10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-K

_____________________

(Mark One):

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 0-28364

_____________________

NORWOOD FINANCIAL CORP

(Exact Name of Registrant as Specified in its Charter)

_____________________

Pennsylvania	23-2828306
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
717 Main Street, Honesdale, Pennsylvania	18431
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (570) 253-1455

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.10 par value	NWFL	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

_____________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☐  YES    ☒  NO

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ☐  YES    ☒  NO

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  YES    ☐  NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  YES    ☐  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐  Yes    ☒  No

The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the closing price of the registrant’s Common Stock as of June 30, 2021, $26.00 per share, was $194.7 million based on 7,488,147 shares of Common Stock held by non-affiliates on that date. Solely for purposes of this calculation, shares held by directors, executive officers and greater than 10% stockholders are treated as shares held by affiliates.

As of March 1, 2022, there were 8,203,073 shares outstanding of the registrant’s Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders. (Part III)

NORWOOD FINANCIAL CORP

ANNUAL REPORT ON FORM 10-K

Table of Contents

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Part I		Page
Item 1.	Business.	2
Item 1A.	Risk Factors.	8
Item 1B.	Unresolved Staff Comments.	8
Item 2.	Properties.	8
Item 3.	Legal Proceedings.	8
Item 4.	Mine Safety Disclosures.	8
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	8
Item 6.	Selected Financial Data	10
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk.	24
Item 8.	Financial Statements and Supplementary Data.	26
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	75
Item 9A.	Controls and Procedures.	75
Item 9B.	Other Information.	75
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	75
Part III
Item 10.	Directors, Executive Officers and Corporate Governance.	75
Item 11.	Executive Compensation.	75
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	75
Item 13.	Certain Relationships and Related Transactions and Director Independence.	76
Item 14.	Principal Accounting Fees and Services.	76
Part IV
Item 15.	Exhibits, Financial Statement Schedules.	76
Item 16.	Form 10-K Summary.	78
SIGNATURES		79

PART I

Forward Looking Statements

This Annual Report on Form 10-K contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

statements of our goals, intentions and expectations;

statements regarding our business plans, prospects, growth and operating strategies;

statements regarding the quality of our loan and investment portfolios; and

estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.  We are under no duty to and do not take any obligation to update any forward-looking statements after the date of the Annual Report on Form 10-K.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

the COVID-19 pandemic may continue to adversely impact the local and national economy and our business and results of operations may continue to be adversely affected;

general economic conditions, either nationally or in our market areas, that are worse than expected;

changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

our ability to access cost-effective funding;

fluctuations in real estate values and both residential and commercial real estate market conditions;

demand for loans and deposits in our market area;

our ability to implement changes in our business strategies;

competition among depository and other financial institutions;

inflation and changes in the interest rate environment that reduce our margins and yields, or reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets;

adverse changes in the securities markets;

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;

our ability to manage market risk, credit risk and operational risk in the current economic conditions;

our ability to enter new markets successfully and capitalize on growth opportunities;

our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we have acquired or may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

changes in consumer demand, borrowing and savings habits

the ability of third-party providers to perform their obligations to us;

the ability of the U.S. Government to manage federal debt limits;

cyber-attacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information and destroy data or disable our systems;

technological changes that may be more difficult or expensive than expected;

changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and

other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing products and services described elsewhere in this Annual Report on Form 10-K.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

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The COVID-19 Pandemic.

The COVID-19 pandemic is continuing to have an adverse impact on the Company, its customers and the communities it serves. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on the business of the Company, its customers, employees and third-party service providers. The extent of such impact will depend on future developments, which are highly uncertain, including whether the pandemic can be controlled and abated. Additionally, the responses of various governmental and nongovernmental authorities to curtail business and consumer activities in an effort to mitigate the pandemic will have material long-term effects on the Company and its customers which are difficult to quantify in the near-term or long-term.

As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company is subject to certain risks, any of which could have a material, adverse effect on the business, financial condition, liquidity, and results of operations of the Company. These risks include, among others,(i) risks to the capital markets that may impact the value or performance of the Company’s investment securities portfolio, as well as limit our access to the capital markets and wholesale funding sources; (ii) effects on key employees, including operational or management personnel and those charged with preparing, monitoring and evaluating the companies’ financial reporting and internal controls; (iii) declines in demand for loans and other banking services and products, as well as a decline in the credit quality of our loan portfolio, owing to the effects of COVID-19 in the markets served by the Company; (iv) collateral for loans, especially real estate, may continue to decline in value, which could cause loan losses to increase; (v) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments; (vi) the allowance for credit losses may increase if borrowers experience financial difficulties, which will adversely affect net income; (vii) if the economy is unable to substantially reopen or reopen in an efficient manner, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased loan losses and reduced interest income; (viii) in certain states in which we do business temporary bans on evictions and foreclosures have been enacted through executive orders, and may continue indefinitely, resulting in our inability to take timely possession of real estate assets collateralizing loans, which may increase our loan losses; (ix) as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on assets may decline to a greater extent than the decline in cost of interest-bearing liabilities, reducing net interest margin and spread and reducing net income; (x) cyber security risks are increased as the result of an increase in the number of employees working remotely and an increase in the number of our clients banking electronically; (xi) declines in demand resulting from adverse impacts of the disease on businesses deemed to be “non-essential” by governments in the markets served by the Company; and (xii) increasing or protracted volatility in the price of the Company’s common stock, which may also impair our goodwill or other intangible assets.

As a participating lender in the SBA Paycheck Protection Program (“PPP”), we are subject to additional risks of litigation from our customers or other parties regarding our processing of loans for the PPP which could have a significant adverse impact on our business, financial position, results of operations, and prospects. The COVID-19 pandemic and its impact on the economy have led to actions including the enactment of the Coronavirus Aid, Relief and Economic Security Act, including the establishment of the PPP administered by the Small Business Administration (“SBA”). Under the PPP, small businesses and other entities and individuals can apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. We are participating as a lender in the PPP. Since the initiation of the PPP, several banks have been subject to litigation or threatened litigation regarding the process and procedures that such banks used in processing applications for the PPP. We may be exposed to the risk of litigation, from both clients and non-clients that approached us regarding PPP loans. If any such litigation is filed or threatened against us and is not resolved in a manner favorable to us, it may result in significant cost or adversely affect our reputation. Any financial liability, litigation costs or reputational damage caused by PPP-related litigation could have a material adverse impact on our business, financial position, results of operations and prospects.

Item 1. Business.

General

Norwood Financial Corp (the “Company”), a Pennsylvania corporation, was incorporated in 1995 to become the holding company for Wayne Bank (the “Bank”). The Company is a registered bank holding company subject to regulation and supervision by the Board of Governors of the Federal Reserve System (“Federal Reserve”). As of December 31, 2021, the Company had total consolidated assets of $2.069 billion, consolidated deposits of $1.757 billion, and consolidated stockholders’ equity of $205.3 million. The Company’s ratio of average equity to average assets was 10.04%, 10.70%, and 10.86% for fiscal years 2021, 2020 and 2019, respectively.

Wayne Bank is a Pennsylvania chartered bank and trust company headquartered in Honesdale, Pennsylvania. The Bank was originally chartered on February 17, 1870, as Wayne County Savings Bank and changed its name to Wayne County Bank and Trust in December 1943. In September 1993, the Bank adopted the name Wayne Bank. The Bank’s deposits are currently insured to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”) and the Bank is a member of the Federal Home Loan Bank (“FHLB”) of Pittsburgh. The Bank is regulated and examined by the Pennsylvania Department of Banking and Securities (“Department”) and the FDIC. The Bank is an independent community bank with fourteen offices in Northeastern Pennsylvania and sixteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York.

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The Bank offers a wide variety of personal and business credit services and trust and investment products and real estate settlement services to the consumers, businesses, nonprofit organizations, and municipalities in each of the communities that the Bank serves. The Bank primarily serves the northeastern Pennsylvania counties of Wayne, Pike, Monroe, Lackawanna and Luzerne and, to a much lesser extent, Susquehanna County in addition to the New York counties of Delaware, Sullivan, Ontario, Otsego and Yates. In addition, the Bank operates automated teller machines at twenty-nine branch facilities plus one machine at an off-site location and one machine at the former Narrowsburg Office location.

The Company’s main office is located at 717 Main Street, Honesdale, Pennsylvania and its main telephone number is (570) 253-1455. The Company maintains a website at wayne.bank. Information on our website should not be treated as part of this Annual Report on Form 10-K. The Company makes copies of its SEC filings available free of charge as soon as reasonably practicable after they are filed, through a link on its website to the SEC’s website.

Completed Acquisitions

UpState New York Bancorp, Inc. On July 7, 2020, the Company completed the acquisition of UpState New York Bancorp, Inc. (“UpState”), and its wholly owned subsidiary, USNY Bank (“USNY Bank”). The acquisition was completed when UpState was merged with and into the Company, with the Company as the surviving corporation of the merger and USNY Bank was merged with and into Wayne Bank, with Wayne Bank as the surviving entity. At the time of completion of the acquisition, USNY Bank conducted its business from two Bank of the Finger Lakes offices in Geneva and Penn Yan, New York, and two Bank of Cooperstown offices in Cooperstown and Oneonta, New York.

In the merger, shareholders of UpState elected to receive for each share of UpState common stock they owned, either 0.9390 shares of the Company’s common stock or $33.33 in cash, or a combination of both. All shareholder elections were subject to the allocation and proration procedures set forth in the Merger Agreement which were intended to ensure that 90% of the shares of UpState would be exchanged for the Company’s common stock and 10% of the shares of UpState would be exchanged for cash. In addition, under the terms of the Merger Agreement, UpState shareholders received an additional $0.67 per share in cash for each share of UpState common stock held. In the aggregate, the merger consideration paid to UpState shareholders consisted of approximately $8,845,198 in cash and 1,865,738 shares of the Company’s common stock.

The senior management of the Company and Wayne Bank remained the same following the completion of the Merger.  UpState directors Jeffrey S. Gifford and Alexandra K. Nolan have been appointed to the boards of directors of the Company and Wayne Bank. In addition, the remaining former directors of UpState were invited to join a regional advisory board. UpState President and CEO R. Michael Briggs entered into a consulting agreement with Wayne Bank. The Company has retained the brand names of USNY Bank’s two units, Bank of the Finger Lakes and Bank of Cooperstown, and has also retained USNY Bank’s administration center in Geneva, New York. Scott D. White, unit President of Bank of Cooperstown, and Jeffrey E. Franklin, unit President of Bank of the Finger Lakes, will also remain in place as executives of their units.

Delaware Bancshares, Inc. On July 31, 2016, the Company completed the acquisition of Delaware Bancshares, Inc. (“Delaware”) and its wholly owned subsidiary, The National Bank of Delaware County (“NBDC”). At the time of acquisition, Delaware had approximately $375.6 million in assets and 12 banking offices in Delaware and Sullivan Counties, New York. Pursuant to the terms of the Agreement and Plan of Merger, dated March 10, 2016, by and among the Company, Wayne Bank, Delaware and NBDC (the “Delaware Agreement”), Delaware was merged with and into the Company, with the Company as the surviving corporation of the merger (the “Merger”) and NBDC was merged with and into Wayne Bank immediately thereafter. At the effective time of the Merger, each outstanding share of the common stock of Delaware was converted, at the election of the holder but subject to the limitations and allocation and proration provisions set forth in the Delaware Agreement, into either $16.68 in cash or 0.6221 of a share of the Company’s common stock, par value $0.10 per share (the “Common Stock”). In the aggregate, the merger consideration paid to Delaware shareholders consisted of approximately $3,860,000 in cash and 431,605 shares of the Common Stock.

Competition

The competition for deposit products comes from other insured financial institutions such as commercial banks, thrift institutions, credit unions, and multi-state regional banks in the Company’s market area of Wayne, Pike, Monroe, Lackawanna and Luzerne Counties, Pennsylvania and Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York as well as from on-line banks. Based on data compiled by the FDIC as of June 30, 2021 (the latest date for which such data is available), the Bank had the third largest share of FDIC-insured deposits in Wayne County with approximately 22.3%, the second largest share in Pike County with 18.1%, seventh largest share in Monroe County with 3.6%, the eleventh largest share in Lackawanna County with 1.0% and the eighteenth largest share in Luzerne County with 0.2%.. At June 30, 2021, the Bank had the largest share of FDIC-insured deposits in Delaware County, New York, with 30.5% and the sixth largest share in Sullivan County, New York, with 7.5%. The Bank’s market share in Ontario, Otsego and Yates Counties were 4.3%, 16.4% and 11.7%, respectively. This data does not reflect deposits held by credit unions with which the Bank also competes. Deposit competition also includes a number of insurance products sold by local agents and

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investment products such as mutual funds and other securities sold by local and regional brokers. Loan competition varies depending upon market conditions and comes from other insured financial institutions such as commercial banks, thrift institutions, credit unions, multi-state regional banks, and mortgage bankers.

Personnel

As of December 31, 2021, the Bank had 263 full-time and three part-time employees. None of the Bank’s employees are represented by a collective bargaining group.

Trust Activities

The Bank operates a Wealth Management/Trust Department which provides estate planning, investment management and financial planning to customers for which it is generally compensated based on a percentage of assets under management. As of December 31, 2021, the Bank had $196.0 million of assets under management compared to $168.1 million as of December 31, 2020. The increase reflects new business generated during 2021, as well as stock market performance which can affect the value of a customer’s investment portfolio.

Subsidiary Activities

The Bank, a Pennsylvania chartered bank, is the only wholly owned subsidiary of the Company. Norwood Investment Corp. (“NIC”), a Pennsylvania corporation incorporated in 1996 and a Pennsylvania licensed insurance agency, is a wholly owned subsidiary of the Bank. NIC’s business is annuity and mutual fund sales and discount brokerage activities primarily to customers of the Bank. The annuities, mutual funds and other investment products are not insured by the FDIC or any other government agency. They are not deposits, obligations of or guaranteed by any bank. Until February 16, 2018, securities were offered through Invest Financial, a registered broker/dealer. Effective February 16, 2018, the broker/dealer relationship transitioned to LPL Financial LLC (“LPL”) as a result of the sale of Invest to LPL in 2017. LPL is a registered broker/dealer and a member of FINRA and the SIPC. NIC generated gross revenues for the Company of $127,000 and $122,000 in 2021 and 2020, respectively, which is included in Other Income.

WCB Realty Corp., a Pennsylvania corporation, is a wholly owned real estate subsidiary of the Bank whose principal asset is the administrative offices of the Company, which also includes the Main Office of the Bank.

WTRO Properties Inc., a Pennsylvania corporation, is a wholly owned real estate subsidiary of the Bank established to hold title to certain real estate upon which the Bank has foreclosed. As of December 31, 2021 and 2020, the outstanding balance of foreclosed properties on which WTRO held title totaled $1,742,000 and $965,000, respectively.

Regulation

Set forth below is a brief description of certain laws which relate to the regulation of the Company and the Bank. The description does not purport to be complete and is qualified in its entirety by reference to applicable laws and regulations.

Regulation of the Company

General. The Company, as a bank holding company registered under the Bank Holding Company Act of 1956, as amended (“BHCA”), is subject to regulation and supervision by the Federal Reserve. The Company is required to file periodic reports of its operations with, and is subject to examination by, the Federal Reserve. This regulation and oversight is generally intended to ensure that the Company limits its activities to those allowed by law and that it operates in a safe and sound manner without endangering the financial health of its subsidiary bank.

Under the BHCA, the Company generally must obtain the prior approval of the Federal Reserve before it may acquire control of another bank or bank holding company, merge or consolidate with another bank holding company, acquire all or substantially all of the assets of another bank or bank holding company, or acquire direct or indirect ownership or control of any voting shares of any bank or bank holding company if, after such acquisition, the Company would directly or indirectly own or control more than 5% of such shares.

Federal statutes impose restrictions on the ability of a bank holding company and its nonbank subsidiaries to obtain extensions of credit from its subsidiary bank, on the subsidiary bank’s investments in the stock or securities of the holding company, and on the subsidiary bank’s taking of the holding company’s stock or securities as collateral for loans to any borrower. A bank holding company and its subsidiaries are also prevented from engaging in certain tying arrangements in connection with any extension of credit, lease or sale of property, or furnishing of services by the subsidiary bank.

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Source of Strength Doctrine. Under the Bank Holding Company Act, a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner. Under this source of strength doctrine, a bank holding company should stand ready to use available resources to provide adequate capital to its subsidiary banks during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks. A bank holding company’s failure to meet its obligations to serve as a source of strength to its subsidiary banks will generally be considered by the Federal Reserve to be an unsafe and unsound banking practice or a violation of the Federal Reserve regulations, or both.

Non-Banking Activities. The business activities of the Company, as a bank holding company, are restricted by the BHCA. Under the BHCA and the Federal Reserve’s bank holding company regulations, a bank holding company generally may only engage in, or acquire or control voting securities or assets of a company engaged in, (1) banking or managing or controlling banks and other subsidiaries authorized under the BHCA and (2) any business activity the Federal Reserve has determined to be so closely related to banking or managing or controlling banks to be a proper incident thereto. These include any incidental activities necessary to carry on those activities, as well as a lengthy list of activities that the Federal Reserve has determined to be so closely related to the business of banking as to be a proper incident thereto.

In addition to the above authority, bank holding companies that qualify and elect to be treated as “financial holding companies” may engage in a broad range of additional activities that are (i) financial in nature or incidental to such financial activities or (ii) complementary to a financial activity and do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. These activities include securities underwriting and dealing, insurance agency and underwriting, and making merchant banking investments. The Company has not made an election to be deemed a financial holding company.

Regulatory Capital Requirements. The Federal Reserve has adopted regulatory capital rules pursuant to which it assesses the adequacy of capital in examining and supervising a bank holding company and in analyzing applications to it under the BHCA. The Federal Reserve’s capital rules are similar to those imposed on the Bank by the FDIC. See “Regulation of the Bank-Regulatory Capital Requirements.” The Federal Reserve’s Small Bank Holding Company Policy Statement, however, exempts from the regulatory capital requirements bank holding companies with less than $3.0 billion in consolidated assets that are not engaged in significant non-banking or off-balance sheet activities and that do not have a material amount of debt or equity securities registered with the SEC. As long as their bank subsidiaries are well capitalized, such bank holding companies need only maintain a pro forma debt to equity ratio of less than 1.0 in order to pay dividends and repurchase stock and to be eligible for expedited treatment on applications.

Regulation of the Bank

General. As a Pennsylvania chartered, FDIC-insured commercial bank which is not a member of the Federal Reserve System, the Bank is subject to extensive regulation and examination by the Department and by the FDIC, which insures its deposits to the maximum extent permitted by law. The federal and state laws and regulations applicable to banks regulate, among other things, the scope of their business, their investments, the reserves required to be kept against deposits, the timing of the availability of deposited funds and the nature and amount of and collateral for certain loans. The laws and regulations governing the Bank generally have been promulgated to protect depositors and not for the purpose of protecting stockholders. This regulatory structure also gives the federal and state banking agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in such regulation, whether by the Department, the FDIC or the United States Congress, could have a material impact on the Company, the Bank and their operations.

Pennsylvania Banking Law. The Pennsylvania Banking Code (“Banking Code”) contains detailed provisions governing the organization, location of offices, rights and responsibilities of directors, officers, and employees, as well as corporate powers, savings and investment operations and other aspects of the Bank and its affairs. The Banking Code delegates extensive rule-making power and administrative discretion to the Department so that the supervision and regulation of state-chartered banks may be flexible and readily responsive to changes in economic conditions and in savings and lending practices.

The Federal Deposit Insurance Act (“FDIA”), however, prohibits state-chartered banks from making new investments, loans, or becoming involved in activities as principal and equity investments which are not permitted for national banks unless (1) the FDIC determines the activity or investment does not pose a significant risk of loss to the Deposit Insurance Fund and (2) the bank meets all applicable capital requirements. Accordingly, the additional operating authority provided to the Bank by the Banking Code is significantly restricted by the FDIA.

Interstate Banking. As a result of the acquisition of UpState and Delaware, Wayne Bank now operates branches in Pennsylvania and New York. Under the federal Riegle-Neal Interstate Banking and Branching Efficiency Act (the “Riegle-Neal Act”), an insured state bank that establishes a branch in another state may conduct any activity at such branch that is permissible under the laws of its home state to the extent that such activity is permissible either for a bank chartered by the host state or for a branch of an out-

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of-state national bank in the host state. The laws of the host state, including laws regarding community reinvestment, consumer protection, fair lending and branching within the host state, apply to any branch of an out-of-state bank to the same extent as such laws apply to a branch of an out-of-state national bank. The Riegle-Neal Act prohibits out-of-state banks from using their interstate branches primarily for purposes of deposit production. If a federal banking regulator reasonably determines from available information that an out-of-state bank’s level of lending in a host state is less than half the loan-to-deposit ratio for all banks in the host state, the regulator may order the closure of the out-of-state branches or prohibit the opening of new branches in the host state unless the out-of-state bank has an acceptable plan or can give reasonable assurances that it will reasonably help meet the credit needs of the communities served in the host state.

Federal Deposit Insurance. The Bank’s deposits are insured to applicable limits by the FDIC. The general maximum deposit insurance amount is $250,000.

The FDIC assesses insured depository institutions to maintain the Deposit Insurance Fund.  Under the FDIC’s risk-based assessment system, banks that are deemed to be less risky pay lower assessments. Assessment rates for small institutions (those with less than $10 billion in assets) are based on an institution’s weighted average CAMELS component ratings and certain financial ratios and are applied to the institution’s assessment base, which equals its average total assets minus its average tangible equity. Current deposit insurance assessment rates (which are subject to certain adjustments) range from 3 to 16 basis points for institutions with CAMELS composite ratings of 1 or 2, 6 to 30 basis points for those with a CAMELS composite score of 3, and 16 to 30 basis points for those with CAMELS composite scores of 4 or 5.

The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of the Bank. We cannot predict what the FDIC assessment rates will be in the future.

Regulatory Capital Requirements. The FDIC has promulgated capital adequacy rules for state-chartered banks that, like the Bank, are not members of the Federal Reserve System. Effective January 1, 2015, the capital adequacy rules were substantially revised to conform to the international regulatory standards agreed to by the Basel Committee on Banking Supervision in the accord often referred to as “Basel III”.  The revised capital rules apply to all depository institutions as well as to all top-tier bank and savings and loan holding companies that are not subject to the Federal Reserve Board’s Small Bank Holding Company Policy Statement.

Under the FDIC’s capital rules, banks are required to meet four minimum capital standards: (1) a “Tier 1” or “core” capital leverage ratio equal to at least 4% of total adjusted assets; (2) a common equity Tier 1 capital ratio equal to 4.5% of risk-weighted assets; (3) a Tier 1 risk-based ratio equal to 6% of risk-weighted assets; and (4) a total capital ratio equal to 8% of total risk-weighted assets. Common equity Tier 1 capital is defined as common stock instruments, retained earnings, any common equity Tier 1 minority interest and, unless the bank has made an “opt-out” election, accumulated other comprehensive income, net of goodwill and certain other intangible assets. Tier 1 or core capital is defined as common equity Tier 1 capital plus certain qualifying subordinated interests and grandfathered capital instruments. Total capital consists of Tier 1 capital plus Tier 2 or supplementary capital items, which include allowances for loan losses in an amount of up to 1.25% of risk-weighted assets, qualifying subordinated instruments and certain grandfathered capital instruments. An institution’s risk-based capital requirements are measured against risk-weighted assets, which equal the sum of each on-balance-sheet asset and the credit-equivalent amount of each off-balance-sheet item after being multiplied by an assigned risk weight. Risk weightings range from 0% for cash to 100% for property acquired through foreclosure, commercial loans, and certain other assets to 150% for exposures that are more than 90 days past due or are on nonaccrual status and certain commercial real estate facilities that finance the acquisition, development or construction of real property.

In addition to the above minimum requirements, the capital rules require banks and covered financial institution holding companies to maintain a capital conservation buffer of at least 2.5% of risk-weighted assets over and above the minimum risk-based capital requirements. Institutions that do not maintain the required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital buffer requirement effectively raises the minimum required risk-based capital ratios to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital on a fully phased-in basis.

In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors but also qualitative factors, and has the authority to establish higher capital requirements for individual institutions where necessary.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) enacted in 2018, directed the federal banking agencies to develop a community bank leverage ratio of tangible capital to average total consolidated assets of between 8% and 10% as an alternative to the current leverage and risk-based capital rules for qualifying community banks and satisfying any other leverage or capital requirements to which they are subject. Qualifying community banks meeting the community bank leverage ratio would also be deemed well-capitalized for purposes of the prompt corrective action rules. A qualifying community bank is a depository institution or holding company with total consolidated assets of less than $10 billion that is not excluded from qualification by the federal

6

banking regulators based on the institution’s risk profile. Under the final rule issued by the federal banking agencies, a qualifying community bank may opt in to the community bank leverage ratio framework if its community bank leverage ratio exceeds 9%. The Bank has not elected to opt into the community bank leverage ratio framework.

The Bank is also subject to minimum capital requirements imposed by the Department on Pennsylvania-chartered depository institutions. Under the Department’s capital requirements, a Pennsylvania bank or savings bank must maintain a minimum leverage ratio of Tier 1 capital (as defined under the FDIC’s capital regulations) to total assets of 4%. In addition, the Department has the supervisory discretion to require higher leverage ratio for any institutions based on the institution’s substandard performance in any of a number of areas. The Bank was in compliance with both the FDIC and the Pennsylvania capital requirements in effect as of December 31, 2021.

Prompt Corrective Regulatory Action. Under applicable federal statutes, the federal bank regulatory agencies are required to take “prompt corrective action” with respect to institutions that do not meet specified minimum capital requirements. For these purposes, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the FDIC’s prompt corrective action regulations, an institution is deemed to be “well capitalized” if it has a Total Risk-Based Capital Ratio of 10.0% or greater, a Tier 1 Risk-Based Capital Ratio of 8.0% or greater, a Common Equity Tier 1 risk-based capital ratio of 6.5% or better and a leverage ratio of 5.0% or greater.

An institution is “adequately capitalized” if it has a Total Risk-Based Capital Ratio of 8.0% or greater, a Tier 1 Risk-Based Capital Ratio of 6.0% or greater, a Common Equity Tier 1 Capital Ratio of 4.5% or better and a Leverage Ratio of 4.0% or greater. An institution is “undercapitalized” if it has a Total Risk-Based Capital Ratio of less than 8.0%, a Tier 1 Risk-Based Capital ratio of less than 6.0%, a Common Equity Tier 1 ratio of less than 4.5% or a Leverage Ratio of less than 4.0%. An institution is deemed to be “significantly undercapitalized” if it has a Total Risk-Based Capital Ratio of less than 6.0%, a Tier 1 Risk-Based Capital Ratio of less than 4.0%, a Common Equity Tier 1 ratio of less than 3.0% or a Leverage Ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%

The prompt corrective action regulations provide for the imposition of a variety of requirements and limitations on institutions that fail to meet the above capital requirements. In particular, the FDIC may require any state non-member bank that is not “adequately capitalized” to take certain action to increase its capital ratios. If the non-member bank’s capital is significantly below the minimum required levels of capital or if it is unsuccessful in increasing its capital ratios, the bank’s activities may be restricted.

At December 31, 2021, the Bank qualified as “well capitalized” under the prompt corrective action rules.

Affiliate Transaction Restrictions. Federal laws strictly limit the ability of banks to engage in transactions with their affiliates, including their bank holding companies. In particular, loans by a subsidiary bank and its parent company or the nonbank subsidiaries of the bank holding company are limited to 10% of a bank subsidiary’s capital and surplus and, with respect to such parent company and all such nonbank subsidiaries, to an aggregate of 20% of the bank subsidiary’s capital and surplus. Further, loans and other extensions of credit generally are required to be secured by eligible collateral in specified amounts. Transactions with non-affiliates may be treated as transactions with an affiliate to the extent that proceeds from the transaction are used to benefit the affiliate. Federal law also requires that all transactions between a bank and its affiliates be on terms as favorable to the bank as transactions with non-affiliates.

Loans to One Borrower. Under Pennsylvania law, commercial banks have, subject to certain exemptions, lending limits to one borrower in an amount equal to 15% of the institution’s capital accounts. An institution’s capital account includes the aggregate of all capital, surplus, undivided profits, capital securities and general reserves for loan losses. Pursuant to the national bank parity provisions of the Pennsylvania Banking Code, the Bank may also lend up to the maximum amounts permissible for national banks, which are allowed to make loans to one borrower of up to 25% of capital and surplus in certain circumstances. As of December 31, 2021, the Bank’s loans-to-one-borrower limitation was $28.6 million and the Bank was in compliance with such limitation.

Federal Home Loan Bank System. The Bank is a member of the FHLB of Pittsburgh, which is one of 11 regional FHLBs. Each FHLB serves as a reserve or central bank for its members within its assigned region. It is funded primarily from funds deposited by member institutions and proceeds from the sale of consolidated obligations of the FHLB System. It makes loans to members (i.e., advances) in accordance with policies and procedures established by the Board of Directors of the FHLB.

As a member, the Bank is required to purchase and maintain restricted stock in the FHLB of Pittsburgh in an amount equal to the greater of 1% of its aggregate unpaid residential mortgage loans, home purchase contracts or similar obligations at the beginning of each year or 5% of the Bank’s outstanding advances from the FHLB. At December 31, 2021, the Bank was in compliance with this requirement.

Restrictions on Dividends. The Pennsylvania Banking Code states, in part, that dividends may be declared and paid only out of accumulated net earnings and may not be declared or paid unless surplus (retained earnings) is at least equal to contributed capital.

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The Bank has not declared or paid any dividends which cause the Bank’s retained earnings to be reduced below the amount required. Finally, dividends may not be declared or paid if the Bank is in default in payment of any assessment due the FDIC.

The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the extent that the holding company’s net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition. The Federal Reserve also indicated that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. In addition, the Federal Reserve’s guidance states that a bank holding company should consult with its regional Federal Reserve Bank in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid or that could result in a material adverse change to the organization’s capital structure. Finally, under the federal prompt corrective action regulations, the Federal Reserve may prohibit a bank holding company from paying any dividends if the holding company’s bank subsidiary is classified as “undercapitalized.”

Item 1A. Risk Factors

Not applicable.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties.

The Bank operates from its main office located at 717 Main Street, Honesdale, Pennsylvania and twenty-nine additional branch offices in Northeastern Pennsylvania and upstate New York. The Bank’s total investment in office property and equipment is $35.9 million with a net book value of $17.3 million as of December 31, 2021. The Bank currently operates automated teller machines at all but one of its community office facilities, as well as one off-site ATM. The Bank leases eight of its locations.

Item 3. Legal Proceedings.

Neither the Company nor its subsidiaries are involved in any other pending legal proceedings, other than routine legal matters occurring in the ordinary course of business, which in the aggregate involve amounts which are believed by management to be immaterial to the consolidated financial condition or results of operations of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a)Market Information

STOCK LISTING

Norwood Financial Corp stock is traded on the Nasdaq Global Market under the symbol NWFL. As of December 31, 2021, there were approximately 1,400 registered stockholders based on the records of our transfer agent.

The following firms are known to make a market in the Company’s stock:

Boenning & Scattergood, Inc. ‎West Conshohocken, PA 19428 ‎800-883-1212	RBC Capital Markets Philadelphia, PA 19103 888-848-4677
Janney Montgomery Scott, LLC ‎Scranton, PA 18503 800-638-4417	Stifel Nicolaus St,. Louis, MO 63102 314-342-2000

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The following table sets forth the price range and cash dividends declared per share regarding common stock for the periods indicated:

	Closing Price Range
	High		Low		Cash dividend
Year 2021					Declared per share
First Quarter	$	28.96	$	23.75	$	0.26
Second Quarter		27.07		24.75		0.26
Third Quarter		26.31		24.64		0.26
Fourth Quarter		27.60		25.42		0.28
Year 2020
First Quarter	$	39.03	$	24.37	$	0.25
Second Quarter		26.59		21.65		0.25
Third Quarter		29.57		23.24		0.25
Fourth Quarter		29.25		22.88		0.26

The book value of the common stock was $25.24 per share as of December 31, 2021 compared to $23.72 per share as of December 31, 2020. As of December 31, 2021, the closing stock price was $25.99 per share, compared to $26.17 as of December 31, 2020.

TRANSFER AGENT

Computershare provides Transfer Agent services for the Company. Stockholders who may have questions regarding their stock ownership should contact the Transfer Agent at 800-662-7232, by regular mail at P.O. Box 50500, Louisville, KY 40233-5000, or by overnight delivery at 462 South 4^th Street Suite 1600, Louisville, KY 40202.

DIVIDEND CALENDAR

Dividends on the Company’s common stock, if approved by the Board of Directors, are customarily paid on or about February 1, May 1, August 1 and November 1.

AUTOMATIC DIVIDEND REINVESTMENT PLAN

The Plan, open to all shareholders, provides the opportunity to have dividends automatically reinvested into the Company’s common stock. Participants in the Plan may also elect to make cash contributions to purchase additional shares of common stock. Stockholders of the Company may contact the transfer agent for additional information.

(b)Use of Proceeds. Not applicable.

(c)Issuer Purchases of Equity Securities. Set forth below is information regarding the Company’s stock repurchases during the fourth quarter of the fiscal year ended December 31, 2021.

	Issuer Purchases of Equity Securities
	Total Number of Shares (or Units) purchased	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs *	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs
October 1 – 31, 2021	17,959	$	25.50	17,959	478,134
November 1 – 30, 2021	—		—	—	478,134
December 1 – 31, 2021	420		26.00	420	477,714
Total	18,379	$	25.51	18,379	477,714

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*On March 19, 2008, the Company announced its intention to repurchase up to 5% of its outstanding common stock (approximately 226,050 split-adjusted shares) in the open market. On November 10, 2011, the Company announced that it had increased the number of shares which may be repurchased under its open-market program to 5% of its currently outstanding shares, or approximately 270,600 split-adjusted shares. On March 30, 2021, the Company announced that it had increased the number of shares which may be repurchased under its open-market program to 5% of its currently outstanding shares, or approximately 400,000 split-adjusted shares.

Item 6. Selected Financial Data.

For the years ended December 31,	2021	2020	2019	2018	2017
Net interest income	$65,313	$50,476	$38,606	$36,839	$34,908
Provision for loan losses	4,200	5,450	1,250	1,725	2,200
Other income	8,056	7,182	6,355	6,837	6,496
Net realized gains on sales of loans and securities	269	598	423	228	415
Other expenses	38,578	34,440	27,311	25,975	24,870
Income before income taxes	30,860	18,366	16,823	16,204	14,749
Income tax expense	5,945	3,286	2,608	2,553	6,551
NET INCOME	24,915	15,080	14,215	13,651	8,198
Net income per share-Basic*	$3.05	$2.09	$2.27	$2.19	$1.32
-Diluted*	$3.04	$2.09	$2.25	$2.17	$1.31
Cash dividends declared*	$1.06	$1.01	$0.97	$0.90	$0.87
Dividend pay-out ratio	34.75%	48.33%	42.73%	41.10%	65.91%
Return on average assets	1.24%	0.97%	1.18%	1.19%	0.73%
Return on average equity	12.35%	9.06%	10.83%	11.71%	7.04%
BALANCES AT YEAR-END
Total assets	2,068,504	1,851,864	1,230,610	1,184,559	1,132,916
Loans receivable	1,354,931	1,410,732	924,581	850,182	764,092
Allowance for loan losses	16,442	13,150	8,509	8,452	7,634
Total deposits	1,756,793	1,535,385	957,529	946,780	929,384
Stockholders’ equity	205,262	194,785	137,428	122,285	115,739
Trust assets under management	195,958	168,085	170,685	151,224	157,838
Book value per share*	$25.24	$23.72	$21.67	$19.43	$18.61
Tier 1 Capital to risk-adjusted assets	12.49%	11.65%	13.08%	13.04%	13.16%
Total Capital to risk-adjusted assets	13.66%	12.62%	13.98%	14.00%	14.11%
Allowance for loan losses to total loans	1.21%	0.93%	0.92%	0.99%	1.00%
Non-performing assets to total assets	0.12%	0.24%	0.19%	0.19%	0.37%

* Per share information has been restated to reflect the 50% stock dividend declared in 2017.

Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations.

Introduction

This Management’s Discussion and Analysis and related financial data are presented to assist in the understanding and evaluation of the financial condition and results of operations for the Company and the Bank, as of December 31, 2021 and 2020, and

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for the years ended December 31, 2021 and 2020. This section should be read in conjunction with the consolidated financial statements and related footnotes.

Critical Accounting Policies

Note 2 to the Company’s consolidated financial statements (incorporated by reference in Item 8 of the Form 10-K) lists significant accounting policies used in the development and presentation of its financial statements. This discussion and analysis, the significant accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors that are necessary for an understanding and evaluation of the Company and its results of operations.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, the determination of other-than-temporary impairment on securities, the determination of goodwill impairment and the fair value of financial instruments. Please refer to the discussion of the allowance for loan losses calculation under “Allowance for Loan Losses and Non-performing Assets” in the “Financial Condition” section.

The deferred income taxes reflect temporary differences in the recognition of the revenue and expenses for tax reporting and financial statement purposes, principally because certain items are recognized in different periods for financial reporting and tax return purposes. Although realization is not assured, the Company believes it is more likely than not that all deferred tax assets will be realized.

In estimating other-than-temporary impairment losses on securities, the Company considers 1) the length of time and extent to which the fair value has been less than cost and 2) the financial condition of the issuer. The Company does not have the intent to sell these securities and it is more likely than not that it will not sell the securities before recovery of their cost basis. The Company believes that any unrealized losses at December 31, 2021 and 2020 represent temporary impairment of the securities.

The fair value of financial instruments is based upon quoted market prices, when available. For those instances where a quoted price is not available, fair values are based upon observable market based parameters, as well as unobservable parameters. Any such valuation is applied consistently over time.

In connection with the acquisition of Delaware in 2016, we recorded goodwill in the amount of $1.6 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of UpState.in July 2020, we recorded goodwill in the amount of $17.9 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. Goodwill is tested annually and deemed impaired when the carrying value of goodwill exceeds its implied fair value.

FINANCIAL CONDITION

Total Assets

Total assets as of December 31, 2021 were $2.069 billion compared to $1.852 billion as of year-end 2020, an increase of $216.6 million. The increase in assets was primarily attributable to the $221.4 million increase in total deposits.

Loans Receivable

As of December 31, 2021, loans receivable totaled $1.355 billion compared to $1.411 billion as of year-end 2020, a decrease of $55.8 million due primarily to a $78.8 million decrease in PPP loans resulting from loan forgiveness. Commercial real estate loans grew $49.6 million, while residential mortgage loans increased $9.9 million during the year.

The Bank’s loan products include loans for personal and business use. Personal lending includes mortgage lending to finance principal residences and, to a lesser extent, second home dwellings. The Bank’s loan products include fixed-rate mortgage products with terms up to 30 years which may be sold in the secondary market through the Federal National Mortgage Association (“Fannie Mae”) or the FHLB, or held in the Bank’s portfolio to the extent consistent with our asset/liability management strategies. Fixed-rate home equity loans are originated on terms up to 180 months. Home equity lines of credit tied to the prime rate are also offered. The Bank also offers indirect dealer financing of automobiles (new and used), boats, and recreational vehicles through a limited network of dealers in Northeast Pennsylvania and the Southern Tier of New York. At December 31, 2021, there were $141.7 million of indirect loans in the portfolio. In connection with the acquisition of UpState in 2020, the Company acquired approximately $413.5 million in loans, including $37.3 million in residential real estate loans, $289.0 million in commercial real estate loans, $92.0 million in commercial, financial and agricultural loans, and $2.3 million in consumer loans. As of December 31, 2021, the approximate outstanding balance of these acquired loans was $287.1 million. In connection with the acquisition of Delaware, the Company acquired approximately $116.7 million in loans, including $68.7 million in residential real estate loans, $22.5 million in commercial real estate loans, $13.6 million in commercial,

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financial and agricultural loans, $6.5 million in consumer loans and $5.4 in construction loans. As of December 31, 2021, the approximate outstanding balance of these acquired loans was $37.6 million.

Commercial loans and commercial mortgages are provided to local small and mid-sized businesses at a variety of terms and rate structures. Commercial lending activities include lines of credit, revolving credit, term loans, mortgages, various forms of secured lending and a limited amount of letter of credit facilities. The rate structure may be fixed, immediately repricing tied to the prime rate or adjustable at set intervals. Also included in commercial loans are municipal finance lending in which the Bank has been active in recent years. Municipal lending includes both general obligations of local taxing authorities and revenue obligations of specific revenue producing projects such as sewer authorities and educational units. At December 31, 2021, the Bank had approximately $135.7 million in loans on commercial rentals, as well as $116.3 million of loans outstanding on residential rentals, which are its largest lending concentrations.

As a qualified Small Business Administration (“SBA”) lender, the Bank originated $156.3 million of PPP loans in total, including loans originated by USNY Bank prior to the acquisition date.

The Bank’s construction lending has primarily involved lending for commercial construction projects and for single-family residences. All loans for the construction of speculative sale homes have a loan-to-value ratio of not more than 80%. For both commercial and single-family projects, loan proceeds are disbursed during the construction phase according to a draw schedule based on the stage of completion. Construction projects are inspected by contracted inspectors or bank personnel. Construction loans are underwritten on the basis of the estimated value of the property as completed. For commercial projects, the Bank typically also provides the permanent financing after the construction period, as a commercial mortgage.

The Bank also, from time to time, originates loans secured by undeveloped land. Land loans granted to individuals have a term of up to five years. Land loans granted to developers may have an interest only period during development. The substantial majority of land loans have a loan-to-value ratio not exceeding 75%. The Bank has limited its exposure to land loans but may expand its lending on raw land, as market conditions allow, to qualified borrowers experienced in the development and sale of raw land.

Loans involving construction financing and loans on raw land have a higher level of risk than loans for the purchase of existing homes since collateral values, land values, development costs and construction costs can only be estimated at the time the loan is approved. The Bank has sought to minimize its risk in construction lending and in lending for the purchase of raw land by offering such financing primarily to builders and developers to whom the Bank has loaned funds in the past and to persons who have previous experience in such projects. The Bank also limits construction lending and loans on raw land to its market area, with which management is familiar.

Adjustable-rate loans decrease the risks associated with changes in interest rates by periodically repricing, but involve other risks because as interest rates increase, the underlying payments by the borrower increase, thus increasing the potential for payment default. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustment of the contractual interest rate may also be limited by the maximum periodic interest rate adjustment permitted in certain adjustable-rate mortgage loan documents, and, therefore is potentially limited in effectiveness during periods of rapidly rising interest rates. These risks have not had an adverse effect on the Bank.

The Bank’s adjustable-rate loan portfolio includes approximately $14.8 million in loan participations indexed to the London Interbank Offered Rate (“LIBOR”) which is expected to be phased out by June 30, 2023. The Bank anticipates that the terms of LIBOR-based loans, which have not matured prior to the phase-out of LIBOR will be negotiated to incorporate a to-be-determined substitute reference rate. The Bank must rely on the lead bank to renegotiate the terms of loans in which the Bank has a participation. There can be no assurance that the lead bank will be able to successfully renegotiate the loans in which the Bank has participations or that the substitute reference rate will perform as satisfactorily as LIBOR.

Consumer lending, including indirect financing, provides benefits to the Bank’s asset/liability management program by reducing the Bank’s exposure to interest rate changes, due to their generally shorter terms. Such loans may entail additional credit risks compared to owner-occupied residential mortgage lending especially when unsecured or secured by collateral such as automobiles that depreciate rapidly.

Commercial lending including real-estate related loans entail significant additional risks when compared with residential real estate and consumer lending. For example, commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers. The payment experience on such loans typically is dependent on the successful operation of the project and these risks can be significantly impacted by the cash flow of the borrowers and market conditions for commercial office, retail, and warehouse space. In periods of decreasing cash flows, the commercial borrower may permit a lapse in general maintenance of the property causing the value of the underlying collateral to deteriorate. The liquidation of commercial property is often more costly and may involve more time to sell than residential real estate. The Bank offsets such factors with requiring more owner equity, a lower loan to value ratio and

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by obtaining the personal guaranties of the principals. In addition, a majority of the Bank’s commercial real estate portfolio is owner-occupied property.

Commercial loans and leases are considered to have a higher degree of credit risk than secured real estate lending. The repayment of unsecured commercial business loans is wholly dependent on the success of the borrower’s business, while secured commercial business loans may be secured by collateral that may not be readily marketable in the event of default. Municipal financing includes lending to local taxing authorities and revenue-producing projects. Such loans may constitute the general obligation of the taxing authority or may rely on a specific revenue source which is responsible for the repayment of the debt. General obligations are considered to carry a lower level of risk than other loan types since they are backed by the full faith and credit of the taxing authority. Revenue obligations are backed solely by revenues generated by the project financed and repayment may be affected by the success of the project.

Due to the type and nature of the collateral, consumer lending generally involves more credit risk when compared with residential real estate lending. Consumer lending collections are typically dependent on the borrower’s continuing financial stability, and thus, are more likely to be adversely affected by job loss, divorce, illness and personal bankruptcy. In most cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan balance. The remaining deficiency is usually turned over to a collection agency.

There are additional risks associated with indirect lending since we must rely on the dealer to provide accurate information to us and accurate disclosures to the borrowers. These loans are principally done on a non-recourse basis. We seek to mitigate these risks by only dealing with dealers with whom we have a long-standing relationship.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) prohibits lenders from making residential mortgages unless the lender makes a reasonable and good faith determination that the borrower has a reasonable ability to repay the mortgage loan according to its terms. A borrower may recover statutory damages equal to all finance charges and fees paid within three years of a violation of the ability-to-repay rule and may raise a violation as a defense to foreclosure at any time. As authorized by the Dodd-Frank Act, the Consumer Financial Protection Bureau (“CFPB”) has adopted regulations defining “qualified mortgages” that are presumed to comply with the Dodd-Frank Act’s ability-to-repay rules. Under the CFPB regulations, qualified mortgages must satisfy the following criteria: (i) no negative amortization, interest-only payments, balloon payments, or term greater than 30 years; (ii) no points or fees in excess of 3% of the loan amount for loans over $100,000; (iii) borrower’s income and assets are verified and documented; and (iv) the borrower’s debt-to-income ratio generally may not exceed 43%. Qualified mortgages are conclusively presumed to comply with the ability-to-pay rule unless the mortgage is a “higher cost” mortgage, in which case the presumption is rebuttable. Under the EGRRCPA, enacted in 2018, residential mortgages originated for portfolio by insured depository institutions, like the Bank, with less than $10 billion in total consolidated assets will be treated as qualified mortgages; provided that the mortgage terms do not include interest-only payments or negative amortization, total points and fees do not exceed 3% of the loan amount, prepayment penalties are not in excess of those permitted for qualified mortgages under Regulation Z and the lender has considered and documented the debt, income and financial resources of the borrower.

The Bank has established various lending limits for its officers and also maintains an Officer Loan Committee to approve higher loan amounts. The Officer Loan Committee is comprised of the President and Chief Executive Officer, Chief Lending Officer and other Bank officers. The Officer Loan Committee has the authority to approve all loans up to set limits based on the type of loan and the collateral. Requests in excess of these limits must be submitted to the Directors’ Loan Committee or Board of Directors for approval. Additionally, the President and Chief Executive Officer, and the Chief Lending Officer and other officers have the authority to approve secured and unsecured loans up to amounts approved by the Board of Directors and maintained in the Bank’s Loan Policy. Notwithstanding individual lending authority, certain loan policy exceptions must be submitted to the Officer Loan Committee for approval.

Hazard insurance coverage is required on all properties securing loans made by the Bank. Flood insurance is also required, when applicable.

Loan applicants are notified of the credit decision by letter. If the loan is approved, the loan commitment specifies the terms and conditions of the proposed loan including the amount, interest rate, amortization term, a brief description of the required collateral, and the required insurance coverage. The borrower must provide proof of fire, flood (if applicable) and casualty insurance on the property serving as collateral and title insurance, and these applicable insurances must be maintained during the full term of the loan.

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The following table sets forth maturities and interest rate sensitivity for selected categories of loans as of December 31, 2021. Scheduled repayments are reported in the maturity category in which payment is due. Demand loans, loans having no stated schedule of repayments and no stated maturity and overdrafts are reported as due in one year or less.

	One Year		After One to		After Five Years			After
	or Less		Five Years		Through 15 years			15 years		Total
	(dollars in thousands)
Real Estate:
Residential	$	49,550	$	119,830	$	75,898	$	27,762	$	273,040
Commercial		55,376		192,647		327,434		53,267		628,724
Agricultural		1,003		1,420		16,475		43,027		61,925
Construction		2,483		807		8,036		10,664		21,990
Commercial loans		81,996		77,427		25,943		665		186,031
Other agricultural loans		10,390		10,700		13,848		2,992		37,930
Consumer loans		59,202		79,960		7,183		55		146,400
Total	$	260,000	$	482,791	$	474,817	$	138,432	$	1,356,040
Loans with fixed rates	$	46,765	$	192,717	$	345,033	$	199,759	$	784,274
Loans with floating rates		136,262		362,582		69,722		3,200		571,766
Total	$	183,027	$	555,299	$	414,755	$	202,959	$	1,356,040

allowance for Loan Losses

The allowance for loan losses totaled $16,442,000 as of December 31, 2021 and represented 1.21% of total loans receivable compared to $13,150,000 and 0.93% of total loans as of year-end 2020. Net charge-offs for 2021 totaled $908,000 and represented 0.07% of average loans compared to $809,000 and 0.07% of average loans in 2020.

Management assesses the adequacy of the allowance for loan losses on a quarterly basis. The process includes a review of the risks inherent in the loan portfolio. It also includes an analysis of impaired loans and a historical review of losses. Other factors considered in the analysis include: concentrations of credit in specific industries in the commercial portfolio, the local and regional economic conditions, trends in delinquencies, internal risk rating classifications, total loan growth in the portfolio and fluctuations in large balance credits. During 2020, the Company added qualitative factors for COVID-19 related industries and for loans which have received deferral of payment due to COVID-19 factors. For loans acquired, including those that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discounts.

The Company has limited exposure to higher-risk loans. The Company does not originate option ARM products, interest only loans, sub-prime loans or loans with initial teaser rates in its residential real estate portfolio. The Company has $10.8 million of junior lien home equity loans. For 2021, there were $13,000 of charge-offs for this portfolio, with recoveries of $13,000 in 2021.

As of December 31, 2021, the Company considered its concentration of credit risk profile to be acceptable. The highest concentrations are in commercial rentals and the residential rentals categories.

