Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39036 | |
Entity Registrant Name | ALERUS FINANCIAL CORPORATION | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 45-0375407 | |
Entity Address, Address Line One | 401 Demers Avenue | |
Entity Address, City or Town | Grand Forks | |
Entity Address, State or Province | ND | |
Entity Address, Postal Zip Code | 58201 | |
City Area Code | 701 | |
Local Phone Number | 795-3200 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | ALRS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,914,884 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000903419 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 65,471 | $ 58,242 |
Available-for-sale, at fair value | 677,454 | 717,324 |
Held-to-maturity, at carrying value (allowance for credit losses on investments of $218 June 30, 2023) | 308,416 | 321,902 |
Loans held for sale | 20,893 | 9,488 |
Loans | 2,533,522 | 2,443,994 |
Allowance for credit losses on loans | (35,696) | (31,146) |
Net loans | 2,497,826 | 2,412,848 |
Land, premises and equipment, net | 17,488 | 17,288 |
Operating lease right-of-use assets | 6,440 | 5,419 |
Accrued interest receivable | 13,587 | 12,869 |
Bank-owned life insurance | 32,793 | 33,991 |
Goodwill | 47,087 | 47,087 |
Other intangible assets | 19,806 | 22,455 |
Servicing rights | 2,351 | 2,643 |
Deferred income taxes, net | 43,709 | 42,369 |
Other assets | 79,657 | 75,712 |
Total assets | 3,832,978 | 3,779,637 |
Deposits | ||
Noninterest-bearing | 715,534 | 860,987 |
Interest-bearing | 2,137,321 | 2,054,497 |
Total deposits | 2,852,855 | 2,915,484 |
Short-term borrowings | 492,060 | 378,080 |
Long-term debt | 58,900 | 58,843 |
Operating lease liabilities | 6,746 | 5,902 |
Accrued expenses and other liabilities | 64,732 | 64,456 |
Total liabilities | 3,475,293 | 3,422,765 |
Stockholders' equity | ||
Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding | ||
Common stock, $1 par value, 30,000,000 shares authorized: 19,914,884 and 19,991,681 issued and outstanding | 19,915 | 19,992 |
Additional paid-in capital | 152,673 | 155,095 |
Retained earnings | 285,839 | 280,426 |
Accumulated other comprehensive income (loss) | (100,742) | (98,641) |
Total stockholders' equity | 357,685 | 356,872 |
Total liabilities and stockholders' equity | $ 3,832,978 | $ 3,779,637 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Allowance for credit losses on investments | $ 218 | |
Preferred stock, par value | $ 1 | $ 1 |
Preferred Stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 19,914,884 | 19,991,681 |
Common stock, shares outstanding | 19,914,884 | 19,991,681 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest Income | ||||
Loans, including fees | $ 33,267 | $ 17,988 | $ 64,200 | $ 35,280 |
Taxable | 6,125 | 6,068 | 12,076 | 11,508 |
Exempt from federal income taxes | 186 | 213 | 376 | 429 |
Other | 762 | 157 | 1,497 | 273 |
Total interest income | 40,340 | 24,426 | 78,149 | 47,490 |
Interest Expense | ||||
Deposits | 12,678 | 813 | 21,782 | 1,642 |
Short-term borrowings | 4,763 | 278 | 9,156 | 278 |
Long-term debt | 665 | 559 | 1,319 | 1,121 |
Total interest expense | 18,106 | 1,650 | 32,257 | 3,041 |
Net interest income | 22,234 | 22,776 | 45,892 | 44,449 |
Provision for credit losses | 550 | |||
Net interest income after provision for credit losses | 22,234 | 22,776 | 45,342 | 44,449 |
Noninterest Income | ||||
Mortgage banking | 2,905 | 6,038 | 4,622 | 10,969 |
Other | 1,223 | 935 | 3,781 | 2,139 |
Total noninterest income | 25,778 | 29,226 | 51,031 | 58,696 |
Noninterest Expense | ||||
Compensation | 18,847 | 21,248 | 38,005 | 40,299 |
Employee taxes and benefits | 4,724 | 5,787 | 10,577 | 11,949 |
Occupancy and equipment expense | 1,837 | 1,737 | 3,736 | 3,788 |
Business services, software and technology expense | 5,269 | 4,785 | 10,593 | 9,709 |
Intangible amortization expense | 1,324 | 1,053 | 2,648 | 2,106 |
Professional fees and assessments | 1,530 | 2,246 | 2,682 | 3,787 |
Marketing and business development | 648 | 814 | 1,334 | 1,414 |
Supplies and postage | 406 | 572 | 866 | 1,218 |
Travel | 306 | 356 | 554 | 535 |
Mortgage and lending expenses | 215 | 482 | 712 | 1,168 |
Other | 1,267 | 904 | 2,535 | 2,082 |
Total noninterest expense | 36,373 | 39,984 | 74,242 | 78,055 |
Income before income taxes | 11,639 | 12,018 | 22,131 | 25,090 |
Income tax expense | 2,535 | 2,725 | 4,841 | 5,613 |
Net income | $ 9,104 | $ 9,293 | $ 17,290 | $ 19,477 |
Per Common Share Data | ||||
Basic earnings per common share | $ 0.45 | $ 0.53 | $ 0.86 | $ 1.11 |
Diluted earnings per common share | 0.45 | 0.52 | 0.85 | 1.10 |
Dividends declared per common share | $ 0.19 | $ 0.18 | $ 0.37 | $ 0.34 |
Average common shares outstanding | 20,033 | 17,297 | 20,030 | 17,271 |
Diluted average common shares outstanding | 20,241 | 17,532 | 20,243 | 17,517 |
Retirement and Benefit Services | ||||
Noninterest Income | ||||
Revenue | $ 15,890 | $ 16,293 | $ 31,372 | $ 33,939 |
Wealth Management | ||||
Noninterest Income | ||||
Revenue | 5,449 | 5,548 | 10,644 | 10,874 |
Deposit Account | ||||
Noninterest Income | ||||
Revenue | $ 311 | $ 412 | $ 612 | $ 775 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net Income | $ 9,104 | $ 9,293 | $ 17,290 | $ 19,477 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Unrealized gains (losses) on available-for-sale securities | (9,636) | (37,394) | (4,708) | (88,119) |
Accretion of (gains) losses on debt securities reclassified to held-to-maturity | (84) | (97) | (171) | (199) |
Net change in unrealized gain (losses) on derivatives | 3,794 | 2,069 | ||
Total other comprehensive income (loss), before tax | (5,926) | (37,491) | (2,810) | (88,318) |
Income tax expense (benefit) related to items of other comprehensive income (loss) | (1,491) | (9,410) | (709) | (22,168) |
Other comprehensive income (loss), net of tax | (4,435) | (28,081) | (2,101) | (66,150) |
Total comprehensive income (loss) | $ 4,669 | $ (18,788) | $ 15,189 | $ (46,673) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) $ in Thousands | Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Additional Paid in Capital. Cumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid in Capital. | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Total |
Beginning balance at Dec. 31, 2021 | $ 17,213 | $ 92,878 | $ 253,567 | $ (4,255) | $ 359,403 | |||||||
Net Income | 19,477 | 19,477 | ||||||||||
Other comprehensive income (loss) | (66,150) | (66,150) | ||||||||||
Common stock repurchased | (24) | (673) | (697) | |||||||||
Common stock dividends | (5,916) | (5,916) | ||||||||||
Share-based compensation expense | 10 | 1,031 | 1,041 | |||||||||
Vesting of restricted stock | 107 | (107) | ||||||||||
Ending balance at Jun. 30, 2022 | 17,306 | 93,129 | 267,128 | (70,405) | 307,158 | |||||||
Beginning balance at Mar. 31, 2022 | 17,289 | 92,573 | 260,967 | (42,324) | 328,505 | |||||||
Net Income | 9,293 | 9,293 | ||||||||||
Other comprehensive income (loss) | (28,081) | (28,081) | ||||||||||
Common stock repurchased | (4) | (86) | (90) | |||||||||
Common stock dividends | (3,132) | (3,132) | ||||||||||
Share-based compensation expense | 10 | 653 | 663 | |||||||||
Vesting of restricted stock | 11 | (11) | ||||||||||
Ending balance at Jun. 30, 2022 | 17,306 | 93,129 | 267,128 | (70,405) | 307,158 | |||||||
Beginning balance at Dec. 31, 2022 | $ 19,992 | 19,992 | $ 155,095 | 155,095 | $ (4,452) | $ 275,974 | 280,426 | $ (98,641) | (98,641) | $ (4,452) | $ 352,420 | 356,872 |
Net Income | 17,290 | 17,290 | ||||||||||
Other comprehensive income (loss) | (2,101) | (2,101) | ||||||||||
Common stock repurchased | (187) | (3,127) | (3,314) | |||||||||
Common stock dividends | (7,425) | (7,425) | ||||||||||
Share-based compensation expense | 18 | 797 | 815 | |||||||||
Vesting of restricted stock | 92 | (92) | ||||||||||
Ending balance at Jun. 30, 2023 | 19,915 | 152,673 | 285,839 | (100,742) | 357,685 | |||||||
Beginning balance at Mar. 31, 2023 | 20,067 | 154,818 | 280,540 | (96,307) | 359,118 | |||||||
Net Income | 9,104 | 9,104 | ||||||||||
Other comprehensive income (loss) | (4,435) | (4,435) | ||||||||||
Common stock repurchased | (170) | (2,783) | (2,953) | |||||||||
Common stock dividends | (3,805) | (3,805) | ||||||||||
Share-based compensation expense | 18 | 638 | 656 | |||||||||
Ending balance at Jun. 30, 2023 | $ 19,915 | $ 152,673 | $ 285,839 | $ (100,742) | $ 357,685 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Activities | ||
Net income | $ 17,290 | $ 19,477 |
Adjustments to reconcile net income to net cash provided (used) by operating activities | ||
Deferred income taxes | 857 | 968 |
Provision for credit losses | 550 | |
Depreciation and amortization | 4,239 | 3,998 |
Amortization and accretion of premiums/discounts on investment securities | 1,092 | 1,829 |
Amortization of operating lease right-of-use assets | 1,571 | (51) |
Share-based compensation expense | 815 | 1,041 |
Originations on loans held for sale | (146,664) | (353,547) |
Proceeds on loans held for sale | 138,818 | 351,625 |
(Increase) in value of bank-owned life insurance | (434) | (408) |
Realized loss (gain) on sale of fixed assets | (116) | |
Realized loss (gain) on derivative instruments | 1,344 | (215) |
Realized loss (gain) on loans sold | (3,531) | (6,037) |
Realized loss (gain) on sale of foreclosed assets | 5 | (11) |
Realized loss (gain) on BOLI mortality | (1,196) | |
Realized loss (gain) on servicing rights | (25) | (441) |
Net change in: | ||
Accrued interest receivable | (718) | (618) |
Other assets | 1,414 | (9,803) |
Accrued expenses and other liabilities | (3,311) | 9,924 |
Net cash provided (used) by operating activities | 12,000 | 17,731 |
Investing Activities | ||
Proceeds from maturities of investment securities available-for-sale | 34,549 | 61,313 |
Purchases of investment securities available-for-sale | (95,600) | |
Proceeds from calls of investment securities held-to-maturity | 126 | 726 |
Proceeds from maturities of investment securities held-to-maturity | 12,492 | 18,588 |
Net (increase) decrease in loans | (89,295) | (132,503) |
Net (increase) decrease in FHLB stock | (5,020) | (10,132) |
Proceeds from BOLI mortality claim | 2,828 | |
Purchases of premises and equipment | (1,088) | (471) |
Proceeds from sales of foreclosed assets | 25 | 117 |
Net cash provided (used) by investing activities | (45,383) | (157,962) |
Financing Activities | ||
Net increase (decrease) in deposits | (62,629) | (301,001) |
Net increase (decrease) in short-term borrowings | 113,980 | 242,350 |
Repayments of long-term debt | (119) | |
Cash dividends paid on common stock | (7,425) | (5,570) |
Repurchase of common stock | (3,314) | (697) |
Net cash provided (used) by financing activities | 40,612 | (65,037) |
Net change in cash and cash equivalents | 7,229 | (205,268) |
Cash and cash equivalents at beginning of period | 58,242 | 242,311 |
Cash and cash equivalents at end of period | 65,471 | 37,043 |
Cash paid for: | ||
Interest | 31,723 | 3,913 |
Income taxes | 3,720 | 4,677 |
Supplemental Disclosures of Noncash Investing and Financing Activities | ||
Loan collateral transferred to foreclosed assets | $ 81 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,286 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Significant Accounting Policies | |
Significant Accounting Policies | NOTE 1 Significant Accounting Policies Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage. Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023. Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for credit losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments. Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. Allowance for credit losses Investment securities available-for-sale. In evaluating available-for-sale securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, the Company considers the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors. Accrued interest receivable is excluded from the estimate of credit losses. Investment securities held-to-maturity. probability of default and loss going back several years. Accrued interest receivable on held-to-maturity investment securities is excluded from the estimate of credit losses. Loans held for investment. The Company estimates the ACL based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for collection of cash and charge-offs, as well as applicable accretion or amortization of premium, discount and net deferred fees or costs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made the policy election to exclude accrued interest from the measurement of ACL. Expected credit losses are reflected in the ACL through a charge to provision for credit losses when the Company deems all or a portion of the financial asset will be uncollectible; the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgement to determine when a financial asset is deemed uncollectible; however, generally, an asset will be considered uncollectible no later than when all efforts of collection have been exhausted. Subsequent recoveries, if any, are credited to the ACL when received. Upon the adoption of the CECL accounting standard, the Company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Upon the adoption of the CECL accounting standard, the ACL was determined for each pool and added to the pools’ carrying amount to establish a new amortized cost basis. Loans that do not share similar risk characteristics are evaluated on an individual basis. Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable supportable forecasts. Historical loss experience provides the basis for estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current loan-specific risk characteristics such as different underwriting standards, portfolio mix, delinquency level, or life of the loan, as well as changes in environmental conditions, levels of economic activity, unemployment rates, property values and other relevant factors. The calculation also contemplates that the Company may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical loss information. Ongoing impacts of CECL will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration and other forecasts. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. The ACL on individually evaluated loans is recognized on the basis of the present value of expected future cash flows discounted at the effective interest rate, the fair value of collateral adjusted of estimated costs to sell, or observable market price as of the relevant date. Reserve for off-balance sheet credit exposures. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | NOTE 2 Recent Accounting Pronouncements The following Financial Accounting Standards Board, or FASB, Accounting Standards Updates, or ASUs, are divided into pronouncements which have been adopted by the Company since January 1, 2023, and those which are not yet effective and have been evaluated or are currently being evaluated by management as of June 30, 2023. Adopted Pronouncements On January 1, 2023, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The measurement of expected credit losses under the CECL accounting standard is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar agreements). In addition, ASC 326 made changes to the accounting for held-to-maturity debt securities. One such change is to require credit losses to be presented as an allowance, rather than as a write-down. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost, off-balance sheet credit exposures, and held-to-maturity securities. Results for reporting periods beginning after December 31, 2022, are presented under ASC 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to retained earnings of $4.5 million as of January 1, 2023, for the cumulative effect of adopting ASC 326. The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration previously classified as purchased credit impaired and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether purchased credit impaired, or PCI, assets met the criteria of purchased credit deteriorated, or PCD, assets as of the date of adoption. The following table illustrates the impact of ASC 326: January 1, 2023 As reported Pre-tax impact of (dollars in thousands) under Pre-ASC 326 ASC 326 Assets: ASC 326 Adoption Adoption Investments Held-to-maturity Obligations of state and political agencies $ 110 $ — $ 110 Mortgage backed securities Residential agency 62 — 62 Total allowance for held-to-maturity investment securities 172 — 172 Loans Commercial Commercial and industrial 8,296 9,158 (862) Real estate construction 3,964 1,446 2,518 Commercial real estate 12,264 12,688 (424) Total commercial 24,524 23,292 1,232 Consumer Residential real estate first mortgage 7,849 5,769 2,080 Residential real estate junior lien 1,222 1,289 (67) Other revolving and installment 424 528 (104) Total consumer 9,495 7,586 1,909 Unallocated 984 268 716 Total allowance for loans 35,003 31,146 3,857 Allowance for credit losses on loans and investments securities $ 35,175 $ 31,146 $ 4,029 Liabilities: Allowance for credit losses on unfunded commitments $ 5,159 $ 3,244 $ 1,915 In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method, which clarifies the guidance on fair value hedge accounting of interest rate risk portfolios of financial assets. ASU 2022-01 updates guidance in Topic 815, to expand the scope of the current last-of-layer method to allow multiple hedged layers to be designated for a single closed portfolio of financial assets or one or more beneficial interests secured by a portfolio of financial instruments on a prospective basis. Additionally, ASU 2022-01 clarifies that basis adjustments related to existing portfolio layer hedge relationships should not be considered when measuring credit losses on the financial assets included in the closed portfolio. Further, ASU 2022-01 clarifies that any reversal of fair value hedge basis adjustments associated with an actual breach should be recognized in interest income immediately. ASU 2022-01 was effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2022-01 effective January 1, 2023, and entered into a fair value hedge agreement on February 10, 2023 and adopted the portfolio layer method of accounting for this transaction. This adoption had no impact on our consolidated financial statements as the Company did not have any hedged assets using the last-of-layer hedge accounting method. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the accounting guidance for Troubled Debt Restructurings, or TDRs, by creditors in Subtopic 310-40. Receivables – Troubled Debt Restructurings by Creditors, while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. For public business entities, this amendment also has vintage disclosures that require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20 Financial Instruments – Credit Losses – Measured at Amortized Cost. For entities that had not yet adopted the amendment in ASU 2016-13, the effective date for the amendments in this update are same as the effective date for ASU 2016-13. The Company adopted this ASU on January 1, 2023, and had no loans experience financial difficulty in the current period. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2023 | |
Investment Securities | |
Investment Securities | NOTE 3 Investment Securities The following tables present amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value of the available-for-sale investment securities and the amortized cost, gross unrealized gains and losses and fair value of held-to-maturity securities as of June 30, 2023 and December 31, 2022: June 30, 2023 Amortized Unrealized Unrealized Allowance for Fair (dollars in thousands) Cost Gains Losses Credit Losses Value Available-for-sale U.S. Treasury and agencies $ 2,915 $ 11 $ (20) $ — $ 2,906 Mortgage backed securities Residential agency 673,586 1 (115,131) — 558,456 Commercial 68,379 — (7,470) — 60,909 Asset backed securities 28 — — — 28 Corporate bonds 69,497 — (14,342) — 55,155 Total available-for-sale investment securities 814,405 12 (136,963) — 677,454 Held-to-maturity Obligations of state and political agencies 131,016 — (15,447) 115 115,569 Mortgage backed securities Residential agency 177,618 — (32,477) 103 145,141 Total held-to-maturity investment securities 308,634 — (47,924) 218 260,710 Total investment securities $ 1,123,039 $ 12 $ (184,887) $ 218 $ 938,164 December 31, 2022 Amortized Unrealized Unrealized Allowance for Fair (dollars in thousands) Cost Gains Losses Credit Losses Value Available-for-sale U.S. Treasury and agencies $ 3,518 $ 19 $ (17) N/A $ 3,520 Mortgage backed securities Residential agency 705,845 2 (118,168) N/A 587,679 Commercial 70,669 — (7,111) N/A 63,558 Asset backed securities 34 — — N/A 34 Corporate bonds 69,501 — (6,968) N/A 62,533 Total available-for-sale investment securities 849,567 21 (132,264) N/A 717,324 Held-to-maturity Obligations of state and political agencies 137,787 — (17,736) N/A 120,051 Mortgage backed securities Residential agency 184,115 — (33,254) N/A 150,861 Total held-to-maturity investment securities 321,902 — (50,990) N/A 270,912 Total investment securities $ 1,171,469 $ 21 $ (183,254) N/A $ 988,236 The adequacy of the allowance for credit losses on investment securities is assessed at the end of each quarter. The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of June 30, 2023, represent a credit loss impairment. As of June 30, 2023, and December 31, 2022, the gross unrealized loss positions were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Total gross unrealized losses were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. The Company does not intend to sell the investment securities that were in an unrealized loss position and it is not more likely than not that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. The allowance for credit losses on held-to-maturity debt securities is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable supportable forecasts. Using a probability of default and loss on given default analysis an allowance for credit losses was established in the amount of $218 thousand as of June 30, 2023. Accrued interest receivable on available-for-sale investment securities and held-to-maturity investment securities is recorded in accrued interest receivable and is excluded from the estimate of credit losses. As of June 30, 2023 the accrued interest receivable on available-for-sale investment securities and held-to-maturity investment securities totaled $2.0 million and $1.4 million, respectively. As of December 31, 2022, the accrued interest receivable on available-for-sale investment securities and held-to-maturity investment securities totaled $1.9 million and $1.5 million, respectively. The following table presents investment securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded as of June 30, 2023: June 30, 2023 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ (20) $ 420 $ — $ — $ (20) $ 420 Mortgage backed securities Residential agency (76) 2,148 (115,055) 556,258 (115,131) 558,406 Commercial (32) 570 (7,438) 60,339 (7,470) 60,909 Asset backed securities — 27 — 1 — 28 Corporate bonds (867) 7,109 (13,475) 48,046 (14,342) 55,155 Total available-for-sale investment securities $ (995) $ 10,274 $ (135,968) $ 664,644 $ (136,963) $ 674,918 Gross unrealized losses on investment securities and the fair value of the related securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2022, were as follows: December 31, 2022 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ (17) $ 509 $ — $ — $ (17) $ 509 Mortgage backed securities Residential agency (10,457) 79,693 (107,711) 507,418 (118,168) 587,111 Commercial (4,835) 50,437 (2,276) 13,120 (7,111) 63,557 Asset backed securities — 32 — 2 — 34 Corporate bonds (4,452) 48,048 (2,516) 14,484 (6,968) 62,532 Total available-for-sale investment securities (19,761) 178,719 (112,503) 535,024 (132,264) 713,743 Held-to-maturity Obligations of state and political agencies (3,336) 18,788 (14,400) 98,762 (17,736) 117,550 Mortgage backed securities Residential agency — — (33,254) 150,861 (33,254) 150,861 Total held-to-maturity investment securities (3,336) 18,788 (47,654) 249,623 (50,990) 268,411 Total investment securities $ (23,097) $ 197,507 $ (160,157) $ 784,647 $ (183,254) $ 982,154 Unrealized losses on available-for-sale investments securities have not been recognized into income because the issuers’ bonds are of high credit quality. Furthermore, the Company does not intend to sell, and it is likely that management will not be required to sell, the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The issuers continue to make timely principal and interest payments on their bonds. The Company expects that it could see a continued increase in unrealized losses if the Federal Reserve continues to raise interest rates. The following table presents amortized cost and fair value of available-for-sale investment securities and the carrying value and fair value of held-to-maturity investment securities as of June 30, 2023, by contractual maturity: Held-to-maturity Available-for-sale Carrying Fair Amortized Fair (dollars in thousands) Value Value Cost Value Due within one year or less $ 6,098 $ 5,946 $ — $ — Due after one year through five years 44,352 40,512 17,461 16,096 Due after five years through ten years 67,751 58,000 78,734 63,524 Due after 10 years 12,815 11,111 44,624 39,378 131,016 115,569 140,819 118,998 Mortgage-backed securities Residential agency 177,618 145,141 673,586 558,456 Total investment securities $ 308,634 $ 260,710 $ 814,405 $ 677,454 Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Investment securities with a total carrying value of $388.0 million and $260.7 million were pledged as of June 30, 2023 and December 31, 2022, respectively, to secure public deposits and for other purposes required or permitted by law. The company had no sales or calls of available-for-sale investment securities, for the three and six months ended June 30, 2023 and 2022 Proceeds from the call of held-to-maturity investment securities, for the three and six months ended June 30, 2023 and 2022, are displayed in the table below: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Proceeds $ — $ 211 $ 126 $ 726 Realized gains — — — — Realized losses — — — — As of June 30, 2023 and December 31, 2022, the carrying value of the Company’s Federal Reserve stock and Federal Home Loan Bank of Des Moines, or FHLB, stock was as follows: June 30, December 31, (dollars in thousands) 2023 2022 Federal Reserve $ 4,623 $ 4,595 FHLB 24,382 19,362 These securities can only be redeemed or sold at their par value and only to the respective issuing institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. Visa Class B Restricted Shares In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the settlement of certain litigation which will be indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account be insufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Class B conversion ratio to unrestricted Class A shares. As of June 30, 2023, the conversion ratio was 1.5902. