pass | Commercial | Loans secured by farm land | ||
LOANS | ||
Loans receivable | 10,231 | 6,528 |
Pass | Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans receivable | 56,507 | 30,160 |
Pass | Commercial | Agricultural loans | ||
LOANS | ||
Loans receivable | 2,959 | 3,343 |
Pass | Commercial | Other commercial loans | ||
LOANS | ||
Loans receivable | 17,385 | 16,416 |
Pass | Consumer | ||
LOANS | ||
Loans receivable | 17,184 | 16,720 |
Special Mention | ||
LOANS | ||
Loans receivable | 27,000 | 19,658 |
Special Mention | Residential mortgage | ||
LOANS | ||
Loans receivable | 6,514 | 331 |
Special Mention | Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans receivable | 6,331 | 193 |
Special Mention | Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans receivable | 124 | 79 |
Special Mention | Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans receivable | 59 | 59 |
Special Mention | Residential mortgage | Construction Loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Special Mention | Commercial | ||
LOANS | ||
Loans receivable | 20,486 | 19,327 |
Special Mention | Commercial | Real estate loan | ||
LOANS | ||
Loans receivable | 7,920 | 4,773 |
Special Mention | Commercial | Construction Loans | ||
LOANS | ||
Loans receivable | 198 | 0 |
Special Mention | Commercial | Commercial and industrial | ||
LOANS | ||
Loans receivable | 9,495 | 9,538 |
Special Mention | Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans receivable | 0 | |
Special Mention | Commercial | Political subdivisions | ||
LOANS | ||
Loans receivable | 0 | 0 |
Special Mention | Commercial | Loans secured by farm land | ||
LOANS | ||
Loans receivable | 453 | 4,681 |
Special Mention | Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans receivable | 2,420 | 0 |
Special Mention | Commercial | Agricultural loans | ||
LOANS | ||
Loans receivable | 0 | 335 |
Special Mention | Commercial | Other commercial loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Special Mention | Consumer | ||
LOANS | ||
Loans receivable | 0 | 0 |
Substandard | ||
LOANS | ||
Loans receivable | 27,014 | 18,504 |
Substandard | Residential mortgage | ||
LOANS | ||
Loans receivable | 10,832 | 10,204 |
Substandard | Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans receivable | 9,586 | 9,324 |
Substandard | Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans receivable | 570 | 471 |
Substandard | Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans receivable | 676 | 409 |
Substandard | Residential mortgage | Construction Loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Substandard | Commercial | ||
LOANS | ||
Loans receivable | 16,090 | 8,279 |
Substandard | Commercial | Real estate loan | ||
LOANS | ||
Loans receivable | 10,072 | 1,693 |
Substandard | Commercial | Construction Loans | ||
LOANS | ||
Loans receivable | 49 | 1,331 |
Substandard | Commercial | Commercial and industrial | ||
LOANS | ||
Loans receivable | 2,905 | 2,543 |
Substandard | Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans receivable | 0 | |
Substandard | Commercial | Political subdivisions | ||
LOANS | ||
Loans receivable | 0 | 0 |
Substandard | Commercial | Loans secured by farm land | ||
LOANS | ||
Loans receivable | 1,229 | 1,042 |
Substandard | Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans receivable | 1,233 | 910 |
Substandard | Commercial | Agricultural loans | ||
LOANS | ||
Loans receivable | 602 | 641 |
Substandard | Commercial | Other commercial loans | ||
LOANS | ||
Loans receivable | 0 | 119 |
Substandard | Consumer | ||
LOANS | ||
Loans receivable | 92 | 21 |
Doubtful | ||
LOANS | ||
Loans receivable | 865 | 84 |
Doubtful | Residential mortgage | ||
LOANS | ||
Loans receivable | 63 | 84 |
Doubtful | Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans receivable | 0 | 84 |
Doubtful | Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans receivable | 63 | 0 |
Doubtful | Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Residential mortgage | Construction Loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | ||
LOANS | ||
Loans receivable | 802 | 0 |
Doubtful | Commercial | Real estate loan | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Construction Loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Commercial and industrial | ||
LOANS | ||
Loans receivable | 802 | 0 |
Doubtful | Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans receivable | 0 | |
Doubtful | Commercial | Political subdivisions | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Loans secured by farm land | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Agricultural loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Commercial | Other commercial loans | ||
LOANS | ||
Loans receivable | 0 | 0 |
Doubtful | Consumer | ||
LOANS | ||
Loans receivable | $ 0 | $ 0 |
LOANS - Loan Balances and Allow
LOANS - Loan Balances and Allowance for Loan Losses for Each Impairment Method (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
LOANS | ||||||
Loans receivable: Individually Evaluated | $ 18,612 | $ 5,486 | ||||
Loans receivable: Collectively Evaluated | 1,014,617 | 939,762 | ||||
Loans receivable | 1,691,370 | 1,182,222 | ||||
Allowance for loan losses: individually evaluated | 651 | 1,051 | ||||
Allowance for loan losses: collectively evaluated | 9,517 | 8,200 | ||||
Allowance for loan losses | 10,753 | $ 11,026 | 9,836 | $ 9,257 | $ 8,200 | $ 9,309 |
Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 658,141 | 236,974 | ||||
Residential mortgage | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 2,747 | 1,391 | ||||
Loans receivable: Collectively Evaluated | 451,439 | 476,703 | ||||
Loans receivable | 639,023 | 586,580 | ||||
Allowance for loan losses: individually evaluated | 170 | 176 | ||||
Allowance for loan losses: collectively evaluated | 4,111 | 4,006 | ||||
Allowance for loan losses | 4,281 | 4,320 | 4,182 | 4,054 | 3,963 | 3,986 |
Residential mortgage | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 184,837 | 108,486 | ||||
Residential mortgage | Real estate loan | first liens | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 2,238 | 1,023 | ||||
Loans receivable: Collectively Evaluated | 380,348 | 405,186 | ||||
Loans receivable | 541,827 | 510,641 | ||||
Allowance for loan losses: individually evaluated | 9 | 0 | ||||
Allowance for loan losses: collectively evaluated | 3,456 | 3,405 | ||||
Allowance for loan losses | 3,465 | 3,531 | 3,405 | 3,164 | 3,130 | 3,156 |
Residential mortgage | Real estate loan | first liens | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 159,241 | 104,432 | ||||
Residential mortgage | Real estate loan | junior liens | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 424 | 368 | ||||
Loans receivable: Collectively Evaluated | 21,777 | 24,730 | ||||
Loans receivable | 27,907 | 27,503 | ||||
Allowance for loan losses: individually evaluated | 161 | 176 | ||||
Allowance for loan losses: collectively evaluated | 197 | 208 | ||||
Allowance for loan losses | 358 | 365 | 384 | 350 | 333 | 325 |
Residential mortgage | Real estate loan | junior liens | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 5,706 | 2,405 | ||||
Residential mortgage | Home equity lines of credit | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 85 | 0 | ||||
Loans receivable: Collectively Evaluated | 30,368 | 32,147 | ||||
Loans receivable | 40,143 | 33,638 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 289 | 276 | ||||
Allowance for loan losses | 289 | 287 | 276 | 282 | 280 | 302 |
Residential mortgage | Home equity lines of credit | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 9,690 | 1,491 | ||||
Residential mortgage | Construction Loans | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | 0 | ||||
Loans receivable: Collectively Evaluated | 18,946 | 14,640 | ||||
Loans receivable | 29,146 | 14,798 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 169 | 117 | ||||
Allowance for loan losses | 169 | 137 | 117 | 258 | 220 | 203 |
Residential mortgage | Construction Loans | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 10,200 | 158 | ||||
Commercial | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 15,865 | 4,095 | ||||
Loans receivable: Collectively Evaluated | 546,260 | 446,318 | ||||
Loans receivable | 1,035,071 | 578,901 | ||||
Allowance for loan losses: individually evaluated | 481 | 875 | ||||
Allowance for loan losses: collectively evaluated | 5,148 | 3,913 | ||||
Allowance for loan losses | 5,629 | 5,858 | 4,788 | 4,344 | 3,388 | 4,591 |
Commercial | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 472,946 | 128,488 | ||||
Commercial | Real estate loan | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 12,242 | 684 | ||||
Loans receivable: Collectively Evaluated | 190,045 | 198,532 | ||||
Loans receivable | 530,874 | 301,227 | ||||
Allowance for loan losses: individually evaluated | 410 | 0 | ||||
Allowance for loan losses: collectively evaluated | 1,976 | 1,921 | ||||
Allowance for loan losses | 2,386 | 2,426 | 1,921 | 2,505 | 1,577 | 2,538 |
Commercial | Real estate loan | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 328,587 | 102,011 | ||||
Commercial | Construction Loans | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | |||||