During 2020, the Company recognized an increase in its adversely classified loans due primarily to loan balances acquired from UpState. The loans were accounted for in accordance with ASC 310-30, and were appropriately recorded at fair value after recording a specific loan fair value adjustment of $6,937,000. The Company assesses a loss factor against the classified loans, which is based on prior experience. Classified loans that are considered impaired are measured on a loan-by-loan basis. The Company values such loans by either the present value of expected cash flows, the loan’s obtainable market price or the fair value of collateral if the loan is collateral dependent.

At December 31, 2021, the recorded investment in impaired loans, not requiring an allowance for loan losses, was $157,000 (net of charge-offs against the allowance for loan losses of $0). The recorded investment in impaired loans, requiring an allowance for loan losses, was $1,517,000, (net of charge-offs against the allowance for loan losses of $0) . At December 31, 2020, the recorded

14

investment in impaired loans not requiring an allowance for loan losses, was $2,662,000 (net of charge-offs of $652,000). The recorded investment in impaired loans, requiring an allowance for loan losses, was $0.

As a result of its analysis, after applying these factors, management considers the allowance as of December 31, 2021, adequate. However, there can be no assurance that the allowance for loan losses will be adequate to cover significant losses that might be incurred in the future.

The following table sets forth information with respect to the Bank’s allowance for loan losses as of December 31, 2021 and 2020:

	As of December 31,
	2021			2020
	(dollars in thousands)
Total loans receivable, net of deferred fees	$	1,354,931		$	1,410,732
Allowance balance at beginning of period	$	13,150		$	8,509
Net (charge-offs) recoveries:
Real Estate-Residential		57			(35)
Real Estate-Commercial		(433)			(413)
Real Estate-Agricultural		—			—
Real Estate-Construction		—			—
Commercial loans		(124)			37
Other agricultural loans		(27)			(11)
Consumer		(381)			(387)
Total		(908)			(809)
Provision Expense		4,200			5,450
Allowance balance at end of period	$	16,442		$	13,150
Average loans receivable:
Real Estate-Residential	$	264,305		$	241,961
Real Estate-Commercial		595,854			511,592
Real Estate-Agricultural		64,295			26,935
Real Estate-Construction		21,793			18,268
Commercial loans		247,953			206,164
Other agricultural loans		40,215			16,645
Consumer		152,478			156,208
Total average loans outstanding	$	1,386,893		$	1,177,773
Net (charge-offs) recoveries as a percent of average loans outstanding
Real Estate-Residential		0.02	%		(0.01)	%
Real Estate-Commercial		(0.07)			(0.08)
Real Estate-Agricultural		-			-
Real Estate-Construction		-			-
Commercial loans		(0.05)			0.02
Other agricultural loans		(0.07)			(0.07)
Consumer		(0.25)			(0.25)
Total net charge-offs		(0.07)	%		(0.07)	%
Credit Quality Ratios:
As a percent of year-end loans, net of unearned income:
Allowance for loan losses		1.21%			0.93%
Nonaccrual loans		0.05%			0.24%
Nonperforming loans		0.05%			0.24%
Allowance for loan losses to nonaccrual loans		2557.08%			387.79%
Allowance for loan losses to nonperforming loans		2240.05%			387.79%

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The following table sets forth the allocation of the Bank’s allowance for loan losses by loan category and the percent of loans in each category to total loans at the date indicated. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which credit losses may occur. The total allowance is available to absorb losses from any type of loan.

	As of December 31,
	2021				2020
			% of				% of
			Loans				Loans
			to Total				to Total
	Amount		Loans		Amount		Loans
	(dollars in thousands)
Real estate – residential	$	2,175	20.1	%	$	1,960	18.6	%
Real estate – commercial		10,878	46.4			8,004	41.0
Real estate – agricultural		—	4.6			—	4.7
Real estate – construction		133	1.6			150	1.5
Commercial		1,490	13.7			1,360	20.1
Other agricultural loans		—	2.8			—	2.9
Consumer		1,766	10.8			1,676	11.2
Total	$	16,442	100	%	$	13,150	100	%

As a result of the acquisition of UpState, the Company added $107.3 million of agricultural loans to the loan portfolio. These loans are included in the outstanding balance information, but do not require an allocation of the allowance for loan losses since they were recorded at fair value in accordance with ASC 310-20 and ASC 310-30.

Additional information about the allowance for loan losses at December 31, 2021 is presented under “Item 1. Business” of this Annual Report on Form 10-K, as well as in Note 2 and Note 4 to the audited consolidated financial statements.

Non-Performing Assets

Non-performing assets consist of non-performing loans and real estate owned as a result of foreclosure, which is held for sale. Loans are placed on non-accrual status when management believes that a borrower’s financial condition is such that collection of interest is doubtful. Commercial and real estate related loans are generally placed on non-accrual when interest is 90 days delinquent. When loans are placed on non-accrual, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses.

As of December 31, 2021, non-performing loans totaled $734,000 and represented 0.05% of total loans compared to $3,391,000 or 0.24% as of December 31, 2020. The decrease in the level of non-performing loans reflects upgrades to accrual status on several loans acquired from UpState, as well as payments received on other non-performing credits. Additionally, one loan with a carrying value of $1,487,000 as of December 31, 2020 was transferred to Foreclosed Real Estate Owned during 2021.

Foreclosed real estate owned totaled $1,742,000 as of December 31, 2021 and $965,000 as of December 31, 2020. During 2021, property with a carrying value of $255,000 was disposed of through a sale. The Company did not recorded a gain from the sale of the property. Additionally, one loan with a carrying value of $1,032,000 was transferred to Foreclosed Real Estate Owned during 2021.

Securities

The securities portfolio consists of U.S. Treasury securities, U.S. Government agencies, mortgage-backed securities issued by government sponsored entities and municipal obligations. The Company classifies its investments into two categories: held to maturity (HTM) and available for sale (AFS). The Company does not have trading securities. Securities classified as HTM are those in which the Company has the ability and the intent to hold the security until contractual maturity. As of December 31, 2021, there were no securities carried in the HTM portfolio. Securities classified as AFS are eligible to be sold due to liquidity needs or interest rate risk management. These securities are adjusted to and carried at their fair value with any unrealized gains or losses recorded net of deferred income taxes, as an adjustment to capital and reported in the equity section of the Consolidated Balance Sheet as other comprehensive income. As of December 31, 2021, $406.8 million of securities were so classified and carried at their fair value, with unrealized losses, net of tax, of $1,453,000 included in accumulated other comprehensive income as a component of stockholders’ equity. The Company considers its investment portfolio a source of earnings and liquidity. Investment securities may also be pledged to secure public deposits and customer repurchase agreements.

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As of December 31, 2021, the average life of the portfolio was 5.6 years. The Company has maintained a relatively short average life in the portfolio in order to generate cash flow to support loan growth and maintain liquidity levels. Purchases for the year totaled $268.2 million, while maturities and principal reductions totaled $68.2 million and proceeds from sales were $11.4 million. The purchases were funded principally by cash flow generated from the portfolio and excess overnight liquidity.

The following table sets forth certain information regarding securities not carried at fair value through earnings, weighted average yields, and maturities of the Company’s securities portfolio as of December 31, 2021 and 2020. Yields on tax-exempt securities are stated on a fully taxable equivalent basis using a Federal tax rate of 21%. Actual maturities may differ from contractual maturities as certain instruments have call features which allow prepayment of obligations. Maturity on the mortgage-backed securities is based upon contractual terms, the average life may differ as a result of changes in cash flow.

					After One				After Five								Total Investment
	One Year or Less				Through Five Years				Through Ten Years				After Ten Years				Securities
	Carrying		Average		Carrying		Average		Carrying		Average		Carrying		Average		Carrying		Average
	Value		Yield		Value		Yield		Value		Yield		Value		Yield		Value		Yield
	(dollars in thousands)
U.S. Treasury securities	$	—	—	%	$	1,060	1.01	%	$	18,291	1.19	%	$	—	—	%	$	19,351	1.18	%
U.S. Government agencies		—	—			—	—			16,011	1.51							16,011	1.51
State and political subdivision		583	1.93			10,427	3.14			20,601	2.25			114,256	2.33			145,867	2.38
Corporate obligations		—	—			—	—			—	—			—	—			—	—
Mortgage-backed securities-government sponsored entities		—	—			2,665	2.40			4,110	1.96			218,778	1.39			225,553	1.41
Total Investment Securities	$	583	1.93	%	$	14,152	2.84	%	$	59,013	1.70	%	$	333,034	1.71	%	$	406,782	1.75	%

The portfolio had no adjustable-rate instruments as of December 31, 2021 and 2020. The portfolio contained no private label mortgage-backed securities, collateralized debt obligations (CDOs), or trust preferred securities, and no off-balance sheet derivatives were in use. As of December 31, 2021, the portfolio did not contain any step-up bonds. The mortgage-backed securities portfolio includes pass-through bonds and collateralized mortgage obligations (CMO’s) issued by Fannie Mae, Freddie Mac and the Government National Mortgage Association (GNMA).

The Company evaluates the securities in its portfolio for other-than-temporary-impairment (OTTI) as fair value declines below cost. In estimating OTTI, management considers (1) the length of time and the extent of the decline in fair value and (2) the financial condition and near-term prospects of the issuer. As of December 31, 2021, the Company held 140 investment securities in a loss position, which had a combined unrealized loss of $4.8 million. Management believes that these losses are principally due to changes in interest rates and represent temporary impairment as the Company does not have the intent to sell these securities and it is more likely than not that it will not have to sell the securities before recovery of their cost basis. No impairment charges were recognized in 2021 or 2020.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company uses fair value measurements to record fair value adjustments to certain financial instruments and determine fair value disclosures (see Note 16 of Notes to the Consolidated Financial Statements).

Approximately $406.8 million, which represents 19.7% of total assets at December 31, 2021, consisted of financial instruments recorded at fair value on a recurring basis. This amount consists entirely of the Company’s available for sale securities portfolio and interest rate derivatives. The Company uses valuation methodologies involving market-based or market-derived information, collectively Level 1 and 2 measurements, to measure fair value. There were no transfers into or out of Level 3 for any instruments for the years ended December 31, 2021 and 2020.

The Company utilizes a third party provider to perform valuations of the investments. Methods used to perform the valuations include: pricing models that vary based on asset class, available trade and bid information, actual transacted prices, and proprietary models for valuations of state and municipal obligations. In addition, the Company has a sample of fixed-income securities valued by another independent source. The Company does not adjust values received from its providers, unless it is evident that fair value measurement is not consistent with the Company’s policies.

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The Company also utilizes a third party provider to provide the fair value of certain loan servicing rights. Fair value for the purpose of this measurement is defined as the amount at which the asset could be exchanged in a current transaction between willing parties, other than in a forced liquidation. The fair value of mortgage servicing rights as of December 31, 2021 and 2020 was $500,000 and $476,000, respectively.

DEPOSITS

The Bank provides a full range of deposit products to its retail and business customers. These include interest-bearing and noninterest bearing transaction accounts, statement savings and money market accounts. Certificate of deposit terms range up to five years for retail instruments. As of December 31, 2021, the Bank has $992,000 of brokered deposits obtained through internet listing services, and no broker deposits which were secured through Cede & Co. All of these brokered deposits were acquired from UpState. The Bank has no current brokered deposits through its participation in the Certificate of Deposit Account Registry Service (“CDARS”). The Bank participates in the Jumbo CD ($100,000 and over) markets with local municipalities and school districts which are typically priced on a competitive bid basis. Other services the Bank offers its customers include cash management, direct deposit, Remote Deposit Capture, mobile deposit capture, PopMoney® mobile payments and Automated Clearing House (ACH) activity. The Bank operates thirty-one automated teller machines and is affiliated with the MoneyPass® ATM network. Internet banking including bill-pay is offered through the website at www.waynebank.com. Other services, such as eStatements and mobile banking are available online.

The following table sets forth information regarding deposit categories of the Company.

	Years Ended December 31,
	2021				2020
	Average				Average
	Balance		Rate Paid		Balance		Rate Paid
	(dollars in thousands)
Noninterest-bearing demand	$	423,404	—	%	$	297,175	—	%
Interest-bearing demand		180,080	0.11			123,172	0.13
Money Market		295,626	0.23			185,214	0.28
Savings		265,981	0.06			200,042	0.06
Time		517,087	0.71			457,844	1.27
Total	$	1,682,178			$	1,263,447

As of December 31, 2021 and 2020, the total of uninsured deposits of the Company was $235,515,000 and $177,596,000, respectively. Total uninsured deposits is calculated based on regulatory reporting requirements and reflects the portion of any deposit of a customer at an insured depository institution that exceeds the applicable FDIC insurance coverage for that depositor at that institution and amounts in any other uninsured investment or deposit accounts that are classified as deposits and not subject to any federal or state deposit insurance regime.

As of December 31, 2021, the total of U.S. time deposits in excess of the Federal Deposit Insurance Corporation insurance limits were $257,238,000.

The following table indicates the amount of time deposits that are uninsured by time remaining until maturity as of December 31, 2021:

Amount

(in thousands)

Three months or less	$	65,401
Over 3 through 6 months		55,639
Over 6 months through 12 months		109,607
Over 12 months		26,591
	$	257,238

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Total deposits as of December 31, 2021, were $1.757 billion, an increase of $221.4 million from December 31, 2020. Deposit growth included $145.4 million in non-maturity interest-bearing deposits, and $81.1 million in non-interest bearing demand deposits. The large increases recorded in 2021 reflect the cash inflow from economic stimulus related to the Covid-19 pandemic. Time deposits decreased $5.1 million.

Time deposits over $250,000, which consist principally of school district funds, other public funds and short-term deposits from large commercial customers with maturities generally less than one year, totaled $257.2 million as of December 31, 2021, compared to $205.4 million at year-end 2020. These deposits are subject to competitive bid and the Company bases its bid on current interest rates, loan demand, investment portfolio structure and the relative cost of other funding sources.

As of December 31, 2021, non-interest bearing demand deposits totaled $440.7 million compared to $359.6 million at year-end 2020. Cash management accounts in the form of securities sold under agreements to repurchase included in short-term borrowings, totaled $60.8 million at year end 2021 compared to $63.3 million as of December 31, 2020. These balances represent commercial and municipal customers’ funds invested in overnight securities. The Company considers these accounts as a source of core funding.

RESULTS OF OPERATIONS

Summary

Net income for the Company for the year ended December 31, 2021 was $24,915,000, which was $9,835,000 higher than the $15,080,000 earned in 2020. Earnings per share on a fully diluted basis were $3.04 for 2021 compared to $2.09 in 2020. The return on average assets for the year was 1.24% with a return on average equity of 12.35%, compared to 0.97% and 9.06%, respectively, in 2020. Net interest income increased $14,837,000, which offset a $4,138,000 increase in other expenses. The variances reflect the full-year effect of the results of the acquisition of UpState.

Net interest income (fully taxable equivalent, or fte) totaled $66,100,000, which was an increase of $14,741,000 from the 2020 total. Average loans outstanding increased $209.1 million in 2021, which resulted in an increase in interest income (fte) of $11.1 million. Total average securities increased $120.0 million in 2021 as proceeds from deposit growth and overnight liquidity were used to fund new purchases, resulting in a $1.2 million increase in interest income (fte) on securities. Average interest-bearing deposits increased $292.5 million, but decreasing interest rates on certificates of deposit resulted in a $1.9 reduction in interest expense. The cost of borrowed funds decreased $369,000 compared to the prior year due primarily to a lower cost of borrowings. The resulting net interest spread (fte) increased three basis points to 3.39% in 2021 as a 29 basis point reduction in the yield earned was offset by a 32 basis point decrease in the cost of funds. All variances include the full-year impact from the acquisition of UpState.

Loans receivable decreased $55.8 million from the prior year-end, due primarily to a $78.8 million decrease in PPP loans resulting from loan forgiveness. Loan growth included a $49.6 million increase in commercial real estate loans. Retail loans decreased $5.2 million in 2021 due to a $4.4 million decrease in real estate loans secured by farmland and a $4.7 million decrease in indirect auto and marine financing. Residential mortgage loans and construction loans increased $10.9 million, net. Total non-performing loans decreased from $3,391,000, or 0.24% of total loans at the end of 2020, to $734,000, or 0.05% of total loans on December 31, 2021. Net charge-offs totaled $908,000 in 2021, which was an increase from the $809,000 recorded in 2020. Based on management’s analysis, the Company determined that it would be appropriate to allocate $4,200,000 to the allowance for loan losses in 2021, which resulted in an increase in the ratio of the allowance for loan losses to total loans outstanding of 1.21% at December 31, 2021 compared to 0.93% at December 31, 2020. The allowance for loan losses represented 2,240% of total non-performing loans on December 31, 2021 compared to 388% as of December 31, 2020.

Total other income for the year ended December 31, 2021 totaled $8,325,000 compared to $7,780,000 in the prior year, an increase of $545,000. Gains on the sale of loans and investment securities decreased $329,000 in the aggregate, while service charges and fees increased $578,000. All other items of other income increased $296,000, net. The increase reflects the full-year of benefits derived from the acquisition of UpState.

Other expenses were $38,578,000 in 2021 compared to $34,440,000 for the similar period in 2020, an increase of $4,138,000. Salaries and benefits costs increased $3,487,000 in 2021, while occupancy and equipment costs rose $674,000. All other operating expenses decreased $23,000, net. The increases reflect the full-year cost of operating four new community offices acquired from UpState. Income tax expense for the year totaled $5,945,000, which was an increase of $2,659,000 from the prior year. The effective tax rate in 2021 was 19.3% compared to 17.9% in 2020.

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The following table sets forth changes in net income (in thousands):

Net income 2020	$	15,080
Net interest income		14,837
Provision for loan losses		1,250
Net gains on sales of loans and securities		(329)
Other income		874
Salaries and employee benefits		(3,487)
Occupancy, furniture and equipment		(674)
Professional fees		(520)
Merger related expenses		2,049
Other expenses		(1,506)
Income tax expense		(2,659)
Net income 2021	$	24,915

NET INTEREST INCOME

Net interest income is the most significant source of revenue for the Company and represented 88.7% of total revenue for the year ended December 31, 2021. Net interest income (fte) totaled $66,100,000 for the year ended December 31, 2021 compared to $51,359,000 for 2020, an increase of $14,741,000. The resulting fte net interest spread and net interest margin were 3.39% and 3.50%, respectively, in 2021 compared to 3.36% and 3.55%, respectively, in 2020.

Interest income (fte) for the year ended December 31, 2021 totaled $71,857,000 compared to $59,338,000 in 2020. The fte yield on average earning assets was 3.81%, decreasing 29 basis points from the 4.10% reported last year. The tax-equivalent yield on total loans increased 10 basis points to 4.73% in 2021, while average loans outstanding increased $209.1 million, resulting in an increase in interest income (fte) from loans of $11.1 million. The yield on securities decreased 48 basis points in 2021 due primarily to lower yields on new purchases. Average securities outstanding increased $120.0 million as cash flow from deposit growth was utilized to fund new purchases, and interest income (fte) from the portfolio increased $1.2 million.

Interest expense was $5,757,000 in 2021 which resulted in an average cost of interest-bearing liabilities of 0.42% compared to total interest expense of $7,979,000 in 2020 with an average cost of 0.74%. Total interest-bearing deposits cost was 0.38% in 2021, which was a decrease of 30 basis points over the prior year. The decrease in cost was due primarily to time certificates of deposit that repriced to current market rates upon maturity, resulting in a decrease in the interest rate paid from 1.27% in 2020 to 0.71% in 2021. Borrowing costs also decreased in 2021, reflecting the lower interest rate environment.

PROVISION FOR LOAN LOSSES

The provision for loan losses was $4,200,000 in 2021 compared to $5,450,000 in 2020. The decreased provision for loan losses recorded in 2021 reflects the improvement in the economic factor and other qualitative factors that are utilized to establish a subjective assessment of the adequacy of the allowance for loan losses. Qualitative factors specific to the pandemic that were developed in 2020 required a $2.3 million allocation to the required allowance for loan losses at December 31, 2021. Additionally, the qualitative factor related to large balance loans added $1.4 million to the allowance in 2021 due to growth in this category of loans and an increase in the factor.

Management assesses the adequacy of the allowance for loan losses on a quarterly basis. The process includes a review of the risks inherent in the loan portfolio. It also includes an analysis of impaired loans and a historical review of losses. Other factors considered in the analysis include: concentrations of credit in specific industries in the commercial portfolio, the local and regional economic conditions, trends in delinquencies, internal risk rating classifications, total loan growth in the portfolio and fluctuations in large balance credits. For loans acquired, including those that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discounts.

OTHER INCOME

Total other income was $8,325,000 for the year ended December 31, 2021 compared to $7,780,000 in 2020, an increase of $545,000. Service charges and fees increased $572,000 in 2021, while gains on the sale of loans and investment securities decreased $329,000 in the aggregate. All other items of other income increased $302,000, net.

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Other Income (dollars in thousands)

For the year ended December 31

	2021		2020
Service charges on deposit accounts	$	398	$	377
ATM Fees		443		457
Overdraft Fees		1,029		985
Safe deposit box rental		100		102
Loan related service fees		1,368		1,416
Debit card		2,228		1,656
Fiduciary activities		748		682
Commissions on mutual funds & annuities		127		122
Earnings on and proceeds from bank-owned life insurance		941		845
Other income		674		540
		8,056		7,182
Net realized gains on sales of securities		92		71
Gains on sales of loans		177		527
Total	$	8,325	$	7,780

OTHER EXPENSES

Other expenses totaled $38,578,000 for the year ended December 31, 2021 compared to $34,440,000 in the prior year. The $4,138,000 increase in other expenses reflects the additional costs related to the operations of the four new community offices acquired from UpState. Salaries and employee benefits costs increased $3,487,000 in 2021, while occupancy and equipment costs increased $674,000. All other operating expenses decreased $23,000, net. The Company’s efficiency ratio, which measures total other expenses as a percentage of net interest income (fte) plus other income, was 51.8% in 2021 compared to 58.2% in 2020.

Other Expenses (dollars in thousands)

For the year ended December 31

	2021		2020
Salaries	$	12,944	$	10,903
Employee benefits		7,664		6,218
Occupancy		3,533		3,128
Furniture and equipment		1,289		1,020
Data processing and related operations		2,415		2,457
Federal Deposit Insurance Corporation insurance assessment		681		399
Advertising		473		385
Professional fees		1,582		1,062
Postage and telephone		993		983
Office supplies		443		555
Taxes, other than income		1,122		997
Foreclosed real estate		115		53
Amortization of intangible assets		123		114
Merger related		—		2,049
Other		5,201		4,117
Total	$	38,578	$	34,440

INCOME TAXES

Income tax expense for the year ended December 31, 2021 totaled $5,945,000, which resulted in an effective tax rate of 19.3%, compared to $3,286,000 and 17.9% for 2020. The higher effective tax rate reflects the increase in taxable income.

CAPITAL AND DIVIDENDS

Total stockholders’ equity as of December 31, 2021, was $205.3 million, compared to $194.8 million as of December 31, 2020. Earnings retention net of an $8.7 million reduction resulting from cash dividends declared, contributed to the increase. Fluctuations in interest rates impacted the fair value of the Company’s Available-for Sale securities, and contributed to $5.4 million decrease in capital as a reduction in accumulated other comprehensive income. As of December 31, 2021 the Company had a leverage capital ratio of

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8.51%, a Tier 1 risk-based capital ratio and a common equity Tier 1 risk-based capital ratio of 12.49%, and a total risk-based capital ratio of 13.66%, compared to 8.71%, 11.65% and 12.62%, respectively, at December 31, 2020.

NON-GAAP FINANCIAL MEASURES

This Annual Report contains or references tax-equivalent interest income and net interest income, which are non-GAAP financial measures. Tax-equivalent interest income and net interest income are derived from GAAP interest income and net interest income using a marginal tax rate of 21%. We believe the presentation of interest income and net interest income on a tax-equivalent basis ensures comparability of interest income and net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.

The following table reconciles net interest income to net interest income on a tax-equivalent basis:

(dollars in thousands)	Years ended December 31,
	2021		2020
Net interest income	$	65,313	$	50,476
Tax-equivalent basis adjustment
using a 21% marginal tax rate		787		883
Net interest income on a fully
taxable equivalent basis	$	66,100		51,359

22

CONSOLIDATED AVERAGE BALANCE SHEETS WITH RESULTANT INTEREST AND RATES

(Tax-Equivalent Basis, dollars in thousands)

Year Ended December 31	2021						2020
	Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate
		(2)		(1)				(2)		(1)
ASSETS
Interest-earning assets:
Interest-bearing deposits with banks	$	175,854	$	266	0.15	%	$	65,812	$	72	0.11	%
Securities available for sale:
Taxable		261,912		4,055	1.55			150,019		2,915	1.94
Tax-exempt		61,610		1,889	3.06			53,502		1,800	3.37
Total securities available for sale		323,522		5,944	1.84			203,521		4,715	2.32
Loans receivable (3)(4)		1,386,893		65,647	4.73			1,177,773		54,551	4.63
Total interest-earning assets		1,886,269		71,857	3.81			1,447,106		59,338	4.10
Noninterest earning assets:
Cash and due from banks		23,828						18,693
Allowance for loan losses		(15,263)						(10,388)
Other assets		114,210						100,144
Total noninterest earning assets		122,775						108,449
TOTAL ASSETS	$	2,009,044					$	1,555,555
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing demand and money market	$	475,706		894	0.19		$	308,386		683	0.22
Savings		265,981		169	0.06			200,042		112	0.06
Time		517,087		3,694	0.71			457,844		5,815	1.27
Total interest-bearing deposits		1,258,774		4,757	0.38			966,272		6,610	0.68
Short-term borrowings		73,810		284	0.38			57,014		325	0.57
Other borrowings		36,196		716	1.98			50,286		1,044	2.08
Total interest-bearing liabilities		1,368,780		5,757	0.42			1,073,572		7,979	0.74
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		423,404						297,175
Other liabilities		15,179						18,381
Total noninterest-bearing liabilities		438,583						315,556
Stockholders’ equity		201,681						166,427
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,009,044					$	1,555,555
Net Interest Income/spread
(tax equivalent basis)				66,100	3.39	%				51,359	3.36	%
Tax-equivalent basis adjustment				(787)						(883)
Net Interest Income			$	65,313					$	50,476
Net interest margin
(tax equivalent basis)					3.50	%					3.55	%

(1)Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.

(2)Average balances have been calculated based on daily balances.

(3)Loan balances include non-accrual loans and are net of unearned income.

(4)Loan yields include the effect of amortization of purchased credit marks and deferred fees net of costs.

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23

RATE/VOLUME ANALYSIS

The following table shows the fully taxable equivalent effect of changes in volumes and rates on interest income and interest expense.

	Increase/(Decrease)
(dollars in thousands)	2021 compared to 2020
	Variance due to
	Volume		Rate		Net
INTEREST-EARNING ASSETS:
Interest-bearing deposits	$	135	$	59	$	194
Securities available for sale:
Taxable		2,002		(862)		1,140
Tax-exempt securities		267		(178)		89
Total securities available for sale		2,269		(1,040)		1,229
Loans receivable		9,731		1,365		11,096
Total interest-earning assets		12,135		384		12,519
INTEREST-BEARING LIABILITIES
Interest-bearing demand and money market		344		(133)		211
Savings		57		—		57
Time		468		(2,589)		(2,121)
Total interest-bearing deposits		869		(2,722)		(1,853)
Short-term borrowings		76		(117)		(41)
Other borrowings		(291)		(37)		(328)
Total interest-bearing liabilities		654		(2,876)		(2,222)
Net interest income (tax-equivalent basis)	$	11,481	$	3,260	$	14,741

Changes in net interest income that could not be specifically identified as either a rate or volume change were allocated proportionately to changes in volume and changes in rate.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

MARKET RISK

Interest rate sensitivity and the repricing characteristics of assets and liabilities are managed by the Asset and Liability Management Committee (ALCO). The principal objective of the ALCO is to maximize net interest income within acceptable levels of risk, which are established by policy. Interest rate risk is monitored and managed by using financial modeling techniques to measure the impact of changes in interest rates.

Net interest income, which is the primary source of the Company’s earnings, is impacted by changes in interest rates and the relationship of different interest rates. To manage the impact of the rate changes, the balance sheet should be structured so that repricing opportunities exist for both assets and liabilities at approximately the same time intervals. The Company uses net interest simulation to assist in interest rate risk management. The process includes simulating various interest rate environments and their impact on net interest income. As of December 31, 2021, the level of net interest income at risk in a ± 200 basis points increase was within the Company’s policy limit of a decline less than 10% of net interest income.

Imbalances in repricing opportunities at a given point in time reflect interest-sensitivity gaps measured as the difference between rate-sensitive assets and rate-sensitive liabilities. These are static gap measurements that do not take into account any future activity, and as such are principally used as early indicators of potential interest rate exposures over specific intervals.

At December 31, 2021, the Bank had a positive 90-day interest sensitivity gap of $175.1 million or 8.5% of total assets. The significant level of asset sensitivity reflects the increase in overnight liquidity on hand. A positive gap indicates that the balance sheet has a higher level of rate-sensitive assets (RSA) than rate-sensitive liabilities (RSL) at the specific time interval. This would indicate that in an increasing rate environment, the yield on interest-earning assets would increase faster than the cost of interest-bearing liabilities in the 90-day period. The level of RSA and RSL for an interval is managed by ALCO strategies, including adjusting the average life of the investment portfolio through purchases and sales, pricing of deposit liabilities to attract long or short-term time deposits, utilizing borrowings to fund loan growth, loan pricing to encourage variable-rate products and evaluation of loan sales of long-term, fixed-rate mortgages.

24

The Company analyzes and measures the time periods in which RSA and RSL will mature or reprice in accordance with their contractual terms and assumptions. Management believes that the assumptions used are reasonable. The interest rate sensitivity of assets and liabilities could vary substantially if differing assumptions were used or if actual experience differs from the assumptions used in the analysis. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Interest rates may change at different rates changing the shape of the yield curve. The level of rates on the investment securities may also be affected by the spread relationship between different investments. Further, in the event of a significant change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed. Finally, the ability of borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase. It should be noted that the operating results of the Company are not subject to foreign currency exchange or commodity price risk.

The following table displays interest-sensitivity as of December 31, 2021 (dollars in thousands):

	3 Months			3-12						Over
	Or Less			Months			1-3 Years			3 Years			Total
Federal funds sold and
interest-bearing deposits	$	185,162		$	446		$	—		$	—		$	185,608
Securities		18,545			42,753			85,136			260,348			406,782
Loans Receivable		219,825			231,723			398,844			504,539			1,354,931
Total Rate Sensitive Assets (RSA)	$	423,532		$	274,922		$	483,980		$	764,887		$	1,947,321
Non-maturity interest-bearing deposits	$	119,877		$	122,589		$	324,937		$	220,036		$	787,439
Time Deposits		112,425			293,906			101,899			20,472			528,702
Borrowings		16,130			28,586			46,104			—			90,820
Total Rate Sensitive Liabilities (RSL)	$	248,432		$	445,081		$	472,940		$	240,508		$	1,406,961
Interest sensitivity gap	$	175,100		$	(170,159)		$	11,040		$	524,379		$	540,360
Cumulative gap		175,100			4,941			15,981			540,360
RSA/RSL-cumulative		170.5	%		100.7	%		101.4	%		138.4	%
As of December 31, 2020
Interest sensitivity gap	$	106,233		$	26,320		$	649		$	314,776		$	447,978
Cumulative gap		106,233			132,553			133,202			447,978
RSA/RSL-cumulative		145.5	%		122.0	%		112.4	%		135.0	%

Certain interest-bearing deposits with no stated maturity dates are included in the interest-sensitivity table above. The balances allocated to the respective time periods represent an estimate of the total outstanding balance that has the potential to migrate either through withdrawal or transfer to time deposits, thereby impacting the interest-sensitivity position of the Company. The estimates were derived from a non-maturity deposit study, which was prepared by an independent third party provider. The purpose of the study was to estimate the average lives of various deposit types and their pricing sensitivity to movements in market interest rates.

LIQUIDITY

Liquidity is the ability to fund customers’ borrowing needs and their deposit withdrawal requests while supporting asset growth. The Company’s primary sources of liquidity include deposit generation, asset maturities, cash flow from payments on loans and securities and access to borrowing from the Federal Home Loan Bank and other correspondent banks.

As of December 31, 2021, the Company had cash and cash equivalents of $206.7 million in the form of cash, due from banks, balances with the Federal Reserve Bank, and short-term deposits with other institutions. In addition, the Company had total securities available for sale of $406.8 million, which could be used for liquidity needs. This totals $613.5 million and represents 29.7% of total assets compared to $338.3 million and 18.3% of total assets as of December 31, 2020. The Company also monitors other liquidity measures for compliance with Company policy guidelines. Based upon these measures, the Company believes its liquidity position is adequate.

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The Company maintains established lines of credit with the Federal Home Loan Bank of Pittsburgh (FHLB), the Atlantic Community Bankers Bank (ACBB) and other correspondent banks, which support liquidity needs. The total available credit under all lines was $190.0 million, with $0 outstanding at December 31, 2021 and $0 million outstanding at December 31, 2020. The maximum borrowing capacity from FHLB at December 31, 2021 was $607.1 million. As of December 31, 2021, the Company had $30.0 million in term borrowings from the FHLB, compared to $42.5 million at December 31, 2020. Outstanding Letters of Credit to secure public funds totaled $127.9 million and $100.0 million at December 31, 2021 and 2020, respectively.

Item 8. Financial Statements and Supplementary Data.

REPORT ON MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING

TO THE STOCKHOLDERS OF NORWOOD FINANCIAL CORP

Management of Norwood Financial Corp and its subsidiary (Norwood) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Norwood’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Norwood’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Norwood; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Norwood’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Norwood’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of Norwood’s internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria established in Internal Control – Integrated Framework as set forth by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based upon its assessment, management has concluded that, as of December 31, 2021, the Company’s internal control over financial reporting, including controls over the preparation of regulatory financial statements in accordance with all federal and state laws and regulations, is effective based on the criteria established in the Internal Control – Integrated Framework.

/s/ Lewis J. Critelli	/s/ William S. Lance
Lewis J. Critelli	William S. Lance
President and	Executive Vice President and
Chief Executive Officer	Chief Financial Officer

 
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26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Norwood Financial Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Norwood Financial Corp. and subsidiaries (the “Company”) as of December 31, 2021 and 2020; the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended; and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter, in any way, our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Loan Losses (ALL) – Qualitative Factors

Description of the Matter

The Company’s loan portfolio totaled $1.35 billion as of December 31, 2021, and the associated ALL was $16.4 million. As discussed in Note 4 to the consolidated financial statements, determining the amount of the ALL requires significant judgment about the collectability of loans, which includes an assessment of quantitative factors such as historical loss experience within each risk category of loans and testing of certain commercial loans for impairment. Management applies additional qualitative

27

adjustments to reflect the inherent losses that exist in the loan portfolio at the balance sheet date that are not reflected in the historical loss experience. Qualitative adjustments are made based upon changes in lending policies and practices, economic conditions, changes in the loan portfolio mix, trends in loan delinquencies and classified loans, collateral values, and concentrations of credit risk for the commercial loan portfolios.

Auditing the Company’s ALL involved a high degree of subjectivity due to the judgment involved in management’s determination of commercial loan credit risk ratings and identification and measurement of qualitative factor adjustments included in the estimate of the allowance for loan losses.

How We Addressed the Matter in Our Audit

We gained an understanding of the Company’s process for establishing the ALL, including the qualitative adjustments made to the ALL. We evaluated the design and tested the operating effectiveness of controls over the Company’s ALL process, which included, among others, management’s review and approval controls designed to assess the need and level of qualitative adjustments to the ALL, as well as the reliability of the data utilized to support management’s assessment.

To test the qualitative adjustments, we evaluated the appropriateness of management’s methodology and assessed whether all relevant risks were reflected in the ALL and the need to consider qualitative adjustments, including the potential effect of COVID-19 on the adjustments

Regarding the measurement of the qualitative adjustments, we evaluated the completeness, accuracy, and relevance of the data and inputs utilized in management’s estimate. We evaluated the inputs and data to the Company’s historical loan performance data and third-party macroeconomic data. Furthermore, we analyzed the changes in the components of the qualitative reserves relative to changes in external market factors, the Company’s loan portfolio, and asset quality trends, which included the evaluation of management’s ability to capture and assess relevant data from both external sources and internal reports on loan customers affected by the COVID-19 pandemic and the supporting documentation for substantiating revisions to qualitative factors.

We also utilized internal credit review specialists to perform procedures on a sample of commercial loans to test the Company’s credit risk ratings by comparing key attributes used in the determination of the credit risk rating to supporting documentation such as borrowers’ financial statements, underlying collateral, financial health of the guarantor, and loan payment history.

We have served as the Company’s auditor since 2009.

Cranberry Township, Pennsylvania

March 11, 2022

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CONSOLIDATED BALANCE SHEETS

	December 31,
	2021		2020
	(In Thousands, Except Share ‎and Per Share Data)
ASSETS
Cash and due from banks	$	21,073	$	19,445
Interest-bearing deposits with banks		185,608		92,248
Cash and cash equivalents		206,681		111,693
Securities available for sale		406,782		226,586
Loans receivable (net of allowance for loan losses 2021: $16,442; 2020: $13,150)		1,338,489		1,397,582
Regulatory stock, at cost		3,927		3,981
Premises and equipment, net		17,289		17,814
Bank owned life insurance		40,038		39,608
Accrued interest receivable		5,889		6,232
Foreclosed real estate owned		1,742		965
Goodwill		29,266		29,290
Other intangibles		407		530
Other assets		17,994		17,583
Total Assets	$	2,068,504	$	1,851,864
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing demand	$	440,652	$	359,559
Interest-bearing demand		196,786		149,692
Money market deposit accounts		309,439		259,974
Savings		281,214		232,329
Time		528,702		533,831
Total Deposits		1,756,793		1,535,385
Short-term borrowings		60,822		63,303
Other borrowings		29,998		42,459
Accrued interest payable		1,203		1,601
Other liabilities		14,426		14,331
Total Liabilities		1,863,242		1,657,079
STOCKHOLDERS’ EQUITY
Preferred stock, no par value, authorized: 5,000,000 shares, issued: none		—		—
Common stock, $0.10 par value,
authorized: 20,000,000 shares
issued: 2021: 8,266,751 shares; 2020: 8,236,331 shares		827		824
Surplus		96,443		95,388
Retained earnings		110,015		93,796
Treasury stock at cost: 2021: 65,328 shares; 2020: 10,263 shares		(1,767)		(342)
Accumulated other comprehensive (loss) income		(256)		5,119
Total Stockholders' Equity		205,262		194,785
Total Liabilities and Stockholders' Equity	$	2,068,504	$	1,851,864

See notes to consolidated financial statements.

 
‎

29

CONSOLIDATED STATEMENTS OF INCOME

	Years Ended December 31,
	2021		2020
	(In Thousands, Except Share ‎and Per Share Data)
INTEREST INCOME
Loans receivable, including fees	$	65,257	$	54,046
Securities
Taxable		4,055		2,915
Tax exempt		1,492		1,422
Interest-bearing deposits with banks		266		72
Total Interest Income		71,070		58,455
INTEREST EXPENSE
Deposits		4,757		6,610
Short-term borrowings		284		325
Other borrowings		716		1,044
Total Interest Expense		5,757		7,979
Net Interest Income		65,313		50,476
PROVISION FOR LOAN LOSSES		4,200		5,450
Net Interest Income After
Provision for Loan Losses		61,113		45,026
OTHER INCOME
Service charges and fees		5,693		5,115
Income from fiduciary activities		748		682
Net realized gains on sales of securities		92		71
Net gain on sale of loans		177		527
Earnings and proceeds on life insurance policies		941		845
Other		674		540
Total Other Income		8,325		7,780
OTHER EXPENSES
Salaries and employee benefits		20,608		17,121
Occupancy		3,533		3,128
Furniture and equipment		1,289		1,020
Data processing and related operations		2,415		2,457
Federal Deposit Insurance Corporation insurance assessment		681		399
Advertising		473		385
Professional fees		1,582		1,062
Postage and telephone		993		983
Taxes, other than income		1,122		997
Foreclosed real estate		115		53
Amortization of intangible assets		123		114
Merger related		—		2,049
Other		5,644		4,672
Total Other Expenses		38,578		34,440
Income before Income Taxes		30,860		18,366
INCOME TAX EXPENSE		5,945		3,286
Net income	$	24,915	$	15,080
EARNINGS PER SHARE
BASIC	$	3.05	$	2.09
DILUTED	$	3.04	$	2.09

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended December 31,
(in thousands)	2021		2020
NET INCOME	$	24,915	$	15,080
Other comprehensive (loss) income:
Unrealized gain on pension liability		220		241
Tax Effect		(46)		(51)
Investment securities available for sale:
Unrealized holding (loss) gains		(6,931)		4,809
Tax Effect		1,455		(1,011)
Reclassification of gains from sale of securities		(92)		(71)
Tax Effect		19		15
Other comprehensive (loss) income		(5,375)		3,932
COMPREHENSIVE INCOME	$	19,540	$	19,012

See notes to consolidated financial statements.

 
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31

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

		Years Ended December 31, 2021 and 2020
					(In Thousands, Except Share and Per Share Data)
														Accumulated
														Other
	Common Stock							Retained		Treasury Stock				Comprehensive
	Shares		Amount			Surplus		Earnings		Shares		Amount		Income (Loss)		Total
	(Dollars in Thousands, Except per Share Data)
BALANCE - DECEMBER 31, 2019		6,340,563	$	634		$	49,471	$	86,536		12,007	$	(400)	$	1,187	$	137,428
Net Income		—		—			—		15,080		—		—		—		15,080
Other comprehensive income		—		—			—		—		—		—		3,932		3,932
Cash dividends declared ($1.01 per share)		—		—			—		(7,820)		—		—		—		(7,820)
Acquisition of treasury stock		—		—			—		—		3,243		(108)		—		(108)
Acquisition of UpState New York Bancorp, Inc.		1,865,738		186			45,151										45,337
Stock options exercised		15,530		2			266		—		—		—		—		268
Sale of treasury stock for ESOP		—		—			(36)		—		(4,987)		166		—		130
Compensation expense related to
stock options		—		—			204		—		—		—		—		204
Restricted stock awards		14,500		2			332		—		—		—		—		334
BALANCE - DECEMBER 31, 2020		8,236,331		824			95,388		93,796		10,263		(342)		5,119		194,785
Net Income		—		—			—		24,915		—		—		—		24,915
Other comprehensive loss		—		—			—		—		—		—		(5,375)		(5,375)
Cash dividends declared ($1.06 per share)		—		—			—		(8,696)		—		—		—		(8,696)
Acquisition of treasury stock		—		—			—		—		56,162		(1,440)		—		(1,440)
Stock options exercised		22,420		2			392		—		—		—		—		394
Sale of treasury stock for ESOP		—		—			(5)		—		(4,997)		135		—		130
Compensation expense related to
stock options		—		—			214		—		—		—		—		214
Restricted stock awards		8,000		1			454				3,900		(120)		—		335
BALANCE - DECEMBER 31, 2021		8,266,751	$	827		$	96,443	$	110,015		65,328	$	(1,767)	$	(256)	$	205,262

See notes to consolidated financial statements.

 
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32

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2021		2020
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	24,915	$	15,080
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		4,200		5,450
Depreciation		1,481		1,322
Amortization of intangible assets		123		114
Deferred income taxes		(383)		850
Net amortization of securities premiums and discounts		1,529		1,246
Net realized gains on sales of securities		(92)		(71)
Earnings and proceeds on life insurance policies		(941)		(845)
Loss on sales of fixed assets and foreclosed real estate owned		108		128
Net gain on sale of loans		(177)		(527)
Mortgage loans originated for sale		(8,616)		(12,312)
Proceeds from sale of loans originated for sale		8,793		12,839
Compensation expense related to stock options		214		204
Compensation expense related to restricted stock		335		332
Decrease (increase) in accrued interest receivable		343		(1,087)
Decrease in accrued interest payable		(398)		(1,006)
Other, net		(2,236)		(7,920)
Net Cash Provided by Operating Activities		29,198		13,797
CASH FLOWS FROM INVESTING ACTIVITIES
Securities available for sale:
Proceeds from sales		11,366		24,497
Proceeds from maturities and principal reductions on mortgage-backed securities		68,218		58,876
Purchases		(268,242)		(82,351)
Purchase of regulatory stock		(4,201)		(4,001)
Redemption of regulatory stock		4,255		7,326
Net decrease (increase) in loans		57,938		(80,770)
Proceeds from bank-owned life insurance		511		—
Purchase of premises and equipment		(1,258)		(749)
Proceeds from sales of foreclosed real estate owned		291		612
Proceeds from sales of bank premises and fixed assets		158		10
Acquisition, net of cash and cash equivalents acquired		—		15,193
Net Cash Used for Investing Activities		(130,964)		(61,357)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		221,151		163,743
Net (decrease) increase in short-term borrowings		(2,481)		1,047
Repayments of other borrowings		(12,461)		(23,979)
Proceeds from other borrowings		—		10,000
Stock options exercised		394		268
Sale of treasury stock for ESOP		130		130
Acquisition of treasury stock		(1,440)		(108)
Cash dividends paid		(8,539)		(7,263)
Net Cash Provided by Financing Activities		196,754		143,838
Net Increase in Cash and Cash Equivalents		94,988		96,278
CASH AND CASH EQUIVALENTS - BEGINNING		111,693		15,415
CASH AND CASH EQUIVALENTS - ENDING	$	206,681	$	111,693

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

	Years Ended December 31,
	2021		2020
	(In Thousands)
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest paid	$	6,155	$	8,810
Income taxes paid, net of refunds	$	5,330	$	2,793
Supplemental Schedule of Noncash Investing Activities
Transfers of loans to foreclosed real estate owned and repossession of other assets	$	1,740	$	592
Dividends payable	$	2,296	$	2,139
Merger with UpState New York Bancorp, Inc.
Noncash assets acquired:
Securities available-for-sale			$	13,948
Regulatory stock				2,487
Loans				413,535
Premises and equipment, net				5,529
Accrued interest receivable				1,426
Deferred tax assets				1,495
Other assets				376
			$	438,796
Liabilities assumed:
Time deposits			$	204,440
Deposits other than time deposits				206,919
Accrued interest payable				175
Other liabilities				6,496
				418,030
Net Noncash Assets Acquired				20,766
Cash Acquired			$	24,037

See notes to consolidated financial statements

 
‎

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS

Norwood Financial Corp (Company) is a one bank holding company. Wayne Bank (Bank) is a wholly-owned subsidiary of the Company. The Bank is a state-chartered bank headquartered in Honesdale, Pennsylvania. The Company derives substantially all of its income from bank-related services which include interest earnings on commercial mortgages, residential real estate mortgages, commercial and consumer loans, as well as interest earnings on investment securities and fees from deposit services to its customers. The Company is subject to regulation and supervision by the Federal Reserve Board while the Bank is subject to regulation and supervision by the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities.

Revenue Recognition

Under ASC Topic 606, management determined that the primary sources of revenue emanating from interest and dividend income on loans and investments along with noninterest revenue resulting from investment securities gains, loans servicing, gains on loans sold and earnings on bank-owned life insurance are not within the scope of this Topic.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the year ended December 31:

(dollars in thousands)	2021		2020
Noninterest Income
In-scope of Topic 606:
Service charges on deposit accounts	$	398	$	377
ATM Fees		443		457
Overdraft Fees		1,029		985
Safe deposit box rental		100		102
Loan related service fees		1,238		1,288
Debit card		2,228		1,656
Fiduciary activities		748		682
Commissions on mutual funds & annuities		127		122
Other income		674		540
Noninterest Income (in-scope of Topic 606)		6,985		6,209
Out-of-scope of Topic 606:
Net realized gains on sales of securities		92		71
Loan servicing fees		130		128
Gain on sales of loans		177		527
Earnings on and proceeds from bank-owned life insurance		941		845
Noninterest Income (out-of-scope of Topic 606)		1,340		1,571
Total Noninterest Income	$	8,325	$	7,780

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly-owned subsidiaries, WCB Realty Corp., Norwood Investment Corp. and WTRO Properties. All significant intercompany accounts and transactions have been eliminated in consolidation. The year ended December 31, 2020 includes the acquisition of UpState New York Bancorp, Inc. effective July 7, 2020.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues 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 relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, the determination of other-than-temporary impairment on securities, the determination of goodwill impairment and the fair value of financial instruments.

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Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within its markets in Northeastern Pennsylvania and the New York Counties of Delaware, Sullivan, Ontario, Otsego and Yates. Note 3 discusses the types of securities that the Company invests in. Note 4 discusses the types of lending that the Company engages in. The Company does not have any significant concentrations to any one industry or customer.

Concentrations of Credit Risk

The Bank operates primarily in Wayne, Pike, Lackawanna, Luzerne and Monroe Counties, Pennsylvania and Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. Accordingly, the Bank has extended credit primarily to commercial entities and individuals in these areas whose ability to honor their contracts is influenced by the region’s economy. These customers are also the primary depositors of the Bank. The Bank is limited in extending credit by legal lending limits to any single borrower or group of related borrowers.

Securities

Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized gains and losses are reported in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of the specific securities sold, are included in earnings. Premiums and discounts are recognized in interest income using a method which approximates the interest method over the term of the security.

Bonds, notes and debentures for which the Company has the positive intent and ability to hold to maturity are reported at cost, adjusted for premiums and discounts that are recognized in interest income using the interest method over the term of the security.

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each Consolidated Balance Sheet date.

Declines in the fair value of available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to not sell the securities and it is more likely than not that it will not have to sell the securities before recovery of their cost basis.

Regulatory Stock

The Company, as a member of the Federal Home Loan Bank (FHLB) system is required to maintain an investment in capital stock of its district FHLB according to a predetermined formula. This regulatory stock has no quoted market value and is carried at cost.

Management evaluates the regulatory stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB. Management considers the FHLB’s regulatory capital ratios, liquidity, and the fact that new shares of FHLB stock continue to change hands at the $100 par value. Management believes no impairment charge is necessary related to FHLB stock as of December 31, 2021.

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees. Interest income is accrued on the unpaid principal balance. Loan origination fees are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan.

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The accrual of interest is generally discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Troubled Debt Restructurings

A loan is considered to be a troubled debt restructuring (TDR) loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates that are less than the current market rate for new obligations with similar risk.

Loans Acquired

Loans acquired including loans that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance. Loans are evaluated individually to determine if there is evidence of deterioration of credit quality since origination. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining estimated life. Decreases in expected cash flows are recognized immediately as impairment. Any valuation allowances on these impaired loans reflect only losses incurred after the acquisition.

For purchased loans acquired that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Loans may be aggregated and accounted for as a pool of loans if the loans being aggregated have common risk characteristics. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. The remaining differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans.