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation mentioned above, the 6,924 Class B shares (11,010 Class A equivalents) that the Company owned as of June 30, 2023 and December 31, 2022, were carried at a zero cost basis. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2023 | |
Loans and Allowance for Credit Losses | |
Loans and Allowance for Credit Losses | NOTE 4 Loans and Allowance for Credit Losses The following table presents total loans outstanding, by portfolio segment, as of June 30, 2023 and December 31, 2022: June 30, December 31, (dollars in thousands) 2023 2022 Commercial Commercial and industrial $ 551,860 $ 583,876 Real estate construction 78,428 97,810 Commercial real estate 1,003,821 881,670 Total commercial 1,634,109 1,563,356 Consumer Residential real estate first mortgage 707,630 679,551 Residential real estate junior lien 157,231 150,479 Other revolving and installment 34,552 50,608 Total consumer 899,413 880,638 Total loans $ 2,533,522 $ 2,443,994 Total loans included net deferred loan fees and costs of $0.8 million and $0.9 million at June 30, 2023 and December 31, 2022, respectively. Unearned discounts associated with the acquisition of Metro Phoenix Bank totaled $6.2 million as of June 30, 2023. Accrued interest receivable on loans is recorded within accrued interest receivable, and totaled $9.8 million at both June 30, 2023 and December 31, 2022. Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurements of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2023 and December 31, 2022: June 30, 2023 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 542,769 $ 8,710 $ — $ 381 $ 551,860 Real estate construction 78,277 — — 151 78,428 Commercial real estate 1,002,925 — — 896 1,003,821 Total commercial 1,623,971 8,710 — 1,428 1,634,109 Consumer Residential real estate first mortgage 704,957 2,027 347 299 707,630 Residential real estate junior lien 156,626 105 — 500 157,231 Other revolving and installment 34,400 146 — 6 34,552 Total consumer 895,983 2,278 347 805 899,413 Total loans $ 2,519,954 $ 10,988 $ 347 $ 2,233 $ 2,533,522 December 31, 2022 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 580,288 $ 2,426 $ — $ 1,162 $ 583,876 Real estate construction 97,370 — — 440 97,810 Commercial real estate 879,830 368 — 1,472 881,670 Total commercial 1,557,488 2,794 — 3,074 1,563,356 Consumer Residential real estate first mortgage 677,471 1,545 — 535 679,551 Residential real estate junior lien 149,918 377 — 184 150,479 Other revolving and installment 50,360 247 — 1 50,608 Total consumer 877,749 2,169 — 720 880,638 Total loans $ 2,435,237 $ 4,963 $ — $ 3,794 $ 2,443,994 In calculating expected credit losses, the Company includes loans on nonaccrual status and loans 90 days or more past due and still accruing. The following table presents the amortized cost basis on nonaccrual status loans and loans 90 days or more past due and still accruing as of June 30, 2023: As of June 30, 2023 Nonaccrual 90 Days with no Allowance or More (dollars in thousands) for Credit Losses Nonaccrual Past Due Commercial Commercial and industrial $ 119 $ 381 $ — Real estate construction 151 151 — Commercial real estate — 896 — Total commercial 270 1,428 — Consumer Residential real estate first mortgage 293 299 347 Residential real estate junior lien 500 500 — Other revolving and installment — 6 — Total consumer 793 805 347 Total loans $ 1,063 $ 2,233 $ 347 Loans with a carrying value of $1.6 billion as of June 30, 2023 and $1.5 billion as of December 31, 2022, were pledged to secure public deposits, and for other purposes required or permitted by law. A loan for which the terms have been modified resulting in a concession represents a loan experiencing financial difficulty. Loans experiencing financial difficulty can include modifications for an interest rate reduction below current market rates, a forgiveness of principal balance, an extension of the loan term, an-other than significant payment delay, or some combination of similar types of modifications. During the three and six months ended June 30, 2023, the Company did not provide any modifications to loans under these circumstances that were experiencing financial difficulty. The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows: Pass: Special Mention: Substandard: Doubtful: Loss: The following table sets forth the amortized cost basis of loans by credit quality indicator and vintage based on the most recent analysis performed, as of June 30, 2023: Revolving (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Loans Amortized As of June 30, 2023 2023 2022 2021 2020 2019 Prior Cost Basis Total Commercial and industrial Pass $ 72,021 $ 124,487 $ 81,827 $ 72,874 $ 40,610 $ 24,848 $ 102,467 $ 519,134 Substandard — 5,223 415 8,463 186 823 17,616 32,726 Subtotal 72,021 129,710 82,242 81,337 40,796 25,671 120,083 551,860 Real estate construction Pass 6,263 37,948 19,315 4,440 9,150 1,006 306 78,428 Substandard — — — — — — — — Subtotal 6,263 37,948 19,315 4,440 9,150 1,006 306 78,428 Commercial real estate Pass 105,650 278,338 150,233 160,601 110,705 176,802 14,685 997,014 Substandard — — 886 — 4,096 1,825 — 6,807 Subtotal 105,650 278,338 151,119 160,601 114,801 178,627 14,685 1,003,821 Residential real estate first mortgage Pass 40,090 202,056 226,785 111,801 34,894 91,680 216 707,522 Substandard — — — — — 108 — 108 Subtotal 40,090 202,056 226,785 111,801 34,894 91,788 216 707,630 Residential real estate junior lien Pass 13,552 17,683 6,751 4,936 1,947 6,939 105,066 156,874 Substandard — — — — — 357 — 357 Subtotal 13,552 17,683 6,751 4,936 1,947 7,296 105,066 157,231 Other revolving and installment Pass 4,090 9,031 1,467 6,071 2,506 2,037 9,350 34,552 Substandard — — — — — — — — Subtotal 4,090 9,031 1,467 6,071 2,506 2,037 9,350 34,552 Total Loans Pass 241,666 669,543 486,378 360,723 199,812 303,312 232,090 2,493,524 Substandard — 5,223 1,301 8,463 4,282 3,113 17,616 39,998 Total loans $ 241,666 $ 674,766 $ 487,679 $ 369,186 $ 204,094 $ 306,425 $ 249,706 $ 2,533,522 The following table sets forth the risk category of loans by class of loans and credit quality indicator used on the most recent analysis performed as of December 31, 2022: December 31, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 558,694 $ 21,969 $ 3,213 $ — $ 583,876 Real estate construction 97,548 — 262 — 97,810 Commercial real estate 873,270 — 8,400 — 881,670 Total commercial 1,529,512 21,969 11,875 — 1,563,356 Consumer Residential real estate first mortgage 678,743 63 745 — 679,551 Residential real estate junior lien 149,847 — 632 — 150,479 Other revolving and installment 50,607 — 1 — 50,608 Total consumer 879,197 63 1,378 — 880,638 Total loans $ 2,408,709 $ 22,032 $ 13,253 $ — $ 2,443,994 The adequacy of the allowance for credit losses on loans is assessed at the end of each quarter. The allowance for credit losses is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable supportable forecasts. Historical data is evaluated in multiple components of the expected credit loss, including the reasonable and supportable forecast of each loan segment. Historical experience is used to infer probability of default and loss given the reasonable and supportable forecast period. Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit-related analytics as deemed appropriate. The following tables present, by loan portfolio segment, a summary of the changes in the allowance for credit losses on loans for the three and six months ended June 30, 2023 and 2022: Three months ended June 30, 2023 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Credit Losses (1) Charge-offs Recoveries Balance Commercial Commercial and industrial $ 7,800 $ (340) $ (85) $ 438 $ 7,813 Real estate construction 4,406 (760) — — 3,646 Commercial real estate 12,344 609 — 12 12,965 Total commercial 24,550 (491) (85) 450 24,424 Consumer Residential real estate first mortgage 8,060 (159) — — 7,901 Residential real estate junior lien 1,277 28 — 46 1,351 Other revolving and installment 314 (13) (23) 15 293 Total consumer 9,651 (144) (23) 61 9,545 Unallocated 901 826 — — 1,727 Total $ 35,102 $ 191 $ (108) $ 511 $ 35,696 (1) The difference in the credit loss expense reported herein compared to the Consolidated Statements of Income is associated with the credit loss expense reversal of $186 thousand related to off-balance sheet credit exposures and $5 thousand related to investment securities held-to-maturity. Six months ended June 30, 2023 Beginning Adoption Provision for Loan Loan Ending (dollars in thousands) Balance of ASC 326 Credit Losses (1) Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,158 $ (862) $ (717) $ (260) $ 494 $ 7,813 Real estate construction 1,446 2,518 (318) — — 3,646 Commercial real estate 12,688 (424) 678 — 23 12,965 Total commercial 23,292 1,232 (357) (260) 517 24,424 Consumer Residential real estate first mortgage 5,769 2,080 50 — 2 7,901 Residential real estate junior lien 1,289 (67) 154 (77) 52 1,351 Other revolving and installment 528 (104) (130) (28) 27 293 Total consumer 7,586 1,909 74 (105) 81 9,545 Unallocated 268 716 743 — — 1,727 Total $ 31,146 $ 3,857 $ 460 $ (365) $ 598 $ 35,696 (1) The difference in the credit loss expense reported herein compared to the Consolidated Statements of Income is associated with the credit loss expense of $44 thousand related to off-balance sheet credit exposures and $46 thousand related to investment securities held-to-maturity. Three months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,795 $ 1,085 $ (637) $ 90 $ 10,333 Real estate construction 810 68 — — 878 Commercial real estate 11,946 (1,123) — 11 10,834 Total commercial 22,551 30 (637) 101 22,045 Consumer Residential real estate first mortgage 6,661 (486) — — 6,175 Residential real estate junior lien 1,400 (134) — 201 1,467 Other revolving and installment 644 (5) (37) 32 634 Total consumer 8,705 (625) (37) 233 8,276 Unallocated 457 595 — — 1,052 Total $ 31,713 $ — $ (674) $ 334 $ 31,373 Six months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,856 $ (664) $ 216 $ 10,333 Real estate construction 783 95 — — 878 Commercial real estate 12,376 (1,564) — 22 10,834 Total commercial 22,084 387 (664) 238 22,045 Consumer Residential real estate first mortgage 6,532 (357) — — 6,175 Residential real estate junior lien 1,295 (42) — 214 1,467 Other revolving and installment 481 140 (55) 68 634 Total consumer 8,308 (259) (55) 282 8,276 Unallocated 1,180 (128) — — 1,052 Total $ 31,572 $ — $ (719) $ 520 $ 31,373 The following table presents, by loan portfolio segment, a summary of charge-offs, by vintage, for the six months ended June 30, 2023: Gross Charge-offs for six months ended June 30, 2023 (dollars in thousands) 2023 2022 2021 2020 2019 Prior Total Commercial Commercial and industrial $ 39 $ — $ 25 $ 9 $ 187 $ — $ 260 Real estate construction — — — — — — — Commercial real estate — — — — — — — Total commercial 39 — 25 9 187 — 260 Consumer Residential real estate first mortgage — — — — — — — Residential real estate junior lien — — — — — 77 77 Other revolving and installment — 2 — 21 4 1 28 Total consumer — 2 — 21 4 78 105 Total loans $ 39 $ 2 $ 25 $ 30 $ 191 $ 78 $ 365 The following tables present the amortized cost and related allowance for credit losses on loans, by portfolio segment, as of June 30, 2023 and December 31, 2022: June 30, 2023 Amortized Cost Allowance for Credit Losses on Loans Individually Collectively Individually Collectively Evaluated for Evaluated for Evaluated for Evaluated for (dollars in thousands) Impairment Impairment Total Impairment Impairment Total Commercial Commercial and industrial $ 381 $ 551,479 $ 551,860 $ 78 $ 7,735 $ 7,813 Real estate construction — 78,428 78,428 — 3,646 3,646 Commercial real estate 886 1,002,935 1,003,821 572 12,393 12,965 Total commercial 1,267 1,632,842 1,634,109 650 23,774 24,424 Consumer Residential real estate first mortgage 299 707,331 707,630 5 7,896 7,901 Residential real estate junior lien 500 156,731 157,231 — 1,351 1,351 Other revolving and installment 6 34,546 34,552 6 287 293 Total consumer 805 898,608 899,413 11 9,534 9,545 Unallocated — — — — — 1,727 Total loans $ 2,072 $ 2,531,450 $ 2,533,522 $ 661 $ 33,308 $ 35,696 December 31, 2022 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,313 $ 582,563 $ 583,876 $ 275 $ 8,883 $ 9,158 Real estate construction 262 97,548 97,810 97 1,349 1,446 Commercial real estate 1,472 880,198 881,670 582 12,106 12,688 Total commercial 3,047 1,560,309 1,563,356 954 22,338 23,292 Consumer Residential real estate first mortgage 535 679,016 679,551 — 5,769 5,769 Residential real estate junior lien 184 150,295 150,479 — 1,289 1,289 Other revolving and installment 1 50,607 50,608 — 528 528 Total consumer 720 879,918 880,638 — 7,586 7,586 Unallocated — — — — — 268 Total loans $ 3,767 $ 2,440,227 $ 2,443,994 $ 954 $ 29,924 $ 31,146 The following table presents the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans, as of June 30, 2023: As of June 30, 2023 Primary Type of Collateral Allowance for (dollars in thousands) Real estate Equipment Other Total Credit Losses Commercial Commercial and industrial $ — $ 188 $ — $ 188 $ 68 Commercial real estate — — — — — Total commercial — 188 — 188 68 Consumer Residential real estate first mortgage 299 — — 299 5 Residential real estate junior lien 500 — — 500 — Other revolving and installment — — 6 6 6 Total consumer 799 — 6 805 11 Total loans $ 799 $ 188 $ 6 $ 993 $ 79 Pre-ASC 326 Adoption impaired loan disclosures The table below summarizes key information on impaired loans as of December 31, 2022: December 31, 2022 Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 675 $ 711 $ 275 Real estate construction 262 440 97 Commercial real estate 896 900 582 Residential real estate first mortgage — — — Total impaired loans with a valuation allowance 1,833 2,051 954 Impaired loans without a valuation allowance Commercial and industrial 638 767 — Real estate construction — — — Commercial real estate 576 660 — Residential real estate first mortgage 535 573 — Residential real estate junior lien 184 218 — Other revolving and installment 1 1 — Total impaired loans without a valuation allowance 1,934 2,219 — Total impaired loans Commercial and industrial 1,313 1,478 275 Real estate construction 262 440 97 Commercial real estate 1,472 1,560 582 Residential real estate first mortgage 535 573 — Residential real estate junior lien 184 218 — Other revolving and installment 1 1 — Total impaired loans $ 3,767 $ 4,270 $ 954 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2022: Three months ended June 30, 2022 Average Recorded Interest (dollars in thousands) Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,018 $ 2 Commercial real estate 176 2 Other revolving and installment 75 — Total impaired loans with a valuation allowance 1,269 4 Impaired loans without a valuation allowance Commercial and industrial 761 — Commercial real estate 629 — Residential real estate first mortgage 1,962 — Residential real estate junior lien 196 — Other revolving and installment — — Total impaired loans without a valuation allowance 3,548 — Total impaired loans Commercial and industrial 1,779 2 Commercial real estate 805 2 Residential real estate first mortgage 1,962 — Residential real estate junior lien 196 — Other revolving and installment 75 — Total impaired loans $ 4,817 $ 4 Six Months Ended June 30, 2022 Average Recorded Interest (dollars in thousands) Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,156 $ 6 Commercial real estate 177 3 Other revolving and installment 157 — Total impaired loans with a valuation allowance 1,490 9 Impaired loans without a valuation allowance Commercial and industrial 761 — Commercial real estate 629 — Residential real estate first mortgage 1,953 — Residential real estate junior lien 198 — Total impaired loans without a valuation allowance 3,541 — Total impaired loans Commercial and industrial 1,917 6 Commercial real estate 806 3 Residential real estate first mortgage 1,953 — Residential real estate junior lien 198 — Other revolving and installment 157 — Total impaired loans $ 5,031 $ 9 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | NOTE 5 Goodwill and Other Intangible Assets The following table summarizes the carrying amount of goodwill, by segment, as of June 30, 2023 and December 31, 2022: June 30, December 31, (dollars in thousands) 2023 2022 Banking $ 35,260 $ 35,260 Retirement and benefit services 11,827 11,827 Total goodwill $ 47,087 $ 47,087 Goodwill is evaluated for impairment on an annual basis, at a minimum, and more frequently when the economic environment warrants. The Company determined that there was no goodwill impairment as of June 30, 2023. The gross carrying amount and accumulated amortization for each type of identifiable intangible asset, as of June 30, 2023 and December 31, 2022, were as follows: June 30, 2023 December 31, 2022 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 41,423 $ (27,944) $ 13,479 $ 41,423 $ (25,927) $ 15,496 Core deposit intangible assets 7,592 (1,265) 6,327 7,592 (633) 6,959 Total intangible assets $ 49,015 $ (29,209) $ 19,806 $ 49,015 $ (26,560) $ 22,455 Amortization of intangible assets was $1.3 million and $1.1 million for the three months ended June 30, 2023 and 2022. Amortization of intangible assets was $2.6 million and $2.1 million for the six months ended June 30, 2023 and 2022, respectively. |
Loan Servicing
Loan Servicing | 6 Months Ended |
Jun. 30, 2023 | |
Loan Servicing | |
Loan Servicing | NOTE 6 Loan Servicing Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled $367.8 million and $357.2 million as of June 30, 2023 and December 31, 2022, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on an accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights. The following table summarizes the Company’s activity related to servicing rights for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Balance, beginning of period $ 2,421 $ 1,771 $ 2,643 $ 1,880 Additions 20 13 23 17 Amortization (134) (96) (318) (256) Fair value adjustments 44 376 3 423 Balance, end of period $ 2,351 $ 2,064 $ 2,351 $ 2,064 The following is a summary of key data and assumptions used in the valuation of servicing rights as of June 30, 2023 and December 31, 2022. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements. June 30, December 31, (dollars in thousands) 2023 2022 Fair value of servicing rights $ 2,351 $ 2,643 Weighted-average remaining term, years 19.0 20.5 Prepayment speeds 6.1 % 6.9 % Discount rate 11.0 % 10.5 % |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Leases | NOTE 7 Leases Substantially all of the leases in which the Company is the lessee are comprised of real property for offices and office equipment rentals with terms extending through 2032. Portions of certain properties are subleased for terms extending through 2024. Substantially all of the Company’s leases are classified as operating leases. The Company has no existing finance leases. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated financial statements. The following table presents the classification of the Company’s right-of-use, or ROU, assets and lease liabilities on the consolidated financial statements as of June 30, 2023 and December 31, 2022: June 30, December 31, (dollars in thousands) 2023 2022 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 6,440 $ 5,419 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 6,746 $ 5,902 The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term for the discount rate. For the Company’s only finance lease, the Company utilized its incremental borrowing rate at lease inception. June 30, December 31, 2023 2022 Weighted-average remaining lease term, years Operating leases 4.5 5.0 Weighted-average discount rate Operating leases 3.6 % 3.1 % As the Company elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Variable lease cost also includes payments for usage or maintenance of those capitalized equipment operating leases. The following table presents lease costs and other lease information for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Lease costs Operating lease cost $ 354 $ 414 $ 935 $ 825 Variable lease cost 474 150 699 363 Short-term lease cost 39 43 82 88 Finance lease cost Interest on lease liabilities — 1 — 5 Amortization of right-of-use assets — 29 — 58 Sublease income (60) (59) (119) (116) Net lease cost $ 807 $ 578 $ 1,597 $ 1,223 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 474 $ 393 $ 953 $ 784 Right-of-use assets obtained in exchange for new operating lease liabilities 2,029 — 2,286 — Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of June 30, 2023 were as follows: Operating (dollars in thousands) Leases Twelve months ended June 30, 2024 $ 1,861 June 30, 2025 1,428 June 30, 2026 1,158 June 30, 2027 791 June 30, 2028 408 Thereafter 2,135 Total future minimum lease payments $ 7,781 Amounts representing interest (1,035) Total operating lease liabilities $ 6,746 |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2023 | |