Loans receivable: Collectively Evaluated | 41,906 | |||||
Loans receivable | 41,906 | 33,555 | ||||
Allowance for loan losses: individually evaluated | 0 | |||||
Allowance for loan losses: collectively evaluated | 440 | |||||
Allowance for loan losses | 440 | 420 | 966 | 158 | 152 | 110 |
Commercial | Construction Loans | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 0 | |||||
Commercial | Commercial and industrial | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 1,367 | 1,467 | ||||
Loans receivable: Collectively Evaluated | 119,401 | 122,313 | ||||
Loans receivable | 156,169 | 126,374 | ||||
Allowance for loan losses: individually evaluated | 71 | 149 | ||||
Allowance for loan losses: collectively evaluated | 2,180 | 1,242 | ||||
Allowance for loan losses | 2,251 | 2,496 | 1,391 | 1,256 | 1,246 | 1,553 |
Commercial | Commercial and industrial | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 35,401 | 2,594 | ||||
Commercial | Small Business Administration - Paycheck Protection Program | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | |||||
Loans receivable: Collectively Evaluated | 99,310 | |||||
Loans receivable | 163,050 | 0 | ||||
Allowance for loan losses: individually evaluated | 0 | |||||
Allowance for loan losses: collectively evaluated | 0 | |||||
Allowance for loan losses | 0 | |||||
Commercial | Small Business Administration - Paycheck Protection Program | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 63,740 | |||||
Commercial | Political subdivisions | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | 0 | ||||
Loans receivable: Collectively Evaluated | 47,883 | 53,570 | ||||
Loans receivable | 47,883 | 53,570 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 0 | 0 | ||||
Allowance for loan losses | 0 | 0 | ||||
Commercial | Political subdivisions | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 0 | 0 | ||||
Commercial | Commercial construction and land | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 1,261 | |||||
Loans receivable: Collectively Evaluated | 29,710 | |||||
Loans receivable | 33,555 | |||||
Allowance for loan losses: individually evaluated | 678 | |||||
Allowance for loan losses: collectively evaluated | 288 | |||||
Allowance for loan losses | 966 | |||||
Commercial | Commercial construction and land | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 2,584 | |||||
Commercial | Loans secured by farm land | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 85 | 607 | ||||
Loans receivable: Collectively Evaluated | 11,505 | 11,386 | ||||
Loans receivable | 11,913 | 12,251 | ||||
Allowance for loan losses: individually evaluated | 0 | 48 | ||||
Allowance for loan losses: collectively evaluated | 121 | 110 | ||||
Allowance for loan losses | 121 | 146 | 158 | 101 | 102 | 102 |
Commercial | Loans secured by farm land | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 323 | 258 | ||||
Commercial | Multi-family (5 or more) residential | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 2,171 | 0 | ||||
Loans receivable: Collectively Evaluated | 16,754 | 10,617 | ||||
Loans receivable | 62,330 | 31,070 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 227 | 156 | ||||
Allowance for loan losses | 227 | 163 | 156 | 155 | 150 | 114 |
Commercial | Multi-family (5 or more) residential | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 43,405 | 20,453 | ||||
Commercial | Agricultural loans | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | 76 | ||||
Loans receivable: Collectively Evaluated | 3,561 | 4,243 | ||||
Loans receivable | 3,561 | 4,319 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 37 | 41 | ||||
Allowance for loan losses | 37 | 40 | 41 | 49 | 42 | 46 |
Commercial | Agricultural loans | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 0 | 0 | ||||
Commercial | Other commercial loans | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | 0 | ||||
Loans receivable: Collectively Evaluated | 15,895 | 15,947 | ||||
Loans receivable | 17,385 | 16,535 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 167 | 155 | ||||
Allowance for loan losses | 167 | 167 | 155 | 120 | 119 | 128 |
Commercial | Other commercial loans | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 1,490 | 588 | ||||
Consumer | ||||||
LOANS | ||||||
Loans receivable: Individually Evaluated | 0 | 0 | ||||
Loans receivable: Collectively Evaluated | 16,918 | 16,741 | ||||
Loans receivable | 17,276 | 16,741 | ||||
Allowance for loan losses: individually evaluated | 0 | 0 | ||||
Allowance for loan losses: collectively evaluated | 258 | 281 | ||||
Allowance for loan losses | 258 | 263 | 281 | 274 | 264 | 233 |
Consumer | Purchased Performing Loans | ||||||
LOANS | ||||||
Loans receivable | 358 | 0 | ||||
Unallocated | ||||||
LOANS | ||||||
Allowance for loan losses | $ 585 | $ 585 | $ 585 | $ 585 | $ 585 | $ 499 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) | Sep. 30, 2020USD ($)borrower | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) |
LOANS | ||||
Unpaid Principal Balance - with no allowance | $ 13,560,000 | $ 2,139,000 | ||
Recorded Investment - with no allowance | 10,527,000 | 2,111,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 8,085,000 | 3,375,000 | ||
Recorded investment - with allowance | 8,085,000 | 3,375,000 | ||
Related Allowance - with allowance | 651,000 | 1,051,000 | ||
Unpaid Principal Balance | 21,645,000 | 5,514,000 | ||
Recorded Investment | $ 18,612,000 | 5,486,000 | ||
Residential mortgage | ||||
LOANS | ||||
Number borrowers collateralized by one property with specific allowance | borrower | 2 | |||
Residential mortgage | Real estate loan | ||||
LOANS | ||||
Related Allowance - with allowance | $ 161,000 | 176,000 | ||
Residential mortgage | Real estate loan | first liens | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 1,084,000 | 645,000 | ||
Recorded Investment - with no allowance | 1,034,000 | 617,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 1,204,000 | 406,000 | ||
Recorded investment - with allowance | 1,204,000 | 406,000 | ||
Related Allowance - with allowance | 9,000 | 0 | ||
Residential mortgage | Real estate loan | junior liens | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 167,000 | 42,000 | ||
Recorded Investment - with no allowance | 112,000 | 42,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 312,000 | 326,000 | ||
Recorded investment - with allowance | 312,000 | 326,000 | ||
Related Allowance - with allowance | 161,000 | 176,000 | ||
Residential mortgage | Home equity lines of credit | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 151,000 | 0 | ||
Recorded Investment - with no allowance | 85,000 | 0 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Commercial | Real estate loan | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 7,570,000 | 684,000 | ||
Recorded Investment - with no allowance | 5,745,000 | 684,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 6,497,000 | 0 | ||
Recorded investment - with allowance | 6,497,000 | 0 | ||
Related Allowance - with allowance | 409,000 | $ 1,193,000 | 0 | $ 678,000 |
Commercial | Commercial and industrial | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 1,732,000 | 563,000 | ||
Recorded Investment - with no allowance | 1,295,000 | 563,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 72,000 | 904,000 | ||
Recorded investment - with allowance | 72,000 | 904,000 | ||
Related Allowance - with allowance | 72,000 | 149,000 | ||
Commercial | Loans secured by farm land | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 85,000 | 129,000 | ||
Recorded Investment - with no allowance | 85,000 | 129,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Unpaid Principal Balance - with allowance | 0 | 478,000 | ||
Recorded investment - with allowance | 0 | 478,000 | ||
Related Allowance - with allowance | 0 | 48,000 | ||
Commercial | Multi-family (5 or more) residential | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 2,771,000 | 0 | ||
Recorded Investment - with no allowance | 2,171,000 | 0 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Commercial | Agricultural loans | ||||
LOANS | ||||
Unpaid Principal Balance - with no allowance | 0 | 76,000 | ||
Recorded Investment - with no allowance | 0 | 76,000 | ||
Related Allowance - with no allowance | 0 | 0 | ||
Commercial | Construction Loans | ||||
LOANS | ||||
Unpaid Principal Balance - with allowance | 0 | 1,261,000 | ||
Recorded investment - with allowance | 0 | 1,261,000 | ||
Related Allowance - with allowance | $ 0 | $ 678,000 |
LOANS - Average Balance of Impa
LOANS - Average Balance of Impaired Loans and Income Recognized on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
LOANS | ||||
Average Investment in Impaired Loans | $ 12,519 | $ 5,762 | $ 10,163 | $ 7,074 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 103 | 110 | 237 | 224 |
Residential mortgage | ||||
LOANS | ||||
Average Investment in Impaired Loans | 2,608 | 1,407 | 2,030 | 1,302 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 32 | 32 | 90 | 52 |
Residential mortgage | Real estate loan | first liens | ||||
LOANS | ||||
Average Investment in Impaired Loans | 2,159 | 1,057 | 1,579 | 997 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 27 | 21 | 70 | 39 |