Mortgage Servicing Rights

Servicing assets are recognized as separate assets when rights are acquired through purchase or through the sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment based upon a third party appraisal. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance to the extent that fair value is less than the capitalized amount. The Company’s loan servicing assets at December 31, 2021 and 2020, respectively, were not impaired. Total servicing assets included in other assets as of December 31, 2021 and 2020, were $289,000 and $337,000, respectively.

Allowance for Loan Losses

The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

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The allowance consists of specific and general components. The specific component relates to loans that are classified as substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans were acquired with impairment or are the subject of a restructuring agreement.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is calculated principally on the straight-line method over the respective assets estimated useful lives as follows:

	Years
Buildings and improvements	10 - 40
Furniture and equipment	3 - 10

Leases

The Company applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. At inception, lessees must classify all leases as either finance or operating based on five criteria. Balance sheet recognition of finance and operating leases is similar, but the pattern of expense recognition in the income statement, as well as the effect on the statement of cash flows, differs depending on the lease classification. See Note 8 for related disclosures.

Transfers of Financial Assets

Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

Foreclosed Real Estate

Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value less cost to sell at the date of foreclosure establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of its carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses.

Bank Owned Life Insurance

The Company invests in bank owned life insurance (BOLI) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Bank on a select group of employees. The Company is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Income from the increase in cash surrender value of the policies or from death benefits realized is included in other income on the Consolidated Statements of Income.

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Goodwill

In connection with three acquisitions the Company recorded goodwill in the amount of $29.3 million, representing the excess of amounts paid over the fair value of net assets of the institutions acquired. Goodwill is tested and deemed impaired when the carrying value of goodwill exceeds its implied fair value. The value of the goodwill can change in the future. We expect the value of the goodwill to decrease if there is a significant decrease in the franchise value of the Bank. If an impairment loss is determined in the future, we will reflect the loss as an expense for the period in which the impairment is determined, leading to a reduction of our net income for that period by the amount of the impairment loss. No impairment was recognized for the years ended December 31, 2021 and 2020.

Other Intangible Assets

At December 31, 2021, the Company had other intangible assets of $407,000, which is net of accumulated amortization of $1,347,000. These intangible assets will continue to be amortized using the sum-of-the-years digits method of amortization over ten years. At December 31, 2020, the Company had other intangible assets of $530,000, which was net of accumulated amortization of $1,224,000. Amortization expense related to other intangible assets was $123,000 and $114,000 for the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, the estimated future amortization expense for the core deposit intangible is as follows (in thousands):

2022	$	101
2023		85
2024		69
2025		54
2026		38
Thereafter		60
	$	407

Income Taxes

Deferred income tax assets and liabilities are determined based on the differences between financial statement carrying amounts and the tax basis of existing assets and liabilities. These differences are measured at the enacted tax rates that will be in effect when these differences reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

The Company and its subsidiary file a consolidated federal income tax return. The Company recognizes interest and penalties on income taxes as a component of income tax expense.

The Company analyzes each tax position taken in its tax returns and determines the likelihood that the position will be realized. Only tax positions that are “more-likely-than-not” to be realized can be recognized in an entity’s financial statements. For tax positions that do not meet this recognition threshold, an entity will record an unrecognized tax benefit for the difference between the position taken on the tax return and the amount recognized in the financial statements. The Company does not have any unrecognized tax benefits at December 31, 2021 or 2020, or during the years then ended. No unrecognized tax benefits are expected to arise within the next twelve months.

Advertising Costs

Advertising costs are expensed as incurred.

Earnings per Share

Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Treasury shares are not deemed outstanding for earnings per share calculations.

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Employee Benefit Plans

The Company has a defined contributory profit-sharing plan which includes provisions of a 401(k) plan. The Company’s contributions are expensed as the cost is incurred.

The Company has several supplemental executive retirement plans. To fund the benefits under these plans, the Company is the owner of single premium life insurance policies on the participants.

The Company provides pension benefits to eligible employees. The Company’s funding policy is to contribute at least the minimum required contributions annually.

Interest Rate Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments.  

Stock Option Plans

The Company recognizes the value of share-based payment transactions as compensation costs in the financial statements over the period that an employee provides service in exchange for the award. The fair value of the share-based payments for stock options is estimated using the Black-Scholes option-pricing model. The Company used the modified-prospective transition method to record compensation expense. Under the modified-prospective method, companies are required to record compensation cost for new and modified awards over the related vesting period of such awards and record compensation cost prospectively for the unvested portion, at the date of adoption, of previously issued and outstanding awards over the remaining vesting period of such awards. No change to prior periods presented is permitted under the modified-prospective method.

Restricted Stock

The Company recognizes compensation cost related to restricted stock based on the market price of the stock at the grant date over the vesting period. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted stock under the Company’s 2014 Equity Incentive Plan. The Company recognizes compensation expense for the fair value of the restricted stock on a straight-line basis over the requisite service period for the entire award.

Cash Flow Information

For the purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits with banks and federal funds sold.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit, letters of credit and commitments to sell loans. Such financial instruments are recorded on the balance sheets when they become receivable or payable.

Trust Assets

Assets held by the Company in a fiduciary capacity for customers are not included in the financial statements since such items are not assets of the Company. Trust income is reported on the accrual method.

Treasury Stock

Common shares repurchased are recorded as treasury stock at cost.

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Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities and defined benefit pension obligations, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income as presented in the Consolidated Statement of Comprehensive Income.

Segment Reporting

The Company acts as an independent community financial services provider and offers traditional banking related financial services to individual, business and government customers. Through its Community Office and automated teller machine network, the Company offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of safe deposit services. The Company also performs personal, corporate, pension and fiduciary services through its Trust Department.

Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail, mortgage banking and trust operations of the Company. As such, discrete information is not available and segment reporting would not be meaningful.

Reclassification of Comparative Amounts

Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders’ equity.

New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative-effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This Update is effective for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We expect to recognize a one-time cumulative-effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Update is effective for smaller reporting companies and all other entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments ‒ Credit Losses, which, in addition to addressing other matters, ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. The effective date and transition requirements for ASU 2018-19 are the same as those in ASU 2016-13. This Update is not expected to have a significant impact on the Company’s financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Derivatives, and Hedging (Topic 815); and Financial Instruments (Topic 825), which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. ASU 2019-04 makes clarifying amendments to

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certain financial instrument standards. For entities that have not yet adopted ASU 2016-13, the effective dates for the amendments related to ASU 2016-13 are the same as the effective dates in ASU 2016-13. For entities that have adopted ASU 2016-13, the amendments related to ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For entities that have not yet adopted ASU 2017-12 as of April 25, 2019, the effective dates for the amendments to Topic 815 are the same as the effective dates in ASU 2017-12. For entities that have adopted ASU 2017-12 as of April 25, 2019, the effective date is as of the beginning of the first annual period beginning after April 25, 2019. The amendments related to ASU 2016-01 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs.

In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326), which allows entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost upon adoption of the new credit losses standard. To be eligible for the transition election, the existing financial asset must otherwise be both within the scope of the new credit losses standard and eligible for applying the fair value option in ASC 825-10.3. The election must be applied on an instrument-by-instrument basis and is not available for either available-for-sale or held-to-maturity debt securities. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. For entities that have not yet adopted the credit losses standard, the ASU is effective when they implement the credit losses standard. For entities that already have adopted the credit losses standard, the ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13.

In November 2019, the FASB issued ASU 2019-10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for ASC 944, Financial Services – Insurance, for public business entities that are SEC filers, except for smaller reporting companies, to fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, and for all other entities, including smaller reporting companies, to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13.

In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, to clarify its new credit impairment guidance in ASC 326, based on implementation issues raised by stakeholders. This Update clarified, among other things, that expected recoveries are to be included in the allowance for credit losses for these financial assets; an accounting policy election can be made to adjust the effective interest rate for existing troubled debt restructurings based on the prepayment assumptions instead of the prepayment assumptions applicable immediately prior to the restructuring event; and extends the practical expedient to exclude accrued interest receivable from all additional relevant disclosures involving amortized cost basis. For entities that have not yet adopted ASU 2016-13 as of November 26, 2019, the effective dates for ASU 2019-11 are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted ASU 2016-13, ASU 2019-11 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU was issued to improve and clarify various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven issues that describe the areas of improvement and the related amendments to GAAP; they are intended to make the standards easier to understand and apply and to eliminate inconsistencies, and they are narrow in scope and are not expected to significantly change practice for most entities. Among its provisions, the ASU clarifies that all entities, other than public business entities that elected the fair value option, are required to provide certain fair value disclosures under ASC 825, Financial Instruments, in both interim and annual financial statements. It also clarifies that the contractual term of a net investment in a lease under Topic 842 should be the contractual term used to measure expected credit losses under Topic 326. Amendments related to ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is not permitted before an entity’s adoption of ASU 2016-01. Amendments related to ASU 2016-13 for entities that have not yet adopted that guidance are effective upon adoption of the amendments in ASU 2016-13. Early adoption is not permitted before an entity’s adoption of ASU 2016-13. Amendments related to ASU 2016-13 for entities that have adopted that guidance are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Other amendments are effective upon issuance of this ASU. This Update is not expected to have a significant impact on the Company’s financial statements

In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a

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previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Company’s financial statements.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides optional temporary guidance for entities transitioning away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) to new references rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions within Topic 848. ASU 2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2021-01 is effective immediately for all entities. Entities may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. The amendments in this update do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

NOTE 3 - SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of securities were as follows:

	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
AVAILABLE FOR SALE:
U.S. Treasury securities	$	19,550	$	6	$	(205)	$	19,351
U.S. Government agencies		16,251		24		(264)		16,011
States and political subdivisions		145,107		2,155		(1,395)		145,867
Mortgage-backed securities-
government sponsored entities		227,712		766		(2,925)		225,553
Total debt securities	$	408,620	$	2,951	$	(4,789)	$	406,782

	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
AVAILABLE FOR SALE:
U.S. Government agencies	$	3,998	$	—	$	(29)	$	3,969
States and political subdivisions		70,672		2,419		—		73,091
Corporate obligations		3,019		13		—		3,032
Mortgage-backed securities-
government sponsored entities		143,712		2,809		(27)		146,494
Total debt securities	$	221,401	$	5,241	$	(56)	$	226,586

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The following tables show the Company’s investments’ gross unrealized losses and fair value aggregated by security type and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	December 31, 2021
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities	$	18,361	$	(205)	$	—	$	—	$	18,361	$	(205)
U.S. Government agencies		7,912		(109)		3,843		(155)		11,755		(264)
States and political subdivisions		74,658		(1,395)		—		—		74,658		(1,395)
Mortgage-backed securities-government sponsored entities		170,647		(2,856)		2,919		(69)		173,566		(2,925)
	$	271,578	$	(4,565)	$	6,762	$	(224)	$	278,340	$	(4,789)

	December 31, 2020
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	3,969		(29)	$	—	$	—	$	3,969	$	(29)
Mortgage-backed securities-government sponsored entities		4,980	$	(27)		—		—		4,980		(27)
	$	8,949	$	(56)	$	—	$	—	$	8,949	$	(56)

The Company has 137 debt securities in the less than twelve month category and 3 debt securities in the twelve months or more category as of December 31, 2021. In management’s opinion, the unrealized losses on securities reflect changes in interest rates subsequent to the acquisition of specific securities. No other-than-temporary-impairment charges were recorded in 2021. Management believes that all other unrealized losses represent temporary impairment of the securities, and it is more likely than not that it will not have to sell the securities before recovery of their cost basis.

The amortized cost and fair value of debt securities as of December 31, 2021 by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
		(In Thousands)
Due in one year or less	$	1,086	$	1,093
Due after one year through five years		11,268		11,488
Due after five years through ten years		54,965		54,392
Due after ten years		113,589		114,256
		180,908		181,229
Mortgage-backed securities - government sponsored entities		227,712		225,553
	$	408,620	$	406,782

Gross realized gains and gross realized losses on sales of securities available for sale were $92,000 and $0, respectively, in 2021, compared to $71,000 and $0, respectively, in 2020. The proceeds from the sales of securities totaled $11,366,000 and $24,497,000 for the years ended December 31, 2021 and 2020, respectively.

Securities with a carrying value of $339,769,000 and $199,361,000 at December 31, 2021 and 2020, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

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NOTE 4 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Set forth below is selected data relating to the composition of the loan portfolio (in thousands):

	December 31, 2021				December 31, 2020
Real Estate:
Residential	$	273,040	20.1	%	$	263,127	18.6	%
Commercial		628,724	46.4			579,104	41.0
Agricultural		61,925	4.6			66,334	4.7
Construction		21,990	1.6			21,005	1.5
Commercial loans		186,031	13.7			283,741	20.1
Other agricultural loans		37,930	2.8			40,929	2.9
Consumer loans to individuals		146,400	10.8			158,049	11.2
Total loans		1,356,040	100.0	%		1,412,289	100.0	%
Deferred fees, net		(1,109)				(1,557)
Total loans receivable		1,354,931				1,410,732
Allowance for loan losses		(16,442)				(13,150)
Net loans receivable	$	1,338,489			$	1,397,582

During 2021 and 2020, the Company participated in the Paycheck Protection Program (“PPP”), administered directly by the United States Small Business Administration (“SBA”). The PPP provides loans to small businesses who were affected by economic conditions as a result of COVID-19 to provide cash-flow assistance to employers who maintain their payroll (including healthcare and certain related expenses), mortgage interest, rent, leases, utilities and interest on existing debt during the COVID-19 emergency. As of December 31, 2021 and 2020, the Company had outstanding principal balances of $15,209,000 and $95,043,000, respectively, in PPP loans. The PPP loans are fully guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan is made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. PPP loans are included in the Commercial loan category.

In accordance with the SBA terms and conditions on these PPP loans, the Company received approximately $2.9 million and $2.3 million in fees associated with the processing of these loans in 2021 and 2020, respectively. Upon funding of the loans, these fees were deferred and are amortized over the life of the loan as an adjustment to yield in accordance with FASB ASC 310-20-25-2.

As a result of the acquisition of UpState, the Company added $15,410,000 of loans that were accounted for in accordance with ASC 310-30. Based on a review of the loans acquired by the Company’s senior lending management, which included an analysis of credit deterioration of the loans since origination, the Company recorded a specific credit fair value adjustment of $6,937,000.  For loans that were acquired with specific evidence of deterioration in credit quality, loan losses will be accounted for through a reduction of the specific reserve and will not impact the allowance for loan losses until actual losses exceed the allotted reserves. For loans acquired without a deterioration of credit quality, losses incurred will result in adjustments to the allowance for loan losses through the allowance for loan loss adequacy calculation.

Changes in the accretable yield for purchased credit-impaired loans were as follows for the twelve months ended December 31:

(In thousands)

	2021		2020
Balance at beginning of period	$	1,365	$	—
Additions		—		1,724
Accretion		(880)		(353)
Reclassification and other		1,399		(6)
Balance at end of period	$	1,884	$	1,365

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The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30 (in thousands):

	December 31, 2021		December 31, 2020
Outstanding Balance
	$	12,862	$	15,570
Carrying Amount
	$	8,304	$	9,281

Loans acquired with credit deterioration of $15,410,000 and accounted for in accordance with ASC 310-30 were individually evaluated to estimate credit losses and a net recovery amount for each loan. The net cash flows for each loan were then discounted to present value using a risk-adjusted market rate. The table below presents the components of the purchase accounting adjustments:

(In Thousands)	July 7, 2020
Contractually required principal and interest	$	15,410
Non-accretable discount		(5,213)
Expected cash flows		10,197
Accretable discount		(1,724)
Estimated fair value	$	8,473

There has been no allowance for loan losses recorded for acquired loans with specific evidence of deterioration in credit quality. As of December 31, 2021, for loans that were acquired prior to 2020 with or without specific evidence of deterioration in credit quality, adjustments to the allowance for loan losses have been accounted for through the allowance for loan loss adequacy calculation.

The Company maintains a loan review system, which allows for a periodic review of our loan portfolio and the early identification of potential impaired loans. The system takes into consideration, among other things, delinquency status, size of loans, type and market value of collateral and financial condition of the borrowers. Specific loan loss allowances are established for identified losses based on a review of such information. A loan evaluated for impairment is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans identified as impaired are evaluated independently. The Company does not aggregate such loans for evaluation purposes. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral-dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential mortgage loans for impairment disclosures, unless such loans are part of a larger relationship that is impaired, or are classified as a troubled debt restructuring.

The following tables show the amount of loans in each category that were individually and collectively evaluated for impairment at the dates indicated:

	Real Estate Loans
									Commercial			Other	Consumer
	Residential		Commercial			Agricultural	Construction		Loans			Agricultural	Loans		Total
	(In thousands)
December 31, 2021
Individually evaluated for impairment	$	—	$	1,658	$	—	$	—	$	16	$	—	$	—	$	1,674
Loans acquired with deteriorated credit quality		784		3,285		1,918		—		198		2,119		—		8,304
Collectively evaluated for impairment		272,256		623,781		60,007		21,990		185,817		35,811		146,400		1,346,062
Total Loans	$	273,040	$	628,724	$	61,925	$	21,990	$	186,031	$	37,930	$	146,400	$	1,356,040

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	Real Estate Loans
									Commercial			Other	Consumer
	Residential		Commercial			Agricultural	Construction		Loans			Agricultural	Loans		Total
	(In thousands)
December 31, 2020
Individually evaluated for impairment	$	—	$	2,582	$	—	$	—	$	80	$	—	$	—	$	2,662
Loans acquired with deteriorated credit quality		591		3,995		2,043		194		246		2,212		—		9,281
Collectively evaluated for impairment		262,536		572,527		64,291		20,811		283,415		38,717		158,049		1,400,346
Total Loans	$	263,127	$	579,104	$	66,334	$	21,005	$	283,741	$	40,929	$	158,049	$	1,412,289

The following table includes the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable.

			Unpaid Principal
	Recorded		Principal		Associated
	Investment		Balance		Allowance
December 31, 2021	(In thousands)
With no related allowance recorded:
Real Estate Loans
Commercial	$	141	$	141	$	—
Commercial loans		16		16		—
Subtotal		157		157		—
With an allowance recorded:
Real Estate Loans
Commercial		1,517		1,517		272
Subtotal		1,517		1,517		272
Total:
Real Estate Loans
Commercial	$	1,658	$	1,658	$	272
Commercial loans		16		16		—
Total Impaired Loans	$	1,674	$	1,674	$	272

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			Unpaid
	Recorded		Principal		Associated
	Investment		Balance		Allowance
December 31, 2020	(In thousands)
With no related allowance recorded:
Real Estate Loans
Commercial	$	2,582	$	3,234	$	—
Commercial loans		80		80		—
Subtotal		2,662		3,314		—
With an allowance recorded:
Real Estate Loans
Commercial		—		—		—
Subtotal		—		—		—
Total:
Real Estate Loans
Residential						—
Commercial	$	2,582	$	3,234	$	—
Commercial loans		80		80		—
Total Impaired Loans	$	2,662	$	3,314	$	—

The following information for impaired loans is presented for the years ended December 31, 2021 and 2020:

	Average Recorded				Interest Income
	Investment				Recognized
	2021		2020		2021		2020
	(In thousands)
Total:
Real Estate Loans
Commercial	$	2,358	$	2,105	$	157	$	14
Commercial loans		18		16		7		—
Total Loans	$	2,376	$	2,121	$	164	$	14

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources. As of December 31, 2021, there were no troubled debt restructured loans. During 2021, there were no new loan relationships identified as troubled debt restructurings. During 2021, there were no charge-offs on loans classified as troubled debt restructurings.

As of December 31, 2020, troubled debt restructured loans totaled $75,000 and did not require a specific reserve. During 2020, there were no new loan relationships identified as troubled debt restructurings. During 2020, there was a charge-off in the amount of $20,000 on loans classified as troubled debt restructurings.

On April 7, 2020, federal banking regulators issued a revised interagency statement that included guidance on their approach for the accounting of loan modifications in light of the economic impact of the COVID-19 pandemic. The guidance interprets current accounting standards and indicates that a lender can conclude that a borrower is not experiencing financial difficulty if short-term modifications are made in response to COVID-19, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to the loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented. The agencies confirmed in working with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs.

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in foreclosed real estate owned on the Consolidated Balance Sheets. As of December 31, 2021 and 2020, foreclosed real estate owned totaled $1,742,000 and $965,000, respectively. As of December 31, 2021, included within foreclosed real estate owned are two commercial properties that were received via a deed in lieu. As of December 31, 2021, the Company has initiated formal foreclosure proceedings on five consumer residential mortgage loans with an outstanding balance of $532,000.

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Management uses an eight point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans greater than 90 days past due are considered Substandard unless full payment is expected. Any portion of a loan that has been charged off is placed in the Loss category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as nonperformance, repossession, or death occurs to raise awareness of a possible credit event. The Company’s Loan Review Department is responsible for the timely and accurate risk rating of the loans on an ongoing basis. Every credit which must be approved by Loan Committee or the Board of Directors is assigned a risk rating at time of consideration. Loan Review also annually reviews relationships of $1,500,000 and over to assign or re-affirm risk ratings. Loans in the Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance.

The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard, Doubtful and Loss within the internal risk rating system as of December 31, 2021 and December 31, 2020 (in thousands):

			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
December 31, 2021
Commercial real estate loans	$	618,541	$	5,146	$	4,765	$	—	$	272	$	628,724
Real estate - agricultural		60,193		—		1,732		—		—		61,925
Commercial loans		185,729		199		103		—		—		186,031
Other agricultural loans		35,573		210		2,147		—		—		37,930
Total	$	900,036	$	5,555	$	8,747	$	—	$	272	$	914,610

			Special
	Pass		Mention		Substandard		Doubtful		Loss		Total
December 31, 2020
Commercial real estate loans	$	566,418	$	6,346	$	6,340	$	—	$	—	$	579,104
Real estate - agricultural		58,322		5,111		2,901		—		—		66,334
Commercial loans		282,915		437		389		—		—		283,741
Other agricultural loans		35,772		2,786		2,371		—		—		40,929
Total	$	943,427	$	14,680	$	12,001	$	-	$	-	$	970,108

For residential real estate loans, construction loans and consumer loans, the Company evaluates credit quality based on the performance of the individual credits. Nonperforming loans include loans that have been placed on nonaccrual status and loans remaining in accrual status on which the contractual payment of principal and interest has become 90 days past due.

The following table presents the recorded investment in the loan classes based on payment activity as of December 31, 2021 and December 31, 2020 (in thousands):

	Performing		Nonperforming		Total
December 31, 2021
Residential real estate loans	$	272,571	$	469	$	273,040
Construction		21,990		—		21,990
Consumer loans to individuals		146,345		55		146,400
Total	$	440,906	$	524	$	441,430

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	Performing		Nonperforming		Total
December 31, 2020
Residential real estate loans	$	262,556	$	571	$	263,127
Construction		21,005		—		21,005
Consumer loans to individuals		157,864		185		158,049
Total	$	441,425	$	756	$	442,181

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2021 and December 31, 2020 (in thousands):

	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and still accruing		Non-Accrual		Total Past Due and Non-Accrual		Purchased Credit Impaired Loans		Total Loans
December 31, 2021
Real Estate loans
Residential	$	271,622	$	155	$	10	$	—	$	469	$	634	$	784	$	273,040
Commercial		625,336		—		—		—		103		103		3,285		628,724
Agricultural		59,982		25		—		—		—		25		1,918		61,925
Construction		21,990		—		—		—		—		—		-		21,990
Commercial loans		185,801		3		13		91		16		32		198		186,031
Other agricultural loans		35,811		—		—		—		—		—		2,119		37,930
Consumer loans		145,986		248		111		—		55		414		-		146,400
Total	$	1,346,528	$	431	$	134	$	91	$	643	$	1,208	$	8,304	$	1,356,040

	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and still accruing		Non-Accrual		Total Past Due and Non-Accrual		Purchased Credit Impaired Loans		Total Loans
December 31, 2020
Real Estate loans
Residential	$	261,406	$	355	$	204	$	—	$	571	$	1,130	$	591	$	263,127
Commercial		573,376		59		—		—		1,674		1,733		3,995		579,104
Agricultural		63,615		—		—		—		676		676		2,043		66,334
Construction		20,811		—		—		—		—		—		194		21,005
Commercial loans		282,374		1,009		90		—		22		1,121		246		283,741
Other agricultural loans		38,454		—		—		—		263		263		2,212		40,929
Consumer loans		157,538		233		93		—		185		511		-		158,049
Total	$	1,397,574	$	1,656	$	387	$	—	$	3,391	$	5,434	$	9,281	$	1,412,289

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The following table presents the allowance for loan losses by the classes of the loan portfolio:

(In thousands)	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Beginning balance, December 31, 2020	$	1,960	$	8,004	$	150	$	1,360	$	1,676	$	13,150
Charge Offs		(17)		(452)		—		(200)		(480)		(1,149)
Recoveries		74		19		—		49		99		241
Provision for loan losses		158		3,307		(17)		281		471		4,200
Ending balance, December 31, 2021	$	2,175	$	10,878	$	133	$	1,490	$	1,766	$	16,442
Ending balance individually evaluated ‎for impairment	$	—	$	272	$	—	$	—	$	—	$	272
Ending balance collectively evaluated for impairment	$	2,175	$	10,606	$	133	$	1,490	$	1,766	$	16,170

(In thousands)	Residential Real Estate		Commercial Real Estate		Construction		Commercial		Consumer		Total
Beginning balance, December 31, 2019	$	1,552	$	4,687	$	95	$	949	$	1,226	$	8,509
Charge Offs		(41)		(452)		—		(18)		(431)		(942)
Recoveries		6		39		—		44		44		133
Provision for loan losses		443		3,730		55		385		837		5,450
Ending balance, December 31, 2020	$	1,960	$	8,004	$	150	$	1,360	$	1,676	$	13,150
Ending balance individually evaluated ‎for impairment	$	—	$	—	$	—	$	—	$	—	$	—
Ending balance collectively evaluated for impairment	$	1,960	$	8,004	$	150	$	1,360	$	1,676	$	13,150

During the period ended December 31, 2021, the allowance for loan losses increased from $13,150,000 to $16,442,000. This $3,292,000 increase in the required allowance was due primarily to a $1.5 million increase in the qualitative factor related to loan growth and a $1.4 million increase due to an increase in the qualitative factor related to large balance loans.

During the period ended December 31, 2020, the allowance for loan losses increased from $8,509,000 to $13,150,000. This $4,641,000 increase in the required allowance was due primarily to a $2.3 million increase in the qualitative factor related to economic conditions and a $2.2 million increase due to new qualitative factors directly related to the COVID-19 pandemic.

Interest income that would have been recorded on loans accounted for on a non-accrual basis under the original terms of the loans was $35,000 and $286,000 for 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the Company considered its concentration of credit risk to be acceptable. As of December 31, 2021, the highest concentrations are in commercial rentals and the residential rentals category, with loans outstanding of $135.7 million, or 10.0% of loans outstanding, to commercial rentals, and $116.3 million, or 8.6% of loans outstanding, to residential rentals. There were no charge-offs on loans within these concentrations for the years ended December 31, 2021 and 2020, respectively.

During 2021, the Company sold residential mortgage loans totaling $8,616,000. During 2020, the Company sold residential mortgage loans totaling $12,312,000. Gross realized gains and gross realized losses on sales of residential mortgage loans were $177,000 and $0, respectively, in 2021 and $527,000 and $0, respectively, in 2020. The proceeds from the sales of residential mortgage loans totaled $8,793,000 and $12,839,000 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the outstanding value of loans serviced for others totaled $65.4 million and $72.5 million, respectively.

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NOTE 5 - PREMISES AND EQUIPMENT

Components of premises and equipment at December 31 are as follows:

	2021		2020
	(In Thousands)
Land and improvements	$	3,879	$	3,878
Buildings and improvements		21,846		21,545
Furniture and equipment		10,183		9,717
		35,908		35,140
Accumulated depreciation		(18,619)		(17,326)
	$	17,289	$	17,814

Depreciation expense totaled $1,481,000 and $1,322,000 for the years ended December 31, 2021 and 2020, respectively.
‎ 

NOTE 6 - DEPOSITS

Aggregate time deposits in denominations greater than $250,000 were $257,238,000 and $205,376,000 at December 31, 2021 and 2020, respectively.

At December 31, 2021, the scheduled maturities of time deposits are as follows (in thousands):

2022	$	406,331
2023		70,921
2024		30,978
2025		10,533
2026		9,939
	$	528,702

NOTE 7 – BORROWINGS

Short-term borrowings at December 31 consist of the following:

	2021		2020
	(In Thousands)
Securities sold under agreements to repurchase	$	60,822	$	63,303
Federal Home Loan Bank short-term borrowings		—		—
	$	60,822	$	63,303

The outstanding balances and related information of short-term borrowings are summarized as follows:

	Years Ended December 31,
	2021			2020
	(Dollars In Thousands)
Average balance during the year	$	73,810		$	57,014
Average interest rate during the year		0.39	%		0.55	%
Maximum month-end balance during the year	$	90,409		$	69,294
Weighted average interest rate at the end of the year		0.34	%		0.43	%

Securities sold under agreements to repurchase generally mature within one day to one year from the transaction date. Securities with an amortized cost and fair value of $66,353,000 and $65,162,000 at December 31, 2021 and $63,462,000 and $64,429,000 at December 31, 2020, respectively, were pledged as collateral for these agreements. The securities underlying the agreements were under the Company’s control.

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The collateral pledged for repurchase agreements that are classified as secured borrowings is summarized as follows (in thousands):

	As of December 31, 2021
	Remaining Contractual Maturity of the Agreements
	Overnight and continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
Repurchase Agreements:
Mortgage-backed securities - government sponsored entities	$	65,162	$	—	$	—	$	—	$	65,162
Total liability recognized for repurchase agreements										60,822

	As of December 31, 2020
	Remaining Contractual Maturity of the Agreements
	Overnight and continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
Repurchase Agreements:
Mortgage-backed securities - government sponsored entities	$	64,429	$	—	$	—	$	—	$	64,429
Total liability recognized for repurchase agreements										63,303

The Company has a line of credit commitment available from the FHLB of Pittsburgh for borrowings of up to $150,000,000, which renews annually in June. At December 31, 2021, there were no borrowings outstanding on this line. There were no borrowings outstanding on this line of credit at December 31, 2020. The Company has a line of credit commitment available from Atlantic Community Bankers Bank for $7,000,000, which expires on June 30, 2022. There were no borrowings under this line of credit at December 31, 2021 and 2020. The Company has a line of credit commitment available from PNC Bank for $16,000,000 at December 31, 2021. There were no borrowings under this line of credit at December 31, 2021 and December 31, 2020. The Company also has a line of credit commitment from Zions Bank for $17,000,000. There were no borrowings under this line of credit at December 31, 2021 and December 31, 2020.

Other borrowings consisted of the following at December 31, 2021 and 2020:

	2021		2020
	(In Thousands)
Amortizing fixed rate borrowing due March 2022 at 1.75%	$	227	$	1,126
Amortizing fixed rate borrowing due August 2022 at 1.94%		1,364		3,376
Amortizing fixed rate borrowing due October 2022 at 1.88%		1,386		3,021
Amortizing fixed rate borrowing due October 2023 at 3.24%		3,856		5,865
Amortizing fixed rate borrowing due December 2023 at 3.22%		2,097		3,096
Fixed rate term borrowing due December 2023 at 1.95%		10,000		10,000
Amortizing fixed rate borrowing due December 2023 at 1.73%		5,190		7,616
Amortizing fixed rate borrowing due April 2024 at 0.91%		5,878		8,359
	$	29,998	$	42,459

Contractual maturities and scheduled cash flows of other borrowings at December 31, 2021 are as follows (in thousands):

2022	$	2,977
2023		21,143
2024		5,878
	$	29,998

The Bank’s maximum borrowing capacity with the FHLB was $607,092,000 of which $29,998,000 was outstanding in the form of advances and $127,850,000 was outstanding in the form of letters of credit at December 31, 2021. Advances from the FHLB are secured by qualifying assets of the Bank.

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NOTE 8 – OPERATING LEASES

The Company leases eight office locations under operating leases. Several assumptions and judgments were made when applying the requirements of Topic 842 to the Company’s existing lease commitments, including the allocation of consideration in the contracts between lease and nonlease components, determination of the lease term, and determination of the discount rate used in calculating the present value of the lease payments.

The Company has elected to account for the variable nonlease components, such as common area maintenance charges, utilities, real estate taxes, and insurance, separately from the lease component. Such variable nonlease components are reported in net occupancy expense on the Consolidated Statements of Income when paid. These variable nonlease components were excluded from the calculation of the present value of the remaining lease payments, therefore, they are not included in other assets and other liabilities on the Consolidated Balance Sheets. The lease cost associated with the operating leases for the year ending December 31, 2021 and 2020, amounted to $587,000 and $571,000 respectively. The right-of-use asset associated with operating leases amounted to $4,511,000 and $4,938,000 at December 31, 2021 and 2020, respectively. The lease liability associated with operating leases amounted to $4,577,000 and $4,984,000 at December 31, 2021 and 2020, respectively.

Certain of the Company’s leases contain options to renew the lease after the initial term. Management considers the Company’s historical pattern of exercising renewal options on leases and the positive performance of the leased locations, when determining whether it is reasonably certain that the leases will be renewed. If management concludes that there is reasonable certainty about the renewal option, it is included in the calculation of the remaining term of each applicable lease. The discount rate utilized in calculating the present value of the remaining lease payments for each lease was the Federal Home Loan Bank of Pittsburgh advance rate corresponding to the remaining maturity of the lease. The following table presents the weighted-average remaining lease term and discount rate for the leases outstanding at December 31, 2021.

	Operating
Weighted-average remaining term		11.5 years
Weighted-average discount rate		2.95%

The following table presents the undiscounted cash flows due related to operating leases as of December 31, 2021, along with a reconciliation to the discounted amount recorded on the Consolidated Balance Sheets:

Undiscounted cash flows due (in thousands)	Operating
2022	$	546
2023		535
2024		543
2025		561
2026		504
2027 and thereafter		2,815
Total undiscounted cash flows		5,504
Discount on cash flows		(927)
Total lease liabilities	$	4,577

Under Topic 842, the lessee can elect to not record on the Consolidated Balance Sheets a lease whose term is twelve months or less and does not include a purchase option that the lessee is reasonably certain to exercise. As of December 31, 2021, the Company had no leases that had a term of twelve months or less.

NOTE 9 – EMPLOYEE BENEFIT PLANS

The Company has a defined contributory profit-sharing plan which includes provisions of a 401(k) plan. The plan permits employees to make pre-tax contributions of up to 15% of the employee’s compensation, not to exceed the limits set by the Internal Revenue Service. The amount of contributions to the plan, including matching contributions, is at the discretion of the Board of Directors. All employees over the age of 21 are eligible to participate in the plan and receive Company contributions after one year of employment. Eligible employees are able to contribute to the Plan at the beginning of the first quarterly period after their date of employment. Employee contributions vest immediately, and any Company contributions are fully vested after five years. The Company’s contributions are expensed as the cost is incurred, funded currently, and amounted to $1,135,000 and $1,049,000 for the years ended December 31, 2021 and 2020, respectively.

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The Company has several non-qualified supplemental executive retirement plans for the benefit of certain executive officers and former officers. At December 31, 2021 and 2020, other liabilities include $3,481,000 and $3,529,000 accrued under the Plan. Compensation expense includes approximately $364,000 and $495,000 relating to the supplemental executive retirement plan for 2021 and 2020, respectively. To fund the benefits under this plan, the Company is the owner of single premium life insurance policies on participants in the non-qualified retirement plan. At December 31, 2021 and 2020, the cash value of these policies was $40,038,000 and $39,608,000, respectively.

The Company provides postretirement benefits in the form of split-dollar life arrangements to employees who meet the eligibility requirements. The net periodic postretirement benefit expense included in salaries and employee benefits was $153,000 and $86,000 for the years ended December 31, 2021 and 2020, respectively.

FASB authoritative guidance on accounting for deferred compensation and postretirement benefit aspects of endorsement split-dollar life insurance arrangements requires the recognition of a liability and related compensation expense for endorsement split-dollar life insurance that provides a benefit to an employee that extends to postretirement periods. The life insurance policies purchased for the purpose of providing such benefits do not effectively settle an entity’s obligation to the employee. Accordingly, the entity must recognize a liability and related compensation expense during the employee’s active service period based on the future cost of insurance to be incurred during the employee’s retirement. This expense is included in the SERP plan expense for 2021 and 2020 discussed above. If the entity has agreed to provide the employee with a death benefit, then the liability for the future death benefit should be recognized by following the FASB authoritative guidance on employer’s accounting for postretirement benefits other than pensions. The accumulated postretirement benefit obligation was $1,630,000 and $1,477,000 at December 31, 2021 and 2020, respectively.

Through its acquisition of Delaware, the Company also has certain director fee deferral and continuation plans. These plans allowed directors to defer director fees and provide a benefit payment for a period of five years to fifteen years. The Company expensed $0 and $2,000 under these plans in 2021 and 2020, respectively. At December 31, 2021 and 2020, the liability under these plans was $5,000 and $82,000, respectively.

Certain key executives have change in control agreements with the Company. These agreements provide certain potential benefits in the event of termination of employment following a change in control.

The Company participates in the Pentegra Mulitemployer Defined Benefit Pension Plan (EIN 13-5645888 and Plan # 333) as a result of its acquisition of North Penn. As of December 31, 2021 and 2020, the Company’s Plan was 116.6% and 94.2% funded, respectively, and total contributions made are not more than 5% of the total contributions to the Plan. The Company’s expense related to the Plan was $17,000 in 2021 and $24,000 in 2020. During the plan years ending December 31, 2021 and 2020, the Company made contributions of $17,000 and $24,000, respectively.

As a result of its acquisition of Delaware, the Company is a member of the New York State Bankers Retirement System. Substantially all full-time employees who were former employees of Delaware are covered under this defined benefit pension plan (the “Delaware Plan”). The Company’s funding policy is to contribute at least the minimum required contribution annually. Pension cost is computed using the projected unit credit actuarial cost method. Effective December 31, 2012, the Delaware Plan was closed to new participants and accrued benefits were frozen.

The following table sets forth the projected benefit obligation and change in plan assets for the Delaware Plan at December 31:

(in Thousands)	2021		2020
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	(8,065)	$	(7,515)
Service cost		(51)		(58)
Interest cost		(206)		(257)
Actuarial (gain) loss		177		(767)
Benefits paid		523		532
Benefit obligation at end of year	$	(7,622)	$	(8,065)
Change in plan assets:
Fair value of plan assets at beginning of year	$	7,744	$	6,853
Actual return on plan assets		474		1,416
Benefits paid		(527)		(525)
Fair value of assets at end of year		7,691		7,744
Funded status at end of year	$	69	$	(321)

The Delaware Plan paid $523,000 and $532,000 in benefit payments in 2021 and 2020, respectively. Estimated benefit payments under the Delaware Plan are expected to be approximately $460,000, $445,000, $437,000, $441,000 and $431,000 for the

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next five years. Payments are expected to be approximately $2,055,000 in total for the five-year period ending December 31, 2031. The Company was not required to make any contributions to the Delaware Plan in 2021 or 2020. The increase in the projected discount rate from 2.63% to 2.93% decreased the projected benefit obligation for the year ended December 31, 2021 by approximately $280,000.

The accumulated benefit obligation for the Delaware Plan was $7,622,000 and $8,065,000 at December 31, 2021 and 2020, respectively.

The following table sets forth the amounts recognized in accumulated other comprehensive income for the years ended December 31 (in thousands):

	2021		2020
Transition asset	$	—	$	—
Prior service credit		—		—
Gain		220		241
Total	$	220	$	241

Net pension cost (income) included the following components (in thousands):

	2021		2020
Service cost benefits earned during the period	$	51	$	58
Interest cost on projected benefit obligation		206		257
Actual return on assets		(394)		(395)
Net amortization and deferral		(34)		(20)
Net periodic pension cost (income)	$	(171)	$	(100)

The weighted average assumptions used to determine the benefit obligation at December 31 are as follows:

	2021		2020
Discount rate	2.93	%	2.63	%

The weighted average assumptions used to determine the net periodic pension cost at December 31 are as follows:

	2021		2020
Discount rate	2.63	%	3.55	%
Expected long-term return on plan assets	5.25	%	6.00	%
Rate of compensation increase	—	%	—	%

The expected long-term return on plan assets was determined based upon expected returns on individual asset types included in the asset portfolio.

The Delaware Plan’s weighted-average asset allocations at December 31, by asset category, are as follows:

	2021		2020
Cash equivalents	—	%	—	%
Equity securities	35.7	%	31.6	%
Fixed income securities	35.0	%	62.6	%
Other	29.3	%	5.8	%
	100.0	%	100.0	%

The New York Bankers Retirement System (“System”) overall investment strategy is to invest in a diversified portfolio while managing the variability between the assets and projected liabilities of underfunded pension plans. In 2019, the System’s Board Members approved a migration of substantially all of the System’s assets to one fund, Commingled Pensions Trust Fund (LDI Diversified Balanced) of JPMorgan Chase Bank, N.A. The Fund is a group trust within the meaning of internal Revenue Service Revenue Ruling 81-100, as amended. The growth-oriented portion of the Fund invests in a mix of asset classes that the Fund’s Trustee believes will collectively maximize total risk-adjusted return through a combination of capital appreciation and income. This portion of the Fund will comprise between 35% and 90% of the portfolio and will invest directly or indirectly via underlying funds in a broad

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mix of global equity, global fixed income, real estate and cash-plus strategies. The remaining portion of the Fund, between 10% and 65% of the portfolio, is used to minimize volatility relative to a plan’s projected liabilities.

At December 31, 2021 and 2020, the System had an investment concentration of approximately 100% and 99%, respectively, of its total portfolio in the JPMCB LDI Diversified Balanced Fund, a commingled pension trust fund. Primarily all of the assets of the JPMCD LDI Diversified Balance Fund are valued at Net Asset Value (“NAV”). The NAV of the fund is determined at the last sales price or official market closing price on the primary exchange on which the instrument is traded before the net asset values of the Funds are calculated on a valuation date. In accordance with ASC Subtopic 820-10, certain investments measured at net asset value per share (or its equivalents) are not required to be classified in the fair value hierarchy.

NOTE 10 - INCOME TAXES

The components of the provision for federal income taxes are as follows:

	Years Ended December 31,
	2021		2020
	(In Thousands)
Current	$	6,328	$	7,754
Deferred		(383)		(4,468)
	$	5,945	$	3,286

Deferred income taxes reflect temporary differences in the recognition of revenue and expenses for tax reporting and financial statement purposes, principally because certain items, such as the allowance for loan losses and loan fees are recognized in different periods for financial reporting and tax return purposes. As of December 31, 2021, the Company had a $3,894,000 net operating loss carryforward that will begin to expire by December 31, 2036. A valuation allowance has not been established for deferred tax assets. Realization of the deferred tax assets is dependent on generating sufficient taxable income. Although realization is not assured, management believes it is more likely than not that all of the deferred tax asset will be realized. Deferred tax assets are recorded in other assets.

Income tax expense of the Company is less than the amounts computed by applying statutory federal income tax rates to income before income taxes because of the following:

	Percentage of Income
	before Income Taxes
	Years Ended December 31,
	2021		2020
Tax at statutory rates	21.0	%	21.0	%
Tax exempt interest income, net of interest expense disallowance	(1.9)		(3.7)
Non-deductible merger related expenses	—		1.1
Earnings and proceeds on life insurance	(0.6)		(1.0)
Other	0.8		0.5
	19.3	%	17.9	%

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The net deferred tax asset included in other assets in the accompanying Consolidated Balance Sheets includes the following amounts of deferred tax assets and liabilities:

	2021		2020
	(In Thousands)
Deferred tax assets:
Allowance for loan losses	$	3,855	$	2,761
Deferred compensation		817		758
Core deposit intangible		231		230
Prepaid expenses		—		20
Pension liability		302		118
Foreclosed real estate valuation allowance		19		17
Net operating loss carryforward		913		893
Purchase price adjustment		2,487		2,832
Deferred loan fees		—		60
Net unrealized loss on securities		386		—
Other		404		747
Total Deferred Tax Assets		9,414		8,436

Deferred tax liabilities:
Premises and equipment		1,004		920
Deferred loan fees		125		—
Net unrealized gain on pension liability		318		272
Net unrealized gain on securities		—		1,089
Total Deferred Tax Liabilities		1,447		2,281
Net Deferred Tax Asset	$	7,967	$	6,155

The Company’s federal and state income tax returns for taxable years through 2018 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

NOTE 11 - REGULATORY MATTERS AND STOCKHOLDERS’ EQUITY

The Company and 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings and other factors.

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 table below) of Total, Tier 1 and Common Equity Tier 1 capital (as defined in the regulations) to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2021 and 2020, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2021, the most recent notification from the regulators has categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category.

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The Company’s actual capital amounts and ratios are presented in the following table:

								To be Well Capitalized
								under Prompt
					For Capital Adequacy			Corrective Action
	Actual				Purposes			Provision
	Amount		Ratio		Amount	Ratio		Amount	Ratio
	(Dollars in Thousands)
As of December 31, 2021:
Total capital (to risk-weighted assets)	$	191,469	13.66	%	≥$112,117	≥8.00	%	≥$140,146	≥10.00	%
Tier 1 capital (to risk-weighted assets)		175,027	12.49		≥84,087	≥6.00		≥112,117	≥8.00
Common Equity Tier 1 capital (to risk-weighted assets)		175,027	12.49		≥63,066	≥4.50		≥91,095	≥6.50
Tier 1 capital (to average assets)		175,027	8.51		≥82,243	≥4.00		≥102,804	≥5.00

As of December 31, 2020:
Total capital (to risk-weighted assets)	$	172,103	12.62	%	≥$109,123	≥8.00	%	≥$136,404	≥10.00	%
Tier 1 capital (to risk-weighted assets)		158,953	11.65		≥81,842	≥6.00		≥109,123	≥8.00
Common Equity Tier 1 capital (to risk-weighted assets)		158,953	11.65		≥61,382	≥4.50		≥88,663	≥6.50
Tier 1 capital (to average assets)		158,953	8.71		≥72,994	≥4.00		≥91,243	≥5.00

The Bank’s ratios do not differ significantly from the Company’s ratios presented above.

The Company and the Bank are subject to regulatory capital rules which, among other things, impose a common equity Tier 1 minimum capital requirement of 4.50% of risk-weighted assets; set the minimum leverage ratio for all banking organizations at a uniform 4.00% of total assets; set the minimum Tier 1 capital to risk-based assets requirement at 6.00% of risk-weighted assets; and assign a risk-weight of 150% to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The rules also require unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt out is exercised, which the Company and the Bank have done. The rule also limits a banking organization’s dividends, stock repurchases and other capital distributions, and certain discretionary bonus payments to executive officers, if the banking organization does not hold a “capital conservation buffer” consisting of 2.50% of common equity Tier 1 capital to risk-weighted assets above regulatory minimum risk-based requirements. The Company and the Bank are in compliance with their respective new capital requirements, including the capital conservation buffer, as of December 31, 2021.

Pennsylvania banking regulations limit the ability of the Bank to pay dividends or make loans or advances to the Company. Dividends that may be paid in any calendar year are limited to the current year's net profits, combined with the retained net profits of the preceding two years. At December 31, 2021, dividends from the Bank available to be paid to the Company, without prior approval of the Bank's regulatory agency, totaled $42.7 million, subject to the Bank meeting or exceeding regulatory capital requirements. The Company's principal source of funds for dividend payments to shareholders is dividends received from the Bank.

NOTE 12 - STOCK BASED COMPENSATION

At the Annual Meeting held on April 22, 2014, the Company’s stockholders approved the Norwood Financial Corp 2014 Equity Incentive Plan. An aggregate of 375,000 shares of authorized but unissued Common Stock of the Company were reserved for future issuance under the Plan. This includes up to 60,000 shares for awards to outside directors. The Plan also authorized the Company to award restricted stock to officers and outside directors, limited to 63,000 shares of restricted stock awards for officers and 12,000 shares of restricted stock awards for outside directors. At the Annual Meeting held on April 24, 2018, the Company’s stockholders approved an amendment to the 2014 Equity Incentive Plan to ease certain restrictions on restricted stock awards to outside directors. As a result of this amendment, the number of shares available for restricted stock awards to officers was reduced by 300 shares to 62,700, while the number of shares available for restricted stock awards to outside directors was increased by 20,300 to 32,300 shares. Under this plan, the Company granted 296,966 shares, which included 191,865 options to employees, 10,400 options to directors, 62,625 shares of restricted stock to officers and 32,075 shares of restricted stock to directors. The restricted shares vest over five years. The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted

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stock under the company’s restricted stock plan. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of December 31, 2021, there were 78,035 shares available for future awards under this plan, which includes 60,510 shares available for officer awards and 17,525 shares available for awards to outside directors. Included in these totals are 75 shares available for restricted stock awards to officers and 25 shares available for restricted stock awards to outside directors.

Total unrecognized compensation cost related to stock options was $269,000 as of December 31, 2021 and $214,000 as of December 31, 2020. Salaries and employee benefits expense includes $214,000 and $204,000 of compensation costs related to options for the years ended December 31, 2021 and 2020, respectively. Compensation costs related to restricted stock amounted to $335,000 and $334,000 for the years ended December 31, 2021 and 2020, respectively. The expected future compensation expense relating to non-vested restricted stock outstanding as of December 31, 2021 and 2020 was $953,000 and $1,202,000, respectively.

A summary of the Company’s stock option activity and related information for the years ended December 31 follows:

	2021					2020
		Weighted					Weighted
		Average		Average			Average		Average
		Exercise		Intrinsic			Exercise		Intrinsic
	Options	Price		Value		Options	Price		Value
Outstanding, beginning of year	215,970	$	25.73			199,825	$	24.78
Granted	43,500		25.80			33,750		26.93
Exercised	(22,420)		17.59			(15,530)		17.25
Forfeited	(10,975)		29.48			(2,075)		16.83
Outstanding, end of year	226,075	$	26.37	$	520	215,970	$	25.73	$	742,738
Exercisable, end of year	182,575	$	26.50	$	511	182,220	$	25.51	$	742,738

Exercise prices for options outstanding as of December 31, 2021 ranged from $17.93 to $36.02 per share. The weighted average remaining contractual life is 6.4 years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	Years Ended December 31,
	2021		2020
Dividend yield		3.55%		3.55%
Expected life		10 years		10 years
Expected volatility		34.69%		34.15%
Risk-free interest rate		1.51%		0.91%
Weighted average fair value of options granted	$	6.49	$	6.34

The expected volatility is based on historical volatility. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life is based on historical exercise experience. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts.

Proceeds from stock option exercises totaled $394,000 in 2021. Shares issued in connection with stock option exercises are issued from available treasury shares or from available authorized shares. During 2021, for the shares issued in connection with stock option exercises, 22,420 shares in total, all shares were issued from available authorized shares.