Deposits. | |
Deposits | NOTE 8 Deposits The components of deposits in the consolidated balance sheets as of June 30, 2023 and December 31, 2022 were as follows: June 30, December 31, (dollars in thousands) 2023 2022 Noninterest-bearing $ 715,534 $ 860,987 Interest-bearing Interest-bearing demand 753,194 706,275 Savings accounts 93,557 99,882 Money market savings 986,403 1,035,981 Time deposits 304,167 212,359 Total interest-bearing 2,137,321 2,054,497 Total deposits $ 2,852,855 $ 2,915,484 Certificates of deposit in excess of $250,000 totaled $94.2 million and $51.1 million at June 30, 2023 and December 31, 2022, respectively. |
Short-Term Borrowings
Short-Term Borrowings | 6 Months Ended |
Jun. 30, 2023 | |
Short-Term Borrowings | |
Short-Term Borrowings | NOTE 9 Short-Term Borrowings Short-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following: June 30, December 31, (dollars in thousands) 2023 2022 Fed funds purchased $ 492,060 $ 153,080 FHLB short-term advances — 225,000 Total $ 492,060 $ 378,080 The following table presents information related to short-term borrowings for the three and six months ended June 30, 2023 and 2022: Three months ended June 30, (dollars in thousands) 2023 2022 Fed funds purchased Balance as of end of period $ 492,060 $ 117,350 Average daily balance 360,033 81,506 Maximum month-end balance 492,060 117,350 Weighted-average rate During period 5.31 % 1.18 % End of period 5.35 % 1.44 % FHLB short-term advances Balance as of end of period $ — $ 125,000 Average daily balance — 9,615 Maximum month-end balance — 125,000 Weighted-average rate During period N/A % 1.59 % End of period N/A % 1.80 % Six months ended June 30, (dollars in thousands) 2023 2022 Fed funds purchased Balance as of end of period $ 492,060 $ 117,350 Average daily balance 325,303 40,978 Maximum month-end balance 492,060 117,350 Weighted-average rate During period 5.10 % 1.18 % End of period 5.35 % 1.44 % FHLB short-term advances Balance as of end of period $ — $ 125,000 Average daily balance 39,779 4,834 Maximum month-end balance 225,000 125,000 Weighted-average rate During period 4.69 % 1.59 % End of period N/A % 1.80 % |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt. | |
Long-Term Debt | NOTE 10 Long-Term Debt Long-term debt as of June 30, 2023 and December 31, 2022 consisted of the following: June 30, 2023 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,560 Three-month LIBOR + 3.10% 8.64 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,340 Three-month LIBOR + 1.80% 7.35 % 9/15/2036 9/15/2011 Total long-term debt $ 60,310 $ 58,900 December 31, 2022 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,537 Three-month LIBOR + 3.10% 7.82 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,306 Three-month LIBOR + 1.80% 6.57 % 9/15/2036 9/15/2011 Total long-term debt $ 60,310 $ 58,843 |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 6 Months Ended |
Jun. 30, 2023 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | NOTE 11 Financial Instruments with Off-Balance Sheet Risk In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Company exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the statements of financial condition. A summary of the contractual amounts of the Company’s exposure to off-balance sheet risk as of June 30, 2023 and December 31, 2022, respectively, was as follows: June 30, December 31, (dollars in thousands) 2023 2022 Commitments to extend credit $ 786,451 $ 806,431 Standby letters of credit 9,784 13,089 Total $ 796,235 $ 819,520 The Company had an allowance for loan losses on unfunded commitments of $3.2 million as of December 31, 2022. Upon the adoption of the CECL accounting standard, the Company recorded an additional $1.9 million reserve for unfunded commitments. For the six months ending June 30, 2023, the Company recorded an additional $44 thousand in provision for credit losses on unfunded commitments for a total of $5.1 million of allowance for credit losses on unfunded commitments as of June 30, 2023. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income producing commercial properties. The Company was not required to perform on any financial guarantees and did not incur any losses on its commitments during the past two years. The Company utilizes standby letters of credit issued by either the FHLB or the Bank of North Dakota to secure public unit deposits. The Company had no letters of credit outstanding with the FHLB as of June 30, 2023 or December 31, 2022. With the Bank of North Dakota, the Company had a no letters of credit outstanding as of June 30, 2023 and December 31, 2022. Letters of credit with the Bank of North Dakota were collateralized by loans pledged to the Bank of North Dakota in the amount of $230.3 million and $215.5 million as of June 30, 2023 and December 31, 2022, respectively. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation | |
Share-Based Compensation | NOTE 12 Share-Based Compensation On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan gives the compensation committee the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock-settled stock appreciation right or other awards and were not issued upon the settlement of the award. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of June 30, 2023, 810,277 shares of common stock are still available for issuance under the plan. The compensation expense relating to awards under these plans was $656 thousand and $663 thousand for the three months ended June 30, 2023 and 2022. The compensation expense relating to awards under these plans was $815 thousand and $1.0 million for the six months ended June 30, 2023 and 2022, respectively. The following table presents the activity in the stock plans for the six months ended June 30, 2023 and 2022: Six months ended June 30, 2023 2022 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 238,929 $ 23.66 260,850 $ 21.04 Granted 82,810 20.85 94,592 19.01 Vested (91,867) 21.29 (107,113) 19.19 Forfeited or cancelled (22,204) 21.39 (10,624) 23.71 Outstanding at end of period 207,668 $ 23.83 237,705 $ 20.95 As of June 30, 2023, there was $3.0 million of unrecognized compensation expense related to non-vested awards granted under the plans. The expense is expected to be recognized over a weighted-average period of 2.5 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | NOTE 13 Income Taxes The components of income tax expense (benefit) for the three and six months ended June 30, 2023 and 2022 were as follows: Three months ended June 30, 2023 2022 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,444 21.0 % $ 2,524 21.0 % Tax effect of: Tax exempt income (156) (1.3) % (122) (1.0) % State income taxes, net of federal benefits 485 4.1 % 531 4.4 % Nondeductible items and other (238) (2.0) % (208) (1.7) % Applicable income taxes $ 2,535 21.8 % $ 2,725 22.7 % Six months ended June 30, 2023 2022 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,648 21.0 % $ 5,269 21.0 % Tax effect of: Tax exempt income (300) (1.4) % (239) (1.0) % State income taxes, net of federal benefits 946 4.3 % 1,109 4.4 % Nondeductible items and other (453) (2.0) % (526) (2.1) % Applicable income taxes $ 4,841 21.9 % $ 5,613 22.3 % It is the opinion of management that the Company has no significant uncertain tax positions that would be subject to change upon examination. |
Tax Credit Investments
Tax Credit Investments | 6 Months Ended |
Jun. 30, 2023 | |
Tax Credit Investments. | |
Tax Credit Investments | NOTE 14 Tax Credit Investments The Company invests in qualified affordable housing projects for the purpose of community reinvestment and obtaining tax credits. The Company’s tax credit investments are limited to existing lending relationships with well-known developers and projects within the Company’s market area. The following table presents a summary of the Company’s investments in qualified affordable housing project tax credits as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 (dollars in thousands) Investment Unfunded Commitment Investment Unfunded Commitment Investment Accounting Method Low income housing tax credit Proportional amortization $ 17,906 $ 15,202 $ 17,906 $ 15,559 Total $ 17,906 $ 15,202 $ 17,906 $ 15,559 The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects for the three and six months ended June 30, 2023 and 2022: Three months ended June 30, 2023 2022 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 278 $ (509) $ 111 $ (156) Total $ 278 $ (509) $ 111 $ (156) (1) The amortization expense for low income housing tax credits were included in the income tax expense. (2) All of the tax benefits recognized were included in income tax expense. Six months ended June 30, 2023 2022 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 639 $ (735) $ 111 $ (156) Total $ 639 $ (735) $ 111 $ (156) (1) The amortization expense for low income housing tax credits were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting | |
Segment Reporting | NOTE 15 Segment Reporting The Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to the Company’s financial statements, and management’s regular review of the operating results of those services. The Company operates through four operating segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. The financial information presented for each segment includes net interest income, provision for credit losses, direct noninterest income, and direct noninterest expense, before indirect allocations. Corporate Administration includes the indirect overhead and is set forth in the table below. The segment net income before taxes represents direct revenue and expense before indirect allocations and income taxes. The following table presents key metrics related to the Company’s segments for the periods presented: Three months ended June 30, 2023 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 22,681 $ — $ — $ 218 $ (665) $ 22,234 Provision for credit losses — — — — — — Noninterest income 1,336 15,890 5,449 2,905 198 25,778 Intercompany revenue (expense) (2,933) 1,331 (257) 286 1,573 — Noninterest expense 11,548 8,290 2,100 3,882 10,553 36,373 Net income (loss) before taxes $ 9,536 $ 8,931 $ 3,092 $ (473) $ (9,447) $ 11,639 Six months ended June 30, 2023 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 46,832 $ — $ — $ 380 $ (1,320) $ 45,892 Provision for credit losses 550 — — — — 550 Noninterest income 4,158 31,372 10,644 4,622 235 51,031 Intercompany revenue (expense) (5,980) 2,672 (425) 512 3,221 — Noninterest expense 25,503 15,600 3,613 6,667 22,859 74,242 Net income (loss) before taxes $ 18,957 $ 18,444 $ 6,606 $ (1,153) $ (20,723) $ 22,131 Three months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 22,779 $ — $ — $ 558 $ (561) $ 22,776 Provision for credit losses — — — — — — Noninterest income 1,341 16,293 5,548 6,038 6 29,226 Intercompany revenue (expense) (3,829) 1,095 (337) 1,334 1,737 Noninterest expense 11,790 7,693 1,293 6,543 12,665 39,984 Net income (loss) before taxes $ 8,501 $ 9,695 $ 3,918 $ 1,387 $ (11,483) $ 12,018 Six months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 44,304 $ — $ — $ 1,267 $ (1,122) $ 44,449 Provision for credit losses — — — — — — Noninterest income 2,879 33,939 10,874 10,969 35 58,696 Intercompany revenue (expense) (4,988) 692 (851) 1,828 3,319 — Noninterest expense 23,325 15,722 2,617 12,057 24,334 78,055 Net income (loss) before taxes $ 18,870 $ 18,909 $ 7,406 $ 2,007 $ (22,102) $ 25,090 Banking The Banking division offers a complete line of loan, deposit, cash management, and treasury services through fourteen offices in North Dakota, Minnesota, and Arizona. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the Banking segment’s balance sheet. Retirement and Benefit Services Retirement and Benefit Services provides the following services nationally: recordkeeping and administration services to qualified retirement plans; recordkeeping, and administration; investment fiduciary services to retirement plans; health savings accounts, flex spending accounts, and COBRA recordkeeping and administration services. In addition, the division operates within each of the banking markets, as well as in Lansing, Michigan and Littleton, Colorado. Wealth Management The Wealth Management division provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint. Mortgage The Mortgage division offers first and second mortgage loans through a centralized mortgage unit in Minneapolis, Minnesota, as well as through the Banking office locations. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share | |
Earnings Per Share | NOTE 16 Earnings Per Share The calculation of basic and diluted earnings per share using the two-class method for the three and six months ended June 30, 2023 and 2022 are presented below: Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2023 2022 2023 2022 Net income $ 9,104 $ 9,293 $ 17,290 $ 19,477 Dividends and undistributed earnings allocated to participating securities 62 101 120 225 Net income available to common shareholders $ 9,042 $ 9,192 $ 17,170 $ 19,252 Weighted-average common shares outstanding for basic earnings per share 20,033 17,297 20,030 17,271 Dilutive effect of stock-based awards 208 235 213 246 Weighted-average common shares outstanding for diluted earnings per share 20,241 17,532 20,243 17,517 Earnings per common share: Basic earnings per common share $ 0.45 $ 0.53 $ 0.86 $ 1.11 Diluted earnings per common share $ 0.45 $ 0.52 $ 0.85 $ 1.10 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments | |
Derivative Instruments | NOTE 17 Derivative Instruments The following table presents the total notional amounts and gross fair values of the Company’s derivatives as of June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Designated as hedging instruments: Consolidated Balance Sheet Location Fair value hedges: Interest rate swaps Other assets $ 2,069 $ 200,000 $ — $ — Total derivatives designated as hedging instruments $ 2,069 $ 200,000 $ — $ — Not designated as hedging instruments: Asset Derivatives Interest rate swaps Other assets $ 6,049 $ 42,716 $ 6,277 $ 43,430 Interest rate lock commitments Other assets 523 34,602 121 10,462 Forward loan sales commitments Other assets 71 4,193 7 351 To-be-announced mortgage backed securities Other assets 210 68,750 — — Total asset derivatives not designated as hedging instruments $ 6,853 $ 150,261 $ 6,405 $ 54,243 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 6,049 $ 42,716 $ 6,277 $ 43,430 To-be-announced mortgage backed securities Accrued expenses and other liabilities — — 26 25,750 Total liability derivatives not designated as hedging instruments $ 6,049 $ 42,716 $ 6,303 $ 69,180 Derivatives Designated as Hedging Instruments The Company uses derivative instruments to hedge its exposure to economic risks, including interest rate, liquidity and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value hedges. Fair value hedges: The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships at June 30, 2023: June 30, 2023 Cumulative Fair Value Hedging Adjustment in the Carrying Amount Carrying Amount of of Hedge Assets/ Hedged Assets/ Liabilities Liabilities (dollars in thousands) Mortgage-backed securities Residential agency $ 284,584 $ (2,073) Total $ 284,584 $ (2,073) Derivatives Not Designated as Hedging Instruments Interest rate swaps: Interest rate lock commitments, forward loan sales commitments and to be announced (TBA) mortgage backed securities: The gain (loss) recognized on derivative instruments for the three and six months ended June 30, 2023 and 2022 was as follows: (dollars in thousands) Three months ended June 30, Six months ended June 30, Derivatives designated as hedging instruments Consolidated Statements of Income Location 2023 2022 2023 2022 Interest rate swaps Interest income $ — $ — $ — $ — Total gain (loss) from derivatives designated as hedging instruments $ — $ — $ — $ — Derivatives not designated as hedging instruments Interest rate swaps Other noninterest income $ — $ 1 $ — $ 1 Interest rate lock commitments Mortgage banking 89 563 429 (147) Forward loan sales commitments Mortgage banking 70 542 64 52 To-be-announced mortgage backed securities Mortgage banking 302 1,246 129 3,749 Total gain (loss) from derivatives not designated as hedging instruments $ 461 $ 2,352 $ 622 $ 3,655 The Company has third party agreements that require a minimum dollar transfer amount upon a margin call. These requirements are dependent on certain specified credit measures. The amount of collateral posted with third parties was $290 thousand at June 30, 2023 and $309 thousand at December 31, 2022. The amount of collateral posted with third parties was deemed to be sufficient as of those dates to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures. |
Regulatory Matters
Regulatory Matters | 6 Months Ended |
Jun. 30, 2023 | |
Regulatory Matters | |
Regulatory Matters | NOTE 18 Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes at June 30, 2023 and December 31, 2022, each of the Company and the Bank had met all of the capital adequacy requirements to which it was subject. The following table presents the Company’s and the Bank’s actual capital amounts and ratios as of June 30, 2023 and December 31, 2022: June 30, 2023 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 395,276 13.30 % $ 133,728 4.50 % $ N/A N/A Bank 383,663 12.93 % 133,585 4.50 % 192,895 6.50 % Tier 1 capital to risk weighted assets . Consolidated 404,176 13.60 % 178,304 6.00 % N/A N/A Bank 383,663 12.93 % 178,113 6.00 % 237,409 8.00 % Total capital to risk weighted assets Consolidated 490,091 16.49 % 237,738 8.00 % N/A N/A Bank 419,578 14.14 % 237,486 8.00 % 296,762 10.00 % Tier 1 capital to average assets Consolidated 404,176 11.15 % 144,987 4.00 % N/A N/A Bank 383,663 10.59 % 144,890 4.00 % 181,112 5.00 % December 31, 2022 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 389,335 13.39 % $ 130,862 4.50 % $ N/A N/A Bank 370,749 12.76 % 130,791 4.50 % 188,920 6.50 % Tier 1 capital to risk weighted assets . Consolidated 398,179 13.69 % 174,482 6.00 % N/A N/A Bank 370,749 12.76 % 174,388 6.00 % 232,517 8.00 % Total capital to risk weighted assets Consolidated 479,325 16.48 % 232,643 8.00 % N/A N/A Bank 401,895 13.83 % 232,517 8.00 % 290,646 10.00 % Tier 1 capital to average assets Consolidated 398,179 11.25 % 141,514 4.00 % N/A N/A Bank 370,749 10.48 % 141,440 4.00 % 176,800 5.00 % The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval. The Company and the Bank are subject to the rules of the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act rules. The rules include a 2.5 percent capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount will be subject to the limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. As of June 30, 2023, the capital ratios for the Company and the Bank were sufficient to meet the conservation buffer. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development, or HUD, regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of June 30, 2023 and December 31, 2022, the Company was in compliance with the aforementioned guidelines. |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Jun. 30, 2023 | |
Stock Repurchase Program | |
Stock Repurchase Program | NOTE 19 Stock Repurchase Program On February 18, 2021, the Board of Directors of the Company approved a stock repurchase program, or the Program, which authorizes the Company to repurchase up to 770,000 shares of its common stock subject to certain limitations and conditions. The Program was effective immediately and will continue for a period of 36 months, until February 28, 2024. The Program does not obligate the Company to repurchase any shares of its common stock and there is no assurance that the Company will do so. For the six months ended June 30, 2023, the Company repurchased 170,046 shares of common stock under the Program. The Company also repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | NOTE 20 Fair Value of Assets and Liabilities The Company categorizes its assets and liabilities measured at estimated fair value into a three level hierarchy based on the priority of the inputs to the valuation technique used to determine estimated fair value. The estimated fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the estimated fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the estimated fair value measurement. Assets and liabilities valued at estimated fair value are categorized based on the following inputs to the valuation techniques as follows: Level 1— Level 2— Level 3— Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at estimated fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at estimated fair value. The Company has not elected to measure any existing financial instruments at estimated fair value; however, it may elect to measure newly acquired financial instruments at estimated fair value in the future. Recurring Basis The Company uses estimated fair value measurements to record estimated fair value adjustments to certain assets and liabilities and to determine estimated fair value disclosures. The following tables present the balances of the assets and liabilities measured at estimated fair value on a recurring basis as of June 30, 2023 and December 31, 2022: June 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 2,906 $ — $ 2,906 Mortgage backed securities Residential agency — 558,456 — 558,456 Commercial — 60,909 — 60,909 Asset backed securities — 28 — 28 Corporate bonds — 55,155 — 55,155 Total available-for-sale investment securities $ — $ 677,454 $ — $ 677,454 Other assets Derivatives $ — $ 6,853 $ — $ 6,853 Other liabilities Derivatives $ — $ 8,118 $ — $ 8,118 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,520 $ — $ 3,520 Mortgage backed securities Residential agency — 587,679 — 587,679 Commercial — 63,558 — 63,558 Asset backed securities — 34 — 34 Corporate bonds — 62,533 — 62,533 Total available-for-sale investment securities $ — $ 717,324 $ — $ 717,324 Other assets Derivatives $ — $ 6,405 $ — $ 6,405 Other liabilities Derivatives $ — $ 6,303 $ — $ 6,303 The following is a description of the valuation methodologies used for instruments measured at estimated fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities, Available-for-Sale Generally, debt securities are valued using pricing for similar securities, recently executed transactions, and other pricing models utilizing observable inputs and therefore are classified as Level 2. Derivatives All of the Company’s derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For these derivatives, estimated fair value is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities, and accordingly, classify as Level 2. Examples of Level 2 derivatives are basic interest rate swaps and forward contracts. Nonrecurring Basis Certain