Residential mortgage | Real estate loan | junior liens | ||||
LOANS | ||||
Average Investment in Impaired Loans | 384 | 285 | 386 | 289 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 5 | 8 | 18 | 10 |
Residential mortgage | Home Equity Line of Credit [Member] | ||||
LOANS | ||||
Average Investment in Impaired Loans | 65 | 65 | 65 | 16 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 0 | 3 | 2 | 3 |
Commercial | ||||
LOANS | ||||
Average Investment in Impaired Loans | 9,911 | 4,355 | 8,133 | 5,768 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 71 | 78 | 147 | 172 |
Commercial | Real estate loan | ||||
LOANS | ||||
Average Investment in Impaired Loans | 7,298 | 1,738 | 3,779 | 2,371 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 65 | 49 | 81 | 66 |
Commercial | Commercial and industrial | ||||
LOANS | ||||
Average Investment in Impaired Loans | 2,235 | 1,202 | 3,178 | 1,460 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 1 | 4 | 21 | 38 |
Commercial | Construction Loans | ||||
LOANS | ||||
Average Investment in Impaired Loans | 49 | 0 | 678 | 0 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 1 | 0 | 14 | 0 |
Commercial | Loans secured by farm land | ||||
LOANS | ||||
Average Investment in Impaired Loans | 253 | 1,359 | 397 | 1,443 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 2 | 23 | 26 | 42 |
Commercial | Agricultural loans | ||||
LOANS | ||||
Average Investment in Impaired Loans | 76 | 6 | 76 | 481 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 2 | 0 | 4 | 24 |
Commercial | Other commercial loans | ||||
LOANS | ||||
Average Investment in Impaired Loans | 0 | 50 | 25 | 13 |
Interest Income Recognized on Impaired Loans on a Cash Basis | 0 | 2 | 1 | 2 |
Consumer | ||||
LOANS | ||||
Average Investment in Impaired Loans | 0 | 0 | 0 | 4 |
Interest Income Recognized on Impaired Loans on a Cash Basis | $ 0 | $ 0 | $ 0 | $ 0 |
LOANS - Nonaccrual Loans and Lo
LOANS - Nonaccrual Loans and Loans Past Due Ninety Days or More and Still Accruing (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
LOANS | ||
Past Due 90+ Days and Accruing | $ 2,308,000 | $ 1,207,000 |
Nonaccrual | 22,796,000 | 9,218,000 |
Multi-family (5 or more) residential | ||
LOANS | ||
Past Due 90+ Days and Accruing | 0 | 0 |
Nonaccrual | 2,170,000 | 0 |
Purchased Credit Impaired | ||
LOANS | ||
Nonaccrual | 7,447,000 | 441,000 |
Residential mortgage | ||
LOANS | ||
Past Due 90+ Days and Accruing | 1,605,000 | 1,002,000 |
Nonaccrual | 7,031,000 | 5,078,000 |
Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Past Due 90+ Days and Accruing | 1,336,000 | 878,000 |
Nonaccrual | 6,354,000 | 4,679,000 |
Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Past Due 90+ Days and Accruing | 56,000 | 53,000 |
Nonaccrual | 383,000 | 326,000 |
Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Past Due 90+ Days and Accruing | 213,000 | 71,000 |
Nonaccrual | 255,000 | 73,000 |
Residential mortgage | Construction Loans | ||
LOANS | ||
Past Due 90+ Days and Accruing | 0 | 0 |
Nonaccrual | 39,000 | 0 |
Commercial | ||
LOANS | ||
Past Due 90+ Days and Accruing | 681,000 | 165,000 |
Nonaccrual | 15,673,000 | 4,124,000 |
Commercial | Real estate loan | ||
LOANS | ||
Past Due 90+ Days and Accruing | 381,000 | 107,000 |
Nonaccrual | 12,414,000 | 1,148,000 |
Commercial | Construction Loans | ||
LOANS | ||
Past Due 90+ Days and Accruing | 0 | 0 |
Nonaccrual | 49,000 | 1,311,000 |
Commercial | Commercial and industrial | ||
LOANS | ||
Past Due 90+ Days and Accruing | 112,000 | 15,000 |
Nonaccrual | 955,000 | 1,051,000 |
Commercial | Loans secured by farm land | ||
LOANS | ||
Past Due 90+ Days and Accruing | 188,000 | 43,000 |
Nonaccrual | 85,000 | 565,000 |
Commercial | Other commercial loans | ||
LOANS | ||
Past Due 90+ Days and Accruing | 0 | 0 |
Nonaccrual | 0 | 49,000 |
Consumer | ||
LOANS | ||
Past Due 90+ Days and Accruing | 22,000 | 40,000 |
Nonaccrual | $ 92,000 | $ 16,000 |
LOANS - Contractual Aging of No
LOANS - Contractual Aging of Nonaccrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
LOANS | ||
Nonaccrual loans | $ 22,796 | $ 9,218 |
Non accrual Loans [Member] | ||
LOANS | ||
Loans current and past due, nonaccrual | 12,605 | 3,840 |
Nonaccrual loans | 22,796 | 9,218 |
Non accrual Loans [Member] | Past Due 30-89 Days | ||
LOANS | ||
Loans current and past due, nonaccrual | 1,228 | 1,134 |
Non accrual Loans [Member] | Past Due 90+ Days | ||
LOANS | ||
Loans current and past due, nonaccrual | $ 8,963 | $ 4,244 |
LOANS - Contractual Aging of Lo
LOANS - Contractual Aging of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
LOANS | ||
Loans current and past due less than 30 days | $ 1,675,372 | $ 1,166,748 |
Loans receivable | 1,691,370 | 1,182,222 |
Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 4,727 | 10,023 |
Past Due 90+ Days | ||
LOANS | ||
Loans past due | 11,271 | 5,451 |
Residential mortgage | ||
LOANS | ||
Loans current and past due less than 30 days | 630,329 | 573,938 |
Loans receivable | 639,023 | 586,580 |
Residential mortgage | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 3,525 | 8,414 |
Residential mortgage | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 5,169 | 4,228 |
Residential mortgage | Real estate loan | first liens | ||
LOANS | ||
Loans current and past due less than 30 days | 534,303 | 499,024 |
Loans receivable | 541,827 | 510,641 |
Residential mortgage | Real estate loan | first liens | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 2,819 | 7,839 |
Residential mortgage | Real estate loan | first liens | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 4,705 | 3,778 |
Residential mortgage | Real estate loan | junior liens | ||
LOANS | ||
Loans current and past due less than 30 days | 27,660 | 27,041 |
Loans receivable | 27,907 | 27,503 |
Residential mortgage | Real estate loan | junior liens | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 44 | 83 |
Residential mortgage | Real estate loan | junior liens | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 203 | 379 |
Residential mortgage | Home equity lines of credit | ||
LOANS | ||
Loans current and past due less than 30 days | 39,737 | 33,115 |
Loans receivable | 40,143 | 33,638 |
Residential mortgage | Home equity lines of credit | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 145 | 452 |
Residential mortgage | Home equity lines of credit | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 261 | 71 |
Residential mortgage | Construction Loans | ||
LOANS | ||
Loans current and past due less than 30 days | 28,629 | 14,758 |
Loans receivable | 29,146 | 14,798 |
Residential mortgage | Construction Loans | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 517 | 40 |
Residential mortgage | Construction Loans | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | ||
LOANS | ||
Loans current and past due less than 30 days | 1,027,966 | 576,314 |
Loans receivable | 1,035,071 | 578,901 |
Commercial | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 1,115 | 1,420 |
Commercial | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 5,990 | 1,167 |
Commercial | Real estate loan | ||
LOANS | ||
Loans current and past due less than 30 days | 525,211 | 299,640 |
Loans receivable | 530,874 | 301,227 |
Commercial | Real estate loan | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 867 | 737 |
Commercial | Real estate loan | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 4,796 | 850 |
Commercial | Construction Loans | ||
LOANS | ||
Loans current and past due less than 30 days | 41,857 | 33,505 |
Loans receivable | 41,906 | 33,555 |
Commercial | Construction Loans | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 49 | 0 |
Commercial | Construction Loans | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 50 |
Commercial | Commercial and industrial | ||
LOANS | ||
Loans current and past due less than 30 days | 155,140 | 126,221 |
Loans receivable | 156,169 | 126,374 |
Commercial | Commercial and industrial | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 57 | 16 |
Commercial | Commercial and industrial | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 972 | 137 |
Commercial | Small Business Administration - Paycheck Protection Program | ||
LOANS | ||
Loans current and past due less than 30 days | 163,050 | 0 |
Loans receivable | 163,050 | 0 |
Commercial | Small Business Administration - Paycheck Protection Program | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Small Business Administration - Paycheck Protection Program | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Political subdivisions | ||
LOANS | ||
Loans current and past due less than 30 days | 47,883 | 53,570 |
Loans receivable | 47,883 | 53,570 |
Commercial | Political subdivisions | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Political subdivisions | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Loans secured by farm land | ||
LOANS | ||
Loans current and past due less than 30 days | 11,654 | 11,455 |
Loans receivable | 11,913 | 12,251 |
Commercial | Loans secured by farm land | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 37 | 666 |
Commercial | Loans secured by farm land | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 222 | 130 |