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As of December 31, 2021, outstanding stock options consist of the following:

		Average				Average
	Options	Exercise		Remaining	Options	Exercise
	Outstanding	Price		Life, Years	Exercisable	Price
	21,450	$	18.03	1.0	21,450	$	18.03
	1,650		18.36	1.0	1,650		18.36
	19,375		17.93	2.0	19,375		17.93
	8,250		19.39	2.9	8,250		19.39
	9,375		19.03	3.9	9,375		19.03
	14,375		22.37	5.0	14,375		22.37
	26,750		32.81	6.0	26,750		32.81
	23,600		32.34	7.0	23,600		32.34
	24,000		36.02	8.0	24,000		36.02
	33,750		26.93	9.0	33,750		26.93
	1,000		26.35	9.3	—		—
	1,000		25.38	9.5	—		—
	41,500		25.80	9.9	—		—
Total	226,075				182,575

A summary of the Company’s restricted stock activity and related information for the years ended December 31 is as follows:

	2021		2020
		Weighted-Average		Weighted-Average
	Number of	Grant Date	Number of	Grant Date
	Shares	Fair Value	Shares	Fair Value
Non-vested, beginning of year	39,135	$30.72	36,195	$31.65
Granted	8,000	25.80	14,500	26.93
Vested	(11,205)	32.15	(11,560)	32.89
Forfeited	(3,900)	31.72	—	—
Non-vested at December 31	32,030	$26.76	39,135	$30.72

NOTE 13 - EARNINGS PER SHARE

The following table sets forth the computations of basic and diluted earnings per share:

	Years Ended December 31,
	2021		2020
	(In Thousands, Except Per Share Data)
Numerator, net income	$	24,915	$	15,080
Denominator:
Weighted average shares outstanding		8,213		7,239
Less: Weighted average unvested restricted shares		(35)		(36)
Denominator: Basic earnings per share		8,178		7,203
Weighted average shares outstanding, basic		8,178		7,203
Add: Dilutive effect of stock options and restricted stock		21		27
Denominator: Diluted earnings per share		8,199		7,230
Basic earnings per common share	$	3.05	$	2.09
Diluted earnings per common share	$	3.04	$	2.09

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Stock options which had no intrinsic value because their effect would be anti-dilutive, and therefore would not be included in the diluted EPS calculation, were 109,100 and 116,350 for the years ended December 31, 2021 and 2020, respectively, based on the closing price of the Company’s common stock which was $25.99 and $26.17 as of December 31, 2021 and 2020, respectively.

NOTE 14 - OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

A summary of the Bank’s financial instrument commitments is as follows:

	December 31,
	2021		2020
	(In Thousands)
Commitments to grant loans	$	78,996	$	78,310
Unfunded commitments under lines of credit		156,899		137,965
Standby letters of credit		8,462		5,636
	$	244,357	$	221,911

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer and generally consists of real estate.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The majority of these standby letters of credit expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit when deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.

NOTE 15 – INTEREST RATE SWAPS

The Company enters into interest rate swaps that allow our commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate into a fixed-rate. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. There was no effect on earnings in any periods presented. At December 31, 2021, based upon the swap contract values, the company pledged cash in the amount of $350,000 as collateral for its interest rate swaps with a third-party financial institution which had a fair value $235,000.

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Summary information regarding these derivatives is presented below:

(Amounts in thousands)
	Notional Amount, December 31,						Fair Value December 31,
		2021		2020	Interest Rate Paid	Interest Rate Received		2021		2020
Customer interest rate swap
Maturing November, 2030	$	6,873	$	7,222	1 month LIBOR + Margin	Fixed	$	144	$	165
Maturing December, 2030		4,553		4,800	1 month LIBOR + Margin	Fixed		91		111
Total	$	11,426	$	12,022			$	235	$	276
Third party interest rate swap
Maturing November, 2030	$	6,873	$	7,222	Fixed	1 month LIBOR + Margin	$	144	$	165
Maturing December, 2030		4,553		4,800	Fixed	1 month LIBOR + Margin		91		111
Total	$	11,426	$	12,022			$	235	$	276

The following table presents the fair values of derivative instruments in the Consolidated Balance Sheet.

	(Amounts in thousands)
	Assets			Liabilities
	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
December 31, 2021
Interest rate derivatives	Other assets	$	235	Other liabilities	$	235
December 31, 2020
Interest rate derivatives	Other assets		276	Other liabilities		276

NOTE 16 – FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In accordance with fair value accounting guidance, the Company measures, records, and reports various types of assets and liabilities at fair value on either a recurring or non-recurring basis in the Consolidated Financial Statements. Those assets and liabilities are presented in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis”. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows (in thousands):

	Fair Value Measurement Reporting Date using
Description	Total		Level 1		Level 2		Level 3
December 31, 2021
ASSETS
U.S. Treasury securities	$	19,351	$	—	$	19,351	$	—
U.S. Government agencies		16,011		—		16,011		—
States and political subdivisions		145,867		—		145,867		—
Mortgage-backed securities-government
sponsored entities		225,553		—		225,553		—
Interest rate derivatives		235		—		235		—
LIABILITIES
Interest rate derivatives		235		—		235		—
December 31, 2020
ASSETS
U.S. Government agencies	$	3,969	$	—	$	3,969	$	—
States and political subdivisions		73,091		—		73,091		—
Corporate obligations		3,032		—		3,032		—
Mortgage-backed securities-government
sponsored entities		146,494		—		146,494		—
Interest rate derivatives		276		—		276		—
LIABILITIES
Interest rate derivatives		276		—		276		—

Securities:

The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) are used to support fair values of certain Level 3 investments, if applicable.

Interest Rate Swaps:

The fair value of interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable.

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Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows (in thousands):

	Fair Value Measurement Reporting Date using
Description	Total		Level 1		Level 2		Level 3
December 31, 2021
Impaired Loans	$	1,402	$	—	$	—	$	1,402
Foreclosed real estate		1,742		—		—		1,742
December 31, 2020
Impaired Loans	$	2,662	$	—	$	—	$	2,662
Foreclosed real estate		965		—		—		965

Impaired loans (generally carried at fair value):

The Company measures impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the lowest level of input that is significant to the fair value measurements.

As of December 31, 2021, the fair value investment in impaired loans totaled $1,402,000, which included three loan relationships with a carrying value of $157,000 that did not require a valuation allowance since either the estimated realizable value of the collateral or the discounted cash flows exceeded the recorded investment in the loan. As of December 31, 2021, the Company has recognized charge-offs against the allowance for loan losses on these impaired loans in the amount of $0 over the life of the loans. As of December 31, 2021, the fair value investment in impaired loans included one loan relationships with a carrying value of $1,517,000 that required a valuation allowance of $272,000 since the estimated realizable value of the collateral did not support the recorded investment in the loan. As of December 31, 2021, the Company has recognized charge-offs against the allowance for loan losses on this impaired loan in the amount of $0 over the life of the loan.

As of December 31, 2020, the fair value investment in impaired loans totaled $2,662,000, which included six loan relationships that did not require a valuation allowance since either the estimated realizable value of the collateral or the discounted cash flows exceeded the recorded investment in the loan. As of December 31, 2020, the Company has recognized charge-offs against the allowance for loan losses on these impaired loans in the amount of $652,000 over the life of the loans. There were no loan relationships which required a valuation allowance.

Foreclosed real estate owned (carried at fair value):

Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices, appraised value of the collateral or management’s estimation of the value of the collateral. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement.

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Quantitative Information about Level 3 Fair Value Measurements
(dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
December 31, 2021
Impaired loans	$	1,402	Appraisal of collateral(1)	Appraisal adjustments(2)	0%-10.0% (1.12%)
Foreclosed real estate owned	$	1,742	Appraisal of collateral(1)	Liquidation Expenses(2)	7.00% ‎(7.00%)

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	Quantitative Information about Level 3 Fair Value Measurements
(dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
December 31, 2020
Impaired loans	$	2,662	Appraisal of collateral(1)	Appraisal adjustments(2)	0%-10.59% (9.75%)
Foreclosed real estate owned	$	965	Appraisal of collateral(1)	Liquidation Expenses(2)	7.00% ‎(7.00%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less any associated allowance.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Assets and Liabilities Not Required to be Measured or Reported at Fair Value

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

The estimated fair values of the Bank’s financial instruments not required to be measured or reported at fair value were as follows at December 31, 2021 and December 31, 2020. (In thousands):

	Fair Value Measurements at December 31, 2021
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents (1)	$	206,681	$	206,681	$	206,681	$	—	$	—
Loans receivable, net		1,338,489		1,389,870		—		—		1,389,870
Mortgage servicing rights		289		500		—		—		500
Regulatory stock (1)		3,927		3,927		3,927		—		—
Bank owned life insurance (1)		40,038		40,038		40,038		—		—
Accrued interest receivable (1)		5,889		5,889		5,889		—		—
Financial liabilities:
Deposits		1,756,793		1,759,722		1,228,091		—		531,631
Short-term borrowings (1)		60,822		60,822		60,822		—		—
Other borrowings		29,998		30,221		—		—		30,221
Accrued interest payable (1)		1,203		1,203		1,203		—		—
Off-balance sheet financial instruments:
Commitments to extend credit and ‎outstanding letters of credit		—		—		—		—		—

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	Fair Value Measurements at December 31, 2020
	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents (1)	$	111,693	$	111,693	$	111,693	$	—	$	—
Loans receivable, net		1,397,582		1,493,480		—		—		1,493,480
Mortgage servicing rights		337		476		—		—		476
Regulatory stock (1)		3,981		3,981		3,981		—		—
Bank owned life insurance (1)		39,608		39,608		39,608		—		—
Accrued interest receivable (1)		6,232		6,232		6,232		—		—
Financial liabilities:
Deposits		1,535,385		1,540,661		1,001,554		—		539,107
Short-term borrowings (1)		63,303		63,303		63,303		—		—
Other borrowings		42,459		43,452		—		—		43,452
Accrued interest payable (1)		1,601		1,601		1,601		—		—
Off-balance sheet financial instruments:
Commitments to extend credit and ‎outstanding letters of credit		—		—		—		—		—

(1) This financial instrument is carried at cost, which approximates the fair value of the instrument.

NOTE 17 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The following tables present the changes in accumulated other comprehensive income (loss) (in thousands) by component, net of tax, for the years ended December 31, 2021 and 2022:

	Unrealized gains on available for sale securities (a)		Unrealized gain on pension liability (a)		Total (a)
Balance as of December 31, 2020	$	4,096	$	1,023	$	5,119
Other comprehensive income (loss) before reclassification		(5,476)		174		(5,302)
Amount reclassified from accumulated other comprehensive loss		(73)		—		(73)
Total other comprehensive income		(5,549)		174		(5,375)
Balance as of December 31, 2021	$	(1,453)	$	1,197	$	(256)
	Unrealized gains on available for sale securities (a)		Unrealized gain on pension liability (a)
Balance as of December 31, 2019	$	354	$	833	$	1,187
Other comprehensive income (loss) before reclassification		3,798		190		3,988
Amount reclassified from accumulated other comprehensive loss		(56)		—		(56)
Total other comprehensive		3,742		190		3,932
Balance as of December 31, 2020	$	4,096	$	1,023	$	5,119

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

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The following table presents significant amounts reclassified out of each component of accumulated other comprehensive income (loss) (in thousands) for the years ended December 31, 2021 and 2020:

	Amount Reclassified
	From Accumulated				Affected Line Item in
	Other				Consolidated
	Comprehensive				Statements of
Details about other comprehensive income	Income (a)				Income
	Twelve months		Twelve months
	ended		ended
	December 31,		December 31,
	2021		2020
Unrealized gains on available for sale securities	$	92	$	71	Net realized gains on sales of securities
		(19)		(15)	Income tax expense
	$	73	$	56

(a)Amounts in parentheses indicate debits to net income.

NOTE 18 – ACQUISITION OF UPSTATE NEW YORK BANCORP, INC. AND USNY BANK

On January 8, 2020, the Company and the Bank, and UpState and its wholly owned subsidiary, USNY Bank entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which UpState would merge with and into the Company, with the Company as the surviving corporation (“the Merger”). The Merger was completed on July 7, 2020. Pursuant to the terms of the Merger Agreement, UpState was merged with and into the Company, with the Company as the surviving corporation of the Merger. Immediately following the Merger, USNY Bank was merged with and into Wayne Bank, with Wayne Bank as the surviving entity.

USNY Bank conducted its business from two Bank of the Finger Lakes offices in Geneva and Penn Yan, New York, and two Bank of Cooperstown offices in Cooperstown and Oneonta, New York. At June 30, 2020, UpState had total assets of $463.8 million, total deposits of $412.8 million and total stockholders’ equity of $44.8 million.

Pursuant to the terms of the Merger Agreement, shareholders of UpState elected to receive for each share of UpState common stock they owned, either 0.9390 shares of the Company’s common stock or $33.33 in cash, or a combination of both. All shareholder elections were subject to the allocation and proration procedures set forth in the Merger Agreement which were intended to ensure that 90% of the shares of UpState would be exchanged for the Company’s common stock and 10% of the shares of UpState would be exchanged for cash. In addition, under the terms of the Merger Agreement, UpState shareholders received an additional $0.67 per share in cash for each share of UpState common stock held. In the aggregate, the merger consideration paid to UpState shareholders consisted of approximately $8,845,198 in cash and 1,865,738 shares of the Company’s common stock.

The senior management of the Company and Wayne Bank remained the same following the completion of the Merger.  UpState directors Jeffrey S. Gifford and Alexandra K. Nolan have been appointed to the boards of directors of the Company and Wayne Bank. In addition, the remaining former directors of UpState have been invited to join a regional advisory board. UpState President and CEO R. Michael Briggs has entered into a consulting agreement with Wayne Bank. The Company has retained the brand names of USNY Bank’s two units, Bank of the Finger Lakes and Bank of Cooperstown, and has also retained USNY Bank’s administration center in Geneva, New York. Scott D. White, unit President of Bank of Cooperstown, and Jeffrey E. Franklin, unit President of Bank of the Finger Lakes, will also remain in place as executives of their units.

The acquired assets and assumed liabilities were measured at estimated fair values. Management made significant estimates and exercised significant judgement in accounting for the acquisition. Management measured loan fair values based on loan file reviews, appraised collateral values, expected cash flows, and historical loss factors. The Company also recorded and identifiable asset representing the core deposit base of UpState based on management’s evaluation of the cost of such deposits relative to alternative funding sources. Management used significant estimates including the average lives of depository accounts, future interest rate levels, and the cost of servicing various depository products. Management used market quotations to determine the fair value of investment securities.

The business combination resulted in the acquisition of loans with and without evidence of credit quality deterioration. UpState loans were deemed impaired at the acquisition date if the Company did not expect to receive all contractually required cash flows due to concerns about credit quality. Such loans were fair valued and the difference between contractually required payments at the acquisition date and cash flows expected to be collected was recorded as a non-accretable difference. At the acquisition date, the Company recorded $15,410,000 of purchased credit-impaired loans subject to a non-accretable difference of $5,213,000. The method

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of measuring carrying value of purchased loans differs from loans originated by the Company (originated loans), and as such, the Company identifies purchased loans and purchased loans with a credit quality discount and originated loans at amortized cost.

UpState’s loans without evidence of credit deterioration were fair valued by discounting both expected principal and interest cash flows using an observable discount rate for similar instruments that a market participant would consider in determining fair value. Additionally, consideration was given to management’s best estimates of default rates and payment speeds. At acquisition, UpState’s loan portfolio without evidence of deterioration totaled $400,127,000 and was recorded at a fair value of $393,580,000.

The allocation of purchase consideration related to the Merger was considered preliminary, primarily with respect to certain tax-related assets and liabilities. Subsequent to the closing date of the acquisition, final tax returns were prepared and filed for UpState which resulted in tax refunds related to the operations of UpState and USNY Bank.

In accordance with ASC 805 the acquiring Company shall adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. A provisional amount is necessary when the buyer must issue financial statements prior to completing its accounting for the business combination (i.e. prior to the end of the measurement period). The measurement period begins on the acquisition date and ends on the earlier of either: (a) the buyer obtaining the information needed to finish the accounting for the business combination or (b) one year from the acquisition date.

Adjustments to preliminary allocations related to certain tax-related assets and liabilities occurred in the fourth quarter of 2020. The change to provisional amounts resulted in a reduction in goodwill of $923,000 and no impact to results of operations during the fourth quarter.

The Company finalized the allocation of purchase price during the second quarter of 2021, which was within the one-year measurement-period following the acquisition. The final adjustment resulted in a $24,000 reduction in goodwill and had no impact to results of operations during the second quarter.

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The following table summarizes the purchase of UpState as of July 7, 2020:

(Dollars in Thousands, Except Per Share Data)
Purchase Price Consideration in Common Stock
UpState New York Bancorp, Inc. common shares settled for stock		1,987,206
Exchange Ratio		0.9390
Norwood Financial Corp shares issued		1,865,738
Value assigned to each Norwood Financial Corp common share	$	24.30
Purchase price assigned to UpState New York Bancorp, Inc. common shares			$	45,337
exchanged for Norwood Financial Corp shares
Purchase Price Consideration - Cash for Common Stock
UpState New York Bancorp, Inc. shares exchanged for cash, excluding fractional shares		220,794
Purchase price paid to each UpState New York Bancorp, Inc. common share exchanged for cash	$	33.33
Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for cash			$	7,359
Purchase price additional cash consideration per share				1,479
Purchase price consideration - Cash-in-lieu of Fractional Shares				6
Total Purchase Price			$	54,181
Net Assets Acquired:
UpState New York Bancorp, Inc. shareholders' equity	$	44,803
UpState New York Bancorp, Inc. goodwill and intangibles		-
Total tangible equity		44,803
Adjustments to reflect assets acquired at fair value:
Investments		(112)
Loans
Interest rate		3,982
General credit		(10,529)
Specific credit - non-amortizing		(5,213)
Specific credit - amortizing		(1,724)
Core deposit intangible		409
Deferred loan fees		(812)
Premises and equipment		(1,211)
Allowance for loan and lease losses		5,982
Deferred tax assets		3,730
Other		(48)
Adjustments to reflect liabilities acquired at fair value:
Time deposits		(3,011)
Net assets acquired				36,246
Goodwill resulting from merger			$	17,935

70

The following condensed statement reflects the values assigned to UpState New York Bancorp, Inc. net assets as of the acquisition date:

(In Thousands)
Total purchase price			$	54,181
Net assets acquired:
Cash	$	24,037
Securities available for sale		13,836
Loans		405,221
Premises and equipment, net		4,318
Regulatory stock		2,487
Accrued interest receivable		1,426
Core deposit intangible		564
Other assets		5,398
Deposits		(414,370)
Accrued interest payable		(175)
Other liabilities		(6,496)
Total identifiable net assets acquired				36,246
Goodwill resulting from UpState New York Bancorp, Inc. Merger			$	17,935

The Company recorded goodwill associated with the acquisition of UpState totaling $17,935,000. Goodwill is not amortized, but is periodically evaluated for impairment. The Company did not recognize any impairment during the year ended December 31, 2021. The carrying amount of the goodwill at December 31, 2021 related to the UpState acquisition was $17,935,000.

Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. During the year ended December 31, 2021, no such adjustments were recorded. The identifiable intangible assets consist of a core deposit intangible which is being amortized on an accelerated basis over the useful life of such asset. The gross carrying amount of the core deposit intangible at December 31, 2021 was $409,000 with $108,000 accumulated depreciation as of that date.

As of December 31, 2021, the current year and estimated future amortization expense for the core deposit intangible associated with the UpState acquisition is:

(In thousands)
2022	$	63
2023		56
2024		48
2025		41
After five years		93
	$	301

71

The following table presents financial information for the former UpState included in the Consolidated Statements of Income from the date of acquisition through December 31, 2020:

		Actual From
		Acquisition Date
		Through
		December 31,2020
		(in thousands)
Net interest income after provision for loan losses	$	7,291
Noninterest income	$	313

The following table presents pro forma information for the years ended December 31, 2021 and 2020, as if the acquisition of UpState had occurred on January 1, 2020. This table has been prepared for comparative purposes only, and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results:

		Pro Forma
		Twelve Months Ended December 31,
(In Thousands, Except Per Share Data)	2020
Net interest income after provision for loan losses	$	52,897
Noninterest income		8,726
Net income		20,613
Pro forma earnings per share:
Basic	$	2.52
Diluted	$	2.52

NOTE 19 - RISKS AND UNCERTAINTIES

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, we were automatically authorized to originate PPP loans.

Under the original terms of the PPP, an eligible business can apply for a PPP loan up to the greater of: (1) 2.5 times its average monthly payroll costs; or (2) $10.0 million. PPP loans will have: (a) an interest rate of 1.0%, (b) a two-year or five-year loan term to maturity; and (c) principal and interest payments deferred for ten months from the end of the coverage period. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 60% of the loan proceeds are used for payroll expenses, with the remaining 40% of the loan proceeds used for other qualifying expenses. As of December 31, 2021, the Company approved over 1,900 applications for $156.3 million of loans under the PPP.

Since the opening of the PPP, several larger banks have been subject to litigation regarding the process and procedures that such banks used in processing applications for the PPP. Norwood may be exposed to the risk of similar litigation, from both customers and non-customers that approached the bank regarding PPP loans, regarding the process and procedures used in processing applications for the PPP. If any such litigation is filed against and is not resolved in a manner favorable to Norwood, it may result in significant financial liability or adversely affect reputation. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP-related litigation could have a material adverse impact on our business, financial condition and results of operations.

The Company also has credit risk on PPP loans if a determination is made by the SBA that there is a deficiency in the manner in which the loan was originated, funded, or serviced by, such as an issue with the eligibility of a borrower to receive a PPP loan, which may or may not be related to the ambiguity in the laws, rules and guidance regarding the operation of the PPP. In the event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a deficiency in the manner in which the PPP loan was originated, funded, or serviced by the Company , the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from the Company.

72

COVID-19 Loan Forbearance Programs. Section 4013 of the CARES Act provides that banks may elect not to categorize a loan modification as a TDR if the loan modification is (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020, under the National Emergencies Act terminates, or (B) December 31, 2020.

On December 27, 2020, the president signed into law the Consolidated Appropriations Act, 2021, which amended CARES Act Section 4013.  The amendment extends the applicable period for which a financial institution is able to (a) suspend the requirements under United States generally accepted accounting principles for loan modifications related to the coronavirus disease (COVID-19) pandemic that would otherwise be categorized as a troubled debt restructuring and (b) any determination of a loan modified as a result of the effects of the COVID-19 pandemic as being a TDR, including impairment for accounting purposes. The amended end date for the relief related to a financial institution electing to suspend TDR and loan impairment accounting for qualifying modifications was extended from the earlier of December 31, 2020, or 60 days after the national emergency concerning COVID-19 declared by the president terminates to the earlier of January 1, 2022, or 60 days after the national emergency concerning COVID-19 declared by the president terminates.

According to the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by the federal bank regulatory agencies on April 7, 2020, short-term loan modifications not otherwise eligible under Section 4013 that are made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. See Note 4 of the financial statements for additional disclosure of TDRs at December 31, 2021.

The following table presents a summary of loans that were granted forbearance by type of loan during the years ended December 31, 2021 and 2020:

Loan Type	Number of ‎Loans		Balance ‎(in thousands)
Real Estate Loans:
Residential	118	$	10,883
Commercial	385		218,984
Agricultural	16		5,267
Construction	24		4,125
Commercial	186		23,801
Other agricultural loans	—		-
Consumer loans to individuals	486		11,130
Total	1,215	$	274,190

As of December 31, 2021, no loans remained in deferment under the Bank’s COVID-19 loan forbearance program.

‎

73

NOTE 20 - NORWOOD FINANCIAL CORP (PARENT COMPANY ONLY) FINANCIAL INFORMATION

BALANCE SHEETS

	December 31,
	2021		2020
	(In Thousands)
ASSETS
Cash on deposit in bank subsidiary	$	1,511	$	854
Investment in bank subsidiary		204,547		195,035
Other assets		2,472		2,337
Total assets	$	208,530	$	198,226
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities	$	3,268	$	3,441
Stockholders’ equity		205,262		194,785
Total liabilities and stockholders' equity	$	208,530	$	198,226

STATEMENTS OF INCOME

	Years Ended December 31,
	2021		2020
Income:	(In Thousands)
Dividends from bank subsidiary	$	10,697	$	15,319
Expenses		627		1,704
		10,070		13,615
Income tax benefit		(171)		(180)
		10,241		13,795
Equity in undistributed earnings of subsidiary		14,674		1,285
Net Income	$	24,915	$	15,080
Comprehensive Income	$	19,540	$	19,012

STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2021		2020
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	24,915	$	15,080
Adjustments to reconcile net income to
net cash provided by operating activities:
Undistributed earnings of bank subsidiary		(14,674)		(1,285)
Other, net		(129)		28
Net Cash Provided by Operating Activities		10,112		13,823
CASH FLOWS FROM INVESTING ACTIVITIES
Outlays for business combinations		—		(8,844)
Net Cash (Used in) Provided by Investing Activities		—		(8,844)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised		394		268
Sale of treasury stock for ESOP		130		130
Acquisition of treasury stock		(1,440)		(108)
Cash dividends paid		(8,539)		(7,263)
Net Cash Used in Financing Activities		(9,455)		(6,973)
Net Increase (Decrease) in Cash and Cash Equivalents		657		(1,994)
CASH AND CASH EQUIVALENTS - BEGINNING		854		2,848
CASH AND CASH EQUIVALENTS - ENDING	$	1,511	$	854

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

(a) Disclosure Controls and Procedures. The Company’s management evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Internal Control over Financial Reporting. Management’s Report on Internal Control over Financial Reporting is included in this Annual Report on Form 10-K under Item 8.

(c) Changes in Internal Control over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information contained under the sections captioned “Proposal I - Election of Directors” and “Corporate Governance” in the Proxy Statement for the 2022 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated herein by reference.

The Company has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer or controller. The Code of Ethics is posted on the stockholder services page of Wayne Bank’s website at www.waynebank.com/stockholder-services. The Company intends to report any waiver or amendment to its Code of Ethics on its website at www.waynebank.com/stockholder-services.

Item 11. Executive Compensation.

The information contained under the sections captioned “Executive Compensation” and “Director Compensation” in the Proxy Statement are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

(a)          Security Ownership of Certain Beneficial Owners

                              Information required by this item is incorporated herein by reference to the Section captioned “Principal Holders of Our Common Stock” of the Proxy Statement.

(b)          Security Ownership of Management

                              Information required by this item is incorporated herein by reference to the section captioned “Proposal I - Election of Directors” of the Proxy Statement.

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(c)          Changes in Control

                              Management of the Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the registrant.

(d)          Equity Compensation Plan Information

EQUITY COMPENSATION PLAN INFORMATION

	(a)	(b)		(c)
	Number of Securities to be issued upon exercise of outstanding options, warrants and rights*	Weighted-average exercise price of outstanding options, warrants and rights *		Number of securities remaining available for future issuance under equity compensation plans, (excluding securities reflected in column (a)) *
Equity compensation plans
approved by security holders:
2014 Equity Incentive Plan, as amended	226,075	$	26.37	78,035
Equity compensation plans
not approved by security holders:.
None	—		—	—
TOTAL	226,075	$	26.37	78,035

* Share and per share data adjusted for the 50% stock dividend declared on August 8, 2017.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by this item is incorporated herein by reference to the sections in the Proxy Statement captioned “Related Party Transactions” and “Corporate Governance”.

Item 14. Principal Accounting Fees and Services

The information required by this item is incorporated herein by reference to the section in the Proxy Statement captioned “Proposal III -Ratification of Appointment of Independent Auditors.”

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)Listed below are all financial statements, schedules and exhibits filed as part of this Annual Report on Form 10-K.

1.The consolidated balance sheets of Norwood Financial Corp and subsidiary as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2021, together with the related notes and the independent registered public accounting firm reports of S.R. Snodgrass, P.C. (PCAOB: 00074), independent registered public accounting firm.

2.Schedules omitted as they are not applicable.

‎

76

3.The following exhibits are filed as part of the Form 10-K

No.	Description
3(i)	Amended and Restated Articles of Incorporation of Norwood Financial Corp (13)
3(ii)	Bylaws of Norwood Financial Corp (1)
4.1	Specimen Stock Certificate of Norwood Financial Corp (2)
4.2	Description of Capital Stock of Norwood Financial Corp (15)
10.1†	Employment Agreement with Lewis J. Critelli (3)
10.2†	Change in Control Severance Agreement with William S. Lance (3)
10.3†	Change in Control Severance Agreement with Robert J. Mancuso (4)
10.4†	Salary Continuation Agreement between the Bank and William W. Davis, Jr. (5)
10.5†	Amended and Restated Salary Continuation Agreement, dated September 1, 2017, between the Bank and Lewis J. Critelli (6)
10.7†	2006 Stock Option Plan (7)
10.8†	First and Second Amendments to Salary Continuation Agreement with William W. Davis, Jr. (8)
10.11†	2014 Equity Incentive Plan, as amended (9)
10.12†	Addendum to Change in Control Severance Agreement with William S. Lance (10)
10.13†	Salary Continuation Agreement, dated September 1, 2017, between Wayne Bank and William S. Lance (6)
10.14†	Salary Continuation Agreement, dated September 1, 2017, between Wayne Bank and Robert J. Mancuso (6)
10.15†	Change-In-Control Severance Agreement, dated February 14, 2022, by and among Norwood Financial Corp, Wayne Bank, and Vincent G. O’Bell
10.16†	Change-In-Control Severance Agreement, dated January 16, 2018, by and among Norwood Financial Corp, Wayne Bank, and John F. Carmody (11)
10.17†	Addendum, dated January  16, 2018, to Change-In-Control Severance Agreement, dated March 2, 2010, by and among Norwood Financial Corp, Wayne Bank and William S. Lance (11)
10.18†	Addendum, dated January  16, 2018, to Change-In-Control Severance Agreement, dated January 3, 2013, by and among Norwood Financial Corp, Wayne Bank and Robert J. Mancuso (11)
10.19	Wayne Bank Executive Annual Incentive Plan (14)
10.20	Salary-Continuation Agreement dated March 1, 2021, between Wayne Bank and John F. Carmody (12)
21	Subsidiaries of Norwood Financial Corp
23	Consent of S.R. Snodgrass, P.C.
31.1	Rule 13a-14(a)/15d-14(a) Certification of CEO
31.2	Rule 13a-14(a)/15d-14(a) Certification of CFO
32	Certification pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of Sarbanes Oxley Act of 2002

101	The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
101.INS	Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

77

†	Management contract or compensatory plan or arrangement.
(1)	Incorporated by reference into this document from the identically numbered exhibit to the Company’s Form 10-Q filed with the Commission on August 8, 2014.
(2)	Incorporated herein by reference into this document from the identically numbered Exhibit to the Company’s Form 10, Registration Statement initially filed in paper with the Commission on April 29, 1996, Registration No. 0-28364.
(3)	Incorporated herein by reference from the identically numbered exhibits to the Company’s Form 10-K filed with the Commission on March 15, 2010.
(4)	Incorporated by reference into this document from Exhibit 10.4 to the Company’s Form 10-K filed with the Commission on March 14, 2013. File No 0-28364.
(5)	Incorporated herein by reference into this document from Exhibit 10.1 to the Company’s Form 10-K filed with the Commission on March 23, 2000, File No. 0-28364.
(6)	Incorporated by reference from the exhibits to the Current Report on Form 8-K filed with the Commission on September 5, 2017.
(7)	Incorporated herein by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (File No. 333-134831) filed with the Commission on June 8, 2006.
(8)	Incorporated herein by reference from Exhibits 10.1 and 10.5 to the Company’s Current Report on Form 8-K filed April 4, 2006.
(9)	Incorporated by reference to Exhibit 10.1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-8 (File No. 333-195643) filed with the Commission on May 4, 2018.
(10)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 18, 2015.
(11)	Incorporated by reference into this document from the exhibits to the Company’s Current Report on Form 8-K filed with the Commission on January 16, 2018
(12)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 2, 2021, (File No. 0-28364).
(13)	Incorporated herein by reference from the identically numbered exhibit to the Company’s Form 10-K filed with the Commission on March 13, 2020.
(14)	Incorporated herein by reference from the identically numbered exhibit to the Company’s Form 10-K filed with the Commission on March 13, 2020.

(15) Incorporated herein by reference from the identically numbered exhibit to the Company’s Form 10-K filed with the

Commission on March 9, 2021.

Item 16. Form 10-K Summary

None.

‎

78

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NORWOOD FINANCIAL CORP

Dated: March 11, 2022	By:	/s/ Lewis J. Critelli
		Lewis J. Critelli President and Chief Executive Officer (Duly Authorized Representative)

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on March 11, 2022 on behalf of the registrant and in the capacities indicated.

/s/ Lewis J. Critelli	/s/ William W. Davis, Jr.
Lewis J. Critelli President, Chief Executive Officer and Director (Principal Executive Officer)	William W. Davis, Jr. Director
/s/ Andrew A. Forte	/s/ Susan Campfield
Dr. Andrew A. Forte Director	Susan Campfield Director
/s/ Joseph W. Adams	/s/ Kevin M. Lamont
Joseph W. Adams Director /s/ Ralph A. Matergia	Kevin M. Lamont Director /s/ Kenneth A. Phillips
Ralph A. Matergia Director	Dr. Kenneth A. Phillips Director
/s/ Jeffrey S. Gifford	/s/ Alexandra K. Nolan
Jeffrey S. Gifford Director	Alexandra K. Nolan Director
/s/ William S. Lance	/s/ Meg L. Hungerford
William S. Lance Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	Meg L. Hungerford Director

79

EX-10.15

Exhibit 10.15

CHANGE-IN-CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT entered into this 14th day of February, 2022 (the "Effective Date"), by and between Mr. Vincent O’Bell, (the "Employee"), Wayne Bank (the "Bank"), and Norwood Financial Corp. (the "Company").

WHEREAS, the Employee has heretofore been employed by the Bank and the Company as Senior Vice President and Chief Lending Officer, and the Bank and the Company deem it to be in their best interest to enter into this Agreement as additional incentive to the Employee to continue as an executive employee of the Bank and the Company; and

WHEREAS, the parties desire by this writing to set forth their understanding as to their respective rights and obligations in the event a change of control occurs with respect to the Bank or the Company.

NOW, THEREFORE, the undersigned parties AGREE as follows:

1.Defined Terms

When used anywhere in this Agreement, the following terms shall have the meaning set forth herein.

(a)"Change in Control" shall mean any one of the following events:  (i) the acquisition of ownership, holding or power to vote more than 25% of the Bank's or the Company's voting stock, (ii) the acquisition of the ability to control the election of a majority of the Bank's or the Company's directors, (iii) the acquisition of a controlling influence over the management or policies of the Bank or the Company by any person or by persons acting as a "group" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or (iv) during any period of two consecutive years, individuals (the "Continuing Directors") who at the beginning of such period constitute the Board of Directors of the Bank or the Company (the "Existing Board") cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Existing Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director.  Notwithstanding the foregoing, in the case of (i), (ii) and (iii) hereof, ownership or control of the Bank by the Company itself shall not constitute a Change in Control.  For purposes of this paragraph only, the term "person" refers to an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.  The decision of the Bank's non-employee directors as to whether or not a Change in Control has occurred shall be conclusive and binding. 

(b)"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and as interpreted through applicable rulings and regulations in effect from time to time.

{DC031315.1}

-1-

(c)"Code §280G Maximum" shall mean the product of 2.99 and the Employee’s "base amount" as defined in Code §280G(b)(3).

(d)"Good Reason" shall mean any of the following events, which has not been consented to in advance by the Employee in writing: (i) the requirement that the Employee move his personal residence, or perform his principal executive functions, more than thirty (30) miles from his primary office in effect as of the date of the Change in Control; (ii) a material reduction in the Employee's base compensation as in effect on the date of the Change in Control or as the same may be increased from time to time; (iii) the failure by the Bank or the Company to continue to provide the Employee with compensation and benefits provided for on the date of the Change in Control, as the same may be increased from time to time, or with benefits substantially similar to those provided to him under any of the employee benefit plans in which the Employee now or hereafter becomes a participant, or the taking of any action by the Bank or the Company which would directly or indirectly reduce any of such benefits or deprive the Employee of any material fringe benefit enjoyed by him at the time of the Change in Control; (iv) the assignment to the Employee of duties and responsibilities materially different from those normally associated with his position; (v) a failure to elect or reelect the Employee to the Board of Directors of the Bank or the Company, if the Employee is serving on such Board on the date of the Change in Control; (vi) a material diminution or reduction in the Employee's responsibilities or authority (including reporting responsibilities) in connection with his employment with the Bank or the Company; or (vii) a material reduction in the secretarial or other administrative support provided to the Employee. 

(e)"Just Cause" shall mean, in the good faith determination of the Bank's Board of Directors, the Employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement.  The Employee shall have no right to receive compensation or other benefits for any period after termination for Just Cause.  No act, or failure to act, on the Employee's part shall be considered "willful" unless he has acted, or failed to act, with an absence of good faith and without a reasonable belief that his action or failure to act was in the best interest of the Bank and the Company.

(f)"Protected Period" shall mean the period that begins on the date six months before a Change in Control and ends on the later of the first annual anniversary of the Change in Control or the expiration date of this Agreement.

2.Trigger Events

The Employee shall be entitled to collect the severance benefits set forth in Section 3 of this Agreement in the event that (i) the Employee voluntarily terminates employment either for any reason within the 30-day period beginning on the date of a Change in Control, (ii) the Employee voluntarily terminates employment within 90 days of an event that both occurs during the Protected Period and constitutes Good Reason, or (iii) the Bank or the Company or their successor(s) in interest terminate the Employee's employment for any reason other than Just Cause during the Protected Period. 

3.Amount of Severance Benefit

If the Employee becomes entitled to collect severance benefits pursuant to Section 2 hereof, the Employee shall receive from the Bank an amount equal to one times the Employee’s base salary in effect as of the last date of the calendar year immediately preceding the Change in Control, but in no event more than the Code §280G Maximum.  Said sum shall be paid in one lump sum within ten (10) days of the later of the date of the Change in Control and the Employee's last day of employment with the Bank or the Company.

In the event that the Employee, the Bank, and the Company jointly agree that the Employee has collected an amount exceeding the Code §280G Maximum, the parties may jointly agree in writing that such excess shall be treated as a loan abinitio which the Employee shall repay to the Bank, on terms and conditions mutually agreeable to the parties, together with interest at the applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.

4.Funding of Grantor Trust upon Change in Control

Not later than ten business days after a Change in Control, the Bank shall (i) establish a grantor trust (the "Trust") designed in accordance with Revenue Procedure 92-64 and having a trustee independent of the Bank and the Company, (ii) deposit in said Trust an amount equal to the Code §280G Maximum, unless the Employee has previously provided a written release of any claims under this Agreement, and (iii) provide the trustee of the Trust with a written direction to hold said amount and any investment return thereon in a segregated account for the benefit of the Employee, and to follow the procedures set forth in the next paragraph as to the payment of such amounts from the Trust.  Upon the earlier of the Trust's final payment of all amounts due under the following paragraph or the date 15 months after the Change in Control, the trustee of the Trust shall pay to the Bank the entire balance remaining in the segregated account maintained for the benefit of the Employee.  The Employee shall thereafter have no further interest in the Trust.

During the 12-consecutive month period after a Change in Control, the Employee may provide the trustee of the Trust with a written notice requesting that the trustee pay to the Employee an amount designated in the notice as being payable pursuant to this Agreement.  Within three business days after receiving said notice, the trustee of the Trust shall send a copy of the notice to the Bank via overnight and registered mail return receipt requested.  On the tenth (10th) business day after mailing said notice to the Bank, the trustee of the Trust shall pay the Employee the amount designated therein in immediately available funds, unless prior thereto the Bank provides the trustee with a written notice directing the trustee to withhold such payment.  In the latter event, the trustee shall submit the dispute to non-appealable binding arbitration for a determination of the amount payable to the Employee pursuant to this Agreement, and the costs of such arbitration shall be paid by the Bank.  The trustee shall choose the arbitrator to settle the dispute, and such arbitrator shall be bound by the rules of the American Arbitration Association in making his determination.  The parties and the trustee shall be bound by the results of the arbitration and, within 3 days of the determination by the arbitrator, the trustee shall pay from the Trust the amounts required to be paid to the Employee and/or the Bank, and in no event shall the trustee be liable to either party for making the payments as determined by the arbitrator.

5.Term of the Agreement.  This Agreement shall remain in effect for the period commencing on the Effective Date and ending on the earlier of (i) the date sixty months after the Effective Date, and (ii) the date on which the Employee terminates employment with the Bank; provided that the Employee's rights hereunder shall continue following the termination of this employment with the Bank under any of the circumstances described in Section 2 hereof. 

6.Termination or Suspension under Federal Law.

(a)Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and the Federal Deposit Insurance Corporation Regulations at 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments promulgated thereunder.

(b)If the Employee is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) or (g)(1)), all obligations of the Bank under this Agreement shall terminate, as of the effective date of the order, but the vested rights of the parties shall not be affected.

(c)If the Bank is in default (as defined in Section 3(x)(1) of FDIA), all obligations of the Bank under this Agreement shall terminate as of the date of default; however, this Paragraph shall not affect the vested rights of the parties.

(d)If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee from participating in the conduct of the Bank's affairs, the Bank's obligations under this Agreement shall be suspended as of the date of such service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank shall (i) pay the Employee all or part of the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

7.Expense Reimbursement.

In the event that any dispute arises between the Employee and the Bank or the Company as to the terms or interpretation of this Agreement, whether instituted by formal legal proceedings or otherwise, including any action that the Employee takes to enforce the terms of this Agreement or to defend against any action taken by the Bank or the Company, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys' fees, arising from such

{DC031315.1}

-2-

dispute, proceedings or actions, provided that the Employee shall obtain a final judgment in favor of the Employee in a court of competent jurisdiction or in binding arbitration under the rules of the American Arbitration Association.  Such reimbursement shall be paid within ten (10) days of Employee's furnishing to the Bank and the Company written evidence, which may be in the form, among other things, of a cancelled check or receipt, of any costs or expenses incurred by the Employee.

8.Successors and Assigns.

(a)This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or the Company which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Company.

(b)Since the Bank and the Company are contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank and the Company.

9.Joint and Several Liability

The Company hereby agrees that to the extent permitted by law, it shall be jointly and severally liable for both the payment of all amounts due under this Agreement, and the taking of any actions required under this Agreement.

10.Amendments

No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties, except as herein otherwise specifically provided.

11.Applicable Law

Except to the extent preempted by Federal law, the laws of the Commonwealth of Pennsylvania shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.

{DC031315.1}

-3-

12.Severability

The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

13.Entire Agreement

This Agreement, together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first hereinabove written.

ATTEST:	WAYNE BANK
/s/ William S. Lance	By:	/s/ Lewis J. Critelli
Secretary		Lewis J. Critelli President and Chief Executive Officer
ATTEST:
	NORWOOD FINANCIAL CORP
/s/ William S. Lance	By:	/s/ Lewis J. Critelli
Secretary		Lewis J. Critelli President and Chief Executive Officer
WITNESS:	EMPLOYEE:
/s/ Noelle S. Dobbins	/s/ Vincent G. O’Bell

Vincent O’Bell

{DC031315.1}

-4-

EX-21

Exhibit 21

Subsidiaries of the Registrant

Parent

Norwood Financial Corp.

Subsidiaries	State or Other Jurisdiction of Incorporation	Percentage Ownership
Wayne Bank	Pennsylvania	100%
Subsidiaries of Wayne Bank
Norwood Investment Corp.	Pennsylvania	100%
WCB Realty Corp.	Pennsylvania	100%
WTRO Properties, Inc.	Pennsylvania	100%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements File No. 333-61487, File No. 333-134831, and File No. 333-195643 on Form S-8 of Norwood Financial Corp. of our report dated March 11, 2022, relating to our audit of the consolidated financial statements, which is incorporated in this Annual Report on Form 10-K of Norwood Financial Corp. for the year ended December 31, 2021.