assets are measured at estimated fair value on a nonrecurring basis. These assets are not measured at estimated fair value on an ongoing basis; however, they are subject to estimated fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment. Net impairment related to nonrecurring estimated fair value measurements of certain assets as of June 30, 2023 and December 31, 2022 consisted of the following: June 30, 2023 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 20,893 $ — $ 20,893 $ — Individually evaluated — 2,390 2,390 288 Servicing rights — 2,351 2,351 — December 31, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 9,488 $ — $ 9,488 $ — Individually evaluated — 2,813 2,813 954 Foreclosed assets — 30 30 — Servicing rights — 2,643 2,643 — Loans Held for Sale Loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically, these quotes include a premium on the sale and thus these quotes indicate estimated fair value of the held for sale loans is greater than cost. Impairment losses for loans held for sale that are carried at the lower of cost or estimated fair value represent additional net write-downs during the period to record these loans at the lower of cost or estimated fair value, subsequent to their initial classification as loans held for sale. The valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values as of June 30, 2023 and December 31, 2022, were as follows: June 30, 2023 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Individually evaluated Appraisal value Property specific adjustment $ 2,390 N/A N/A Foreclosed assets Appraisal value Property specific adjustment — N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,351 83-134 101 Discount rate 11.0 % 11.0 % December 31, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Individually evaluated Appraisal value Property specific adjustment $ 2,813 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 30 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,643 103-137 115 Discount rate 10.5 % 10.5 % Disclosure of estimated fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases in which quoted market prices are not available, estimated 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 estimate of future cash flows. In that regard, the derived estimated fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments, with an estimated fair value that is not practicable to estimate and all non-financial instruments, are excluded from the disclosure requirements. Accordingly, the aggregate estimated fair value amounts presented do not necessarily represent the underlying value of the Company. The following disclosures represent financial instruments in which the ending balances, as of June 30, 2023 and December 31, 2022, were not carried at estimated fair value in their entirety on the consolidated balance sheets. Cash and Cash Equivalents and Accrued Interest The carrying amounts reported in the consolidated balance sheets approximate those assets and liabilities estimated fair values. Investment Securities, Held-to-Maturity The fair values of debt securities held-to-maturity are based on quoted market prices for the same or similar securities, recently executed transactions and pricing models. Loans For variable-rate loans that reprice frequently and with no significant change in credit risk, estimated fair values are based on carrying values. The estimated fair values of other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Bank-Owned Life Insurance Bank-owned life insurance is carried at the amount due upon surrender of the policy, which is also the estimated fair value. This amount was provided by the insurance companies based on the terms of the underlying insurance contract. Deposits The estimated fair values of demand deposits are, by definition, equal to the amount payable on demand at the consolidated balance sheet date. The estimated fair values of fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies current incremental interest rates being offered on certificates of deposit to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit. Short-Term Borrowings and Long-Term Debt For variable-rate borrowings that reprice frequently, estimated fair values are based on carrying values. The estimated fair values of fixed-rate borrowings are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Off-Balance Sheet Credit-Related Commitments Off-balance sheet credit related commitments are generally of short-term nature. The contract amount of such commitments approximates their estimated fair value since the commitments are comprised primarily of unfunded loan commitments which are generally priced at market at the time of funding. The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at the dates indicated are as follows: June 30, 2023 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 65,471 $ 65,471 $ — $ — $ 65,471 Investment securities held-to-maturity 308,416 — 260,710 — 260,710 Loans, net 2,497,826 — — 2,403,819 2,403,819 Accrued interest receivable 13,587 13,587 — — 13,587 Bank-owned life insurance 32,793 — 32,793 — 32,793 Financial Liabilities Noninterest-bearing deposits $ 715,534 $ — $ 715,534 $ — $ 715,534 Interest-bearing deposits 1,833,154 — 1,833,154 — 1,833,154 Time deposits 304,167 — — 300,375 300,375 Short-term borrowings 492,060 492,060 — — 492,060 Long-term debt 58,900 — 56,008 — 56,008 Accrued interest payable 2,960 2,960 — — 2,960 December 31, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 58,242 $ 58,242 $ — $ — $ 58,242 Investment securities held-to-maturity 321,902 — 270,912 — 270,912 Loans, net 2,412,848 — — 2,311,956 2,311,956 Accrued interest receivable 12,869 12,869 — — 12,869 Bank-owned life insurance 33,991 — 33,991 — 33,991 Financial Liabilities Noninterest-bearing deposits $ 860,987 $ — $ 860,987 $ — $ 860,987 Interest-bearing deposits 1,842,138 — 1,842,138 — 1,842,138 Time deposits 212,359 — — 208,550 208,550 Short-term borrowings 378,080 378,080 — — 378,080 Long-term debt 58,843 — 56,116 — 56,116 Accrued interest payable 2,426 2,426 — — 2,426 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Significant Accounting Policies | |
Organization | Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for credit losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments. |
Reclassifications | Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. |
Emerging Growth Company | Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. |
Allowance for credit losses | Allowance for credit losses Investment securities available-for-sale. In evaluating available-for-sale securities in unrealized loss positions for impairment and the criteria regarding its intent or requirement to sell such securities, the Company considers the extent to which fair value is less than amortized cost, whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuers’ financial condition, among other factors. Accrued interest receivable is excluded from the estimate of credit losses. Investment securities held-to-maturity. probability of default and loss going back several years. Accrued interest receivable on held-to-maturity investment securities is excluded from the estimate of credit losses. Loans held for investment. The Company estimates the ACL based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for collection of cash and charge-offs, as well as applicable accretion or amortization of premium, discount and net deferred fees or costs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made the policy election to exclude accrued interest from the measurement of ACL. Expected credit losses are reflected in the ACL through a charge to provision for credit losses when the Company deems all or a portion of the financial asset will be uncollectible; the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgement to determine when a financial asset is deemed uncollectible; however, generally, an asset will be considered uncollectible no later than when all efforts of collection have been exhausted. Subsequent recoveries, if any, are credited to the ACL when received. Upon the adoption of the CECL accounting standard, the Company elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. Upon the adoption of the CECL accounting standard, the ACL was determined for each pool and added to the pools’ carrying amount to establish a new amortized cost basis. Loans that do not share similar risk characteristics are evaluated on an individual basis. Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable supportable forecasts. Historical loss experience provides the basis for estimation of expected credit losses. Adjustments to historical loss information are made for differences in the current loan-specific risk characteristics such as different underwriting standards, portfolio mix, delinquency level, or life of the loan, as well as changes in environmental conditions, levels of economic activity, unemployment rates, property values and other relevant factors. The calculation also contemplates that the Company may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical loss information. Ongoing impacts of CECL will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration and other forecasts. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. The ACL on individually evaluated loans is recognized on the basis of the present value of expected future cash flows discounted at the effective interest rate, the fair value of collateral adjusted of estimated costs to sell, or observable market price as of the relevant date. Reserve for off-balance sheet credit exposures. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Recent Accounting Pronouncements | |
Schedule of impact of ASC 326 | January 1, 2023 As reported Pre-tax impact of (dollars in thousands) under Pre-ASC 326 ASC 326 Assets: ASC 326 Adoption Adoption Investments Held-to-maturity Obligations of state and political agencies $ 110 $ — $ 110 Mortgage backed securities Residential agency 62 — 62 Total allowance for held-to-maturity investment securities 172 — 172 Loans Commercial Commercial and industrial 8,296 9,158 (862) Real estate construction 3,964 1,446 2,518 Commercial real estate 12,264 12,688 (424) Total commercial 24,524 23,292 1,232 Consumer Residential real estate first mortgage 7,849 5,769 2,080 Residential real estate junior lien 1,222 1,289 (67) Other revolving and installment 424 528 (104) Total consumer 9,495 7,586 1,909 Unallocated 984 268 716 Total allowance for loans 35,003 31,146 3,857 Allowance for credit losses on loans and investments securities $ 35,175 $ 31,146 $ 4,029 Liabilities: Allowance for credit losses on unfunded commitments $ 5,159 $ 3,244 $ 1,915 |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investment Securities | |
Schedule of amortized cost of investment securities to estimated fair values | June 30, 2023 Amortized Unrealized Unrealized Allowance for Fair (dollars in thousands) Cost Gains Losses Credit Losses Value Available-for-sale U.S. Treasury and agencies $ 2,915 $ 11 $ (20) $ — $ 2,906 Mortgage backed securities Residential agency 673,586 1 (115,131) — 558,456 Commercial 68,379 — (7,470) — 60,909 Asset backed securities 28 — — — 28 Corporate bonds 69,497 — (14,342) — 55,155 Total available-for-sale investment securities 814,405 12 (136,963) — 677,454 Held-to-maturity Obligations of state and political agencies 131,016 — (15,447) 115 115,569 Mortgage backed securities Residential agency 177,618 — (32,477) 103 145,141 Total held-to-maturity investment securities 308,634 — (47,924) 218 260,710 Total investment securities $ 1,123,039 $ 12 $ (184,887) $ 218 $ 938,164 December 31, 2022 Amortized Unrealized Unrealized Allowance for Fair (dollars in thousands) Cost Gains Losses Credit Losses Value Available-for-sale U.S. Treasury and agencies $ 3,518 $ 19 $ (17) N/A $ 3,520 Mortgage backed securities Residential agency 705,845 2 (118,168) N/A 587,679 Commercial 70,669 — (7,111) N/A 63,558 Asset backed securities 34 — — N/A 34 Corporate bonds 69,501 — (6,968) N/A 62,533 Total available-for-sale investment securities 849,567 21 (132,264) N/A 717,324 Held-to-maturity Obligations of state and political agencies 137,787 — (17,736) N/A 120,051 Mortgage backed securities Residential agency 184,115 — (33,254) N/A 150,861 Total held-to-maturity investment securities 321,902 — (50,990) N/A 270,912 Total investment securities $ 1,171,469 $ 21 $ (183,254) N/A $ 988,236 |
Schedule of investment securities with gross unrealized losses | June 30, 2023 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ (20) $ 420 $ — $ — $ (20) $ 420 Mortgage backed securities Residential agency (76) 2,148 (115,055) 556,258 (115,131) 558,406 Commercial (32) 570 (7,438) 60,339 (7,470) 60,909 Asset backed securities — 27 — 1 — 28 Corporate bonds (867) 7,109 (13,475) 48,046 (14,342) 55,155 Total available-for-sale investment securities $ (995) $ 10,274 $ (135,968) $ 664,644 $ (136,963) $ 674,918 December 31, 2022 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value Available-for-sale U.S. Treasury and agencies $ (17) $ 509 $ — $ — $ (17) $ 509 Mortgage backed securities Residential agency (10,457) 79,693 (107,711) 507,418 (118,168) 587,111 Commercial (4,835) 50,437 (2,276) 13,120 (7,111) 63,557 Asset backed securities — 32 — 2 — 34 Corporate bonds (4,452) 48,048 (2,516) 14,484 (6,968) 62,532 Total available-for-sale investment securities (19,761) 178,719 (112,503) 535,024 (132,264) 713,743 Held-to-maturity Obligations of state and political agencies (3,336) 18,788 (14,400) 98,762 (17,736) 117,550 Mortgage backed securities Residential agency — — (33,254) 150,861 (33,254) 150,861 Total held-to-maturity investment securities (3,336) 18,788 (47,654) 249,623 (50,990) 268,411 Total investment securities $ (23,097) $ 197,507 $ (160,157) $ 784,647 $ (183,254) $ 982,154 |
Schedule of contractual maturity of amortized cost and estimated fair value | Held-to-maturity Available-for-sale Carrying Fair Amortized Fair (dollars in thousands) Value Value Cost Value Due within one year or less $ 6,098 $ 5,946 $ — $ — Due after one year through five years 44,352 40,512 17,461 16,096 Due after five years through ten years 67,751 58,000 78,734 63,524 Due after 10 years 12,815 11,111 44,624 39,378 131,016 115,569 140,819 118,998 Mortgage-backed securities Residential agency 177,618 145,141 673,586 558,456 Total investment securities $ 308,634 $ 260,710 $ 814,405 $ 677,454 |
Schedule of proceeds from the call of held-to-maturity investment securities | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Proceeds $ — $ 211 $ 126 $ 726 Realized gains — — — — Realized losses — — — — |
Schedule of federal home loan bank | June 30, December 31, (dollars in thousands) 2023 2022 Federal Reserve $ 4,623 $ 4,595 FHLB 24,382 19,362 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Loans and Allowance for Credit Losses | |
Schedule of total loans outstanding by portfolio segment | June 30, December 31, (dollars in thousands) 2023 2022 Commercial Commercial and industrial $ 551,860 $ 583,876 Real estate construction 78,428 97,810 Commercial real estate 1,003,821 881,670 Total commercial 1,634,109 1,563,356 Consumer Residential real estate first mortgage 707,630 679,551 Residential real estate junior lien 157,231 150,479 Other revolving and installment 34,552 50,608 Total consumer 899,413 880,638 Total loans $ 2,533,522 $ 2,443,994 |
Schedule of past due aging analysis of the loan portfolio | June 30, 2023 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 542,769 $ 8,710 $ — $ 381 $ 551,860 Real estate construction 78,277 — — 151 78,428 Commercial real estate 1,002,925 — — 896 1,003,821 Total commercial 1,623,971 8,710 — 1,428 1,634,109 Consumer Residential real estate first mortgage 704,957 2,027 347 299 707,630 Residential real estate junior lien 156,626 105 — 500 157,231 Other revolving and installment 34,400 146 — 6 34,552 Total consumer 895,983 2,278 347 805 899,413 Total loans $ 2,519,954 $ 10,988 $ 347 $ 2,233 $ 2,533,522 December 31, 2022 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 580,288 $ 2,426 $ — $ 1,162 $ 583,876 Real estate construction 97,370 — — 440 97,810 Commercial real estate 879,830 368 — 1,472 881,670 Total commercial 1,557,488 2,794 — 3,074 1,563,356 Consumer Residential real estate first mortgage 677,471 1,545 — 535 679,551 Residential real estate junior lien 149,918 377 — 184 150,479 Other revolving and installment 50,360 247 — 1 50,608 Total consumer 877,749 2,169 — 720 880,638 Total loans $ 2,435,237 $ 4,963 $ — $ 3,794 $ 2,443,994 |
Schedule of amortized cost basis on loans | As of June 30, 2023 Nonaccrual 90 Days with no Allowance or More (dollars in thousands) for Credit Losses Nonaccrual Past Due Commercial Commercial and industrial $ 119 $ 381 $ — Real estate construction 151 151 — Commercial real estate — 896 — Total commercial 270 1,428 — Consumer Residential real estate first mortgage 293 299 347 Residential real estate junior lien 500 500 — Other revolving and installment — 6 — Total consumer 793 805 347 Total loans $ 1,063 $ 2,233 $ 347 |
Schedule of loans outstanding, by portfolio segment and risk category | Revolving (dollars in thousands) Term Loans Amortized Cost Basis by Origination Year Loans Amortized As of June 30, 2023 2023 2022 2021 2020 2019 Prior Cost Basis Total Commercial and industrial Pass $ 72,021 $ 124,487 $ 81,827 $ 72,874 $ 40,610 $ 24,848 $ 102,467 $ 519,134 Substandard — 5,223 415 8,463 186 823 17,616 32,726 Subtotal 72,021 129,710 82,242 81,337 40,796 25,671 120,083 551,860 Real estate construction Pass 6,263 37,948 19,315 4,440 9,150 1,006 306 78,428 Substandard — — — — — — — — Subtotal 6,263 37,948 19,315 4,440 9,150 1,006 306 78,428 Commercial real estate Pass 105,650 278,338 150,233 160,601 110,705 176,802 14,685 997,014 Substandard — — 886 — 4,096 1,825 — 6,807 Subtotal 105,650 278,338 151,119 160,601 114,801 178,627 14,685 1,003,821 Residential real estate first mortgage Pass 40,090 202,056 226,785 111,801 34,894 91,680 216 707,522 Substandard — — — — — 108 — 108 Subtotal 40,090 202,056 226,785 111,801 34,894 91,788 216 707,630 Residential real estate junior lien Pass 13,552 17,683 6,751 4,936 1,947 6,939 105,066 156,874 Substandard — — — — — 357 — 357 Subtotal 13,552 17,683 6,751 4,936 1,947 7,296 105,066 157,231 Other revolving and installment Pass 4,090 9,031 1,467 6,071 2,506 2,037 9,350 34,552 Substandard — — — — — — — — Subtotal 4,090 9,031 1,467 6,071 2,506 2,037 9,350 34,552 Total Loans Pass 241,666 669,543 486,378 360,723 199,812 303,312 232,090 2,493,524 Substandard — 5,223 1,301 8,463 4,282 3,113 17,616 39,998 Total loans $ 241,666 $ 674,766 $ 487,679 $ 369,186 $ 204,094 $ 306,425 $ 249,706 $ 2,533,522 December 31, 2022 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 558,694 $ 21,969 $ 3,213 $ — $ 583,876 Real estate construction 97,548 — 262 — 97,810 Commercial real estate 873,270 — 8,400 — 881,670 Total commercial 1,529,512 21,969 11,875 — 1,563,356 Consumer Residential real estate first mortgage 678,743 63 745 — 679,551 Residential real estate junior lien 149,847 — 632 — 150,479 Other revolving and installment 50,607 — 1 — 50,608 Total consumer 879,197 63 1,378 — 880,638 Total loans $ 2,408,709 $ 22,032 $ 13,253 $ — $ 2,443,994 |
Summary of changes in allowances | Three months ended June 30, 2023 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Credit Losses (1) Charge-offs Recoveries Balance Commercial Commercial and industrial $ 7,800 $ (340) $ (85) $ 438 $ 7,813 Real estate construction 4,406 (760) — — 3,646 Commercial real estate 12,344 609 — 12 12,965 Total commercial 24,550 (491) (85) 450 24,424 Consumer Residential real estate first mortgage 8,060 (159) — — 7,901 Residential real estate junior lien 1,277 28 — 46 1,351 Other revolving and installment 314 (13) (23) 15 293 Total consumer 9,651 (144) (23) 61 9,545 Unallocated 901 826 — — 1,727 Total $ 35,102 $ 191 $ (108) $ 511 $ 35,696 (1) The difference in the credit loss expense reported herein compared to the Consolidated Statements of Income is associated with the credit loss expense reversal of $186 thousand related to off-balance sheet credit exposures and $5 thousand related to investment securities held-to-maturity. Six months ended June 30, 2023 Beginning Adoption Provision for Loan Loan Ending (dollars in thousands) Balance of ASC 326 Credit Losses (1) Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,158 $ (862) $ (717) $ (260) $ 494 $ 7,813 Real estate construction 1,446 2,518 (318) — — 3,646 Commercial real estate 12,688 (424) 678 — 23 12,965 Total commercial 23,292 1,232 (357) (260) 517 24,424 Consumer Residential real estate first mortgage 5,769 2,080 50 — 2 7,901 Residential real estate junior lien 1,289 (67) 154 (77) 52 1,351 Other revolving and installment 528 (104) (130) (28) 27 293 Total consumer 7,586 1,909 74 (105) 81 9,545 Unallocated 268 716 743 — — 1,727 Total $ 31,146 $ 3,857 $ 460 $ (365) $ 598 $ 35,696 (1) The difference in the credit loss expense reported herein compared to the Consolidated Statements of Income is associated with the credit loss expense of $44 thousand related to off-balance sheet credit exposures and $46 thousand related to investment securities held-to-maturity. Three months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 9,795 $ 1,085 $ (637) $ 90 $ 10,333 Real estate construction 810 68 — — 878 Commercial real estate 11,946 (1,123) — 11 10,834 Total commercial 22,551 30 (637) 101 22,045 Consumer Residential real estate first mortgage 6,661 (486) — — 6,175 Residential real estate junior lien 1,400 (134) — 201 1,467 Other revolving and installment 644 (5) (37) 32 634 Total consumer 8,705 (625) (37) 233 8,276 Unallocated 457 595 — — 1,052 Total $ 31,713 $ — $ (674) $ 334 $ 31,373 Six months ended June 30, 2022 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 8,925 $ 1,856 $ (664) $ 216 $ 10,333 Real estate construction 783 95 — — 878 Commercial real estate 12,376 (1,564) — 22 10,834 Total commercial 22,084 387 (664) 238 22,045 Consumer Residential real estate first mortgage 6,532 (357) — — 6,175 Residential real estate junior lien 1,295 (42) — 214 1,467 Other revolving and installment 481 140 (55) 68 634 Total consumer 8,308 (259) (55) 282 8,276 Unallocated 1,180 (128) — — 1,052 Total $ 31,572 $ — $ (719) $ 520 $ 31,373 |
Schedule of amortized cost and related allowance for credit losses on loans by portfolio segment methodology | June 30, 2023 Amortized Cost Allowance for Credit Losses on Loans Individually Collectively Individually Collectively Evaluated for Evaluated for Evaluated for Evaluated for (dollars in thousands) Impairment Impairment Total Impairment Impairment Total Commercial Commercial and industrial $ 381 $ 551,479 $ 551,860 $ 78 $ 7,735 $ 7,813 Real estate construction — 78,428 78,428 — 3,646 3,646 Commercial real estate 886 1,002,935 1,003,821 572 12,393 12,965 Total commercial 1,267 1,632,842 1,634,109 650 23,774 24,424 Consumer Residential real estate first mortgage 299 707,331 707,630 5 7,896 7,901 Residential real estate junior lien 500 156,731 157,231 — 1,351 1,351 Other revolving and installment 6 34,546 34,552 6 287 293 Total consumer 805 898,608 899,413 11 9,534 9,545 Unallocated — — — — — 1,727 Total loans $ 2,072 $ 2,531,450 $ 2,533,522 $ 661 $ 33,308 $ 35,696 December 31, 2022 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Total Commercial Commercial and industrial $ 1,313 $ 582,563 $ 583,876 $ 275 $ 8,883 $ 9,158 Real estate construction 262 97,548 97,810 97 1,349 1,446 Commercial real estate 1,472 880,198 881,670 582 12,106 12,688 Total commercial 3,047 1,560,309 1,563,356 954 22,338 23,292 Consumer Residential real estate first mortgage 535 679,016 679,551 — 5,769 5,769 Residential real estate junior lien 184 150,295 150,479 — 1,289 1,289 Other revolving and installment 1 50,607 50,608 — 528 528 Total consumer 720 879,918 880,638 — 7,586 7,586 Unallocated — — — — — 268 Total loans $ 3,767 $ 2,440,227 $ 2,443,994 $ 954 $ 29,924 $ 31,146 |