Commercial | Multi-family (5 or more) residential | ||
LOANS | ||
Loans current and past due less than 30 days | 62,330 | 31,070 |
Loans receivable | 62,330 | 31,070 |
Commercial | Multi-family (5 or more) residential | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Multi-family (5 or more) residential | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Agricultural loans | ||
LOANS | ||
Loans current and past due less than 30 days | 3,456 | 4,318 |
Loans receivable | 3,561 | 4,319 |
Commercial | Agricultural loans | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 105 | 1 |
Commercial | Agricultural loans | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Other commercial loans | ||
LOANS | ||
Loans current and past due less than 30 days | 17,385 | 16,535 |
Loans receivable | 17,385 | 16,535 |
Commercial | Other commercial loans | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Commercial | Other commercial loans | Past Due 90+ Days | ||
LOANS | ||
Loans past due | 0 | 0 |
Consumer | ||
LOANS | ||
Loans current and past due less than 30 days | 17,077 | 16,496 |
Loans receivable | 17,276 | 16,741 |
Consumer | Past Due 30-89 Days | ||
LOANS | ||
Loans past due | 87 | 189 |
Consumer | Past Due 90+ Days | ||
LOANS | ||
Loans past due | $ 112 | $ 56 |
LOANS - Aging of Troubled Debt
LOANS - Aging of Troubled Debt Restructurings (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Troubled Debt Restructurings | ||
Loans current and past due less than 30 days | $ 1,675,372 | $ 1,166,748 |
Nonaccrual loans | 22,796 | 9,218 |
Past Due 30-89 Days | ||
Troubled Debt Restructurings | ||
Loans past due | 4,727 | 10,023 |
Past Due 90+ Days | ||
Troubled Debt Restructurings | ||
Loans past due | 11,271 | 5,451 |
Troubled Debt Restructuring | ||
Troubled Debt Restructurings | ||
Loans current and past due less than 30 days | 167 | 889 |
Nonaccrual loans | 7,441 | 1,737 |
Troubled debt restructurings | 8,037 | 2,626 |
Troubled Debt Restructuring | Past Due 30-89 Days | ||
Troubled Debt Restructurings | ||
Loans past due | 91 | 0 |
Troubled Debt Restructuring | Past Due 90+ Days | ||
Troubled Debt Restructurings | ||
Loans past due | $ 338 | $ 0 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($)loan | Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($)loan | |
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 7 | 12 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 7,271 | $ 1,811 | ||
Interest only payments for a nine-month period | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 5 | 1 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 7,001 | $ 1,261 | ||
Residential mortgage | Real estate loan | junior liens | Reduced monthly payments and extended maturity date | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 18 | ||
Residential mortgage | Real estate loan | junior liens | New loan at lower than risk-adjusted market rate to borrower from whom short sale of other collateral was accepted | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 1 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 30 | $ 0 | ||
Residential mortgage | Multi-family (5 or more) residential | Principal and interest payment deferral non-Covid related | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 3 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 2,170 | $ 0 | ||
Commercial | Real estate loan | Principal and interest payment deferral non-Covid related | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 2 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 4,831 | $ 0 | ||
Commercial | Real estate loan | Extended interest only payments and reduced monthly payments with a balloon payment at maturity | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 1,261 | ||
Commercial | Commercial and industrial | Principal and interest payment deferral non-Covid related | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 2 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 4,831 | $ 0 | ||
Commercial | Commercial and industrial | Extended interest only payments and reduced monthly payments with a balloon payment at maturity | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 1,261 | ||
Commercial | Commercial and industrial | Reduced monthly payments and extended maturity date | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 9 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 448 | ||
Commercial | Commercial and industrial | Interest only payments for a nine-month period | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 1 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 240 | $ 0 | ||
Commercial | Multi-family (5 or more) residential | Principal and interest payment deferral non-Covid related | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 3 | 0 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 2,170 | $ 0 | ||
Commercial | Agricultural loans | Reduced monthly payments and extended maturity date | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | ||
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 84 | ||
Troubled Debt Restructuring | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 1 | 12 | 1 | 12 |
Troubled debt restructurings, post-modification recorded investment | $ | $ 240 | $ 530 | $ 240 | $ 530 |
Troubled Debt Restructuring | Commercial and industrial | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 9 | 0 | 9 |
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 431 | $ 0 | $ 431 |
Troubled Debt Restructuring | Agricultural loans | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | 0 | 1 |
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 81 | $ 0 | $ 81 |
Troubled Debt Restructuring | Residential mortgage | junior liens | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 0 | 1 | 0 | 1 |
Troubled debt restructurings, post-modification recorded investment | $ | $ 0 | $ 18 | $ 0 | $ 18 |
Troubled Debt Restructuring | Commercial | Real estate loan | ||||
Troubled Debt Restructurings | ||||
Troubled debt restructurings, number of contracts | loan | 1 | 0 | 1 | 0 |
Troubled debt restructurings, post-modification recorded investment | $ | $ 240 | $ 0 | $ 240 | $ 0 |
LOANS - Foreclosed Residential
LOANS - Foreclosed Residential Real Estate (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Residential mortgage | ||
LOANS | ||
Foreclosed residential real estate | $ 104 | $ 292 |
LOANS - Mortgage Loans in Proce
LOANS - Mortgage Loans in Process of Foreclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Residential mortgage | ||
LOANS | ||
Residential real estate in process of foreclosure | $ 1,719 | $ 1,717 |
LOANS - Additional information
LOANS - Additional information (Details) | Mar. 27, 2020USD ($) | Sep. 30, 2020USD ($)item | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Apr. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
LOANS | |||||||||||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Total | $ 7,620,000 | $ 7,620,000 | $ 2,482,000 | ||||||||
Recorded investment - with allowance | 8,085,000 | 8,085,000 | 3,375,000 | ||||||||
Specific allowances | 651,000 | 651,000 | 1,051,000 | ||||||||
Provision for loan losses | 1,941,000 | $ 1,158,000 | 3,293,000 | $ 197,000 | |||||||
Loans receivable | $ 1,691,370,000 | 1,691,370,000 | 1,182,222,000 | ||||||||
Increase in expenses | $ 3,096,000 | ||||||||||
Minimum extension period to determine if loan is impaired | item | 1 | 1 | |||||||||
Allowance for Loan losses | $ 10,753,000 | 9,257,000 | $ 10,753,000 | 9,257,000 | 9,836,000 | $ 11,026,000 | $ 8,200,000 | $ 9,309,000 | |||
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 100,000 | ||||||||||
Financing receivable charge-offs | 2,249,000 | 116,000 | $ 2,443,000 | 295,000 | |||||||
Recorded Investment | 18,612,000 | 18,612,000 | 5,486,000 | ||||||||
Financial Assets Facing Additional Credit Deterioration Due to Economic Impact of Covid-19 | |||||||||||
LOANS | |||||||||||
Provision for loan losses | 79,000 | 725,000 | |||||||||
TDRs for which payment defaults occurred | |||||||||||
LOANS | |||||||||||
Financing receivable charge-offs | 2,214,000 | ||||||||||
Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 1,035,071,000 | $ 1,035,071,000 | 578,901,000 | ||||||||
Charge-off rate period considered in evaluating loss exposure | 5 years | ||||||||||
Allowance for Loan losses | 5,629,000 | 4,344,000 | $ 5,629,000 | 4,344,000 | 4,788,000 | 5,858,000 | 3,388,000 | 4,591,000 | |||
Financing receivable charge-offs | 2,219,000 | 0 | 2,343,000 | 6,000 | |||||||
Commercial | Maximum | |||||||||||
LOANS | |||||||||||
Financing Receivable Individually Evaluated for Impairment Threshold With Estimated Loss | 200,000 | 200,000 | |||||||||
Commercial | Minimum | |||||||||||
LOANS | |||||||||||
Financing Receivable Individually Evaluated for Impairment Threshold With Estimated Loss | 200,000 | 200,000 | |||||||||
Commercial loan of $3,500,000 | |||||||||||
LOANS | |||||||||||
Loans receivable | 3,500,000 | 3,500,000 | |||||||||
Specific Loans Portfolio Segment | |||||||||||
LOANS | |||||||||||
Specific allowances | 1,305,000 | 1,305,000 | |||||||||
Provision for loan losses | 909,000 | 1,976,000 | |||||||||
Unallocated | |||||||||||
LOANS | |||||||||||
Allowance for Loan losses | 585,000 | 585,000 | 585,000 | 585,000 | 585,000 | 585,000 | 585,000 | 499,000 | |||