Cranberry Township, Pennsylvania

March 11, 2022

S.R. Snodgrass, P.C.  2009 Mackenzie Way, Suite 340  Cranberry Township, PA 16066  Phone: 724-934-0344  Fax: 724-934-0345

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Lewis J. Critelli, certify that:

1.I have reviewed this annual report on Form 10-K of Norwood Financial Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for  external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting  that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 11, 2022	By:	/s/ Lewis J. Critelli
		Lewis J. Critelli President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, William S. Lance, certify that:

1.I have reviewed this annual report on Form 10-K of Norwood Financial Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting  that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 11, 2022	By:	/s/ William S. Lance
		William S. Lance Executive Vice President & Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Norwood Financial Corp. (the Company) on Form 10-K for the year ending December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Lewis J. Critelli, President and Chief Executive Officer and William S. Lance, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lewis J. Critelli	/s/ William S. Lance
Lewis J. Critelli	William S. Lance
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

March 11, 2022

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Mar. 01, 2022	Jun. 30, 2021
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Transition Report	false
Entity File Number	0-28364
Entity Registrant Name	NORWOOD FINANCIAL CORP
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2828306
Entity Address, Address Line One	717 Main Street
Entity Address, City or Town	Honesdale
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18431
City Area Code	570
Local Phone Number	253-1455
Title of 12(b) Security	Common Stock, $.10 par value
Trading Symbol	NWFL
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,203,073
Entity Public Float			$ 194.7
Documents Incorporated by Reference [Text Block]	Portions of the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders. (Part III)
Entity Central Index Key	0001013272
Amendment Flag	false
Document Fiscal Period Focus	FY
Auditor Firm ID	74
Auditor Location	Cranberry Township, Pennsylvania
Auditor Name	S.R. Snodgrass, P.C

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
ASSETS
Cash and due from banks	$ 21,073	$ 19,445
Interest-bearing deposits with banks	185,608	92,248
Cash and cash equivalents	206,681	111,693
Securities available for sale	406,782	226,586
Loans receivable (net of allowance for loan losses 2021: $16,442; 2020: $13,150)	1,338,489	1,397,582
Regulatory stock, at cost	3,927	3,981
Bank premises and equipment, net	17,289	17,814
Bank owned life insurance	40,038	39,608
Accrued interest receivable	5,889	6,232
Foreclosed real estate owned	1,742	965
Goodwill	29,266	29,290
Other intangibles	407	530
Other assets	17,994	17,583
TOTAL ASSETS	2,068,504	1,851,864
Deposits:
Non-interest bearing demand	440,652	359,559
Interest-bearing demand	196,786	149,692
Money market deposit accounts	309,439	259,974
Savings	281,214	232,329
Time	528,702	533,831
Total Deposits	1,756,793	1,535,385
Short-term borrowings	60,822	63,303
Other borrowings	29,998	42,459
Accrued interest payable	1,203	1,601
Other liabilities	14,426	14,331
TOTAL LIABILITIES	1,863,242	1,657,079
STOCKHOLDERS' EQUITY
Preferred stock, no par value per share, authorized: 5,000,000 shares; issued: none
Common stock, $0.10 par value per share, authorized: 20,000,000 shares, issued: 2021: 8,266,751 shares; 2020: 8,236,331 shares	827	824
Surplus	96,443	95,388
Retained earnings	110,015	93,796
Treasury stock at cost: 2021: 65,328 shares; 2020: 10,263 shares	(1,767)	(342)
Accumulated other comprehensive (loss) income	(256)	5,119
TOTAL STOCKHOLDERS’ EQUITY	205,262	194,785
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 2,068,504	$ 1,851,864

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Consolidated Balance Sheets [Abstract]
net of allowance for loan losses	$ 16,442	$ 13,150
Preferred Stock, No Par Value
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par Value Per Share	$ 0.10	$ 0.10
Common Stock, Shares Authorized	20,000,000	20,000,000
Common Stock, Shares, Issued	8,266,751	8,236,331
Treasury Stock, Shares	65,328	10,263

XML

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
INTEREST INCOME
Loans receivable, including fees	$ 65,257	$ 54,046
Securities: Taxable	4,055	2,915
Securities: Tax exempt	1,492	1,422
Interest-bearing deposits with banks	266	72
Total interest income	71,070	58,455
INTEREST EXPENSE
Deposits	4,757	6,610
Short-term borrowings	284	325
Other borrowings	716	1,044
Total interest expense	5,757	7,979
NET INTEREST INCOME	65,313	50,476
PROVISION FOR LOAN LOSSES	4,200	5,450
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	61,113	45,026
OTHER INCOME
OTHER INCOME	6,985	6,209
Net realized gains on sales of securities	92	71
Net gain on sale of loans	177	527
Earnings and proceeds on life insurance policies	941	845
Other	674	540
Total other income	8,325	7,780
OTHER EXPENSES
Salaries and employee benefits	20,608	17,121
Occupancy, furniture & equipment, net	3,533	3,128
Furniture and equipment	1,289	1,020
Data processing and related operations	2,415	2,457
Federal Deposit Insurance Corporation insurance assessment	681	399
Advertising	473	385
Professional fees	1,582	1,062
Postage and telephone	993	983
Taxes, other than income	1,122	997
Foreclosed real estate	115	53
Amortization of intangibles	123	114
Merger related		2,049
Other	5,644	4,672
Total other expenses	38,578	34,440
INCOME BEFORE INCOME TAXES	30,860	18,366
INCOME TAX EXPENSE	5,945	3,286
NET INCOME	$ 24,915	$ 15,080
BASIC EARNINGS PER SHARE	$ 3.05	$ 2.09
DILUTED EARNINGS PER SHARE	$ 3.04	$ 2.09
Service Charges And Fees [Member]
OTHER INCOME
OTHER INCOME	$ 5,693	$ 5,115
Income From Fiduciary Activities [Member]
OTHER INCOME
OTHER INCOME	$ 748	$ 682

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Comprehensive Income [Abstract]
Net Income	$ 24,915	$ 15,080
Other comprehensive (loss) income:
Unrealized gain on pension liability	220	241
Tax Effect	(46)	(51)
Investment securities available for sale:
Unrealized holding (loss) gain	(6,931)	4,809
Tax Effect	1,455	(1,011)
Reclassification of gains from sale of securities	(92)	(71)
Tax Effect	19	15
Other comprehensive (loss) income	(5,375)	3,932
Comprehensive Income	$ 19,540	$ 19,012

XML

Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Common Stock [Member]	Surplus [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning balance at Dec. 31, 2019	$ 634	$ 49,471	$ 86,536	$ (400)	$ 1,187	$ 137,428
Beginning balance, shares at Dec. 31, 2019	6,340,563			12,007
Net Income			15,080			15,080
Other comprehensive income (loss)					3,932	3,932
Cash dividends declared			(7,820)			(7,820)
Acquisition of treasury stock, shares				3,243
Acquisition of treasury stock				$ (108)		(108)
Acquisition of UpState New York Bancorp, Inc.	$ 186	45,151				45,337
Acquisition of UpState New York Bancorp, Inc., shares	1,865,738
Stock options exercised	$ 2	266				$ 268
Stock options exercised, shares	15,530					15,530
Sale of treasury stock		(36)		$ 166		$ 130
Sale of treasury stock, shares				(4,987)
Compensation expense related to stock options		204				204
Restricted stock awards	$ 2	332				334
Restricted stock awards, shares	14,500
Ending balance, shares at Dec. 31, 2020	8,236,331			10,263
Ending balance at Dec. 31, 2020	$ 824	95,388	93,796	$ (342)	5,119	194,785
Net Income			24,915			24,915
Other comprehensive income (loss)					(5,375)	(5,375)
Cash dividends declared			(8,696)			(8,696)
Acquisition of treasury stock, shares				56,162
Acquisition of treasury stock				$ (1,440)		(1,440)
Stock options exercised	$ 2	392				$ 394
Stock options exercised, shares	22,420					22,420
Sale of treasury stock		(5)		$ 135		$ 130
Sale of treasury stock, shares				(4,997)
Compensation expense related to stock options		214				214
Restricted stock awards	$ 1	454		$ (120)		335
Restricted stock awards, shares	8,000			3,900
Ending balance, shares at Dec. 31, 2021	8,266,751			65,328
Ending balance at Dec. 31, 2021	$ 827	$ 96,443	$ 110,015	$ (1,767)	$ (256)	$ 205,262

XML

Consolidated Statements of Stockholders’ Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Stockholders’ Equity [Abstract]
Cash dividends declared	$ 1.06	$ 1.01

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 24,915,000	$ 15,080,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	4,200,000	5,450,000
Depreciation	1,481,000	1,322,000
Amortization of intangible assets	123,000	114,000
Deferred income taxes	(383,000)	850,000
Net amortization of securities premiums and discounts	1,529,000	1,246,000
Net realized gain on sales of securities	(92,000)	(71,000)
Earnings and proceeds on life insurance policies	(941,000)	(845,000)
Loss on sales of fixed assets and foreclosed real estate owned	108,000	128,000
Net gain on sale of loans	(177,000)	(527,000)
Mortgage loans originated for sale	(8,616,000)	(12,312,000)
Proceeds from sale of loans originated for sale	8,793,000	12,839,000
Compensation expense related to stock options	214,000	204,000
Compensation expense related to restricted stock	335,000	332,000
Decrease (increase) in accrued interest receivable	343,000	(1,087,000)
Decrease in accrued interest payable	(398,000)	(1,006,000)
Other, net	(2,236,000)	(7,920,000)
Net cash provided by operating activities	29,198,000	13,797,000
Securities available for sale:
Proceeds from sales	11,366,000	24,497,000
Proceeds from maturities and principal reductions on mortgage-backed securities	68,218,000	58,876,000
Purchases	(268,242,000)	(82,351,000)
Purchase of regulatory stock	(4,201,000)	(4,001,000)
Redemption of regulatory stock	4,255,000	7,326,000
Net decrease (increase) in loans	57,938,000	(80,770,000)
Proceeds from bank-owned life insurance	511,000
Purchase of premises and equipment	(1,258,000)	(749,000)
Proceeds from sales of foreclosed real estate owned	291,000	612,000
Proceeds from sales of bank premises and fixed assets	158,000	10,000
Acquisition, net of cash and cash equivalents acquired		15,193,000
Net cash used in investing activities	(130,964,000)	(61,357,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	221,151,000	163,743,000
Net increase in short-term borrowings	(2,481,000)	1,047,000
Repayments of other borrowings	(12,461,000)	(23,979,000)
Proceeds from other borrowings		10,000,000
Stock options exercised	394,000	268,000
Sale of treasury stock for ESOP	130,000	130,000
Purchase of treasury stock	(1,440,000)	(108,000)
Cash dividends paid	(8,539,000)	(7,263,000)
Net cash provided by financing activities	196,754,000	143,838,000
Net Increase in Cash and Cash Equivalents	94,988,000	96,278,000
CASH AND CASH EQUIVALENTS - BEGINNING	111,693,000	15,415,000
CASH AND CASH EQUIVALENTS - ENDING	206,681,000	111,693,000
Cash payments for:
Interest paid	6,155,000	8,810,000
Income taxes paid, net of refunds	5,330,000	2,793,000
Supplemental Schedule of Noncash Investing Activities:
Transfers of loans to foreclosed real estate owned and repossession of other assets	1,740,000	592,000
Dividends payable	$ 2,296,000	2,139,000
Merger with UpState New York Bancorp, Inc.
Noncash assets acquired: Securities available-for-sale		13,948,000
Noncash assets acquired: Regulatory stock		2,487,000
Noncash assets acquired: Loans		413,535,000
Noncash assets acquired: Premises and equipment, net		5,529,000
Noncash assets acquired: Accrued interest receivable		1,426,000
Noncash assets acquired: Deferred tax assets		1,495,000
Noncash assets acquired: Other assets		376,000
Total Noncash assets acquired		438,796,000
Liabilities assumed:
Time deposits		204,440,000
Deposits other than time deposits		206,919,000
Accrued interest payable		175,000
Other liabilities		6,496,000
Total Liabilities assumed		418,030,000
Net Noncash Assets Acquired		20,766,000
Cash Acquired		$ 24,037,000

XML

Nature of Operations	12 Months Ended
	Dec. 31, 2021
Nature of Operations [Abstract]
Nature of Operations	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - NATURE OF OPERATIONS Norwood Financial Corp (Company) is a one bank holding company. Wayne Bank (Bank) is a wholly-owned subsidiary of the Company. The Bank is a state-chartered bank headquartered in Honesdale, Pennsylvania. The Company derives substantially all of its income from bank-related services which include interest earnings on commercial mortgages, residential real estate mortgages, commercial and consumer loans, as well as interest earnings on investment securities and fees from deposit services to its customers. The Company is subject to regulation and supervision by the Federal Reserve Board while the Bank is subject to regulation and supervision by the Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities. Revenue Recognition Under ASC Topic 606, management determined that the primary sources of revenue emanating from interest and dividend income on loans and investments along with noninterest revenue resulting from investment securities gains, loans servicing, gains on loans sold and earnings on bank-owned life insurance are not within the scope of this Topic. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the year ended December 31: (dollars in thousands) 2021 2020Noninterest Income In-scope of Topic 606: Service charges on deposit accounts $ 398 $ 377 ATM Fees 443 457 Overdraft Fees 1,029 985 Safe deposit box rental 100 102 Loan related service fees 1,238 1,288 Debit card 2,228 1,656 Fiduciary activities 748 682 Commissions on mutual funds & annuities 127 122 Other income 674 540 Noninterest Income (in-scope of Topic 606) 6,985 6,209 Out-of-scope of Topic 606: Net realized gains on sales of securities 92 71 Loan servicing fees 130 128 Gain on sales of loans 177 527 Earnings on and proceeds from bank-owned life insurance 941 845 Noninterest Income (out-of-scope of Topic 606) 1,340 1,571Total Noninterest Income $ 8,325 $ 7,780

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Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2021
Summary of Significant Accounting Policies [Abstract]
New and Recently Adopted Accounting Pronouncements	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly-owned subsidiaries, WCB Realty Corp., Norwood Investment Corp. and WTRO Properties. All significant intercompany accounts and transactions have been eliminated in consolidation. The year ended December 31, 2020 includes the acquisition of UpState New York Bancorp, Inc. effective July 7, 2020. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues 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 relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, the determination of other-than-temporary impairment on securities, the determination of goodwill impairment and the fair value of financial instruments. Significant Group Concentrations of Credit Risk Most of the Company’s activities are with customers located within its markets in Northeastern Pennsylvania and the New York Counties of Delaware, Sullivan, Ontario, Otsego and Yates. Note 3 discusses the types of securities that the Company invests in. Note 4 discusses the types of lending that the Company engages in. The Company does not have any significant concentrations to any one industry or customer. Concentrations of Credit Risk The Bank operates primarily in Wayne, Pike, Lackawanna, Luzerne and Monroe Counties, Pennsylvania and Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. Accordingly, the Bank has extended credit primarily to commercial entities and individuals in these areas whose ability to honor their contracts is influenced by the region’s economy. These customers are also the primary depositors of the Bank. The Bank is limited in extending credit by legal lending limits to any single borrower or group of related borrowers. Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized gains and losses are reported in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of the specific securities sold, are included in earnings. Premiums and discounts are recognized in interest income using a method which approximates the interest method over the term of the security. Bonds, notes and debentures for which the Company has the positive intent and ability to hold to maturity are reported at cost, adjusted for premiums and discounts that are recognized in interest income using the interest method over the term of the security. Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each Consolidated Balance Sheet date. Declines in the fair value of available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to not sell the securities and it is more likely than not that it will not have to sell the securities before recovery of their cost basis. Regulatory Stock The Company, as a member of the Federal Home Loan Bank (FHLB) system is required to maintain an investment in capital stock of its district FHLB according to a predetermined formula. This regulatory stock has no quoted market value and is carried at cost. Management evaluates the regulatory stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB. Management considers the FHLB’s regulatory capital ratios, liquidity, and the fact that new shares of FHLB stock continue to change hands at the $100 par value. Management believes no impairment charge is necessary related to FHLB stock as of December 31, 2021. Loans Receivable Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees. Interest income is accrued on the unpaid principal balance. Loan origination fees are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. The accrual of interest is generally discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Troubled Debt Restructurings A loan is considered to be a troubled debt restructuring (TDR) loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates that are less than the current market rate for new obligations with similar risk. Loans Acquired Loans acquired including loans that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance. Loans are evaluated individually to determine if there is evidence of deterioration of credit quality since origination. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining estimated life. Decreases in expected cash flows are recognized immediately as impairment. Any valuation allowances on these impaired loans reflect only losses incurred after the acquisition. For purchased loans acquired that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Loans may be aggregated and accounted for as a pool of loans if the loans being aggregated have common risk characteristics. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. The remaining differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans. Mortgage Servicing Rights Servicing assets are recognized as separate assets when rights are acquired through purchase or through the sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment based upon a third party appraisal. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance to the extent that fair value is less than the capitalized amount. The Company’s loan servicing assets at December 31, 2021 and 2020, respectively, were not impaired. Total servicing assets included in other assets as of December 31, 2021 and 2020, were $289,000 and $337,000, respectively. Allowance for Loan Losses The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific and general components. The specific component relates to loans that are classified as substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans were acquired with impairment or are the subject of a restructuring agreement. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is calculated principally on the straight-line method over the respective assets estimated useful lives as follows: YearsBuildings and improvements 10 - 40Furniture and equipment 3 - 10 Leases The Company applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. At inception, lessees must classify all leases as either finance or operating based on five criteria. Balance sheet recognition of finance and operating leases is similar, but the pattern of expense recognition in the income statement, as well as the effect on the statement of cash flows, differs depending on the lease classification. See Note 8 for related disclosures. Transfers of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Foreclosed Real Estate Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value less cost to sell at the date of foreclosure establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of its carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses. Bank Owned Life Insurance The Company invests in bank owned life insurance (BOLI) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Bank on a select group of employees. The Company is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Income from the increase in cash surrender value of the policies or from death benefits realized is included in other income on the Consolidated Statements of Income. Goodwill In connection with three acquisitions the Company recorded goodwill in the amount of $29.3 million, representing the excess of amounts paid over the fair value of net assets of the institutions acquired. Goodwill is tested and deemed impaired when the carrying value of goodwill exceeds its implied fair value. The value of the goodwill can change in the future. We expect the value of the goodwill to decrease if there is a significant decrease in the franchise value of the Bank. If an impairment loss is determined in the future, we will reflect the loss as an expense for the period in which the impairment is determined, leading to a reduction of our net income for that period by the amount of the impairment loss. No impairment was recognized for the years ended December 31, 2021 and 2020. Other Intangible Assets At December 31, 2021, the Company had other intangible assets of $407,000, which is net of accumulated amortization of $1,347,000. These intangible assets will continue to be amortized using the sum-of-the-years digits method of amortization over ten years. At December 31, 2020, the Company had other intangible assets of $530,000, which was net of accumulated amortization of $1,224,000. Amortization expense related to other intangible assets was $123,000 and $114,000 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the estimated future amortization expense for the core deposit intangible is as follows (in thousands): 2022$ 1012023 852024 692025 542026 38Thereafter 60 $ 407 Income Taxes Deferred income tax assets and liabilities are determined based on the differences between financial statement carrying amounts and the tax basis of existing assets and liabilities. These differences are measured at the enacted tax rates that will be in effect when these differences reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company and its subsidiary file a consolidated federal income tax return. The Company recognizes interest and penalties on income taxes as a component of income tax expense. The Company analyzes each tax position taken in its tax returns and determines the likelihood that the position will be realized. Only tax positions that are “more-likely-than-not” to be realized can be recognized in an entity’s financial statements. For tax positions that do not meet this recognition threshold, an entity will record an unrecognized tax benefit for the difference between the position taken on the tax return and the amount recognized in the financial statements. The Company does not have any unrecognized tax benefits at December 31, 2021 or 2020, or during the years then ended. No unrecognized tax benefits are expected to arise within the next twelve months. Advertising Costs Advertising costs are expensed as incurred. Earnings per Share Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Treasury shares are not deemed outstanding for earnings per share calculations. Employee Benefit Plans The Company has a defined contributory profit-sharing plan which includes provisions of a 401(k) plan. The Company’s contributions are expensed as the cost is incurred. The Company has several supplemental executive retirement plans. To fund the benefits under these plans, the Company is the owner of single premium life insurance policies on the participants. The Company provides pension benefits to eligible employees. The Company’s funding policy is to contribute at least the minimum required contributions annually.Interest Rate DerivativesThe Company is exposed to certain risk arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments.   Stock Option Plans The Company recognizes the value of share-based payment transactions as compensation costs in the financial statements over the period that an employee provides service in exchange for the award. The fair value of the share-based payments for stock options is estimated using the Black-Scholes option-pricing model. The Company used the modified-prospective transition method to record compensation expense. Under the modified-prospective method, companies are required to record compensation cost for new and modified awards over the related vesting period of such awards and record compensation cost prospectively for the unvested portion, at the date of adoption, of previously issued and outstanding awards over the remaining vesting period of such awards. No change to prior periods presented is permitted under the modified-prospective method. Restricted Stock The Company recognizes compensation cost related to restricted stock based on the market price of the stock at the grant date over the vesting period. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted stock under the Company’s 2014 Equity Incentive Plan. The Company recognizes compensation expense for the fair value of the restricted stock on a straight-line basis over the requisite service period for the entire award. Cash Flow Information For the purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits with banks and federal funds sold. Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit, letters of credit and commitments to sell loans. Such financial instruments are recorded on the balance sheets when they become receivable or payable. Trust Assets Assets held by the Company in a fiduciary capacity for customers are not included in the financial statements since such items are not assets of the Company. Trust income is reported on the accrual method. Treasury Stock Common shares repurchased are recorded as treasury stock at cost. Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities and defined benefit pension obligations, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income as presented in the Consolidated Statement of Comprehensive Income. Segment Reporting The Company acts as an independent community financial services provider and offers traditional banking related financial services to individual, business and government customers. Through its Community Office and automated teller machine network, the Company offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of safe deposit services. The Company also performs personal, corporate, pension and fiduciary services through its Trust Department. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail, mortgage banking and trust operations of the Company. As such, discrete information is not available and segment reporting would not be meaningful. Reclassification of Comparative Amounts Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders’ equity. New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative-effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This Update is effective for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We expect to recognize a one-time cumulative-effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Update is effective for smaller reporting companies and all other entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments ‒ Credit Losses, which, in addition to addressing other matters, ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. The effective date and transition requirements for ASU 2018-19 are the same as those in ASU 2016-13. This Update is not expected to have a significant impact on the Company’s financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Derivatives, and Hedging (Topic 815); and Financial Instruments (Topic 825), which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. ASU 2019-04 makes clarifying amendments to certain financial instrument standards. For entities that have not yet adopted ASU 2016-13, the effective dates for the amendments related to ASU 2016-13 are the same as the effective dates in ASU 2016-13. For entities that have adopted ASU 2016-13, the amendments related to ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For entities that have not yet adopted ASU 2017-12 as of April 25, 2019, the effective dates for the amendments to Topic 815 are the same as the effective dates in ASU 2017-12. For entities that have adopted ASU 2017-12 as of April 25, 2019, the effective date is as of the beginning of the first annual period beginning after April 25, 2019. The amendments related to ASU 2016-01 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326), which allows entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost upon adoption of the new credit losses standard. To be eligible for the transition election, the existing financial asset must otherwise be both within the scope of the new credit losses standard and eligible for applying the fair value option in ASC 825-10.3. The election must be applied on an instrument-by-instrument basis and is not available for either available-for-sale or held-to-maturity debt securities. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. For entities that have not yet adopted the credit losses standard, the ASU is effective when they implement the credit losses standard. For entities that already have adopted the credit losses standard, the ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13. In November 2019, the FASB issued ASU 2019-10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for ASC 944, Financial Services – Insurance, for public business entities that are SEC filers, except for smaller reporting companies, to fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, and for all other entities, including smaller reporting companies, to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, to clarify its new credit impairment guidance in ASC 326, based on implementation issues raised by stakeholders. This Update clarified, among other things, that expected recoveries are to be included in the allowance for credit losses for these financial assets; an accounting policy election can be made to adjust the effective interest rate for existing troubled debt restructurings based on the prepayment assumptions instead of the prepayment assumptions applicable immediately prior to the restructuring event; and extends the practical expedient to exclude accrued interest receivable from all additional relevant disclosures involving amortized cost basis. For entities that have not yet adopted ASU 2016-13 as of November 26, 2019, the effective dates for ASU 2019-11 are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted ASU 2016-13, ASU 2019-11 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs. In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU was issued to improve and clarify various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven issues that describe the areas of improvement and the related amendments to GAAP; they are intended to make the standards easier to understand and apply and to eliminate inconsistencies, and they are narrow in scope and are not expected to significantly change practice for most entities. Among its provisions, the ASU clarifies that all entities, other than public business entities that elected the fair value option, are required to provide certain fair value disclosures under ASC 825, Financial Instruments, in both interim and annual financial statements. It also clarifies that the contractual term of a net investment in a lease under Topic 842 should be the contractual term used to measure expected credit losses under Topic 326. Amendments related to ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is not permitted before an entity’s adoption of ASU 2016-01. Amendments related to ASU 2016-13 for entities that have not yet adopted that guidance are effective upon adoption of the amendments in ASU 2016-13. Early adoption is not permitted before an entity’s adoption of ASU 2016-13. Amendments related to ASU 2016-13 for entities that have adopted that guidance are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Other amendments are effective upon issuance of this ASU. This Update is not expected to have a significant impact on the Company’s financial statements In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Company’s financial statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides optional temporary guidance for entities transitioning away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) to new references rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions within Topic 848. ASU 2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2021-01 is effective immediately for all entities. Entities may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. The amendments in this update do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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Securities	12 Months Ended
	Dec. 31, 2021
Securities [Abstract]
Securities	NOTE 3 - SECURITIES The amortized cost, gross unrealized gains and losses, and fair value of securities were as follows: December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In Thousands)AVAILABLE FOR SALE: U.S. Treasury securities$ 19,550 $ 6 $ (205) $ 19,351U.S. Government agencies 16,251 24 (264) 16,011States and political subdivisions 145,107 2,155 (1,395) 145,867Mortgage-backed securities- government sponsored entities 227,712 766 (2,925) 225,553 Total debt securities$ 408,620 $ 2,951 $ (4,789) $ 406,782 December 31, 2020 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In Thousands)AVAILABLE FOR SALE: U.S. Government agencies$ 3,998 $ — $ (29) $ 3,969States and political subdivisions 70,672 2,419 — 73,091Corporate obligations 3,019 13 — 3,032Mortgage-backed securities- government sponsored entities 143,712 2,809 (27) 146,494 Total debt securities$ 221,401 $ 5,241 $ (56) $ 226,586 The following tables show the Company’s investments’ gross unrealized losses and fair value aggregated by security type and length of time that individual securities have been in a continuous unrealized loss position (in thousands): December 31, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized LossesU.S. Treasury securities$ 18,361 $ (205) $ — $ — $ 18,361 $ (205)U.S. Government agencies 7,912 (109) 3,843 (155) 11,755 (264)States and political subdivisions 74,658 (1,395) — — 74,658 (1,395)Mortgage-backed securities-government sponsored entities 170,647 (2,856) 2,919 (69) 173,566 (2,925) $ 271,578 $ (4,565) $ 6,762 $ (224) $ 278,340 $ (4,789) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized LossesU.S. Government agencies$ 3,969 (29) $ — $ — $ 3,969 $ (29)Mortgage-backed securities-government sponsored entities 4,980 $ (27) — — 4,980 (27) $ 8,949 $ (56) $ — $ — $ 8,949 $ (56) The Company has 137 debt securities in the less than twelve month category and 3 debt securities in the twelve months or more category as of December 31, 2021. In management’s opinion, the unrealized losses on securities reflect changes in interest rates subsequent to the acquisition of specific securities. No other-than-temporary-impairment charges were recorded in 2021. Management believes that all other unrealized losses represent temporary impairment of the securities, and it is more likely than not that it will not have to sell the securities before recovery of their cost basis. The amortized cost and fair value of debt securities as of December 31, 2021 by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties. Amortized Fair Cost Value (In Thousands)Due in one year or less$ 1,086 $ 1,093Due after one year through five years 11,268 11,488Due after five years through ten years 54,965 54,392Due after ten years 113,589 114,256 180,908 181,229 Mortgage-backed securities - government sponsored entities 227,712 225,553 $ 408,620 $ 406,782 Gross realized gains and gross realized losses on sales of securities available for sale were $92,000 and $0, respectively, in 2021, compared to $71,000 and $0, respectively, in 2020. The proceeds from the sales of securities totaled $11,366,000 and $24,497,000 for the years ended December 31, 2021 and 2020, respectively. Securities with a carrying value of $339,769,000 and $199,361,000 at December 31, 2021 and 2020, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

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Loans Receivable and Allowance for Loan Losses	12 Months Ended
	Dec. 31, 2021
Loans Receivable and Allowance for Loan Losses [Abstract]
Loans Receivable and Allowance for Loan Losses	NOTE 4 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES Set forth below is selected data relating to the composition of the loan portfolio (in thousands): December 31, 2021 December 31, 2020 Real Estate: Residential$ 273,040 20.1% $ 263,127 18.6%Commercial 628,724 46.4 579,104 41.0 Agricultural 61,925 4.6 66,334 4.7 Construction 21,990 1.6 21,005 1.5 Commercial loans 186,031 13.7 283,741 20.1 Other agricultural loans 37,930 2.8 40,929 2.9 Consumer loans to individuals 146,400 10.8 158,049 11.2 Total loans 1,356,040 100.0% 1,412,289 100.0% Deferred fees, net (1,109) (1,557) Total loans receivable 1,354,931 1,410,732 Allowance for loan losses (16,442) (13,150) Net loans receivable$ 1,338,489 $ 1,397,582 During 2021 and 2020, the Company participated in the Paycheck Protection Program (“PPP”), administered directly by the United States Small Business Administration (“SBA”). The PPP provides loans to small businesses who were affected by economic conditions as a result of COVID-19 to provide cash-flow assistance to employers who maintain their payroll (including healthcare and certain related expenses), mortgage interest, rent, leases, utilities and interest on existing debt during the COVID-19 emergency. As of December 31, 2021 and 2020, the Company had outstanding principal balances of $15,209,000 and $95,043,000, respectively, in PPP loans. The PPP loans are fully guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan is made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. PPP loans are included in the Commercial loan category. In accordance with the SBA terms and conditions on these PPP loans, the Company received approximately $2.9 million and $2.3 million in fees associated with the processing of these loans in 2021 and 2020, respectively. Upon funding of the loans, these fees were deferred and are amortized over the life of the loan as an adjustment to yield in accordance with FASB ASC 310-20-25-2. As a result of the acquisition of UpState, the Company added $15,410,000 of loans that were accounted for in accordance with ASC 310-30. Based on a review of the loans acquired by the Company’s senior lending management, which included an analysis of credit deterioration of the loans since origination, the Company recorded a specific credit fair value adjustment of $6,937,000.  For loans that were acquired with specific evidence of deterioration in credit quality, loan losses will be accounted for through a reduction of the specific reserve and will not impact the allowance for loan losses until actual losses exceed the allotted reserves. For loans acquired without a deterioration of credit quality, losses incurred will result in adjustments to the allowance for loan losses through the allowance for loan loss adequacy calculation. Changes in the accretable yield for purchased credit-impaired loans were as follows for the twelve months ended December 31: (In thousands) 2021 2020Balance at beginning of period $ 1,365 $ —Additions — 1,724Accretion (880) (353)Reclassification and other 1,399 (6)Balance at end of period$ 1,884 $ 1,365 The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30 (in thousands): December 31, 2021 December 31, 2020Outstanding Balance $ 12,862 $ 15,570Carrying Amount $ 8,304 $ 9,281 Loans acquired with credit deterioration of $15,410,000 and accounted for in accordance with ASC 310-30 were individually evaluated to estimate credit losses and a net recovery amount for each loan. The net cash flows for each loan were then discounted to present value using a risk-adjusted market rate. The table below presents the components of the purchase accounting adjustments:    (In Thousands)July 7, 2020Contractually required principal and interest$ 15,410Non-accretable discount (5,213)Expected cash flows 10,197Accretable discount (1,724)Estimated fair value$ 8,473 There has been no allowance for loan losses recorded for acquired loans with specific evidence of deterioration in credit quality. As of December 31, 2021, for loans that were acquired prior to 2020 with or without specific evidence of deterioration in credit quality, adjustments to the allowance for loan losses have been accounted for through the allowance for loan loss adequacy calculation. The Company maintains a loan review system, which allows for a periodic review of our loan portfolio and the early identification of potential impaired loans. The system takes into consideration, among other things, delinquency status, size of loans, type and market value of collateral and financial condition of the borrowers. Specific loan loss allowances are established for identified losses based on a review of such information. A loan evaluated for impairment is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans identified as impaired are evaluated independently. The Company does not aggregate such loans for evaluation purposes. Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral-dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential mortgage loans for impairment disclosures, unless such loans are part of a larger relationship that is impaired, or are classified as a troubled debt restructuring. The following tables show the amount of loans in each category that were individually and collectively evaluated for impairment at the dates indicated: Real Estate Loans Commercial Other Consumer Residential Commercial Agricultural Construction Loans Agricultural Loans Total (In thousands)December 31, 2021 Individually evaluated for impairment$ — $ 1,658 $ — $ — $ 16 $ — $ — $ 1,674Loans acquired with deteriorated credit quality 784 3,285 1,918 — 198 2,119 — 8,304Collectively evaluated for impairment 272,256 623,781 60,007 21,990 185,817 35,811 146,400 1,346,062Total Loans$ 273,040 $ 628,724 $ 61,925 $ 21,990 $ 186,031 $ 37,930 $ 146,400 $ 1,356,040 Real Estate Loans Commercial Other Consumer Residential Commercial Agricultural Construction Loans Agricultural Loans Total (In thousands)December 31, 2020 Individually evaluated for impairment$ — $ 2,582 $ — $ — $ 80 $ — $ — $ 2,662Loans acquired with deteriorated credit quality 591 3,995 2,043 194 246 2,212 — 9,281Collectively evaluated for impairment 262,536 572,527 64,291 20,811 283,415 38,717 158,049 1,400,346Total Loans$ 263,127 $ 579,104 $ 66,334 $ 21,005 $ 283,741 $ 40,929 $ 158,049 $ 1,412,289 The following table includes the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable. Unpaid Principal Recorded Principal Associated Investment Balance AllowanceDecember 31, 2021 (In thousands)With no related allowance recorded: Real Estate Loans Commercial$ 141 $ 141 $ —Commercial loans 16 16 —Subtotal 157 157 — With an allowance recorded: Real Estate Loans Commercial 1,517 1,517 272 Subtotal 1,517 1,517 272Total: Real Estate Loans Commercial$ 1,658 $ 1,658 $ 272Commercial loans 16 16 —Total Impaired Loans$ 1,674 $ 1,674 $ 272 Unpaid Recorded Principal Associated Investment Balance AllowanceDecember 31, 2020 (In thousands)With no related allowance recorded: Real Estate Loans Commercial$ 2,582 $ 3,234 $ —Commercial loans 80 80 —Subtotal 2,662 3,314 — With an allowance recorded: Real Estate Loans Commercial — — — Subtotal — — —Total: Real Estate Loans Residential — Commercial$ 2,582 $ 3,234 $ —Commercial loans 80 80 —Total Impaired Loans$ 2,662 $ 3,314 $ — The following information for impaired loans is presented for the years ended December 31, 2021 and 2020: Average Recorded Interest Income Investment Recognized 2021 2020 2021 2020 (In thousands)Total: Real Estate Loans Commercial$ 2,358 $ 2,105 $ 157 $ 14Commercial loans 18 16 7 —Total Loans$ 2,376 $ 2,121 $ 164 $ 14 Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources. As of December 31, 2021, there were no troubled debt restructured loans. During 2021, there were no new loan relationships identified as troubled debt restructurings. During 2021, there were no charge-offs on loans classified as troubled debt restructurings. As of December 31, 2020, troubled debt restructured loans totaled $75,000 and did not require a specific reserve. During 2020, there were no new loan relationships identified as troubled debt restructurings. During 2020, there was a charge-off in the amount of $20,000 on loans classified as troubled debt restructurings. On April 7, 2020, federal banking regulators issued a revised interagency statement that included guidance on their approach for the accounting of loan modifications in light of the economic impact of the COVID-19 pandemic. The guidance interprets current accounting standards and indicates that a lender can conclude that a borrower is not experiencing financial difficulty if short-term modifications are made in response to COVID-19, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to the loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented. The agencies confirmed in working with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in foreclosed real estate owned on the Consolidated Balance Sheets. As of December 31, 2021 and 2020, foreclosed real estate owned totaled $1,742,000 and $965,000, respectively. As of December 31, 2021, included within foreclosed real estate owned are two commercial properties that were received via a deed in lieu. As of December 31, 2021, the Company has initiated formal foreclosure proceedings on five consumer residential mortgage loans with an outstanding balance of $532,000. Management uses an eight point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans greater than 90 days past due are considered Substandard unless full payment is expected. Any portion of a loan that has been charged off is placed in the Loss category. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as nonperformance, repossession, or death occurs to raise awareness of a possible credit event. The Company’s Loan Review Department is responsible for the timely and accurate risk rating of the loans on an ongoing basis. Every credit which must be approved by Loan Committee or the Board of Directors is assigned a risk rating at time of consideration. Loan Review also annually reviews relationships of $1,500,000 and over to assign or re-affirm risk ratings. Loans in the Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance. The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard, Doubtful and Loss within the internal risk rating system as of December 31, 2021 and December 31, 2020 (in thousands): Special Pass Mention Substandard Doubtful Loss TotalDecember 31, 2021 Commercial real estate loans$ 618,541 $ 5,146 $ 4,765 $ — $ 272 $ 628,724Real estate - agricultural 60,193 — 1,732 — — 61,925Commercial loans 185,729 199 103 — — 186,031Other agricultural loans 35,573 210 2,147 — — 37,930Total$ 900,036 $ 5,555 $ 8,747 $ — $ 272 $ 914,610 Special Pass Mention Substandard Doubtful Loss TotalDecember 31, 2020 Commercial real estate loans$ 566,418 $ 6,346 $ 6,340 $ — $ — $ 579,104Real estate - agricultural 58,322 5,111 2,901 — — 66,334Commercial loans 282,915 437 389 — — 283,741Other agricultural loans 35,772 2,786 2,371 — — 40,929Total$ 943,427 $ 14,680 $ 12,001 $ - $ - $ 970,108 For residential real estate loans, construction loans and consumer loans, the Company evaluates credit quality based on the performance of the individual credits. Nonperforming loans include loans that have been placed on nonaccrual status and loans remaining in accrual status on which the contractual payment of principal and interest has become 90 days past due. The following table presents the recorded investment in the loan classes based on payment activity as of December 31, 2021 and December 31, 2020 (in thousands): Performing Nonperforming TotalDecember 31, 2021 Residential real estate loans$ 272,571 $ 469 $ 273,040Construction 21,990 — 21,990Consumer loans to individuals 146,345 55 146,400Total$ 440,906 $ 524 $ 441,430 Performing Nonperforming TotalDecember 31, 2020 Residential real estate loans$ 262,556 $ 571 $ 263,127Construction 21,005 — 21,005Consumer loans to individuals 157,864 185 158,049Total$ 441,425 $ 756 $ 442,181 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2021 and December 31, 2020 (in thousands): Current 31-60 Days Past Due 61-90 Days Past Due Greater than 90 Days Past Due and still accruing Non-Accrual Total Past Due and Non-Accrual Purchased Credit Impaired Loans Total LoansDecember 31, 2021 Real Estate loans Residential$ 271,622 $ 155 $ 10 $ — $ 469 $ 634 $ 784 $ 273,040Commercial 625,336 — — — 103 103 3,285 628,724Agricultural 59,982 25 — — — 25 1,918 61,925Construction 21,990 — — — — — - 21,990Commercial loans 185,801 3 13 91 16 32 198 186,031Other agricultural loans 35,811 — — — — — 2,119 37,930Consumer loans 145,986 248 111 — 55 414 - 146,400Total$ 1,346,528 $ 431 $ 134 $ 91 $ 643 $ 1,208 $ 8,304 $ 1,356,040 Current 31-60 Days Past Due 61-90 Days Past Due Greater than 90 Days Past Due and still accruing Non-Accrual Total Past Due and Non-Accrual Purchased Credit Impaired Loans Total LoansDecember 31, 2020 Real Estate loans Residential$ 261,406 $ 355 $ 204 $ — $ 571 $ 1,130 $ 591 $ 263,127Commercial 573,376 59 — — 1,674 1,733 3,995 579,104Agricultural 63,615 — — — 676 676 2,043 66,334Construction 20,811 — — — — — 194 21,005Commercial loans 282,374 1,009 90 — 22 1,121 246 283,741Other agricultural loans 38,454 — — — 263 263 2,212 40,929Consumer loans 157,538 233 93 — 185 511 - 158,049Total$ 1,397,574 $ 1,656 $ 387 $ — $ 3,391 $ 5,434 $ 9,281 $ 1,412,289 The following table presents the allowance for loan losses by the classes of the loan portfolio: (In thousands)Residential Real Estate Commercial Real Estate Construction Commercial Consumer TotalBeginning balance, December 31, 2020$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150Charge Offs (17) (452) — (200) (480) (1,149)Recoveries 74 19 — 49 99 241Provision for loan losses 158 3,307 (17) 281 471 4,200Ending balance, December 31, 2021$ 2,175 $ 10,878 $ 133 $ 1,490 $ 1,766 $ 16,442Ending balance individually evaluated‎for impairment$ — $ 272 $ — $ — $ — $ 272Ending balance collectively evaluated for impairment$ 2,175 $ 10,606 $ 133 $ 1,490 $ 1,766 $ 16,170 (In thousands)Residential Real Estate Commercial Real Estate Construction Commercial Consumer TotalBeginning balance, December 31, 2019$ 1,552 $ 4,687 $ 95 $ 949 $ 1,226 $ 8,509Charge Offs (41) (452) — (18) (431) (942)Recoveries 6 39 — 44 44 133Provision for loan losses 443 3,730 55 385 837 5,450Ending balance, December 31, 2020$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150Ending balance individually evaluated‎for impairment$ — $ — $ — $ — $ — $ —Ending balance collectively evaluated for impairment$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150 During the period ended December 31, 2021, the allowance for loan losses increased from $13,150,000 to $16,442,000. This $3,292,000 increase in the required allowance was due primarily to a $1.5 million increase in the qualitative factor related to loan growth and a $1.4 million increase due to an increase in the qualitative factor related to large balance loans. During the period ended December 31, 2020, the allowance for loan losses increased from $8,509,000 to $13,150,000. This $4,641,000 increase in the required allowance was due primarily to a $2.3 million increase in the qualitative factor related to economic conditions and a $2.2 million increase due to new qualitative factors directly related to the COVID-19 pandemic. Interest income that would have been recorded on loans accounted for on a non-accrual basis under the original terms of the loans was $35,000 and $286,000 for 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company considered its concentration of credit risk to be acceptable. As of December 31, 2021, the highest concentrations are in commercial rentals and the residential rentals category, with loans outstanding of $135.7 million, or 10.0% of loans outstanding, to commercial rentals, and $116.3 million, or 8.6% of loans outstanding, to residential rentals. There were no charge-offs on loans within these concentrations for the years ended December 31, 2021 and 2020, respectively. During 2021, the Company sold residential mortgage loans totaling $8,616,000. During 2020, the Company sold residential mortgage loans totaling $12,312,000. Gross realized gains and gross realized losses on sales of residential mortgage loans were $177,000 and $0, respectively, in 2021 and $527,000 and $0, respectively, in 2020. The proceeds from the sales of residential mortgage loans totaled $8,793,000 and $12,839,000 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the outstanding value of loans serviced for others totaled $65.4 million and $72.5 million, respectively.

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Premises and Equipment	12 Months Ended
	Dec. 31, 2021
Premises and Equipment [Abstract]
Premises and Equipment	NOTE 5 - PREMISES AND EQUIPMENT Components of premises and equipment at December 31 are as follows: 2021 2020 (In Thousands)Land and improvements$ 3,879 $ 3,878Buildings and improvements 21,846 21,545Furniture and equipment 10,183 9,717 35,908 35,140Accumulated depreciation (18,619) (17,326) $ 17,289 $ 17,814 Depreciation expense totaled $1,481,000 and $1,322,000 for the years ended December 31, 2021 and 2020, respectively.‎

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Deposits	12 Months Ended
	Dec. 31, 2021
Deposits:
Deposits	NOTE 6 - DEPOSITS Aggregate time deposits in denominations greater than $250,000 were $257,238,000 and $205,376,000 at December 31, 2021 and 2020, respectively. At December 31, 2021, the scheduled maturities of time deposits are as follows (in thousands): 2022$ 406,3312023 70,9212024 30,9782025 10,5332026 9,939 $ 528,702

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Borrowings	12 Months Ended
	Dec. 31, 2021
Borrowings [Abstract]
Borrowings	NOTE 7 – BORROWINGS Short-term borrowings at December 31 consist of the following: 2021 2020 (In Thousands)Securities sold under agreements to repurchase$ 60,822 $ 63,303Federal Home Loan Bank short-term borrowings — — $ 60,822 $ 63,303 The outstanding balances and related information of short-term borrowings are summarized as follows: Years Ended December 31, 2021 2020 (Dollars In Thousands)Average balance during the year$ 73,810 $ 57,014 Average interest rate during the year 0.39% 0.55%Maximum month-end balance during the year$ 90,409 $ 69,294 Weighted average interest rate at the end of the year 0.34% 0.43% Securities sold under agreements to repurchase generally mature within one day to one year from the transaction date. Securities with an amortized cost and fair value of $66,353,000 and $65,162,000 at December 31, 2021 and $63,462,000 and $64,429,000 at December 31, 2020, respectively, were pledged as collateral for these agreements. The securities underlying the agreements were under the Company’s control. The collateral pledged for repurchase agreements that are classified as secured borrowings is summarized as follows (in thousands): As of December 31, 2021 Remaining Contractual Maturity of the Agreements Overnight and continuous Up to 30 days 30-90 days Greater than 90 days TotalRepurchase Agreements: Mortgage-backed securities - government sponsored entities $ 65,162 $ — $ — $ — $ 65,162 Total liability recognized for repurchase agreements 60,822 As of December 31, 2020 Remaining Contractual Maturity of the Agreements Overnight and continuous Up to 30 days 30-90 days Greater than 90 days TotalRepurchase Agreements: Mortgage-backed securities - government sponsored entities $ 64,429 $ — $ — $ — $ 64,429 Total liability recognized for repurchase agreements 63,303 The Company has a line of credit commitment available from the FHLB of Pittsburgh for borrowings of up to $150,000,000, which renews annually in June. At December 31, 2021, there were no borrowings outstanding on this line. There were no borrowings outstanding on this line of credit at December 31, 2020. The Company has a line of credit commitment available from Atlantic Community Bankers Bank for $7,000,000, which expires on June 30, 2022. There were no borrowings under this line of credit at December 31, 2021 and 2020. The Company has a line of credit commitment available from PNC Bank for $16,000,000 at December 31, 2021. There were no borrowings under this line of credit at December 31, 2021 and December 31, 2020. The Company also has a line of credit commitment from Zions Bank for $17,000,000. There were no borrowings under this line of credit at December 31, 2021 and December 31, 2020. Other borrowings consisted of the following at December 31, 2021 and 2020: 2021 2020 (In Thousands) Amortizing fixed rate borrowing due March 2022 at 1.75%$ 227 $ 1,126Amortizing fixed rate borrowing due August 2022 at 1.94% 1,364 3,376Amortizing fixed rate borrowing due October 2022 at 1.88% 1,386 3,021Amortizing fixed rate borrowing due October 2023 at 3.24% 3,856 5,865Amortizing fixed rate borrowing due December 2023 at 3.22% 2,097 3,096Fixed rate term borrowing due December 2023 at 1.95% 10,000 10,000Amortizing fixed rate borrowing due December 2023 at 1.73% 5,190 7,616Amortizing fixed rate borrowing due April 2024 at 0.91% 5,878 8,359 $ 29,998 $ 42,459 Contractual maturities and scheduled cash flows of other borrowings at December 31, 2021 are as follows (in thousands): 2022$ 2,9772023 21,1432024 5,878 $ 29,998 The Bank’s maximum borrowing capacity with the FHLB was $607,092,000 of which $29,998,000 was outstanding in the form of advances and $127,850,000 was outstanding in the form of letters of credit at December 31, 2021. Advances from the FHLB are secured by qualifying assets of the Bank.

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Operating Leases	12 Months Ended
	Dec. 31, 2021
Operating Leases [Abstract]
Operating Leases	NOTE 8 – OPERATING LEASES The Company leases eight office locations under operating leases. Several assumptions and judgments were made when applying the requirements of Topic 842 to the Company’s existing lease commitments, including the allocation of consideration in the contracts between lease and nonlease components, determination of the lease term, and determination of the discount rate used in calculating the present value of the lease payments. The Company has elected to account for the variable nonlease components, such as common area maintenance charges, utilities, real estate taxes, and insurance, separately from the lease component. Such variable nonlease components are reported in net occupancy expense on the Consolidated Statements of Income when paid. These variable nonlease components were excluded from the calculation of the present value of the remaining lease payments, therefore, they are not included in other assets and other liabilities on the Consolidated Balance Sheets. The lease cost associated with the operating leases for the year ending December 31, 2021 and 2020, amounted to $587,000 and $571,000 respectively. The right-of-use asset associated with operating leases amounted to $4,511,000 and $4,938,000 at December 31, 2021 and 2020, respectively. The lease liability associated with operating leases amounted to $4,577,000 and $4,984,000 at December 31, 2021 and 2020, respectively. Certain of the Company’s leases contain options to renew the lease after the initial term. Management considers the Company’s historical pattern of exercising renewal options on leases and the positive performance of the leased locations, when determining whether it is reasonably certain that the leases will be renewed. If management concludes that there is reasonable certainty about the renewal option, it is included in the calculation of the remaining term of each applicable lease. The discount rate utilized in calculating the present value of the remaining lease payments for each lease was the Federal Home Loan Bank of Pittsburgh advance rate corresponding to the remaining maturity of the lease. The following table presents the weighted-average remaining lease term and discount rate for the leases outstanding at December 31, 2021. OperatingWeighted-average remaining term 11.5 yearsWeighted-average discount rate 2.95% The following table presents the undiscounted cash flows due related to operating leases as of December 31, 2021, along with a reconciliation to the discounted amount recorded on the Consolidated Balance Sheets: Undiscounted cash flows due (in thousands)Operating2022$ 5462023 5352024 5432025 5612026 5042027 and thereafter 2,815 Total undiscounted cash flows 5,504Discount on cash flows (927)Total lease liabilities$ 4,577 Under Topic 842, the lessee can elect to not record on the Consolidated Balance Sheets a lease whose term is twelve months or less and does not include a purchase option that the lessee is reasonably certain to exercise. As of December 31, 2021, the Company had no leases that had a term of twelve months or less.

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Employee Benefit Plans	12 Months Ended
	Dec. 31, 2021
Employee Benefit Plans [Abstract]
Employee Benefit Plans	NOTE 9 – EMPLOYEE BENEFIT PLANS The Company has a defined contributory profit-sharing plan which includes provisions of a 401(k) plan. The plan permits employees to make pre-tax contributions of up to 15% of the employee’s compensation, not to exceed the limits set by the Internal Revenue Service. The amount of contributions to the plan, including matching contributions, is at the discretion of the Board of Directors. All employees over the age of 21 are eligible to participate in the plan and receive Company contributions after one year of employment. Eligible employees are able to contribute to the Plan at the beginning of the first quarterly period after their date of employment. Employee contributions vest immediately, and any Company contributions are fully vested after five years. The Company’s contributions are expensed as the cost is incurred, funded currently, and amounted to $1,135,000 and $1,049,000 for the years ended December 31, 2021 and 2020, respectively. The Company has several non-qualified supplemental executive retirement plans for the benefit of certain executive officers and former officers. At December 31, 2021 and 2020, other liabilities include $3,481,000 and $3,529,000 accrued under the Plan. Compensation expense includes approximately $364,000 and $495,000 relating to the supplemental executive retirement plan for 2021 and 2020, respectively. To fund the benefits under this plan, the Company is the owner of single premium life insurance policies on participants in the non-qualified retirement plan. At December 31, 2021 and 2020, the cash value of these policies was $40,038,000 and $39,608,000, respectively. The Company provides postretirement benefits in the form of split-dollar life arrangements to employees who meet the eligibility requirements. The net periodic postretirement benefit expense included in salaries and employee benefits was $153,000 and $86,000 for the years ended December 31, 2021 and 2020, respectively. FASB authoritative guidance on accounting for deferred compensation and postretirement benefit aspects of endorsement split-dollar life insurance arrangements requires the recognition of a liability and related compensation expense for endorsement split-dollar life insurance that provides a benefit to an employee that extends to postretirement periods. The life insurance policies purchased for the purpose of providing such benefits do not effectively settle an entity’s obligation to the employee. Accordingly, the entity must recognize a liability and related compensation expense during the employee’s active service period based on the future cost of insurance to be incurred during the employee’s retirement. This expense is included in the SERP plan expense for 2021 and 2020 discussed above. If the entity has agreed to provide the employee with a death benefit, then the liability for the future death benefit should be recognized by following the FASB authoritative guidance on employer’s accounting for postretirement benefits other than pensions. The accumulated postretirement benefit obligation was $1,630,000 and $1,477,000 at December 31, 2021 and 2020, respectively. Through its acquisition of Delaware, the Company also has certain director fee deferral and continuation plans. These plans allowed directors to defer director fees and provide a benefit payment for a period of five years to fifteen years. The Company expensed $0 and $2,000 under these plans in 2021 and 2020, respectively. At December 31, 2021 and 2020, the liability under these plans was $5,000 and $82,000, respectively. Certain key executives have change in control agreements with the Company. These agreements provide certain potential benefits in the event of termination of employment following a change in control. The Company participates in the Pentegra Mulitemployer Defined Benefit Pension Plan (EIN 13-5645888 and Plan # 333) as a result of its acquisition of North Penn. As of December 31, 2021 and 2020, the Company’s Plan was 116.6% and 94.2% funded, respectively, and total contributions made are not more than 5% of the total contributions to the Plan. The Company’s expense related to the Plan was $17,000 in 2021 and $24,000 in 2020. During the plan years ending December 31, 2021 and 2020, the Company made contributions of $17,000 and $24,000, respectively. As a result of its acquisition of Delaware, the Company is a member of the New York State Bankers Retirement System. Substantially all full-time employees who were former employees of Delaware are covered under this defined benefit pension plan (the “Delaware Plan”). The Company’s funding policy is to contribute at least the minimum required contribution annually. Pension cost is computed using the projected unit credit actuarial cost method. Effective December 31, 2012, the Delaware Plan was closed to new participants and accrued benefits were frozen. The following table sets forth the projected benefit obligation and change in plan assets for the Delaware Plan at December 31: (in Thousands)2021 2020 Change in projected benefit obligation: Projected benefit obligation at beginning of year$ (8,065) $ (7,515) Service cost (51) (58) Interest cost (206) (257) Actuarial (gain) loss 177 (767) Benefits paid 523 532 Benefit obligation at end of year$ (7,622) $ (8,065) Change in plan assets: Fair value of plan assets at beginning of year$ 7,744 $ 6,853 Actual return on plan assets 474 1,416 Benefits paid (527) (525) Fair value of assets at end of year 7,691 7,744 Funded status at end of year$ 69 $ (321) The Delaware Plan paid $523,000 and $532,000 in benefit payments in 2021 and 2020, respectively. Estimated benefit payments under the Delaware Plan are expected to be approximately $460,000, $445,000, $437,000, $441,000 and $431,000 for the next five years. Payments are expected to be approximately $2,055,000 in total for the five-year period ending December 31, 2031. The Company was not required to make any contributions to the Delaware Plan in 2021 or 2020. The increase in the projected discount rate from 2.63% to 2.93% decreased the projected benefit obligation for the year ended December 31, 2021 by approximately $280,000. The accumulated benefit obligation for the Delaware Plan was $7,622,000 and $8,065,000 at December 31, 2021 and 2020, respectively. The following table sets forth the amounts recognized in accumulated other comprehensive income for the years ended December 31 (in thousands): 2021 2020Transition asset$ — $ —Prior service credit — —Gain 220 241 Total$ 220 $ 241 Net pension cost (income) included the following components (in thousands): 2021 2020Service cost benefits earned during the period$ 51 $ 58Interest cost on projected benefit obligation 206 257Actual return on assets (394) (395)Net amortization and deferral (34) (20) Net periodic pension cost (income) $ (171) $ (100) The weighted average assumptions used to determine the benefit obligation at December 31 are as follows: 2021 2020 Discount rate 2.93% 2.63% The weighted average assumptions used to determine the net periodic pension cost at December 31 are as follows: 2021 2020 Discount rate 2.63% 3.55%Expected long-term return on plan assets 5.25% 6.00%Rate of compensation increase —% —% The expected long-term return on plan assets was determined based upon expected returns on individual asset types included in the asset portfolio. The Delaware Plan’s weighted-average asset allocations at December 31, by asset category, are as follows: 2021 2020 Cash equivalents —% —%Equity securities 35.7% 31.6%Fixed income securities 35.0% 62.6%Other 29.3% 5.8% 100.0% 100.0% The New York Bankers Retirement System (“System”) overall investment strategy is to invest in a diversified portfolio while managing the variability between the assets and projected liabilities of underfunded pension plans. In 2019, the System’s Board Members approved a migration of substantially all of the System’s assets to one fund, Commingled Pensions Trust Fund (LDI Diversified Balanced) of JPMorgan Chase Bank, N.A. The Fund is a group trust within the meaning of internal Revenue Service Revenue Ruling 81-100, as amended. The growth-oriented portion of the Fund invests in a mix of asset classes that the Fund’s Trustee believes will collectively maximize total risk-adjusted return through a combination of capital appreciation and income. This portion of the Fund will comprise between 35% and 90% of the portfolio and will invest directly or indirectly via underlying funds in a broad mix of global equity, global fixed income, real estate and cash-plus strategies. The remaining portion of the Fund, between 10% and 65% of the portfolio, is used to minimize volatility relative to a plan’s projected liabilities. At December 31, 2021 and 2020, the System had an investment concentration of approximately 100% and 99%, respectively, of its total portfolio in the JPMCB LDI Diversified Balanced Fund, a commingled pension trust fund. Primarily all of the assets of the JPMCD LDI Diversified Balance Fund are valued at Net Asset Value (“NAV”). The NAV of the fund is determined at the last sales price or official market closing price on the primary exchange on which the instrument is traded before the net asset values of the Funds are calculated on a valuation date. In accordance with ASC Subtopic 820-10, certain investments measured at net asset value per share (or its equivalents) are not required to be classified in the fair value hierarchy.