Schedule of financing receivables collateral dependent loans | As of June 30, 2023 Primary Type of Collateral Allowance for (dollars in thousands) Real estate Equipment Other Total Credit Losses Commercial Commercial and industrial $ — $ 188 $ — $ 188 $ 68 Commercial real estate — — — — — Total commercial — 188 — 188 68 Consumer Residential real estate first mortgage 299 — — 299 5 Residential real estate junior lien 500 — — 500 — Other revolving and installment — — 6 6 6 Total consumer 799 — 6 805 11 Total loans $ 799 $ 188 $ 6 $ 993 $ 79 |
Schedule of impaired loans | December 31, 2022 Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 675 $ 711 $ 275 Real estate construction 262 440 97 Commercial real estate 896 900 582 Residential real estate first mortgage — — — Total impaired loans with a valuation allowance 1,833 2,051 954 Impaired loans without a valuation allowance Commercial and industrial 638 767 — Real estate construction — — — Commercial real estate 576 660 — Residential real estate first mortgage 535 573 — Residential real estate junior lien 184 218 — Other revolving and installment 1 1 — Total impaired loans without a valuation allowance 1,934 2,219 — Total impaired loans Commercial and industrial 1,313 1,478 275 Real estate construction 262 440 97 Commercial real estate 1,472 1,560 582 Residential real estate first mortgage 535 573 — Residential real estate junior lien 184 218 — Other revolving and installment 1 1 — Total impaired loans $ 3,767 $ 4,270 $ 954 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2022: Three months ended June 30, 2022 Average Recorded Interest (dollars in thousands) Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,018 $ 2 Commercial real estate 176 2 Other revolving and installment 75 — Total impaired loans with a valuation allowance 1,269 4 Impaired loans without a valuation allowance Commercial and industrial 761 — Commercial real estate 629 — Residential real estate first mortgage 1,962 — Residential real estate junior lien 196 — Other revolving and installment — — Total impaired loans without a valuation allowance 3,548 — Total impaired loans Commercial and industrial 1,779 2 Commercial real estate 805 2 Residential real estate first mortgage 1,962 — Residential real estate junior lien 196 — Other revolving and installment 75 — Total impaired loans $ 4,817 $ 4 Six Months Ended June 30, 2022 Average Recorded Interest (dollars in thousands) Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 1,156 $ 6 Commercial real estate 177 3 Other revolving and installment 157 — Total impaired loans with a valuation allowance 1,490 9 Impaired loans without a valuation allowance Commercial and industrial 761 — Commercial real estate 629 — Residential real estate first mortgage 1,953 — Residential real estate junior lien 198 — Total impaired loans without a valuation allowance 3,541 — Total impaired loans Commercial and industrial 1,917 6 Commercial real estate 806 3 Residential real estate first mortgage 1,953 — Residential real estate junior lien 198 — Other revolving and installment 157 — Total impaired loans $ 5,031 $ 9 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill by segment | June 30, December 31, (dollars in thousands) 2023 2022 Banking $ 35,260 $ 35,260 Retirement and benefit services 11,827 11,827 Total goodwill $ 47,087 $ 47,087 |
Schedule of identifiable intangible assets | June 30, 2023 December 31, 2022 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 41,423 $ (27,944) $ 13,479 $ 41,423 $ (25,927) $ 15,496 Core deposit intangible assets 7,592 (1,265) 6,327 7,592 (633) 6,959 Total intangible assets $ 49,015 $ (29,209) $ 19,806 $ 49,015 $ (26,560) $ 22,455 |
Loan Servicing (Tables)
Loan Servicing (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Loan Servicing | |
Summary of activity related to loan servicing | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Balance, beginning of period $ 2,421 $ 1,771 $ 2,643 $ 1,880 Additions 20 13 23 17 Amortization (134) (96) (318) (256) Fair value adjustments 44 376 3 423 Balance, end of period $ 2,351 $ 2,064 $ 2,351 $ 2,064 |
Summary of key economic assumptions | June 30, December 31, (dollars in thousands) 2023 2022 Fair value of servicing rights $ 2,351 $ 2,643 Weighted-average remaining term, years 19.0 20.5 Prepayment speeds 6.1 % 6.9 % Discount rate 11.0 % 10.5 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of right-of-use assets and lease liabilities | June 30, December 31, (dollars in thousands) 2023 2022 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 6,440 $ 5,419 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 6,746 $ 5,902 |
Schedule of weighted average remaining lease term and average discount rate | June 30, December 31, 2023 2022 Weighted-average remaining lease term, years Operating leases 4.5 5.0 Weighted-average discount rate Operating leases 3.6 % 3.1 % |
Schedule of lease costs and other lease information | Three months ended Six months ended June 30, June 30, (dollars in thousands) 2023 2022 2023 2022 Lease costs Operating lease cost $ 354 $ 414 $ 935 $ 825 Variable lease cost 474 150 699 363 Short-term lease cost 39 43 82 88 Finance lease cost Interest on lease liabilities — 1 — 5 Amortization of right-of-use assets — 29 — 58 Sublease income (60) (59) (119) (116) Net lease cost $ 807 $ 578 $ 1,597 $ 1,223 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 474 $ 393 $ 953 $ 784 Right-of-use assets obtained in exchange for new operating lease liabilities 2,029 — 2,286 — |
Schedule of future minimum payments for leases | Operating (dollars in thousands) Leases Twelve months ended June 30, 2024 $ 1,861 June 30, 2025 1,428 June 30, 2026 1,158 June 30, 2027 791 June 30, 2028 408 Thereafter 2,135 Total future minimum lease payments $ 7,781 Amounts representing interest (1,035) Total operating lease liabilities $ 6,746 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Deposits. | |
Schedule of components of deposits | June 30, December 31, (dollars in thousands) 2023 2022 Noninterest-bearing $ 715,534 $ 860,987 Interest-bearing Interest-bearing demand 753,194 706,275 Savings accounts 93,557 99,882 Money market savings 986,403 1,035,981 Time deposits 304,167 212,359 Total interest-bearing 2,137,321 2,054,497 Total deposits $ 2,852,855 $ 2,915,484 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Short-Term Borrowings | |
Schedule of short-term borrowings | June 30, December 31, (dollars in thousands) 2023 2022 Fed funds purchased $ 492,060 $ 153,080 FHLB short-term advances — 225,000 Total $ 492,060 $ 378,080 |
Schedule of additional information related to short term borrowings | Three months ended June 30, (dollars in thousands) 2023 2022 Fed funds purchased Balance as of end of period $ 492,060 $ 117,350 Average daily balance 360,033 81,506 Maximum month-end balance 492,060 117,350 Weighted-average rate During period 5.31 % 1.18 % End of period 5.35 % 1.44 % FHLB short-term advances Balance as of end of period $ — $ 125,000 Average daily balance — 9,615 Maximum month-end balance — 125,000 Weighted-average rate During period N/A % 1.59 % End of period N/A % 1.80 % Six months ended June 30, (dollars in thousands) 2023 2022 Fed funds purchased Balance as of end of period $ 492,060 $ 117,350 Average daily balance 325,303 40,978 Maximum month-end balance 492,060 117,350 Weighted-average rate During period 5.10 % 1.18 % End of period 5.35 % 1.44 % FHLB short-term advances Balance as of end of period $ — $ 125,000 Average daily balance 39,779 4,834 Maximum month-end balance 225,000 125,000 Weighted-average rate During period 4.69 % 1.59 % End of period N/A % 1.80 % |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Long-Term Debt. | |
Schedule of long-term debt | June 30, 2023 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,560 Three-month LIBOR + 3.10% 8.64 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,340 Three-month LIBOR + 1.80% 7.35 % 9/15/2036 9/15/2011 Total long-term debt $ 60,310 $ 58,900 December 31, 2022 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 50,000 Fixed 3.50 % 3/30/2031 3/31/2026 Junior subordinated debenture (Trust I) 4,124 3,537 Three-month LIBOR + 3.10% 7.82 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,306 Three-month LIBOR + 1.80% 6.57 % 9/15/2036 9/15/2011 Total long-term debt $ 60,310 $ 58,843 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Financial Instruments with Off-Balance Sheet Risk | |
Schedule of the contractual amounts of the Company's exposure to off-balance sheet risk | June 30, December 31, (dollars in thousands) 2023 2022 Commitments to extend credit $ 786,451 $ 806,431 Standby letters of credit 9,784 13,089 Total $ 796,235 $ 819,520 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation | |
Schedule of stock plan activity | Six months ended June 30, 2023 2022 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 238,929 $ 23.66 260,850 $ 21.04 Granted 82,810 20.85 94,592 19.01 Vested (91,867) 21.29 (107,113) 19.19 Forfeited or cancelled (22,204) 21.39 (10,624) 23.71 Outstanding at end of period 207,668 $ 23.83 237,705 $ 20.95 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Schedule of components of income tax expense | Three months ended June 30, 2023 2022 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 2,444 21.0 % $ 2,524 21.0 % Tax effect of: Tax exempt income (156) (1.3) % (122) (1.0) % State income taxes, net of federal benefits 485 4.1 % 531 4.4 % Nondeductible items and other (238) (2.0) % (208) (1.7) % Applicable income taxes $ 2,535 21.8 % $ 2,725 22.7 % Six months ended June 30, 2023 2022 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,648 21.0 % $ 5,269 21.0 % Tax effect of: Tax exempt income (300) (1.4) % (239) (1.0) % State income taxes, net of federal benefits 946 4.3 % 1,109 4.4 % Nondeductible items and other (453) (2.0) % (526) (2.1) % Applicable income taxes $ 4,841 21.9 % $ 5,613 22.3 % |
Tax Credit Investments (Tables)
Tax Credit Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Tax Credit Investments. | |
Schedule of tax credits | June 30, 2023 December 31, 2022 (dollars in thousands) Investment Unfunded Commitment Investment Unfunded Commitment Investment Accounting Method Low income housing tax credit Proportional amortization $ 17,906 $ 15,202 $ 17,906 $ 15,559 Total $ 17,906 $ 15,202 $ 17,906 $ 15,559 |
Summary of amortization expense and tax benefit | Three months ended June 30, 2023 2022 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 278 $ (509) $ 111 $ (156) Total $ 278 $ (509) $ 111 $ (156) (1) The amortization expense for low income housing tax credits were included in the income tax expense. (2) All of the tax benefits recognized were included in income tax expense. Six months ended June 30, 2023 2022 Amortization Tax Benefit Amortization Tax Benefit (dollars in thousands) Expense (1) Recognized (2) Expense (1) Recognized (2) Low income housing tax credit $ 639 $ (735) $ 111 $ (156) Total $ 639 $ (735) $ 111 $ (156) (1) The amortization expense for low income housing tax credits were included in income tax expense. (2) All of the tax benefits recognized were included in income tax expense. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting | |
Schedule of key metrics related to segments | Three months ended June 30, 2023 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 22,681 $ — $ — $ 218 $ (665) $ 22,234 Provision for credit losses — — — — — — Noninterest income 1,336 15,890 5,449 2,905 198 25,778 Intercompany revenue (expense) (2,933) 1,331 (257) 286 1,573 — Noninterest expense 11,548 8,290 2,100 3,882 10,553 36,373 Net income (loss) before taxes $ 9,536 $ 8,931 $ 3,092 $ (473) $ (9,447) $ 11,639 Six months ended June 30, 2023 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 46,832 $ — $ — $ 380 $ (1,320) $ 45,892 Provision for credit losses 550 — — — — 550 Noninterest income 4,158 31,372 10,644 4,622 235 51,031 Intercompany revenue (expense) (5,980) 2,672 (425) 512 3,221 — Noninterest expense 25,503 15,600 3,613 6,667 22,859 74,242 Net income (loss) before taxes $ 18,957 $ 18,444 $ 6,606 $ (1,153) $ (20,723) $ 22,131 Three months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 22,779 $ — $ — $ 558 $ (561) $ 22,776 Provision for credit losses — — — — — — Noninterest income 1,341 16,293 5,548 6,038 6 29,226 Intercompany revenue (expense) (3,829) 1,095 (337) 1,334 1,737 Noninterest expense 11,790 7,693 1,293 6,543 12,665 39,984 Net income (loss) before taxes $ 8,501 $ 9,695 $ 3,918 $ 1,387 $ (11,483) $ 12,018 Six months ended June 30, 2022 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income (loss) $ 44,304 $ — $ — $ 1,267 $ (1,122) $ 44,449 Provision for credit losses — — — — — — Noninterest income 2,879 33,939 10,874 10,969 35 58,696 Intercompany revenue (expense) (4,988) 692 (851) 1,828 3,319 — Noninterest expense 23,325 15,722 2,617 12,057 24,334 78,055 Net income (loss) before taxes $ 18,870 $ 18,909 $ 7,406 $ 2,007 $ (22,102) $ 25,090 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share | |
Schedule of basic and diluted earnings per share | Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2023 2022 2023 2022 Net income $ 9,104 $ 9,293 $ 17,290 $ 19,477 Dividends and undistributed earnings allocated to participating securities 62 101 120 225 Net income available to common shareholders $ 9,042 $ 9,192 $ 17,170 $ 19,252 Weighted-average common shares outstanding for basic earnings per share 20,033 17,297 20,030 17,271 Dilutive effect of stock-based awards 208 235 213 246 Weighted-average common shares outstanding for diluted earnings per share 20,241 17,532 20,243 17,517 Earnings per common share: Basic earnings per common share $ 0.45 $ 0.53 $ 0.86 $ 1.11 Diluted earnings per common share $ 0.45 $ 0.52 $ 0.85 $ 1.10 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments | |
Schedule of amounts recorded in the Company's consolidated balance sheets for derivatives not designated as hedging instruments | June 30, 2023 December 31, 2022 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Designated as hedging instruments: Consolidated Balance Sheet Location Fair value hedges: Interest rate swaps Other assets $ 2,069 $ 200,000 $ — $ — Total derivatives designated as hedging instruments $ 2,069 $ 200,000 $ — $ — Not designated as hedging instruments: Asset Derivatives Interest rate swaps Other assets $ 6,049 $ 42,716 $ 6,277 $ 43,430 Interest rate lock commitments Other assets 523 34,602 121 10,462 Forward loan sales commitments Other assets 71 4,193 7 351 To-be-announced mortgage backed securities Other assets 210 68,750 — — Total asset derivatives not designated as hedging instruments $ 6,853 $ 150,261 $ 6,405 $ 54,243 Liability Derivatives Interest rate swaps Accrued expenses and other liabilities $ 6,049 $ 42,716 $ 6,277 $ 43,430 To-be-announced mortgage backed securities Accrued expenses and other liabilities — — 26 25,750 Total liability derivatives not designated as hedging instruments $ 6,049 $ 42,716 $ 6,303 $ 69,180 |
Schedule of hedge accounting included in the carrying amount of hedged assets and liabilities in fair value hedging relationships: | June 30, 2023 Cumulative Fair Value Hedging Adjustment in the Carrying Amount Carrying Amount of of Hedge Assets/ Hedged Assets/ Liabilities Liabilities (dollars in thousands) Mortgage-backed securities Residential agency $ 284,584 $ (2,073) Total $ 284,584 $ (2,073) |
Schedule of gain (loss) recognized on derivatives instruments | (dollars in thousands) Three months ended June 30, Six months ended June 30, Derivatives designated as hedging instruments Consolidated Statements of Income Location 2023 2022 2023 2022 Interest rate swaps Interest income $ — $ — $ — $ — Total gain (loss) from derivatives designated as hedging instruments $ — $ — $ — $ — Derivatives not designated as hedging instruments Interest rate swaps Other noninterest income $ — $ 1 $ — $ 1 Interest rate lock commitments Mortgage banking 89 563 429 (147) Forward loan sales commitments Mortgage banking 70 542 64 52 To-be-announced mortgage backed securities Mortgage banking 302 1,246 129 3,749 Total gain (loss) from derivatives not designated as hedging instruments $ 461 $ 2,352 $ 622 $ 3,655 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Regulatory Matters | |
Schedule of Bank's actual capital amounts and ratios | June 30, 2023 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 395,276 13.30 % $ 133,728 4.50 % $ N/A N/A Bank 383,663 12.93 % 133,585 4.50 % 192,895 6.50 % Tier 1 capital to risk weighted assets . Consolidated 404,176 13.60 % 178,304 6.00 % N/A N/A Bank 383,663 12.93 % 178,113 6.00 % 237,409 8.00 % Total capital to risk weighted assets Consolidated 490,091 16.49 % 237,738 8.00 % N/A N/A Bank 419,578 14.14 % 237,486 8.00 % 296,762 10.00 % Tier 1 capital to average assets Consolidated 404,176 11.15 % 144,987 4.00 % N/A N/A Bank 383,663 10.59 % 144,890 4.00 % 181,112 5.00 % December 31, 2022 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 389,335 13.39 % $ 130,862 4.50 % $ N/A N/A Bank 370,749 12.76 % 130,791 4.50 % 188,920 6.50 % Tier 1 capital to risk weighted assets . Consolidated 398,179 13.69 % 174,482 6.00 % N/A N/A Bank 370,749 12.76 % 174,388 6.00 % 232,517 8.00 % Total capital to risk weighted assets Consolidated 479,325 16.48 % 232,643 8.00 % N/A N/A Bank 401,895 13.83 % 232,517 8.00 % 290,646 10.00 % Tier 1 capital to average assets Consolidated 398,179 11.25 % 141,514 4.00 % N/A N/A Bank 370,749 10.48 % 141,440 4.00 % 176,800 5.00 % |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value of Assets and Liabilities | |
Summary of balances of the assets and liabilities measured at estimated fair value on a recurring basis | June 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 2,906 $ — $ 2,906 Mortgage backed securities Residential agency — 558,456 — 558,456 Commercial — 60,909 — 60,909 Asset backed securities — 28 — 28 Corporate bonds — 55,155 — 55,155 Total available-for-sale investment securities $ — $ 677,454 $ — $ 677,454 Other assets Derivatives $ — $ 6,853 $ — $ 6,853 Other liabilities Derivatives $ — $ 8,118 $ — $ 8,118 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale U.S. treasury and government agencies $ — $ 3,520 $ — $ 3,520 Mortgage backed securities Residential agency — 587,679 — 587,679 Commercial — 63,558 — 63,558 Asset backed securities — 34 — 34 Corporate bonds — 62,533 — 62,533 Total available-for-sale investment securities $ — $ 717,324 $ — $ 717,324 Other assets Derivatives $ — $ 6,405 $ — $ 6,405 Other liabilities Derivatives $ — $ 6,303 $ — $ 6,303 |
Schedule of net impairment losses related to nonrecurring estimated fair value measurements of certain assets | June 30, 2023 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 20,893 $ — $ 20,893 $ — Individually evaluated — 2,390 2,390 288 Servicing rights — 2,351 2,351 — December 31, 2022 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 9,488 $ — $ 9,488 $ — Individually evaluated — 2,813 2,813 954 Foreclosed assets — 30 30 — Servicing rights — 2,643 2,643 — |
Schedule of valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values | June 30, 2023 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Individually evaluated Appraisal value Property specific adjustment $ 2,390 N/A N/A Foreclosed assets Appraisal value Property specific adjustment — N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,351 83-134 101 Discount rate 11.0 % 11.0 % December 31, 2022 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Individually evaluated Appraisal value Property specific adjustment $ 2,813 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 30 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,643 103-137 115 Discount rate 10.5 % 10.5 % |
Summary of estimated fair values and related carrying or notional amounts, of the Company's financial instruments | June 30, 2023 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 65,471 $ 65,471 $ — $ — $ 65,471 Investment securities held-to-maturity 308,416 — 260,710 — 260,710 Loans, net 2,497,826 — — 2,403,819 2,403,819 Accrued interest receivable 13,587 13,587 — — 13,587 Bank-owned life insurance 32,793 — 32,793 — 32,793 Financial Liabilities Noninterest-bearing deposits $ 715,534 $ — $ 715,534 $ — $ 715,534 Interest-bearing deposits 1,833,154 — 1,833,154 — 1,833,154 Time deposits 304,167 — — 300,375 300,375 Short-term borrowings 492,060 492,060 — — 492,060 Long-term debt 58,900 — 56,008 — 56,008 Accrued interest payable 2,960 2,960 — — 2,960 December 31, 2022 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 58,242 $ 58,242 $ — $ — $ 58,242 Investment securities held-to-maturity 321,902 — 270,912 — 270,912 Loans, net 2,412,848 — — 2,311,956 2,311,956 Accrued interest receivable 12,869 12,869 — — 12,869 Bank-owned life insurance 33,991 — 33,991 — 33,991 Financial Liabilities Noninterest-bearing deposits $ 860,987 $ — $ 860,987 $ — $ 860,987 Interest-bearing deposits 1,842,138 — 1,842,138 — 1,842,138 Time deposits 212,359 — — 208,550 208,550 Short-term borrowings 378,080 378,080 — — 378,080 Long-term debt 58,843 — 56,116 — 56,116 Accrued interest payable 2,426 2,426 — — 2,426 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Significant Accounting Policies | |
Number of operating segments | 4 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Jun. 30, 2023 USD ($) | |
New Accounting Pronouncements | ||
Retained earnings | $ 280,426 | $ 285,839 |
Number of loans experience financial difficulty | loan | 0 | |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | ||
New Accounting Pronouncements | ||
Retained earnings | $ (4,500) |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements - Impact of ASC (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Investment Securities | ||||||
Allowance for credit losses on investments | $ 218 | |||||
Loans | ||||||
Loans | 2,533,522 | $ 2,443,994 | ||||
Allowance for credit losses | 35,696 | $ 35,102 | 31,146 | $ 31,373 | $ 31,713 | $ 31,572 |
Unallocated | ||||||
Loans | ||||||
Allowance for credit losses | 1,727 | 901 | 268 | 1,052 | 457 | 1,180 |
Commercial | ||||||
Loans | ||||||
Loans | 1,634,109 | 1,563,356 | ||||
Allowance for credit losses | 24,424 | 24,550 | 23,292 | 22,045 | 22,551 | 22,084 |
Commercial | Commercial and industrial | ||||||
Loans | ||||||
Loans | 551,860 | 583,876 | ||||
Allowance for credit losses | 7,813 | 7,800 | 9,158 | 10,333 | 9,795 | 8,925 |
Commercial | Real estate construction | ||||||
Loans | ||||||
Loans | 78,428 | 97,810 | ||||
Allowance for credit losses | 3,646 | 4,406 | 1,446 | 878 | 810 | 783 |
Commercial | Commercial real estate | ||||||
Loans | ||||||
Loans | 1,003,821 | 881,670 | ||||
Allowance for credit losses | 12,965 | 12,344 | 12,688 | 10,834 | 11,946 | 12,376 |
Consumer | ||||||
Loans | ||||||
Loans | 899,413 | 880,638 | ||||
Allowance for credit losses | 9,545 | 9,651 | 7,586 | 8,276 | 8,705 | 8,308 |
Consumer | Other revolving and installment | ||||||
Loans | ||||||
Loans | 34,552 | 50,608 | ||||
Allowance for credit losses | 293 | 314 | 528 | 634 | 644 | 481 |
Real estate first mortgage | Consumer | Residential | ||||||
Loans | ||||||
Loans | 707,630 | 679,551 | ||||
Allowance for credit losses | 7,901 | 8,060 | 5,769 | 6,175 | 6,661 | 6,532 |
Real estate junior lien | Consumer | Residential | ||||||
Loans | ||||||