Financing receivable charge-offs | 0 | 0 | 0 | 0 | |||||||
Residential mortgage | |||||||||||
LOANS | |||||||||||
Loans receivable | 639,023,000 | $ 639,023,000 | 586,580,000 | ||||||||
Charge-off rate period considered in evaluating loss exposure | 3 years | ||||||||||
Allowance for Loan losses | 4,281,000 | 4,054,000 | $ 4,281,000 | 4,054,000 | 4,182,000 | 4,320,000 | 3,963,000 | 3,986,000 | |||
Financing receivable charge-offs | 0 | 50,000 | 0 | 157,000 | |||||||
Residential mortgage | Maximum | |||||||||||
LOANS | |||||||||||
Financing Receivable Individually Evaluated for Impairment Threshold With Estimated Loss | 400,000 | 400,000 | |||||||||
Residential mortgage | Minimum | |||||||||||
LOANS | |||||||||||
Financing Receivable Individually Evaluated for Impairment Threshold With Estimated Loss | 400,000 | 400,000 | |||||||||
One Real Estate Secured Commercial Loan | |||||||||||
LOANS | |||||||||||
Specific allowances | 678,000 | 678,000 | |||||||||
Small Business Administration - Paycheck Protection Program | |||||||||||
LOANS | |||||||||||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Total | 4,402,000 | 4,402,000 | |||||||||
Amount of stimulus package designed | $ 2,000,000,000,000 | ||||||||||
Provision for loan losses | 0 | ||||||||||
Contractual principal balances | 166,690,000 | 166,690,000 | |||||||||
Accretion of fees received | 467,000 | 804,000 | |||||||||
Recorded Investment | 163,050,000 | 163,050,000 | |||||||||
Small Business Administration - Paycheck Protection Program | Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 163,050,000 | 163,050,000 | 0 | ||||||||
Allowance for Loan losses | 0 | 0 | |||||||||
Construction Loans | Commercial | |||||||||||
LOANS | |||||||||||
Recorded investment - with allowance | 0 | 0 | 1,261,000 | ||||||||
Specific allowances | 0 | 0 | 678,000 | ||||||||
Loans receivable | 41,906,000 | 41,906,000 | 33,555,000 | ||||||||
Allowance for Loan losses | 440,000 | 158,000 | 440,000 | 158,000 | 966,000 | 420,000 | 152,000 | 110,000 | |||
Financing receivable charge-offs | 0 | 0 | 107,000 | 0 | |||||||
Construction Loans | Residential mortgage | |||||||||||
LOANS | |||||||||||
Loans receivable | 29,146,000 | 29,146,000 | 14,798,000 | ||||||||
Allowance for Loan losses | 169,000 | 258,000 | 169,000 | 258,000 | 117,000 | 137,000 | 220,000 | 203,000 | |||
Financing receivable charge-offs | 0 | 0 | 0 | 0 | |||||||
Real estate loan | Commercial | |||||||||||
LOANS | |||||||||||
Recorded investment - with allowance | 6,497,000 | 6,497,000 | 0 | ||||||||
Specific allowances | 409,000 | 678,000 | 409,000 | 678,000 | 0 | 1,193,000 | |||||
Provision for loan losses | $ 107,000 | 2,376,000 | |||||||||
Loans receivable | 530,874,000 | 530,874,000 | 301,227,000 | ||||||||
Allowance for Loan losses | $ 2,386,000 | 2,505,000 | 2,386,000 | 2,505,000 | 1,921,000 | $ 2,426,000 | $ 1,577,000 | $ 2,538,000 | |||
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment | 1 | ||||||||||
Financing receivable charge-offs | $ 0 | 0 | 0 | 0 | |||||||
Real estate loan | Commercial | Troubled Debt Restructuring | |||||||||||
LOANS | |||||||||||
Specific allowances | 134,000 | 134,000 | |||||||||
Real estate loan | Commercial | TDRs for which payment defaults occurred | |||||||||||
LOANS | |||||||||||
Specific allowances | 0 | 0 | |||||||||
Real estate loan | Commercial loan of $3,500,000 | |||||||||||
LOANS | |||||||||||
Financing receivable charge-offs | 2,219,000 | 2,219,000 | |||||||||
Real estate loan | Specific Loans Portfolio Segment | |||||||||||
LOANS | |||||||||||
Net decrease in allowance | 400,000 | ||||||||||
Real estate loan | Residential mortgage | |||||||||||
LOANS | |||||||||||
Specific allowances | 161,000 | $ 161,000 | $ 176,000 | ||||||||
Loans Receivable 1 | Credit Availability Concentration Risk | |||||||||||
LOANS | |||||||||||
Concentration Risk, Percentage | 10.00% | 10.00% | |||||||||
Purchased Credit Impaired | |||||||||||
LOANS | |||||||||||
Loans receivable | 7,447,000 | $ 7,447,000 | $ 441,000 | ||||||||
Purchased Credit Impaired | Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 7,298,000 | 7,298,000 | 364,000 | ||||||||
Purchased Credit Impaired | Residential mortgage | |||||||||||
LOANS | |||||||||||
Loans receivable | 149,000 | 149,000 | 77,000 | ||||||||
Purchased Credit Impaired | Small Business Administration - Paycheck Protection Program | Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 0 | 0 | |||||||||
Purchased Credit Impaired | Construction Loans | Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 0 | 0 | 0 | ||||||||
Purchased Credit Impaired | Construction Loans | Residential mortgage | |||||||||||
LOANS | |||||||||||
Loans receivable | 0 | 0 | 0 | ||||||||
Purchased Credit Impaired | Real estate loan | Commercial | |||||||||||
LOANS | |||||||||||
Loans receivable | 4,342,000 | 4,342,000 | 364,000 | ||||||||
Changes to Experience Factors Used to Estimate Allowance | |||||||||||
LOANS | |||||||||||
Provision for loan losses | 834,000 | 745,000 | 347,000 | ||||||||
Impact of Reduction in Loans | |||||||||||
LOANS | |||||||||||
Provision for loan losses | 153,000 | ||||||||||
Impact of loan growth | |||||||||||
LOANS | |||||||||||
Provision for loan losses | 119,000 | 373,000 | |||||||||
Market Rate Adjustment | |||||||||||
LOANS | |||||||||||
Adjustment recorded in acquisition | 2,909,000 | $ 0 | 2,909,000 | $ (1,807,000) | |||||||
Market Rate Adjustment | Small Business Administration - Paycheck Protection Program | |||||||||||
LOANS | |||||||||||
Adjustment recorded in acquisition | 762,000 | ||||||||||
Monument Bancorp, Inc | |||||||||||
LOANS | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans Receivable | $ 259,300,000 | ||||||||||
Monument Bancorp, Inc | Purchased Credit Impaired | |||||||||||
LOANS | |||||||||||
Interest and Fee Income, Loans and Leases, Total | $ 7,000 | 120,000 | |||||||||
Allowance for Loan and Lease Losses, Loans Acquired | $ 7,127,000 | $ 1,216,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Core Deposit Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Gross amount | $ 6,639 | $ 3,495 |
Accumulated amortization | (2,580) | (2,248) |
Net | $ 4,059 | $ 1,247 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense Core Deposit Intangibles (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Amortization Expense | ||||
Amortization expense | $ 208,000 | $ 74,000 | $ 332,000 | $ 149,000 |
Covenant Financial Inc. | ||||
Amortization Expense | ||||
Amortization expense | $ 146,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($)D$ / shares | Sep. 30, 2020USD ($)D$ / shares | Dec. 31, 2019USD ($)$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)D$ / shares | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Changes in the carrying amount of goodwill | |||||||||
Balance, beginning of period | $ 28,388 | $ 28,618 | $ 28,618 | $ 28,388 | $ 11,942 | ||||
Goodwill arising in business combination | 24,138 | 0 | 24,138 | 16,676 | |||||
Balance, end of period | $ 52,526 | $ 52,526 | $ 28,388 | 28,618 | $ 52,526 | 28,618 | |||
Number of the last trading days of the period in measuring closing price | D | 10 | 10 | 10 | ||||||
Average closing share price (in dollars per share) | $ / shares | $ 16.24 | $ 15.96 | $ 26.05 | ||||||
Share price (in dollars per share) | $ / shares | $ 18.65 | $ 18.65 | $ 18.65 | ||||||
Estimated Fair value of reporting unit | $ 352,700 | $ 352,700 | $ 352,700 | ||||||
Stockholders' equity | $ 296,316 | $ 296,316 | $ 244,452 | $ 242,939 | $ 296,316 | $ 242,939 | $ 255,791 | $ 239,716 | $ 197,368 |
Rate of Excess in Fair value of reporting unit over the Stockholders' equity | 19.00% | 19.00% | 19.00% | ||||||
Goodwill impairment | $ 0 | ||||||||
Valuation: Income Approach | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Weighting percentage | 60.00% | ||||||||
Resulted fair value | $ 375,300 | $ 375,300 | $ 375,300 | ||||||
Estimated earnings period | 5 years | ||||||||
Percentage of Operating Expenses Reduction | 20.00% | 20.00% | 20.00% | ||||||
Required percentage of Intangible assets to be maintained | 9.00% | 9.00% | 9.00% | ||||||
Valuation: Income Approach | Maximum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 410,700 | $ 410,700 | $ 410,700 | ||||||
Projected cash flows, Discount rate | 14.00% | 14.00% | 14.00% | ||||||
Projected cash flows, Capitalization rate | 11.00% | 11.00% | 11.00% | ||||||
Valuation: Income Approach | Minimum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 340,000 | $ 340,000 | $ 340,000 | ||||||
Projected cash flows, Discount rate | 12.00% | 12.00% | 12.00% | ||||||
Projected cash flows, Capitalization rate | 9.00% | 9.00% | 9.00% | ||||||
Valuation: Income Approach | Midpoint | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Projected cash flows, Discount rate | 13.00% | 13.00% | 13.00% | ||||||
Projected cash flows, Capitalization rate | 10.00% | 10.00% | 10.00% | ||||||
Change of control premium to Corporation's September 30, 2020 Market price Approach | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Weighting percentage | 20.00% | ||||||||
Resulted fair value | $ 329,000 | $ 329,000 | $ 329,000 | ||||||