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Income Taxes	12 Months Ended
	Dec. 31, 2021
Income Taxes [Abstract]
Income Taxes	NOTE 10 - INCOME TAXES The components of the provision for federal income taxes are as follows: Years Ended December 31, 2021 2020 (In Thousands)Current$ 6,328 $ 7,754Deferred (383) (4,468) $ 5,945 $ 3,286 Deferred income taxes reflect temporary differences in the recognition of revenue and expenses for tax reporting and financial statement purposes, principally because certain items, such as the allowance for loan losses and loan fees are recognized in different periods for financial reporting and tax return purposes. As of December 31, 2021, the Company had a $3,894,000 net operating loss carryforward that will begin to expire by December 31, 2036. A valuation allowance has not been established for deferred tax assets. Realization of the deferred tax assets is dependent on generating sufficient taxable income. Although realization is not assured, management believes it is more likely than not that all of the deferred tax asset will be realized. Deferred tax assets are recorded in other assets. Income tax expense of the Company is less than the amounts computed by applying statutory federal income tax rates to income before income taxes because of the following: Percentage of Income before Income Taxes Years Ended December 31, 2021 2020 Tax at statutory rates 21.0% 21.0%Tax exempt interest income, net of interest expense disallowance (1.9) (3.7) Non-deductible merger related expenses — 1.1 Earnings and proceeds on life insurance (0.6) (1.0) Other 0.8 0.5 19.3% 17.9% The net deferred tax asset included in other assets in the accompanying Consolidated Balance Sheets includes the following amounts of deferred tax assets and liabilities: 2021 2020 (In Thousands)Deferred tax assets: Allowance for loan losses$ 3,855 $ 2,761Deferred compensation 817 758Core deposit intangible 231 230Prepaid expenses — 20Pension liability 302 118Foreclosed real estate valuation allowance 19 17Net operating loss carryforward 913 893Purchase price adjustment 2,487 2,832Deferred loan fees — 60Net unrealized loss on securities 386 —Other 404 747Total Deferred Tax Assets 9,414 8,436 Deferred tax liabilities: Premises and equipment 1,004 920Deferred loan fees 125 —Net unrealized gain on pension liability 318 272Net unrealized gain on securities — 1,089Total Deferred Tax Liabilities 1,447 2,281 Net Deferred Tax Asset$ 7,967 $ 6,155 The Company’s federal and state income tax returns for taxable years through 2018 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

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Regulatory Matters and Stockholders' Equity	12 Months Ended
	Dec. 31, 2021
Regulatory Matters and Stockholders' Equity [Abstract]
Regulatory Matters and Stockholders' Equity	NOTE 11 - REGULATORY MATTERS AND STOCKHOLDERS’ EQUITY The Company and 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings and other factors. 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 table below) of Total, Tier 1 and Common Equity Tier 1 capital (as defined in the regulations) to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2021 and 2020, that the Company and the Bank meet all capital adequacy requirements to which they are subject. As of December 31, 2021, the most recent notification from the regulators has categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Company’s actual capital amounts and ratios are presented in the following table: To be Well Capitalized under Prompt For Capital Adequacy Corrective Action Actual Purposes Provision Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands)As of December 31, 2021: Total capital (to risk-weighted assets)$ 191,469 13.66% ≥$112,117 ≥8.00% ≥$140,146 ≥10.00%Tier 1 capital (to risk-weighted assets) 175,027 12.49 ≥84,087 ≥6.00 ≥112,117 ≥8.00 Common Equity Tier 1 capital (to risk-weighted assets) 175,027 12.49 ≥63,066 ≥4.50 ≥91,095 ≥6.50 Tier 1 capital (to average assets) 175,027 8.51 ≥82,243 ≥4.00 ≥102,804 ≥5.00 As of December 31, 2020: Total capital (to risk-weighted assets)$ 172,103 12.62% ≥$109,123 ≥8.00% ≥$136,404 ≥10.00%Tier 1 capital (to risk-weighted assets) 158,953 11.65 ≥81,842 ≥6.00 ≥109,123 ≥8.00 Common Equity Tier 1 capital (to risk-weighted assets) 158,953 11.65 ≥61,382 ≥4.50 ≥88,663 ≥6.50 Tier 1 capital (to average assets) 158,953 8.71 ≥72,994 ≥4.00 ≥91,243 ≥5.00 The Bank’s ratios do not differ significantly from the Company’s ratios presented above. The Company and the Bank are subject to regulatory capital rules which, among other things, impose a common equity Tier 1 minimum capital requirement of 4.50% of risk-weighted assets; set the minimum leverage ratio for all banking organizations at a uniform 4.00% of total assets; set the minimum Tier 1 capital to risk-based assets requirement at 6.00% of risk-weighted assets; and assign a risk-weight of 150% to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The rules also require unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt out is exercised, which the Company and the Bank have done. The rule also limits a banking organization’s dividends, stock repurchases and other capital distributions, and certain discretionary bonus payments to executive officers, if the banking organization does not hold a “capital conservation buffer” consisting of 2.50% of common equity Tier 1 capital to risk-weighted assets above regulatory minimum risk-based requirements. The Company and the Bank are in compliance with their respective new capital requirements, including the capital conservation buffer, as of December 31, 2021.  Pennsylvania banking regulations limit the ability of the Bank to pay dividends or make loans or advances to the Company. Dividends that may be paid in any calendar year are limited to the current year's net profits, combined with the retained net profits of the preceding two years. At December 31, 2021, dividends from the Bank available to be paid to the Company, without prior approval of the Bank's regulatory agency, totaled $42.7 million, subject to the Bank meeting or exceeding regulatory capital requirements. The Company's principal source of funds for dividend payments to shareholders is dividends received from the Bank.

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Stock-Based Compensation	12 Months Ended
	Dec. 31, 2021
Stock-Based Compensation [Abstract]
Stock-Based Compensation	NOTE 12 - STOCK BASED COMPENSATION At the Annual Meeting held on April 22, 2014, the Company’s stockholders approved the Norwood Financial Corp 2014 Equity Incentive Plan. An aggregate of 375,000 shares of authorized but unissued Common Stock of the Company were reserved for future issuance under the Plan. This includes up to 60,000 shares for awards to outside directors. The Plan also authorized the Company to award restricted stock to officers and outside directors, limited to 63,000 shares of restricted stock awards for officers and 12,000 shares of restricted stock awards for outside directors. At the Annual Meeting held on April 24, 2018, the Company’s stockholders approved an amendment to the 2014 Equity Incentive Plan to ease certain restrictions on restricted stock awards to outside directors. As a result of this amendment, the number of shares available for restricted stock awards to officers was reduced by 300 shares to 62,700, while the number of shares available for restricted stock awards to outside directors was increased by 20,300 to 32,300 shares. Under this plan, the Company granted 296,966 shares, which included 191,865 options to employees, 10,400 options to directors, 62,625 shares of restricted stock to officers and 32,075 shares of restricted stock to directors. The restricted shares vest over five years. The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted stock under the company’s restricted stock plan. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of December 31, 2021, there were 78,035 shares available for future awards under this plan, which includes 60,510 shares available for officer awards and 17,525 shares available for awards to outside directors. Included in these totals are 75 shares available for restricted stock awards to officers and 25 shares available for restricted stock awards to outside directors. Total unrecognized compensation cost related to stock options was $269,000 as of December 31, 2021 and $214,000 as of December 31, 2020. Salaries and employee benefits expense includes $214,000 and $204,000 of compensation costs related to options for the years ended December 31, 2021 and 2020, respectively. Compensation costs related to restricted stock amounted to $335,000 and $334,000 for the years ended December 31, 2021 and 2020, respectively. The expected future compensation expense relating to non-vested restricted stock outstanding as of December 31, 2021 and 2020 was $953,000 and $1,202,000, respectively. A summary of the Company’s stock option activity and related information for the years ended December 31 follows: 2021 2020 Weighted Weighted Average Average Average Average Exercise Intrinsic Exercise Intrinsic Options Price Value Options Price ValueOutstanding, beginning of year 215,970 $ 25.73 199,825 $ 24.78 Granted 43,500 25.80 33,750 26.93 Exercised (22,420) 17.59 (15,530) 17.25 Forfeited (10,975) 29.48 (2,075) 16.83 Outstanding, end of year 226,075 $ 26.37 $ 520 215,970 $ 25.73 $ 742,738 Exercisable, end of year 182,575 $ 26.50 $ 511 182,220 $ 25.51 $ 742,738 Exercise prices for options outstanding as of December 31, 2021 ranged from $17.93 to $36.02 per share. The weighted average remaining contractual life is 6.4 years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Years Ended December 31, 2021 2020Dividend yield 3.55% 3.55%Expected life 10 years 10 yearsExpected volatility 34.69% 34.15%Risk-free interest rate 1.51% 0.91%Weighted average fair value of options granted$ 6.49 $ 6.34 The expected volatility is based on historical volatility. The risk-free interest rates for periods within the contractual life of the awards are based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life is based on historical exercise experience. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. Proceeds from stock option exercises totaled $394,000 in 2021. Shares issued in connection with stock option exercises are issued from available treasury shares or from available authorized shares. During 2021, for the shares issued in connection with stock option exercises, 22,420 shares in total, all shares were issued from available authorized shares. As of December 31, 2021, outstanding stock options consist of the following: Average Average Options Exercise Remaining Options Exercise Outstanding Price Life, Years Exercisable Price 21,450 $ 18.03 1.0 21,450 $ 18.03 1,650 18.36 1.0 1,650 18.36 19,375 17.93 2.0 19,375 17.93 8,250 19.39 2.9 8,250 19.39 9,375 19.03 3.9 9,375 19.03 14,375 22.37 5.0 14,375 22.37 26,750 32.81 6.0 26,750 32.81 23,600 32.34 7.0 23,600 32.34 24,000 36.02 8.0 24,000 36.02 33,750 26.93 9.0 33,750 26.93 1,000 26.35 9.3 — — 1,000 25.38 9.5 — — 41,500 25.80 9.9 — — Total 226,075 182,575 A summary of the Company’s restricted stock activity and related information for the years ended December 31 is as follows: 2021 2020 Weighted-Average Weighted-Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair ValueNon-vested, beginning of year 39,135 $30.72 36,195 $31.65Granted 8,000 25.80 14,500 26.93Vested (11,205) 32.15 (11,560) 32.89Forfeited (3,900) 31.72 — —Non-vested at December 31 32,030 $26.76 39,135 $30.72

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Earnings Per Share	12 Months Ended
	Dec. 31, 2021
EARNINGS PER SHARE
Earnings Per Share	NOTE 13 - EARNINGS PER SHARE The following table sets forth the computations of basic and diluted earnings per share: Years Ended December 31, 2021 2020 (In Thousands, Except Per Share Data)Numerator, net income$ 24,915 $ 15,080 Denominator: Weighted average shares outstanding 8,213 7,239Less: Weighted average unvested restricted shares (35) (36)Denominator: Basic earnings per share 8,178 7,203 Weighted average shares outstanding, basic 8,178 7,203Add: Dilutive effect of stock options and restricted stock 21 27Denominator: Diluted earnings per share 8,199 7,230 Basic earnings per common share$ 3.05 $ 2.09 Diluted earnings per common share$ 3.04 $ 2.09 Stock options which had no intrinsic value because their effect would be anti-dilutive, and therefore would not be included in the diluted EPS calculation, were 109,100 and 116,350 for the years ended December 31, 2021 and 2020, respectively, based on the closing price of the Company’s common stock which was $25.99 and $26.17 as of December 31, 2021 and 2020, respectively.

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Off-Balance Sheet Financial Instruments	12 Months Ended
	Dec. 31, 2021
Off-Balance Sheet Financial Instruments [Abstract]
Off-Balance Sheet Financial Instruments	NOTE 14 - OFF-BALANCE SHEET FINANCIAL INSTRUMENTS The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Bank’s financial instrument commitments is as follows: December 31, 2021 2020 (In Thousands)Commitments to grant loans$ 78,996 $ 78,310Unfunded commitments under lines of credit 156,899 137,965Standby letters of credit 8,462 5,636 $ 244,357 $ 221,911 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer and generally consists of real estate. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The majority of these standby letters of credit expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit when deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.

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Interest Rate Swaps	12 Months Ended
	Dec. 31, 2021
Interest Rate Swaps [Abstract]
Interest Rate Swaps	NOTE 15 – INTEREST RATE SWAPS The Company enters into interest rate swaps that allow our commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate into a fixed-rate. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. There was no effect on earnings in any periods presented. At December 31, 2021, based upon the swap contract values, the company pledged cash in the amount of $350,000 as collateral for its interest rate swaps with a third-party financial institution which had a fair value $235,000. Summary information regarding these derivatives is presented below: (Amounts in thousands) Notional Amount, December 31, Fair Value December 31, 2021 2020 Interest Rate Paid Interest Rate Received 2021 2020Customer interest rate swap Maturing November, 2030 $ 6,873 $ 7,222 1 month LIBOR + Margin Fixed $ 144 $ 165Maturing December, 2030 4,553 4,800 1 month LIBOR + Margin Fixed 91 111 Total $ 11,426 $ 12,022 $ 235 $ 276 Third party interest rate swap Maturing November, 2030 $ 6,873 $ 7,222 Fixed 1 month LIBOR + Margin $ 144 $ 165Maturing December, 2030 4,553 4,800 Fixed 1 month LIBOR + Margin 91 111 Total $ 11,426 $ 12,022 $ 235 $ 276 The following table presents the fair values of derivative instruments in the Consolidated Balance Sheet. (Amounts in thousands) Assets Liabilities Balance Sheet Location Fair Value Balance Sheet Location Fair ValueDecember 31, 2021 Interest rate derivatives Other assets$ 235 Other liabilities$ 235 December 31, 2020 Interest rate derivatives Other assets 276 Other liabilities 276

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Fair Values of Financial Instruments	12 Months Ended
	Dec. 31, 2021
Fair Values of Financial Instruments [Abstract]
Fair Values of Financial Instruments	NOTE 16 – FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In accordance with fair value accounting guidance, the Company measures, records, and reports various types of assets and liabilities at fair value on either a recurring or non-recurring basis in the Consolidated Financial Statements. Those assets and liabilities are presented in the sections entitled “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis” and “Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis”. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows (in thousands): Fair Value Measurement Reporting Date usingDescription Total Level 1 Level 2 Level 3December 31, 2021 ASSETS U.S. Treasury securities $ 19,351 $ — $ 19,351 $ —U.S. Government agencies 16,011 — 16,011 —States and political subdivisions 145,867 — 145,867 —Mortgage-backed securities-government sponsored entities 225,553 — 225,553 —Interest rate derivatives 235 — 235 — LIABILITIES Interest rate derivatives 235 — 235 — December 31, 2020 ASSETS U.S. Government agencies $ 3,969 $ — $ 3,969 $ —States and political subdivisions 73,091 — 73,091 —Corporate obligations 3,032 — 3,032 —Mortgage-backed securities-government sponsored entities 146,494 — 146,494 —Interest rate derivatives 276 — 276 — LIABILITIES Interest rate derivatives 276 — 276 — Securities: The fair value of securities available for sale (carried at fair value) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) are used to support fair values of certain Level 3 investments, if applicable. Interest Rate Swaps: The fair value of interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. Assets and Liabilities Required to be Measured and Reported at Fair Value on a Non-Recurring Basis For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2021 and 2020 are as follows (in thousands): Fair Value Measurement Reporting Date using Description Total Level 1 Level 2 Level 3December 31, 2021 Impaired Loans $ 1,402 $ — $ — $ 1,402Foreclosed real estate 1,742 — — 1,742 December 31, 2020 Impaired Loans $ 2,662 $ — $ — $ 2,662Foreclosed real estate 965 — — 965 Impaired loans (generally carried at fair value): The Company measures impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the lowest level of input that is significant to the fair value measurements. As of December 31, 2021, the fair value investment in impaired loans totaled $1,402,000, which included three loan relationships with a carrying value of $157,000 that did not require a valuation allowance since either the estimated realizable value of the collateral or the discounted cash flows exceeded the recorded investment in the loan. As of December 31, 2021, the Company has recognized charge-offs against the allowance for loan losses on these impaired loans in the amount of $0 over the life of the loans. As of December 31, 2021, the fair value investment in impaired loans included one loan relationships with a carrying value of $1,517,000 that required a valuation allowance of $272,000 since the estimated realizable value of the collateral did not support the recorded investment in the loan. As of December 31, 2021, the Company has recognized charge-offs against the allowance for loan losses on this impaired loan in the amount of $0 over the life of the loan. As of December 31, 2020, the fair value investment in impaired loans totaled $2,662,000, which included six loan relationships that did not require a valuation allowance since either the estimated realizable value of the collateral or the discounted cash flows exceeded the recorded investment in the loan. As of December 31, 2020, the Company has recognized charge-offs against the allowance for loan losses on these impaired loans in the amount of $652,000 over the life of the loans. There were no loan relationships which required a valuation allowance. Foreclosed real estate owned (carried at fair value): Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices, appraised value of the collateral or management’s estimation of the value of the collateral. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Quantitative Information about Level 3 Fair Value Measurements(dollars in thousands)Fair Value Estimate Valuation Techniques Unobservable Input Range (Weighted Average)December 31, 2021 Impaired loans$ 1,402 Appraisal of collateral(1) Appraisal adjustments(2) 0%-10.0% (1.12%) Foreclosed real estate owned$ 1,742 Appraisal of collateral(1) Liquidation Expenses(2) 7.00%‎(7.00%) Quantitative Information about Level 3 Fair Value Measurements(dollars in thousands)Fair Value Estimate Valuation Techniques Unobservable Input Range (Weighted Average)December 31, 2020 Impaired loans$ 2,662 Appraisal of collateral(1) Appraisal adjustments(2) 0%-10.59% (9.75%) Foreclosed real estate owned$ 965 Appraisal of collateral(1) Liquidation Expenses(2) 7.00%‎(7.00%) (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less any associated allowance.(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. Assets and Liabilities Not Required to be Measured or Reported at Fair Value The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The estimated fair values of the Bank’s financial instruments not required to be measured or reported at fair value were as follows at December 31, 2021 and December 31, 2020. (In thousands): Fair Value Measurements at December 31, 2021 Carrying Fair Amount Value Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents (1)$ 206,681 $ 206,681 $ 206,681 $ — $ —Loans receivable, net 1,338,489 1,389,870 — — 1,389,870Mortgage servicing rights 289 500 — — 500Regulatory stock (1) 3,927 3,927 3,927 — —Bank owned life insurance (1) 40,038 40,038 40,038 — —Accrued interest receivable (1) 5,889 5,889 5,889 — — Financial liabilities: Deposits 1,756,793 1,759,722 1,228,091 — 531,631Short-term borrowings (1) 60,822 60,822 60,822 — —Other borrowings 29,998 30,221 — — 30,221Accrued interest payable (1) 1,203 1,203 1,203 — — Off-balance sheet financial instruments: Commitments to extend credit and‎outstanding letters of credit — — — — — Fair Value Measurements at December 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents (1)$ 111,693 $ 111,693 $ 111,693 $ — $ —Loans receivable, net 1,397,582 1,493,480 — — 1,493,480Mortgage servicing rights 337 476 — — 476Regulatory stock (1) 3,981 3,981 3,981 — —Bank owned life insurance (1) 39,608 39,608 39,608 — —Accrued interest receivable (1) 6,232 6,232 6,232 — — Financial liabilities: Deposits 1,535,385 1,540,661 1,001,554 — 539,107Short-term borrowings (1) 63,303 63,303 63,303 — —Other borrowings 42,459 43,452 — — 43,452Accrued interest payable (1) 1,601 1,601 1,601 — — Off-balance sheet financial instruments: Commitments to extend credit and‎outstanding letters of credit — — — — — (1) This financial instrument is carried at cost, which approximates the fair value of the instrument.

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Accumulated Other Comprehensive Income	12 Months Ended
	Dec. 31, 2021
Accumulated Other Comprehensive Income [Abstract]
Accumulated Other Comprehensive Income	NOTE 17 – ACCUMULATED OTHER COMPREHENSIVE INCOME The following tables present the changes in accumulated other comprehensive income (loss) (in thousands) by component, net of tax, for the years ended December 31, 2021 and 2022: Unrealized gains on available for sale securities (a) Unrealized gain on pension liability (a) Total (a)Balance as of December 31, 2020$ 4,096 $ 1,023 $ 5,119Other comprehensive income (loss) before reclassification (5,476) 174 (5,302)Amount reclassified from accumulated other comprehensive loss (73) — (73)Total other comprehensive income (5,549) 174 (5,375)Balance as of December 31, 2021$ (1,453) $ 1,197 $ (256) Unrealized gains on available for sale securities (a) Unrealized gain on pension liability (a) Balance as of December 31, 2019$ 354 $ 833 $ 1,187Other comprehensive income (loss) before reclassification 3,798 190 3,988Amount reclassified from accumulated other comprehensive loss (56) — (56)Total other comprehensive 3,742 190 3,932Balance as of December 31, 2020$ 4,096 $ 1,023 $ 5,119 (a) All amounts are net of tax. Amounts in parentheses indicate debits. The following table presents significant amounts reclassified out of each component of accumulated other comprehensive income (loss) (in thousands) for the years ended December 31, 2021 and 2020: Amount Reclassified From Accumulated Affected Line Item in Other Consolidated Comprehensive Statements ofDetails about other comprehensive income Income (a) Income Twelve months Twelve months ended ended December 31, December 31, 2021 2020 Unrealized gains on available for sale securities $ 92 $ 71 Net realized gains on sales of securities (19) (15) Income tax expense $ 73 $ 56 (a)Amounts in parentheses indicate debits to net income.

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank.	12 Months Ended
	Dec. 31, 2021
Acquisition of UpState New York Bancorp, Inc. and USNY Bank. [Abstract]
Acquisition of UpState New York Bancorp, Inc. and USNY Bank.	NOTE 18 – ACQUISITION OF UPSTATE NEW YORK BANCORP, INC. AND USNY BANK On January 8, 2020, the Company and the Bank, and UpState and its wholly owned subsidiary, USNY Bank entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which UpState would merge with and into the Company, with the Company as the surviving corporation (“the Merger”). The Merger was completed on July 7, 2020. Pursuant to the terms of the Merger Agreement, UpState was merged with and into the Company, with the Company as the surviving corporation of the Merger. Immediately following the Merger, USNY Bank was merged with and into Wayne Bank, with Wayne Bank as the surviving entity. USNY Bank conducted its business from two Bank of the Finger Lakes offices in Geneva and Penn Yan, New York, and two Bank of Cooperstown offices in Cooperstown and Oneonta, New York. At June 30, 2020, UpState had total assets of $463.8 million, total deposits of $412.8 million and total stockholders’ equity of $44.8 million. Pursuant to the terms of the Merger Agreement, shareholders of UpState elected to receive for each share of UpState common stock they owned, either 0.9390 shares of the Company’s common stock or $33.33 in cash, or a combination of both. All shareholder elections were subject to the allocation and proration procedures set forth in the Merger Agreement which were intended to ensure that 90% of the shares of UpState would be exchanged for the Company’s common stock and 10% of the shares of UpState would be exchanged for cash. In addition, under the terms of the Merger Agreement, UpState shareholders received an additional $0.67 per share in cash for each share of UpState common stock held. In the aggregate, the merger consideration paid to UpState shareholders consisted of approximately $8,845,198 in cash and 1,865,738 shares of the Company’s common stock. The senior management of the Company and Wayne Bank remained the same following the completion of the Merger.  UpState directors Jeffrey S. Gifford and Alexandra K. Nolan have been appointed to the boards of directors of the Company and Wayne Bank. In addition, the remaining former directors of UpState have been invited to join a regional advisory board. UpState President and CEO R. Michael Briggs has entered into a consulting agreement with Wayne Bank. The Company has retained the brand names of USNY Bank’s two units, Bank of the Finger Lakes and Bank of Cooperstown, and has also retained USNY Bank’s administration center in Geneva, New York. Scott D. White, unit President of Bank of Cooperstown, and Jeffrey E. Franklin, unit President of Bank of the Finger Lakes, will also remain in place as executives of their units. The acquired assets and assumed liabilities were measured at estimated fair values. Management made significant estimates and exercised significant judgement in accounting for the acquisition. Management measured loan fair values based on loan file reviews, appraised collateral values, expected cash flows, and historical loss factors. The Company also recorded and identifiable asset representing the core deposit base of UpState based on management’s evaluation of the cost of such deposits relative to alternative funding sources. Management used significant estimates including the average lives of depository accounts, future interest rate levels, and the cost of servicing various depository products. Management used market quotations to determine the fair value of investment securities. The business combination resulted in the acquisition of loans with and without evidence of credit quality deterioration. UpState loans were deemed impaired at the acquisition date if the Company did not expect to receive all contractually required cash flows due to concerns about credit quality. Such loans were fair valued and the difference between contractually required payments at the acquisition date and cash flows expected to be collected was recorded as a non-accretable difference. At the acquisition date, the Company recorded $15,410,000 of purchased credit-impaired loans subject to a non-accretable difference of $5,213,000. The method of measuring carrying value of purchased loans differs from loans originated by the Company (originated loans), and as such, the Company identifies purchased loans and purchased loans with a credit quality discount and originated loans at amortized cost. UpState’s loans without evidence of credit deterioration were fair valued by discounting both expected principal and interest cash flows using an observable discount rate for similar instruments that a market participant would consider in determining fair value. Additionally, consideration was given to management’s best estimates of default rates and payment speeds. At acquisition, UpState’s loan portfolio without evidence of deterioration totaled $400,127,000 and was recorded at a fair value of $393,580,000. The allocation of purchase consideration related to the Merger was considered preliminary, primarily with respect to certain tax-related assets and liabilities. Subsequent to the closing date of the acquisition, final tax returns were prepared and filed for UpState which resulted in tax refunds related to the operations of UpState and USNY Bank. In accordance with ASC 805 the acquiring Company shall adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. A provisional amount is necessary when the buyer must issue financial statements prior to completing its accounting for the business combination (i.e. prior to the end of the measurement period). The measurement period begins on the acquisition date and ends on the earlier of either: (a) the buyer obtaining the information needed to finish the accounting for the business combination or (b) one year from the acquisition date. Adjustments to preliminary allocations related to certain tax-related assets and liabilities occurred in the fourth quarter of 2020. The change to provisional amounts resulted in a reduction in goodwill of $923,000 and no impact to results of operations during the fourth quarter. The Company finalized the allocation of purchase price during the second quarter of 2021, which was within the one-year measurement-period following the acquisition. The final adjustment resulted in a $24,000 reduction in goodwill and had no impact to results of operations during the second quarter. The following table summarizes the purchase of UpState as of July 7, 2020: (Dollars in Thousands, Except Per Share Data) Purchase Price Consideration in Common StockUpState New York Bancorp, Inc. common shares settled for stock 1,987,206 Exchange Ratio 0.9390 Norwood Financial Corp shares issued 1,865,738 Value assigned to each Norwood Financial Corp common share$ 24.30 Purchase price assigned to UpState New York Bancorp, Inc. common shares $ 45,337 exchanged for Norwood Financial Corp shares Purchase Price Consideration - Cash for Common Stock UpState New York Bancorp, Inc. shares exchanged for cash, excluding fractional shares 220,794 Purchase price paid to each UpState New York Bancorp, Inc. common share exchanged for cash$ 33.33 Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for cash $ 7,359Purchase price additional cash consideration per share 1,479Purchase price consideration - Cash-in-lieu of Fractional Shares 6Total Purchase Price $ 54,181 Net Assets Acquired: UpState New York Bancorp, Inc. shareholders' equity$ 44,803 UpState New York Bancorp, Inc. goodwill and intangibles - Total tangible equity 44,803 Adjustments to reflect assets acquired at fair value: Investments (112) Loans Interest rate 3,982 General credit (10,529) Specific credit - non-amortizing (5,213) Specific credit - amortizing (1,724) Core deposit intangible 409 Deferred loan fees (812) Premises and equipment (1,211) Allowance for loan and lease losses 5,982 Deferred tax assets 3,730 Other (48) Adjustments to reflect liabilities acquired at fair value: Time deposits (3,011) Net assets acquired 36,246Goodwill resulting from merger $ 17,935 The following condensed statement reflects the values assigned to UpState New York Bancorp, Inc. net assets as of the acquisition date: (In Thousands) Total purchase price $ 54,181 Net assets acquired: Cash$ 24,037 Securities available for sale 13,836 Loans 405,221 Premises and equipment, net 4,318 Regulatory stock 2,487 Accrued interest receivable 1,426 Core deposit intangible 564 Other assets 5,398 Deposits (414,370) Accrued interest payable (175) Other liabilities (6,496) Total identifiable net assets acquired 36,246 Goodwill resulting from UpState New York Bancorp, Inc. Merger $ 17,935 The Company recorded goodwill associated with the acquisition of UpState totaling $17,935,000. Goodwill is not amortized, but is periodically evaluated for impairment. The Company did not recognize any impairment during the year ended December 31, 2021. The carrying amount of the goodwill at December 31, 2021 related to the UpState acquisition was $17,935,000. Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. During the year ended December 31, 2021, no such adjustments were recorded. The identifiable intangible assets consist of a core deposit intangible which is being amortized on an accelerated basis over the useful life of such asset. The gross carrying amount of the core deposit intangible at December 31, 2021 was $409,000 with $108,000 accumulated depreciation as of that date. As of December 31, 2021, the current year and estimated future amortization expense for the core deposit intangible associated with the UpState acquisition is: (In thousands) 2022$632023 562024 482025 41After five years 93 $301 The following table presents financial information for the former UpState included in the Consolidated Statements of Income from the date of acquisition through December 31, 2020: Actual From Acquisition Date Through December 31,2020 (in thousands) Net interest income after provision for loan losses$ 7,291Noninterest income$ 313 The following table presents pro forma information for the years ended December 31, 2021 and 2020, as if the acquisition of UpState had occurred on January 1, 2020. This table has been prepared for comparative purposes only, and is not indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results:   Pro Forma Twelve Months Ended December 31,(In Thousands, Except Per Share Data) 2020Net interest income after provision for loan losses $ 52,897Noninterest income 8,726Net income 20,613Pro forma earnings per share: Basic $ 2.52 Diluted $ 2.52

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Risks and Uncertainties	12 Months Ended
	Dec. 31, 2021
Risks and Uncertainties [Abstract]
Risks and Uncertainties	NOTE 19 - RISKS AND UNCERTAINTIES The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, we were automatically authorized to originate PPP loans. Under the original terms of the PPP, an eligible business can apply for a PPP loan up to the greater of: (1) 2.5 times its average monthly payroll costs; or (2) $10.0 million. PPP loans will have: (a) an interest rate of 1.0%, (b) a two-year or five-year loan term to maturity; and (c) principal and interest payments deferred for ten months from the end of the coverage period. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 60% of the loan proceeds are used for payroll expenses, with the remaining 40% of the loan proceeds used for other qualifying expenses. As of December 31, 2021, the Company approved over 1,900 applications for $156.3 million of loans under the PPP. Since the opening of the PPP, several larger banks have been subject to litigation regarding the process and procedures that such banks used in processing applications for the PPP. Norwood may be exposed to the risk of similar litigation, from both customers and non-customers that approached the bank regarding PPP loans, regarding the process and procedures used in processing applications for the PPP. If any such litigation is filed against and is not resolved in a manner favorable to Norwood, it may result in significant financial liability or adversely affect reputation. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP-related litigation could have a material adverse impact on our business, financial condition and results of operations. The Company also has credit risk on PPP loans if a determination is made by the SBA that there is a deficiency in the manner in which the loan was originated, funded, or serviced by, such as an issue with the eligibility of a borrower to receive a PPP loan, which may or may not be related to the ambiguity in the laws, rules and guidance regarding the operation of the PPP. In the event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a deficiency in the manner in which the PPP loan was originated, funded, or serviced by the Company , the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from the Company. COVID-19 Loan Forbearance Programs. Section 4013 of the CARES Act provides that banks may elect not to categorize a loan modification as a TDR if the loan modification is (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020, under the National Emergencies Act terminates, or (B) December 31, 2020. On December 27, 2020, the president signed into law the Consolidated Appropriations Act, 2021, which amended CARES Act Section 4013.  The amendment extends the applicable period for which a financial institution is able to (a) suspend the requirements under United States generally accepted accounting principles for loan modifications related to the coronavirus disease (COVID-19) pandemic that would otherwise be categorized as a troubled debt restructuring and (b) any determination of a loan modified as a result of the effects of the COVID-19 pandemic as being a TDR, including impairment for accounting purposes. The amended end date for the relief related to a financial institution electing to suspend TDR and loan impairment accounting for qualifying modifications was extended from the earlier of December 31, 2020, or 60 days after the national emergency concerning COVID-19 declared by the president terminates to the earlier of January 1, 2022, or 60 days after the national emergency concerning COVID-19 declared by the president terminates. According to the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by the federal bank regulatory agencies on April 7, 2020, short-term loan modifications not otherwise eligible under Section 4013 that are made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. See Note 4 of the financial statements for additional disclosure of TDRs at December 31, 2021. The following table presents a summary of loans that were granted forbearance by type of loan during the years ended December 31, 2021 and 2020: Loan Type Number of‎Loans Balance ‎(in thousands) Real Estate Loans: Residential 118 $ 10,883 Commercial 385 218,984 Agricultural 16 5,267 Construction 24 4,125 Commercial 186 23,801 Other agricultural loans — - Consumer loans to individuals 486 11,130 Total 1,215 $ 274,190 As of December 31, 2021, no loans remained in deferment under the Bank’s COVID-19 loan forbearance program.

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Norwood Financial Corp (Parent Company Only) Financial Information	12 Months Ended
	Dec. 31, 2021
Norwood Financial Corp (Parent Company Only) Financial Information [Abstract]
Norwood Financial Corp (Parent Company Only) Financial	NOTE 20 - NORWOOD FINANCIAL CORP (PARENT COMPANY ONLY) FINANCIAL INFORMATION BALANCE SHEETS December 31, 2021 2020 (In Thousands)ASSETS Cash on deposit in bank subsidiary $ 1,511 $ 854Investment in bank subsidiary 204,547 195,035Other assets 2,472 2,337 Total assets $ 208,530 $ 198,226LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities $ 3,268 $ 3,441Stockholders’ equity 205,262 194,785 Total liabilities and stockholders' equity $ 208,530 $ 198,226 STATEMENTS OF INCOME Years Ended December 31, 2021 2020Income: (In Thousands)Dividends from bank subsidiary $ 10,697 $ 15,319 Expenses 627 1,704 10,070 13,615Income tax benefit (171) (180) 10,241 13,795Equity in undistributed earnings of subsidiary 14,674 1,285Net Income $ 24,915 $ 15,080Comprehensive Income $ 19,540 $ 19,012 STATEMENTS OF CASH FLOWS Years Ended December 31, 2021 2020 (In Thousands)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 24,915 $ 15,080Adjustments to reconcile net income to net cash provided by operating activities: Undistributed earnings of bank subsidiary (14,674) (1,285)Other, net (129) 28Net Cash Provided by Operating Activities 10,112 13,823 CASH FLOWS FROM INVESTING ACTIVITIES Outlays for business combinations — (8,844)Net Cash (Used in) Provided by Investing Activities — (8,844) CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 394 268 Sale of treasury stock for ESOP 130 130 Acquisition of treasury stock (1,440) (108) Cash dividends paid (8,539) (7,263)Net Cash Used in Financing Activities (9,455) (6,973)Net Increase (Decrease) in Cash and Cash Equivalents 657 (1,994) CASH AND CASH EQUIVALENTS - BEGINNING 854 2,848CASH AND CASH EQUIVALENTS - ENDING $ 1,511 $ 854

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Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2021
Summary of Significant Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly-owned subsidiaries, WCB Realty Corp., Norwood Investment Corp. and WTRO Properties. All significant intercompany accounts and transactions have been eliminated in consolidation. The year ended December 31, 2020 includes the acquisition of UpState New York Bancorp, Inc. effective July 7, 2020.
Estimates	Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues 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 relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, the determination of other-than-temporary impairment on securities, the determination of goodwill impairment and the fair value of financial instruments.
Significant Group Concentrations of Credit Risk and Concentrations of Credit Risk	Significant Group Concentrations of Credit Risk Most of the Company’s activities are with customers located within its markets in Northeastern Pennsylvania and the New York Counties of Delaware, Sullivan, Ontario, Otsego and Yates. Note 3 discusses the types of securities that the Company invests in. Note 4 discusses the types of lending that the Company engages in. The Company does not have any significant concentrations to any one industry or customer. Concentrations of Credit Risk The Bank operates primarily in Wayne, Pike, Lackawanna, Luzerne and Monroe Counties, Pennsylvania and Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. Accordingly, the Bank has extended credit primarily to commercial entities and individuals in these areas whose ability to honor their contracts is influenced by the region’s economy. These customers are also the primary depositors of the Bank. The Bank is limited in extending credit by legal lending limits to any single borrower or group of related borrowers.
Securities	Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movement in interest rates, changes in maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized gains and losses are reported in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of the specific securities sold, are included in earnings. Premiums and discounts are recognized in interest income using a method which approximates the interest method over the term of the security. Bonds, notes and debentures for which the Company has the positive intent and ability to hold to maturity are reported at cost, adjusted for premiums and discounts that are recognized in interest income using the interest method over the term of the security. Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each Consolidated Balance Sheet date. Declines in the fair value of available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to not sell the securities and it is more likely than not that it will not have to sell the securities before recovery of their cost basis.
Regulatory Stock	Regulatory Stock The Company, as a member of the Federal Home Loan Bank (FHLB) system is required to maintain an investment in capital stock of its district FHLB according to a predetermined formula. This regulatory stock has no quoted market value and is carried at cost. Management evaluates the regulatory stock for impairment. Management’s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB. Management considers the FHLB’s regulatory capital ratios, liquidity, and the fact that new shares of FHLB stock continue to change hands at the $100 par value. Management believes no impairment charge is necessary related to FHLB stock as of December 31, 2021.
Loans Receivable	Loans Receivable Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees. Interest income is accrued on the unpaid principal balance. Loan origination fees are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. The accrual of interest is generally discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.
Troubled Debt Restructurings	Troubled Debt Restructurings A loan is considered to be a troubled debt restructuring (TDR) loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates that are less than the current market rate for new obligations with similar risk.
Loans Acquired	Loans Acquired Loans acquired including loans that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable, are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance. Loans are evaluated individually to determine if there is evidence of deterioration of credit quality since origination. The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield,” is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining estimated life. Decreases in expected cash flows are recognized immediately as impairment. Any valuation allowances on these impaired loans reflect only losses incurred after the acquisition. For purchased loans acquired that are not deemed impaired at acquisition, credit discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Loans may be aggregated and accounted for as a pool of loans if the loans being aggregated have common risk characteristics. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans is similar to originated loans; however, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. The remaining differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loans.
Mortgage Servicing Rights	Mortgage Servicing Rights Servicing assets are recognized as separate assets when rights are acquired through purchase or through the sale of financial assets. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Servicing assets are evaluated for impairment based upon a third party appraisal. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance to the extent that fair value is less than the capitalized amount. The Company’s loan servicing assets at December 31, 2021 and 2020, respectively, were not impaired. Total servicing assets included in other assets as of December 31, 2021 and 2020, were $289,000 and $337,000, respectively.
Allowance for Loan Losses	Allowance for Loan Losses The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance consists of specific and general components. The specific component relates to loans that are classified as substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans were acquired with impairment or are the subject of a restructuring agreement.
Premises and Equipment	Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is calculated principally on the straight-line method over the respective assets estimated useful lives as follows: YearsBuildings and improvements 10 - 40Furniture and equipment 3 - 10
Leases	Leases The Company applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. At inception, lessees must classify all leases as either finance or operating based on five criteria. Balance sheet recognition of finance and operating leases is similar, but the pattern of expense recognition in the income statement, as well as the effect on the statement of cash flows, differs depending on the lease classification. See Note 8 for related disclosures.
Transfers of Financial Assets	Transfers of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.
Foreclosed Real Estate	Foreclosed Real Estate Real estate properties acquired through, or in lieu of, loan foreclosure are to be sold and are initially recorded at fair value less cost to sell at the date of foreclosure establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of its carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses.
Bank Owned Life Insurance	Bank Owned Life Insurance The Company invests in bank owned life insurance (BOLI) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Bank on a select group of employees. The Company is the owner and beneficiary of the policies. This life insurance investment is carried at the cash surrender value of the underlying policies. Income from the increase in cash surrender value of the policies or from death benefits realized is included in other income on the Consolidated Statements of Income.
Goodwill	Goodwill In connection with three acquisitions the Company recorded goodwill in the amount of $29.3 million, representing the excess of amounts paid over the fair value of net assets of the institutions acquired. Goodwill is tested and deemed impaired when the carrying value of goodwill exceeds its implied fair value. The value of the goodwill can change in the future. We expect the value of the goodwill to decrease if there is a significant decrease in the franchise value of the Bank. If an impairment loss is determined in the future, we will reflect the loss as an expense for the period in which the impairment is determined, leading to a reduction of our net income for that period by the amount of the impairment loss. No impairment was recognized for the years ended December 31, 2021 and 2020.
Other Intangible Assets	Other Intangible Assets At December 31, 2021, the Company had other intangible assets of $407,000, which is net of accumulated amortization of $1,347,000. These intangible assets will continue to be amortized using the sum-of-the-years digits method of amortization over ten years. At December 31, 2020, the Company had other intangible assets of $530,000, which was net of accumulated amortization of $1,224,000. Amortization expense related to other intangible assets was $123,000 and $114,000 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the estimated future amortization expense for the core deposit intangible is as follows (in thousands): 2022$ 1012023 852024 692025 542026 38Thereafter 60 $ 407
Income Taxes	Income Taxes Deferred income tax assets and liabilities are determined based on the differences between financial statement carrying amounts and the tax basis of existing assets and liabilities. These differences are measured at the enacted tax rates that will be in effect when these differences reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Company and its subsidiary file a consolidated federal income tax return. The Company recognizes interest and penalties on income taxes as a component of income tax expense. The Company analyzes each tax position taken in its tax returns and determines the likelihood that the position will be realized. Only tax positions that are “more-likely-than-not” to be realized can be recognized in an entity’s financial statements. For tax positions that do not meet this recognition threshold, an entity will record an unrecognized tax benefit for the difference between the position taken on the tax return and the amount recognized in the financial statements. The Company does not have any unrecognized tax benefits at December 31, 2021 or 2020, or during the years then ended. No unrecognized tax benefits are expected to arise within the next twelve months.
Advertising Costs	Advertising Costs Advertising costs are expensed as incurred.
Earnings Per Share	Earnings per Share Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period less any unvested restricted shares. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Treasury shares are not deemed outstanding for earnings per share calculations.
Employee Benefit Plans	Employee Benefit Plans The Company has a defined contributory profit-sharing plan which includes provisions of a 401(k) plan. The Company’s contributions are expensed as the cost is incurred. The Company has several supplemental executive retirement plans. To fund the benefits under these plans, the Company is the owner of single premium life insurance policies on the participants. The Company provides pension benefits to eligible employees. The Company’s funding policy is to contribute at least the minimum required contributions annually.
Interest Rate Derivatives	Interest Rate DerivativesThe Company is exposed to certain risk arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments.
Stock Option Plans	Stock Option Plans The Company recognizes the value of share-based payment transactions as compensation costs in the financial statements over the period that an employee provides service in exchange for the award. The fair value of the share-based payments for stock options is estimated using the Black-Scholes option-pricing model. The Company used the modified-prospective transition method to record compensation expense. Under the modified-prospective method, companies are required to record compensation cost for new and modified awards over the related vesting period of such awards and record compensation cost prospectively for the unvested portion, at the date of adoption, of previously issued and outstanding awards over the remaining vesting period of such awards. No change to prior periods presented is permitted under the modified-prospective method.
Restricted Stock	Restricted Stock The Company recognizes compensation cost related to restricted stock based on the market price of the stock at the grant date over the vesting period. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted stock under the Company’s 2014 Equity Incentive Plan. The Company recognizes compensation expense for the fair value of the restricted stock on a straight-line basis over the requisite service period for the entire award.
Cash Flow Information	Cash Flow Information For the purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits with banks and federal funds sold.
Off-Balance Sheet Financial Instruments	Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit, letters of credit and commitments to sell loans. Such financial instruments are recorded on the balance sheets when they become receivable or payable.
Trust Assets	Trust Assets Assets held by the Company in a fiduciary capacity for customers are not included in the financial statements since such items are not assets of the Company. Trust income is reported on the accrual method.
Treasury Stock	Treasury Stock Common shares repurchased are recorded as treasury stock at cost.
Comprehensive Income	Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities and defined benefit pension obligations, are reported as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income as presented in the Consolidated Statement of Comprehensive Income.
Segment Reporting	Segment Reporting The Company acts as an independent community financial services provider and offers traditional banking related financial services to individual, business and government customers. Through its Community Office and automated teller machine network, the Company offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of safe deposit services. The Company also performs personal, corporate, pension and fiduciary services through its Trust Department. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail, mortgage banking and trust operations of the Company. As such, discrete information is not available and segment reporting would not be meaningful.
Reclassification of Comparative Amounts	Reclassification of Comparative Amounts Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders’ equity.
New Accounting Pronouncements Not Yet Adopted	New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative-effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This Update is effective for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We expect to recognize a one-time cumulative-effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Update is effective for smaller reporting companies and all other entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments ‒ Credit Losses, which, in addition to addressing other matters, ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. The effective date and transition requirements for ASU 2018-19 are the same as those in ASU 2016-13. This Update is not expected to have a significant impact on the Company’s financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Derivatives, and Hedging (Topic 815); and Financial Instruments (Topic 825), which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. ASU 2019-04 makes clarifying amendments to certain financial instrument standards. For entities that have not yet adopted ASU 2016-13, the effective dates for the amendments related to ASU 2016-13 are the same as the effective dates in ASU 2016-13. For entities that have adopted ASU 2016-13, the amendments related to ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For entities that have not yet adopted ASU 2017-12 as of April 25, 2019, the effective dates for the amendments to Topic 815 are the same as the effective dates in ASU 2017-12. For entities that have adopted ASU 2017-12 as of April 25, 2019, the effective date is as of the beginning of the first annual period beginning after April 25, 2019. The amendments related to ASU 2016-01 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326), which allows entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost upon adoption of the new credit losses standard. To be eligible for the transition election, the existing financial asset must otherwise be both within the scope of the new credit losses standard and eligible for applying the fair value option in ASC 825-10.3. The election must be applied on an instrument-by-instrument basis and is not available for either available-for-sale or held-to-maturity debt securities. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. For entities that have not yet adopted the credit losses standard, the ASU is effective when they implement the credit losses standard. For entities that already have adopted the credit losses standard, the ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13. In November 2019, the FASB issued ASU 2019-10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date for ASC 944, Financial Services – Insurance, for public business entities that are SEC filers, except for smaller reporting companies, to fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, and for all other entities, including smaller reporting companies, to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, to clarify its new credit impairment guidance in ASC 326, based on implementation issues raised by stakeholders. This Update clarified, among other things, that expected recoveries are to be included in the allowance for credit losses for these financial assets; an accounting policy election can be made to adjust the effective interest rate for existing troubled debt restructurings based on the prepayment assumptions instead of the prepayment assumptions applicable immediately prior to the restructuring event; and extends the practical expedient to exclude accrued interest receivable from all additional relevant disclosures involving amortized cost basis. For entities that have not yet adopted ASU 2016-13 as of November 26, 2019, the effective dates for ASU 2019-11 are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted ASU 2016-13, ASU 2019-11 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASUs. In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU was issued to improve and clarify various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven issues that describe the areas of improvement and the related amendments to GAAP; they are intended to make the standards easier to understand and apply and to eliminate inconsistencies, and they are narrow in scope and are not expected to significantly change practice for most entities. Among its provisions, the ASU clarifies that all entities, other than public business entities that elected the fair value option, are required to provide certain fair value disclosures under ASC 825, Financial Instruments, in both interim and annual financial statements. It also clarifies that the contractual term of a net investment in a lease under Topic 842 should be the contractual term used to measure expected credit losses under Topic 326. Amendments related to ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is not permitted before an entity’s adoption of ASU 2016-01. Amendments related to ASU 2016-13 for entities that have not yet adopted that guidance are effective upon adoption of the amendments in ASU 2016-13. Early adoption is not permitted before an entity’s adoption of ASU 2016-13. Amendments related to ASU 2016-13 for entities that have adopted that guidance are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Other amendments are effective upon issuance of this ASU. This Update is not expected to have a significant impact on the Company’s financial statements In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, March 2020, to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. It is too early to predict whether a new rate index replacement and the adoption of the ASU will have a material impact on the Company’s financial statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides optional temporary guidance for entities transitioning away from the London Interbank Offered Rate (LIBOR) and other interbank offered rates (IBORs) to new references rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions within Topic 848. ASU 2021-01 clarifies that the derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2021-01 is effective immediately for all entities. Entities may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. The amendments in this update do not apply to contract modifications made, as well as new hedging relationships entered into, after December 31, 2022, and to existing hedging relationships evaluated for effectiveness for periods after December 31, 2022, except for certain hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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Nature of Operations (Tables)	12 Months Ended
	Dec. 31, 2021
Nature of Operations [Abstract]
Noninterest Income	(dollars in thousands) 2021 2020Noninterest Income In-scope of Topic 606: Service charges on deposit accounts $ 398 $ 377 ATM Fees 443 457 Overdraft Fees 1,029 985 Safe deposit box rental 100 102 Loan related service fees 1,238 1,288 Debit card 2,228 1,656 Fiduciary activities 748 682 Commissions on mutual funds & annuities 127 122 Other income 674 540 Noninterest Income (in-scope of Topic 606) 6,985 6,209 Out-of-scope of Topic 606: Net realized gains on sales of securities 92 71 Loan servicing fees 130 128 Gain on sales of loans 177 527 Earnings on and proceeds from bank-owned life insurance 941 845 Noninterest Income (out-of-scope of Topic 606) 1,340 1,571Total Noninterest Income $ 8,325 $ 7,780