Loans | 157,231 | 150,479 | ||||
Allowance for credit losses | 1,351 | $ 1,277 | 1,289 | $ 1,467 | $ 1,400 | $ 1,295 |
Unfunded commitments | ||||||
Liabilities [Abstract] | ||||||
Off balance sheet liability, Allowance for loan losses | 5,100 | 3,244 | ||||
Mortgage backed securities - Residential agency | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | $ 103 | |||||
Accounting Standards Update 2016-13 | Unfunded commitments | ||||||
Liabilities [Abstract] | ||||||
Off balance sheet liability, Allowance for loan losses | 1,900 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | 172 | |||||
Loans | ||||||
Allowance for credit losses on loans and investments securities | 35,175 | |||||
Allowance for credit losses | 35,003 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Unallocated | ||||||
Loans | ||||||
Allowance for credit losses | 984 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Commercial | ||||||
Loans | ||||||
Allowance for credit losses | 24,524 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Commercial | Commercial and industrial | ||||||
Loans | ||||||
Allowance for credit losses | 8,296 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Commercial | Real estate construction | ||||||
Loans | ||||||
Allowance for credit losses | 3,964 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Commercial | Commercial real estate | ||||||
Loans | ||||||
Allowance for credit losses | 12,264 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Consumer | ||||||
Loans | ||||||
Allowance for credit losses | 9,495 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Consumer | Other revolving and installment | ||||||
Loans | ||||||
Allowance for credit losses | 424 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Real estate first mortgage | Consumer | Residential | ||||||
Loans | ||||||
Allowance for credit losses | 7,849 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Real estate junior lien | Consumer | Residential | ||||||
Loans | ||||||
Allowance for credit losses | 1,222 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Unfunded commitments | ||||||
Liabilities [Abstract] | ||||||
Off balance sheet liability, Allowance for loan losses | 5,159 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Obligations of state and political agencies | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | 110 | |||||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Mortgage backed securities - Residential agency | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | 62 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | 172 | |||||
Loans | ||||||
Allowance for credit losses on loans and investments securities | 4,029 | |||||
Allowance for credit losses | 3,857 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Unallocated | ||||||
Loans | ||||||
Allowance for credit losses | 716 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Commercial | ||||||
Loans | ||||||
Allowance for credit losses | 1,232 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Commercial | Commercial and industrial | ||||||
Loans | ||||||
Allowance for credit losses | (862) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Commercial | Real estate construction | ||||||
Loans | ||||||
Allowance for credit losses | 2,518 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Commercial | Commercial real estate | ||||||
Loans | ||||||
Allowance for credit losses | (424) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Consumer | ||||||
Loans | ||||||
Allowance for credit losses | 1,909 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Consumer | Other revolving and installment | ||||||
Loans | ||||||
Allowance for credit losses | (104) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Real estate first mortgage | Consumer | Residential | ||||||
Loans | ||||||
Allowance for credit losses | 2,080 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Real estate junior lien | Consumer | Residential | ||||||
Loans | ||||||
Allowance for credit losses | (67) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Unfunded commitments | ||||||
Liabilities [Abstract] | ||||||
Off balance sheet liability, Allowance for loan losses | 1,915 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Obligations of state and political agencies | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | 110 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Mortgage backed securities - Residential agency | ||||||
Investment Securities | ||||||
Allowance for credit losses on investments | $ 62 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Investment securities available-for-sale | ||
Amortized Cost | $ 814,405 | $ 849,567 |
Unrealized Gains | 12 | 21 |
Unrealized Losses | (136,963) | (132,264) |
Fair Value | 677,454 | 717,324 |
Amortized Cost | 308,634 | 321,902 |
Unrealized Losses | (47,924) | (50,990) |
Allowance for Credit Losses | 218 | |
Fair Value | 260,710 | 270,912 |
Amortized Cost | 1,123,039 | 1,171,469 |
Unrealized Gains | 12 | 21 |
Unrealized Losses | (184,887) | (183,254) |
Allowance for Credit Losses | 218 | |
Fair Value | 938,164 | 988,236 |
Available-for-Sale accrued interest receivable | 2,000 | 1,900 |
Held-to-Maturity accrued interest receivable | 1,400 | 1,500 |
U. S. Treasury and agencies | ||
Investment securities available-for-sale | ||
Amortized Cost | 2,915 | 3,518 |
Unrealized Gains | 11 | 19 |
Unrealized Losses | (20) | (17) |
Fair Value | 2,906 | 3,520 |
Mortgage backed securities - Residential agency | ||
Investment securities available-for-sale | ||
Amortized Cost | 673,586 | 705,845 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | (115,131) | (118,168) |
Fair Value | 558,456 | 587,679 |
Amortized Cost | 177,618 | 184,115 |
Unrealized Losses | (32,477) | (33,254) |
Allowance for Credit Losses | 103 | |
Fair Value | 145,141 | 150,861 |
Mortgage backed securities - Commercial | ||
Investment securities available-for-sale | ||
Amortized Cost | 68,379 | 70,669 |
Unrealized Losses | (7,470) | (7,111) |
Fair Value | 60,909 | 63,558 |
Asset backed securities | ||
Investment securities available-for-sale | ||
Amortized Cost | 28 | 34 |
Fair Value | 28 | 34 |
Corporate bonds | ||
Investment securities available-for-sale | ||
Amortized Cost | 69,497 | 69,501 |
Unrealized Losses | (14,342) | (6,968) |
Fair Value | 55,155 | 62,533 |
Obligations of state and political agencies. | ||
Investment securities available-for-sale | ||
Amortized Cost | 131,016 | 137,787 |
Unrealized Losses | (15,447) | (17,736) |
Allowance for Credit Losses | 115 | |
Fair Value | $ 115,569 | $ 120,051 |
Investment Securities - Gross u
Investment Securities - Gross unrealized losses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | $ (995) | $ (19,761) |
Fair value less than 12 months | 10,274 | 178,719 |
Unrealized losses over 12 months | (135,968) | (112,503) |
Fair value over 12 months | 664,644 | 535,024 |
Total Unrealized losses | (136,963) | (132,264) |
Total Fair value | 674,918 | 713,743 |
Held-to-maturity investment securities | ||
Unrealized losses less than 12 months | (3,336) | |
Fair value less than 12 months | 18,788 | |
Unrealized losses over 12 months | (47,654) | |
Fair value over 12 months | 249,623 | |
Total Unrealized losses | (50,990) | |
Total Fair value | 268,411 | |
Unrealized losses less than 12 months | (23,097) | |
Fair value less than 12 months | 197,507 | |
Unrealized losses over 12 months | (160,157) | |
Fair value over 12 months | 784,647 | |
Total Unrealized losses | (183,254) | |
Total Fair value | 982,154 | |
U. S. Treasury and agencies | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (20) | (17) |
Fair value less than 12 months | 420 | 509 |
Total Unrealized losses | (20) | (17) |
Total Fair value | 420 | 509 |
Mortgage backed securities - Residential agency | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (76) | (10,457) |
Fair value less than 12 months | 2,148 | 79,693 |
Unrealized losses over 12 months | (115,055) | (107,711) |
Fair value over 12 months | 556,258 | 507,418 |
Total Unrealized losses | (115,131) | (118,168) |
Total Fair value | 558,406 | 587,111 |
Held-to-maturity investment securities | ||
Unrealized losses over 12 months | (33,254) | |
Fair value over 12 months | 150,861 | |
Total Unrealized losses | (33,254) | |
Total Fair value | 150,861 | |
Mortgage backed securities - Commercial | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (32) | (4,835) |
Fair value less than 12 months | 570 | 50,437 |
Unrealized losses over 12 months | (7,438) | (2,276) |
Fair value over 12 months | 60,339 | 13,120 |
Total Unrealized losses | (7,470) | (7,111) |
Total Fair value | 60,909 | 63,557 |
Asset backed securities | ||
Investment securities available-for-sale | ||
Fair value less than 12 months | 27 | 32 |
Fair value over 12 months | 1 | 2 |
Total Fair value | 28 | 34 |
Corporate bonds | ||
Investment securities available-for-sale | ||
Unrealized losses less than 12 months | (867) | (4,452) |
Fair value less than 12 months | 7,109 | 48,048 |
Unrealized losses over 12 months | (13,475) | (2,516) |
Fair value over 12 months | 48,046 | 14,484 |
Total Unrealized losses | (14,342) | (6,968) |
Total Fair value | $ 55,155 | 62,532 |
Obligations of state and political agencies. | ||
Held-to-maturity investment securities | ||
Unrealized losses less than 12 months | (3,336) | |
Fair value less than 12 months | 18,788 | |
Unrealized losses over 12 months | (14,400) | |
Fair value over 12 months | 98,762 | |
Total Unrealized losses | (17,736) | |
Total Fair value | $ 117,550 |
Investment Securities - Amortiz
Investment Securities - Amortized cost and estimated fair value (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Value | ||
Due within one year or less | $ 6,098 | |
Due after one year through five years | 44,352 | |
Due after five years through ten years | 67,751 | |
Due after 10 years | 12,815 | |
Held-to-maturity securities carrying value | 131,016 | |
Amortized Cost | 308,634 | $ 321,902 |
Estimated Fair Value | ||
Due within one year or less | 5,946 | |
Due after one year through five years | 40,512 | |
Due after five years through ten years | 58,000 | |
Due after 10 years | 11,111 | |
Total investment securities | 115,569 | |
Debt Securities, Held-to-maturity, Fair Value, Total | 260,710 | 270,912 |
Amortized Cost | ||
Due after one year through five years | 17,461 | |
Due after five years through ten years | 78,734 | |
Due after 10 years | 44,624 | |
Total investment securities available-for-sale | 140,819 | |
Total investment securities, Amortized Cost | 814,405 | |
Fair Value | ||
Due after one year through five years | 16,096 | |
Due after five years through ten years | 63,524 | |
Due after 10 years | 39,378 | |
Total investment securities available-for-sale | 118,998 | |
Debt Securities, Available-for-sale, Total | 677,454 | 717,324 |
Mortgage backed securities - Residential agency | ||
Carrying Value | ||
Mortgage-backed securities, Carrying value | 177,618 | |
Amortized Cost | 177,618 | 184,115 |
Estimated Fair Value | ||
Mortgage-backed securities, Fair value | 145,141 | |
Debt Securities, Held-to-maturity, Fair Value, Total | 145,141 | 150,861 |
Amortized Cost | ||
Mortgage-backed securities, Amortized Cost | 673,586 | |
Fair Value | ||
Mortgage-backed securities, Fair value | 558,456 | |
Debt Securities, Available-for-sale, Total | $ 558,456 | $ 587,679 |
Investment Securities - Pledged
Investment Securities - Pledged (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Investment Securities | |||||
Investment securities with carrying value pledged to secure deports or other | $ 388 | $ 388 | $ 260.7 | ||
Proceeds from sales or calls of investment securities available-for-sale | $ 0 | $ 0 | $ 0 | $ 0 |
Investment Securities - Proceed
Investment Securities - Proceeds from the call of held-to-maturity investment securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Investment Securities | |||
Proceeds | $ 211 | $ 126 | $ 726 |
Investment Securities - Carryin
Investment Securities - Carrying value (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Investment Securities | ||
Federal Reserve | $ 4,623 | $ 4,595 |
FHLB | $ 24,382 | $ 19,362 |
Investment Securities - Visa Cl
Investment Securities - Visa Class B Restricted Shares (Details) - Visa $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | |
Common Class A | ||
Securities | ||
Investment shares owned, if converted | 11,010 | 11,010 |
Common Class B | ||
Securities | ||
Conversion ratio | 1.5902 | |
Investment shares owned | 6,924 | 6,924 |
Cost basis | $ | $ 0 | $ 0 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses - Loans outstanding by portfolio segment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Loans and Allowance for Loan Losses | ||
Carrying amount | $ 2,533,522 | $ 2,443,994 |
Deferred loan fees and costs | 800 | 900 |
Accrued interest receivable | 9,800 | 9,800 |
MPB | ||
Loans and Allowance for Loan Losses | ||
Unearned discount | 6,200 | |
Commercial | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 1,634,109 | 1,563,356 |
Consumer | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 899,413 | 880,638 |
Commercial and industrial | Commercial | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 551,860 | 583,876 |
Real estate construction | Commercial | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 78,428 | 97,810 |
Residential | Consumer | Real estate first mortgage | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 707,630 | 679,551 |
Residential | Consumer | Real estate junior lien | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 157,231 | 150,479 |
Commercial real estate | Commercial | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | 1,003,821 | 881,670 |
Other revolving and installment | Consumer | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | $ 34,552 | $ 50,608 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Past due aging analysis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Past due aging analysis of loans | ||
Loans | $ 2,533,522 | $ 2,443,994 |
Nonaccrual | 2,233 | 3,794 |
30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 10,988 | 4,963 |
90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 347 | |
Current | ||
Past due aging analysis of loans | ||
Loans | 2,519,954 | 2,435,237 |
Commercial | ||
Past due aging analysis of loans | ||
Loans | 1,634,109 | 1,563,356 |
Nonaccrual | 1,428 | 3,074 |
Commercial | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 8,710 | 2,794 |
Commercial | Current | ||
Past due aging analysis of loans | ||
Loans | 1,623,971 | 1,557,488 |
Commercial | Commercial and industrial | ||
Past due aging analysis of loans | ||
Loans | 551,860 | 583,876 |
Nonaccrual | 381 | 1,162 |
Commercial | Commercial and industrial | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 8,710 | 2,426 |
Commercial | Commercial and industrial | Current | ||
Past due aging analysis of loans | ||
Loans | 542,769 | 580,288 |
Commercial | Real estate construction | ||
Past due aging analysis of loans | ||
Loans | 78,428 | 97,810 |
Nonaccrual | 151 | 440 |
Commercial | Real estate construction | Current | ||
Past due aging analysis of loans | ||
Loans | 78,277 | 97,370 |
Commercial | Commercial real estate | ||
Past due aging analysis of loans | ||
Loans | 1,003,821 | 881,670 |
Nonaccrual | 896 | 1,472 |
Commercial | Commercial real estate | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 368 | |
Commercial | Commercial real estate | Current | ||
Past due aging analysis of loans | ||
Loans | 1,002,925 | 879,830 |
Consumer | ||
Past due aging analysis of loans | ||
Loans | 899,413 | 880,638 |
Nonaccrual | 805 | 720 |
Consumer | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 2,278 | 2,169 |
Consumer | 90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 347 | |
Consumer | Current | ||
Past due aging analysis of loans | ||
Loans | 895,983 | 877,749 |
Consumer | Residential | Real estate first mortgage | ||
Past due aging analysis of loans | ||
Loans | 707,630 | 679,551 |
Nonaccrual | 299 | 535 |
Consumer | Residential | Real estate first mortgage | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 2,027 | 1,545 |
Consumer | Residential | Real estate first mortgage | 90 Days or More Past Due | ||
Past due aging analysis of loans | ||
Loans | 347 | |
Consumer | Residential | Real estate first mortgage | Current | ||
Past due aging analysis of loans | ||
Loans | 704,957 | 677,471 |
Consumer | Residential | Real estate junior lien | ||
Past due aging analysis of loans | ||
Loans | 157,231 | 150,479 |
Nonaccrual | 500 | 184 |
Consumer | Residential | Real estate junior lien | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 105 | 377 |
Consumer | Residential | Real estate junior lien | Current | ||
Past due aging analysis of loans | ||
Loans | 156,626 | 149,918 |
Consumer | Other revolving and installment | ||
Past due aging analysis of loans | ||
Loans | 34,552 | 50,608 |
Nonaccrual | 6 | 1 |
Consumer | Other revolving and installment | 30 - 89 Days Past Due | ||
Past due aging analysis of loans | ||
Loans | 146 | 247 |
Consumer | Other revolving and installment | Current | ||
Past due aging analysis of loans | ||
Loans | $ 34,400 | $ 50,360 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Amortized cost basis of loans on nonaccrual status loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | $ 1,063 | |
Nonaccrual | 2,233 | $ 3,794 |
90 Days or More Past Due | 347 | |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 270 | |
Nonaccrual | 1,428 | 3,074 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 793 | |
Nonaccrual | 805 | 720 |
90 Days or More Past Due | 347 | |
Commercial and industrial | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 119 | |
Nonaccrual | 381 | 1,162 |
Real estate construction | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 151 | |
Nonaccrual | 151 | 440 |
Commercial real estate | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 896 | 1,472 |
Other revolving and installment | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual | 6 | 1 |
Real estate first mortgage | Residential | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 293 | |
Nonaccrual | 299 | 535 |
90 Days or More Past Due | 347 | |
Real estate junior lien | Residential | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with no Allowance for Credit Losses | 500 | |
Nonaccrual | $ 500 | $ 184 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Pledged (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Loans and Allowance for Loan Losses | ||
Carrying amount | $ 2,533,522 | $ 2,443,994 |
Pledged | ||
Loans and Allowance for Loan Losses | ||
Carrying amount | $ 1,600,000 | $ 1,500,000 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Amortized cost basis of loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
2023 | $ 241,666 | |
2022 | 674,766 | |
2021 | 487,679 | |
2020 | 369,186 | |
2019 | 204,094 | |
Prior | 306,425 | |
Loans amortized cost basis | 249,706 | |
Loans | 2,533,522 | $ 2,443,994 |
Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 241,666 | |
2022 | 669,543 | |
2021 | 486,378 | |
2020 | 360,723 | |
2019 | 199,812 | |
Prior | 303,312 | |
Loans amortized cost basis | 232,090 | |
Loans | 2,493,524 | 2,408,709 |
Special Mention | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 22,032 | |
Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | 5,223 | |
2021 | 1,301 | |
2020 | 8,463 | |
2019 | 4,282 | |
Prior | 3,113 | |
Loans amortized cost basis | 17,616 | |
Loans | 39,998 | 13,253 |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,634,109 | 1,563,356 |
Commercial | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,529,512 | |
Commercial | Special Mention | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 21,969 | |
Commercial | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 11,875 | |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 899,413 | 880,638 |
Consumer | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 879,197 | |
Consumer | Special Mention | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 63 | |
Consumer | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 1,378 | |
Commercial and industrial | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 72,021 | |
2022 | 129,710 | |
2021 | 82,242 | |
2020 | 81,337 | |
2019 | 40,796 | |
Prior | 25,671 | |
Loans amortized cost basis | 120,083 | |
Loans | 551,860 | 583,876 |
Commercial and industrial | Commercial | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 72,021 | |
2022 | 124,487 | |
2021 | 81,827 | |
2020 | 72,874 | |
2019 | 40,610 | |
Prior | 24,848 | |
Loans amortized cost basis | 102,467 | |
Loans | 519,134 | 558,694 |
Commercial and industrial | Commercial | Special Mention | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 21,969 | |
Commercial and industrial | Commercial | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | 5,223 | |
2021 | 415 | |
2020 | 8,463 | |
2019 | 186 | |
Prior | 823 | |
Loans amortized cost basis | 17,616 | |
Loans | 32,726 | 3,213 |
Real estate construction | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 6,263 | |
2022 | 37,948 | |
2021 | 19,315 | |
2020 | 4,440 | |
2019 | 9,150 | |
Prior | 1,006 | |
Loans amortized cost basis | 306 | |
Loans | 78,428 | 97,810 |
Real estate construction | Commercial | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 6,263 | |
2022 | 37,948 | |
2021 | 19,315 | |
2020 | 4,440 | |
2019 | 9,150 | |
Prior | 1,006 | |
Loans amortized cost basis | 306 | |
Loans | 78,428 | 97,548 |
Real estate construction | Commercial | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 262 | |
Residential | Real estate first mortgage | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 40,090 | |
2022 | 202,056 | |
2021 | 226,785 | |
2020 | 111,801 | |
2019 | 34,894 | |
Prior | 91,788 | |
Loans amortized cost basis | 216 | |
Loans | 707,630 | 679,551 |
Residential | Real estate first mortgage | Consumer | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 40,090 | |
2022 | 202,056 | |
2021 | 226,785 | |
2020 | 111,801 | |
2019 | 34,894 | |
Prior | 91,680 | |
Loans amortized cost basis | 216 | |
Loans | 707,522 | 678,743 |
Residential | Real estate first mortgage | Consumer | Special Mention | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | 63 | |
Residential | Real estate first mortgage | Consumer | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Prior | 108 | |
Loans | 108 | 745 |
Residential | Real estate junior lien | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 13,552 | |
2022 | 17,683 | |
2021 | 6,751 | |
2020 | 4,936 | |
2019 | 1,947 | |
Prior | 7,296 | |
Loans amortized cost basis | 105,066 | |
Loans | 157,231 | 150,479 |
Residential | Real estate junior lien | Consumer | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 13,552 | |
2022 | 17,683 | |
2021 | 6,751 | |
2020 | 4,936 | |
2019 | 1,947 | |
Prior | 6,939 | |
Loans amortized cost basis | 105,066 | |
Loans | 156,874 | 149,847 |
Residential | Real estate junior lien | Consumer | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Prior | 357 | |
Loans | 357 | 632 |
Commercial real estate | Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 105,650 | |
2022 | 278,338 | |
2021 | 151,119 | |
2020 | 160,601 | |
2019 | 114,801 | |
Prior | 178,627 | |
Loans amortized cost basis | 14,685 | |
Loans | 1,003,821 | 881,670 |
Commercial real estate | Commercial | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 105,650 | |
2022 | 278,338 | |
2021 | 150,233 | |
2020 | 160,601 | |
2019 | 110,705 | |
Prior | 176,802 | |
Loans amortized cost basis | 14,685 | |