Change of control premium to Corporation's September 30, 2020 Market price Approach | Maximum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 335,500 | $ 335,500 | $ 335,500 | ||||||
Control premium percentage | 30.00% | 30.00% | 30.00% | ||||||
Change of control premium to Corporation's September 30, 2020 Market price Approach | Minimum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 322,600 | $ 322,600 | $ 322,600 | ||||||
Control premium percentage | 25.00% | 25.00% | 25.00% | ||||||
Change of control premium to the Corporation's Volume-weighted average market price Approach | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Weighting percentage | 20.00% | ||||||||
Resulted fair value | $ 319,200 | $ 319,200 | $ 319,200 | ||||||
Change of control premium to the Corporation's Volume-weighted average market price Approach | Maximum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 325,700 | $ 325,700 | $ 325,700 | ||||||
Control premium percentage | 30.00% | 30.00% | 30.00% | ||||||
Change of control premium to the Corporation's Volume-weighted average market price Approach | Minimum | |||||||||
Changes in the carrying amount of goodwill | |||||||||
Resulted fair value | $ 312,700 | $ 312,700 | $ 312,700 | ||||||
Control premium percentage | 25.00% | 25.00% | 25.00% |
BORROWED FUNDS AND SUBORDINAT_3
BORROWED FUNDS AND SUBORDINATED DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | $ 40,870 | $ 86,220 |
Federal Home Loan Bank of Pittsburgh | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | 38,557 | 84,292 |
FHLB-Pittsburgh borrowings | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | 38,557 | 84,292 |
Overnight Borrowing | Federal Home Loan Bank of Pittsburgh | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | 0 | 64,000 |
Customer repurchase agreements | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | 2,313 | 1,928 |
Other short-term advances | Federal Home Loan Bank of Pittsburgh | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Short-term borrowings | $ 38,557 | $ 20,292 |
BORROWED FUNDS AND SUBORDINAT_4
BORROWED FUNDS AND SUBORDINATED DEBT - Long-term Borrowing (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term Borrowing | ||
Long-term borrowings | $ 102,787 | $ 52,127 |
Federal Home Loan Bank of Pittsburgh | ||
Long-term Borrowing | ||
Long-term borrowings | 102,787 | 52,127 |
Federal Home Loan Bank of Pittsburgh | Loans matured in 2020 with a weighted-average rate of 2.71% | ||
Long-term Borrowing | ||
Long-term borrowings | 0 | 5,069 |
Federal Home Loan Bank of Pittsburgh | Loans maturing in 2021 with a weighted-average effective rate of 1.36% | ||
Long-term Borrowing | ||
Long-term borrowings | 26,124 | 6,000 |
Federal Home Loan Bank of Pittsburgh | Loans maturing in 2022 with a weighted-average effective rate of 1.40% | ||
Long-term Borrowing | ||
Long-term borrowings | 35,740 | 20,000 |
Federal Home Loan Bank of Pittsburgh | Loans maturing in 2023 with a weighted-average effective rate of 1.44% | ||
Long-term Borrowing | ||
Long-term borrowings | 27,750 | 20,500 |
Federal Home Loan Bank of Pittsburgh | Loans maturing in 2024 with a weighted-average effective rate of 1.06% | ||
Long-term Borrowing | ||
Long-term borrowings | 12,683 | 0 |
Federal Home Loan Bank of Pittsburgh | Loan maturing in 2025 with a rate of 4.91% | ||
Long-term Borrowing | ||
Long-term borrowings | $ 490 | $ 558 |
BORROWED FUNDS AND SUBORDINAT_5
BORROWED FUNDS AND SUBORDINATED DEBT - Long term Borrowing Additional Information (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Rate | 1.36% | 1.36% |
Loans matured in 2020 with a weighted-average rate of 2.71% | ||
Debt Instrument [Line Items] | ||
Rate | 2.71% | 2.71% |
Loans maturing in 2022 with a weighted-average effective rate of 1.40% | ||
Debt Instrument [Line Items] | ||
Rate | 1.40% | 1.40% |
Loans maturing in 2023 with a weighted-average effective rate of 1.44% | ||
Debt Instrument [Line Items] | ||
Rate | 1.44% | 1.44% |
Loans maturing in 2024 with a weighted-average effective rate of 1.06% | ||
Debt Instrument [Line Items] | ||
Rate | 1.06% | 1.06% |
Loan maturing in 2025 with a rate of 4.91% | ||
Debt Instrument [Line Items] | ||
Rate | 4.91% | 4.91% |
BORROWED FUNDS AND SUBORDINAT_6
BORROWED FUNDS AND SUBORDINATED DEBT - Additional Information (Details) | Sep. 30, 2020USD ($)loanfacility | Dec. 31, 2019USD ($) |
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Letter of credit | $ 400,000 | |
Subordinated Debt, Ending Balance | 16,572,000 | $ 6,500,000 |
Other Correspondent Banks | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Line of Credit Facility, Maximum Borrowing Capacity | 45,000,000 | 45,000,000 |
Long-term Line of Credit, Total | 0 | 0 |
Federal Reserve Bank of Philadelphia | Collateral Pledged | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Debt Securities, Available-for-sale, Restricted | $ 15,124,000 | $ 14,728,000 |
Customer repurchase agreements | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Debt, Weighted Average Interest Rate | 0.10% | 0.10% |
Carrying Value of Securities Sold under Repurchase Agreements and Deposits Received for Securities Loaned, Total | $ 2,350,000 | $ 1,951,000 |
Federal Home Loan Bank of Pittsburgh | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Line of Credit Facility, Maximum Borrowing Capacity | 782,434,000 | 552,546,000 |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | 1,062,779,000 | 778,877,000 |
Line of Credit Facility, Remaining Borrowing Capacity | 641,753,000 | 416,122,000 |
Federal Home Loan Bank of Pittsburgh | Other Assets | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | 11,929,000 | 10,131,000 |
Federal Home Loan Bank Stock | 11,929,000 | 10,131,000 |
Federal Home Loan Bank of Pittsburgh | Federal Reserve Bank of Philadelphia | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Line of Credit Facility, Maximum Borrowing Capacity | 14,654,000 | 14,244,000 |
Long-term Line of Credit, Total | $ 0 | $ 0 |
Federal Home Loan Bank of Pittsburgh | Federal Home Loan Bank Advances 1 | ||
BORROWED FUNDS AND SUBORDINATED DEBT | ||
Number of Short-term Advances | loanfacility | 10 | |
Short-term Borrowing, Amount of Each Borrowing | $ 38,400,000 | |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 0.58% |
BORROWED FUNDS AND SUBORDINAT_7
BORROWED FUNDS AND SUBORDINATED DEBT -Subordinated Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Subordinated debt | $ 16,572 | $ 6,500 |
6.25% maturing in June 2026 and redeemable at par in June 2021 | ||
Debt Instrument [Line Items] | ||
Subordinated debt | 8,042 | 0 |
6.50% maturing in April 2027 and redeemable at par in April 2022 | ||
Debt Instrument [Line Items] | ||
Subordinated debt | 6,500 | 6,500 |
6.50% maturing in July 2027 and redeemable at par in July 2022 | ||
Debt Instrument [Line Items] | ||
Subordinated debt | $ 2,030 | $ 0 |
BORROWED FUNDS AND SUBORDINAT_8
BORROWED FUNDS AND SUBORDINATED DEBT -Subordinated Debt Additional Information (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
6.25% maturing in June 2026 and redeemable at par in June 2021 | ||
Aggregate par value | $ 8,000,000 | $ 8,000,000 |
Stated interest rate | 6.25% | 6.25% |
6.50% maturing in April 2027 and redeemable at par in April 2022 | ||
Aggregate par value | $ 6,500,000 | $ 6,500,000 |
Stated interest rate | 6.50% | 6.50% |
6.50% maturing in July 2027 and redeemable at par in July 2022 | ||
Aggregate par value | $ 2,000,000 | $ 2,000,000 |
Stated interest rate | 6.50% | 6.50% |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 70,940 | ||||
Restricted Stock | |||||
Share-based Payment Arrangement, Expense | $ 248,000 | $ 215,000 | $ 672,000 | $ 646,000 | |
Restricted Stock | Forecast | |||||
Share-based Payment Arrangement, Expense | $ 920,000 | ||||
Stock Incentive Plan | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 3 years | ||||
Independent Directors Stock Incentive Plan | Time Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 1 year |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Restricted Stock Awards Granted (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares | shares | 70,940 |
Average Grant Date Fair Value | $ | $ 1,644 |
First quarter awards | Time Based Awards | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares | shares | 30,381 |
Average Grant Date Fair Value | $ | $ 801 |
First quarter awards | Time Based Awards | Director | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares | shares | 7,580 |
Average Grant Date Fair Value | $ | $ 200 |
First quarter awards | Performance Shares | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares | shares | 17,903 |
Average Grant Date Fair Value | $ | $ 343 |
Third quarter awards | Time Based Awards | |
STOCK-BASED COMPENSATION PLANS | |
Number of shares | shares | 15,076 |
Average Grant Date Fair Value | $ | $ 300 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Jul. 01, 2020 | |
Derivative Financial Instruments | ||
Fair value derivative asset | $ 7,932,000 | |
Fair value of the derivative liability | 7,932,000 | |
Interest rate swap agreements | ||
Derivative Financial Instruments | ||
Aggregate notional amount | $ 136,620,000 | $ 137,176,000 |
Fair value derivative asset | 7,478,000 | |
Fair value of the derivative liability | 7,478,000 | |