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Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2021
Summary of Significant Accounting Policies [Abstract]
Schedule of Estimated Useful Lives	YearsBuildings and improvements 10 - 40Furniture and equipment 3 - 10
Schedule of Estimated Future Amortization Expense for the Core Deposit Intangible	2022$ 1012023 852024 692025 542026 38Thereafter 60 $ 407

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Securities (Tables)	12 Months Ended
	Dec. 31, 2021
Securities [Abstract]
Schedule of Amortized Cost Gross Unrealized Gains and Losses, and Fair Values of Securities	December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In Thousands)AVAILABLE FOR SALE: U.S. Treasury securities$ 19,550 $ 6 $ (205) $ 19,351U.S. Government agencies 16,251 24 (264) 16,011States and political subdivisions 145,107 2,155 (1,395) 145,867Mortgage-backed securities- government sponsored entities 227,712 766 (2,925) 225,553 Total debt securities$ 408,620 $ 2,951 $ (4,789) $ 406,782 December 31, 2020 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In Thousands)AVAILABLE FOR SALE: U.S. Government agencies$ 3,998 $ — $ (29) $ 3,969States and political subdivisions 70,672 2,419 — 73,091Corporate obligations 3,019 13 — 3,032Mortgage-backed securities- government sponsored entities 143,712 2,809 (27) 146,494 Total debt securities$ 221,401 $ 5,241 $ (56) $ 226,586
Schedule of Investments' Gross Unrealized Losses and Fair Value Aggregated by Security Type and Length of Time that Individual Securities have been in a Continuous Unrealized Loss Position	December 31, 2021 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized LossesU.S. Treasury securities$ 18,361 $ (205) $ — $ — $ 18,361 $ (205)U.S. Government agencies 7,912 (109) 3,843 (155) 11,755 (264)States and political subdivisions 74,658 (1,395) — — 74,658 (1,395)Mortgage-backed securities-government sponsored entities 170,647 (2,856) 2,919 (69) 173,566 (2,925) $ 271,578 $ (4,565) $ 6,762 $ (224) $ 278,340 $ (4,789) December 31, 2020 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized LossesU.S. Government agencies$ 3,969 (29) $ — $ — $ 3,969 $ (29)Mortgage-backed securities-government sponsored entities 4,980 $ (27) — — 4,980 (27) $ 8,949 $ (56) $ — $ — $ 8,949 $ (56)
Schedule of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity	Amortized Fair Cost Value (In Thousands)Due in one year or less$ 1,086 $ 1,093Due after one year through five years 11,268 11,488Due after five years through ten years 54,965 54,392Due after ten years 113,589 114,256 180,908 181,229 Mortgage-backed securities - government sponsored entities 227,712 225,553 $ 408,620 $ 406,782

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Loans Receivable and Allowance for Loan Losses (Tables)	12 Months Ended
	Dec. 31, 2021
Loans Receivable and Allowance for Loan Losses [Abstract]
Composition of the Loan Portfolio	December 31, 2021 December 31, 2020 Real Estate: Residential$ 273,040 20.1% $ 263,127 18.6%Commercial 628,724 46.4 579,104 41.0 Agricultural 61,925 4.6 66,334 4.7 Construction 21,990 1.6 21,005 1.5 Commercial loans 186,031 13.7 283,741 20.1 Other agricultural loans 37,930 2.8 40,929 2.9 Consumer loans to individuals 146,400 10.8 158,049 11.2 Total loans 1,356,040 100.0% 1,412,289 100.0% Deferred fees, net (1,109) (1,557) Total loans receivable 1,354,931 1,410,732 Allowance for loan losses (16,442) (13,150) Net loans receivable$ 1,338,489 $ 1,397,582
Information Regarding Loans Acquired and Accounted for in Accordance With ASC 310-30	December 31, 2021 December 31, 2020Outstanding Balance $ 12,862 $ 15,570Carrying Amount $ 8,304 $ 9,281
Changes in the Accretable Yield for Purchased Credit-impaired Loans	2021 2020Balance at beginning of period $ 1,365 $ —Additions — 1,724Accretion (880) (353)Reclassification and other 1,399 (6)Balance at end of period$ 1,884 $ 1,365
Components Of Purchase Accounting Adjustments Related To Purchased Credit-impaired Loans Acquired	(In Thousands)July 7, 2020Contractually required principal and interest$ 15,410Non-accretable discount (5,213)Expected cash flows 10,197Accretable discount (1,724)Estimated fair value$ 8,473
Summary of Amount of Loans in Each Category that were Individually and Collectively Evaluated for Impairment	Real Estate Loans Commercial Other Consumer Residential Commercial Agricultural Construction Loans Agricultural Loans Total (In thousands)December 31, 2021 Individually evaluated for impairment$ — $ 1,658 $ — $ — $ 16 $ — $ — $ 1,674Loans acquired with deteriorated credit quality 784 3,285 1,918 — 198 2,119 — 8,304Collectively evaluated for impairment 272,256 623,781 60,007 21,990 185,817 35,811 146,400 1,346,062Total Loans$ 273,040 $ 628,724 $ 61,925 $ 21,990 $ 186,031 $ 37,930 $ 146,400 $ 1,356,040 Real Estate Loans Commercial Other Consumer Residential Commercial Agricultural Construction Loans Agricultural Loans Total (In thousands)December 31, 2020 Individually evaluated for impairment$ — $ 2,582 $ — $ — $ 80 $ — $ — $ 2,662Loans acquired with deteriorated credit quality 591 3,995 2,043 194 246 2,212 — 9,281Collectively evaluated for impairment 262,536 572,527 64,291 20,811 283,415 38,717 158,049 1,400,346Total Loans$ 263,127 $ 579,104 $ 66,334 $ 21,005 $ 283,741 $ 40,929 $ 158,049 $ 1,412,289
Impaired Loans and Related Interest Income by Loan Portfolio Class	The following table includes the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable. Unpaid Principal Recorded Principal Associated Investment Balance AllowanceDecember 31, 2021 (In thousands)With no related allowance recorded: Real Estate Loans Commercial$ 141 $ 141 $ —Commercial loans 16 16 —Subtotal 157 157 — With an allowance recorded: Real Estate Loans Commercial 1,517 1,517 272 Subtotal 1,517 1,517 272Total: Real Estate Loans Commercial$ 1,658 $ 1,658 $ 272Commercial loans 16 16 —Total Impaired Loans$ 1,674 $ 1,674 $ 272 Unpaid Recorded Principal Associated Investment Balance AllowanceDecember 31, 2020 (In thousands)With no related allowance recorded: Real Estate Loans Commercial$ 2,582 $ 3,234 $ —Commercial loans 80 80 —Subtotal 2,662 3,314 — With an allowance recorded: Real Estate Loans Commercial — — — Subtotal — — —Total: Real Estate Loans Residential — Commercial$ 2,582 $ 3,234 $ —Commercial loans 80 80 —Total Impaired Loans$ 2,662 $ 3,314 $ — The following information for impaired loans is presented for the years ended December 31, 2021 and 2020: Average Recorded Interest Income Investment Recognized 2021 2020 2021 2020 (In thousands)Total: Real Estate Loans Commercial$ 2,358 $ 2,105 $ 157 $ 14Commercial loans 18 16 7 —Total Loans$ 2,376 $ 2,121 $ 164 $ 14
Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating	Special Pass Mention Substandard Doubtful Loss TotalDecember 31, 2021 Commercial real estate loans$ 618,541 $ 5,146 $ 4,765 $ — $ 272 $ 628,724Real estate - agricultural 60,193 — 1,732 — — 61,925Commercial loans 185,729 199 103 — — 186,031Other agricultural loans 35,573 210 2,147 — — 37,930Total$ 900,036 $ 5,555 $ 8,747 $ — $ 272 $ 914,610 Special Pass Mention Substandard Doubtful Loss TotalDecember 31, 2020 Commercial real estate loans$ 566,418 $ 6,346 $ 6,340 $ — $ — $ 579,104Real estate - agricultural 58,322 5,111 2,901 — — 66,334Commercial loans 282,915 437 389 — — 283,741Other agricultural loans 35,772 2,786 2,371 — — 40,929Total$ 943,427 $ 14,680 $ 12,001 $ - $ - $ 970,108 For residential real estate loans, construction loans and consumer loans, the Company evaluates credit quality based on the performance of the individual credits. Nonperforming loans include loans that have been placed on nonaccrual status and loans remaining in accrual status on which the contractual payment of principal and interest has become 90 days past due. The following table presents the recorded investment in the loan classes based on payment activity as of December 31, 2021 and December 31, 2020 (in thousands): Performing Nonperforming TotalDecember 31, 2021 Residential real estate loans$ 272,571 $ 469 $ 273,040Construction 21,990 — 21,990Consumer loans to individuals 146,345 55 146,400Total$ 440,906 $ 524 $ 441,430 Performing Nonperforming TotalDecember 31, 2020 Residential real estate loans$ 262,556 $ 571 $ 263,127Construction 21,005 — 21,005Consumer loans to individuals 157,864 185 158,049Total$ 441,425 $ 756 $ 442,181
Loan Portfolio Summarized by the Past Due Status	Current 31-60 Days Past Due 61-90 Days Past Due Greater than 90 Days Past Due and still accruing Non-Accrual Total Past Due and Non-Accrual Purchased Credit Impaired Loans Total LoansDecember 31, 2021 Real Estate loans Residential$ 271,622 $ 155 $ 10 $ — $ 469 $ 634 $ 784 $ 273,040Commercial 625,336 — — — 103 103 3,285 628,724Agricultural 59,982 25 — — — 25 1,918 61,925Construction 21,990 — — — — — - 21,990Commercial loans 185,801 3 13 91 16 32 198 186,031Other agricultural loans 35,811 — — — — — 2,119 37,930Consumer loans 145,986 248 111 — 55 414 - 146,400Total$ 1,346,528 $ 431 $ 134 $ 91 $ 643 $ 1,208 $ 8,304 $ 1,356,040 Current 31-60 Days Past Due 61-90 Days Past Due Greater than 90 Days Past Due and still accruing Non-Accrual Total Past Due and Non-Accrual Purchased Credit Impaired Loans Total LoansDecember 31, 2020 Real Estate loans Residential$ 261,406 $ 355 $ 204 $ — $ 571 $ 1,130 $ 591 $ 263,127Commercial 573,376 59 — — 1,674 1,733 3,995 579,104Agricultural 63,615 — — — 676 676 2,043 66,334Construction 20,811 — — — — — 194 21,005Commercial loans 282,374 1,009 90 — 22 1,121 246 283,741Other agricultural loans 38,454 — — — 263 263 2,212 40,929Consumer loans 157,538 233 93 — 185 511 - 158,049Total$ 1,397,574 $ 1,656 $ 387 $ — $ 3,391 $ 5,434 $ 9,281 $ 1,412,289
Allowance for Loan Losses and Recorded Investment in Financing Receivables	Current 31-60 Days Past Due 61-90 Days Past Due Greater than 90 Days Past Due and still accruing Non-Accrual Total Past Due and Non-Accrual Purchased Credit Impaired Loans Total LoansDecember 31, 2020 Real Estate loans Residential$ 261,406 $ 355 $ 204 $ — $ 571 $ 1,130 $ 591 $ 263,127Commercial 573,376 59 — — 1,674 1,733 3,995 579,104Agricultural 63,615 — — — 676 676 2,043 66,334Construction 20,811 — — — — — 194 21,005Commercial loans 282,374 1,009 90 — 22 1,121 246 283,741Other agricultural loans 38,454 — — — 263 263 2,212 40,929Consumer loans 157,538 233 93 — 185 511 - 158,049Total$ 1,397,574 $ 1,656 $ 387 $ — $ 3,391 $ 5,434 $ 9,281 $ 1,412,289 The following table presents the allowance for loan losses by the classes of the loan portfolio: (In thousands)Residential Real Estate Commercial Real Estate Construction Commercial Consumer TotalBeginning balance, December 31, 2020$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150Charge Offs (17) (452) — (200) (480) (1,149)Recoveries 74 19 — 49 99 241Provision for loan losses 158 3,307 (17) 281 471 4,200Ending balance, December 31, 2021$ 2,175 $ 10,878 $ 133 $ 1,490 $ 1,766 $ 16,442Ending balance individually evaluated‎for impairment$ — $ 272 $ — $ — $ — $ 272Ending balance collectively evaluated for impairment$ 2,175 $ 10,606 $ 133 $ 1,490 $ 1,766 $ 16,170 (In thousands)Residential Real Estate Commercial Real Estate Construction Commercial Consumer TotalBeginning balance, December 31, 2019$ 1,552 $ 4,687 $ 95 $ 949 $ 1,226 $ 8,509Charge Offs (41) (452) — (18) (431) (942)Recoveries 6 39 — 44 44 133Provision for loan losses 443 3,730 55 385 837 5,450Ending balance, December 31, 2020$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150Ending balance individually evaluated‎for impairment$ — $ — $ — $ — $ — $ —Ending balance collectively evaluated for impairment$ 1,960 $ 8,004 $ 150 $ 1,360 $ 1,676 $ 13,150

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Premises and Equipment (Tables)	12 Months Ended
	Dec. 31, 2021
Premises and Equipment [Abstract]
Componenets of Premises and Equipment	Components of premises and equipment at December 31 are as follows: 2021 2020 (In Thousands)Land and improvements$ 3,879 $ 3,878Buildings and improvements 21,846 21,545Furniture and equipment 10,183 9,717 35,908 35,140Accumulated depreciation (18,619) (17,326) $ 17,289 $ 17,814

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Deposits (Tables)	12 Months Ended
	Dec. 31, 2021
Deposits:
Schedule of Maturities of Time Deposits	2022$ 406,3312023 70,9212024 30,9782025 10,5332026 9,939 $ 528,702

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Borrowings (Tables)	12 Months Ended
	Dec. 31, 2021
Borrowings [Abstract]
Short-Term Borrowings	Short-term borrowings at December 31 consist of the following: 2021 2020 (In Thousands)Securities sold under agreements to repurchase$ 60,822 $ 63,303Federal Home Loan Bank short-term borrowings — — $ 60,822 $ 63,303 The outstanding balances and related information of short-term borrowings are summarized as follows: Years Ended December 31, 2021 2020 (Dollars In Thousands)Average balance during the year$ 73,810 $ 57,014 Average interest rate during the year 0.39% 0.55%Maximum month-end balance during the year$ 90,409 $ 69,294 Weighted average interest rate at the end of the year 0.34% 0.43%
Collateral Pledged for Repurchase Agreements	As of December 31, 2021 Remaining Contractual Maturity of the Agreements Overnight and continuous Up to 30 days 30-90 days Greater than 90 days TotalRepurchase Agreements: Mortgage-backed securities - government sponsored entities $ 65,162 $ — $ — $ — $ 65,162 Total liability recognized for repurchase agreements 60,822 As of December 31, 2020 Remaining Contractual Maturity of the Agreements Overnight and continuous Up to 30 days 30-90 days Greater than 90 days TotalRepurchase Agreements: Mortgage-backed securities - government sponsored entities $ 64,429 $ — $ — $ — $ 64,429 Total liability recognized for repurchase agreements 63,303
Other Borrowings	2021 2020 (In Thousands) Amortizing fixed rate borrowing due March 2022 at 1.75%$ 227 $ 1,126Amortizing fixed rate borrowing due August 2022 at 1.94% 1,364 3,376Amortizing fixed rate borrowing due October 2022 at 1.88% 1,386 3,021Amortizing fixed rate borrowing due October 2023 at 3.24% 3,856 5,865Amortizing fixed rate borrowing due December 2023 at 3.22% 2,097 3,096Fixed rate term borrowing due December 2023 at 1.95% 10,000 10,000Amortizing fixed rate borrowing due December 2023 at 1.73% 5,190 7,616Amortizing fixed rate borrowing due April 2024 at 0.91% 5,878 8,359 $ 29,998 $ 42,459
Contractual Maturities of Other Borrowings	2022$ 2,9772023 21,1432024 5,878 $ 29,998

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Operating Leases (Tables)	12 Months Ended
	Dec. 31, 2021
Operating Leases [Abstract]
Lease Cost	OperatingWeighted-average remaining term 11.5 yearsWeighted-average discount rate 2.95%
Undiscounted Cash Flows Due	Undiscounted cash flows due (in thousands)Operating2022$ 5462023 5352024 5432025 5612026 5042027 and thereafter 2,815 Total undiscounted cash flows 5,504Discount on cash flows (927)Total lease liabilities$ 4,577

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Employee Benefit Plans (Tables)	12 Months Ended
	Dec. 31, 2021
Employee Benefit Plans [Abstract]
Schedule Of Projected Benefit Obligation And Changes In Plan Assets For The Defined Benefit Pension Plan	(in Thousands)2021 2020 Change in projected benefit obligation: Projected benefit obligation at beginning of year$ (8,065) $ (7,515) Service cost (51) (58) Interest cost (206) (257) Actuarial (gain) loss 177 (767) Benefits paid 523 532 Benefit obligation at end of year$ (7,622) $ (8,065) Change in plan assets: Fair value of plan assets at beginning of year$ 7,744 $ 6,853 Actual return on plan assets 474 1,416 Benefits paid (527) (525) Fair value of assets at end of year 7,691 7,744 Funded status at end of year$ 69 $ (321)
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income	2021 2020Transition asset$ — $ —Prior service credit — —Gain 220 241 Total$ 220 $ 241
Components Of Net Pension Cost (Income)	2021 2020Service cost benefits earned during the period$ 51 $ 58Interest cost on projected benefit obligation 206 257Actual return on assets (394) (395)Net amortization and deferral (34) (20) Net periodic pension cost (income) $ (171) $ (100)
Schedule of Weighted Average Assumptions Used to Determine the Benefit Obligation and the Net Periodic Cost	The weighted average assumptions used to determine the benefit obligation at December 31 are as follows: 2021 2020 Discount rate 2.93% 2.63% The weighted average assumptions used to determine the net periodic pension cost at December 31 are as follows: 2021 2020 Discount rate 2.63% 3.55%Expected long-term return on plan assets 5.25% 6.00%Rate of compensation increase —% —%
Schedule Of Target Asset Allocations	2021 2020 Cash equivalents —% —%Equity securities 35.7% 31.6%Fixed income securities 35.0% 62.6%Other 29.3% 5.8% 100.0% 100.0%

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Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2021
Income Taxes [Abstract]
Schedule of Components of the Provision for Federal Income Taxes	Years Ended December 31, 2021 2020 (In Thousands)Current$ 6,328 $ 7,754Deferred (383) (4,468) $ 5,945 $ 3,286
Schedule of Effective Income Tax Rate Reconciliation	Percentage of Income before Income Taxes Years Ended December 31, 2021 2020 Tax at statutory rates 21.0% 21.0%Tax exempt interest income, net of interest expense disallowance (1.9) (3.7) Non-deductible merger related expenses — 1.1 Earnings and proceeds on life insurance (0.6) (1.0) Other 0.8 0.5 19.3% 17.9%
Schedule of Deferred Tax Assets and Liabilties	2021 2020 (In Thousands)Deferred tax assets: Allowance for loan losses$ 3,855 $ 2,761Deferred compensation 817 758Core deposit intangible 231 230Prepaid expenses — 20Pension liability 302 118Foreclosed real estate valuation allowance 19 17Net operating loss carryforward 913 893Purchase price adjustment 2,487 2,832Deferred loan fees — 60Net unrealized loss on securities 386 —Other 404 747Total Deferred Tax Assets 9,414 8,436 Deferred tax liabilities: Premises and equipment 1,004 920Deferred loan fees 125 —Net unrealized gain on pension liability 318 272Net unrealized gain on securities — 1,089Total Deferred Tax Liabilities 1,447 2,281 Net Deferred Tax Asset$ 7,967 $ 6,155

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Regulatory Matters and Stockholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2021
Regulatory Matters and Stockholders' Equity [Abstract]
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations	To be Well Capitalized under Prompt For Capital Adequacy Corrective Action Actual Purposes Provision Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands)As of December 31, 2021: Total capital (to risk-weighted assets)$ 191,469 13.66% ≥$112,117 ≥8.00% ≥$140,146 ≥10.00%Tier 1 capital (to risk-weighted assets) 175,027 12.49 ≥84,087 ≥6.00 ≥112,117 ≥8.00 Common Equity Tier 1 capital (to risk-weighted assets) 175,027 12.49 ≥63,066 ≥4.50 ≥91,095 ≥6.50 Tier 1 capital (to average assets) 175,027 8.51 ≥82,243 ≥4.00 ≥102,804 ≥5.00 As of December 31, 2020: Total capital (to risk-weighted assets)$ 172,103 12.62% ≥$109,123 ≥8.00% ≥$136,404 ≥10.00%Tier 1 capital (to risk-weighted assets) 158,953 11.65 ≥81,842 ≥6.00 ≥109,123 ≥8.00 Common Equity Tier 1 capital (to risk-weighted assets) 158,953 11.65 ≥61,382 ≥4.50 ≥88,663 ≥6.50 Tier 1 capital (to average assets) 158,953 8.71 ≥72,994 ≥4.00 ≥91,243 ≥5.00

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Stock-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2021
Stock-Based Compensation [Abstract]
Summary of Stock Option Activity	2021 2020 Weighted Weighted Average Average Average Average Exercise Intrinsic Exercise Intrinsic Options Price Value Options Price ValueOutstanding, beginning of year 215,970 $ 25.73 199,825 $ 24.78 Granted 43,500 25.80 33,750 26.93 Exercised (22,420) 17.59 (15,530) 17.25 Forfeited (10,975) 29.48 (2,075) 16.83 Outstanding, end of year 226,075 $ 26.37 $ 520 215,970 $ 25.73 $ 742,738 Exercisable, end of year 182,575 $ 26.50 $ 511 182,220 $ 25.51 $ 742,738
Schedule of Fair Value Assumptions	Years Ended December 31, 2021 2020Dividend yield 3.55% 3.55%Expected life 10 years 10 yearsExpected volatility 34.69% 34.15%Risk-free interest rate 1.51% 0.91%Weighted average fair value of options granted$ 6.49 $ 6.34
Schedule of Outstanding Stock Options	Average Average Options Exercise Remaining Options Exercise Outstanding Price Life, Years Exercisable Price 21,450 $ 18.03 1.0 21,450 $ 18.03 1,650 18.36 1.0 1,650 18.36 19,375 17.93 2.0 19,375 17.93 8,250 19.39 2.9 8,250 19.39 9,375 19.03 3.9 9,375 19.03 14,375 22.37 5.0 14,375 22.37 26,750 32.81 6.0 26,750 32.81 23,600 32.34 7.0 23,600 32.34 24,000 36.02 8.0 24,000 36.02 33,750 26.93 9.0 33,750 26.93 1,000 26.35 9.3 — — 1,000 25.38 9.5 — — 41,500 25.80 9.9 — — Total 226,075 182,575
Summary of Restricted Stock Activity	2021 2020 Weighted-Average Weighted-Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair ValueNon-vested, beginning of year 39,135 $30.72 36,195 $31.65Granted 8,000 25.80 14,500 26.93Vested (11,205) 32.15 (11,560) 32.89Forfeited (3,900) 31.72 — —Non-vested at December 31 32,030 $26.76 39,135 $30.72

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Earnings Per Share (Tables)	12 Months Ended
	Dec. 31, 2021
EARNINGS PER SHARE
Computations of Basic and Diluted Earnings Per Share	Years Ended December 31, 2021 2020 (In Thousands, Except Per Share Data)Numerator, net income$ 24,915 $ 15,080 Denominator: Weighted average shares outstanding 8,213 7,239Less: Weighted average unvested restricted shares (35) (36)Denominator: Basic earnings per share 8,178 7,203 Weighted average shares outstanding, basic 8,178 7,203Add: Dilutive effect of stock options and restricted stock 21 27Denominator: Diluted earnings per share 8,199 7,230 Basic earnings per common share$ 3.05 $ 2.09 Diluted earnings per common share$ 3.04 $ 2.09

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Off-Balance Sheet Financial Instruments (Tables)	12 Months Ended
	Dec. 31, 2021
Off-Balance Sheet Financial Instruments [Abstract]
Schedule of Fair Value, Off-balance Sheet Risks	December 31, 2021 2020 (In Thousands)Commitments to grant loans$ 78,996 $ 78,310Unfunded commitments under lines of credit 156,899 137,965Standby letters of credit 8,462 5,636 $ 244,357 $ 221,911

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Interest Rate Swaps (Tables)	12 Months Ended
	Dec. 31, 2021
Interest Rate Swaps [Abstract]
Summary of Derivatives	(Amounts in thousands) Notional Amount, December 31, Fair Value December 31, 2021 2020 Interest Rate Paid Interest Rate Received 2021 2020Customer interest rate swap Maturing November, 2030 $ 6,873 $ 7,222 1 month LIBOR + Margin Fixed $ 144 $ 165Maturing December, 2030 4,553 4,800 1 month LIBOR + Margin Fixed 91 111 Total $ 11,426 $ 12,022 $ 235 $ 276 Third party interest rate swap Maturing November, 2030 $ 6,873 $ 7,222 Fixed 1 month LIBOR + Margin $ 144 $ 165Maturing December, 2030 4,553 4,800 Fixed 1 month LIBOR + Margin 91 111 Total $ 11,426 $ 12,022 $ 235 $ 276
Fair Value of Derivative Instruments	(Amounts in thousands) Assets Liabilities Balance Sheet Location Fair Value Balance Sheet Location Fair ValueDecember 31, 2021 Interest rate derivatives Other assets$ 235 Other liabilities$ 235 December 31, 2020 Interest rate derivatives Other assets 276 Other liabilities 276

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Fair Values of Financial Instruments (Tables)	12 Months Ended
	Dec. 31, 2021
Fair Values of Financial Instruments [Abstract]
Fair Value, Assets Measured on Recurring Basis	Fair Value Measurement Reporting Date usingDescription Total Level 1 Level 2 Level 3December 31, 2021 ASSETS U.S. Treasury securities $ 19,351 $ — $ 19,351 $ —U.S. Government agencies 16,011 — 16,011 —States and political subdivisions 145,867 — 145,867 —Mortgage-backed securities-government sponsored entities 225,553 — 225,553 —Interest rate derivatives 235 — 235 — LIABILITIES Interest rate derivatives 235 — 235 — December 31, 2020 ASSETS U.S. Government agencies $ 3,969 $ — $ 3,969 $ —States and political subdivisions 73,091 — 73,091 —Corporate obligations 3,032 — 3,032 —Mortgage-backed securities-government sponsored entities 146,494 — 146,494 —Interest rate derivatives 276 — 276 — LIABILITIES Interest rate derivatives 276 — 276 —
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis	Fair Value Measurement Reporting Date using Description Total Level 1 Level 2 Level 3December 31, 2021 Impaired Loans $ 1,402 $ — $ — $ 1,402Foreclosed real estate 1,742 — — 1,742 December 31, 2020 Impaired Loans $ 2,662 $ — $ — $ 2,662Foreclosed real estate 965 — — 965
Additional Qualitative Information about Level 3 Assets	Quantitative Information about Level 3 Fair Value Measurements(dollars in thousands)Fair Value Estimate Valuation Techniques Unobservable Input Range (Weighted Average)December 31, 2021 Impaired loans$ 1,402 Appraisal of collateral(1) Appraisal adjustments(2) 0%-10.0% (1.12%) Foreclosed real estate owned$ 1,742 Appraisal of collateral(1) Liquidation Expenses(2) 7.00%‎(7.00%) Quantitative Information about Level 3 Fair Value Measurements(dollars in thousands)Fair Value Estimate Valuation Techniques Unobservable Input Range (Weighted Average)December 31, 2020 Impaired loans$ 2,662 Appraisal of collateral(1) Appraisal adjustments(2) 0%-10.59% (9.75%) Foreclosed real estate owned$ 965 Appraisal of collateral(1) Liquidation Expenses(2) 7.00%‎(7.00%) (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable, less any associated allowance.(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
Fair Value, by Balance Sheet Grouping	Fair Value Measurements at December 31, 2021 Carrying Fair Amount Value Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents (1)$ 206,681 $ 206,681 $ 206,681 $ — $ —Loans receivable, net 1,338,489 1,389,870 — — 1,389,870Mortgage servicing rights 289 500 — — 500Regulatory stock (1) 3,927 3,927 3,927 — —Bank owned life insurance (1) 40,038 40,038 40,038 — —Accrued interest receivable (1) 5,889 5,889 5,889 — — Financial liabilities: Deposits 1,756,793 1,759,722 1,228,091 — 531,631Short-term borrowings (1) 60,822 60,822 60,822 — —Other borrowings 29,998 30,221 — — 30,221Accrued interest payable (1) 1,203 1,203 1,203 — — Off-balance sheet financial instruments: Commitments to extend credit and‎outstanding letters of credit — — — — — Fair Value Measurements at December 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3Financial assets: Cash and cash equivalents (1)$ 111,693 $ 111,693 $ 111,693 $ — $ —Loans receivable, net 1,397,582 1,493,480 — — 1,493,480Mortgage servicing rights 337 476 — — 476Regulatory stock (1) 3,981 3,981 3,981 — —Bank owned life insurance (1) 39,608 39,608 39,608 — —Accrued interest receivable (1) 6,232 6,232 6,232 — — Financial liabilities: Deposits 1,535,385 1,540,661 1,001,554 — 539,107Short-term borrowings (1) 63,303 63,303 63,303 — —Other borrowings 42,459 43,452 — — 43,452Accrued interest payable (1) 1,601 1,601 1,601 — — Off-balance sheet financial instruments: Commitments to extend credit and‎outstanding letters of credit — — — — — (1) This financial instrument is carried at cost, which approximates the fair value of the instrument.

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Accumulated Other Comprehensive Income (Tables)	12 Months Ended
	Dec. 31, 2021
Accumulated Other Comprehensive Income [Abstract]
Summary of Changes In Accumulated Other Comprehensive Income (Loss)	Unrealized gains on available for sale securities (a) Unrealized gain on pension liability (a) Total (a)Balance as of December 31, 2020$ 4,096 $ 1,023 $ 5,119Other comprehensive income (loss) before reclassification (5,476) 174 (5,302)Amount reclassified from accumulated other comprehensive loss (73) — (73)Total other comprehensive income (5,549) 174 (5,375)Balance as of December 31, 2021$ (1,453) $ 1,197 $ (256) Unrealized gains on available for sale securities (a) Unrealized gain on pension liability (a) Balance as of December 31, 2019$ 354 $ 833 $ 1,187Other comprehensive income (loss) before reclassification 3,798 190 3,988Amount reclassified from accumulated other comprehensive loss (56) — (56)Total other comprehensive 3,742 190 3,932Balance as of December 31, 2020$ 4,096 $ 1,023 $ 5,119 (a) All amounts are net of tax. Amounts in parentheses indicate debits.
Significant Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Income (Loss)	Amount Reclassified From Accumulated Affected Line Item in Other Consolidated Comprehensive Statements ofDetails about other comprehensive income Income (a) Income Twelve months Twelve months ended ended December 31, December 31, 2021 2020 Unrealized gains on available for sale securities $ 92 $ 71 Net realized gains on sales of securities (19) (15) Income tax expense $ 73 $ 56 (a)Amounts in parentheses indicate debits to net income.

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank. (Tables)	12 Months Ended
	Dec. 31, 2021
Business Acquisition [Line Items]
Future Amortization Expense	2022$ 1012023 852024 692025 542026 38Thereafter 60 $ 407
UpState New York Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Summary of Purchase	(Dollars in Thousands, Except Per Share Data) Purchase Price Consideration in Common StockUpState New York Bancorp, Inc. common shares settled for stock 1,987,206 Exchange Ratio 0.9390 Norwood Financial Corp shares issued 1,865,738 Value assigned to each Norwood Financial Corp common share$ 24.30 Purchase price assigned to UpState New York Bancorp, Inc. common shares $ 45,337 exchanged for Norwood Financial Corp shares Purchase Price Consideration - Cash for Common Stock UpState New York Bancorp, Inc. shares exchanged for cash, excluding fractional shares 220,794 Purchase price paid to each UpState New York Bancorp, Inc. common share exchanged for cash$ 33.33 Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for cash $ 7,359Purchase price additional cash consideration per share 1,479Purchase price consideration - Cash-in-lieu of Fractional Shares 6Total Purchase Price $ 54,181 Net Assets Acquired: UpState New York Bancorp, Inc. shareholders' equity$ 44,803 UpState New York Bancorp, Inc. goodwill and intangibles - Total tangible equity 44,803 Adjustments to reflect assets acquired at fair value: Investments (112) Loans Interest rate 3,982 General credit (10,529) Specific credit - non-amortizing (5,213) Specific credit - amortizing (1,724) Core deposit intangible 409 Deferred loan fees (812) Premises and equipment (1,211) Allowance for loan and lease losses 5,982 Deferred tax assets 3,730 Other (48) Adjustments to reflect liabilities acquired at fair value: Time deposits (3,011) Net assets acquired 36,246Goodwill resulting from merger $ 17,935
Schedule of Business Acquisitions, by Acquisition	(In Thousands) Total purchase price $ 54,181 Net assets acquired: Cash$ 24,037 Securities available for sale 13,836 Loans 405,221 Premises and equipment, net 4,318 Regulatory stock 2,487 Accrued interest receivable 1,426 Core deposit intangible 564 Other assets 5,398 Deposits (414,370) Accrued interest payable (175) Other liabilities (6,496) Total identifiable net assets acquired 36,246 Goodwill resulting from UpState New York Bancorp, Inc. Merger $ 17,935
Future Amortization Expense	(In thousands) 2022$632023 562024 482025 41After five years 93 $301
Proforma	Actual From Acquisition Date Through December 31,2020 (in thousands) Net interest income after provision for loan losses$ 7,291Noninterest income$ 313
Nonrecurring Adjustments	Pro Forma Twelve Months Ended December 31,(In Thousands, Except Per Share Data) 2020Net interest income after provision for loan losses $ 52,897Noninterest income 8,726Net income 20,613Pro forma earnings per share: Basic $ 2.52 Diluted $ 2.52

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Risks and Uncertainties (Tables)	12 Months Ended
	Dec. 31, 2021
Risks and Uncertainties [Abstract]
Summary of Loan Forbearance	Loan Type Number of‎Loans Balance ‎(in thousands) Real Estate Loans: Residential 118 $ 10,883 Commercial 385 218,984 Agricultural 16 5,267 Construction 24 4,125 Commercial 186 23,801 Other agricultural loans — - Consumer loans to individuals 486 11,130 Total 1,215 $ 274,190

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Norwood Financial Corp (Parent Company Only) Financial Information (Tables) - Parent Company [Member]	12 Months Ended
	Dec. 31, 2021
Condensed Financial Statements, Captions [Line Items]
Parent Company Only – Balance Sheets	BALANCE SHEETS December 31, 2021 2020 (In Thousands)ASSETS Cash on deposit in bank subsidiary $ 1,511 $ 854Investment in bank subsidiary 204,547 195,035Other assets 2,472 2,337 Total assets $ 208,530 $ 198,226LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities $ 3,268 $ 3,441Stockholders’ equity 205,262 194,785 Total liabilities and stockholders' equity $ 208,530 $ 198,226
Parent Company Only – Statements of Income	STATEMENTS OF INCOME Years Ended December 31, 2021 2020Income: (In Thousands)Dividends from bank subsidiary $ 10,697 $ 15,319 Expenses 627 1,704 10,070 13,615Income tax benefit (171) (180) 10,241 13,795Equity in undistributed earnings of subsidiary 14,674 1,285Net Income $ 24,915 $ 15,080Comprehensive Income $ 19,540 $ 19,012
Parent Company Only – Statements of Cash Flows	STATEMENTS OF CASH FLOWS Years Ended December 31, 2021 2020 (In Thousands)CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 24,915 $ 15,080Adjustments to reconcile net income to net cash provided by operating activities: Undistributed earnings of bank subsidiary (14,674) (1,285)Other, net (129) 28Net Cash Provided by Operating Activities 10,112 13,823 CASH FLOWS FROM INVESTING ACTIVITIES Outlays for business combinations — (8,844)Net Cash (Used in) Provided by Investing Activities — (8,844) CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 394 268 Sale of treasury stock for ESOP 130 130 Acquisition of treasury stock (1,440) (108) Cash dividends paid (8,539) (7,263)Net Cash Used in Financing Activities (9,455) (6,973)Net Increase (Decrease) in Cash and Cash Equivalents 657 (1,994) CASH AND CASH EQUIVALENTS - BEGINNING 854 2,848CASH AND CASH EQUIVALENTS - ENDING $ 1,511 $ 854

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Nature of Operations (Revenue) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Noninterest Income (in scope of Topic 606)	$ 6,985	$ 6,209
Net realized gains on sales of securities	92	71
Loan servicing fees	130	128
Gain on sales of loans	177	527
Earnings on and proceeds from bank-owned life insurance	941	845
Noninterest Income (out-of-scope of Topic 606)	1,340	1,571
Total other income	8,325	7,780
Service Charges On Deposit Accounts [Member]
Noninterest Income (in scope of Topic 606)	398	377
ATM Fees [Member]
Noninterest Income (in scope of Topic 606)	443	457
Overdraft Fees [Member]
Noninterest Income (in scope of Topic 606)	1,029	985
Safe Deposit Box Rental [Member]
Noninterest Income (in scope of Topic 606)	100	102
Loan Related Service Fees [Member]
Noninterest Income (in scope of Topic 606)	1,238	1,288
Debit Card [Member]
Noninterest Income (in scope of Topic 606)	2,228	1,656
Fiduciary Activities [Member]
Noninterest Income (in scope of Topic 606)	748	682
Commissions On Mutual Funds And Annuities [Member]
Noninterest Income (in scope of Topic 606)	127	122
Other Income [Member]
Noninterest Income (in scope of Topic 606)	$ 674	$ 540

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Summary of Significant Accounting Policies (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Jul. 07, 2020
Summary of Significant Accounting Policies [Abstract]
Regulatory Stock, Par Value	$ 100
Impairment of investments	$ 0
Loan servicing assets, impairment	0	$ 0
Servicing Assets	289,000	337,000
Goodwill	29,266,000	29,290,000	$ 17,935,000
Goodwill, Impairment Loss	0	0
Intangible Assets, Net (Excluding Goodwill)	407,000	530,000
Finite-Lived Intangible Assets, Accumulated Amortization	$ 1,347,000	1,224,000
Finite-Lived Intangible Asset, Useful Life	10 years
Amortization of Intangibles	$ 123,000	114,000
Unrecognized Tax Benefits	0	$ 0
Unrecognized tax benefits expected within next twelve months	$ 0

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Summary of Significant Accounting Policies (Schedule of Estimated Useful Lives ) (Details)	12 Months Ended
	Dec. 31, 2021
Minimum [Member] | Buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Minimum [Member] | Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member] | Buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Maximum [Member] | Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years

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Summary of Significant Accounting Policies (Schedule of Estimated Future Amortization Expense for the Core Deposit Intangible) (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Summary of Significant Accounting Policies [Abstract]
2022	$ 101
2023	85
2024	69
2025	54
2026	38
Thereafter	60
Amortization Expense for the Core Deposit Intangible, Total	$ 407

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Securities (Narrative) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) security	Dec. 31, 2020 USD ($)
Securities [Abstract]
Debt securities in unrealized loss position in the less than twelve months category | security	137
Debt securities in unrealized loss position in the twelve months or more category | security	3
Impairment of investments	$ 0
Available-for-sale Securities Pledged as Collateral	339,769,000	$ 199,361,000
Available-for-sale Securities, Gross Realized Gain (Loss)	92,000	71,000
Available-for-sale Securities, Gross Realized Losses	0	0
Proceeds from Sale of Available-for-sale Securities	$ 11,366,000	$ 24,497,000

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Securities (Schedule of Amortized Cost Gross Unrealized Gains and Losses, and Fair Values of Securities) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	$ 408,620
Available for Sale, Fair Value	406,782	$ 226,586
Fixed income [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	408,620	221,401
Available for Sale, Gross Unrealized Gains	2,951	5,241
Available for Sale, Gross Unrealized Losses	(4,789)	(56)
Available for Sale, Fair Value	406,782	226,586
US Treasury Securities [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	19,550
Available for Sale, Gross Unrealized Gains	6
Available for Sale, Gross Unrealized Losses	(205)
Available for Sale, Fair Value	19,351
U.S. Government Agencies [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	16,251	3,998
Available for Sale, Gross Unrealized Gains	24
Available for Sale, Gross Unrealized Losses	(264)	(29)
Available for Sale, Fair Value	16,011	3,969
States And Political Subdivisions [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	145,107	70,672
Available for Sale, Gross Unrealized Gains	2,155	2,419
Available for Sale, Gross Unrealized Losses	(1,395)
Available for Sale, Fair Value	145,867	73,091
Corporate Obligations [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total		3,019
Available for Sale, Gross Unrealized Gains		13
Available for Sale, Fair Value		3,032
Mortgage-backed Securities-Government Sponsored Entities [Member]
Schedule of Investments [Line Items]
Available for Sale, Amortized Cost, Total	227,712	143,712
Available for Sale, Gross Unrealized Gains	766	2,809
Available for Sale, Gross Unrealized Losses	(2,925)	(27)
Available for Sale, Fair Value	$ 225,553	$ 146,494

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Securities (Schedule of Investments' Gross Unrealized Losses and Fair Value Aggregated by Security Type and Length of Time that Individual Securities have been in a Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
US Treasury Securities [Member]
Schedule of Investments [Line Items]
Less than 12 Months, Fair Value	$ 18,361
Less than 12 Months, Unrealized Losses	(205)
Total, Fair Value	18,361
Total, Unrealized Losses	(205)
U.S. Government Agencies [Member]
Schedule of Investments [Line Items]
Less than 12 Months, Fair Value	7,912	$ 3,969
Less than 12 Months, Unrealized Losses	(109)	(29)
12 Months or More, Fair Value	3,843
12 Months or More, Unrealized Losses	(155)
Total, Fair Value	11,755	3,969
Total, Unrealized Losses	(264)	(29)
States And Political Subdivisions [Member]
Schedule of Investments [Line Items]
Less than 12 Months, Fair Value	74,658
Less than 12 Months, Unrealized Losses	(1,395)
Total, Fair Value	74,658
Total, Unrealized Losses	(1,395)
Mortgage-backed Securities-Government Sponsored Entities [Member]
Schedule of Investments [Line Items]
Less than 12 Months, Fair Value	170,647	4,980
Less than 12 Months, Unrealized Losses	(2,856)	(27)
12 Months or More, Fair Value	2,919
12 Months or More, Unrealized Losses	(69)
Total, Fair Value	173,566	4,980
Total, Unrealized Losses	(2,925)	(27)
Fixed income [Member]
Schedule of Investments [Line Items]
Less than 12 Months, Fair Value	271,578	8,949
Less than 12 Months, Unrealized Losses	(4,565)	(56)
12 Months or More, Fair Value	6,762
12 Months or More, Unrealized Losses	(224)
Total, Fair Value	278,340	8,949
Total, Unrealized Losses	$ (4,789)	$ (56)

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Securities (Schedule of Amortized Cost and Fair Value Of Debt Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Securities [Abstract]
Available for Sale, Amortized Cost, Due in one year or less	$ 1,086
Available for Sale, Amortized Cost, Due after one year through five years	11,268
Available for Sale, Amortized Cost, Due after five years through ten years	54,965
Available for Sale, Amortized Cost, Due after ten years	113,589
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis, Total	180,908
Available for Sale, Amortized Cost, Mortgage-backed securities-government sponsored agencies	227,712
Available for Sale, Amortized Cost, Total	408,620
Available for Sale, Fair Value, Due in one year or less	1,093
Available for Sale, Fair Value, Due after one year through five years	11,488
Available for Sale, Fair Value, Due after five years through ten years	54,392
Available for Sale, Fair Value, Due after ten years	114,256
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Total	181,229
Available for Sale, Fair Value, Mortgage-backed securities-government sponsored agencies	225,553
Available for Sale, Fair Value, Total	$ 406,782	$ 226,586

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Loans Receivable and Allowance for Loan Losses (Narrative) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) loan property	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Payments for Origination of Mortgage Loans Held-for-sale	$ 8,616,000	$ 12,312,000
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	0
Financing Receivable, Modifications, Post-Modification Recorded Investment	0
Financing Receivable, Troubled Debt Restructuring	0	0
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	0	20,000
Loans acquired with credit deterioration	15,410,000
Real Estate Acquired Through Foreclosure	1,742,000	965,000
Annual Loan Review threshold, amount	1,500,000
Loans and Leases Receivable, Gross	1,356,040,000	1,412,289,000
Proceeds from Sale of Mortgage Loans Held-for-sale	8,616,000	12,312,000
Allowance for Loan and Lease Losses, Adjustments, Other	1,500,000	2,300,000
Allowance for Loan and Lease Losses, Period Increase (Decrease)	3,292,000	4,641,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	35,000	286,000
Allowance for Loan and Lease Losses, Real Estate	16,442,000	13,150,000	$ 8,509,000
Servicing Asset at Amortized Cost	65,400,000	72,500,000
Outstanding Balance	12,862,000	15,570,000
Hospitality Lodging Industry [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	$ 0	0
Residential Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number Of Properties Under Foreclosure Proceedings | loan	5
Mortgage Loans in Process of Foreclosure, Amount	$ 532,000
Loans and Leases Receivable, Gross	273,040,000	263,127,000
Proceeds from Sale of Mortgage Loans Held-for-sale	8,793,000	12,839,000
Gross Realized Gains on Loans	177,000	527,000
Gross Realized Losses on Loans	0	0
Residential Real Estate Loans [Member] | Hospitality Lodging Industry [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 116,300,000
Concentration Risk, Percentage	8.60%
Commercial Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number Of Properties Under Foreclosure Proceedings | property	2
Loans and Leases Receivable, Gross	$ 628,724,000	579,104,000
Commercial Real Estate Loans [Member] | Commercial Rentals [Member] | Loans Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 135,700,000
Concentration Risk, Percentage	10.00%
Troubled Debt Restructured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment		75,000
PPP Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 15,209,000	95,043,000
Fee income	2,900,000	2,300,000
UpState New York Bancorp, Inc. [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Assets, Fair Value Adjustment	6,937,000
Outstanding Balance	15,410,000
COVID [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for Loan and Lease Losses, Period Increase (Decrease)	$ 1,400,000	$ 2,200,000

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Loans Receivable and Allowance for Loan Losses (Composition of the Loan Portfolio) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 1,356,040	$ 1,412,289
Deferred fees, net	(1,109)	(1,557)
Total loans receivable	1,354,931	1,410,732
Allowance for loan losses	(16,442)	(13,150)	$ (8,509)
Net loans receivable	$ 1,338,489	$ 1,397,582
Percent of Loans	100.00%	100.00%
Residential Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 273,040	$ 263,127
Allowance for loan losses	$ (2,175)	$ (1,960)	(1,552)
Percent of Loans	20.10%	18.60%
Commercial Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 628,724	$ 579,104
Allowance for loan losses	$ (10,878)	$ (8,004)	(4,687)
Percent of Loans	46.40%	41.00%
Agricultural Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 61,925	$ 66,334
Percent of Loans	4.60%	4.70%
Construction Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 21,990	$ 21,005
Allowance for loan losses	$ (133)	$ (150)	(95)
Percent of Loans	1.60%	1.50%
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 186,031	$ 283,741
Allowance for loan losses	$ (1,490)	$ (1,360)	(949)
Percent of Loans	13.70%	20.10%
Other Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 37,930	$ 40,929
Percent of Loans	2.80%	2.90%
Consumer Loans To Individuals [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 146,400	$ 158,049
Allowance for loan losses	$ (1,766)	$ (1,676)	$ (1,226)
Percent of Loans	10.80%	11.20%

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Loans Receivable and Allowance for Loan Losses (Information Regarding Loans Acquired and Accounted for in Accordance with ASC 310-30) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loans Receivable and Allowance for Loan Losses [Abstract]
Outstanding Balance	$ 12,862	$ 15,570
Carrying Amount	$ 8,304	$ 9,281

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Loans Receivable and Allowance for Loan Losses (Changes in the Accretable Yield for Purchased Credit Impaired Loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Loans Receivable and Allowance for Loan Losses [Abstract]
Balance at beginning of period	$ 1,365
Additions		1,724
Accretion	(880)	(353)
Reclassification and other	1,399	(6)
Balance at end of period	$ 1,884	$ 1,365

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Loans Receivable and Allowance for Loan Losses (Components of Purchase Accounting Adjustments Related to Purchased Credit-impaired Loans Acquired) (Details) $ in Thousands	Jul. 07, 2020 USD ($)
Loans Receivable and Allowance for Loan Losses [Abstract]
Contractually required principal and interest	$ 15,410
Non-accretable discount	(5,213)
Expected cash flows	10,197
Accretable discount	(1,724)
Estimated fair value	$ 8,473

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Loans Receivable and Allowance for Loan Losses (Summary of Amount of Loans in Each Category that were Individually and Collectively Evaluated for Impairment) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 1,674	$ 2,662
Loans acquired with deteriorated credit quality	8,304	9,281
Collectively evaluated for impairment	1,346,062	1,400,346
Total Loans	1,356,040	1,412,289
Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	8,304	9,281
Residential Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans acquired with deteriorated credit quality	784	591
Collectively evaluated for impairment	272,256	262,536
Total Loans	273,040	263,127
Residential Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	784	591
Commercial Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	1,658	2,582
Loans acquired with deteriorated credit quality	3,285	3,995
Collectively evaluated for impairment	623,781	572,527
Total Loans	628,724	579,104
Commercial Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,285	3,995
Agricultural Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans acquired with deteriorated credit quality	1,918	2,043
Collectively evaluated for impairment	60,007	64,291
Total Loans	61,925	66,334
Agricultural Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,918	2,043
Construction Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans acquired with deteriorated credit quality		194
Collectively evaluated for impairment	21,990	20,811
Total Loans	21,990	21,005
Construction Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans		194
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	16	80
Loans acquired with deteriorated credit quality	198	246
Collectively evaluated for impairment	185,817	283,415
Total Loans	186,031	283,741
Commercial [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	198	246
Other Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans acquired with deteriorated credit quality	2,119	2,212
Collectively evaluated for impairment	35,811	38,717
Total Loans	37,930	40,929
Other Agricultural Loans [Member] | Purchased Credit-Impaired [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,119	2,212
Consumer Loans To Individuals [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collectively evaluated for impairment	146,400	158,049
Total Loans	$ 146,400	$ 158,049