Loans | 997,014 | 873,270 |
Commercial real estate | Commercial | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
2021 | 886 | |
2019 | 4,096 | |
Prior | 1,825 | |
Loans | 6,807 | 8,400 |
Other revolving and installment | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 4,090 | |
2022 | 9,031 | |
2021 | 1,467 | |
2020 | 6,071 | |
2019 | 2,506 | |
Prior | 2,037 | |
Loans amortized cost basis | 9,350 | |
Loans | 34,552 | 50,608 |
Other revolving and installment | Consumer | Pass | ||
Financing Receivable, Past Due [Line Items] | ||
2023 | 4,090 | |
2022 | 9,031 | |
2021 | 1,467 | |
2020 | 6,071 | |
2019 | 2,506 | |
Prior | 2,037 | |
Loans amortized cost basis | 9,350 | |
Loans | $ 34,552 | 50,607 |
Other revolving and installment | Consumer | Substandard | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | $ 1 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Loans by risk category (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Loans outstanding by loan portfolio segment and risk category | ||
Loans | $ 2,533,522 | $ 2,443,994 |
Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 2,493,524 | 2,408,709 |
Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 22,032 | |
Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 39,998 | 13,253 |
Commercial | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,634,109 | 1,563,356 |
Commercial | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,529,512 | |
Commercial | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 21,969 | |
Commercial | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 11,875 | |
Commercial | Commercial and industrial | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 551,860 | 583,876 |
Commercial | Commercial and industrial | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 519,134 | 558,694 |
Commercial | Commercial and industrial | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 21,969 | |
Commercial | Commercial and industrial | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 32,726 | 3,213 |
Commercial | Real estate construction | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 78,428 | 97,810 |
Commercial | Real estate construction | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 78,428 | 97,548 |
Commercial | Real estate construction | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 262 | |
Commercial | Commercial real estate | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,003,821 | 881,670 |
Commercial | Commercial real estate | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 997,014 | 873,270 |
Commercial | Commercial real estate | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 6,807 | 8,400 |
Consumer | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 899,413 | 880,638 |
Consumer | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 879,197 | |
Consumer | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 63 | |
Consumer | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 1,378 | |
Consumer | Residential | Real estate first mortgage | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 707,630 | 679,551 |
Consumer | Residential | Real estate first mortgage | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 707,522 | 678,743 |
Consumer | Residential | Real estate first mortgage | Special Mention | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 63 | |
Consumer | Residential | Real estate first mortgage | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 108 | 745 |
Consumer | Residential | Real estate junior lien | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 157,231 | 150,479 |
Consumer | Residential | Real estate junior lien | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 156,874 | 149,847 |
Consumer | Residential | Real estate junior lien | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 357 | 632 |
Consumer | Other revolving and installment | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | 34,552 | 50,608 |
Consumer | Other revolving and installment | Pass | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | $ 34,552 | 50,607 |
Consumer | Other revolving and installment | Substandard | ||
Loans outstanding by loan portfolio segment and risk category | ||
Loans | $ 1 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Changes in allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Changes in the allowance | ||||
Beginning balance | $ 35,102 | $ 31,713 | $ 31,146 | $ 31,572 |
Provision for credit losses | 191 | 460 | ||
Loan charge-offs | (108) | (674) | (365) | (719) |
Loan recoveries | 511 | 334 | 598 | 520 |
Ending balance | 35,696 | 31,373 | 35,696 | 31,373 |
Provision for off-balance sheet credit loss | 186 | 44 | ||
Debt securities held-to-maturity credit loss | 5 | 46 | ||
Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 3,857 | |||
Unallocated | ||||
Changes in the allowance | ||||
Beginning balance | 901 | 457 | 268 | 1,180 |
Provision for credit losses | 826 | 595 | 743 | (128) |
Ending balance | 1,727 | 1,052 | 1,727 | 1,052 |
Unallocated | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 716 | |||
Commercial | ||||
Changes in the allowance | ||||
Beginning balance | 24,550 | 22,551 | 23,292 | 22,084 |
Provision for credit losses | (491) | 30 | (357) | 387 |
Loan charge-offs | (85) | (637) | (260) | (664) |
Loan recoveries | 450 | 101 | 517 | 238 |
Ending balance | 24,424 | 22,045 | 24,424 | 22,045 |
Commercial | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 1,232 | |||
Commercial | Commercial and industrial | ||||
Changes in the allowance | ||||
Beginning balance | 7,800 | 9,795 | 9,158 | 8,925 |
Provision for credit losses | (340) | 1,085 | (717) | 1,856 |
Loan charge-offs | (85) | (637) | (260) | (664) |
Loan recoveries | 438 | 90 | 494 | 216 |
Ending balance | 7,813 | 10,333 | 7,813 | 10,333 |
Commercial | Commercial and industrial | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | (862) | |||
Commercial | Real estate construction | ||||
Changes in the allowance | ||||
Beginning balance | 4,406 | 810 | 1,446 | 783 |
Provision for credit losses | (760) | 68 | (318) | 95 |
Ending balance | 3,646 | 878 | 3,646 | 878 |
Commercial | Real estate construction | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 2,518 | |||
Commercial | Commercial real estate | ||||
Changes in the allowance | ||||
Beginning balance | 12,344 | 11,946 | 12,688 | 12,376 |
Provision for credit losses | 609 | (1,123) | 678 | (1,564) |
Loan recoveries | 12 | 11 | 23 | 22 |
Ending balance | 12,965 | 10,834 | 12,965 | 10,834 |
Commercial | Commercial real estate | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | (424) | |||
Consumer | ||||
Changes in the allowance | ||||
Beginning balance | 9,651 | 8,705 | 7,586 | 8,308 |
Provision for credit losses | (144) | (625) | 74 | (259) |
Loan charge-offs | (23) | (37) | (105) | (55) |
Loan recoveries | 61 | 233 | 81 | 282 |
Ending balance | 9,545 | 8,276 | 9,545 | 8,276 |
Consumer | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 1,909 | |||
Consumer | Real estate junior lien | ||||
Changes in the allowance | ||||
Loan charge-offs | (77) | |||
Consumer | Residential | Real estate first mortgage | ||||
Changes in the allowance | ||||
Beginning balance | 8,060 | 6,661 | 5,769 | 6,532 |
Provision for credit losses | (159) | (486) | 50 | (357) |
Loan recoveries | 2 | |||
Ending balance | 7,901 | 6,175 | 7,901 | 6,175 |
Consumer | Residential | Real estate first mortgage | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | 2,080 | |||
Consumer | Residential | Real estate junior lien | ||||
Changes in the allowance | ||||
Beginning balance | 1,277 | 1,400 | 1,289 | 1,295 |
Provision for credit losses | 28 | (134) | 154 | (42) |
Loan charge-offs | (77) | |||
Loan recoveries | 46 | 201 | 52 | 214 |
Ending balance | 1,351 | 1,467 | 1,351 | 1,467 |
Consumer | Residential | Real estate junior lien | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | (67) | |||
Consumer | Other revolving and installment | ||||
Changes in the allowance | ||||
Beginning balance | 314 | 644 | 528 | 481 |
Provision for credit losses | (13) | (5) | (130) | 140 |
Loan charge-offs | (23) | (37) | (28) | (55) |
Loan recoveries | 15 | 32 | 27 | 68 |
Ending balance | $ 293 | $ 634 | 293 | $ 634 |
Consumer | Other revolving and installment | Adoption of CECL | Cumulative Effect, Period of Adoption, Adjustment | ||||
Changes in the allowance | ||||
Beginning balance | $ (104) |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Summary of charge-offs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, Total | $ 108 | $ 674 | $ 365 | $ 719 |
Commercial | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, 2023 | 39 | |||
Current period gross charge-off, 2021 | 25 | |||
Current period gross charge-off, 2020 | 9 | |||
Current period gross charge-off, 2019 | 187 | |||
Current period gross charge-off, Total | 85 | 637 | 260 | 664 |
Commercial | Commercial and industrial | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, 2023 | 39 | |||
Current period gross charge-off, 2021 | 25 | |||
Current period gross charge-off, 2020 | 9 | |||
Current period gross charge-off, 2019 | 187 | |||
Current period gross charge-off, Total | 85 | 637 | 260 | 664 |
Consumer | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, 2022 | 2 | |||
Current period gross charge-off, 2020 | 21 | |||
Current period gross charge-off, 2019 | 4 | |||
Current period gross charge-off, Prior | 78 | |||
Current period gross charge-off, Total | 23 | 37 | 105 | 55 |
Consumer | Other revolving and installment | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, 2022 | 2 | |||
Current period gross charge-off, 2020 | 21 | |||
Current period gross charge-off, 2019 | 4 | |||
Current period gross charge-off, Prior | 1 | |||
Current period gross charge-off, Total | $ 23 | $ 37 | 28 | $ 55 |
Consumer | Real estate junior lien | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, Prior | 77 | |||
Current period gross charge-off, Total | 77 | |||
Consumer | Real estate junior lien | Residential | ||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Write-off, by Origination Year [Abstract] | ||||
Current period gross charge-off, Total | $ 77 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses - Components of loans and associated allowance (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | $ 2,072 | $ 3,767 | ||||
Recorded Investment, Collectively Evaluated | 2,531,450 | 2,440,227 | ||||
Loans | 2,533,522 | 2,443,994 | ||||
Allowance for Loan Losses, Individually Evaluated | 661 | 954 | ||||
Allowance for Loan Losses, Collectively Evaluated | 33,308 | 29,924 | ||||
Loans and Leases Receivable, Allowance, Total | 35,696 | $ 35,102 | 31,146 | $ 31,373 | $ 31,713 | $ 31,572 |
Unallocated | ||||||
Loans and Allowance for Loan Losses | ||||||
Loans and Leases Receivable, Allowance, Total | 1,727 | 901 | 268 | 1,052 | 457 | 1,180 |
Commercial | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 1,267 | 3,047 | ||||
Recorded Investment, Collectively Evaluated | 1,632,842 | 1,560,309 | ||||
Loans | 1,634,109 | 1,563,356 | ||||
Allowance for Loan Losses, Individually Evaluated | 650 | 954 | ||||
Allowance for Loan Losses, Collectively Evaluated | 23,774 | 22,338 | ||||
Loans and Leases Receivable, Allowance, Total | 24,424 | 24,550 | 23,292 | 22,045 | 22,551 | 22,084 |
Commercial | Commercial and industrial | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 381 | 1,313 | ||||
Recorded Investment, Collectively Evaluated | 551,479 | 582,563 | ||||
Loans | 551,860 | 583,876 | ||||
Allowance for Loan Losses, Individually Evaluated | 78 | 275 | ||||
Allowance for Loan Losses, Collectively Evaluated | 7,735 | 8,883 | ||||
Loans and Leases Receivable, Allowance, Total | 7,813 | 7,800 | 9,158 | 10,333 | 9,795 | 8,925 |
Commercial | Real estate construction | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 262 | |||||
Recorded Investment, Collectively Evaluated | 78,428 | 97,548 | ||||
Loans | 78,428 | 97,810 | ||||
Allowance for Loan Losses, Individually Evaluated | 97 | |||||
Allowance for Loan Losses, Collectively Evaluated | 3,646 | 1,349 | ||||
Loans and Leases Receivable, Allowance, Total | 3,646 | 4,406 | 1,446 | 878 | 810 | 783 |
Commercial | Commercial real estate | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 886 | 1,472 | ||||
Recorded Investment, Collectively Evaluated | 1,002,935 | 880,198 | ||||
Loans | 1,003,821 | 881,670 | ||||
Allowance for Loan Losses, Individually Evaluated | 572 | 582 | ||||
Allowance for Loan Losses, Collectively Evaluated | 12,393 | 12,106 | ||||
Loans and Leases Receivable, Allowance, Total | 12,965 | 12,344 | 12,688 | 10,834 | 11,946 | 12,376 |
Consumer | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 805 | 720 | ||||
Recorded Investment, Collectively Evaluated | 898,608 | 879,918 | ||||
Loans | 899,413 | 880,638 | ||||
Allowance for Loan Losses, Individually Evaluated | 11 | |||||
Allowance for Loan Losses, Collectively Evaluated | 9,534 | 7,586 | ||||
Loans and Leases Receivable, Allowance, Total | 9,545 | 9,651 | 7,586 | 8,276 | 8,705 | 8,308 |
Consumer | Residential | Real estate first mortgage | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 299 | 535 | ||||
Recorded Investment, Collectively Evaluated | 707,331 | 679,016 | ||||
Loans | 707,630 | 679,551 | ||||
Allowance for Loan Losses, Individually Evaluated | 5 | |||||
Allowance for Loan Losses, Collectively Evaluated | 7,896 | 5,769 | ||||
Loans and Leases Receivable, Allowance, Total | 7,901 | 8,060 | 5,769 | 6,175 | 6,661 | 6,532 |
Consumer | Residential | Real estate junior lien | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 500 | 184 | ||||
Recorded Investment, Collectively Evaluated | 156,731 | 150,295 | ||||
Loans | 157,231 | 150,479 | ||||
Allowance for Loan Losses, Collectively Evaluated | 1,351 | 1,289 | ||||
Loans and Leases Receivable, Allowance, Total | 1,351 | 1,277 | 1,289 | 1,467 | 1,400 | 1,295 |
Consumer | Other revolving and installment | ||||||
Loans and Allowance for Loan Losses | ||||||
Recorded Investment, Individually Evaluated | 6 | 1 | ||||
Recorded Investment, Collectively Evaluated | 34,546 | 50,607 | ||||
Loans | 34,552 | 50,608 | ||||
Allowance for Loan Losses, Individually Evaluated | 6 | |||||
Allowance for Loan Losses, Collectively Evaluated | 287 | 528 | ||||
Loans and Leases Receivable, Allowance, Total | $ 293 | $ 314 | $ 528 | $ 634 | $ 644 | $ 481 |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses - Collateral Dependent Loans (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | $ 993 |
Allowance for credit loss, collateral dependent loans | 79 |
Commercial | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 188 |
Allowance for credit loss, collateral dependent loans | 68 |
Commercial | Commercial and industrial | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 188 |
Allowance for credit loss, collateral dependent loans | 68 |
Consumer | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 805 |
Allowance for credit loss, collateral dependent loans | 11 |
Consumer | Real estate first mortgage | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 299 |
Allowance for credit loss, collateral dependent loans | 5 |
Consumer | Real estate junior lien | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 500 |
Consumer | Other revolving and installment | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 6 |
Allowance for credit loss, collateral dependent loans | 6 |
Real Estate | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 799 |
Real Estate | Consumer | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 799 |
Real Estate | Consumer | Real estate first mortgage | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 299 |
Real Estate | Consumer | Real estate junior lien | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 500 |
Equipment | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 188 |
Equipment | Commercial | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 188 |
Equipment | Commercial | Commercial and industrial | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 188 |
Other | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 6 |
Other | Consumer | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | 6 |
Other | Consumer | Other revolving and installment | |
Loans and Allowance for Loan Losses | |
Amortized costs, collateral dependent loans | $ 6 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses - Impaired loans (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Impaired | |
Loans with related allowance for loan losses, Recorded investment | $ 1,833 |
Loans with related allowance for loan losses, unpaid principal | 2,051 |
Loans with related allowance for loan losses, Related Allowance | 954 |
Loans with no related allowance for loan losses, Recorded investment | 1,934 |
Loans with no related allowance for loan losses, unpaid principal | 2,219 |
Recorded investment | 3,767 |
Unpaid principal balance | 4,270 |
Commercial | Commercial and industrial | |
Impaired | |
Loans with related allowance for loan losses, Recorded investment | 675 |
Loans with related allowance for loan losses, unpaid principal | 711 |
Loans with related allowance for loan losses, Related Allowance | 275 |
Loans with no related allowance for loan losses, Recorded investment | 638 |
Loans with no related allowance for loan losses, unpaid principal | 767 |
Recorded investment | 1,313 |
Unpaid principal balance | 1,478 |
Commercial | Real estate construction | |
Impaired | |
Loans with related allowance for loan losses, Recorded investment | 262 |
Loans with related allowance for loan losses, unpaid principal | 440 |
Loans with related allowance for loan losses, Related Allowance | 97 |
Recorded investment | 262 |
Unpaid principal balance | 440 |
Commercial | Commercial real estate | |
Impaired | |
Loans with related allowance for loan losses, Recorded investment | 896 |
Loans with related allowance for loan losses, unpaid principal | 900 |
Loans with related allowance for loan losses, Related Allowance | 582 |
Loans with no related allowance for loan losses, Recorded investment | 576 |
Loans with no related allowance for loan losses, unpaid principal | 660 |
Recorded investment | 1,472 |
Unpaid principal balance | 1,560 |
Consumer | Residential | Real estate first mortgage | |
Impaired | |
Loans with no related allowance for loan losses, Recorded investment | 535 |
Loans with no related allowance for loan losses, unpaid principal | 573 |
Recorded investment | 535 |
Unpaid principal balance | 573 |
Consumer | Residential | Real estate junior lien | |
Impaired | |
Loans with no related allowance for loan losses, Recorded investment | 184 |
Loans with no related allowance for loan losses, unpaid principal | 218 |
Recorded investment | 184 |
Unpaid principal balance | 218 |
Consumer | Other revolving and installment | |
Impaired | |
Loans with related allowance for loan losses, Recorded investment | 1 |
Loans with related allowance for loan losses, unpaid principal | 1 |
Recorded investment | 1 |
Unpaid principal balance | $ 1 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses - Interest Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Impaired | ||
Loans with related allowance for loan losses, Average recorded investment | $ 1,269 | $ 1,490 |
Loans with no related allowance for loan losses, Average recorded investment | 3,548 | 3,541 |
Loans, Average recorded investment | 4,817 | 5,031 |
Loans with related allowance for loan losses, Interest income | 4 | 9 |
Loans, Interest income | 4 | 9 |
Commercial | Commercial and industrial | ||
Impaired | ||
Loans with related allowance for loan losses, Average recorded investment | 1,018 | 1,156 |
Loans with no related allowance for loan losses, Average recorded investment | 761 | 761 |
Loans, Average recorded investment | 1,779 | 1,917 |
Loans with related allowance for loan losses, Interest income | 2 | 6 |
Loans, Interest income | 2 | 6 |
Commercial | Commercial real estate | ||
Impaired | ||
Loans with related allowance for loan losses, Average recorded investment | 176 | 177 |
Loans with no related allowance for loan losses, Average recorded investment | 629 | 629 |
Loans, Average recorded investment | 805 | 806 |
Loans with related allowance for loan losses, Interest income | 2 | 3 |
Loans, Interest income | 2 | 3 |
Consumer | Residential | Real estate first mortgage | ||
Impaired | ||
Loans with no related allowance for loan losses, Average recorded investment | 1,962 | 1,953 |
Loans, Average recorded investment | 1,962 | 1,953 |
Consumer | Residential | Real estate junior lien | ||
Impaired | ||
Loans with no related allowance for loan losses, Average recorded investment | 196 | 198 |
Loans, Average recorded investment | 196 | 198 |
Consumer | Other revolving and installment | ||
Impaired | ||
Loans with related allowance for loan losses, Average recorded investment | 75 | 157 |
Loans, Average recorded investment | $ 75 | $ 157 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill | ||
Total goodwill | $ 47,087 | $ 47,087 |
Banking | ||
Goodwill | ||
Total goodwill | 35,260 | 35,260 |
Retirement and Benefit Services | ||
Goodwill | ||
Total goodwill | $ 11,827 | $ 11,827 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill | |||||
Gross Carrying Amount | $ 49,015 | $ 49,015 | $ 49,015 | ||
Accumulated Amortization | (29,209) | (29,209) | (26,560) | ||
Total | 19,806 | 19,806 | 22,455 | ||
Intangible amortization expense | 1,324 | $ 1,053 | 2,648 | $ 2,106 | |
Goodwill, Impairment Loss | 0 | ||||
Identifiable customer intangibles | |||||
Goodwill | |||||
Gross Carrying Amount | 41,423 | 41,423 | 41,423 | ||
Accumulated Amortization | (27,944) | (27,944) | (25,927) | ||
Total | 13,479 | 13,479 | 15,496 | ||
Core deposit intangible assets | |||||
Goodwill | |||||
Gross Carrying Amount | 7,592 | 7,592 | 7,592 | ||
Accumulated Amortization | (1,265) | (1,265) | (633) | ||
Total | $ 6,327 | $ 6,327 | $ 6,959 |
Loan Servicing (Details)
Loan Servicing (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Loan Servicing | |||||
Loans serviced for others | $ 367,800 | $ 367,800 | $ 357,200 | ||
Servicing Asset at Fair Value, Amount | |||||
Balance, beginning of period | 2,421 | $ 1,771 | 2,643 | $ 1,880 | |
Additions | 20 | 13 | 23 | 17 | |
Amortization | (134) | (96) | (318) | (256) | |
Fair value adjustments | 44 | 376 | 3 | 423 | |
Balance, end of period | $ 2,351 | $ 2,064 | $ 2,351 | $ 2,064 |
Loan Servicing - Key economic a
Loan Servicing - Key economic assumptions (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Loan Servicing | ||
Fair value of servicing rights | $ 2,351 | $ 2,643 |
Weighted-average remaining term, years | 19 years | 20 years 6 months |
Prepayment speeds | 6.10% | 6.90% |
Discount rate | 11% | 10.50% |
Leases - Lease right-of-use ass
Leases - Lease right-of-use assets and liabilities (Details) $ in Thousands | Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) |
Leases | ||
Number of finance leases | item | 0 | |
Lease Right-of-Use Assets | ||
Operating lease right-of-use assets | $ 6,440 | $ 5,419 |
Operating lease liabilities | $ 6,746 | $ 5,902 |
Leases - Weighted-average remai
Leases - Weighted-average remaining lease term and average discount rate (Details) - item | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Leases | ||
Minimum number of options to renew lease agreements | 1 | |
Weighted-average remaining lease term, Operating leases | 4 years 6 months | 5 years |
Weighted-average discount rate, Operating leases | 3.60% | 3.10% |
Leases - Lease costs and other
Leases - Lease costs and other lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Lease costs | ||||