Derivatives not designated as hedging instruments | Interest rate swap agreements | ||
Derivative Financial Instruments | ||
Interest rate swap | 0 | |
Interest income | $ 351,000 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Narratives (Details) - USD ($) | Sep. 30, 2020 | Jul. 01, 2020 |
Derivative Financial Instruments | ||
Asset Derivatives, Fair Value | $ 7,932,000 | |
Liability Derivatives, Fair Value | $ 7,932,000 | |
Asset pledged | ||
Derivative Financial Instruments | ||
Available-for-sale securities pledged as collateral | $ 12,226,000 | |
Interest rate swap agreements | ||
Derivative Financial Instruments | ||
Asset Derivatives, Notional Amount | 68,310,000 | |
Asset Derivatives, Fair Value | 7,478,000 | |
Liability Derivatives, Notional Amount | 68,310,000 | |
Liability Derivatives, Fair Value | $ 7,478,000 |
FAIR VALUE MEASUREMENTS AND F_3
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets Measured at Fair Value (Details) - USD ($) | Sep. 30, 2020 | Jul. 01, 2020 | Dec. 31, 2019 |
Assets Measured at Fair Value | |||
Total, fair value | $ 340,545,000 | $ 346,723,000 | |
Marketable equity security | 1,003,000 | 979,000 | |
Derivative Asset, Fair Value, Gross Asset | $ 7,932,000 | ||
Derivative Asset, Fair Value, Gross Liability | $ 7,932,000 | ||
Impaired loans with a valuation allowance | 8,085,000 | 3,375,000 | |
Valuation allowance | (651,000) | (1,051,000) | |
Impaired loans, net | 8,085,000 | 3,375,000 | |
Interest rate swap agreements | |||
Assets Measured at Fair Value | |||
Derivative Asset, Fair Value, Gross Asset | 7,478,000 | ||
Derivative Asset, Fair Value, Gross Liability | 7,478,000 | ||
Interest rate swap agreements | Level 1 | |||
Assets Measured at Fair Value | |||
Derivative Asset, Fair Value, Gross Asset | 0 | ||
Derivative Asset, Fair Value, Gross Liability | 0 | ||
Interest rate swap agreements | Level 2 | |||
Assets Measured at Fair Value | |||
Derivative Asset, Fair Value, Gross Asset | 7,478,000 | ||
Derivative Asset, Fair Value, Gross Liability | 7,478,000 | ||
Interest rate swap agreements | Level 3 | |||
Assets Measured at Fair Value | |||
Derivative Asset, Fair Value, Gross Asset | 0 | ||
Derivative Asset, Fair Value, Gross Liability | 0 | ||
Obligations of the U.S. Treasury | |||
Assets Measured at Fair Value | |||
Total, fair value | 12,226,000 | ||
Obligations of U.S. Government agencies | |||
Assets Measured at Fair Value | |||
Total, fair value | 16,355,000 | 17,000,000 | |
Obligations of States and Political Subdivisions Tax Exempt | |||
Assets Measured at Fair Value | |||
Total, fair value | 109,668,000 | 70,760,000 | |
Obligations of States and Political Subdivisions Taxable | |||
Assets Measured at Fair Value | |||
Total, fair value | 44,195,000 | 36,303,000 | |
Residential Pass-Through Securities | |||
Assets Measured at Fair Value | |||
Total, fair value | 46,211,000 | 59,210,000 | |
Residential Collateralized Mortgage Obligations | |||
Assets Measured at Fair Value | |||
Total, fair value | 69,337,000 | 114,723,000 | |
Commercial Mortgage Backed Securities | |||
Assets Measured at Fair Value | |||
Total, fair value | 42,553,000 | 48,727,000 | |
Recurring fair value measurements | |||
Assets Measured at Fair Value | |||
Total, fair value | 340,545,000 | 346,723,000 | |
Marketable equity security | 1,003,000 | 979,000 | |
Servicing rights | 1,437,000 | 1,277,000 | |
Total asset fair value measurements | 350,463,000 | 348,979,000 | |
Recurring fair value measurements | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Marketable equity security | 1,003,000 | 979,000 | |
Servicing rights | 0 | 0 | |
Total asset fair value measurements | 1,003,000 | 979,000 | |
Recurring fair value measurements | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 340,545,000 | 346,723,000 | |
Marketable equity security | 0 | 0 | |
Servicing rights | 0 | 0 | |
Total asset fair value measurements | 348,023,000 | 346,723,000 | |
Recurring fair value measurements | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Marketable equity security | 0 | 0 | |
Servicing rights | 1,437,000 | 1,277,000 | |
Total asset fair value measurements | 1,437,000 | 1,277,000 | |
Recurring fair value measurements | Obligations of the U.S. Treasury | |||
Assets Measured at Fair Value | |||
Total, fair value | 12,226,000 | ||
Recurring fair value measurements | Obligations of the U.S. Treasury | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | ||
Recurring fair value measurements | Obligations of the U.S. Treasury | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 12,226,000 | ||
Recurring fair value measurements | Obligations of the U.S. Treasury | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | ||
Recurring fair value measurements | Obligations of U.S. Government agencies | |||
Assets Measured at Fair Value | |||
Total, fair value | 16,355,000 | 17,000,000 | |
Recurring fair value measurements | Obligations of U.S. Government agencies | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Obligations of U.S. Government agencies | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 16,355,000 | 17,000,000 | |
Recurring fair value measurements | Obligations of U.S. Government agencies | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Tax Exempt | |||
Assets Measured at Fair Value | |||
Total, fair value | 109,668,000 | 70,760,000 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Tax Exempt | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Tax Exempt | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 109,668,000 | 70,760,000 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Tax Exempt | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Taxable | |||
Assets Measured at Fair Value | |||
Total, fair value | 44,195,000 | 36,303,000 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Taxable | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Taxable | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 44,195,000 | 36,303,000 | |
Recurring fair value measurements | Obligations of States and Political Subdivisions Taxable | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Residential Pass-Through Securities | |||
Assets Measured at Fair Value | |||
Total, fair value | 46,211,000 | 59,210,000 | |
Recurring fair value measurements | Residential Pass-Through Securities | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Residential Pass-Through Securities | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 46,211,000 | 59,210,000 | |
Recurring fair value measurements | Residential Pass-Through Securities | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Residential Collateralized Mortgage Obligations | |||
Assets Measured at Fair Value | |||
Total, fair value | 69,337,000 | 114,723,000 | |
Recurring fair value measurements | Residential Collateralized Mortgage Obligations | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Residential Collateralized Mortgage Obligations | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 69,337,000 | 114,723,000 | |
Recurring fair value measurements | Residential Collateralized Mortgage Obligations | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Commercial Mortgage Backed Securities | |||
Assets Measured at Fair Value | |||
Total, fair value | 42,553,000 | 48,727,000 | |
Recurring fair value measurements | Commercial Mortgage Backed Securities | Level 1 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Recurring fair value measurements | Commercial Mortgage Backed Securities | Level 2 | |||
Assets Measured at Fair Value | |||
Total, fair value | 42,553,000 | 48,727,000 | |
Recurring fair value measurements | Commercial Mortgage Backed Securities | Level 3 | |||
Assets Measured at Fair Value | |||
Total, fair value | 0 | 0 | |
Nonrecurring fair value measurements | |||
Assets Measured at Fair Value | |||
Total asset fair value measurements | 9,803,000 | 5,210,000 | |
Impaired loans with a valuation allowance | 8,085,000 | 3,375,000 | |
Valuation allowance | (651,000) | (1,051,000) | |
Impaired loans, net | 7,434,000 | 2,324,000 | |
Foreclosed assets held for sale | 2,369,000 | 2,886,000 | |
Nonrecurring fair value measurements | Level 1 | |||
Assets Measured at Fair Value | |||
Total asset fair value measurements | 0 | 0 | |
Impaired loans with a valuation allowance | 0 | 0 | |
Valuation allowance | 0 | 0 | |
Impaired loans, net | 0 | 0 | |
Foreclosed assets held for sale | 0 | 0 | |
Nonrecurring fair value measurements | Level 2 | |||
Assets Measured at Fair Value | |||
Total asset fair value measurements | 0 | 0 | |
Impaired loans with a valuation allowance | 0 | 0 | |
Valuation allowance | 0 | 0 | |
Impaired loans, net | 0 | 0 | |
Foreclosed assets held for sale | 0 | 0 | |
Nonrecurring fair value measurements | Level 3 | |||
Assets Measured at Fair Value | |||
Total asset fair value measurements | 9,803,000 | 5,210,000 | |
Impaired loans with a valuation allowance | 8,085,000 | 3,375,000 | |
Valuation allowance | (651,000) | (1,051,000) | |
Impaired loans, net | 7,434,000 | 2,324,000 | |
Foreclosed assets held for sale | $ 2,369,000 | $ 2,886,000 |
FAIR VALUE MEASUREMENTS AND F_4
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS - Valuation Techniques and the Unobservable Inputs (Details) - Recurring fair value measurements - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Valuation Techniques and the Unobservable Inputs | ||
Fair value | $ 1,437,000 | $ 1,277,000 |
Valuation Technique, Discounted cash flow | ||
Valuation Techniques and the Unobservable Inputs | ||
Fair value | $ 1,437,000 | $ 1,277,000 |
Valuation Technique, Discounted cash flow | Servicing rights | ||
Valuation Techniques and the Unobservable Inputs | ||
Discount rate | 12.50% | 12.50% |
Weighted-average PSA | 354.00% | 183.00% |
Servicing fees of loan balances | 0.25% | 0.25% |
Servicing fees of payments are late | 4.00% | 4.00% |
Late fees assessed | 5.00% | 5.00% |
Miscellaneous fees per account per month | $ 1.94 | $ 1.94 |
Monthly servicing cost per account | 6 | 6 |
Additional monthly servicing cost per loan on loans more than 30 days delinquent | $ 24 | $ 24 |
Servicing costs of loans more than 30 days delinquent | 1.50% | 1.50% |
Annual increase in servicing costs | 3.00% | 3.00% |
FAIR VALUE MEASUREMENTS AND F_5
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS - Level 3 (Details) - Level 3 - Servicing rights - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Level 3 | ||||
Servicing rights balance, beginning of period | $ 1,284 | $ 1,322 | $ 1,277 | $ 1,404 |
Originations of servicing rights | 374 | 70 | 777 | 136 |
Unrealized losses included in earnings | (221) | (164) | (617) | (312) |
Servicing rights balance, end of period | $ 1,437 | $ 1,228 | $ 1,437 | $ 1,228 |
FAIR VALUE MEASUREMENTS AND F_6
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS - Valuation Techniques of Unobservable - Nonrecurring Basis (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | $ 8,085,000 | $ 3,375,000 | ||
Related allowance | 651,000 | 1,051,000 | ||
Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 7,434,000 | 2,324,000 | ||
Related allowance | 651,000 | 1,051,000 | ||
Foreclosed assets held for sale | 2,369,000 | 2,886,000 | ||
Residential mortgage | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Foreclosed assets held for sale | 104,000 | 292,000 | ||
Residential mortgage | Real estate loan | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Related allowance | 161,000 | 176,000 | ||
Commercial | Real estate loan | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 6,497,000 | 0 | ||
Related allowance | 409,000 | $ 1,193,000 | 0 | $ 678,000 |
Commercial | Commercial and industrial | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 72,000 | 904,000 | ||
Related allowance | 72,000 | 149,000 | ||
Commercial | Loans secured by farm land | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 0 | 478,000 | ||
Related allowance | 0 | 48,000 | ||
Impaired loans | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 8,085,000 | 3,375,000 | ||
Related allowance | 651,000 | 1,051,000 | ||
Fair value | 7,434,000 | 2,324,000 | ||
Impaired loans | Valuation, Market Approach | Residential mortgage | Real estate loan | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 1,516,000 | 732,000 | ||
Related allowance | 170,000 | 176,000 | ||
Fair value | $ 1,346,000 | $ 556,000 | ||
Impaired loans | Valuation, Market Approach | Residential mortgage | Real estate loan | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 31.00% | 30.00% | ||
Impaired loans | Valuation, Market Approach | Commercial | Commercial loans secured by real estate | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | $ 6,497,000 | |||
Related allowance | 409,000 | |||
Fair value | $ 6,088,000 | |||
Impaired loans | Valuation, Market Approach | Commercial | Commercial loans secured by real estate | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 38.00% | |||
Impaired loans | Valuation, Market Approach | Commercial | Commercial and industrial | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | $ 72,000 | $ 106,000 | ||
Related allowance | 72,000 | 89,000 | ||
Fair value | $ 0 | 17,000 | ||
Impaired loans | Valuation, Market Approach | Commercial | Commercial and industrial | Nonrecurring fair value measurements | Discount to borrower's financial statement value | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | 798,000 | |||
Related allowance | 60,000 | |||
Fair value | $ 738,000 | |||
Impaired loans | Valuation, Market Approach | Commercial | Commercial and industrial | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 100.00% | 69.00% | ||
Impaired loans | Valuation, Market Approach | Commercial | Commercial and industrial | Weighted average | Nonrecurring fair value measurements | Discount to borrower's financial statement value | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 15.00% | |||
Impaired loans | Valuation, Market Approach | Commercial | Commercial construction and land | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | $ 1,261,000 | |||
Related allowance | 678,000 | |||
Fair value | $ 583,000 | |||
Impaired loans | Valuation, Market Approach | Commercial | Commercial construction and land | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 47.00% | |||
Impaired loans | Valuation, Market Approach | Commercial | Loans secured by farm land | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Recorded investment - with allowance | $ 478,000 | |||
Related allowance | 48,000 | |||
Fair value | $ 430,000 | |||
Impaired loans | Valuation, Market Approach | Commercial | Loans secured by farm land | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 46.00% | |||
Foreclosed assets held for sale | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Foreclosed assets held for sale | $ 2,369,000 | $ 2,886,000 | ||
Valuation allowance | 0 | 0 | ||
Fair value | 2,369,000 | 2,886,000 | ||
Foreclosed assets held for sale | Valuation, Market Approach | Land | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Foreclosed assets held for sale | 70,000 | |||
Valuation allowance | 0 | |||
Fair value | $ 70,000 | |||
Foreclosed assets held for sale | Valuation, Market Approach | Land | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 53.00% | |||
Foreclosed assets held for sale | Valuation, Market Approach | Commercial real estate | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Foreclosed assets held for sale | 2,265,000 | $ 2,524,000 | ||
Valuation allowance | 0 | 0 | ||
Fair value | $ 2,265,000 | $ 2,524,000 | ||
Foreclosed assets held for sale | Valuation, Market Approach | Commercial real estate | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 34.00% | 39.00% | ||
Foreclosed assets held for sale | Valuation, Market Approach | Residential mortgage | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Foreclosed assets held for sale | $ 104,000 | $ 292,000 | ||
Valuation allowance | 0 | 0 | ||
Fair value | $ 104,000 | $ 292,000 | ||
Foreclosed assets held for sale | Valuation, Market Approach | Residential mortgage | Weighted average | Nonrecurring fair value measurements | ||||
Valuation Techniques and the Unobservable Inputs | ||||
Discount rate | 47.00% | 46.00% |
FAIR VALUE MEASUREMENTS AND F_7
FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS - Estimated Fair Values, and Related Carrying Amounts, of the Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Subordinated debt | $ 16,572 | $ 6,500 |
Reported value measurement | Level 1 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Cash and cash equivalents | 168,148 | 31,122 |
Reported value measurement | Level 2 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Certificates of deposit | 6,330 | 4,080 |
Restricted equity securities (included in Other Assets) | 12,179 | 10,321 |
Accrued interest receivable | 8,296 | 5,001 |
Short-term borrowings | 40,870 | 86,220 |
Long-term borrowings | 102,787 | 52,127 |
Subordinated debt | 16,572 | 6,500 |
Accrued interest payable | 563 | 311 |
Reported value measurement | Level 2 | Deposits with no stated maturity | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Deposits, fair value | 1,440,602 | 877,965 |
Reported value measurement | Level 2 | Time deposits | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Deposits, fair value | 430,912 | 374,695 |
Reported value measurement | Level 3 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Loans, net | 1,680,617 | 1,172,386 |
Estimate of fair value measurement | Level 1 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Cash and cash equivalents | 168,148 | 31,122 |
Estimate of fair value measurement | Level 2 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Certificates of deposit | 6,567 | 4,227 |
Restricted equity securities (included in Other Assets) | 12,179 | 10,321 |
Accrued interest receivable | 8,296 | 5,001 |
Short-term borrowings | 40,902 | 86,166 |
Long-term borrowings | 105,336 | 52,040 |
Subordinated debt | 16,680 | 6,499 |
Accrued interest payable | 563 | 311 |
Estimate of fair value measurement | Level 2 | Deposits with no stated maturity | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Deposits, fair value | 1,440,602 | 877,965 |
Estimate of fair value measurement | Level 2 | Time deposits | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Deposits, fair value | 434,978 | 376,738 |
Estimate of fair value measurement | Level 3 | ||
Fair values, and carrying amounts financial instruments not recorded at fair value | ||
Loans, net | $ 1,686,087 | $ 1,181,000 |