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Loans Receivable and Allowance for Loan Losses (Impaired Loans and Related Interest Income by Loan Portfolio Class) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, Total	$ 2,376	$ 2,121
Interest Income Recognized, Total	164	14
Impaired Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	157	2,662
Impaired Financing Receivable, with Related Allowance, Recorded Investment	1,517
Impaired Financing Receivable, Recorded Investment	1,674	2,662
Unpaid Principal Balance, With no related allowance recorded	157	3,314
Unpaid Principal Balance, With an allowance recorded	1,517
Unpaid Principal Balance, Total	1,674	3,314
Associated Allowance	272
Commercial Real Estate Loans [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, Total	2,358	2,105
Interest Income Recognized, Total	157	14
Commercial Real Estate Loans [Member] | Impaired Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	16	2,582
Impaired Financing Receivable, Recorded Investment	16	2,582
Unpaid Principal Balance, With no related allowance recorded	16	3,234
Unpaid Principal Balance, Total	16	3,234
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, Total	18	16
Interest Income Recognized, Total	7
Commercial [Member] | Impaired Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	141	80
Impaired Financing Receivable, with Related Allowance, Recorded Investment	1,517
Impaired Financing Receivable, Recorded Investment	1,658	80
Unpaid Principal Balance, With no related allowance recorded	141	80
Unpaid Principal Balance, With an allowance recorded	1,517
Unpaid Principal Balance, Total	1,658	$ 80
Associated Allowance	$ 272

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Loans Receivable and Allowance for Loan Losses (Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	$ 440,906	$ 441,425
Nonperforming [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	524	756
Summarized by Aggregate Risk Rating [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	914,610	970,108
Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	900,036	943,427
Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	5,555	14,680
Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	8,747	12,001
Doubtful Or Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount		0
Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	272	0
Summarized by Performance of Individual Credits [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	441,430	442,181
Commercial Real Estate Loans [Member] | Summarized by Aggregate Risk Rating [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	628,724	579,104
Commercial Real Estate Loans [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	618,541	566,418
Commercial Real Estate Loans [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	5,146	6,346
Commercial Real Estate Loans [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	4,765	6,340
Commercial Real Estate Loans [Member] | Doubtful Or Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount		0
Commercial Real Estate Loans [Member] | Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	272	0
Agricultural Real Estate Loans [Member] | Summarized by Aggregate Risk Rating [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	61,925	66,334
Agricultural Real Estate Loans [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	60,193	58,322
Agricultural Real Estate Loans [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount		5,111
Agricultural Real Estate Loans [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	1,732	2,901
Commercial [Member] | Summarized by Aggregate Risk Rating [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	186,031	283,741
Commercial [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	185,729	282,915
Commercial [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	199	437
Commercial [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	103	389
Commercial [Member] | Doubtful Or Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount		0
Commercial [Member] | Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount		0
Other Agricultural Loans [Member] | Summarized by Aggregate Risk Rating [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	37,930	40,929
Other Agricultural Loans [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	35,573	35,772
Other Agricultural Loans [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	210	2,786
Other Agricultural Loans [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	2,147	2,371
Other Agricultural Loans [Member] | Doubtful Or Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount
Other Agricultural Loans [Member] | Loss [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount
Residential Real Estate Loans [Member] | Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	272,571	262,556
Residential Real Estate Loans [Member] | Nonperforming [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	469	571
Residential Real Estate Loans [Member] | Summarized by Performance of Individual Credits [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	273,040	263,127
Construction Real Estate Loans [Member] | Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	21,990	21,005
Construction Real Estate Loans [Member] | Nonperforming [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount
Construction Real Estate Loans [Member] | Summarized by Performance of Individual Credits [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	21,990	21,005
Consumer Loans To Individuals [Member] | Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	146,345	157,864
Consumer Loans To Individuals [Member] | Nonperforming [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	55	185
Consumer Loans To Individuals [Member] | Summarized by Performance of Individual Credits [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Amount	$ 146,400	$ 158,049

XML

Loans Receivable and Allowance for Loan Losses (Loan Portfolio Summarized by the Past Due Status) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, Past Due [Line Items]
Total Loans	$ 1,356,040	$ 1,412,289
Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual	643	3,391
Total Past Due and Non-Accrual	1,208	5,434
Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	8,304	9,281
Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	1,346,528	1,397,574
Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	431	1,656
Financing Receivables, 61 to 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	134	387
Financing Receivables, Greater than 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	91
Residential Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	273,040	263,127
Residential Real Estate Loans [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual	469	571
Total Past Due and Non-Accrual	634	1,130
Residential Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	784	591
Residential Real Estate Loans [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	271,622	261,406
Residential Real Estate Loans [Member] | Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	155	355
Residential Real Estate Loans [Member] | Financing Receivables, 61 to 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	10	204
Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	628,724	579,104
Commercial Real Estate Loans [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual	103	1,674
Total Past Due and Non-Accrual	103	1,733
Commercial Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	3,285	3,995
Commercial Real Estate Loans [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	625,336	573,376
Commercial Real Estate Loans [Member] | Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due		59
Agricultural Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	61,925	66,334
Agricultural Real Estate Loans [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual		676
Total Past Due and Non-Accrual	25	676
Agricultural Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	1,918	2,043
Agricultural Real Estate Loans [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	59,982	63,615
Agricultural Real Estate Loans [Member] | Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	25
Construction Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	21,990	21,005
Construction Real Estate Loans [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans		194
Construction Real Estate Loans [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	21,990	20,811
Commercial [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	186,031	283,741
Commercial [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual	16	22
Total Past Due and Non-Accrual	32	1,121
Commercial [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	198	246
Commercial [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	185,801	282,374
Commercial [Member] | Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	3	1,009
Commercial [Member] | Financing Receivables, 61 to 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	13	90
Commercial [Member] | Financing Receivables, Greater than 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	91
Other Agricultural Loans [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	37,930	40,929
Other Agricultural Loans [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual		263
Total Past Due and Non-Accrual		263
Other Agricultural Loans [Member] | Purchased Credit-Impaired [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	2,119	2,212
Other Agricultural Loans [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	35,811	38,454
Consumer Loans To Individuals [Member]
Financing Receivable, Past Due [Line Items]
Total Loans	146,400	158,049
Consumer Loans To Individuals [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Non-Accrual	55	185
Total Past Due and Non-Accrual	414	511
Consumer Loans To Individuals [Member] | Financing Receivables, 1 to 30 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	145,986	157,538
Consumer Loans To Individuals [Member] | Financing Receivables, 31 to 60 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due	248	233
Consumer Loans To Individuals [Member] | Financing Receivables, 61 to 90 Days Past Due [Member] | Company Originated [Member]
Financing Receivable, Past Due [Line Items]
Past Due and still accruing	$ 111	$ 93

XML

Loans Receivable and Allowance for Loan Losses (Allowance for Loan Losses and Recorded Investment in Financing Receivables) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	$ 13,150	$ 8,509
Charge Offs	(1,149)	(942)
Recoveries	241	133
Provision for loan losses	4,200	5,450
Ending balance,	16,442	13,150
Ending balance individually evaluated for impairment	272
Ending balance collectively evaluated for impairment	16,170	13,150
Residential Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	1,960	1,552
Charge Offs	(17)	(41)
Recoveries	74	6
Provision for loan losses	158	443
Ending balance,	2,175	1,960
Ending balance individually evaluated for impairment
Ending balance collectively evaluated for impairment	2,175	1,960
Commercial Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	8,004	4,687
Charge Offs	(452)	(452)
Recoveries	19	39
Provision for loan losses	3,307	3,730
Ending balance,	10,878	8,004
Ending balance individually evaluated for impairment	272
Ending balance collectively evaluated for impairment	10,606	8,004
Construction Real Estate Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	150	95
Charge Offs
Recoveries
Provision for loan losses	(17)	55
Ending balance,	133	150
Ending balance individually evaluated for impairment
Ending balance collectively evaluated for impairment	133	150
Commercial [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	1,360	949
Charge Offs	(200)	(18)
Recoveries	49	44
Provision for loan losses	281	385
Ending balance,	1,490	1,360
Ending balance individually evaluated for impairment
Ending balance collectively evaluated for impairment	1,490	1,360
Consumer Loans To Individuals [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance,	1,676	1,226
Charge Offs	(480)	(431)
Recoveries	99	44
Provision for loan losses	471	837
Ending balance,	1,766	1,676
Ending balance individually evaluated for impairment
Ending balance collectively evaluated for impairment	$ 1,766	$ 1,676

XML

Premises and Equipment (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Premises and Equipment [Abstract]
Depreciation expense	$ 1,481	$ 1,322

XML

Premises and Equipment (Components of Premises and Equipment) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 35,908	$ 35,140
Accumulated depreciation	(18,619)	(17,326)
Property, Plant and Equipment, Net, Total	17,289	17,814
Land and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,879	3,878
Buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	21,846	21,545
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 10,183	$ 9,717

XML

Deposits (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deposits:
Time Deposits, $250,000 or More	$ 257,238	$ 205,376

XML

Deposits (Schedule of Maturities of Time Deposits) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deposits:
2022	$ 406,331
2023	70,921
2024	30,978
2025	10,533
2026	9,939
Time Deposits, Total	$ 528,702	$ 533,831

XML

Borrowings (Narrative) (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Available-for-sale Securities Pledged as Collateral	$ 339,769,000	$ 199,361,000
FHLB of Pittsburgh [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	150,000,000
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	607,092,000
Advances from Federal Home Loan Banks	29,998,000
Outstanding letter of credit amount	127,850,000
Atlantic Community Bankers Bank [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	0	0
Line of Credit Facility, Maximum Borrowing Capacity	7,000,000
PNC Bank [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	0	0
Line of Credit Facility, Maximum Borrowing Capacity	16,000,000
Zion Bank [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	0	0
Line of Credit Facility, Maximum Borrowing Capacity	17,000,000
Securities Sold under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Available-for-sale securities pledged as collateral, amortized cost	66,353,000	63,462,000
Available-for-sale Securities Pledged as Collateral	$ 65,162,000	$ 64,429,000

XML

Borrowings (Short-Term Borrowings) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Short-term Debt [Line Items]
Short-term borrowings	$ 60,822	$ 63,303
Securities Sold under Agreements to Repurchase [Member]
Short-term Debt [Line Items]
Short-term borrowings	$ 60,822	$ 63,303

XML

Borrowings (Outstanding Balances and Related Information of Short-Term Borrowings) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Borrowings [Abstract]
Short-term Debt, Average Balance During the Year	$ 73,810	$ 57,014
Short-term Debt, Average Interest Rate During the Year	0.39%	0.55%
Short-term Debt, Maximum Month-end Balance During The Year	$ 90,409	$ 69,294
Short-term Debt, Weighted Average Interest Rate at the End of the Year	0.34%	0.43%

XML

Borrowings (Collateral Pledged for Repurchase Agreements) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets Sold under Agreements to Repurchase [Line Items]
Available-for-sale Securities Pledged as Collateral	$ 339,769	$ 199,361
Short-term Borrowings	60,822	63,303
Mortgage-backed Securities-Government Sponsored Entities [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Available-for-sale Securities Pledged as Collateral	65,162	64,429
Maturity Overnight [Member] | Mortgage-backed Securities-Government Sponsored Entities [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Available-for-sale Securities Pledged as Collateral	65,162	64,429
Securities Sold under Agreements to Repurchase [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Available-for-sale Securities Pledged as Collateral	65,162	64,429
Short-term Borrowings	$ 60,822	$ 63,303

XML

Borrowings (Other Borrowings) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 29,998	$ 42,459
Amortizing fixed rate borrowing due March 2022 at 1.75% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 227	1,126
Debt Instrument, Interest Rate, Stated Percentage	1.75%
Amortizing fixed rate borrowing due August 2022 at 1.94% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 1,364	3,376
Debt Instrument, Interest Rate, Stated Percentage	1.94%
Amortizing fixed rate borrowing due October 2022 at 1.88% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 1,386	3,021
Debt Instrument, Interest Rate, Stated Percentage	1.88%
Amortizing fixed rate borrowing due October 2023 at 3.24% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 3,856	5,865
Debt Instrument, Interest Rate, Stated Percentage	3.24%
Amortizing fixed rate borrowing due December 2023 at 3.22% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 2,097	3,096
Debt Instrument, Interest Rate, Stated Percentage	3.22%
Fixed Rate Term Borrowing Due December 2023 At 1.95% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 10,000	10,000
Debt Instrument, Interest Rate, Stated Percentage	1.95%
Amortizing Fixed Rate Borrowing Due December 2023 At 1.73% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 5,190	7,616
Debt Instrument, Interest Rate, Stated Percentage	1.73%
Amortizing Fixed Rate Borrowing Due April 2024 At 0.91% [Member]
Debt Instrument [Line Items]
Long-term Federal Home Loan Bank Advances	$ 5,878	$ 8,359
Debt Instrument, Interest Rate, Stated Percentage	0.91%

XML

Borrowings (Contractual Maturities of Other Borrowings) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Borrowings [Abstract]
2022	$ 2,977
2023	21,143
2024	5,878
Long-term Federal Home Loan Bank Advances, Total	$ 29,998	$ 42,459

XML

Operating Leases (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($)
Operating Leases [Abstract]
Number of operating leases | item	8
Lease, Cost	$ 587	$ 571
Right-of-use assets	$ 4,511	$ 4,938
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Prepaid Expense and Other Assets	Prepaid Expense and Other Assets
Operating Lease, Liability	$ 4,577	$ 4,984
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities

XML

Operating Leases (Lease Cost) (Details)	Dec. 31, 2021
Operating Leases [Abstract]
Weighted-average remaining term	11 years 6 months
Weighted-average discount rate	2.95%

XML

Operating Leases (Undiscounted Cash Flows Due) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Operating Leases [Abstract]
2022	$ 546
2023	535
2024	543
2025	561
2026	504
2026 and thereafter	2,815
Total undiscounted cash flows	5,504
Discount on cash flows	(927)
Total lease liabilities	$ 4,577	$ 4,984
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities

XML

Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	15.00%
Defined Contribution Plan, Employer Contributions, Vesting Period	5 years
Defined Contribution Plan, Cost	$ 1,135	$ 1,049
Defined Benefit Plan, Benefit Obligation	7,622	8,065	$ 7,515
Defined Benefit Plan, Net Periodic Benefit Cost	(171)	(100)
Defined Benefit Plan, Benefits Paid	523	$ 532
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	460
Defined Benefit Plan, Expected Future Benefit Payments, Year Five	431
Defined Benefit Plan, Expected Future Benefit Payments, Year Four	441
Defined Benefit Plan, Expected Future Benefit Payments, Year Three	437
Defined Benefit Plan, Expected Future Benefit Payments, Year Two	445
Defined Benefit Plan, Expected Future Benefit Payment	$ 2,055
Projected Benefit Obligation, Projected Discount Rate	2.93%	2.63%
Change in Projected Benefit Obligation from Change in Projected Discount Rate	$ 280
Defined Benefit Plan, Accumulated Benefit Obligation	$ 7,622	$ 8,065
Defined Benefit Plan, Target Plan Asset Allocations	100.00%	100.00%
Accumulated Postretirement Benefit Obligation	$ 1,630	$ 1,477
Supplemental Employee Retirement Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Benefit Obligation	3,481	3,529
Pension and Other Postretirement Benefits Cost (Reversal of Cost)	364	495
Cash Surrender Value of Life Insurance	40,038	39,608
Defined Benefit Plan, Net Periodic Benefit Cost	153	86
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Net Periodic Benefit Cost	17	24
Defined Benefit Plan, Contributions by Employer	$ 17	$ 24
Defined Benefit Plan, Percentage of Plan Funded	116.60%	94.20%
Domestic equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	35.70%	31.60%
Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	35.00%	62.60%
Other Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	29.30%	5.80%
JPMCB LDI Diversified Balanced Fund [Member]
Defined Benefit Plan Disclosure [Line Items]
Investment concentration	100.00%	99.00%
Maximum [Member] | Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Contribution Percentage	5.00%
Commingled Pensions Trust Fund [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	10.00%
Commingled Pensions Trust Fund [Member] | Minimum [Member] | Global Equity, Global Fixed Income, Real Estate And Cash-Plus [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	35.00%
Commingled Pensions Trust Fund [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	65.00%
Commingled Pensions Trust Fund [Member] | Maximum [Member] | Global Equity, Global Fixed Income, Real Estate And Cash-Plus [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	90.00%
Delaware Bancshares, Inc. [Member] | Director Fee Deferral and Continuation Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Benefit Obligation	$ 5	$ 82
Pension and Other Postretirement Benefits Cost (Reversal of Cost)	$ 0	$ 2
Delaware Bancshares, Inc. [Member] | Director Fee Deferral and Continuation Plan [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Benefit Payment Period	5 years
Delaware Bancshares, Inc. [Member] | Director Fee Deferral and Continuation Plan [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Benefit Payment Period	15 years

XML

Employee Benefit Plans (Schedule of Projected Benefit Obligation and Changes in Plan Assets for the Defined Benefit Pension Plan) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Change in benefit obligation:
Projected benefit obligation at beginning of year	$ (8,065)	$ (7,515)
Service cost	(51)	(58)
Interest cost	(206)	(257)
Actuarial (gain) loss	177	(767)
Benefits paid	523	532
Benefit obligation at end of year	(7,622)	(8,065)
Change in plan assets:
Balance	7,744	6,853
Actual return on plan assets	474	1,416
Benefits paid	(527)	(525)
Fair value of plan assets at end of year	7,691	7,744
Funded status at end of year	$ 69	$ (321)

XML

Employee Benefit Plans (Schedule of Amounts Recognized in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Pension Plans And Other Postretirement Benefits [Abstract]
Gain	$ 220	$ 241
Total	$ 220	$ 241

XML

Employee Benefit Plans (Components of Net Pension Cost (Income)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Service cost benefits earned during the period	$ 51	$ 58
Interest cost on projected benefit obligation	206	257
Actual return on assets	(394)	(395)
Net amortization and deferral	(34)	(20)
Net periodic pension cost	(171)	(100)
Other Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic pension cost	$ 17	$ 24

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Employee Benefit Plans (Schedule of Weighted Average Assumptions Used to Determine the Benefit Obligation And the Net Periodic Cost) (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Pension Plans And Other Postretirement Benefits [Abstract]
Discount rate, benefit obligation	2.93%	2.63%
Discount rate, net periodic pension cost	2.63%	3.55%
Expected long-term return on plan assets	5.25%	6.00%

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Employee Benefit Plans (Schedule Of Target Asset Allocations) (Details)	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	100.00%	100.00%
Domestic equities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	35.70%	31.60%
Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	35.00%	62.60%
Other Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Target Plan Asset Allocations	29.30%	5.80%

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Employee Benefit Plans (Schedule of Changes in Level 3 Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Employee Benefit Plans [Abstract]
Balance	$ 7,744	$ 6,853
Balance	$ 7,691	$ 7,744

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Income Taxes (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward	$ 3,894
Net operating loss carryforward, expiration date	Dec. 31, 2036
Earliest Tax Year [Member]
Operating Loss Carryforwards [Line Items]
Open Tax Year	2018

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Income Taxes (Schedule of Components of the Provision for Federal Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Taxes [Abstract]
Current	$ 6,328	$ 7,754
Deferred	(383)	(4,468)
Income Tax Expense (Benefit), Total	$ 5,945	$ 3,286

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Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Taxes [Abstract]
Tax at statutory rates	21.00%	21.00%
Tax exempt interest income, net of interest expense disallowance	(1.90%)	(3.70%)
Non-deductible merger related expenses		1.10%
Earnings and proceeds on life insurance	(0.60%)	(1.00%)
Other	0.80%	0.50%
Effective Income Tax Rate, Continuing Operations, Total	19.30%	17.90%

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Income Taxes (Schedule of Deferred Tax Assets and Liabilties) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Income Taxes [Abstract]
Deferred tax assets, Allowance for loan losses	$ 3,855	$ 2,761
Deferred tax assets, Deferred compensation	817	758
Deferred tax assets, Core deposit intangible	231	230
Deferred tax assets, Prepaid expenses		20
Deferred tax assets, Pension liability	302	118
Deferred tax assets, Foreclosed real estate valuance allowance	19	17
Deferred tax assets, Net operating loss carryforward	913	893
Deferred Tax Assets, Purchase Price Adjustment	2,487	2,832
Deferred Tax Assets, Deferred loan fees		60
Deferred tax assets, Net unrealized loss on securities	386
Deferred tax assets, Other	404	747
Total Deferred Tax Assets	9,414	8,436
Deferred tax liabilities, Premises and equipment	1,004	920
Deferred tax liablities, Deferred loan fees	125
Deferred tax liabilities, Net unrealized gain on pension liability	318	272
Deferred Tax Liabilities, Net unrealized gain on securities		1,089
Total Deferred Tax Liabilities	1,447	2,281
Net Deferred Tax Asset	$ 7,967	$ 6,155

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Regulatory Matters and Stockholders' Equity (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2020
Regulatory Matters and Stockholders' Equity [Abstract]
Tier 1 capital (to risk weighted assets) For Capital Adequacy Purposes, Ratio	0.0600	0.0600
Common Equity Tier 1 capital (to risk-weighted assets) For Capital Adequacy Purposes, Ratio	0.0450	0.0450
Tier 1 capital (to average assets) For Capital Adequacy Purposes, Ratio	0.0400	0.0400
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments without Regulatory Approval	$ 42.7
Risk weight assigned to exposures	150.00%
Capital conservation buffer	2.50%

XML

Regulatory Matters and Stockholders' Equity (Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations) (Details) $ in Thousands	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Regulatory Matters and Stockholders' Equity [Abstract]
Total capital (to risk weighted assets), Amount	$ 191,469	$ 172,103
Total capital (to risk weighted assets) For Capital Adequacy Purposes, Amount	112,117	109,123
Total capital (to risk weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 140,146	$ 136,404
Total capital (to risk weighted assets), Ratio	0.1366	0.1262
Total capital (to risk weighted assets) For Capital Adequacy Purposes, Ratio	0.0800	0.0800
Total capital (to risk weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.1000	0.1000
Tier 1 capital (to risk weighted assets), Amount	$ 175,027	$ 158,953
Tier 1 capital (to risk weighted assets) For Capital Adequacy Purposes, Amount	84,087	81,842
Tier 1 capital (to risk weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 112,117	$ 109,123
Tier 1 capital (to risk weighted assets), Ratio	0.1249	0.1165
Tier 1 capital (to risk weighted assets) For Capital Adequacy Purposes, Ratio	0.0600	0.0600
Tier 1 capital (to risk weighted assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.0800	0.0800
Common Equity Tier 1 capital (to risk-weighted assets), amount	$ 175,027	$ 158,953
Common Equity Tier 1 capital (to risk-weighted assets), for Capital Adequacy Purposes, amount	63,066	61,382
Common Equity Tier 1 capital (to risk-weighted assets) to be Well Capitalized under Prompt Corrective Action Provision, amount	$ 91,095	$ 88,663
Common Equity Tier 1 capital (to risk-weighted assets), Ratio	0.1249	0.1165
Common Equity Tier 1 capital (to risk-weighted assets) For Capital Adequacy Purposes, Ratio	0.0450	0.0450
Common Equity Tier 1 capital (to risk-weighted assets) to be Well Capitalized under Prompt Corrective Action Provision	0.0650	0.0650
Tier 1 capital (to average assets), Amount	$ 175,027	$ 158,953
Tier 1 capital (to average assets) For Capital Adequacy Purposes, Amount	82,243	72,994
Tier 1 capital (to average assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 102,804	$ 91,243
Tier 1 capital (to average assets), Ratio	0.0851	0.0871
Tier 1 capital (to average assets) For Capital Adequacy Purposes, Ratio	0.0400	0.0400
Tier 1 capital (to average assets) To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.0500	0.0500

XML

Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Apr. 22, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price, min	$ 17.93
Exercise price, max	$ 36.02
Allocated Share-based Compensation Expense	$ 214	$ 204
Future compensation expense of non-vested restricted stock outstanding	953	1,202
Unrecognized Salaries And Employee Benefits Expense	$ 269	$ 214
Options, Granted	43,500	33,750
Compensation expense related to stock options	$ 214	$ 204
Share price	$ 25.99	$ 26.17
Proceeds from Stock Options Exercised	$ 394	$ 268
Stock Issued During Period Shares Stock Options Exercised	22,420	15,530
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 335	$ 334
Non-vested stock outstanding	32,030	39,135	36,195
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period Shares Stock Options Exercised	22,420	15,530
Norwood Financial Corp 2014 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				375,000
Shares available for awards	78,035
Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				63,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for awards	60,510
Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Officer [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for awards	75
Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				60,000
Shares available for awards	17,525
Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Outside Directors [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				12,000
Shares available for awards	25
Amended Norwood Financial Corp 2014 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options and restricted stock, granted	296,966
Amended Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Officer [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	62,700
Options and restricted stock, granted	62,625
Shares increased (decrased)	(300)
Amended Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Outside Directors [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	32,300
Options and restricted stock, granted	32,075
Shares increased (decrased)	20,300
Amended Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options and restricted stock, granted			191,865
Amended Norwood Financial Corp 2014 Equity Incentive Plan [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options and restricted stock, granted			10,400

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Stock-Based Compensation (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Stock-Based Compensation [Abstract]
Options, beginning of year	215,970	199,825
Options, Granted	43,500	33,750
Options, Exercised	(22,420)	(15,530)
Options, Forfeited	(10,975)	(2,075)
Options, end of year	226,075	215,970
Options, Exercisable, end of period	182,575	182,220
Weighted Average Exercise Price Per Share, Outstanding, beginning of period	$ 25.73	$ 24.78
Weighted Average Exercise Price Per Share, Granted	25.80	26.93
Weighted Average Exercise Price Per Share, Exercised	17.59	17.25
Weighted Average Exercise Price Per Share, Forfeited	29.48	16.83
Weighted Average Exercise Price Per Share, Outstanding, end of period	26.37	25.73
Weighted Average Exercise Price Per Share, Exercisable, end of period	$ 26.50	$ 25.51
Weighted Average Remaining Contractual Term, Outstanding	6 years 4 months 24 days
Aggregate Intrinsic Value, Outstanding, beginning of period	$ 742,738
Aggregate Intrinsic Value, Outstanding, end of period	520	$ 742,738
Aggregate Intrinsic Value, Exercisable at end of period	$ 511	$ 742,738

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Stock Based Compensation (Schedule of Fair Value Assumptions) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Stock-Based Compensation [Abstract]
Dividend yield	3.55%	3.55%
Expected life	10 years	10 years
Expected volatility	34.69%	34.15%
Risk-free interest rate	1.51%	0.91%
Weighted average fair value of options granted	$ 6.49	$ 6.34

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Stock Based Compensation (Schedule of Outstanding Stock Options) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	226,075	215,970	199,825
Average Exercise Price	$ 26.37	$ 25.73	$ 24.78
Remaining Life, Years	6 years 4 months 24 days
Options Exercisable	182,575	182,220
Average Exercise Price	$ 26.50	$ 25.51
Average Exercise Price 1 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	21,450
Average Exercise Price	$ 18.03
Remaining Life, Years	1 year
Options Exercisable	21,450
Average Exercise Price	$ 18.03
Average Exercise Price 2 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	1,650
Average Exercise Price	$ 18.36
Remaining Life, Years	1 year
Options Exercisable	1,650
Average Exercise Price	$ 18.36
Average Exercise Price 3 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	19,375
Average Exercise Price	$ 17.93
Remaining Life, Years	2 years
Options Exercisable	19,375
Average Exercise Price	$ 17.93
Average Exercise Price 4 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	8,250
Average Exercise Price	$ 19.39
Remaining Life, Years	2 years 10 months 24 days
Options Exercisable	8,250
Average Exercise Price	$ 19.39
Average Exercise Price 5 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	9,375
Average Exercise Price	$ 19.03
Remaining Life, Years	3 years 10 months 24 days
Options Exercisable	9,375
Average Exercise Price	$ 19.03
Average Exercise Price 6 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	14,375
Average Exercise Price	$ 22.37
Remaining Life, Years	5 years
Options Exercisable	14,375
Average Exercise Price	$ 22.37
Average Exercise Price 7 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	26,750
Average Exercise Price	$ 32.81
Remaining Life, Years	6 years
Options Exercisable	26,750
Average Exercise Price	$ 32.81
Average Exercise Price 8 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	23,600
Average Exercise Price	$ 32.34
Remaining Life, Years	7 years
Options Exercisable	23,600
Average Exercise Price	$ 32.34
Average Exercise Price 9 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	24,000
Average Exercise Price	$ 36.02
Remaining Life, Years	8 years
Options Exercisable	24,000
Average Exercise Price	$ 36.02
Average Exercise Price 10 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	33,750
Average Exercise Price	$ 26.93
Remaining Life, Years	9 years
Options Exercisable	33,750
Average Exercise Price	$ 26.93
Average Exercise Price 11 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	1,000
Average Exercise Price	$ 26.35
Remaining Life, Years	9 years 3 months 18 days
Average Exercise Price 12 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	1,000
Average Exercise Price	$ 25.38
Remaining Life, Years	9 years 6 months
Average Exercise Price - 13 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding	41,500
Average Exercise Price	$ 25.80
Remaining Life, Years	9 years 10 months 24 days

XML

Stock-Based Compensation (Summary of Restricted Stock Activity) (Details) - Restricted Stock [Member] - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock Non-vested, beginning balance	39,135	36,195
Restricted stock, granted	8,000	14,500
Restricted stock, vested	(11,205)	(11,560)
Restricted stock, forfeited	(3,900)	0
Restricted stock Non-vested, ending balance	32,030	39,135
Restricted stock Non-vested, weighted-average grant date fair value, beginning balance	$ 30.72	$ 31.65
Restricted stock, granted, weighted-average grant date fair value	25.80	26.93
Restricted stock, vested, weighted-average grant date fair value	32.15	32.89
Restricted stock, forfeited, weighted-average grant date fair value	31.72
Restricted stock Non-vested, weighted-average grant date fair value, ending balance	$ 26.76	$ 30.72

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Earnings Per Share (Narrative) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	109,100	116,350
Share price	$ 25.99	$ 26.17

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Earnings Per Share (Schedule of Weighted Average Shares Outstanding Used in the Computations of Basic and Diluted Earnings Per Share) (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Weighted Average Number of Shares Outstanding, Basic [Abstract]
Weighted average shares outstanding	8,213	7,239
Less: Unvested restricted shares	(35)	(36)
Basic EPS weighted average shares outstanding	8,178	7,203
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Basic EPS weighted average shares outstanding	8,178	7,203
Add: Dilutive effect of stock options and restricted shares	21	27
Diluted EPS weighted average shares outstanding	8,199	7,230

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Off-Balance Sheet Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Financial instrument commitments	$ 244,357	$ 221,911
Commitments to grant loans [Member]
Loss Contingencies [Line Items]
Financial instrument commitments	78,996	78,310
Unfunded commitments under lines of credit [Member]
Loss Contingencies [Line Items]
Financial instrument commitments	156,899	137,965
Standby letters of credit [Member]
Loss Contingencies [Line Items]
Financial instrument commitments	$ 8,462	$ 5,636

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Interest Rate Swaps (Narrative) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Effect on earnings	$ 0
Interest Rate Contract [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Pledged cash as collateral	350,000
Derivative Asset	$ 235,000

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Interest Rate Swaps (Summary of Derivatives) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Customer Interest Rate Swap [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	$ 11,426	$ 12,022
Fair Value	235	276
Customer Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | Maturing November, 2030 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	6,873	7,222
Fair Value	144	165
Customer Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | Maturing December, 2030 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	4,553	4,800
Fair Value	91	111
Third Party Interest Rate Swap [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	11,426	12,022
Fair Value	235	276
Third Party Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | Maturing November, 2030 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	6,873	7,222
Fair Value	144	165
Third Party Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | Maturing December, 2030 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	4,553	4,800
Fair Value	$ 91	$ 111

XML

Interest Rate Swaps (Fair Value of Derivative Instruments) (Details) - Interest Rate Contract [Member] - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Assets	$ 235
Other Assets [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Assets	235	$ 276
Other Liabilities [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Liabilities	$ 235	$ 276

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Fair Values of Financial Instruments (Narrative) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)
Loan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of loans with related allowance | loan	1
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 1,517,000
Valuation allowance	272,000
Impaired Loans, Cumulative Charge-Offs	0
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,402,000
Impaired Financing Receivable, Recorded Investment	1,674,000	$ 2,662,000
Impaired Financing Receivable, Related Allowance	$ 272,000
Number of impaired loans not requiring a valuation allowance | loan	3
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	$ 157,000	$ 2,662,000
Impaired Financing Receivable, with Related Allowance, Recorded Investment	1,517,000
Impaired Loans, Cumulative Charge-Offs	$ 0

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Fair Values of Financial Instruments (Fair Value, Assets Measured on Recurring Basis) (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	$ 19,351
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	19,351
US Treasury Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	16,011	$ 3,969
U.S. Government Agencies [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
U.S. Government Agencies [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	16,011	3,969
U.S. Government Agencies [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
States And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	145,867	73,091
States And Political Subdivisions [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
States And Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	145,867	73,091
States And Political Subdivisions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
Corporate Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS		3,032
Corporate Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
Corporate Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS		3,032
Corporate Obligations [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
Mortgage-backed Securities-Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	225,553	146,494
Mortgage-backed Securities-Government Sponsored Entities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
Mortgage-backed Securities-Government Sponsored Entities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	225,553	146,494
Mortgage-backed Securities-Government Sponsored Entities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
Interest Rate Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	235	276
LIABILITIES	235	276
Interest Rate Derivatives [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
LIABILITIES
Interest Rate Derivatives [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS	235	276
LIABILITIES	235	276
Interest Rate Derivatives [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
ASSETS
LIABILITIES

XML

Fair Values of Financial Instruments (Fair Value, Assets and Liabilities Measured on Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 1,402
Fair Value, Nonrecurring [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,402	$ 2,662
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,402	2,662
Fair Value, Nonrecurring [Member] | Foreclosed Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1,742	965
Fair Value, Nonrecurring [Member] | Foreclosed Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure
Fair Value, Nonrecurring [Member] | Foreclosed Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure
Fair Value, Nonrecurring [Member] | Foreclosed Real Estate Owned [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 1,742	$ 965

XML

Fair Values of Financial Instruments (Additional Qualitative Information about Level 3 Assets) (Details) $ in Thousands	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($) item
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure | $	$ 1,402
Impaired Loans [Member] | Appraisal of collateral [Member] | Measurement Input, Appraised Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure | $	$ 1,402	$ 2,662
Impaired Loans [Member] | Minimum [Member] | Appraisal of collateral [Member] | Measurement Input, Appraised Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing Asset, Measurement Input	0	0
Impaired Loans [Member] | Maximum [Member] | Appraisal of collateral [Member] | Measurement Input, Appraised Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing Asset, Measurement Input	0.100	0.1059
Impaired Loans [Member] | Weighted Average [Member] | Appraisal of collateral [Member] | Measurement Input, Appraised Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing Asset, Measurement Input	0.0112	0.0975
Foreclosed Real Estate Owned [Member] | Appraisal of collateral [Member] | Measurement Input, Liquidation Espenses [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure | $	$ 1,742	$ 965
Servicing Asset, Measurement Input	0.0700	0.0700
Foreclosed Real Estate Owned [Member] | Weighted Average [Member] | Appraisal of collateral [Member] | Measurement Input, Liquidation Espenses [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Servicing Asset, Measurement Input	0.0700	0.0700

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Fair Values of Financial Instruments (Fair Value, by Balance Sheet Grouping) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets: Cash and cash equivalents, Fair Value Disclosure	$ 206,681	$ 111,693
Financial assets: Loans receivable, net, Fair Value Disclosure	1,389,870	1,493,480
Financial assets: Mortgage servicing rights, Fair Value Disclosure	500	476
Financial assets: Regulatory stock, Fair Value Disclosure	3,927	3,981
Financial assets: Bank owned life insurance, Fair Value Disclosure	40,038	39,608
Financial assets: Accrued interest receivable, Fair Value Disclosure	5,889	6,232
Financial liabilities: Deposits, Fair Value Disclosure	1,759,722	1,540,661
Financial liabilities: Short-term borrowings, Fair Value Disclosure	60,822	63,303
Financial liabilities: Other borrowings, Fair Value Disclosure	30,221	43,452
Financial liabilities: Accrued interest payable, Fair Value Disclosure	1,203	1,601
Off-balance sheet financial instruments: Commitments to extend credit and outstanding letters of credit, Fair Value Disclosure
Financial assets: Cash and cash equivalents	206,681	111,693	$ 15,415
Financial assets: Loans receivable, net	1,338,489	1,397,582
Financial assets: Mortgage servicing rights	289	337
Financial assets: Regulatory stock	3,927	3,981
Financial assets: Bank owned life insurance	40,038	39,608
Financial assets: Accrued interest receivable	5,889	6,232
Financial liabilities: Deposits	1,756,793	1,535,385
Financial liabilities: Short-term borrowings	60,822	63,303
Financial liabilities: Other borrowings	29,998	42,459
Financial liabilities: Accrued interest payable	1,203	1,601
Off-balance sheet financial instruments: Commitments to extend credit and outstanding letters of credit
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets: Cash and cash equivalents, Fair Value Disclosure	206,681	111,693
Financial assets: Loans receivable, net, Fair Value Disclosure
Financial assets: Mortgage servicing rights, Fair Value Disclosure
Financial assets: Regulatory stock, Fair Value Disclosure	3,927	3,981
Financial assets: Bank owned life insurance, Fair Value Disclosure	40,038	39,608
Financial assets: Accrued interest receivable, Fair Value Disclosure	5,889	6,232
Financial liabilities: Deposits, Fair Value Disclosure	1,228,091	1,001,554
Financial liabilities: Short-term borrowings, Fair Value Disclosure	60,822	63,303
Financial liabilities: Other borrowings, Fair Value Disclosure
Financial liabilities: Accrued interest payable, Fair Value Disclosure	1,203	1,601
Off-balance sheet financial instruments: Commitments to extend credit and outstanding letters of credit, Fair Value Disclosure
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets: Cash and cash equivalents, Fair Value Disclosure
Financial assets: Loans receivable, net, Fair Value Disclosure
Financial assets: Mortgage servicing rights, Fair Value Disclosure
Financial assets: Regulatory stock, Fair Value Disclosure
Financial assets: Bank owned life insurance, Fair Value Disclosure
Financial assets: Accrued interest receivable, Fair Value Disclosure
Financial liabilities: Deposits, Fair Value Disclosure
Financial liabilities: Short-term borrowings, Fair Value Disclosure
Financial liabilities: Other borrowings, Fair Value Disclosure
Financial liabilities: Accrued interest payable, Fair Value Disclosure
Off-balance sheet financial instruments: Commitments to extend credit and outstanding letters of credit, Fair Value Disclosure
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets: Cash and cash equivalents, Fair Value Disclosure
Financial assets: Loans receivable, net, Fair Value Disclosure	1,389,870	1,493,480
Financial assets: Mortgage servicing rights, Fair Value Disclosure	500	476
Financial assets: Regulatory stock, Fair Value Disclosure
Financial assets: Bank owned life insurance, Fair Value Disclosure
Financial assets: Accrued interest receivable, Fair Value Disclosure
Financial liabilities: Deposits, Fair Value Disclosure	531,631	539,107
Financial liabilities: Short-term borrowings, Fair Value Disclosure
Financial liabilities: Other borrowings, Fair Value Disclosure	30,221	43,452
Financial liabilities: Accrued interest payable, Fair Value Disclosure
Off-balance sheet financial instruments: Commitments to extend credit and outstanding letters of credit, Fair Value Disclosure

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Accumulated Other Comprehensive Income (Summary Of Changes In Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 5,119
Other comprehensive (loss) income	(5,375)	$ 3,932
Ending balance	(256)	5,119
Unrealized gains and losses on available-for-sale securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	4,096	354
Other comprehensive income (loss) before reclassification	(5,476)	3,798
Amount reclassified from accumulated other comprehensive (income) loss	(73)	(56)
Other comprehensive (loss) income	(5,549)	3,742
Ending balance	(1,453)	4,096
Unrealized gain (loss) on pension liability [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	1,023	833
Other comprehensive income (loss) before reclassification	174	190
Other comprehensive (loss) income	174	190
Ending balance	1,197	1,023
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	5,119	1,187
Other comprehensive income (loss) before reclassification	(5,302)	3,988
Amount reclassified from accumulated other comprehensive (income) loss	(73)	(56)
Other comprehensive (loss) income	(5,375)	3,932
Ending balance	$ (256)	$ 5,119

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Accumulated Other Comprehensive Income (Significant Amounts Reclassified Out Of Each Component Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized gains on sales of securities	$ 92	$ 71
Income tax expense	(5,945)	(3,286)
NET INCOME	24,915	15,080
Amount Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] | Unrealized gains and losses on available-for-sale securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized gains on sales of securities	92	71
Income tax expense	(19)	(15)
NET INCOME	$ 73	$ 56

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank. (Narrative) (Details) - USD ($)		3 Months Ended		12 Months Ended
	Jul. 07, 2020	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2021	Jun. 30, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Total Assets			$ 1,851,864,000	$ 2,068,504,000
Deposits			1,535,385,000	1,756,793,000
Stockholders’ equity			194,785,000	205,262,000		$ 137,428,000
Loans acquired with credit deterioration				15,410,000
Goodwill resulting from merger	$ 17,935,000		29,290,000	29,266,000
Accumulated depreciation			1,224,000	1,347,000
UpState New York Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Total Assets					$ 463,800,000
Deposits					412,800,000
Stockholders’ equity	$ 44,803,000				$ 44,800,000
Conversion of shares	0.9390
Cash paid per share	$ 33.33
Percent exchanged for stock	90.00%
Percent exchanged for cash	10.00%
Performance conditions	$ 0.67
Payments to Acquire Businesses, Gross	$ 8,845,198
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	1,865,738
Loans Acquired Without Evidence Of Deterioration, Unpaid Principal Balance	$ 400,127,000
Loans Acquired Without Evidence Of Deterioration, Fair Value	393,580,000
Credit impaired loans acquired subject to a non-accretable difference	15,410,000
Non-accretable difference for credit impaired loans acquired	$ 5,213,000
Goodwill and intangible assets				17,935,000
Goodwill resulting from merger				17,935,000
Reduction in goodwill		$ 24,000	$ 923,000
Asset Impairment Charges				0
UpState New York Bancorp, Inc. [Member] | Core Deposits [Member]
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Gross				409,000
Accumulated depreciation				$ 108,000

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank. (Schedule of Business Acquisitions, by Acquisition) (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jul. 07, 2020	Dec. 31, 2020	Dec. 31, 2021	Jun. 30, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for Norwood Financial Corp shares		$ 45,337
Total purchase price	$ 54,181
UpState New York Bancorp, Inc. shareholders' equity		194,785	$ 205,262		$ 137,428
Adjustments to investments acquired to fair value	(112)
Adjustments to interest rates on loans acquired to fair value	3,982
Adjustments to general credit on loans acquired to fair value	(10,529)
Adjustments to specific credit - non-amortizing on loans acquired to fair value	(5,213)
Adjustments to specific credit - amortizing on loans acquired to fair value	(1,724)
Adjustments to core deposit intangibles acquired to fair value	409
Adjustments to deferred loan fees acquired to fair value	(812)
Adjustments to premises and equipment acquired to fair value	(1,211)
Adjustments to allowance for loan and lease losses acquired to fair value	5,982
Adjustments to deferred tax assets acquired to fair value	3,730
Adjustments to other assets acquired to fair value	(48)
Adjustments to time deposits acquired to fair value	(3,011)
Net Assets Acquired: Cash	24,037
Net Assets Acquired: Securities available for sale	13,836
Net Assets Acquired: Loans	405,221
Net Assets Acquired: Premises & equipment, net	4,318
Net assets acquired: Regulatory stock	2,487
Net Assets Acquired: Accrued interest receivable	1,426
Net Assets Acquired: Core deposit intangible	564
Net Assets Acquired: Other assets	5,398
Net Assets Acquired: Time deposits	(414,370)
Net Assets Acquired: Accrued interest payable	(175)
Net Assets Acquired: Other liabilities	(6,496)
Net Assets Acquired	36,246
Goodwill resulting from merger	$ 17,935	$ 29,290	29,266
UpState New York Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Acquiree shares settled for stock	1,987,206
Exchange Ratio	0.939%
Norwood Financial Corp shares issued	1,865,738
Value assigned to acquirer common share, per share	$ 24.30
Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for Norwood Financial Corp shares	$ 45,337
UpState New York Bancorp, Inc. shares exchanged for cash, excluding fractional shares	220,794
Purchase price paid to each UpState New York Bancorp, Inc. common share exchanged for cash	$ 33.33
Purchase price assigned to UpState New York Bancorp, Inc. common shares exchanged for cash	$ 7,359
Purchase price consideration - Cash-in-lieu of Fractional Shares	1,479
Cash in lieu of fractional shares	6
Total purchase price	54,181
UpState New York Bancorp, Inc. shareholders' equity	44,803			$ 44,800
UpState New York Bancorp, Inc. goodwill and intangibles			(17,935)
Tangible equity	$ 44,803
Goodwill resulting from merger			$ 17,935

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank. (Future Amortization Expense) (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
2022	$ 101
2023	85
2024	69
2025	54
2026	38
After five years	60
Amortization Expense for the Core Deposit Intangible, Total	407
UpState New York Bancorp, Inc. [Member]
Business Acquisition [Line Items]
2022	63
2023	56
2024	48
2025	41
After five years	93
Amortization Expense for the Core Deposit Intangible, Total	$ 301

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Acquisition of UpState New York Bancorp, Inc. and USNY Bank (Proforma) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Net interest income	$ 65,313	$ 50,476
Non-interest Income	8,325	7,780
Net Income	$ 24,915	$ 15,080
Earnings Per Share, Basic	$ 3.05	$ 2.09
Earnings Per Share, Diluted	$ 3.04	$ 2.09
UpState New York Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Net interest income		$ 7,291
Non-interest Income		313
UpState New York Bancorp, Inc. [Member] | Pro Forma [Member]
Business Acquisition [Line Items]
Net interest income		52,897
Non-interest Income		8,726
Net Income		$ 20,613
Earnings Per Share, Basic		$ 2.52
Earnings Per Share, Diluted		$ 2.52

XML

Risks and Uncertainties (Narrative) (Details) $ in Millions	Dec. 31, 2021 USD ($) item
Risks and Uncertainties [Abstract]
Number of applications | item	1,900
PPP loans | $	$ 156.3

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Risks and Uncertainties (Summary of Loan Forbearance) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) loan
Risks And Uncertainties [Line Items]
Number of Loans | loan	1,215
Balance	$ 274,190,000
Residential Real Estate Loans [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	118
Balance	$ 10,883,000
Commercial Real Estate Loans [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	385
Balance	$ 218,984,000
Agricultural Real Estate Loans [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	16
Balance	$ 5,267,000
Construction Real Estate Loans [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	24
Balance	$ 4,125,000
Commercial [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	186
Balance	$ 23,801,000
Consumer Loans To Individuals [Member]
Risks And Uncertainties [Line Items]
Number of Loans | loan	486
Balance	$ 11,130,000
COVID [Member]
Risks And Uncertainties [Line Items]
Balance	$ 0

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Norwood Financial Corp (Parent Company Only) Financial Information (Balance Sheets) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Financial Statements, Captions [Line Items]
Cash on deposit in bank subsidiary	$ 21,073	$ 19,445
Securities available for sale	406,782	226,586
Other assets	17,994	17,583
TOTAL ASSETS	2,068,504	1,851,864
Liabilities	1,863,242	1,657,079
Stockholders’ equity	205,262	194,785	$ 137,428
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	2,068,504	1,851,864
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Cash on deposit in bank subsidiary	1,511	854
Investment in bank subsidiary	204,547	195,035
Other assets	2,472	2,337
TOTAL ASSETS	208,530	198,226
Liabilities	3,268	3,441
Stockholders’ equity	205,262	194,785
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 208,530	$ 198,226

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Norwood Financial Corp (Parent Company Only) Financial Information (Statements of Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Condensed Financial Statements, Captions [Line Items]
INCOME BEFORE INCOME TAXES	$ 30,860	$ 18,366
Income tax expense	5,945	3,286
NET INCOME	24,915	15,080
Comprehensive Income	19,540	19,012
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Dividends from bank subsidiary	10,697	15,319
Expenses	627	1,704
INCOME BEFORE INCOME TAXES	10,070	13,615
Income tax expense	(171)	(180)
Income before equity in undistributed earnings	10,241	13,795
Equity in undistributed earnings of subsidiary	14,674	1,285
NET INCOME	24,915	15,080
Comprehensive Income	$ 19,540	$ 19,012

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Norwood Financial Corp (Parent Company Only) Financial Information (Statements of Cash Flows) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Condensed Financial Statements, Captions [Line Items]
Net Income	$ 24,915,000	$ 15,080,000
Net realized gain on sales of securities	(92,000)	(71,000)
Other, net	(2,236,000)	(7,920,000)
Net cash provided by operating activities	29,198,000	13,797,000
Proceeds from sales of securities	11,366,000	24,497,000
Net cash used in investing activities	(130,964,000)	(61,357,000)
Stock options exercised	394,000	268,000
Sale of treasury stock for ESOP	130,000	130,000
Purchase of treasury stock	(1,440,000)	(108,000)
Cash dividends paid	(8,539,000)	(7,263,000)
Net cash provided by financing activities	196,754,000	143,838,000
Net Increase (Decrease) in Cash and Cash Equivalents	94,988,000	96,278,000
CASH AND CASH EQUIVALENTS - BEGINNING	111,693,000	15,415,000
CASH AND CASH EQUIVALENTS - ENDING	206,681,000	111,693,000
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Net Income	24,915,000	15,080,000
Undistributed earnings of bank subsidiary	(14,674,000)	(1,285,000)
Other, net	(129,000)	28,000
Net cash provided by operating activities	10,112,000	13,823,000
Investment in bank subsidiary		(8,844,000)
Net cash used in investing activities		(8,844,000)
Stock options exercised	394,000	268,000
Sale of treasury stock for ESOP	130,000	130,000
Purchase of treasury stock	(1,440,000)	(108,000)
Cash dividends paid	(8,539,000)	(7,263,000)
Net cash provided by financing activities	(9,455,000)	(6,973,000)
Net Increase (Decrease) in Cash and Cash Equivalents	657,000	(1,994,000)
CASH AND CASH EQUIVALENTS - BEGINNING	854,000	2,848,000
CASH AND CASH EQUIVALENTS - ENDING	$ 1,511,000	$ 854,000