Operating lease cost | $ 354 | $ 414 | $ 935 | $ 825 |
Variable lease cost | 474 | 150 | 699 | 363 |
Short-term lease cost | 39 | 43 | 82 | 88 |
Finance lease cost | ||||
Interest on lease liabilities | 1 | 5 | ||
Amortization of right-of-use assets | 29 | 58 | ||
Sublease Income | (60) | (59) | (119) | (116) |
Net lease cost | 807 | 578 | 1,597 | 1,223 |
Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases | 474 | $ 393 | 953 | $ 784 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,029 | $ 2,286 |
Leases - Future minimum payment
Leases - Future minimum payments for leases (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating leases | ||
June 30, 2024 | $ 1,861 | |
June 30, 2025 | 1,428 | |
June 30, 2026 | 1,158 | |
June 30, 2027 | 791 | |
June 30, 2028 | 408 | |
Thereafter | 2,135 | |
Total future minimum lease payments | 7,781 | |
Amounts representing interest | (1,035) | |
Total operating lease liabilities | $ 6,746 | $ 5,902 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Deposits. | ||
Noninterest-bearing | $ 715,534 | $ 860,987 |
Interest-bearing demand | 753,194 | 706,275 |
Savings accounts | 93,557 | 99,882 |
Money market savings | 986,403 | 1,035,981 |
Time deposits | 304,167 | 212,359 |
Total interest-bearing | 2,137,321 | 2,054,497 |
Total deposits | 2,852,855 | 2,915,484 |
Certificates of deposit in excess of $250,000 | $ 94,200 | $ 51,100 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Short-term borrowings | |||||
Balance as of end of period | $ 492,060 | $ 492,060 | $ 378,080 | ||
Federal Funds Purchased | |||||
Short-term borrowings | |||||
Balance as of end of period | 492,060 | $ 117,350 | 492,060 | $ 117,350 | 153,080 |
Average daily balance | 360,033 | 81,506 | 325,303 | 40,978 | |
Maximum month-end balance | $ 492,060 | $ 117,350 | $ 492,060 | $ 117,350 | |
During period | 5.31% | 1.18% | 5.10% | 1.18% | |
End of period | 5.35% | 1.44% | 5.35% | 1.44% | |
FHLB short-term advances | |||||
Short-term borrowings | |||||
Balance as of end of period | $ 125,000 | $ 125,000 | $ 225,000 | ||
Average daily balance | 9,615 | $ 39,779 | 4,834 | ||
Maximum month-end balance | $ 125,000 | $ 225,000 | $ 125,000 | ||
During period | 1.59% | 4.69% | 1.59% | ||
End of period | 1.80% | 1.80% |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Long-Term Debt | ||
Face Value | $ 60,310 | $ 60,310 |
Carrying Amount | 58,900 | 58,843 |
Subordinated notes payable | ||
Long-Term Debt | ||
Face Value | 50,000 | 50,000 |
Carrying Amount | $ 50,000 | $ 50,000 |
Fixed interest rate | 3.50% | 3.50% |
Junior subordinated debenture (Trust I) | ||
Long-Term Debt | ||
Face Value | $ 4,124 | $ 4,124 |
Carrying Amount | $ 3,560 | $ 3,537 |
Interest Rate | 3.10% | 3.10% |
Investment, Variable Interest Rate, Type [Extensible Enumeration] | alrs:ThreeMonthLiborMember | alrs:ThreeMonthLiborMember |
Period End Interest Rate | 8.64% | 7.82% |
Junior subordinated debenture (Trust II) | ||
Long-Term Debt | ||
Face Value | $ 6,186 | $ 6,186 |
Carrying Amount | $ 5,340 | $ 5,306 |
Interest Rate | 1.80% | 1.80% |
Investment, Variable Interest Rate, Type [Extensible Enumeration] | alrs:ThreeMonthLiborMember | alrs:ThreeMonthLiborMember |
Period End Interest Rate | 7.35% | 6.57% |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial Instruments with Off Balance Sheet Risk | ||
Off-balance sheet risk | $ 796,235 | $ 819,520 |
Commitments to extend credit | ||
Financial Instruments with Off Balance Sheet Risk | ||
Off-balance sheet risk | 786,451 | 806,431 |
Standby letters of credit | ||
Financial Instruments with Off Balance Sheet Risk | ||
Off-balance sheet risk | $ 9,784 | $ 13,089 |
Financial Instruments with Off
Financial Instruments with Off Balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Financial Instruments with Off Balance Sheet Risk | |||
Provision for off-balance sheet credit loss | $ 186 | $ 44 | |
Unfunded commitments | |||
Financial Instruments with Off Balance Sheet Risk | |||
Allowance for credit loss | 5,100 | 5,100 | $ 3,244 |
Provision for off-balance sheet credit loss | 44 | ||
Unfunded commitments | Adoption of CECL | |||
Financial Instruments with Off Balance Sheet Risk | |||
Allowance for credit loss | 1,900 | ||
Letter of credit with FHLB | |||
Financial Instruments with Off Balance Sheet Risk | |||
Outstanding letters of credit | 0 | 0 | 0 |
Letter of credit with Bank of North Dakota | |||
Financial Instruments with Off Balance Sheet Risk | |||
Outstanding letters of credit | 0 | 0 | 0 |
Collateralized loans | $ 230,300 | $ 230,300 | $ 215,500 |
Share-Based Compensation - Plan
Share-Based Compensation - Plan Information (Details) - 2019 Equity Incentive Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | May 06, 2019 | |
Share-Based Compensation | |||||
Awards authorized | 1,100,000 | ||||
Number of shares available for grant | 810,277 | 810,277 | |||
Compensation expense | $ 656 | $ 663 | $ 815 | $ 1,000 |
Share-Based Compensation - Acti
Share-Based Compensation - Activity in stock (Details) - Restricted Stock Awards and Units. - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Restricted Stock Awards and Units | ||
Outstanding at beginning of period | 238,929 | 260,850 |
Granted | 82,810 | 94,592 |
Vested | (91,867) | (107,113) |
Forfeited or cancelled | (22,204) | (10,624) |
Outstanding at end of period | 207,668 | 237,705 |
Weighted Average Grant Date Fair Value | ||
Outstanding at beginning of period | $ 23.66 | $ 21.04 |
Granted | 20.85 | 19.01 |
Vested | 21.29 | 19.19 |
Forfeited or cancelled | 21.39 | 23.71 |
Outstanding at end of period | $ 23.83 | $ 20.95 |
Additional disclosures | ||
Unrecognized compensation cost | $ 3 | |
Weighted average period | 2 years 6 months |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between applicable income taxes and statutory federal tax rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Tax amount | ||||
Taxes at statutory federal income tax rate | $ 2,444 | $ 2,524 | $ 4,648 | $ 5,269 |
Tax exempt income | (156) | (122) | (300) | (239) |
State income taxes, net of federal benefits | 485 | 531 | 946 | 1,109 |
Nondeductible items and other | (238) | (208) | (453) | (526) |
Applicable income taxes | $ 2,535 | $ 2,725 | $ 4,841 | $ 5,613 |
Percentage of pretax income | ||||
Taxes at statutory federal income tax rate (as percentage) | 21% | 21% | 21% | 21% |
Tax exempt income (as percentage) | (1.30%) | (1.00%) | (1.40%) | (1.00%) |
State income taxes, net of federal benefits (as percentage) | 4.10% | 4.40% | 4.30% | 4.40% |
Nondeductible items and other (as percentage) | (2.00%) | (1.70%) | (2.00%) | (2.10%) |
Applicable income taxes (as percentage) | 21.80% | 22.70% | 21.90% | 22.30% |
Tax Credit Investments - Tax cr
Tax Credit Investments - Tax credits (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Tax Credit Investments [Line items] | ||
Investment | $ 17,906 | $ 17,906 |
Unfunded Commitment | 15,202 | 15,559 |
Proportional amortization | ||
Tax Credit Investments [Line items] | ||
Investment | 17,906 | 17,906 |
Unfunded Commitment | $ 15,202 | $ 15,559 |
Tax Credit Investments - Amorti
Tax Credit Investments - Amortization expense and tax benefit recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | $ 1,324 | $ 1,053 | $ 2,648 | $ 2,106 |
Income tax benefit | 2,535 | 2,725 | 4,841 | 5,613 |
Housing projects | ||||
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | 278 | 111 | 639 | 111 |
Income tax benefit | (509) | (156) | (735) | (156) |
Low income housing tax credit | Housing projects | ||||
Tax Credit Investments [Line items] | ||||
Intangible amortization expense | 278 | 111 | 639 | 111 |
Income tax benefit | $ (509) | $ (156) | $ (735) | $ (156) |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment item | Jun. 30, 2022 USD ($) | |
Segment Reporting | ||||
Number of operating segments | segment | 4 | |||
Number of banking offices | item | 14 | |||
Key metrics related to segments | ||||
Net interest income (loss) | $ 22,234 | $ 22,776 | $ 45,892 | $ 44,449 |
Provision for credit losses | 550 | |||
Noninterest income | 25,778 | 29,226 | 51,031 | 58,696 |
Noninterest expense | 36,373 | 39,984 | 74,242 | 78,055 |
Net income (loss) before taxes | 11,639 | 12,018 | 22,131 | 25,090 |
Corporate Administration | ||||
Key metrics related to segments | ||||
Net interest income (loss) | (665) | (561) | (1,320) | (1,122) |
Noninterest income | 198 | 6 | 235 | 35 |
Intercompany revenue (expense) | 1,573 | 1,737 | 3,221 | 3,319 |
Noninterest expense | 10,553 | 12,665 | 22,859 | 24,334 |
Net income (loss) before taxes | (9,447) | (11,483) | (20,723) | (22,102) |
Banking | Operating Segments | ||||
Key metrics related to segments | ||||
Net interest income (loss) | 22,681 | 22,779 | 46,832 | 44,304 |
Provision for credit losses | 550 | |||
Noninterest income | 1,336 | 1,341 | 4,158 | 2,879 |
Intercompany revenue (expense) | (2,933) | (3,829) | (5,980) | (4,988) |
Noninterest expense | 11,548 | 11,790 | 25,503 | 23,325 |
Net income (loss) before taxes | 9,536 | 8,501 | 18,957 | 18,870 |
Retirement and Benefit Services | Operating Segments | ||||
Key metrics related to segments | ||||
Noninterest income | 15,890 | 16,293 | 31,372 | 33,939 |
Intercompany revenue (expense) | 1,331 | 1,095 | 2,672 | 692 |
Noninterest expense | 8,290 | 7,693 | 15,600 | 15,722 |
Net income (loss) before taxes | 8,931 | 9,695 | 18,444 | 18,909 |
Wealth Management | Operating Segments | ||||
Key metrics related to segments | ||||
Noninterest income | 5,449 | 5,548 | 10,644 | 10,874 |
Intercompany revenue (expense) | (257) | (337) | (425) | (851) |
Noninterest expense | 2,100 | 1,293 | 3,613 | 2,617 |
Net income (loss) before taxes | 3,092 | 3,918 | 6,606 | 7,406 |
Mortgage | Operating Segments | ||||
Key metrics related to segments | ||||
Net interest income (loss) | 218 | 558 | 380 | 1,267 |
Noninterest income | 2,905 | 6,038 | 4,622 | 10,969 |
Intercompany revenue (expense) | 286 | 1,334 | 512 | 1,828 |
Noninterest expense | 3,882 | 6,543 | 6,667 | 12,057 |
Net income (loss) before taxes | $ (473) | $ 1,387 | $ (1,153) | $ 2,007 |
Earnings Per Share - Two-class
Earnings Per Share - Two-class method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share | ||||
Net Income (Loss) | $ 9,104 | $ 9,293 | $ 17,290 | $ 19,477 |
Dividends and undistributed earnings allocated to participating securities | 62 | 101 | 120 | 225 |
Net income available to common shareholders | $ 9,042 | $ 9,192 | $ 17,170 | $ 19,252 |
Weighted-average common shares outstanding for basic earnings per share | 20,033 | 17,297 | 20,030 | 17,271 |
Dilutive effect of stock-based awards | 208 | 235 | 213 | 246 |
Weighted-average common shares outstanding for diluted earnings per share | 20,241 | 17,532 | 20,243 | 17,517 |
Per Common Share Data | ||||
Basic earnings per common share | $ 0.45 | $ 0.53 | $ 0.86 | $ 1.11 |
Diluted earnings per common share | $ 0.45 | $ 0.52 | $ 0.85 | $ 1.10 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Not designated as hedging | ||
Derivative Instruments | ||
Derivative Assets | $ 6,853 | $ 6,405 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 6,049 | $ 6,303 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | Accrued Liabilities and Other Liabilities |
Notional Amount, Derivative Assets | $ 150,261 | $ 54,243 |
Notional Amount, Derivative Liabilities | 42,716 | 69,180 |
Not designated as hedging | Interest rate swaps | ||
Derivative Instruments | ||
Derivative Assets | 6,049 | 6,277 |
Derivative liabilities | 6,049 | 6,277 |
Notional Amount, Derivative Assets | 42,716 | 43,430 |
Notional Amount, Derivative Liabilities | 42,716 | 43,430 |
Not designated as hedging | Interest rate lock commitments | ||
Derivative Instruments | ||
Derivative Assets | 523 | 121 |
Notional Amount, Derivative Assets | 34,602 | 10,462 |
Not designated as hedging | Forward loan sales commitments | ||
Derivative Instruments | ||
Derivative Assets | 71 | 7 |
Notional Amount, Derivative Assets | 4,193 | 351 |
Not designated as hedging | To-be-announced mortgage backed securities | ||
Derivative Instruments | ||
Derivative Assets | 210 | |
Derivative liabilities | 26 | |
Notional Amount, Derivative Assets | 68,750 | |
Notional Amount, Derivative Liabilities | $ 25,750 | |
Designated as hedging instruments | ||
Derivative Instruments | ||
Derivative liabilities | $ 2,069 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities and Other Liabilities | |
Notional Amount, Derivative Liabilities | $ 200,000 | |
Designated as hedging instruments | Interest rate swaps | ||
Derivative Instruments | ||
Derivative liabilities | 2,069 | |
Notional Amount, Derivative Liabilities | $ 200,000 | |
Derivative, Fixed Interest Rate | 4.019% |
Derivative Instruments - Hedged
Derivative Instruments - Hedged assets and liabilities in fair value (Details) - Designated as hedging instruments - Fair value hedging $ in Thousands | Jun. 30, 2023 USD ($) |
Derivative Instruments | |
Carrying Amount of Hedged Assets / Liabilities | $ 284,584 |
Cumulative Fair Value Hedging Adjustment in the Carrying Amount of Hedged Assets / Liabilities | (2,073) |
Mortgage backed securities - Residential agency | |
Derivative Instruments | |
Carrying Amount of Hedged Assets / Liabilities | 284,584 |
Cumulative Fair Value Hedging Adjustment in the Carrying Amount of Hedged Assets / Liabilities | $ (2,073) |
Derivative Instruments - Gain (
Derivative Instruments - Gain (loss) recognized on derivatives instruments (Details) - Not designated as hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | $ 461 | $ 2,352 | $ 622 | $ 3,655 |
Interest rate swaps | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 1 | 1 | ||
Interest rate lock commitments | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 89 | 563 | 429 | (147) |
Forward loan sales commitments | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | 70 | 542 | 64 | 52 |
To-be-announced mortgage backed securities | ||||
Gain (loss) recognized on derivative instruments | ||||
Total gain/(loss) from derivative instruments | $ 302 | $ 1,246 | $ 129 | $ 3,749 |
Derivative Instruments - Collat
Derivative Instruments - Collateral (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Derivative Instruments | ||
Collateral held by third parties | $ 290 | $ 309 |
Regulatory Matters (Details)
Regulatory Matters (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Common equity tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 395,276 | $ 389,335 |
Requirements for Capital Adequacy Purposes (Amount) | $ 133,728 | $ 130,862 |
Actual (Ratio) | 0.1330 | 0.1339 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0450 | 0.0450 |
Tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 404,176 | $ 398,179 |
Requirements for Capital Adequacy Purposes (Amount) | $ 178,304 | $ 174,482 |
Actual (Ratio) | 0.1360 | 0.1369 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0600 | 0.0600 |
Total capital to risk weighted assets | ||
Actual (Amount) | $ 490,091 | $ 479,325 |
Requirements for Capital Adequacy Purposes (Amount) | $ 237,738 | $ 232,643 |
Actual (Ratio) | 0.1649 | 0.1648 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0800 | 0.0800 |
Tier 1 capital to average assets | ||
Actual (Amount) | $ 404,176 | $ 398,179 |
Requirements for Capital Adequacy Purposes (Amount) | $ 144,987 | $ 141,514 |
Actual (Ratio) | 0.1115 | 0.1125 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0400 | 0.0400 |
Bank | ||
Common equity tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 383,663 | $ 370,749 |
Requirements for Capital Adequacy Purposes (Amount) | 133,585 | 130,791 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 192,895 | $ 188,920 |
Actual (Ratio) | 0.1293 | 0.1276 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0450 | 0.0450 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0650 | 0.0650 |
Tier 1 capital to risk weighted assets | ||
Actual (Amount) | $ 383,663 | $ 370,749 |
Requirements for Capital Adequacy Purposes (Amount) | 178,113 | 174,388 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 237,409 | $ 232,517 |
Actual (Ratio) | 0.1293 | 0.1276 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0600 | 0.0600 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0800 | 0.0800 |
Total capital to risk weighted assets | ||
Actual (Amount) | $ 419,578 | $ 401,895 |
Requirements for Capital Adequacy Purposes (Amount) | 237,486 | 232,517 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 296,762 | $ 290,646 |
Actual (Ratio) | 0.1414 | 0.1383 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0800 | 0.0800 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.1000 | 0.1000 |
Tier 1 capital to average assets | ||
Actual (Amount) | $ 383,663 | $ 370,749 |
Requirements for Capital Adequacy Purposes (Amount) | 144,890 | 141,440 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Amount) | $ 181,112 | $ 176,800 |
Actual (Ratio) | 0.1059 | 0.1048 |
Requirements for Capital Adequacy Purposes (Ratio) | 0.0400 | 0.0400 |
Minimum to be Well Capitalized Under Prompt Corrective Action (Ratio) | 0.0500 | 0.0500 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - shares | 6 Months Ended | |
Feb. 18, 2021 | Jun. 30, 2023 | |
Stock Repurchase Program | ||
Number of shares authorized for repurchase | 770,000 | |
Repurchase program period | 36 months | |
Shares repurchased | 170,046 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | $ 677,454 | $ 717,324 |
Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 558,456 | 587,679 |
Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 60,909 | 63,558 |
Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 28 | 34 |
Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 55,155 | 62,533 |
Recurring | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 677,454 | 717,324 |
Derivative Assets | 6,853 | 6,405 |
Derivative liabilities | 8,118 | 6,303 |
Recurring | U.S. treasury and government agencies | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 2,906 | 3,520 |
Recurring | Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 558,456 | 587,679 |
Recurring | Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 60,909 | 63,558 |
Recurring | Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 28 | 34 |
Recurring | Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 55,155 | 62,533 |
Recurring | Level 2 | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 677,454 | 717,324 |
Derivative Assets | 6,853 | 6,405 |
Derivative liabilities | 8,118 | 6,303 |
Recurring | Level 2 | U.S. treasury and government agencies | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 2,906 | 3,520 |
Recurring | Level 2 | Mortgage backed securities - Residential agency | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 558,456 | 587,679 |
Recurring | Level 2 | Mortgage backed securities - Commercial | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 60,909 | 63,558 |
Recurring | Level 2 | Asset backed securities | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | 28 | 34 |
Recurring | Level 2 | Corporate bonds | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Available-for-sale, at fair value | $ 55,155 | $ 62,533 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Nonrecurring Basis (Details) - Non recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Individually evaluated | $ 2,390 | $ 2,813 |
Foreclosed assets | 30 | |
Servicing rights | 2,351 | 2,643 |
Loans held for sale | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Loans held for sale | 20,893 | 9,488 |
Impaired loans | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Net impairment | 288 | 954 |
Level 2 | Loans held for sale | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Loans held for sale | 20,893 | 9,488 |
Level 3 | ||
Fair value, assets and liabilities measured on recurring and non recurring basis | ||
Individually evaluated | 2,390 | 2,813 |
Foreclosed assets | 30 | |
Servicing rights | $ 2,351 | $ 2,643 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Valuation Technique (Details) - Level 3 $ in Thousands | Jun. 30, 2023 USD ($) item | Dec. 31, 2022 USD ($) |
Impaired loans | Appraisal value | Property specific adjustment | ||
Valuation techniques and significant unobservable inputs | ||
Individually evaluated | $ 2,390 | $ 2,813 |
Foreclosed assets | Appraisal value | Property specific adjustment | ||
Valuation techniques and significant unobservable inputs | ||
Foreclosed assets | $ 30 | |
Servicing rights | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueDiscountedCashFlowMember | us-gaap:ValuationTechniqueDiscountedCashFlowMember |
Servicing rights | Prepayment speed assumptions | ||
Valuation techniques and significant unobservable inputs | ||
Servicing rights | $ 2,351 | $ 2,643 |
Servicing rights | Prepayment speed assumptions | Minimum | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 83 | 103 |
Servicing rights | Prepayment speed assumptions | Maximum | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 134 | 137 |
Servicing rights | Prepayment speed assumptions | Weighted average | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 101 | 115 |
Servicing rights | Discount rate | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 0.110 | 0.105 |
Servicing rights | Discount rate | Weighted average | ||
Valuation techniques and significant unobservable inputs | ||
Servicing Asset, Measurement Input | 0.110 | 0.105 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Off-Balance Sheet Credit-Related Commitments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial Assets | ||
Investment securities held-to-maturity | $ 260,710 | $ 270,912 |
Carrying Amount | ||
Financial Assets | ||
Cash and cash equivalents | 65,471 | 58,242 |
Investment securities held-to-maturity | 308,416 | 321,902 |
Loans, net | 2,497,826 | 2,412,848 |
Accrued interest receivable | 13,587 | 12,869 |
Bank-owned life insurance | 32,793 | 33,991 |
Financial Liabilities | ||
Noninterest-bearing deposits | 715,534 | 860,987 |
Interest-bearing deposits | 1,833,154 | 1,842,138 |
Time deposits | 304,167 | 212,359 |
Short-term borrowings | 492,060 | 378,080 |
Long-term debt | 58,900 | 58,843 |
Accrued interest payable | 2,960 | 2,426 |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 65,471 | 58,242 |
Investment securities held-to-maturity | 260,710 | 270,912 |
Loans, net | 2,403,819 | 2,311,956 |
Accrued interest receivable | 13,587 | 12,869 |
Bank-owned life insurance | 32,793 | 33,991 |
Financial Liabilities | ||
Noninterest-bearing deposits | 715,534 | 860,987 |
Interest-bearing deposits | 1,833,154 | 1,842,138 |
Time deposits | 300,375 | 208,550 |
Short-term borrowings | 492,060 | 378,080 |
Long-term debt | 56,008 | 56,116 |
Accrued interest payable | 2,960 | 2,426 |
Level 1 | Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 65,471 | 58,242 |
Accrued interest receivable | 13,587 | 12,869 |
Financial Liabilities | ||
Short-term borrowings | 492,060 | 378,080 |
Accrued interest payable | 2,960 | 2,426 |
Level 2 | Estimated Fair Value | ||
Financial Assets | ||
Investment securities held-to-maturity | 260,710 | 270,912 |
Bank-owned life insurance | 32,793 | 33,991 |
Financial Liabilities | ||
Noninterest-bearing deposits | 715,534 | 860,987 |
Interest-bearing deposits | 1,833,154 | 1,842,138 |
Long-term debt | 56,008 | 56,116 |
Level 3 | Estimated Fair Value | ||
Financial Assets | ||
Loans, net | 2,403,819 | 2,311,956 |
Financial Liabilities | ||
Time deposits | $ 300,375 | $ 208,550 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 9,104 | $ 9,293 | $ 17,290 | $ 19,477 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |